PRETORIA - Local manufacturers for the retail industry and multi-national companies say load-shedding is having a catastrophic impact on their production.
Not only are the power outages impacting on their existing contracts, but questions are also being raised about whether they will invest in the future.
Universal Paper and Plastic is one of the biggest manufacturers in Garankuwa, north of Pretoria but there’s nothing to produce at the company that runs a 24-hour operation.
“As one of the largest employers, this is not sustainable any further,” said Universal Paper and Plastic’s Shaman Reddy.
“Further losses and downtime will inevitably result in job losses. In the current economy and volatile climate, that’s not acceptable.”
When load-shedding hits, the machines are switched off, production stops and staff are forced to down their tools but the producers are expected to deliver to their clients in the retail industry and multi-national companies.
“It’s catastrophic. It’s difficult to meet targets, when you’re efficient only 50-percent of the time.
“Inefficiency of 70-percent is detrimental to any business, not just ours.”
While multi-national companies and large retailers have agreements in place with Eskom to provide reliable power, this is not the case for most local producers.
Economist Dr Heinrich Bohlmann says multi-nationals are likely to review their future investments.
“These big multinationals that want to invest and set up supply chain from SA, they don’t want to hear stories that our supply chain might be interrupted,” Bohlmann said.
“They need certainty. At the moment our electricity supply which is critical to this exercise is not looking certain at all.”
Experts warn there is a real possibility that investment promises, recently made to South Africa by multinational companies, might already be lost due to the load shedding.