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Cost of power cuts underestimated - chamber

Dec 12 2014 12:44

Cape Town - The extent of the damage to industry and the costs that arise directly from load shedding have been gravely underestimated, said the Cape Chamber of Commerce and Industry on Friday.

“This is a crisis for the country and a disaster for many industries. People in high places need to be made aware of the real consequences of the Eskom fiasco,” said Janine Myburgh, president of the chamber.
She said a survey of just one industrial area in the Cape, namely Parow Industria, revealed:

- Ceramic factories may have to close their doors. Kilns take up to ten hours to reach the required temperature and any interruption in the power supply causes quality problems.

Kilns have to cool down completely before they can be restarted and the loss of product, production time and the risk of further load shedding means that it is not worth carrying on until there is a secure power supply;

- In the metal industry the situation is even worse. When furnaces lose power, the metal in them can solidify causing many thousands of rands damage, as well as the loss of two days' production time;

- The food industry has been hard hit. Ice cream and dairy factories, operating at full capacity for the season, are losing product while labour costs go up as they are forced to pay overtime. Ice cream has melted and covered factory floors;

- The baking and confectionary industries operate within very precise temperature ranges and when the power goes product is lost and equipment damaged. Losses can exceed R100 000 in stock value on a single product;

- Modern factory machines have precise shut-down procedures and when these procedures are not followed because of load shedding equipment can be damaged and controlling software corrupted;

- The pharmaceutical and cold storage industries have to operate within defined temperature ranges and power interruptions can make product unsafe;

Peter Haylett, chair of the chamber’s industrial focus portfolio committee, said Eskom would not be able to solve its problems in the near future and the damage caused would eat into company profits, jobs and tax revenue for the government.

Industry in the Cape would be particularly hard hit as local factories would not be able to compete with rivals in Gauteng, where gas from Mozambique and Sasol is available for kilns, furnaces, ovens and other process-heat requirements in industry.

“Part of the answer was the rapid development of our own natural gas resources, while the need to import natural gas had become urgent. We have been arguing for this for more than a decade, but our call has fallen on deaf ears and now we are paying the price,” said Haylett.



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