Business leaders in Roodekop are urging Ekurhuleni Metropolitan Municipality to address the area’s poor power supply, which is having a crippling effect on the local economy.

Germiston-based manufacturers may face the prospect of significant job losses, as businesses in the area are losing millions of rand in revenue on a daily basis, as a result of the frequent and unpredictable power outages occurring in the region.

DPI Plastics, which produces a range of water reticulation, drainage and pipe-fitting systems from its Roodekop manufacturing plant, has reported losses of more than R6-million for 2011, which can be directly-linked to the unreliable power supply.

DPI Plastics manufacturing director Kallie Albertse points out that the company runs a continuous PVC extrusion process, and that the blackouts and power dips interrupt this process - resulting in a high amount of PVC scrap, with the need to restart each extrusion line. “The Roodekop area has experienced power supply problems throughout 2011; however, in the first two weeks of June alone, the region had already experienced nine major outages, and a number of power dips.”

Albertse stresses that this regular loss of revenue will have to be considered in the longer-term strategy of the business. “The industry in which DPI Plastics operates is very sensitive to pricing and this reduces the competitive advantage DPI enjoys.”

Despite the fact that DPI Plastics purchased a R1-million 570 kW generator to minimise the effects of the power outages, Albertse notes that the 3 MW factory cannot afford to run solely on a generator. “The generator has helped to minimise the effects of the power cuts; however, this is not sustainable as a long-term solution.”

Lafarge Gypsum, a business unit of Lafarge Industries SA, which produces ceiling and partition solutions, concedes that the multitude of power outages have had a negative impact on its business and production in its Roodekop plant.  In the month of June alone, the power cuts have resulted in approximately a 20% loss in production capacity for Lafarge Gypsum. 

“These frequent outages not only disrupt production runs, but also affect long-term sustainability of any manufacturing entity.  Lafarge Gypsum supports the suggestion that the municipality needs to engage with all stakeholder businesses to find a negotiated way forward on electricity supply.  In the spirit of economic sustainability and protection of jobs, the resultant impact of the power outages needs to be addressed immediately,” adds a Gypsum Lafarge Industries spokesperson.

Monier Roofing, a business unit of the International Monier Group, which manufactures concrete roof tiles, confirms that the endless power cuts have had a negative impact on business. A company spokesperson points out that the power cuts in May and June have resulted in a total loss of production time of 28 hours.

“This loss is not only limited to the loss of production of 129 000 tiles, but also 40 wet mixes of raw material that could not be recovered, and ultimately scrapped. The loss in power has also affected the curing of the concrete tiles – with potential colour variations and efflorescence.

None of these outages were communicated to Monier Roofing beforehand and; therefore, no proactive planning could be undertaken.  Due to the nature of the business of Monier Roofing, none of these losses can be made up for in future production days. Constant electricity supply is crucial for manufacturing businesses and, in order to keep a sustainable business - while ensuring that no job losses occur - electricity supply to these businesses needs to be guaranteed.”

Trident Steel, also in Roodekop, has reported that these power outages have created severe difficulties in meeting production requirements. The month of June has been particularly severe as there were numerous and prolonged outages, following one upon the other.

A company spokesperson says: “Standby diesel power is installed but this can only assist in some areas. It is also extremely-expensive to run diesel generators. If this sort of power failure should continue, serious consequences could follow. These consequences could be any of a number of different scenarios, and will be detrimental to the local economy and the area’s employment.”

The general consensus amongst interviewed companies is that the Ekurhuleni Metropolitan Municipality should engage with all businesses in Roodekop, and urgently implement mutually-agreed measures that will ensure a constant electricity supply. “If the power shortage is not addressed as a matter of urgency, the council runs the risk of massive job losses, as well as businesses locating to new areas that can guarantee a reliable and constant power supply,” Albertse concludes.