SA Plastics

February / March 2017 PREVIOUS ISSUES

February / March 2017

VOLUME 15, NUMBER 1

Only realistic forecast is: expect it to be tough

WEATHER forecasts have become far more accurate than ever before, but the same can’t be said for economic forecasting – your money is probably safer if you’re betting on the horses.

A lot of people are obviously interested in where the South African economy is headed in 2017 and possibly the only relief is that the situation is not as bad as quite a lot of people were predicting. We frequently get questioned on the topic and it is true that, because of the nature of journalism, we speak to a lot of convertors around the country – so the interested parties are usually just as interested in how other convertors in their market sectors are doing, which is arguably also a barometer of the state of the industry. The only thing I can confirm is that most of the successful convertors are too busy to worry much about political factors and influence, although not ignoring the political scene altogether.

But I can confirm that even some of the top convertors have grudgingly conceded that “it’s tough” at the moment. And it’s probably the same almost everywhere – just a glance at global headlines suggests there are problems all over the place. With over-capacity in most sectors of most economies, the competitive environment is brutal at times – if not most of the time. So probably the only thing to expect over the next year is that it is going to be challenging.

 

Another int’l entrant

In spite of the challenging scenario, Astrapak group has attracted an international buyer, which suggests that the view from outside of South Africa may be slightly brighter than for many of those in the country. RPC of the United Kingdom has tabled an offer of close to R1,4-billion for the nine operations in Astrapak’s moulding and forming divisions. This brings to and end rumours which have been swirling around the industry since March last year. If you are surprised that a foreign convertor group should make so large an investment in South Africa, you are probably not going to be surprised that RPC’s entry to the market is likely to shake things up a bit – just as the arrival of Alpla has done over the past two years. These international convertors bring with them a slightly different way of doing things, with methods that have been tried and tested in other countries. RPC is involved in 31 countries and employs over 20,000 people.

Alpla had similar origins (it operates 159 plants in 42 countries but it has only a single plant in South Africa, whereas RPC will be using the 9 Astra plants as its springboard, so it is likely to provide serious competition. Astrapak’s flexibles business is going to be split off from the divisions bought by RPC, and the Astra-RPC business is to be delisted from the JSE.

Besides that, it’s business as usual and expect to see continued growth in the plastic packaging sector this year. That is simply because it’s a global trend, which was noticeable at the K show in Germany towards the end of last year, with convertors from unheard of places arriving and a lot of growth expected in India particularly.

What we need to hope for is that the technical moulding sector shows resilience and regains some of the market share it has lost of the past few years.

Our newest venture – Composites SA

Can you believe that we’ve been publishing SA Plastics, Composites & Rubber magazine for 15 years already! During this time we can say (modestly) that we have learned A LOT about the industry. We believe the time is right for another publication, but this one is unambiguously about composites, and more specifically, the composites industry in South Africa.

With the industry’s interest, the digital Composites SA version will gain market traction and we may even print an annual print issue. There is major scope for composites in transport, mining, construction and numerous other sectors, and composites are seen as materials of the future, so we are looking forward to exciting and interesting times. If you haven’t yet seen the magazine, visit our website and click on the icon in the right-hand column.

Martin Wells, Publisher

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