SA Plastics

February / March 2016

February / March 2016

VOLUME 14 ISSUE 1

We need more ‘Made in SA’

‘MADE in SA’ is going to have to replace ‘Made in China’ if we are going to have any chance of growing our industry in the foreseeable future.

Imports and importers are a reality and have had a serious impact on our industry and margins over at least the past decade. Gone are the days back in the 1960s and ‘70s and so on when most convertors could bank on good growth. We’ve been under the cosh for some time now, but the unexpected collapse in the rand may present some opportunities. One of the areas where that looks possible is in the replacement of goods imported from China, and the only reason why that may be possible is the fact that imports are costing more. Although there are other factors at play, making the situation more complicated, we may be slightly more competitive with imports from China for at least the near future.

However, one area where that’s less likely to happen is in the packaging market, where the local manufacturers are already supplying an outstanding service to the brand holders and retailers (at least, that is our view). The packaging sector is going to be very much in focus at Propak Africa from 15-18 March in Johannesburg. It may come as a surprise to some that plastics comprise by far the bulk of South Africa’s packaging demand (R35,9-billion of R79-billion in 2014), that is over R10-billion p/a more than the next main contender, paper & board (see page 84).

Propak Africa is without a doubt the main event for the industry in Southern Africa, it’s going to be entertaining and people in the industry are encouraged to attend. For the SA packaging manufacturers, the show will almost certainly present opportunities to increase supply into Africa (many visitors from Sub-Saharan Africa are expected). Besides containers, most packaging items can be exported relatively cost-effectively, so it’s going to be interesting for the packaging companies. But even if you’re not in the mainstream packaging market, it’s worth attending Propak Africa, it’s the meeting place for our industry and it only comes along every three years.

 

More international groups arrive

South Africa is increasingly seen as a gateway into Africa and a number of international groups have been buying local plastics businesses as a foothold from which to supply or expand into the continent. Some of them have tried to do this ‘under the radar,’ which is laughable. It may be a cliché, but it’s just a matter of respect to say ‘hullo’ to the hosts when entering a new market. It was exemplary therefore of Constantia Flexibles of Austria to welcome all the 1150 staff of Afripack group to its ‘family’ when it officially took over the local business in December. Read about the new business, Constantia Afripack (page 22).

By the way, another of SA’s top flexibles manufacturers has recently also been sold to an international group, and we hope to report about that soon.

 

WorldStar winners

A number of South African companies won WorldStar Awards at the World Packaging Organisation’s competition last year, including Boxmore, Extrupet and Polyoak. It’s our belief that the quality of packaging supplied in South Africa is truly of a global standard, so it’s nice to see some of our companies getting recognition. Our report (page 42) also features the other international winners, which are impressive too.

 

Compounding matters

Congratulations are due to Continental Compounders of Durban, which has started compounding polyamide and talc-filler PP grades at a new site in Westmead. It’s a good example of keeping value-adding potential in the country and especially of supporting the technical moulding sector, specifically injection moulding companies – which we believe now potentially have an opportunity to replace imported product, let’s go for it.

Martin Wells, Publisher