SA Plastics

October/November 2016

October/November 2016

VOLUME 15  NUMBER 5

Are we being out-competed by global groups?

DUCKING and diving can be a necessary strategy, especially in crossfire situations, which is not entirely unlike operating in the current market conditions. One such scenario presented itself in the blow moulding sector of late, namely the arrival of unexpected international competitors.

The entry of Alpla of Austria and Serioplast of Italy has seen fairly substantial container contract work moved away from some of the top South African convertors. Make no mistake, the European arrivals are well-established and efficient operations. But you have to ask why the European operations were welcomed by the SA government and IDC, who apparently supplied fairly substantial funding for the new ventures?

No-one can really argue with the European convertors, who were most probably encouraged to open local operations by the brand groups they supply. These are global agreements and similar scenarios are present in most national markets. But the Europeans are employing very few people and are sourcing their own machinery. Now we hear they are also having their moulds made in Europe, resulting in lost work to some of South Africa’s top toolrooms. And to really rub the salt in, we hear, the newcomers recently started importing closures from the Middle East. Again, lost work for the local convertors.

This has been a hard lesson for a number of the local blow moulding companies. A similar scenario has been playing out in the flexibles market, where Amcor (Australia/USA) and Constantia (also Austria) have recently established themselves in South Africa, with a similar loss of contract work for the local film manufacturers and ratcheting up of the competitiveness rate.

Are we being out-competed by these global groups? It is obviously possible for South African companies to set up converting operations in foreign countries. Developing a business to the point where one can compete internationally is a major challenge, but not impossible. So, after ducking and diving after the initial fusillade, all we can do is regroup and plan … and we are happy to report that a number of the local convertors are succeeding in exactly this area: read about Polyoak setting up in Zimbabwe and Wilvic Plastics in Australia in this issue. Well done to both companies!

 

Developing product designers

In this issue we also discuss how many company owners appear to take a product designer for granted. But there could be a win-win solution involving the designer and the brand owner.

Due to the extraordinary costs to manufacture tooling to produce innovative ideas, a product designer, together with the brand owner, could set aside funds to support the development of the design concept to make the idea/innovation a reality. After all, brand owners do have the power to engage in developments that will enhance their brand against those of competitors.

In this way the designer cannot be exploited for his/her efforts under such demands requested by bossy individuals/owners of companies or famous brand housed corporates.

But it may not only be financial incentives only which encourage designers to perform, or for that matter all employees. An unusual competition is conducted in the USA annually for exactly this purpose: the ‘NorthCoast 99 Great Place to Work’ event conducted in Ohio annually honours human resources and talent management organisation that develops people in the workplace. Read more about this on page 66.