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PLASTICS CONVERTORS ASSOCIATION Presentation to NERSA ESKOM REVENUE APPLICATION: MULTI YEAR PRICE DETERMINATION . Polokw PowerPoint Presentation
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PLASTICS CONVERTORS ASSOCIATION Presentation to NERSA ESKOM REVENUE APPLICATION: MULTI YEAR PRICE DETERMINATION . Polokw - PowerPoint PPT Presentation


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Thanks very much Nonhlanhla, I have attached to this mail my presentation and a copy of the letter sent in advance. To make arrangements please contact Ms Edith Mkhabela on 012 401 4756 . Kind regards, Mike. PLASTICS CONVERTORS ASSOCIATION Presentation to NERSA

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slide1

Thanks very much Nonhlanhla,

I have attached to this mail my presentation and a copy of the letter sent in advance.

To make arrangements please contact Ms Edith Mkhabela on 012 401 4756 .

Kind regards,

Mike

PLASTICS CONVERTORS ASSOCIATION

Presentation to NERSA

ESKOM REVENUE APPLICATION: MULTI YEAR PRICE DETERMINATION.

Polokwane 12th Jan 2010

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slide2

Presenter CV.

  • Mike Bullock
  • Part time employee PCA 2009- now.
  • National Diploma Plastics Technology
  • University of East London UK 1974
  • .
  • Technical, sales and production positions
  • Manufacturing, training and trading experience.
  • MD Metal Box CA Plastics Div 1976-82.
  • MD Aries Plastics 1982-86.
  • CEO Plastics Industry Training Board 1990-2000
  • CEO Plastics Convertors Association 2000- 2009

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ESKOM REVENUE APPLICATION: MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

slide3

The Plastics Sector.

Contribution to national

economy per year = R32 billion.

Share of National GDP =5-6%

Users of electrical energy = 2nd

(after Aluminium)

Annual conversion of

raw materials =1.2 m tons.

Number of employees = 40 000

Packaging sector = 50% of sales

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ESKOM REVENUE APPLICATION: MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

slide4

The Plastics Industry

  • Expects
  • An uninterrupted supply of
  • Good quality electricity
  • At a competitive price

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ESKOM REVENUE APPLICATION: MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

slide5

Pressures on the Plastics Industry.

  • Raw material price increases based on world oil prices
  • .
  • Wage increase demands for labour above inflation rate.
  • World recession
  • .
  • Limited benefit from FIFA World Cup and Gautrain.
  • ESKOM REVENUE APPLICATION:MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

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slide6

Pressures on the Plastics Industry (cont)

  • Plastics becoming uncompetitive compared with metal and board.
  • Industry already at high levels of efficiency so little opportunity to improve.
  • Packaging sector customers unable to accept above inflation price increases.
  • Eskom price increases.
  • ESKOM REVENUE APPLICATION:MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

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slide7

Actions taken by the plastics Industry.

  • Raw materials.
    • Reduction of import duties from 10% to 0% over 3 years.
  • Cost of labour.
    • Negotiating within the MEIBC for a Special Plastics Wage Table @ 65%.
  • Cost of Energy
    • Challenging Eskom’s price increases.
  • ESKOM REVENUE APPLICATION:MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

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slide8

Industry average as %age of sales =3%

  • Eskom Challenge.
  • Impact of proposed increases.
  • Industry average as %age of sales =3%

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ESKOM REVENUE APPLICATION:MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

slide9

Industry average as %age of sales =3%

  • The Plastics Recycling Sector.
  • The industry recycles about 175 000 tons per year of plastics.(14.5%)
  • It uses about 3 times the amount of energy for transportation, washing, drying and processing when compared with normal plastics processing.
  • Run by entrepreneurs with no subsidies.
  • Creates over 3000 fulltime and about 15 000 informal jobs.

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ESKOM REVENUE APPLICATION:MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

slide10

Industry average as %age of sales =3%

  • Eskom Challenge.
  • Impact of proposed increases on the Plastics Recycling sector..
  • Industry average as %age of sales =11%

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ESKOM REVENUE APPLICATION:MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

slide11

Industry average as %age of sales =3%

  • Eskom Challenge.
  • Consequences of proposed increases on the Plastics Recycling sector.
  • Energy to the sector would have to be subsidised.
  • Companies would close down.
  • Serious environmental impact
  • Increase pressure on landfill.

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ESKOM REVENUE APPLICATION:MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

slide12

Eskom Challenge (cont)

  • Supply policy ought to be reviewed, direct or through Municipality.
  • Introduce a competitive environment because now we are being asked to fund inefficiencies.
  • Generating capacity on mines must be more competitive than shipping in coal.
  • ESKOM REVENUE APPLICATION:MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

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slide13

Conclusion

  • Plastics will not be able to absorb the proposed increases without serious loss of markets and jobs.
  • The National economy cannot afford bleeding in a sector contributing 6% to the GDP.
  • Eskom must shoulder its responsibilities in a responsible manner.
  • ESKOM REVENUE APPLICATION:MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

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slide14

35%

Hertz !!

Thank you

ESKOM REVENUE APPLICATION:MULTI YEAR PRICE DETERMINATION.Polokwane 12th Jan 2010

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