The alcohol sales ban is costing glassmaker Consol R8 million a day in energy costs to keep its furnaces warm and running, despite the company not producing effectively or supplying its products to market.
During a Gauteng Growth and Development Agency (GGDA) webinar on Tuesday, titled ‘Resuscitating Gauteng’s manufacturing as a catalyst for growth’, Consol human resources and corporate affairs senior executive Thami Mkhuzangwe said Consol must keep its furnaces warm because it will take the company 18 to 24 months to get those furnaces back if it takes “the drastic decision of draining and closing” them.
He said glass accounts for about 85% of the alcohol industry’s packaging and the alcohol sales ban has led to a drastic reduction in sales and thus a need for it to scale down production significantly.
Mkhuzangwe said the industry fully appreciates and understands the reasons that led to the suspension of alcohol sales – to reduce trauma and the use of hospitals – and believes it is the right thing to do.
However, he stressed that this needs to be balanced to ensure the economy does not suffer and that the glass manufacturing industry, which has invested billions, does not fail.
If the industry is allowed to fail, it will lead to around R20 billion in deindustrialisation from South Africa, he said.
Mkhuzangwe called on the government and decision-makers for clarity and a firm commitment on when the ban will be lifted, to enable the industry to plan and make important decisions.
This article first appeared on Moneyweb
