By Deryck Spence
RECENTLY, the SA Paint Manufacturing Association (SAPMA) was advised that our Government, through recommendations made by the seemingly omnipotent National Economic Development and Labour Council (NEDLAC), decided to negotiate for the abolishment of Chapter 39 import duties, specifically resins, from Egypt and the East African community. This decision was made with the endorsement of NEDLAC without the slightest consultation with the coatings industry or SAPMA. Or without any thought of conducting a business impact study to see how this move would affect the nine local manufacturers – who were not consulted either.
When we put the manufacturers’ case to the DTI, we were told that DTI was not allowed to consult with industry, under instruction from NEDLAC!
We were then advised by the Director General of DTI that the negotiations for import duty abolishment were “too far gone” and that the DTI could now not pull out of the negotiations.
Now, it must be remembered that just four years ago Egyptian products were dumped onto our market. The imports proved to be under specification compared with samples provided, leading to the payment of millions of rand in compensation. To make matters worse, Egypt – as a member of OPEC – enjoys cheap prices for solvents, labour costs that are significantly lower than in SA, and the Egyptian Government provides US $2.4 billion in export subsidies, allowing their exporters to land their product in SA at below our manufacturing cost. And now it will also be import duty free.
So, when SA companies close because they cannot compete against these pirates, the cry will come “What about our jobs?”
Indeed, what about all these people’s jobs – at a time when unemployment is rampant in our country?
Perhaps the all-powerful NEDLAC can provide an answer.
- Deryck Spence is Executive Director of the SA Paint Manufacturing Association (SAPMA).