Construction World July 2022

EQUIPMENT

The South African coatings sector urgently needs government assistance to counter growing challenges that could endanger its entire future, says Sanjeev Bhatt who was recently re-elected as Chairperson of the SA Paint Manufacturing Association (SAPMA). Here he spells out the sector’s main problems for ConstructionWorld. GOVERNMENT UNDERSTANDING AND ASSISTANCE CAN MAKE OR BREAK THE COATINGS SECTOR

developed countries. In SA, it is mainly because of the challenges we already faced before Covid-19 and the Eastern European confl ict. The South African emerging market has for some years now had to deal with formidable issues l ike unemployment, disruptions in electricity supply, crumbl ing infrastructure and inefficient management of parastatal entities. CW:What other major challenges are facing the coatings sector at the moment? SB: Competition from other African countries is a major problem. At present, the Department of Trade Industry and Competition (DTIC) has confirmed that an African Free Trade Agreement has been ring-fenced for South Africa which will mean that coatings and associated raw material imports from the l ikes of Egypt will not be allowed duty-free into South Africa. The employment rates that some African governments, such as Egypt, grant their manufacturing sectors make production costs there much lower than in South Africa. If these cheaper imports are allowed to flood the SA market, the local coatings manufacturing sector will suffer serious economic consequences and ultimately cease production. Due to the cost of electricity - and lack of constant supply – as well as the cost of labour in South Africa, we bel ieve the government must assist the coatings sector with rebates for electricity, and any other possible rebates to assist our sector. If not, many SAPMA members will consider moving to alternate countries to set up plants where labour costs are lower and electricity supply more assured. CW: How can government helpmore to level the playing field for the coatings sector? SB: Government and government departments need to work more closely with the coatings sector to ensure that current pol icies that are in place, or planned, are reconsidered or revised to help our sector to streaml ine operational processes. Take permits required at ports of entry, for example. These are now required in writing for every single individual consignment brought into South Africa. As some coatings companies have consignments of the same chemicals and raw materials coming into port four or five times a year, the importers laboriously must repeat the same paper-based permit appl ications over and over again. We would l ike government departments to make these import permit processes more streaml ined - and definitely place it onl ine. Government departments generally should consult members of the coatings sector to better understand our manufacturing process as well

CW: How did the pandemic, and now the war in Europe, affect the coatings sector in terms of supplies, productivity, and profits? Are there signs of a recovery and were producers and retailers equally affected? SB: Many raw materials for the coatings sector are imported from South East Asia and Europe. So, shipping delays and logistical uncertainty created huge bottlenecks for local manufacturing, thereby affecting productivity and profits. However, the shortage of raw materials led to a lot of sub-Saharan African countries beginning to depend more on South Africa for manufacturing suppl ies. To a certain extent, this has compensated for the large volumes lost in local sales and helped coatings to weather the worst of the storm. CW: You suggested at the recent SAPMA AGM that emerging markets and developing economies should be more crises-prepared in future. Can you elaborate on that? SB: Emerging markets and developing economies such as SA have felt – and are still feel ing - the brunt of both the pandemic and the European confl ict far more than

38 CONSTRUCTION WORLD JULY 2022