The coatings and construction sectors are experiencing a time of unbelievable turmoil in South Africa. Our government has adopted the policy of rewarding and promoting individuals who are not fulfilling their mandates and removing the few competent members of our cabinet – all in the name of efficiency and improvement. Meanwhile, our country, with erstwhile exemplary fiscal record, has been downgraded to junk status.
To make matters worse our government seems determined, not only to undermine the financial stability of the country, but to tinker with the very mechanisms that underpin our economy, the manufacturing base on which our employment, taxes and ultimately growth is based. The introduction of prohibitive employment and BBBEE requirements will surely demotivate the entrepreneurs and the family businesses on which this country was built, and force them into submission.
Import and Customs Duties are designed to protect our local manufacturing base in South Africa from dumping of substandard products on our markets to threaten the very ‘goose’ that lays the golden egg. And yet, the coatings sector is witnessing spurious agreements being made with countries for the importation of products into our markets. These products are not subject to either the stringent technical standards set for our local manufacturers, nor import duties for the importation of products into our markets.
We all witnessed the demise of the textile industry due to the very same myopic vision. Now the coatings Industry is facing the very same challenge.
Our newly appointed Minister of Finance has just told us that his strategy is to enlarge the capabilities of our local value-added manufacturing base and thereby stimulate the growth of the economy and decrease unemployment. Noble words indeed. Yet recently, the Association on behalf of the coatings sector managed to prevent an unopposed, off-the-record dare we say, proposed agreement with the Egyptian Government for the duty-free importation of resins into South Africa (destined for the coatings industry. This threatens the very existence of the seven local manufactures who more than adequately service the local market in terms of pricing and quality.
This blatant attempt at dumping follows a sortie into our market some years ago with substandard products that reaped havoc in our market.
The coatings industry is further threatened by the ‘wish lists’ of the Indian Government in terms of trade with South Africa. This include the supply of chemicals and coatings into our markets. Yes, this would encourage competition, some quarters counter - but let’s examine the facts.
The largest paint manufacturer in India manufactures, in one single day, more than our biggest manufacturers produce in a month. The Indian input costs in terms of raw material and labour costs are significantly lower than those in South Africa, and notwithstanding government incentives, by virtue of them belonging to BRIC, the Indian manufacturers are not subject to any import duties either.
Another exacerbating concern is that South Africa is the only country in Africa that has legislation limiting the use of lead pigments in paint, in fact in November 2016, the coatings industry met with the Department of Health to phase out the use of lead in paint completely by 2020, including industrial paint products. Neither India, nor China for that matter, has such legislation. And these hazardous paints could very well soon be on our shelves.
To make matters worse, South Africa has no mechanism in place, similar to the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) body in Europe, that ensures imported products meet the stringent quality and legislative requirements local manufacturers are subject to.
The dumping and industry-capture threats come on top the alarming lack of government support or enthusiasm to help uplift skills and create job opportunities in the coatings sector, so it has become an industry struggling for survival.
And we are not the only industrial sector on its knees. If industry is being decimated, how can jobs be created? How long will the hundreds of thousands who cannot find work just accept the situation and beg on street corners?
I pick up my copy of Alan Paton’s ‘Cry the beloved country’ and wonder what his sequel would have been like if he could have written it now? What would Nelson Mandela have said had he been alive to see the demise of all that he stood for?
The paint industry produces the colours for the Rainbow Nation but there’s no pot of gold there anymore. It’s also been plundered.
Viva the coatings industry! We can but hope it will live a little longer.