The growth of the South African manufacturing industry has been hindered by intermittent power cuts, resulting in a 2.5% sector decrease in 2014, says the Steel and Engineering Federation of South Africa.
The Federation said that an estimated decrease of 5% and 13% was evident in the rubber and steel industries.
The industry was heavily affected in 2014 with a 5 month platinum mine protest, followed by the National Union of Metalworkers of South Africa (Numsa) strike, topped with state utility Eskom forcing rolling blackouts, says a report by eyewitness news.
Head economist at the Federation, Mr Henk Langenhoven, said that the steel and engineering sector comprise the bulk of Eskom’s users.
‘We are a large proportion of the energy users. If you look at electricity as a percentage of the cost of inputs it isn’t that high. But if you compare that with the fact that if you don’t have energy you can’t produce and secondly, with profit margins, it becomes quite serious’, Langehoven said.
Eskom has notified the public that its funds are running at a deficit and they are struggling to meet energy demands with the low diesel reserves they have left remaining.