An Assessment of the South African Plastic Market
Prepared for
Prepared by: Whitehouse & Associates Johannesburg, South Africa Tel: +27 11 728 5878 Fax: +27 11 728 7555 E-mail: [email protected]
Contents
List of Acronyms and Abbreviations...... 1 1.0 Brief Background, Objectives and Methodology ...... 2 1.1. Background...... 2 1.2. Objectives...... 3 1.3. Methodology ...... 4 2.0 Market Overview and Trends...... 5 2.1 Industry Overview...... 5 2.2 Demographics...... 7 2.3 Industry Policies ...... 9 2.3.1 Black Economic Empowerment (BEE) ...... 9 2.3.2 Manufacturing Grants...... 11 2.4 Domestic Production and Distribution...... 12 2.4.1 Packaging Industry...... 15 2.5 Imports and Exports...... 18 2.5.1 Imports of Plastics ...... 18 2.5.2 Exports of Plastics...... 32 3.0 Industry Players and Distribution...... 45 3.1 Current Issues and Factors Affecting the Industry...... 45 3.1.1 Plastic Shopping Bags...... 45 3.1.2 Packaging Industry...... 45 3.1.3 Closures ...... 46 3.1.4 Palletless Bulk Bags...... 48 3.2 Consumption Patterns for Household Utensils...... 49
3.3 Identification of Key Players...... 51 3.3.1 Raw Materials Suppliers...... 51 3.3.2 Key Manufacturers ...... 51 3.3.3 Key Importers ...... 57 3.3.4 Key Retailers ...... 58 3.4 Distribution Structure ...... 61 3.4.1 Plastic Bags and Film (including bulk) and Closures ...... 61 3.4.2 Geomembranes...... 61 3.4.3 Household Utensils...... 62 3.5 Product Specifications ...... 63 3.5.1 Sizing...... 63 3.5.2 Industry and Official Standards ...... 65 3.6 Pricing Review...... 68 3.6.1 Trade Tariffs and Regulations...... 70 3.6.2 Transport and Logistics...... 71 4.0 Identification of Potential Importers and Distributors...... 74 4.1 Potential Partners for Brazilian Business ...... 74 4.1.1 Importers, Wholesalers and Distributors...... 74 4.1.2 Retailers...... 83 4.2 Buying Patterns...... 90 4.3 Trade Shows and Industry Events ...... 90 4.3.1 Trade Shows...... 90 4.3.2 Institutes and Associations ...... 92 5.0 Analysis and Recommendations ...... 94
The Plastics Market in South Africa
List of Acronyms and Abbreviations
ARMSA: Association of Rotational Moulders of South Africa BBBEE: Broad-based Black Economic Empowerment BEE: Black Economic Empowerment Dti: Department of Trade and Industry EPSASA Expanded Polystyrene Association of South Africa GIGSA: International Geosynthetic Society of South Africa IPSA: Institute of Packaging of South Africa PACSA: Packaging Council of South Africa PCA: Plastics Converters Association PISA: Plastics Institute of Southern Africa PLASFED: Plastics Federation of South Africa SAPIA: South African Polymer Importers Association SAPPMA South African Plastic Pipe Manufacturers Association SARS: South African Revenue Services UN Comtrade: United Nations Commodity Trade Statistics Database
1 The Plastics Market in South Africa
1.0 Brief Background, Objectives and Methodology
1.1. Background
APEX-Brasil is the Brazilian Trade and Investment Promotion Agency responsible to insert more companies in the international market, diversify exports of goods and services, increase the amount of sales, open new markets, and consolidate current ones. The agency concentrates on the complexity of the Brazilian economy and the high sophistication level of the commercialization of goods and services in global markets, supporting Brazilian companies to be inserted in this environment. It helps preparing the companies to export, providing better business consciousness, competitiveness and productsí accordance to the international demand.
After a prospective mission to South Africa, APEX-Brazilís team found potential opportunities in the South African market for Brazilian products in a number of segments, one of which is plastics and plastic products. To confirm these opportunities, APEX-Brasil commissioned Whitehouse & Associates to provide in depth information about this sector. The following product definitions, as supplied by APEX-Brasil, have been included in this sector analysis. Please note that South Africa does not classify these products beyond six digits on the harmonised system (HS Codes):
! HS-392010 Sheet/film not cellular/reinf polymers of ethylene ! HS-392119 Sheet etc, cellular of plastics nes ! HS-392321 Sacks & bags (including cones) of polymers of ethylene ! HS-392350 Plastic stoppers, lids, caps and other closures ! HS-392410 Plastic table and kitchen ware ! HS-392490 Plastic household, toilet articles not table, kitchen ! HS-392610 Plastic office and school articles and supplies ! HS-392690 Plastic articles not elsewhere specified ! HS-630532 Sacks & bags, flexible packaging
2 The Plastics Market in South Africa
1.2. Objectives
The following information has been provided on the South African plastics market. • Market Overview and Trends o Industry Overview o Industry Policies o Domestic Production and Distribution o Imports and Exports • Industry Players and Distribution o Current Issues and Factors Affecting the Industry o Consumption Patterns o Identification of Key Players o Distribution Structure o Product Specifications (sizing, industry and official standards, packaging and labelling requirements, quality issues, key brands) • Pricing Review o Pricing Structures o Indicative Pricing Levels o Trade Tariffs and Regulations o Transport and Logistics • Identification of Potential Importers and Distributors o Potential Partners for Brazilian Business o Buying Patterns o Trade Shows and Industry Events • Analysis and Recommendations
3 The Plastics Market in South Africa
1.3. Methodology
In order to obtain the required information, the following methodology has been applied:
• Information has been extracted from various published sources including official trade and industry statistics, publications from the various industry associations, the department of trade and industry, the Reserve Bank, the South African Revenue Services, South African Bureau of Standards and various newspapers and industry journals; • Specific one-to one interviews with industry associations; • Telephonic discussions with Customs and Excise, freight forwarders and other relevant stakeholders; • Once potential importers and distributors were identified through the associations, private databases and Chambers of Commerce, Whitehouse & Associates designed a questionnaire to obtain all the required details on these companies and their specific import requirements. Where possible, these questionnaires have been completed through face-to-face interviews. Some of these interviews were conducted telephonically.
4 The Plastics Market in South Africa
2.0 Market Overview and Trends
2.1 Industry Overview
According to the Plastics Federation of South Africa, the value of the local plastics converting industry value is roughly US$4.3-US$5.0 billion. It contributes some 5% to GDP and employs around 35,000 people, with around 30,000 employees employed in the converting sector that consists of about 850 companies, many based in Gauteng. Market growth is some 4-6% per annum.
The polypropylene sector is the fastest growing sector globally and is only surpassed by the polyethylene sector in market size. The industry market split is packaging 52%, building 7%, electrical/electronic 6%, 4% each for medical, automotive, mechanical engineering and agriculture, and the rest makes up 19%.
According to research conducted by BMI Foodpack, the South African flexible plastic packaging market volume grew by 4.3% in 2006 after a decline recorded in 2005. The flexible plastic market volume remained fairly static from 2003 to 2005, only growing at an average annual rate of 0.4%. The fairly static performance of the market is attributed to the strength of the Rand that had a negative influence on the South African flexible plastic market. Raw material and more specifically, increased imports of finished product entering the country had an adverse affect on the local market. In addition, the exports of packaging and finished goods from South Africa also decreased over the same period.
Furthermore, the flexible market was notably affected in 2003 when government imposed a levy on plastic check-out bags, with the intention of reducing usage of these bags and to enhance the environment. The resultant effect was that the tonnage volume of plastic check-out bags decreased by approximately 35% from the previous volume and many jobs were lost.
5 The Plastics Market in South Africa
The good growth recorded in the South African flexible plastic market volume in 2006 is attributed to the following:
• Increased consumer spending in 2006 despite increased interest rates and rising inflation. • Aggressive crackdown by the South African Revenue Services (SARS) on illegal imports of finished product. Importers are now not able to misclassify imports to pay lower import duty. The local product manufacturers and consequently local packaging industry have benefited. • Good performance of certain end-use markets including beverages, bread bags, snack foods etc. due to warm weather, effective innovation and increased consumer spending. As a result, the related flexible plastic packaging markets have benefited. • Market recovery from the pressure and losses that the flexible plastic industry has experienced over the last few years.
6 The Plastics Market in South Africa
2.2 Demographics
South Africa has a total population of almost 47 million people spread across 12,1 million households. These are in turn spread across 9 different provinces. The country has a population growth of 0.9% which is slowing as the impact of the HIV/AIDS pandemic becomes apparent.
The difference in wealth and density of the population across the 9 provinces is marked with Gauteng being the most powerful province housing 19% of the total population and accounting for 33% of national GDP and 35% of national household expenditure and yet only covering 1% of the total land area. The average income per capita of residents of Gauteng was 93 % higher than the national average for South Africa. The other two key provinces in terms of economic activity and income are the Western Cape and KwaZulu- Natal. The importance of these three regions cannot be underestimated in determining sales and marketing strategies in South Africa.
South Africa has one of the most skewed income distribution patterns in the world, with the top 10% of the population accounting for 47% of consumption or income. A widely utilised market segmentation tool in South Africa is the Living Standards Measure (LSM) developed by the South African Advertising research Foundation (SAARF). This tool divides the population into 10 LSM groups were 10 is the highest and 1 is the lowest. The LSM measure cuts across race and other techniques of categorising people, and instead groups people according to their living standards using criteria such as degree of urbanisation and ownership of cars and major appliances. The LSM uses 29 criteria such as hot running water, electric stove, satellite TV, PC in the home and number of cell phones per household. The highest LSM group, LSM 10, accounts for 7% of total households and 31% of cash expenditure whereas the lowest LSM group, LSM 1, accounts for 8% of household and 1% of cash expenditure:
7 The Plastics Market in South Africa
Household Expenditure by LSM Group
LSM 10
LSM 9
LSM 8 LSM 7 LSM 6 Households LSM 5 Cash Expenditure
LSM 4
LSM 3 LSM 2 LSM 1
05101520253035 Source: South African Advertising and Research Foundation (SAARF)
ìBlack Diamondsî One of the drivers of growth of retail sales in South Africa is the emergence and rapid growth of an upwardly mobile middle-class consumer. Research carried out in 2007 on the growing middle class in South Africa has concluded that there are some 2.6 million ìBlack Diamondsî in South Africa, with an estimated annual spending power of US$26.4 million. ìBlack Diamondsî is a term coined by the research company, TNS Research Surveys and the UCT Unilever Institute to describe the South Africans that comprise the countryís fast-growing and affluent black middle class. This group represents 10% of the black adult population but makes up 43% of black consumer spend and 23% of total consumer spend. According to the research, the size of this group of consumers has grown by 30% over the past two years. It is estimated that 47% of Black Diamonds live in the suburbs and 53% live in the townships. (Townships were built during the apartheid area as labour reservoirs and which were not incorporated into the mainstream infrastructure of cities.)
8 The Plastics Market in South Africa
2.3 Industry Policies
2.3.1 Black Economic Empowerment (BEE)
South Africaís economy was racially divided and dominated by white owned companies for decades. Black Africans and others not classified as ëwhiteí under apartheid were excluded from virtually all sectors of the economy, in any meaningful sense. In order for South Africaís black majority to play a meaningful role in the future development and prosperity of the country, the government has drafted legislation aimed at integrating black entrepreneurs and companies into the mainstream of the economy.
The Broad-based Black Economic Empowerment Act, 2004 establishes a legislative framework for the promotion of black economic empowerment and empowers the Minister to publish transformation charters and issue codes of good practice relating to procurement criteria, indicators, weightings and guidelines. This legislation is relevant to the plastics and packaging sector in South Africa.
The key objectives of the Act are to facilitate broad-based black economic empowerment by: • promoting economic transformation in order to enable meaningful participation of black people in the economy; • achieving a substantial change in the racial composition of ownership and management structures and in the skilled occupations of existing and new enterprises; • increasing the extent to which communities, workers, cooperatives and other collective enterprises own and manage existing and new enterprises and increasing their access to economic activities, infrastructure and skills training; • increasing the extent to which black women own and manage existing and new enterprises, and increasing their access to economic activities, infrastructure and skills training;
9 The Plastics Market in South Africa
• promoting investment programmes that lead to broad-based and meaningful participation in the economy by black people in order to achieve sustainable development and general prosperity; • empowering rural and local communities by enabling access to economic activities, land, infrastructure, ownership and skills; and • promoting access to finance for black economic empowerment.
Government will use a ëbalanced scorecardí to measure progress made in achieving BEE by enterprises and sectors. The use of a common scorecard by different stakeholders provides a basic framework against which to benchmark the BEE process in different enterprises and sectors. The scorecard will measure the following core elements of BEE: • Direct empowerment through ownership and control of enterprises and assets. • Human resource development and employment equity. • Indirect empowerment through preferential procurement and enterprise development.
The scorecard also allows government departments, state-owned enterprises, and other public agencies, to align their own procurement practices and individual BEE strategies. The scorecard also facilitates the process of setting measurable targets for BEE. The scorecard will be issued as a Code of Good Practice in terms of the forthcoming enabling legislation. The code will allow for a measure of flexibility in order that it can be adapted to the particular circumstances of specific sectors or enterprises, while at the same time bringing a measure of standardisation to the definition and measurement of BEE.
The Department of Trade and Industryís (Dti) Strategy document, entitled South Africaís Economic Transformation: A Strategy for Broad-Based Black Economic Empowerment lays the foundation for the objectives and measurement of broad-based BEE in South Africa. More detail on the Broad-Based Black Economic Empowerment Strategy can be obtained from the dtiís website (http://www.thedti.gov.za/bee/BEEAct-2003-2004.pdf)
10 The Plastics Market in South Africa
2.3.2 Manufacturing Grants
The Department of Trade and Industry introduced manufacturing incentives in September 2000. This programme replaces the previous Industrial Development Programmes, which terminated in October 2000, has a significantly higher investment ceiling of R100m and attracts exceedingly Lucrative Cash Based Tax Free benefits. It is not restricted to manufacturing and also applies to expansion projects.
Establishment Grant: The grant offers a three year cash incentive on qualifying assets. The third year is subject to attaining a Human Resource remuneration ratio expressed in terms of manufacturing cost of at least 30% per annum.
Qualifying assets
Qualifying Assets for Manufacturing Incentives: South Africa Qualifying Assets Ownership Valuation Machinery and Equipment Owned or fin lease Cost Commercial Vehicles (excluding Owned or fin lease Cost Double cabs & 4x4s) Land & Buildings Owned Cost Land & Buildings Rented Capitalised annual rent * *Rental is capitalised at 15%, but subject to market valuation or related party cost
Incentives
The incentive is calculated on a sliding scale of benefit based on the level of investment in qualifying assets: Incentives for Manufacturing Level of Investment Sliding scale % of Maximum potential Max cumulative in Qualifying assets benefit incentive (R000) potential incentive below R 5m 10% p.a. R 500 R 0,5m p.a. next R 10m 6% p.a. R 600 R 1,1m p.a. next R 15m 4% p.a. R 600 R 1,7m p.a. next R 20m 3% p.a. R 600 R 2,3m p.a. next R 25m 2% p.a. R 500 R 2,8m p.a. next R 25m 1% p.a. R 250 R 3,05m p.a. Source: Department of Trade & Industry ñ South Africa
11 The Plastics Market in South Africa
Tax Status
The incentive income is exempt from Income Tax.
2.4 Domestic Production and Distribution
South Africaís total plastics market (from raw materials to converters to all other suppliers) is estimated to be worth around R33 billion (US$4.7bn) a year. There are roughly 4,000 plastics converters in South Africa, employing roughly 35,000 people. A quarter of companies are classed as medium to large converters with the balance being small and micro-enterprises.1 The industry suffered from a slight decline in the early part of the decade but has shown strong growth since then, with consumption rising steadily since 2001 to reach an estimated 1.49 million tons in 2005. Overall this is an increase of 54% over the levels of the late nineties and an increase of 63% over the 2001 figure of 912,000 tons.
Apparent Annual Consumption of Plastics Materials In South Africa: 1998-2005
1,600,000 1,400,000
1,200,000
1,000,000
800,000 600,000 400,000 200,000
- 1999 2000 2001 2002 2003 2004 2005
Note: Consumption available in volume only
The industry has been under increasing strain in recent years as imports undermine the local production base and government legislation has reduced the consumption of plastic bags by 50% from 8 billion per annum to roughly half of that through the imposition of a
1 Plastic Federation of South Africa
12 The Plastics Market in South Africa levy on the sales of these to the public. These factors have resulted in local production declining by over 40% in the last few years. As a result, the industry has become fairly protectionist. In addition, in many sectors such as packaging and related fields, there is a strong industry and government push to use local converters for products rather than imported ones.
Plastics Production and Trade: 1999-2005 (tons)
1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 - 1999 2000 2001 2002 2003 2004 2005
Local Production Imports Exports
Source: Adapted from Plastics Federation Data (published by volume only)
South Africaís production of plastic materials and goods by volume is illustrated below, with polypropylene and polyethylene products accounting for the bulk of production, with PVC products also accounting for a large share of the market. The graph below is based on local production in 2005:
13 The Plastics Market in South Africa
Locally produced Plastics: 2005
UNSAT. PET POLYESTERS POLYURETHANES 8.5% 1.8% 0.8% UF & MF & PF 0.5%
PE-HD PP 9.0% 37.9%
PVC 19.6% PE-LD & PE-LLD 21.8%
Source: Plastics Federation of South Africa
In 2005 local polymer consumption (virgin and semi-finished) reached 1,100,000 tons, with local recycled material consumption at 150,000 tons. Local polymer production stood at 1,000,000 tons, with imports of polymers at 365,000 tons. Polymer exports amounted to 265,000 tons. The local industry is highly dependent on imports of polymers (grades and types not locally made).2
The South African plastics converting sector has around 850 companies, most of which are small and medium sized enterprises and employ roughly 30,000 people. The sector has recorded sales of around R25bn (US$3.6bn). Plastics play a part in virtually every sector of the economy in South Africa, but packaging dominates the local plastics industry, accounting for 52% of the market.
2 Plastic Federation of South Africa
14 The Plastics Market in South Africa
2.4.1 Packaging Industry
The South African packaging industry as a whole went through a period of change from the mid-nineties, when the lifting of sanctions created both new opportunities for local manufacturers as well as threats to the local industry. The perceived need to develop South African companies into world-class manufacturers has led to a number of consolidations in the packaging industry, refocusing on core businesses, and relatively heavy investment in new plant and machinery. These were seen as necessary steps to
ward off international competition in a traditionally competitive market.3
According to a report by the US Commercial Service, South Africa is ranked fifth by the World Packaging Organisation (WPO) in terms of packaging standards and quality of
packaging. The countryís packaging sector is thus both competitive and sophisticated.4 According to the publisher of Packaging Review, Gill Loubser, ìpackaging in South Africa
is undoubtedly up there with the best, it is truly world-class.î5 The packaging industry covers a wide range of consumer, commercial and industrial sectors. The South African packaging industry is highly-automated, using state-of-the-art technology to manufacture modern packaging to attract consumers to products, and to keep these products moving from the shelves.
The South African packaging market is not well documented in public forums, and as such there are different estimates to the sectorsí value. The chart below reflects the estimated size and growth of the sector based on figures from a number of industry sources, including companies and industry associations.
3 International Trade Centre, Supply Survey To Increase South Africaís Participation In Development Aid Procurement, August 2002 4 US Commercial Service, Packaging Industry in South Africa, July 2003 5 Engineering News ìIndustry focusing on training and quality improvement every yearî, July 2003
15 The Plastics Market in South Africa
Estimated Value of the South African Packaging Sector: 2001- 2005
4000 3500 3000 2500 2000 1500 1000 Value (US$millions) Value 500 0 2001 2002 2003 2004 2005 Year
Source: Whitehouse & Associates
These figures appear to be relatively accurate, and indicate an industry that has grown by 53% over the last five years, or around 10% a year. Much of this is in the food and beverage packaging sectors, and relies heavily on export trade to keep increasing volumes. The chart below indicates the structure of the printing and packaging sector in South Africa. The sector is dominated numerically at least, by small companies, with payroll figures of less than R5 million (about US$720,000), although large companies such as Nampak and Astrapak and others dominate the industry as a whole and are valued at anywhere between US$30 million and US$300 million.
16 The Plastics Market in South Africa
Structure of the Broad Industry by Sector and Size
2,250 2,000
1,750 1,500 1,250 1,000 750 500 250 Number Number of Companies 0 Less than Payroll of Payroll R5 Companies R500,000 R500,001 to million and with no payroll payroll R5million more
Printing Packaging
Source: MAPPSETA Strategic Skills Plan
Put another way, large companies in the South African printing and packaging sector account for only 4.5% of the total numerically.
Structure of the Sector by Company Size: 2004
Companies with no payroll Less than 30.2% R500,000 payroll 43.7% Payroll R5 million and more 4.5% Payroll of R500,001 to R5million 21.6%
Source: MAPPSETA Strategic Skills Plan
17 The Plastics Market in South Africa
2.5 Imports and Exports
South Africaís total trade in the plastics and articles under consideration in this report have risen steadily over the last few years, from around US$140.7 million in 2002 to US$314.5 million in 2006. This represents an increase of 123% over the last five years. Total imports have grown by 140% over this period, whilst exports have grown by 91%.
Total Trade in Plastics & Articles by Value (US$): 2002-2006
350000000
300000000
250000000
200000000 150000000
Value (US$) 100000000
50000000
0 2002 2003 2004 2005 2006
Year
Imports Exports
Source: UN Comtrade
2.5.1 Imports of Plastics
The value of South Africaís imports of plastic articles has risen quickly over the last five years, up from US$93.9 million to US$225.3 million, or a rise of 140%. The largest imports are in the category plastic articles not elsewhere specified, accounting for 42% of imports, and sheets and film (not cellular), and stoppers caps and closures are the two second largest import categories at 12% each.
18 The Plastics Market in South Africa
Growth of Imports of Plastic Articles by Value: 2002-2006 Classification Value (US$í000) 2002 2006 % Growth 392010: Sheet/film not cel/reinf. polymers of ethylene 10,325 25,943 151.3 392119: Sheet etc, cellular of plastics not elsewhere spec. 4,726 8,298 75.6 392321: Sacks & bags (inc cones) of polymers of ethylene 5,918 21,970 271.2 630532: Sacks & bags, for packaging, flexible 421 - n/a 392350: Plastic stoppers, lids, caps & other closures 13,506 26,007 92.6 392410: Plastic table & kitchenware 6,185 22,767 268.1 392490: Plastic h/hold, toilet articles not table, kitchen 4,088 15,379 276.2 392610: Plastic office & school articles & supplies 4,065 10,617 161.2 392690: Plastic articles not elsewhere specified 44,730 94,349 110.9 Total 93,969 225,333 139.8 Source: UN Comtrade
2.5.1.1 Imports of Sheet or film not cellular or reinforced polymers of ethylene (HS392010)
South Africaís imports of this plastic film and sheet have grown steadily over the last five years, increasing from a value of US$10.3 million to US$25.9 million or an increase of 151%. This is mainly due to a sharp rise in per unit cost, with imports rising from US$1.99/kg to US$3.05/kg, a climb of 53% over the five years.
Imports of sheet of film not cellular or reinforced polymersof ethynol 2002-2006
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000 Value (US$) 5,000,000
- 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
19 The Plastics Market in South Africa
South Africa imports these plastics from a large number of countries, although Germany was the key supplier in 2006, with 33% of the total. The UK was the second largest supplier with 9% overall, followed by Argentina at 7%, and France, USA and Israel at 5% respectively. Brazil was the tenth largest supplier with 3% of the market.
Of the top ten suppliers, the countries that have enjoyed the biggest growth in exports to South Africa between 2002 and 2006 are Israel (1821%), Sweden (1130%), and Germany (533%). The value of Brazilís exports grew by 344%.
Imports of Sheet or film not cellular or reinforced polymers of ethylene by value (US$): 2002-2006 2002 2003 2004 2005 2006 % Share Growth 2002-06 Total 10,325,505 13,210,145 15,753,984 21,019,439 25,943,018 100.0 151.3 Germany 1,336,894 2,149,347 4,518,476 7,002,973 8,457,079 32.6 532.6 UK 957,239 1,097,819 1,353,589 1,639,101 2,287,236 8.8 138.9 Argentina - 8,111 426,274 923,932 1,794,734 6.9 n/a France 362,582 679,391 719,196 1,357,952 1,407,085 5.4 288.1 USA 1,102,926 1,512,035 1,798,891 1,170,602 1,394,740 5.4 26.5 Israel 72,412 306,147 367,764 1,568,256 1,390,889 5.4 1820.8 Sweden 90,879 169,822 205,056 1,165,164 1,118,212 4.3 1130.4 Italy 946,555 1,632,086 1,153,137 742,663 889,247 3.4 -6.1 Rep. Korea 348,772 377,289 304,827 349,799 806,285 3.1 131.2 Belgium 524,369 696,893 474,576 539,132 733,782 2.8 39.9 Brazil 161,005 214,751 295,517 277,176 714,654 2.8 343.9 Austria 225,885 51,717 475,459 847,613 707,029 2.7 213.0 Taiwan 488,869 150,220 236,946 335,151 686,291 2.6 40.4 Australia 29,188 29,673 29,535 73,982 572,781 2.2 1862.4 China 75,172 66,645 251,912 362,717 535,749 2.1 612.7 Netherlands 107,255 156,666 180,667 291,483 496,184 1.9 362.6 Spain 79,091 77,059 229,267 481,393 414,714 1.6 424.4 Canada 51,743 163,858 619,807 649,353 380,215 1.5 634.8 Denmark 1,312,269 924,651 1,046,561 145,005 344,894 1.3 -73.7 Other 2,052,400 2,745,965 1,066,527 1,095,992 811,218 3.1 -60.5 Source: UN Comtrade
20 The Plastics Market in South Africa
2.5.1.2 Import of Sheet etc, cellular of plastics nes (HS-392119)
Imports rose from US$4.7 million to US$8.3 million over the five years, an increase of 76%. Most of this growth occurred between 2003 and 2004, and thereafter the import market levelled out. The slower growth in imported value has seen the unit cost of imports decline by 28% over the period from US$4.29/kg to US$3.08/kg.
Sheets etc, cellular of plastics, other
9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000
Value (US$) 3,000,000 2,000,000 1,000,000 - 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
In 2006, the Republic of Korea, with 18% of the overall market, was the key supplier of these goods to South Africa. The second biggest supplier was India with a 15% share, followed by USA at 12%, Germany at 11% and China and Thailand at 6% respectively. Of the top ten suppliers, Malaysia and Republic of Korea have experienced the largest growth of imports to South Africa between 2002 and 2006.
In 2003, Brazil supplied US$312,600 worth of products to South Africa. However, in 2006 this had declined to only US$1,223.
21 The Plastics Market in South Africa
Import of Sheet etc, cellular of plastics nes by value (US$): 2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 4,726,498 5,345,425 7,859,949 7,939,379 8,298,268 100.0 75.6 Rep. Korea 50,179 76,581 433,723 965,774 1,505,214 18.1 2899.7 India 363,515 385,150 745,969 941,079 1,263,958 15.2 247.7 USA 801,842 342,061 614,796 781,821 1,001,984 12.1 25.0 Germany 1,710,031 1,922,993 2,141,874 675,860 906,084 10.9 -47.0 China 68,935 244,284 973,242 790,116 491,700 5.9 613.3 Thailand 197,895 363,506 211,624 506,341 489,264 5.9 147.2 UK 293,902 431,131 971,671 1,125,386 465,580 5.6 58.4 Malaysia 1,779 19,061 177,487 326,800 463,538 5.6 25956.1 Turkey - - - - 415,507 5.0 n/a France 33,434 54,302 232,549 162,310 218,361 2.6 553.1 Italy 356,720 226,883 234,592 336,172 195,785 2.4 -45.1 Viet Nam - - - - 191,678 2.3 n/a Netherlands 85,249 107,940 117,238 73,116 120,547 1.5 41.4 Israel 14,152 17,237 33,028 248,308 98,521 1.2 596.2 Austria 90,053 110,332 101,586 125,138 92,101 1.1 2.3 Brazil 3,046 312,606 213,802 98,475 1,223 0.0 -59.8 Other 655,766 731,358 656,768 782,683 377,223 4.5 -42.5
2.5.1.3 Imports of Sacks & bags (including cones) of polymers of ethylene (HS-392321)
South Africaís imports of sacks and bags used for both industrial purposes and supermarket and T-shirt bags have increased dramatically during the 4 year period 2003 to 2006. Since 2004 and the introduction of new legislation governing plastic shopping bags, imports have increased sharply. Overall, imports have increased from a value of US$5.9 million to almost US$22 million, or by 271%.
The unit price has increased slightly from US$1.87/kg to US$2.05/kg, a rise of 9% over the period, but has been fairly steady at just over US$2/kg for the last three years.
22 The Plastics Market in South Africa
Imports of sacks & bags (including cones) of polymers of ethylene: 2002-2006
25,000,000
20,000,000
15,000,000
10,000,000 Value (US$) 5,000,000
- 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
China and Malaysia have accounted for the bulk of the growth in imports, with Singapore entering as a supplier of consequence in the last two years. Singaporeís growth in exports for the 5-year period was 6345% while Chinaís growth was 1002% and Malaysiaís growth was 702%. In 2005, Brazilís supply to South Africa was valued at US$299,523. However this dropped to US$3,997 in 2006.
Imports of Sacks & bags (including cones) of polymers of ethylene (HS-392321) Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 5,918,464 5,186,303 7,581,517 15,085,061 21,970,647 100.0 271.2 China 544,628 918,963 1,622,054 3,987,680 6,000,723 27.3 1001.8 Malaysia 678,638 867,227 1,332,073 4,484,210 5,442,222 24.8 701.9 Singapore 74,388 46,985 132,254 1,390,399 4,793,991 21.8 6344.6 Hong Kong 118,021 82,783 144,644 346,897 1,140,409 5.2 866.3 Israel 479,665 440,864 348,781 743,188 735,010 3.3 53.2 New Zealand 222,491 214,260 263,177 456,706 494,800 2.3 122.4 Netherlands 386,555 239,629 621,548 632,856 489,547 2.2 26.6 Thailand 134,005 107,598 113,795 203,241 346,492 1.6 158.6 Argentina - - 10,621 71,533 273,416 1.2 n/a Spain 143,054 19,112 589,040 481,637 268,124 1.2 87.4 Germany 251,605 169,783 93,999 91,958 261,243 1.2 3.8 UK 428,636 375,698 576,107 193,970 256,474 1.2 -40.2 France 384,851 489,767 252,912 440,105 210,252 1.0 -45.4 Brazil - - 298 299,523 3,997 0.0 n/a Other 2,071,927 1,213,634 1,480,214 1,261,158 1,253,947 5.707374 -39.4792 Source: UN Comtrade
23 The Plastics Market in South Africa
2.5.1.4 Imports of Sacks and bags, for packaging, flexible (HS-6305.32)
South Africaís imports of flexible intermediate bulk containers have been insignificant over the last five years, and stopped altogether in 2005 and 2006. It is possible that they been moved into another category, but they were very small in any case, valued at US$190,116 in 2004.
Imports of sacks & bags, for packaging, flexible: 2002- 2006
600,000
500,000
400,000
300,000
200,000 Value (US$) 100,000
- 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
Over the period in question, only the UK supplied regular quantities of these containers into South Africa, with Poland, China and Turkey supplying small quantities as well.
Imports of sacks and bags for packaging, flexible by Value (US$): 2002-2004 Partner 2002 2003 2004 % Share Total 421,777 553,584 190,116 100.0 Poland - - 71,639 37.7 UK 398,516 413,475 65,159 34.3 China 13,819 - 43,586 22.9 Turkey - 7,521 8,188 4.3 Belgium - - 717 0.4 Kenya - - 389 0.2 Thailand - - 207 0.1 Pakistan - - 206 0.1 Germany - - 18 0.0 Netherlands 9,305 122,426 7 0.0
24 The Plastics Market in South Africa
Imports of sacks and bags for packaging, flexible by Value (US$): 2002-2004 Partner 2002 2003 2004 % Share Total 421,777 553,584 190,116 100.0 Brazil - 4,516 - 0.0 Switzerland - 3,135 - 0.0 Hong Kong - 1,382 - 0.0 France - 670 - 0.0 Other 137 459 - 0.0 Source: UN Comtrade
2.5.1.5 Imports of Plastic stoppers, lids, caps and other closures (HS-3923.50)
Imports of plastic lids and other closures have grown steadily in the last five years, growing by 93% in value from US$13.5 million to US$26 million. The unit cost of imported closures has remained fairly steady, growing by only 5% over the five years, increasing from US$5.06/kg to US$5.32/kg.
Imports of plastic stoppers, lids, caps and other closures: 2002-2006
30,000,000
25,000,000 20,000,000
15,000,000
10,000,000 Value (US$)
5,000,000
- 2002 2003 2004 2005 2006 Year
Source: UN Comtrade
In 2006, USA was South Africaís main supplier of plastic closures, accounting for 23% of the overall market, followed by Italy with 10% of the market overall, and Spain, UK, Australia and Germany with 8% respectively. Amongst the key suppliers, Spain has shown the highest growth over the five years, followed by Italy and France. In 2006, Brazil supplied South Africa with US$83,064 worth of products.
25 The Plastics Market in South Africa
Imports of plastic stoppers, lids, caps and other closures by Value (US$): 2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 13,506,639 15,864,531 19,733,960 23,145,094 26,007,107 100.0 92.6 USA 6,324,691 5,660,266 5,425,264 7,818,296 6,013,864 23.1 -4.9 Italy 726,122 1,541,029 1,849,476 2,822,943 2,550,178 9.8 251.2 Spain 231,335 287,813 573,462 509,732 2,193,654 8.4 848.3 UK 796,551 1,125,261 1,377,147 1,587,437 2,173,684 8.4 172.9 Australia 1,637,027 2,214,235 2,261,532 2,011,063 2,143,634 8.2 30.9 Germany 1,162,989 1,455,975 1,724,679 1,850,624 2,138,097 8.2 83.8 France 622,736 837,247 1,837,140 1,621,600 1,945,770 7.5 212.5 Sweden 554,636 435,022 404,257 491,652 1,316,565 5.1 137.4 Netherlands 348,590 645,908 887,206 818,335 1,092,853 4.2 213.5 Switzerland 130,566 70,925 77,843 49,222 525,417 2.0 302.4 Israel 113,109 329,698 942,468 756,032 474,536 1.8 319.5 China 203,775 431,678 558,985 306,708 407,459 1.6 100.0 India 93,397 170,662 145,128 150,379 381,735 1.5 308.7 Ireland 39,521 5,641 226,390 265,711 264,867 1.0 570.2 Egypt 4,718 - 44,925 83,006 251,816 1.0 5237.3 Brazil 45,726 1,046 11,718 14,394 83,064 0.3 81.7 Other 471,150 652,125 1,386,340 1,987,960 2,049,914 7.88213 335.0873 Source: UN Comtrade
2.5.1.6 Imports of Plastic table and kitchenware (HS-3924.10)
South Africaís imports of plastic table and kitchenware have shown steady, quick growth over the last five years. Imports by value rose from US$6.2 million to US$22.8 million over the five years, or an increase of 268%. In unit cost terms, this rise in imports equated to a 64% increase over the five years, up from US$1.86/kg to US$3.04/kg.
26 The Plastics Market in South Africa
Imports of plastic table and kitchenware: 2002-2006
25,000,000
20,000,000
15,000,000
10,000,000 Value (US$)
5,000,000
- 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
Asian supplies dominate this sector, with China in particular a key supplier, accounting for 53% of the total market. Thailand is the second largest supplier with 15% of the total, followed by India with 6% of the overall market in value terms. Each of these countries has shown good growth, particularly India. Brazil supplied South Africa with products valued at US$490,927 in 2006. Brazilís exports to South Africa have grown by 71,673% over the five year period.
Imports of plastic table and kitchenware by value (US$): 2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 6,185,711 8,106,900 13,687,224 18,108,732 22,767,813 100.0 268.1 China 2,309,903 3,420,799 5,558,339 7,990,612 12,090,301 53.1 423.4 Thailand 1,479,954 2,055,041 3,355,119 3,901,599 3,511,816 15.4 137.3 India 88,010 363,577 828,169 1,121,419 1,329,335 5.8 1410.4 USA 548,982 458,692 753,076 803,090 878,972 3.9 60.1 Hong Kong 463,621 493,564 741,491 974,785 822,151 3.6 77.3 Taiwan 363,486 483,395 580,328 519,271 614,554 2.7 69.1 Brazil 684 4,785 110,356 147,953 490,927 2.2 71673.0 UK 87,116 65,683 47,375 117,354 430,474 1.9 394.1 Rep Korea 97,976 55,818 197,013 293,273 390,429 1.7 298.5 Italy 227,558 194,256 357,894 315,341 271,653 1.2 19.4 Belgium 24,744 23,061 182,534 135,302 265,732 1.2 973.9 Other 493,677 488,229 975,530 1,788,733 1,671,469 7.3 238.6 Source: UN Comtrade
27 The Plastics Market in South Africa
2.5.1.7 Imports of Plastic household, toilet articles not table, kitchen (HS-3924.90)
South Africaís imports of household and toilet plastic articles have shown steady growth in the last five years. In value terms, imports have risen from US$4.1 million to US$15.4 million over the five year period, an increase of 276%. Unit costs have increased each year, rising by 30% over the period from US$2.49/kg to US$3.24/kg.
Imports of plastic household, toilet articles not table, kitchen: 2002-2006
18,000,000 16,000,000 14,000,000
12,000,000
10,000,000
8,000,000
6,000,000 Value(US$) 4,000,000 2,000,000 - 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
China is the key supplier of household plastics in this category and has been for several years now. China accounts for 60% of the overall market, with Thailand, Hong Kong, United Kingdom and Taiwan as the only other significant suppliers.
The overall growth of this category of products has risen by 276% over the five year period, while imports from China rose by 425% and from Thailand by 240%. Imports from Brazil accounted for 0.3% of the total imports in 2006, and were valued at US$52,382.
28 The Plastics Market in South Africa
Imports of plastic household, toilet articles not table, kitchen by value (US$): 2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 4,088,279 5,337,313 6,927,920 9,898,447 15,379,474 100.0 276.2 China 1,745,089 2,272,326 2,905,876 4,734,318 9,162,643 59.6 425.1 Thailand 540,450 527,917 974,552 1,070,530 1,835,526 11.9 239.6 Hong Kong 237,387 442,521 282,201 366,377 685,622 4.5 188.8 UK 216,158 259,971 174,183 498,614 526,858 3.4 143.7 Taiwan 245,148 328,310 350,119 416,334 479,747 3.1 95.7 USA 454,730 578,528 663,082 534,817 433,084 2.8 -4.8 India 23,237 66,314 253,776 878,162 331,638 2.2 1327.2 Italy 140,447 153,473 156,443 296,444 320,640 2.1 128.3 Rep. Korea 42,617 72,426 257,887 287,317 268,980 1.7 531.2 Israel 12,837 62,303 151,931 150,480 217,576 1.4 1594.9 France 22,704 6,415 30,024 19,750 187,199 1.2 724.5 Germany 100,620 122,228 92,412 79,490 185,214 1.2 84.1 Malawi 557 24,398 107,306 80,916 0.5 14427.1 Indonesia 49,472 27,081 92,131 54,031 79,343 0.5 60.4 UAE 22,872 8,488 87,278 42,255 67,449 0.4 194.9 Brazil 736 3,188 19,852 9,188 52,382 0.3 7017.1 Other 233,218 405,824 411,775 353,034 464,657 3.0 99.2 Source: UN Comtrade
2.5.1.8 Imports of Plastic office and school articles and supplies (HS-3926.10)
Imports of plastic office and school articles showed good growth from 2002 to 2005, before levelling out. In value terms, imports have risen from US$4.1 million to US$10.6 million, an increase of 161% over the five years. The average unit cost of office and school plastic items has risen slightly over the five years, up by 13% from US$2.82/kg to US$3.18/kg.
29 The Plastics Market in South Africa
Imports of plastic office & school articles & supplies: 2002-2006
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000 Value(US$)
2,000,000
- 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
In 2006, China accounted for 67% of the total market, and Taiwan accounted for a further 11%. China increased its market share in 2006 over the average, with a growth of 476% over the five year period.
Imports of Plastic office and school articles and supplies by value (US$): 2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 4,065,841 5,533,803 8,364,759 10,042,626 10,617,990 100.0 161.2 China 1,229,532 3,048,719 4,415,508 6,245,318 7,083,091 66.7 476.1 Taiwan 531,730 520,713 768,871 1,348,153 1,142,921 10.8 114.9 Germany 224,780 304,918 300,885 311,852 376,458 3.5 67.5 Hong Kong 181,273 232,014 438,474 368,085 272,002 2.6 50.1 Rep. Korea 133,510 55,232 52,878 143,336 221,945 2.1 66.2 Austria 245,722 384,300 533,295 214,016 212,527 2.0 -13.5 Thailand 2,335 124,369 48,249 90,458 200,155 1.9 8471.9 UK 43,025 96,003 262,534 75,284 197,297 1.9 358.6 Malaysia 654,645 43,642 191,182 187,740 114,980 1.1 -82.4 Poland 31,618 24,546 369,292 71,484 113,262 1.1 258.2 USA 113,506 90,017 97,294 137,102 112,601 1.1 -0.8 Japan 68,888 200,778 305,793 223,272 103,759 1.0 50.6 Other 605,277 408,552 580,504 626,526 466,992 4.4 -22.8
Source: UN Comtrade
30 The Plastics Market in South Africa
2.5.1.9 Imports of Plastic articles not elsewhere specified (HS-3926.90)
This is the largest category of plastic imports in this survey and includes a very wide variety of goods. The value of imports has more than doubled, rising by 111% from US$44.7 million to US$94.3 million over the five years. Unit costs have, on balance, remained fairly steady declining by 4.5% over the five years or by less than 1% a year, from US$6.32/kg to US$6.03/kg.
Imports of plastic other articles: 2002-2006
100,000,000 90,000,000 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000
Value(US$) 30,000,000 20,000,000 10,000,000 - 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
China is the leading supplier of these plastic articles to South Africa and accounted for 20% of the overall market from 2002 to 2006. Germany is the second largest exporter with 17% overall. Of the key suppliers, Spain has shown the highest growth at 1097%, followed by China at 351% and UK at 114%.
Imports of Plastic articles not elsewhere specified by Value (US$): 2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 44,730,848 49,946,572 65,063,248 83,500,601 94,349,376 100.0 110.9 China 4,113,034 5,323,031 8,547,594 15,123,281 18,545,152 19.7 350.9 Germany 9,980,260 11,600,106 13,820,999 16,437,096 15,836,567 16.8 58.7 USA 8,099,679 7,867,381 8,405,496 8,607,248 10,861,250 11.5 34.1 UK 3,534,283 3,890,552 4,491,733 8,011,260 7,559,323 8.0 113.9 Spain 418,489 584,282 1,304,284 3,358,372 5,008,761 5.3 1096.9
31 The Plastics Market in South Africa
Imports of Plastic articles not elsewhere specified by Value (US$): 2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Italy 2,413,793 2,895,606 4,026,563 3,659,066 4,438,805 4.7 83.9 France 3,122,946 2,254,322 2,903,160 2,811,741 4,141,780 4.4 32.6 Japan 2,515,675 1,857,493 2,713,887 3,702,042 3,658,156 3.9 45.4 Taiwan 1,480,066 1,657,853 2,266,096 2,757,363 3,016,093 3.2 103.8 Rep. Korea 951,336 1,373,254 1,579,852 2,023,859 2,520,209 2.7 164.9 Thailand 344,660 646,518 1,044,714 2,101,092 2,489,206 2.6 622.2 Hong Kong 1,042,134 1,467,858 1,714,473 1,696,447 1,586,173 1.7 52.2 Netherlands 596,793 646,435 1,200,850 1,156,917 1,335,475 1.4 123.8 Austria 922,911 1,244,130 1,379,495 1,661,542 1,308,987 1.4 41.8 India 287,614 410,205 872,547 915,216 1,112,701 1.2 286.9 Greece 41,591 87,507 118,842 137,220 1,002,505 1.1 2310.4 Australia 413,619 695,554 738,787 1,419,548 1,000,017 1.1 141.8 Other 4,451,965 5,444,485 7,933,876 7,921,291 8,928,216 9.5 100.5 Source: UN Comtrade
2.5.2 Exports of Plastics
The value of South Africaís exports of plastic articles has risen over the last five years from US$46.7 million to US$89.2 million, or a rise of 91%. The largest exports are in the category plastic articles not elsewhere specified, accounting for 40% of exports in the categories under consideration in 2006, with sacks and bags of polymers of ethylene the second largest export category at 15%, followed by sheets and film (not cellular) at 13%, and stoppers, caps and closures at 11%.
Growth of Exports of Plastic Articles by Value: 2002-2006 Value (US$í000) 2002 2006 % Growth 392010: Sheet/film not cel/reinf. polymers of ethylene 1,871 11,252 501.4 392119: Sheet etc, cellular of plastics not elsewhere spec. 3,480 3,843 10.4 392321: Sacks & bags (inc cones) of polymers of ethylene 7,146 12,910 80.7 630532: Sacks & bags, for packaging, flexible 475 - n/a 392350: Plastic stoppers, lids, caps & other closures 5,544 10,139 82.9 392410: Plastic table & kitchenware 2,040 3,425 67.9 392490: Plastic h/hold, toilet articles not table, kitchen 4,211 2,714 -35.5 392610: Plastic office & school articles & supplies 1,686 8,941 430.3 392690: Plastic articles not elsewhere specified 20,265 35,963 77.5 Total 46,722 89,191 90.9 Source: UN Comtrade
32 The Plastics Market in South Africa
2.5.2.1 Exports of Sheet or film not cellular or reinforced polymers of ethylene (HS392010)
South Africaís exports of sheet or film in this category have shown strong growth, albeit off a relatively small base. In value terms exports increased from US$1.9 million to US$11.3 million, an overall increase of 501%. The unit costs of South Africaís exported sheet and film have also increased quite substantially, up by 63% from US$1.39/kg to US$2.27/kg over the period.
Exports of sheet or film not cellular or reinforced polymers
of ethylene: 2002-2006
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000 Value (US$) 2,000,000 -
2002 2003 2004 2005 2006 Year
Source: UN Comtrade
South Africa exports this plastic to a wide variety of countries, largely, but not exclusively, in Africa. Zimbabwe is South Africaís key destination for these goods despite the current economic difficulties being experienced in that country, accounting for 26% of the 2006. The UK was the second largest destination at 13%, followed by Zambia at 9%. Of the key destinations, the growth in exports has increased significantly to Kenya, Seychelles, and Zimbabwe.
33 The Plastics Market in South Africa
Exports of Sheet or film not cellular or reinforced polymers of ethylene by Value (US$):2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 1,871,381 3,881,341 7,778,220 10,466,853 11,252,637 100 501.3 Zimbabwe 395,925 407,507 2,155,696 1,861,265 2,916,857 25.9 636.7 UK - 8,356 240,470 1,493,518 1,511,212 13.4 n/a Zambia 179,301 156,739 575,614 156,216 982,271 8.7 447.8 Mozambique 112,922 590,816 896,804 414,251 773,470 6.9 585.0 Kenya 13,111 41,592 371,570 799,204 722,356 6.4 5,409.5 Mauritius 288,515 717,971 429,584 830,007 678,147 6.0 135.0 Seychelles 17,313 139,665 416,011 850,925 612,171 5.4 3,435.9 Saudi Arabia - - - 28,705 552,616 4.9 n/a Tanzania 18,527 124,266 163,116 343,685 412,331 3.7 2,125.6 Turkey - - - 409,923 401,648 3.6 n/a UAE 3,010 - 25,632 136,262 378,188 3.4 12,464.4 Ghana - - 85,270 288,332 208,288 1.9 n/a Spain 27,210 - - - 160,033 1.4 488.1 Nigeria 3,687 123,482 57,371 123,450 148,048 1.3 3,915.4 Chile 79,602 64,614 54,340 322,637 114,625 1.0 44.0 Malawi 338,503 217,549 85,126 160,782 107,899 1.0 -68.1 Singapore 150,157 1,055,415 1,618,643 946,052 98,076 0.9 -34.7 Other 243,598 233,369 602,973 1,301,639 474,401 4.21591 94.747494 Source: UN Comtrade
2.5.2.2 Exports of Sheet etc, cellular of plastics nes (HS-3921.19)
South Africaís exports of cellular plastic sheets in this category have not been very stable in the last five years. In value terms, exports grew from US$3.5 million to US$5.1 million in 2004, before declining to US$3.8 million by 2006. Unit costs have generally fluctuated between US$3.10/kg and US$3.60/kg, with one or two years below US$3/kg.
Exports of sheets etc, cellular of plastics: 2002-2006
6000000
5000000
4000000
3000000 Series1
Value (US$) 2000000
1000000
0 2002 2003 2004 2005 2006 Year
Source: UN Comtrade
34 The Plastics Market in South Africa
South Africaís key destinations for these goods are the UK, Germany and the Netherlands, accounting for 34%, 11% and 8% in 2006 respectively. Exports to the UK have grown substantially over the last five years. Off low bases, exports to the Netherlands and Tanzania have also grown significantly.
Exports of sheets etc, cellular of plastic, nes by Value (US$): 2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 3,480,876 3,761,221 5,100,382 4,862,949 3,843,974 100 10.4 UK 246,784 328,677 1,111,102 1,546,152 1,311,454 34.1 431.4 Germany 1,098,078 690,317 529,151 322,820 425,969 11.1 -61.2 Netherlands 2,231 - 219,145 355,139 310,736 8.1 13,828.1 USA 121,496 283,821 293,925 250,839 243,563 6.3 100.5 Zimbabwe 260,740 320,901 850,325 205,107 192,691 5.0 -26.1 Tanzania 4,694 31,542 137,977 56,871 127,421 3.3 2,614.6 Mozambique 133,511 465,696 173,273 193,275 113,005 2.9 -15.4 Australia 407,915 201,314 165,847 149,492 108,771 2.8 -73.3 Angola 39,309 31,299 240,761 14,906 104,495 2.7 165.8 Denmark 42,371 44,402 24,903 32,614 101,824 2.6 140.3 Canada 17,063 78,578 97,715 115,894 84,414 2.2 394.7 Ghana 36,713 44,980 30,691 15,161 83,009 2.2 126.1 Nigeria 27,205 16,191 46,329 340,447 80,900 2.1 197.4 Zambia 94,225 180,533 33,238 205,509 78,254 2.0 -16.9 Other 948,541 1,042,970 1,146,000 1,058,723 477,468 12.4 -49.7 Source: UN Comtrade
2.5.2.3 Exports of Sacks & bags (including cones) of polymers of ethylene (HS-3923.21)
South Africaís exports of sacks and bags of polymers of ethylene collapsed in 2003. In value terms, South Africaís exports initially dropped, from US$7.1 million in 2002 to US$3.4 million in 2003, but have recovered dramatically since then to reach US$14.6 million in 2005, before falling back to US$12.9 million in 2006. The unit costs have shown a general upward trend, from US$0,87/kg in 2002 to US$3.25kg in 2006, having peaked at US$4.17/kg in 2005.
35 The Plastics Market in South Africa
Exports of sacks & bags (including cones) of polymers of ethylene: 2002-2006
16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 Value(US$) 4,000,000 2,000,000 - 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
The USA, Australia, Belgium, Zimbabwe, and Mozambique are the key destinations for South Africaís exports in 2006. The key destinations with the highest growth rates over the 5 year period are Australia (off a low base), Mozambique and Zimbabwe.
Exports of sacks and bags (including cones) of polymers of ethylene by Value (US$): 2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 7,146,356 3,424,243 11,021,159 14,593,602 12,910,362 100.0 80.7 USA 547,291 405,680 2,392,940 2,453,193 2,407,482 18.6 339.9 Australia 3,810 15,955 891,308 1,202,676 1,540,082 11.9 40,322.1 Belgium 630,092 1,187,695 1,384,728 10.7 n/a Zimbabwe 101,056 275,931 1,048,907 809,096 941,079 7.3 831.2 Mozambique 70,282 395,048 465,627 924,705 810,549 6.3 1,053.3 Cameroon 178,479 577,988 772,102 566,379 4.4 n/a India 491,604 484,054 358,480 335,381 487,095 3.8 -0.9 Chile 16,211 363,169 148,766 439,926 3.4 n/a Spain 981 146,579 544,750 427,115 3.3 n/a Angola 12,552 102,535 218,598 365,888 391,519 3.0 3,019.2 Zambia 109,173 321,777 832,088 417,348 380,712 2.9 248.7 Argentina 1,358 4,305 126,696 413,014 363,163 2.8 26,642.5 UK 4,894,477 204,219 436,999 572,080 309,047 2.4 -93.7 Nigeria 59,244 53,577 31,958 276,788 289,476 2.2 388.6 Italy 163,916 420,414 274,822 2.1 n/a Malawi 68,854 138,314 198,121 227,846 261,520 2.0 279.8 Other 786,655 827,177 2,137,693 3,521,860 1,635,668 12.7 107.9 Source: UN Comtrade
36 The Plastics Market in South Africa
2.5.2.4 Exports of Sacks and bags, for packaging, flexible (HS-6305.32)
The value of South Africaís exports of these bags increased from around US$475,511 in 2002 to US$796,125 in 2004 before disappearing altogether in 2005. Once again, changes in legislation are likely to have played a role, as it did with imports of these items.
South Africaís exports of these items were almost exclusively to the region whilst they existed, with the USA being the notable exception to this rule.
Exports of sacks & bags, for packaging, flexible 2002-2006
900,000
800,000 700,000 600,000 500,000 400,000
Value (US$) 300,000 200,000 100,000 - 2002 2003 2004 2005 2006
Year
Source UN Comtrade
Exports of sacks and bags, for packaging, flexible by Value (US$): 2002-2006 Growth 2002- Partner 2002 2003 2004 % Share 2004 Total 475,511 745,048 796,125 100.0 67.4 Mauritius 176,127 283,608 334,179 42.0 89.7 USA 194,824 163,480 158,061 19.9 -18.9 DRC - 11,474 120,679 15.2 n/a Zimbabwe 1,409 - 89,369 11.2 6,242.7 Mozambique 79,347 145,933 42,252 5.3 -46.8 UK 14,843 2,551 16,136 2.0 8.7 Zambia 5,910 7,825 15,134 1.9 156.1 Other 3,051 130,177 20,315 2.6 565.8 Source: UN Comtrade
37 The Plastics Market in South Africa
2.5.2.5 Exports of Plastic stoppers, lids, caps and other closures (HS-3923.50)
South Africaís exports of plastic stoppers and others closures have been inconsistent over the last five years, ranging between US$5.5 million to US$10.1 million during this period. Exports increased significantly in 2003, and then declined in 2004. For the last two periods, exports have grown. Total growth for the five year period was 83%.
Exports of plastic stoppers, lids, caps and other closures: 2002-2006
12,000,000
10,000,000
8,000,000
6,000,000
Value (US$) 4,000,000
2,000,000
- 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
Zambia, Angola and Zimbabwe are the three key markets for South African plastic stoppers and related closures. Angola is emerging as a key market for South African suppliers.
Exports of plastic stoppers, lids, caps and other closures by value (US$): 2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 5,544,385 9,447,376 8,085,925 9,048,057 10,139,379 100.0 82.9 Zambia 542,322 857,257 977,133 1,538,787 1,654,527 16.3 205.1 Angola 6,293 55,680 243,005 421,308 1,235,844 12.2 19,538.4 Zimbabwe 625,372 982,538 1,253,145 1,690,691 1,057,167 10.4 69.0 USA 1,763,642 2,970,155 1,164,843 622,381 550,935 5.4 -68.8 Sweden - 12,968 - - 499,681 4.9 n/a Madagascar 307,884 560,167 470,855 376,484 439,684 4.3 42.8 Mozambique 205,080 748,855 502,674 471,804 438,056 4.3 113.6 UK 41,546 94,968 838,954 106,077 354,086 3.5 752.3 Netherlands 26,731 24,067 4,046 138,290 350,136 3.5 1,209.8
38 The Plastics Market in South Africa
Exports of plastic stoppers, lids, caps and other closures by value (US$): 2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Australia 88,552 241,718 99,954 160,512 343,433 3.4 287.8 Seychelles 16,574 76,228 66,260 104,687 279,082 2.8 1,583.9 Nigeria 424,758 721,885 403,618 1,071,439 274,746 2.7 -35.3 Chile - - - 50,012 246,706 2.4 n/a Mauritius 458,061 717,098 692,840 367,789 226,117 2.2 -50.6 DRC 24,905 53,981 57,109 165,526 175,948 1.7 606.5 Ghana 75,994 57,868 81,689 30,280 150,699 1.5 98.3 Other 936,671 1,271,943 1,229,800 1,731,990 1,862,532 18.4 98.8 Source: UN Comtrade
2.5.2.6 Exports of Plastic table and kitchenware (HS-3924.10)
South Africaís exports were in the US$2 million to US$2.5 million range until 2005, when they rose to US$6.2 million, before falling back to US$3.4 million in 2006. In unit cost terms, they rose steadily from US$2.25/kg to US$7.57/kg in 2005 before falling back below US$4.70/kg.
Exports of plastic table & kitchenware: 2002-2006
7,000,000
6,000,000
5,000,000
4,000,000 3,000,000 Value (US$) 2,000,000
1,000,000
- 2002 2003 2004 2005 2006 Year
Source: UN Comtrade
39 The Plastics Market in South Africa
Although South Africa exports these items broadly, the largest and most consistent markets are exports into other African countries, notably in the SADC region. Non- African export markets include USA, and UK.
Exports of plastic table and kitchenware by Value (US$): 2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 2,040,406 2,410,248 2,013,792 6,209,862 3,425,853 100.0 67.9 Zambia 224,992 247,730 212,562 331,933 467,361 13.6 107.7 Angola 183,395 256,402 285,088 421,018 323,452 9.4 76.4 Mozambique 182,609 162,447 135,813 242,143 240,931 7.0 31.9 Tanzania 102,338 90,757 95,102 96,400 213,000 6.2 108.1 Kenya 85,244 49,553 34,401 9,075 200,694 5.9 135.4 Mauritius 131,340 394,802 206,945 3,489,024 170,917 5.0 30.1 USA 49,584 53,064 191,224 188,488 140,064 4.1 182.5 Uganda 47,984 45,211 65,412 77,756 134,131 3.9 179.5 Malawi 138,839 99,494 80,427 96,791 131,082 3.8 -5.6 Zimbabwe 127,938 143,123 136,097 96,307 129,992 3.8 1.6 Cameroon 991 - 21,350 20,010 110,772 3.2 11,077.8 UK 161,912 223,672 233,020 225,177 108,239 3.2 -33.1 Djibouti 1,528 3,840 399 - 102,953 3.0 6,637.8 Nigeria 94,150 65,342 22,508 29,469 77,065 2.2 -18.1 Gabon 1,625 5,913 174 99,351 75,746 2.2 4,561.3 Other 505,937 568,898 286,950 732,555 553,789 23.4 9.5 Source: UN Trade
2.5.2.7 Exports of Plastic household, toilet articles not table, kitchen (HS-3924.90)
South Africaís exports of plastic household and toilet articles dropped by 36% in value between 2002 and 2006, although they stabilised somewhat from 2004. The total value of exports in 2002 was US$4.2 million compared to US$2.7 million in 2006. Unit costs of exports rose each year, from US$1.85/kg to US$3.49/kg over the period.
40 The Plastics Market in South Africa
Exports of plastic household, toilet articles not table, kitchen: 2002-2006
4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 Value (US$) 1,000,000 500,000 - 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
Zambia was South Africaís largest destination for these items in 2006, followed by Angola, Malawi, Mozambique and Zimbabwe. Exports to Zambia increased by 91% over the five year period, and export to Tanzania and Mozambique increased by 39% and 32% respectively. Exports to Zimbabwe and Malawi declined by 31% and 21% respectively.
Exports of plastic household, toilet articles not table, kitchen by Value (US$): 2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 4,211,799 4,219,918 2,871,587 2,724,037 2,714,879 100.0 -35.5 Zambia 266,904 376,865 204,890 300,207 510,925 18.8 91.4 Angola 381,262 320,214 246,392 837,286 426,918 15.7 12.0 Malawi 323,442 175,279 148,362 150,252 256,621 9.5 -20.7 Mozambique 150,151 143,412 115,748 168,391 198,663 7.3 32.3 Zimbabwe 265,658 460,177 305,167 176,404 184,455 6.8 -30.6 Germany 648 12,161 225 45,208 138,321 5.1 21,245.8 Tanzania 81,488 90,446 106,999 43,993 113,143 4.2 38.8 UK 1,609,096 311,479 160,669 109,579 95,834 3.5 -94.0 Mauritius 377,133 389,365 311,332 88,472 80,561 3.0 -78.6 France 15,561 110,501 73,231 55,032 77,803 2.9 400.0 Uganda 30,607 23,477 84,296 45,985 75,558 2.8 146.9 Kenya 85,497 130,039 117,151 210,808 69,490 2.6 -18.7 Other 624,352 1,676,503 997,125 492,420 486,587 17.9 -22.1 Source: UN Comtrade
41 The Plastics Market in South Africa
2.5.2.8 Exports of Plastic office and school articles and supplies (HS-3926.10)
Exports of plastic office and school articles and supplies increased by 430% from 2002 to 2006. Exports of these products were showing a steady decline in 2003 and 2004. The massive increase in exports occurred in 2006, when the value of exported products increased from US$1.6 million in 2005 to US$8.9 million in 2006. The key reason for this is the large orders from the DRC, Uganda and Congo in 2006 compared to previous years. Future trade information will show whether these were once off orders.
Exports of plastic office & school articles & supplies: 2002-2006 10,000,000
8,000,000
6,000,000
4,000,000 Value(US$) 2,000,000
- 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
Other key destinations for plastic office and school articles and supplies exported from South Africa in 2006 were Mozambique, Hong Kong and Zambia. Brazil received goods to the value of US$7,465 in 2006.
42 The Plastics Market in South Africa
Exports of Plastic office and school articles and supplies by Value (US$): 2002-2006 Partner 2002 2003 2004 2005 2006 % Share Growth 2002-06 Total 1,686,073 1,406,801 1,053,613 1,596,794 8,941,027 100.0 430.3 DRC 4,698 5,332 1,449 12,986 4,224,906 47.3 89,829.9 Uganda 6,543 37,834 10,781 11,571 2,319,899 25.9 35,356.2 Congo 253,753 2,987 23,711 2,709 1,446,074 16.2 469.9 Mozambique 650,963 136,482 101,931 205,312 161,413 1.8 -75.2 Hong Kong 4,167 11,865 63,068 436,366 133,241 1.5 3,097.5 Zambia 126,656 174,347 223,296 70,595 108,202 1.2 -14.6 Angola 52,394 55,721 22,900 67,983 80,029 0.9 52.7 Kenya 37,308 63,285 93,432 320,821 73,713 0.8 97.6 Zimbabwe 46,612 87,317 33,437 26,193 62,636 0.7 34.4 Malawi 110,315 121,038 106,369 38,144 44,414 0.5 -59.7 Nigeria 31,199 1,701 37,325 25,203 40,490 0.5 29.8 Australia 207,783 186,164 13,736 34,773 40,114 0.4 -80.7 UK 12,595 168,852 43,542 108,232 20,516 0.2 62.9 Tanzania 11,513 24,311 21,227 6,170 19,743 0.2 71.5 Germany 8,353 26,853 497 15,141 0.2 81.3 Mauritius 26,638 21,286 21,405 14,063 13,201 0.1 -50.4 Ghana 5,751 1,745 14 5,886 12,026 0.1 109.1 USA 21,127 135,654 177 88,291 11,801 0.1 -44.1 Indonesia 804 3,105 49 9,276 0.1 n/a Brazil 870 2,200 761 7,465 0.1 758.0 Other 66,835 141,023 232,708 120,189 96,727 1.1 44.7 Source: UN Comtrade
2.5.2.9 Exports of Plastic articles not elsewhere specified (HS-3926.90)
The volume of exports from South Africa of plastics that are not specified elsewhere grew from US$20.3 million in 2002 to US$36.5 million in 2005. However, exports declined in 2006 to just under US$36 million. Overall the market has grown by 78% over the 5 year period.
43 The Plastics Market in South Africa
Exports of other plastics: 2002-2006
40,000,000
35,000,000 30,000,000 25,000,000
20,000,000 15,000,000 Value (US$) 10,000,000
5,000,000 - 2002 2003 2004 2005 2006
Year
Source: UN Comtrade
The USA has traditionally been South Africaís largest export destination for these products, although in the last period exports have dropped. Once again regional markets absorb the bulk of South Africaís exports of these products, with Mozambique and Tanzania showing the highest growth patterns.
Exports of other plastic articles by Value (US$): 2002-2006 Growth Partner 2002 2003 2004 2005 2006 % Share 2002-06 Total 20,265,848 24,119,712 30,380,700 36,482,684 35,963,527 100.0 77.5 USA 7,500,897 6,103,292 7,841,456 11,896,020 9,297,807 25.9 24.0 Mozambique 1,250,926 1,556,445 2,180,387 1,578,531 4,160,215 11.6 232.6 Zambia 1,378,624 1,419,981 1,740,545 1,916,587 2,832,697 7.9 105.5 Zimbabwe 1,489,431 1,547,340 1,819,853 2,618,009 2,552,489 7.1 71.4 UK 771,114 1,427,005 1,535,733 2,534,757 1,653,136 4.6 114.4 Angola 606,479 626,554 703,073 1,541,710 1,290,763 3.6 112.8 Germany 913,641 1,435,483 720,576 787,529 1,145,873 3.2 25.4 Tanzania 387,040 504,493 766,786 673,245 1,081,660 3.0 179.5 Ghana 145,812 455,775 802,331 640,070 1,016,616 2.8 597.2 Nigeria 189,349 427,090 750,867 798,148 976,726 2.7 415.8 Australia 779,330 840,102 1,417,309 1,061,727 946,339 2.6 21.4 DRC 208,571 236,213 802,767 285,513 798,722 2.2 282.9 Malawi 583,869 557,656 894,230 954,054 717,637 2.0 22.9 Other 4,060,765 6,982,283 8,404,787 9,196,784 7,492,847 20.8 84.5 Source: UN Comtrade
44 The Plastics Market in South Africa
3.0 Industry Players and Distribution
3.1 Current Issues and Factors Affecting the Industry
3.1.1 Plastic Shopping Bags
Prior to the plastic bag legislation being introduced in 2003, South Africa, shoppers used eight billion bags a year. The legislation permits the use of plastic bags with a minimum thickness of 30 microns, compared to the 17 micron thickness previously used. Legislation on the minimum thickness of plastic vest type carrier bags including an environmental levy of 3 cents per bag. Furthermore, the flexible market was notably affected in 2003 when government imposed a levy on plastic check-out bags, with the intention of reducing usage of these bags and to enhance the environment. The resultant effect was that the tonnage volume of plastic check-out bags decreased by approximately 35% from the previous volume, and many jobs were lost. However, the market has recovered from the pressure and losses that the flexible plastic industry has experienced over the last few years, and good growth was recorded in 2006.
3.1.2 Packaging Industry
According to the Institute of Packaging (IPSA), the South African packaging industry volume grew at a positive rate of 4,1% in 2006. The most prominent trends recorded in the packaging industry in 2006 include:
• Raw material price increases - All packaging raw material prices increased in 2006 as a continued decline in crude oil prices resulted in increased international raw material prices. Packaging raw material prices that increased particularly include soda ash and polymer prices.
45 The Plastics Market in South Africa
• Increased consumer spending - Despite a 2% interest rate increase in the second half of 2006, consumer spending remained particularly high on the back of high levels of credit demand. Specific end-use markets ñ beverages, breakfast foods, snack foods and yoghurt ñ benefited from the increased spending. Consequent benefits were recorded by packaging materials used in these markets. • Building industry growth - Good growth has been recorded in the South African building industry in 2007, particularly in the non-residential sector. As indicated by Statistics South Africa, non-residential building plans passed in 2006 increased by 21% from 2005. Increased consumer spending has prompted increased building of shopping centres, while Gautrain construction as well as preparation for the 2010 Soccer World Cup have been prominent factors that have contributed to the recorded growth in the local building industry in 2007.
Rigid plastic demand again outperformed most packaging markets in 2006. Substitution with other packaging materials, continued innovation and favourable beverage consumption weather are noted as prominent reasons for the growth of the rigid plastics market. The flexible plastic market grew in 2006, despite continued threat from imports. Increased consumer spending coupled with good innovation resulted in the growth seen in the past year. Packaging demand is forecast to grow at rate of 6,2% in 2008, and annual medium term growth is forecast to be between 0,0% and 2,5% annually until 2012.
3.1.3 Closures
According to research carried out by BMI FoodPak, the plastic closure sector is a rapidly growing market in South Africa. This growth can be attributed to a number of factors:
• A worldwide trend towards the consumption of healthier beverages: veggie and fruit juices, iced teas and bottled water. Locally, South Africaís growing middle class is able to afford these premium drinks in greater volumes, thus boosting the demand.
46 The Plastics Market in South Africa
• The significant increase can also be attributed to growth in products which have previously not had a closure, such as dairy products (one-litre milk carton, UHT milk containers, and ultramel custard). • Consumer demand for increased convenience is one of the key drivers of growth: containers can be stored upside down so that the product is easy to dispense (e.g. tomato sauce); various pouring or dispensing options (sprinkle vs teaspoon access), pouring small amounts or large amounts, drip-free pouring; ease of opening ñ being able to open in one motion; using the closure as a measuring and/or dispensing device (e.g. pool chemicals where the closure serves as a lid and a dispensing cup); and being able to open the closure with oneís mouth (e.g. sportscaps).
According to the research, trigger sprayers, lotion dispensers and the use of sports closures continue to grow. Even in the chemicals industry, there is a trend to pull-ups, less spillage via telescopic spouts and child-proof closures. There is no legislation in South Africa yet that insists on child-proof closures for chemicals. If regulations are passed in the future, there will be some good opportunities in this sector.
It is believed that the demand for sports closures is still increasing. Once a product is taken from a flat cap into a sportscap, it shows major growth.
The theme of tamper evidence is also growing dramatically. Some products that previously havenít had any imperative for tamper evidence are now featuring it because of what the closure can offer. Such closures can help with product integrity, which is vital in food and pharmaceutical products.
There is a strong worldwide move from metal to plastic closures. This change is predominantly cost related, and the container is also easier to open. The choice of plastic is extensive too: from polypropylene to HDPE, the type of plastic used is chosen to match the application of the closure. Sport closures, for example, are usually made from LDPE because they have to slide.
47 The Plastics Market in South Africa
Metal closures still predominate in the food-processing market, because of the hot-fill process. However, it is believed that with the slow transition internationally from glass to plastic containers, even in hot-fill applications, closures will follow.
South African manufacturers are slowly becoming aware of how important the closure is to the image of the product. ëThe shape, ergonomics and tactility of a bottle are all very important elements, but the consumer interfaces with the cap. Closures are unscrewed, flipped open, poured from, sipped from, sprayed or spread from. If the interaction is positive, it will drive the demand for the product. However, if this initial interaction fails or frustrates, then the consumer will stop buying the product.
Closures can have a huge impact on the final product by enhancing the overall pack design. It also allows the effective use of colour to denote different variants or flavours. They can differentiate a product if the closure makes the product more user friendly. In some instances, they are part of the brand identity and work hand in hand with the shape of the bottle or container.
3.1.4 Palletless Bulk Bags
Tellap palletless bulk bags recently received patent approval from authorities in South Africa, and are being distributed by the company, Megabags. The recyclable palletless bulk bag, which can be described as a pallet within a bag, has been designed for cost- efficient, organised and secure packaging, storage and transportation of dry, loose and bulk products. This single operator storage and transportation system integrates two light plastic sleeves into a polypropylene bulk bag, replacing the conventional wooden pallet with a totally recyclable hygienic design. Tellapís palletless bulk bagsí design complies with international requirements, including the new ISPM-15 regulations, which stipulate the mandatory treatment of solid timber packing and dunnage, in order to reduce the risk of pest or disease entry into foreign countries. Tellap palletless bags are ideal for packaging chemicals, minerals, pharmaceuticals, agricultural seeds and grains, as well as food commodities and ingredients.
48 The Plastics Market in South Africa
3.2 Consumption Patterns for Household Utensils
There is a trend in South Africa towards the profile of buyers of housewares getting younger. This is mainly due to the rising younger middle class, access of this middle class to store accounts, and the affordability of housewares. However, there is increasing competition for the disposable income of this rising middle class, with the demand for luxuries such as mobile phones.
In terms of lifestyle trends, South Africans are perceived to entertain formally less than they did in the past. People are generally too busy, and entertaining has become more casual ñ for example, caring and cleaning of silver is too much trouble. There is no age profile for formal entertainment, and young people tend to follow in their parents footsteps.
At the top end of the market, styles include modern, classical and traditional housewares. The giftware in this category is design orientated, and to a large extent, suppliers are selected based on exclusivity, quality, design, range and branding.
Many homeware stores have opened in South Africa in the past 10 years, but there remains little competition in the exclusive ranges of housewares at the high end of the market.
Typically, South Africa is one season behind the European and US markets trends. The South African retailers watch these international trends very closely and base their buying decisions on these trends one season later. South African consumers are divided between the UK trends which are generally more adventurous in terms of colour and design, and the USA trends which are more traditional.
Retailers aiming the middle end of the market are continuously searching for new suppliers in order to remain competitive and also to be able to introduce new look and distinguish their brands from those of their competitors. They are continuously on the
49 The Plastics Market in South Africa look out for new suppliers who offer an innovative range of products of good quality and competitively priced.
The mass market chains base their buying decision for kitchenwares and tableware almost exclusively on price, with factors such as design, service and quality being secondary considerations.
There has been a trend towards increasing the ratio of imports to local manufacturers over the past few years, as South African manufacturers find it increasingly difficult to compete on price. The quality of imported Chinese housewares is considered to be of a high enough standard for the mass market chains, and, as a result, these stores do not shop around for quality, but base their buying decision on price.
The buyers of housewares tend to visit the European and Asian international trade fairs for ideas and new suppliers. There is not much interest in the Americaís in terms of sourcing or attending trade fairs for new ideas.
50 The Plastics Market in South Africa
3.3 Identification of Key Players
3.3.1 Raw Materials Suppliers
The key suppliers of polypropylene and high density polyethylene to the converting industry for the manufacture of a wide range of packaging and industrial end uses are Safripol (previously Dow Chemicals) and Sasol Polymers. Approximately 800,000 tons of locally produced polymers are produced from monomers derived from coal gassification. These are supplied by Sasol Polymers, a division of Sasol Chemical Industries Limited.
Sasol Polymers is Southern Africaís leading producer and marketer of monomers (ethylene and propylene), polymers (polyethylene, polypropylene and polyvinyl chloride), chlor-alkali chemicals, including chlorine, caustic soda, hydrochloric acid and mining reagents such as sodium cyanide and calcium cyanide.
3.3.2 Key Manufacturers
NAMPAK
Nampak is Africaís largest and most diversified packaging manufacturer and also has operations in several countries in Europe. Closures: The division manufactures specialised plastic closures for a diverse range of markets, including beverage, condiments, edible and motor oils and cleaning and household sectors. Tubs Buckets and Containers: The division manufactures injection moulded polypropylene buckets, containers, dishes, basins and re-usable household containers from both virgin and recycled materials. Containers are available in sizes ranging from 250ml to 25 litres. Flexible Plastics: Nampak Flexipak and Nampak Flexible manufacture non PVC, polyethylene based cling wrap, for domestic, retail and industrial applications. The extruded film and sheeting division produces extruded and co-extruded films for applications such as sheeting, tubes and bags. Nampak Flexpak specialises in blown and
51 The Plastics Market in South Africa cast film, monolayer and co-ex including polypropylene and HDPE, while Nampak Flexible extrudes both mono and three-layer polyolefin combinations. Film Products: Film Products manufactures Diaper Film, Rubber Release Film used in the manufacture of tyres, Pallet Stretchwrap, Shrink Shrouds used for pallet protection, Bundle Wrap, and Test Liner.
TRANSPACO
Transpaco is a manufacturing and distribution company, operating extensively in the plastic and packaging industries. The groupís emphasis is in: Packaging for retail, industrial, agricultural and mining sectors; Scholastic and office stationery; Plastic reclamation and recycling; Plastic fabrication; Plastic raw material supply; Water cooling and treatment media; Tubular core manufacturing; Pipe extrusion and Rigid PVC foil extrusion Transpaco Flexibles: Transpaco Flexibles produces polyethylene/plastic bags sheets and tubes, plastic poly book rolls banana film and polyethylene/plastic stationery products. Transpaco Packaging: Transpaco Packaging is a leading supplier to the retail, industrial, wholesale, agricultural and stationery markets. Transpaco Packaging supplies all types of packaging materials, including plastic bags (plain / printed), carrier bags, refuse bags, mini grip bags, plastic tubing / sheeting (plain / printed), bubble airwrap, anti-static airwrap, bubble sheets / bags, cushion kraft, bubble padded manlite bags, jiffy padded bags, air-o- thene rolls / sheets, and pallet wrap (hand and machine rolls).
ASTRAPAK Astrapak is a group of companies specialising in the production and supply of plastic packaging. The Group operates nationally through three divisions, namely Films, Rigids and Flexibles. These businesses supply specialised plastic packaging to the food, beverage, confectionery, fruit, petrochemical, industrial and general merchandise markets. The operations are focused in specific areas from high-volume low-cost producers to high-tech specialised companies. Films
52 The Plastics Market in South Africa
East Rand Plastics: An industry leader in the manufacture of HDPE film for a range of applications including: bags for bakery, retail, industrial and refuse applications. They also manufacture a range of LDPE single and multi-layered films for the industrial, retail and construction sectors. Peninsula Packaging: Specialises in the manufacture of plain and printed film bags for food, fruit, retail and industrial packaging. City Packaging: City Packaging manufactures a high quality range of clear and highly decorative flexible film products, for the beverage, frozen food, dairy and milling industries. They specialise in flexographic printing and have the capability to print 8- colour wide width film. Tristar Plastics: Tristar Plastics (Pty) Ltd produces pallet stabilization and industrial packaging products. The Tristar plastics factory manufactures both blown film extrusion and 3 layer cast films. The prime focus is pallet stretch film manufactured in blown or latest technology triple layer cast. Tristar also manufacture bags and shrouds on the roll as well as a full range of top and bottom pallet covers. These industrial packaging films are complemented by an agricultural film range that includes silage bale and other agricultural films and mulches. Pack-Line Holdings Pack-Line Holdings manufacturer plastics sheeting, tubing and bags for the industrial and retail market, as well as printed LDPE sheeting tubing and bags, stretchfilm, castfilm, bubble pack, aerothene, and polyprop and polywoven bags. Barrier Film Converters: Barrier film converters. Flexibles DLC Pack: DLC uses narrow web flexographic printing equipment to meet short and long run market demands. The products range from PVC shrink sleeves for container decoration, banded packs, and tamper evident packaging, through the labelling range specializing in Polypropelene wraparound labels for various applications including shrink polypropelene for curved label panels. Stretch labels are manufactured under license to ITW Autosleeve as an alternative to traditional wraparound labelling. Astraflex: Astraflex specialises in flexographic printing. Tamperpak: Tamper Pak specialises in short-run, undecorated, tamper-evident sleeves for the food, pharmaceutical, and cosmetic industry.
53 The Plastics Market in South Africa
Saflite: The company manufactures stand-up pouches (ìdoypacksî), for a wide variety of market sectors. Astrapak Flexible: Astrapak Flexible produces stand up pouches of Saflite, banding, and PVC shrink sleeves. Knilam packaging The manufacturer and marketing of Modified Atmosphere Packaging Systems for shelf life extension of respiring produce. Rigids JJ Precision Plastics, Cinqplast Plastop, Marcom Plastics, and Hilfort Plastics manufacture a wide range of thin-wall injection-moulded polypropylene containers and lids, including tubs for the dairy industry (yoghurt, cottage cheese, etc), items such as beer cups and food trays for the catering and hospitality sectors, rigid plastic containers and closures in capacities from 50ml to five litres, and plastics injection moulded closures.
MONDIPAK PLASTICS Mondipak Plastics is a part of the South African packaging group, Mondi Packaging South Africa. Mondipak Plastics has opened a new US$12.8 million bottling closure manufacturing facility in Gauteng in the July 2007. The plant offers laser printing and PVC-free liners which allow the closures to be recycled after use. Designed and developed for the Coca Cola bottling company, ABI, the facility has a capacity of 1,4 billion units annually, and has been contracted to supply 1,1 billion units yearly to ABI, escalating at 5% a year for the next five years, and providing 60% of the Coca-Cola glass and PET closure requirements in South Africa. Furthermore, Mondipak Plastics will be actively marketing its closure supply to other sub-Saharan bottlers.
POLYOAK PACKAGING GROUP (PPG) Polyoak Packaging manufactures and supplies rigid plastic packaging for the dairy, beverage, foods and industrial sectors in Southern Africa through its divisions Dairypack, Dairypack Tubs, Polyoak, Polypet, African Closures and Lubripack. The African Closures division manufacturers plastic closures for dairy, beverage, food, chemical and industrial applications.
54 The Plastics Market in South Africa
MCG INDUSTRIES MCG are manufacturer of primary and secondary packaging. They have four manufacturing sites in Cape Town and Johannesburg. They manufacture closures suitable for use in the carbonated soft drink, fruit juices, mineral water, iced teas, pharmaceutical, food, oils, and wine and spirits industries.
ALPAL Alpal are manufacturers of bulk packaging solutions, and are based in KwaZulu-Natal. They provide bulk plastic packaging for liquids, powders, fresh produce, frozen produce, and pre-packaged goods. Liquids: 1,000 to 1,210 litre solutions, stable 5 high stacking; flexible filling and emptying options; hygienic and very easy to clean; collapse to 170mm from an erected height of 1,100mm. Powders: Packaging features include stable 8 high stacking; maximized warehouse utilization; flexible filling and emptying options; hygienic and easy to clean; collapse to 170mm from an erected height of 1,100mm. Fresh Produce: Features include: stable 8 high stacking; hygienic and easy to clean; collapses to 170mm from an erected height of 1,100mm; allows for maximum breathability of the product. Frozen Produce: Features include: 8 high stacking to maximize cold room utilization; hygienic and easy to clean; collapsible therefore facilitating efficient empty storage and empty return transport; versatile in that the height of the unit can be tailored to suit varying requirements. Prepackaged Goods: The FMCG (Fast Moving Consumer Goods) ALPAL has been specially designed to offer a solution for the storage and transport of lightweight pre packaged goods. Features include: 4 high stacking (dependent on weight); hygienic and easy to clean; fragile products are protected because no weight is transferred onto the product beneath it. Bulk Plastic Containers: ALPAL offers a solution to the PET and other plastic container industry for the storage and transport of various plastic and PET products.
55 The Plastics Market in South Africa
MEGABAGS
The Mega Group is one of the biggest bulk bag and webbing manufacturers and suppliers on the local market. Bulk bags can be made to any customers specific requirements, and every product has its own bulk break density. Bags can be made to carry any weight from 100 kg to 2000 kg with a minimum safety factor of 5:1. Un-specification bags can be made with a safety factor of 6:1 minimum. All material is UV stabilized Heavy duty Woven Polypropylene. Waterproofing is via a Polyethylene liner or lamination. The two main bag lines are: Single trip (A cost effective lightweight bulk bag with the applicable carrying capacity but only suitable for 1 trip); and Multi trip (A reusable bulk bag that vastly reduces your packaging cost per unit every time the bag is reused). Though the material can be woven in any specific width, there are a few commonly used sizes, namely 80 cm, 91 cm, 100 cm, 110 cm and 120 cm. They are also the agents for Tellap palletless bulk bags in South Africa.
USABCO USABCO is the leading manufacturer in the plastic houseware and brushware markets in South Africa. Under the Addis trade mark, they produce an extensive range of products from cleaning, brooms, mops and brushes, to plastic ware, kitchen and bathroomware, garden equipment, hardware and an Addis paintware range. The products are targeted at the mass market.
56 The Plastics Market in South Africa
3.3.3 Key Importers
ENGINEERED LININGS (EL)
Engineered Linings (EL) is a specialist contracting company that concentrates on the supply and installation of geosynthetic liners to landfills, water storage facilities, heap leach pads, roofs, canals, sewers and various other applications. The imported liners are produced from HDPE and LLDPE resins, and are at least six metres wide. Engineered Linings generally installs 1,0 mm, 1,5 mm, 2,0 mm and 2,5 mm thick material according to the nature of the application.
AQUATAN LINING SYSTEMS
Aquatanís customer base includes the mining, municipal, industrial, waste, agricultural, aqua-culture, building and public services sectors of the market. They provide their clients with reliable and economical solutions to most lining requirements. Hi-Driline Smooth and Textured: Black, high quality, high density polyethylene (HDPE) geomembranes produced from specially formulated, virgin polyethylene resin. The polyethylene resin is designed specifically for flexible and durable geomembrane applications. Driline Smooth: Driline Smooth (LLDPE) are designed for the containment applications that require greater flexibility. Driline Smoothís superior elastic properties allow for it to conform to non-uniform surfaces making it the perfect solution for applications such as landfill caps, tunnel lining and potable water containment, where flexibility and elongation are more important than chemical resistance Driline Textured: Driline Textured (LLDPE) is manufactured homogeneously with the extrusions of the solid barrier portion of the liner as opposed to being added after extrusion. The rough surface is thus fully integrated with the sheet during the molten phase of manufacturing, as opposed to being added after extrusion. This results in a surface that remains intact regardless of the chemicals which may come in contact with the sheet.
57 The Plastics Market in South Africa
Aqualastic (RFPP): A propylene/ethylene copolymer geomembrane produced from a resin formulation designed to provide premium quality geomembrane with excellent flexibility, improved elasticity and resistance to puncture. These properties assure maximum multi axial elongation to accommodate differential settlement. Hypalon (CSPE): A high performance, scrim-reinforced geomembrane for critical containment applications. Covers, liners and caps are used to help safeguard valuable
3.3.4 Key Retailers
EDCON GROUP Edcon is the leading multi-brand clothing, footwear and textiles retailing group in southern Africa trading through a range of retail formats. Edcon has over 900 stores in South Africa, Botswana, Namibia, Swaziland and Lesotho. Edgars and Boardmans are the two chains within the middle and upper income market group that sell plastic kitchen and homewares, and Jet Mart in the discount division is a chain of homeware stores. The Edcon Group has recently been purchased by Bain Capital and it is in the process of delisting from the JSE.
WOOLWORTHS HOLDINGS Listed on the Johannesburg Securities Exchange, Woolworths Holdings Limited is a South African-based retail group. In South Africa, the group trades through Woolworths (Proprietary) Limited, a chain of retail stores offering a selected range of quality clothing, food, plastic kitchenware and homeware, beauty and financial services under its own brand name. Woolworths Holdings also owns Country Road Limited, a clothing and homeware retailer listed on the Australian Stock Exchange. The chain brands itself as an up market quality store and stocks mainly Woolworths label products. There are over 330 Woolworths stores internationally.
58 The Plastics Market in South Africa
PEPKOR GROUP
The Pepkor Group manages a portfolio of retail chains focused on the value market and selling predominantly clothing, footwear, textiles and housewares. Its houseware operating subsidiary is Ackermans Home Comforts which is based on a high volume/lower margin business model. The group trades from more than 2,200 stores internationally and employs almost 20,000 people.
MR PRICE GROUP
Mr Price Group Limited and its subsidiaries operate over 750 stores across Southern Africa. The Group focuses on clothing, footwear, accessories and homewares. Homes are marketed through the Mr. Price Home division.
FOSCHINI GROUP Foschini Limited is an investment holding company whose core business focus is retail and financial services. Comprising 13 companies trading with over 1,200 stores throughout South Africa, the group brings a lifestyle range of brands that are prominent household names into the retail market. Foschiniís @ Home Stores specialise in housewares.
MASSMART Massmart is a managed portfolio of nine wholesale and retail chains, each focused on high volume, low margin, low-cost distribution of mainly branded consumer goods for cash, in 14 countries in sub-Saharan Africa through four divisions comprising 238 stores. The Group is the third largest distributor of consumer goods in Africa, the leading retailer of general merchandise, liquor and home improvement equipment and supplies, and the leading wholesaler of basic groceries.
The Mass Discounters division houses the Game and Dion stores, and has a turnover of US$1,346 million per annum. Game has 82 general merchandise stores in South Africa,
59 The Plastics Market in South Africa
Botswana, Namibia, Mauritius, Mozambique, Uganda, Zambia, Nigeria, Malawi, Tanzania and Ghana. Dion has 8 stores in South Africa. Makro is part of the mass warehouse division and has an annual turnover of US$1,234 million. Makro warehouse clubs trade in food and groceries, general merchandise (including housewares) and liquor.
NEW CLICKS SA New Clicks Holdings Limited is a specialist retail group with more than 900 stores across its operations in Southern Africa. The group focuses on the retailing of health, beauty and lifestyle products and services. It operates an advanced supply chain management infrastructure, and its centralised shared services model allows for multiple store ownership structures, namely company-owned stores, joint ventures and franchise operations.
PICK N PAY The Pick ín Pay Group is one of Africaís largest retailers of food and groceries, clothing and general merchandise. They stock a range of housewares aimed at the more affordable end of the market. There are 14 Hypermarkets, located in all the major centres throughout South Africa, which sell groceries, clothing small and large appliances, homeware, office equipment, outdoor and sports equipment, and hardware.
SHOPRITE GROUP The Shoprite Group of Companies, Africaís largest food retailer, operates 886 corporate outlets in 17 countries across Africa, the Indian Ocean Islands and southern Asia, and reported turnover of US$2,729 billion for the six months to December 2006, Shoprite Holdings Ltd is a public company listed on the JSE Limited, with secondary listings on both the Namibian and Zambian Stock Exchanges. The Shoprite Hypermarkets are situated in the major centres of South Africa and sell food and groceries, clothing small
60 The Plastics Market in South Africa and large appliances, homewares, office equipment, outdoor and sports equipment, and hardware.
3.4 Distribution Structure
3.4.1 Plastic Bags and Film (including bulk) and Closures
Manufacturers distribute nationally to industrial users, the hospitality/catering sector and to retailers, either directly or through wholesalers and distributors. In order to complete their product ranges, the manufacturing companies may import some plastic products.
The packaging sector and the large retail groups are supplied directly by the local manufacturers or will import directly, whereas small independent retailers will buy plastic bags from wholesalers, due to the relatively small quantities used.
In an extremely competitive environment, manufacturers are increasingly looking to focus on cost cutting and improved efficiencies. One of the areas that has been highlighted is distribution, and companies are reducing their lead times. At present, the lead time for delivery to the packaging industry can be up to twelve weeks, and some companies are attempting to reduce this to between four and six weeks.
3.4.2 Geomembranes
Companies specialising in geomembranes act as importers as well as installers / contractors. These companies import the geomembranes directly, and are subcontracted to the large construction companies to install the membranes for water projects in South Africa, Africa and globally.
61 The Plastics Market in South Africa
3.4.3 Household Utensils
Most of the importers of plastic household utensils into South Africa have a dedicated national (and in some cases regional) buyer who will be responsible for the sourcing of products internationally. The large retailers tend to source their product range independently and do not rely on wholesalers, traders or middlemen.
The large chains have central distribution centres from which plastic kitchen and homeware products are either distributed directly to their retail outlets across the country, or via regional distribution depots. Central distribution centres are normally located at the major ports (Durban or Cape Town) or in Johannesburg.
There are four main ways of accessing the market in South Africa for these goods. These are: • Direct to the bulk end-retailers; • Direct to up-market retailers; • Through agents and distributors.
Direct to bulk Retailers The large retail groups all do a certain amount of direct buying, although for different reasons. At the bulk or mass-market end of the South African market, retailers tend to go direct to suppliers for the high volume low margin goods that sell quickly. However, as you move further up the value chain, the greater the reluctance is on the part of the mass retailers to buy directly and to carry stock. They prefer to work through the agents at this level.
Up-Market Retailers Up-market retailers tend to buy through agents as well as directly, and are more likely to import from Europe and the Americaís than from the East.
62 The Plastics Market in South Africa
Agents and Distributors There are very few specialised agents and importers in this field in South Africa, largely because of the direct purchasing and purchasing power of the big retailers. However, they do bring in ranges on behalf of either specific retailers or to sell to a range of retailers. These agents also prefer to work at the bulk end of the market where there is greater certainty over sales, and less risk in carrying expensive stocks.
3.5 Product Specifications
3.5.1 Sizing
The table below shows the standard plastic bag and wrap sizes manufactured and supplied in South Africa.
Description Size Butcher Bags 12x22x20 30x40x20 15x25x20 30x45x20 20x30x20 45x60x20 25x40x20 Vegetable Bags 15x28x20 19x39x20 18x30x20 30x60x60 Fish Bags 15x25x50 28x45x75 15x30x50 30x45x50 20x30x50 30x60x75 20x40x50 45x60x50 Bakery Bags 25x40x15 30x45x15 25x45x15 25x45x8 Millinery Bags 14x19 33x40x30 18x23x30 43x48x30 23x30 48x56x30 23x31x30 56x60 26x40 56x66x30 28x40x30 60x66 Refuse Bags 75x95x22/25mic 75x95x28 Self Seal Bags 6,5x8x40 15x18x40 8x10x40 15x25x40 8x12x40 18x32x40 10x11x40 21x31x40 10x15x40 25x36x40 12x18x40 30x42x40 Carry Bags (Mini) 19+6.5x44x25mic (8 litre) 200 + 120 x 440mm 200 + 100 x 460
63 The Plastics Market in South Africa
Description Size Carry Bags (Handy) 24+7x47x25mic (12 litre) 230 + 130 x 440mm 240 + 130 x 460 Carry Bags (Midi) 27+8x56x25mic (20 litre) 270 + 130 x 540mm 270 + 130 x 560 Carry Bags (Maxi) 31+10x64x25mic Bottle King Carriers (Mini) 205 + 130 x 470mm Bottle King Carriers 6-pack 240 + 140 x 470mm (Handy) Bottle King Carriers maxi 280 + 140 x 570mm Heavy Duty Handy Carriers 240 x 140 x 500mm Dumpy Bags 240 x 130 x 460mm 300 x 130 x 580mm Bottle Bags 150 x 260mm 240 x 400mm 160 x 400mm Boutique bags with punched 23x30+5x45-90mic 55x50+5x45-90mic out handles 38x46+5x45-90mic Plastic Self Opening Bags 115 x 80 x 215 mm 200 x 100 x 380 mm 120 x 80 x 260 mm 200 x 100 x 440 mm 150 x 100 x 280 mm 180 x 110 x 470 mm 150 x 100 x 330 mm Bin Liners Office 350 x 360 Kitchen swing bin 590x720 Normal 750x950 Trolley 800x400x1300 Pallet Wrap Roll (20/25/30 450x300 450x1000 micron) 450x400 600x1000 450x500 Shrink Film Roll 150 ñ 650mm x 1332m x 15um (15 / 19 / 25um) 150 ñ 650mm x 1066m x 19um 150 ñ 650mm x 798m x 25um Closures 28mm Duet WINGARD for PET + Glass application 28mm Duet Double Lock for PET application 28mm Sports Closure (push/pull) for PET application 30mm Sports Closure (30/25) for PET application 38mm Sports Closure for PET application 28mm Duet MEDROPP for 28mm + MEDROPP Glass 31.5mm Duet MEDROPP for 31.5mm + MEDROPP Glass 30mm 1 PIECE for 30/25 neck finishes 28mm single piece Bericap Doubleseal Source: Various suppliers
64 The Plastics Market in South Africa
3.5.2 Industry and Official Standards
Prohibition of certain plastic bags (Government Gazette No. 25082 of June 2003 / SABS Act 29/1993)
The collection and disposal of plastic bags is a growing waste problem in South Africa. The use of plastic bags made of thin plastic film has increased significantly in recent years. The discarding of large numbers of bags results in the degradation of the environment and non-reusable bags are indiscriminately dumped and not collected for recycling or disposal because the thin.plastic film they are made of has little commercial value, either as a cost to the consumer, or a raw material for recyclers.
The new regulations, as published in the Government Gazette in 2003, are as follows: 1) The manufacture, trade and commercial distribution of plastic bags, made of plastic film, for use within the Republic of South Africa, with a wall thickness of less than 80 micrometres is hereby prohibited. 2) Plastic bags, made of plastic film, with a wall thickness of between 30 and 80 micrometres may be manufactured, traded and commercially distributed, for use within the Republic of South Africa, provided they do not, unless required by law, have printing, painting or marks of any kind. 3) Bread bags, made of plastic film, with a wall thickness of between 25 and 80 micrometres may be manufactured, traded and commercially distributed, for use within the Republic of South Africa, if they do not, unless required by law, have printing, painting or marks of any kind. 4) The prohibition will not apply to shrinklene and flimsy bread bags made of plastic film. Any person who contravenes regulation shall be guilty of an offence and liable on conviction to a fine not exceeding US$12,285 or to imprisonment for a period not exceeding 10 years: or to both such a fine and such imprisonment; and to a fine not exceeding three times the commercial value of any thing in respect of which the offence was.
65 The Plastics Market in South Africa
Standards
The South African Bureau of Standards (SABS) is a parastatal organisation that promotes quality and standardisation of products in South Africa. SABS administers an SABS Mark Scheme, which applies to products for which national mark specifications exist, with SABS certification marks serving as testimonials that the product complies with the specification, and that the supplier maintains an efficient and appropriate quality system. SABS will also provide assistance with the inspection of consignments and the testing of products.
Below is a list of the key standards which affect plastic products:
SANS 1526:2003 (SABS 1526) Covers requirements for thermoplastics sheeting for use as geomembranes.
SANS 10409:2005 Provides requirements and guidance for the design, selection and installation of thermoplastics geomembranes. Also specifies quality control (QC) and quality assurance (QA) procedures.
SANS 161-1:1995/ISO 1873-1:1995 (SABS ISO 1873-1) Establishes a system of designation for polypropylene (PP) thermoplastic material, which may be used as the basis for specifications. Is applicable to all propylene homopolymers, to copolymers of propylene with a content of other 1-olefins of less than 50 % (m/m), and to blends of polymers containing at least 50 % (m/m) of aforementioned polymers.
SANS 161-2:1997/ISO 1873-2:1997 (SABS ISO 1873-2) Specifies the methods of preparation of test specimens and the test methods to be used in determining the properties of PP moulding and extrusion materials. Gives requirements for handling test material and for conditioning both the test material before moulding and the specimens before testing.
66 The Plastics Market in South Africa
SANS 527-1:1993/ISO 527-1:1993 (SABS ISO 527-1) Specifies the general principles for determining the tensile properties of plastics and plastic composites under defined conditions. Several different types of test specimen are defined to suit different types of material which are detailed in subsequent parts of ISO 527 (published in South Africa as SANS 527). The methods are used to investigate the tensile behaviour of the test specimens and for determining the tensile strength, tensile modulus and other aspects of the tensile stress/strain relationship under the conditions defined.
SANS 527-2:1993/ISO 527-2:1993 (SABS ISO 527-2) Specifies the test conditions for determining the tensile properties of moulding and extrusion plastics, based upon the general principles given in ISO 527-1. The methods are selectively suitable for use with rigid and semirigid thermoplastics moulding, extrusion and cast materials, rigid and semirigid thermosetting moulding and cast materials, and thermotropic liquid crystal polymers.
SANS 1176:1994 (SABS 1176) Specifies the characteristics of self-supporting containers that are made of plastics materials, are of nominal capacities 5 l to 220 l, and are suitable for the storage and transportation of substances in liquid or solid form. Covers self-supporting plastics containers, of maximum nominal capacity 10 l for reserve fuel for motor vehicles.
SANS 4591:2003/ISO 4591:1992 Specifies a method for the determination of the gravimetric thickness of a sample of plastics film or sheeting and a method for the determination of the average gravimetric thickness and, if required, the yield (area per unit mass) of a roll of plastics film or sheeting.
SANS 4593:2003/ISO 4593:1993 Specifies a method for the measurement of plain plastics film and sheeting, using mechanical. optical or electronic measuring devices. It is not suitable for use with embossed film or sheeting.
67 The Plastics Market in South Africa
CKS 340:1979 (CKS 340) Covers the material, constructional, dimensional and performance requirements for disposable, single-trip refuse bags constructed of a plastics material and intended as a liner for refuse bins (metallic or non-metallic) used for the outdoor storage of refuse.
VC 8087:2003 (VC 8087) Specifies requirements for carrier bags and flat bags that are made from thermoplastic materials. Covers plastic carrier bags and flat bags, both domestically produced and imported, for use within the Republic of South Africa, and covers the thickness and printing requirements of these bags.
3.6 Pricing Review
Below are examples of retail prices of a range of plastic articles:
Category Description Retail Price incl. VAT (US$) Bags Bread Bags 1000ís 4.28-7.14 Bags Butcher Bag Med 25mmx40mm 250ís 4.70-4.85 Bags Butcher Bag Small 20mmx30mm 250ís 3.41 Bags Food Bags 330x420mm 25ís 2.51 Bags Food Bags 280x330mm 20ís 2.50 Bags Freezer Small 230x300mm 50ís 1.96-2.78 Bags Freezer Large 330x420mm 25ís 2.24- 2.46 Bags Ice Cube Bags 8ís 0.77- 0.96 Bags Sandwich Large 180x200mm 50ís 1.47 Bags Sandwich Small 140x170mm 100ís 2.38-2.86 Bags Sandwich Small 140x170mm 50ís 1.28-1.67 Bags Sandwich Large 170x170mm 50ís 1.78 Bags Utility Bags 220x300mm 25ís 1.71 Bags Ziploc Large Freezer Bags 10ís 1.78-2.77 Bags Ziploc Large Storage Bags 10ís 1.78 Bags Ziploc Medium Freezer Bags 15ís 1.78 Bags Ziploc Medium Storage Bags 15ís 1.78 Bags Ziploc Sandwich Bags 30ís 1.78-1.81 Bags Ziploc Variety Pack 15ís 1.78 Bags Ziploc Small Freezer 15ís 1.81-2.14
68 The Plastics Market in South Africa
Category Description Retail Price incl. VAT (US$) Bags Ziploc Sandwich 20ís 1.57 Bags Carrier Bags 12L Handy 250ís 15.14 Bags Carrier Bags 8L Mini 250ís 13.14 Bags Carrier Bags 20L Midi 250ís 19.99 Refuse 750x950mm 20ís 1.98-3.82 Refuse 750x950mm 50ís 5.00 Refuse 750x950mm 100ís 8.28-9.56 Refuse 750x950mm 10ís 1.57-2.56 Refuse Drawstring 750x950mm 10ís 2.52-2.71 Bin Liners Swing Bin 20ís 2.25-2.51 Bin Liners Drawstring Swingbin 590x690 10ís 2.84-3.00 Bin Liners Swing Bin Large 750x580 10ís 1.81 Bin Liners Swingbin Large 15ís 2.71 Bin Liners Pedal Bin 60ís 2.86 Bin Liners Pedal Bin 10ís 1.14 Bin Liners Pedal Bin 520x540mm 15ís 2.36 Bin Liners Pedal Bin 30ís 1.99 Bin Liners Small Round Bin Liners 15ís 1.36 Bin Liners Trolley Bin 10ís 3.14-4.28 Wrap Econowrap 50m 2.48 Wrap Clingwrap 300m x 300mm 7.14-8.41 Wrap Cling Wrap 100m 4.00 Storage 10L Catering Storage 4.14 Storage 11L Storage Box with Lid and Clear Base 5.57 Storage 15L Juice Dispenser with Lid Storage 5.57 Storage 22L Eezy Water 21.29 Storage 22L Freezy Bucket with Styreen Insert 17.00 Storage 25L Catering Storage 7.57 Storage 32L Industrial Bucket 10.57 Storage 500ml Plastic Sauce Dispenser 5.57 Storage Triangular Bowl 300ml 1,s 0.86 Storage Cutlery Box 8.43 Storage Cutting Board 8.43-17.00 Storage Meat Tray 7.86-12.71 Storage Square Food Saver 1ís 0.57 Storage 3 Piece Clear Round Containers 1ís 0.29 Storage 4 Piece Mini Storer Set 1ís 0.57 Storage Juice Dispenser with Lid 9.86-13.57 Source: Various retail outlets
69 The Plastics Market in South Africa
3.6.1 Trade Tariffs and Regulations
Import Duties The framework of the external tariff is the 2-column Harmonised Commodity Coding and Description System (HS). Import duties are levied ad valorem on the fob value. The import tariffs as of November 2007 are listed in the table below.
Statistical Rate of Duty HS Code Description Unit General EU SADC HS-392010 Sheet/film not cellular/reinf polymers of ethylene Kg 15 11.25 Free HS-392119 Sheet etc, cellular of plastics nes Kg 15 11.25 Free HS-392321 Sacks & bags (including cones) of polymers of ethylene Kg 15 11.25 Free Cylindrical closures of a length not exceeding 75 mm HS-3923.50.10 and of diameter of 15 mm or more but not exceeding 24 Kg Free Free Free mm HS-3923.50.90 Plastic stoppers, lids, caps and other closures: Other Kg 15 11.25 Free HS-392410 Plastic table and kitchen ware Kg 20 15 Free HS-392490 Plastic household, toilet articles not table, kitchen Kg 20 15 Free HS-392610 Plastic office and school articles and supplies Kg 20 15 Free 0 to HS-392690 Plastic articles nes Kg 0 to 15 Free 11.25 Flexible intermediate bulk containers: Knitted or HS-6305.32.10 Kg 20 15 Free crocheted HS-6305.32.90 Flexible intermediate bulk containers: Other Kg 25 18.75 Free Source: Cargo Info: November 2007
Value-added tax of 14% is payable on all imports. VAT is levied on the value for customs duty plus an additional 10% surcharge plus any additional duties paid. There are no restrictions imposed on plastic product imports to South Africa.
70 The Plastics Market in South Africa
Preferential Treatment South Africa is a member of the Southern African Customs Union (SACU) along with Botswana, Lesotho, Namibia and Swaziland. Goods are traded within the customs union free of duty.
South Africa is a member of the Southern African Development Community6 (SADC) Under the SADC Trade Protocol implemented in September 2000, South Africa has agreed to reduce tariffs on goods originating in SADC member states to zero over a period of 8 years. The current SADC tariff is reflected in the table above.
The EU/SA Free Trade Agreement came into effect in January 2000. In terms of the agreement, the EU will reduce its import tariffs to zero over a period of 7 years. South Africa has undertaken to reduce her duties to 50% of the MFN tariff level over an 8-year period. The current rates on plastic products are reflected in the table above.
3.6.2 Transport and Logistics
Ports Major shipping lanes pass along the South African coastline in the south Atlantic and Indian oceans, through its seven commercial ports which form by far the largest, best equipped and most efficient network in Africa.
The National Ports Authority (NPA), a division of Transnet, is the largest port authority in greater southern Africa, controlling seven of the 16 biggest ports in this region. These are Richards Bay, Durban, East London, Port Elizabeth, Mossel Bay, Cape Town and Saldanha.
6 Other members are Angola, Botswana, DRC, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Swaziland, Tanzania, Zambia and Zimbabwe.
71 The Plastics Market in South Africa
These ports are not only conduits for trade between South Africa and her partners in SACU and SADC, but also function as hubs for traffic emanating from, and destined for, Europe, Asia, the Americas and the east and west coasts of Africa. Durban is the busiest port in Africa, whilst Cape Town is rapidly positioning itself as the key service hub for the rapidly growing oil and gas industry in West Africa.
Sea freight from Brazil to Cape Town takes approximately 7-9 days, and to Durban takes between 10 and 20 days, dependent on the port of origin in Brazil.
From To Days Santos Cape Town 8-9 days Port Elizabeth 9-12 days Durban 9-16 days Rio de Janeiro Cape Town 7 days Port Elizabeth 10 days Durban 19-20 days Source: Cargo Info
Airways The Airports Company of South Africa (ACSA) is the key player in the aviation industry. ACSAís primary task has been to upgrade standards at the countryís airports and improve productivity. The company currently handles approximately 90% of the countryís aviation requirements, operating three international airports (Johannesburg International, Cape Town International, and Durban International) and six national airports (Port Elizabeth, East London, George, Kimberly, Upington and Bloemfontein). The company also recently decided to acquire the Pilanesberg Airport near Sun City as well as at Plettenberg Bay and Richards Bay.
Rail Spoornet and the SA Rail Commuter Corporation (SARCC) control South Africaís rail network. Spoornet provides goods, container services as well as long distance passenger services. Metrorail, a division of Transnet Ltd, is responsible for operating the
72 The Plastics Market in South Africa metropolitan commuter system in seven regions: Durban, Cape Town, Port Elizabeth, Pretoria, East London, Berlin (Uitenhage) and Wits Greater Johannesburg.
It is contracted to provide this service to the SARCC, which owns the rolling stock and most of the infrastructure. Spoornet is the largest railroad operator in southern Africa ñ it has 31,700km of single rail track, 3,500 locomotives and 124,000 wagons. Spoornet also has shares in or management contracts with a number of other rail operators in Southern and Central Africa, making it the key operator in the region.
Road South Africaís national road network currently covers 7,200km, with about 20,000km of primary roads planned in the future. The roads include 1,400km of dual carriageway freeway, 440km of single carriageway freeway and 5,300km of single-carriage main road with unlimited access. Approximately 1,900km are toll roads, serviced by 27 mainline toll plazas.
Government projects to maintain new and existing roads, as well as the construction of several new toll road developments, are under way. The South African National Roads Agency Limited is an independent, statutory company registered in terms of the Companies Act. The government is the sole shareholder and owner of the company. Its mandate is to develop, maintain and manage the countryís national road network comprising over US$4.3 billion in assets, excluding land.
73 The Plastics Market in South Africa
4.0 Identification of Potential Importers and Distributors
4.1 Potential Partners for Brazilian Business
4.1.1 Importers, Wholesalers and Distributors
Industrial and Supermarket Film and Bags / Geomembranes
Global Packaging Products PO Box 54373, Wierda Park, 0149, Gauteng Tel: +27 12 653 7103 Fax: +27 12 653 7104 Email: [email protected] Contact: Vaughan Geldenhuys Website: www.globalpackaging.co.za Profile Global Packaging Products, are specialists in plain and printed plastic bags, palletwrap, shrink film plain and printed, tubing and sheeting from 50mm to 3m, and carry a full range of stock bags. Global Packaging Products specialise in extrusion, printing, and converting of flexible packaging and are wholesale packaging suppliers of polyethylene or polypropylene plastics, bags and shrink wrap film, printed promotional advertising products for sports and shopping gift bags.
The company manufactures as well as buys locally and import certain products. They are particularly interested in new suppliers of vacuum bags. They distribute to industry, wholesalers and directly to the retail trade.
They supply bag and film products to advertisers, agriculture, bakeries, chicken farmers, bottling companies, tissue paper converters, ceramic industries, door manufacturers, vegetable farmers and egg farmers.
74 The Plastics Market in South Africa
Mistros Catering Supplies 96-100 East Street, Devland, Johannesburg, Tel: +27 11 989 9500 Fax: +27 11 989 9519 Email: [email protected] / [email protected] / [email protected] / [email protected] Website: www.mistro.co.za Contact: Paresh Mistry / Bethalia Dharamand (Plastic Packaging Buyers) Profile Mistro Foods is a distributor of food and non-food products to the food service sector. On the plastics side, the company carries a wide range of plastic packaging, bags and other products for the food industry. The company buys all their plastic packaging products from local suppliers and distribute to the catering and hospitality sector nationally.
Tullyís Plastics PO Box 18911, Pretoria North, 0116, Gauteng Tel: +27 12 327 1531 Fax: +27 12 327-1531 Website: www.tullysplastics.co.za Contact: Jaen Gouws (Financial Manager / Owner) E-mail: [email protected] Mobile: +27 82 571 6816 Contact: Thea Masser (Sales) Profile Tullyís Plastic Bottles supply plastic milk and juice bottles, PET bottles, plastic chemical bottles, 25 litre plastic containers, plastic tubs and buckets, spray bottles, soap dispensing bottles, plastic jars and plastic refuge bags to the food, beverage, dairy, juice and chemical industries. Tullyís manufacture their containers from (HDPE) polyethylene.
75 The Plastics Market in South Africa
Compo Agencies PO Box 17164, Benoni West, 1503, Gauteng Tel: +27 11 421-6321 Fax: +27 11 422-3648 Email: [email protected] Contact: Mr. Greenslade Profile Compo Agencies import speciality grade packaging film, which they sell to packaging converters. They are currently sourcing the film from Brazil, Italy, France and Korea. They also export to countries in southern Africa.
Koogan Plastics PO Box 48, Lenasia, 1820, Gauteng Tel: +27 11 857 1345 / 1370 / 2564 Fax: +27 11 857 2563 Web site: www.kooganplastics.co.za Contact: Shiraz Ismail (General Manager) E-mail: [email protected] Contact: Riaz Ismail (Marketing and Sales) E-mail: [email protected] Profile Koogan Plastics manufacture and distribute a wide range of rigid and flexible packaging for the consumer sector. The company will buy from local manufacturers as well as import directly to complete their product range. The company has two divisions, one that distributes to industry, and the second is a wholesaler that distributes to the retail trade.
BC International PO Box 906, Sea Point, 8060, Cape Town Tel / Fax: +27 21 434 1177 E-mail: [email protected] Website: www.bcinternational.co.za
76 The Plastics Market in South Africa
Profile BC International cc is an import/export/distribution company. They are importers and distributors of Calended PVC Film both rigid and flexible grades. Clear rigid PVC is supplied for packaging stationery, toys, gifts, tools, clothes, cosmetics and food. The general grade uses a special formula so there is no crease whitening when folding to make boxes. Pharmaceutical grade is used for the blister packaging of tablets. Flexible PVC is used for the stationery industries and inflatable objects.
Future Packaging PO Box 460, Honeydew, 2040, Gauteng Tel: +27 11 794 3310 Fax: +27 11 794 2264 E-mail: [email protected] Website: www.futurpac.co.za Contact: Karen van Tonder (Sales) Profile Future Packaging manufacture and import a range of plastics packaging. Products include pallet wrap, stretch packer, polythene shrink film, static protection bags, plastic bags, bin liners, carrier bags, millinery bags, self seal bags, refuse bags etc.
Mipaq Postnet Suite 178, Private Bag X504 Northway, 4065, KwaZulu-Natal Tel: +27 31 569 3056 / 3045 Fax: +27 31 569 3047 E-mail: [email protected] Website: www.mipaq.co.za Profile Mipaq is an importing, manufacturing and distribution company focused on providing the South African packaging industry with specialised products. These products are designed to meet the needs of all sectors from manufacturing to retail. Products are sourced from established international manufacturers whose products are branded and satisfy both
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price and quality. Mipaqís products are made available to the market via a network of distribution agents and re-sellers. Mipaq are agents for Contour polyolefin shrink film.
Geomembrane Importers and Distributors
Engineered Linings (EL) PO Box 10300, Edenglen, 1613, Johannesburg Tel: +27 11 974 1397 Fax: +27 11 974 8731 E-mail: [email protected] Website: www.englining.co.za Contact: Dave Roy E-mail: [email protected] Profile Engineered Linings (EL) is a specialist contracting company founded in 1984. It concentrates on the supply and installation of geosynthetic liners to landfills, water storage facilities, heap leach pads, roofs, canals, sewers and various other applications.
Engineering Lining supplies a high percentage of the marketís needs. The company has ISO 9002 registration to ensure a high standard of quality control and quality assurance from site to management levels. They supply and install top quality geosynthetic lining materials throughout Sub-Saharan Africa.
All their geomembranes are imported, mainly from Canada, Germany, Korea, and China. They have imported from countries in South America in the past. The imported liners are produced from HDPE and LLDPE resins, and are at least six metres wide.
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Aquatan Lining Systems PO Box 633, Isando, 1600, Johannesburg Tel: +27 11 974 5271 Fax: +27 11 974 4111 E-mail: [email protected] Website: www.aquatan.co.za Contact: Morne Breytenbach (Sales Manager) Mobile: +27 79 872 8502 E-mail: [email protected] Profile Aquatanís customer base includes the mining, municipal, industrial, waste, agricultural, aqua-culture, building and public services sectors of the market. They provide their clients with reliable and economical solutions to most lining requirements. Aquatan has recently converted to the new ISO 9001:2000 standards and strictly complies with its listing requirements. Simultaneously, they adhere to the revised national quality standards.
Aquatanís sphere of operation is not only restricted to South Africa. They have successfully completed major Geomembrane projects in many African countries and Indian Ocean Islands.
Household Utensils
Plastic World (Pty) Ltd 249 Booysens Rd, Selby, Johannesburg Tel: +27 11 493 8492 Fax: +27 11 493 0153 E-mail: [email protected] Website: www.plasticworld.co.za Buyer: Mr. Ian Smith E-mail: [email protected]
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Profile Plastic World is a well established stockist and distributor of a wide range of quality plastic sheet, rod & tube materials as well as a host of finished products including bins, buckets, crates, containers, storage systems and signage products. The company procures the majority of their product range from local manufacturers. They also import directly.
Legend Housewares PO Box 2722, Fourways, 2055, Johannesburg Tel: +27 11 462 2250 Fax: +27 11 462 2056 E-mail: [email protected] Contact: Janine McPhail E-mail: [email protected] Profile Legend Housewares was established in 1996 with the view to creating an alternative to the traditional suppliers of household kitchenware in Southern Africa. Their vision was to supply a quality yet affordable range of kitchenware to specific retail market segments. Legend Housewares has three of its own brands in the Southern African market, namely Legend, Home Options and Snappy. In addition to these brands they also represent several international brands namely: Trudeau, Silicone Zone, Fagor, Simplehuman and Neoflam with Microban.
Ben Greenburg & Sons PO Box 39831, Booysens, Johannesburg Tel: +27 11 434 3907 Fax: +27 11 434 4725 E-mail: [email protected] Contact: Mr. Trevor Greenburg Profile Ben Greenburg & Sons are traders and importers of houseware products.
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Chipkins (Caterplus) Tel: +27 11 244 1911 Fax: +27 11 244 1926 Contact: Mr. Charles Watt (Chief Buyer) E-mail: [email protected] Profile Chipkins and Caterplus are part of the Bidvest Group in South Africa and form part of one of the largest distribution networks in South Africa and Southern Africa. The Caterplus division supplies groceries, cleaning material, glassware, crockery, cutlery, utensils, packing material, liquor and other consumable products to the catering industry.
Golden Catering Supplies cc 403 Main Street, Jeppetown, Johannesburg Tel: +27 11 618 1275 Fax: +27 11 618 1003 Contact: Mr Harold Novick (Managing Member) E-mail: [email protected] Profile Golden Catering Supplies import and distribute a range of housewares to the catering sector.
Equico Importers PO Box 1562, Uitenhage, 6230 Tel: +27 41 992 2508 / 2805 Fax: +27 41 992 2467 Website: www.equico.co.za Contact: Mr. Du Plessis (Buyer) E-mail: [email protected] Profile Equico Importers cc specialise in the import and wholesale of homewares and office products. They operate nationwide and also have numerous customers in neighbouring countries.
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Closures
Premier Packaging PO Box 13214, Witfield, 1467, Gauteng Tel: +27 11 397 3532/3/4 Fax: +27 11 397 5021 E-mail: [email protected] / [email protected] Website: www.prempack.co.za Contact: Brendan Ryan E-mail: [email protected] Profile Premier Packaging was established in 1987, with the objective of supplying a packaging service to customers who, were either too small for the major suppliers, or were not prepared to put up with the delivery lead times. The company offers delivery within 48 hours of an order. There key clients are manufacturers and packaging companies.
Premier packaging distributes the following range of products: Plastic Closures, HDPE Bottles, HDPE Jars, P.E. / Fibre Drums, Buckets, Detergent Bottles, Sport Bottles, PET Bottles, Crates, Agri Range, PVC Containers, Vitamin & Tablet Containers, PVC Jars, Bettix Bottles, Cosmetic Luxury Jars, and Crystal Cosmetic Jars.
Global Trading Group PO Box 21584, Helderkruin, 1733, Gauteng Tel: Tel: 27 11 + 795 8300 Fax: +27 11 794 1121 Contact: Bradley Van der Berg Tel: +27 11 795 8334 E-mail: [email protected] Profile Global Trading Group are one of the biggest importers and exporters of industrial and packaging products. They supply a full range of beverage packaging products.
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National Plaspak cc PO Box 1422, Wadeville, 1482, Johannesburg Tel: +27 11 827 5783/4/5 Fax: +27 11 827 9042 E-mail: [email protected] Website: www.nationalplaspak.co.za Profile National Plaspak are suppliers of plastic, plastic bottles and plastic containers and closures.
4.1.2 Retailers
Shoprite Checkers Retail Stores PO Box 215, Brackenfell 7560, Cape Town Tel: +27 21 980 4000 Fax: +27 21 980 4050 Website: www.shoprite.co.za Contact: Mr. Ari Lazarus (Stainless steel kitchenware buyer) E-mail: [email protected] Hyperama 100 Braamfontein Rd, Louwardia, Centurion, Pretoria Tel: +27 12 621 2200 Fax: +27 12 621 2310 Contact: Mr. Moyin Moosa (Buyer) E-mail: [email protected] Profile The Shoprite Group of Companies, Africaís largest food retailer, operates 739 corporate outlets in 17 countries across Africa, the Indian Ocean Islands and southern Asia. In addition to food, Shoprite outlets sell a range of homewares. The Group imports 95% of their housewares from China due to the competitive pricing.
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Shoprite has agents based in China who are responsible for sourcing housewares and conducting quality control checks. The Group buys existing lines and has no input into the manufacturing process or design. Houseware imports are branded as house brands. Lead times from China are generally 30-60 days for production after an order has been placed, and a further 2-4 weeks for shipping.
The Group buys all year round. The high season is Christmas, and stores are generally stocked in September / October from their warehouse.
Pick n Pay Retail Stores PO Box 23087, Claremont, Cape Town, 7735 Tel: +27 21 658 1000 Website: www.pnp.co.za Contact: Zaheed Mathews (Kitchenware buyer) E-mail: [email protected] Hypermarket 2 Skeen Blvrd, Bedfordview, Johannesburg Tel: +27 11 856 8000 / 7000 Fax: +27 11 455 5409 Contact: Warren Marsden (National Buyer) E-mail: [email protected] Contact: Sue McMahon (Buyer) E-mail: [email protected] Profile The Pick ín Pay Group is one of Africaís largest retailers of food, clothing and general merchandise. They stock a range of plastic housewares, including Brazilian products. The group generally import directly and as well as through agents.
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Clicks PO Box 5142, Cape Town, 8000 Tel: +27 21 460 1911 Fax: +27 21 461 8221 / 465 9922 Website: www.newclicks.co.za Contact: Michelle von Waltsleben (Buyer) E-mail: [email protected] Profile New Clicks Holdings Limited is a specialist retail group with more than 900 stores across its operations in Southern Africa. The group focuses on the retailing of health, beauty and lifestyle products and services. It operates an advanced supply chain management infrastructure, and its centralised shared services model allows for multiple store ownership structures, namely company-owned stores, joint ventures and franchise operations.
Makro SA (Pty) Ltd Private Bag X4 Sunninghill 2157, Johannesburg Tel: +27 11 797 000 / 797 0186 Fax: +27 11 803 5833 / 797 0408 E-mail: [email protected] Website: www.massmart.co.za Contact: Gavin Killey (National Buyer) E-mail: [email protected] Contact: Ms Denise Pringle (Buyer) E-mail: [email protected] Profile Makro is owned by Massmart Holdings, and trades through 11 large Makro Warehouse Clubs in South Africa. Makroís low-cost/low-margin trading philosophy is centred on distributing high volumes of merchandise in selected categories at competitive prices. Access to a Makro store, and more particularly the ability to purchase, is restricted to cardholders. This policy has allowed Makro to build the largest and most comprehensive cash customer database in the Southern African distribution industry.
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Game & Dion Stores 10th Floor, Liberty Towers, 214 Aliwal Street, Durban Tel: +27 31 302 8991 Fax: +27 31 302 8801 Website: www.dion.co.za / www.game.co.za Contact: Sagren Reddy (Buyer) E-mail: [email protected] Profile The Dion and Game Groups are retailers of large and small appliances, homeware, office equipment, outdoor and sports equipment, and hardware. Dion has 11 stores in Gauteng and Game has a network of about 70 stores throughout South Africa. By the year 2010, the Game development planners anticipate having an expanded network of 130 stores in place, 75 of these in South Africa and the rest in Africa - as far afield as Kenya, Uganda and Tanzania.
@ Home Stores 240 Voortrekker Rd, Parow East, Cape Town Tel: +27 21 938 1911 Fax: +27 21 938 7555 Contact: Nazlee Isaacs E-mail: [email protected] Website: www.home.co.za Profile The @ Home retail chain is part of the Foschini Group. There are 40 outlets countrywide in the five key provinces in South Africa, one in Namibia, as well as four smaller boutique stores in smaller centres.
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Mr. Price Home PO Box 912, Durban, 4000 Tel: +27 31 310 8806 Fax: +27 31 304 3358 Website: www.mrpricegroup.com Contact: Megan Sinclair (Kitchenware Buyer) Tel: +27 31 310 8800 E-mail: [email protected] Profile The Mr. Price Group is a diverse holding company for a variety of clothing and household goods retail chains. Mr. Price Home has over 130 stores located in South Africa and a further 6 in Namibia, Swaziland and Botswana. The Home stores side of the Mr. Price group was launched in 1998, and provides the entire range of homewares from kitchenware to lounge living. Mr Price Home concentrates on the more affordable end of the market, and as such, price in key. Many of their products are inspired by local design talent to provide style with a distinctive local flavour.
Ackermans Home Comforts PO Box 6100, Parow East, 7501, Cape Town Tel: +27 21 900 1000 Fax: +27 21 903 6028 Website: www.ackermans.co.za Contact: Rachel Chorley (Kitchenware Buyer) E-mail: [email protected] Profile The Ackermans company started operating in 1916 and has since grown into a company with over 200 stores around the Country. While traditionally being involved more in the clothing market, Ackermans have recently launched an Ackermans Home Comforts Stores, which sell kitchenware and tableware. Buying decision is made based on pricing, look and product specifications, and the company targets the lower end mass market.
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Woolworths PO Box 680, Cape Town, 8000 Tel: +27 21 407 9111 Fax: +27 21 407 3939 Website: www.woolworths.co.za Contact: Lauren Rawbone (Kitchenware Buyer) E-mail: [email protected] Contact: Jessica Heyman (Buyer) E-mail: [email protected] Profile Woolworths is an upmarket food, clothing and homewares retailer with outlets around the country that stocks different ranges of up-market kitchen ware and related homeware goods. Woolworths have dedicated strategic suppliers who source all their products.
Edcon Group Boardmans, Edgars and Jet Mart PO Box 100, Crown Mines, 2025, Johannesburg Tel: +27 11 495 6000 Fax: +27 11 837 5019 Web: www.edcon.co.za Buyer: Cindy de Klerk (Kitchenware ñ Boardmans and Edgars) E-mail: [email protected] Buyer: Judy Meyerson (Buyer Jet Mart) E-mail: [email protected] Profile The target market for Edgars and Boardmans is similar and aims at the medium to high end of the market, while Jet Mart is a discount homeware and DIY retailer. The Group has two kitchenware buyers, on who is responsible for Edgars and Boardmans, and the second is responsible for Jet Mart.
Edgars and Boardmanís housewares marketing and pricing positioning is open ended, but without seeming to be expensive. They do have an opening price category used to pull in
88 The Plastics Market in South Africa new customers and to appeal to their existing customer base. Pricing is constantly compared to similar retailers, in order to ensure that they remain competitive.
Some 95% of housewares and kitchenwares are imported, half of which originates in China. The Group also imports a small amount of exclusive products from Europe (mainly Germany) to complete their range. The Group uses South African and Chinese agents for product sourcing, as well as direct buying.
Branding is perceived to be important to consumers, and imported goods from China are branded under a House Brand if the quality is good. Generally, the buyers are happy with the quality of products from China. All branding, packaging, labelling and pricing is handled by the manufacturers. The Edcon packaging department is responsible for sending the artwork to the suppliers.
The buyers visit the Frankfort Fair to source new brands and agents and to get ideas on trends. The stores continuously introduce new brands into their mix, and are constantly on the look out for new suppliers that can offer innovative, quality products at a reasonable price. South Africa is generally one season behind the European houseware trends.
Container loads of housewares are received on a monthly basis, and stocks are drawn from the warehouses for the high Christmas season. The lead time from Europe is approximately 6 weeks from order to on-shelf. Due the high volumes ordered from China, the lead time from orders to delivery are 4 to 6 months. Edcon has distribution centres in Johannesburg and Cape Town.
Home etc. 57 Park Meadow Corner, Kensington, Johannesburg Tel: +27 11 622 0234 Contact: Mr Kevin Smith (Buyer) Mobile: +27 82 921 3159 E-mail: [email protected]
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Profile Home etc. are importers and retailer of housewares. Their target market is the middle and upper class consumer.
4.2 Buying Patterns
Lead times for stock items manufactured in China are generally between 30 and 60 days, with an additional 2 to 4 weeks on the water. However, high volumes may take between 4 to 6 months from placing the order. Products are generally ordered by the container load. The lead times for locally produced plastic bags and film and plastic packaging can be up to 12 weeks, although the manufacturers are attempting to reduce this by half.
Terms of payment are dependant on the relationship with the supplier. In general, payment is made 30 days after receipt of invoice. Forwarding and clearing of imported products is either handled by the importer or their appointed agents.
4.3 Trade Shows and Industry Events
4.3.1 Trade Shows
PLASTPACK AFRICA
Dates: 22-25 May 2008 Venue: Durban Exhibition Centre Website: www.alfajer.net/plastpakafrica Specialised industry trade show for the plastics, rubber and packaging industries to highlight products and services for African traders.
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PROPAK CAPE Dates: 14-16 October 2008 Venue: Cape Town International Convention Centre, Cape Town, Organisers: Specialised Exhibitions (Pty) Ltd Website: www.specialised.com / http://www.propak.co.za Packaging, food processing, labelling, printing and plastics exhibition.
SUSTAINEX Dates: 19-21 August 2009 Venue: Sandton Convention Centre, Johannesburg Organisers: Exhibitions for Africa Website: www.sustainex.co.za Sustain exhibition sets out to present an overview of business solutions and scientifically based technologies that can be employed to reduce the impact of twenty first century man on the planetís resources. The exhibition will have four development components: water, energy, earth and air.
WISA 2008 Dates: 18-22 May 2008 Venue: Sun City, North West Province Organisers: Water Institute of Southern Africa (WISA) Website: www.,wisa.org.za An exhibition to showcase all water and environmentally orientated organisations and companies.
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4.3.2 Institutes and Associations
Institute of Packaging (IPSA) PO Box 145, Pinegowrie, 2123 Tel: +27 11 782 0233 Fax: +27 11 782 4926 E-mail: [email protected] Website: www.ipsa.org.za Contact: Henry Willis (National Secretary) Profile The Institute of Packaging (IPSA), has over 1000 members in South Africa, and represents the main body of packaging professionals within the industry, and services the needs and interests of these members through its five regional offices in the Northern Region, Western Cape, Eastern Cape, KwaZulu-Natal, and the Border region.
Packaging Council of South Africa PO Box 131400, Bryanston 2021, Johannesburg Tel: +27 11 463 9909 Fax: +27 11 463 9587 E-mail: [email protected] Website: www.pacsa.co.za Contact: Andrew Marthinusen (Executive Director) Profile PACSA is a voluntary industry body. Its members are in three broad categories ñ Converters, Associates and Affiliates. The Converters represent some 70% of the US$4.1 billion per annum revenue generated by the industry. Associates are in effect the major raw material suppliers, and Affiliates are customers and major recyclers. Collectively this body directly employs some 60,000 people in South Africa.
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Plastics Federation of South Africa Private Bag X68, Halfway House, 1685, Gauteng Tel: +27 11 314 4021 Fax: 0866 124 366 E-mail: [email protected] Contact: David Hughes (Executive Director) Website: www.plasfed.co.za Profile The Plastics Federation is an umbrella organisation for the plastics industry in South Africa. Members of the Plastics Federation are raw material suppliers, South African Polymer Importers Association (SAPIA), Plastics Converters Association (PCA), Association of Rotational Moulders of South Africa (ARMSA), machinery suppliers, Plastics Institute of Southern Africa (PISA), the South African Plastic Pipe Manufacturers Association (SAPPMA)and the Expanded Polystyrene Association of South Africa (EPSASA).
International Geosynthetic Society of South Africa (GIGSA) Postnet Suite 82, Private Bag X65, Halfway House, 1685, Gauteng Tel: +27 83 253 0592 Contact: Garth James E-mail: [email protected] Website: www.gigsa.org
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5.0 Analysis and Recommendations
The South African plastics industry market split is packaging 52%, building 7%, electrical/electronic 6%, 4% each for medical, automotive, mechanical engineering and agriculture, and the rest makes up 19%. Growth in this sector has been mainly attributed to the good performance in the food, non-alcoholic beverages, dairy, and building industries.
The plastics sector is extremely competitive. Despite the favourable conditions for local manufacturers, such as relatively low labour costs and the local supply of the main materials inputs, there is still a large trade deficit. South Africaís imports of bags and film have risen steadily over the last few years, and were valued at US$56.2 million in 2006 compared to US$21.0 million in 2002, an increase of 168%. In 2006, the ësheet and film not cellular or reinforced polymers of ethyleneí accounted for 46% of imports in this sector, while ësacks and bags of polymers of ethyleneí accounted for 39%, and ësheet, cellular of plastics not elsewhere specifiedí accounted for the remaining 15% of imports.
The South African packaging sector is both competitive and sophisticated. The packaging industry covers a wide range of consumer, commercial and industrial sectors. The South African packaging industry is highly-automated, using state-of-the-art technology to manufacture modern packaging to attract consumers to products, and to keep these products moving from the shelves. Flexible packaging continuously offers new opportunities for companies with innovative products. Research has shown that new and attractive packaging plays an important role in growing the sales of food and beverage brands.
The good growth recorded in the South African flexible plastic market provides opportunities for Brazilian suppliers of plastic bags and film. The mass market polyethylene bags and film are purchased mainly on price, and these markets are generally covered by the local manufacturers and imports from the East. Specialised and
94 The Plastics Market in South Africa bags and film using high technology are mostly imported from Europe and the USA, and these products are not bought on price alone.
In an extremely competitive environment, manufacturers are increasingly looking to focus on cost cutting and improved efficiencies. One of the areas that has been highlighted is distribution, and companies are reducing their lead times. At present, the lead time for delivery to the packaging industry can be up to twelve weeks, and some companies are attempting to reduce this to between four and six weeks.
In order to compete with the existing suppliers of plastic bags and film, Brazilian manufacturers are encouraged to offer competitive pricing after incorporating the 15% import taxes on these products. Furthermore, the Brazilian productsí quality should by emphasised. The more specialised plastics used in the packaging industry are not readily available locally and are imported, and these products offer opportunities for Brazilian suppliers.
Geomembranes
There are two key companies who use geomembranes in South Africa, namely Engineered Lining and Aquatan Lining Systems. These companies act as suppliers and installers. All their geomembranes are imported as the South African manufacturers do not make these specialist membranes.
There are stringent national quality standards applied to geomembrane plastics, and the companies also have ISO 9001/2 registration to ensure a high standard of quality control and quality assurance.
Brazilian geomembrane suppliers should be able to meet the local quality standards and are able to offer competitive prices, they would be advised to deal directly with the geomembrane installers in South Africa.
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Closures
South Africa is currently importing in the region of US$26 million closures, which accounts for approximately 20% of South Africaís consumption of US$129 million. There has been substantial investment in the manufacturing capacity for plastic closures recently with MondiPakís new facility to supply the Coca Cola bottlers, ABI with 1.1 billion plastic closures per annum, escalating at 5% a year for five years. Local manufacturers do not perceive imported products to pose much of a threat for local closure manufacturers, who are world class in their own right. Barriers to import are cost of freight, a duty of 15% and no recourse in the event of failure. However, imports can fulfil niche needs where local tooling is not economic enough for the low volumes required.
Plastic closures is a rapidly growing market, and the focus is on cost, environmental impact and consumer appeal through function, colour and convenience. There is a major global shift towards lightweighting of neck finishes and closures. There is also a continuing growth in the types of products which have not closures in the past. Consumer demand for increased convenience is also a key driver of growth. The growing middle class in South Africa is also driving up sales of premium food and beverage sales, as this group is able to afford these products in greater volumes, boosting demand.
The key customers for closures are the food, beverage, chemical and toiletry and cosmetics manufacturers. There are also a few large importers and distributors of closures. Brazilian companies are advised to contact the manufacturers directly or deal with specialist importers.
Plastic Utensils
Purchasing power is highly concentrated in the hands of the large retail chains in South Africa. These companies are all nationally represented, and command large market shares. This sector also has a number of micro-enterprises, generally serving the upper end or boutique side of the market. In the past 10 years, there has been a shift in the South
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African retail trade for household utensils, with the entrance of many mass market stores, as the distributors and the numerous importers of caterware and kitchenware, which offer a range of options, from cheap imported goods from China to top international brands. The strong local manufacturing market of low end plastic containers and other household utensils is also part of the sector.
Opportunities for Brazilian manufacturers of plastic household utensils to market their products to middle and upper income consumers do exist. Chain stores such as Pick n Pay currently have a range of Brazilian plastic homeware products, which are premium priced and are distinctive in both design and quality.
There are four key methods used for importing goods. These are: direct to the bulk end- retailers; direct to up-market retailers; through agents and distributors; and through direct-marketing organisations. Most importers of home and kitchenware into South Africa have a dedicated buyer who is responsible for the sourcing of products internationally. The large retailers tend to source their product range independently and do not rely on wholesalers, traders or middlemen.
Quality, service and design are important for the top end of the housewares and gifting market in South Africa.
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