Manufacturers say power hikes will put them out of business

Manufacturers will appeal to the National Energy Regulator of South Africa (Nersa) for relief on its planned electricity tariff hikes, according to a newspaper report on Wednesday.

The manufacturers said the increases would force many companies out of business, Business Day reported.

Price cuts were needed for distressed industries, as well as reductions in the proposed 25% hikes pencilled in for the next couple of years, Steward Jennings, the chairperson of industry group the Manufacturing Circle told the paper on Tuesday.

Electricity prices for manufacturing had climbed 140% in the past four years, making it one of the main drivers of rising costs for industry, Jennings said.

“We have to attack these militant price increases ... we can’t afford another two years of 25% increases.

We will fall out [of business], we are already falling out,” he said.

Jennings said the Manufacturing Circle would submit a White Paper on its appeal for reductions on the tariff to Nersa before the end of the year.

The industry group represents 56 large companies including SABMiller, ArcelorMittal SA, Pretoria Portland Cement, Hulamin, Mondi and Altron.

Manufacturing accounts for 15,6% of the economy’s overall output. - Sapa