South African packaging companies can compete globally, but face challenges similar to other sectors and are working to seek 'fair play' regarding duties South African exporters face in countries like Brazil, Mpact chief says

Graziela Medina Shepnick

LOS ANGELES , July 6, 2012 (Industry Intelligence Inc.) –

South African packaging companies are capable of competing globally despite facing similar challenges to other sectors, including tariffs on South African imports in countries like Brazil, said the chief of Mpact Ltd., reported Engineering News on July 6.

Mpact CEO Bruce Strong said that talks are ongoing, and the government is “realizing the significance of this challenge.” While some countries tax South African imports, South Africa does not have duties on imports. “We are not asking for protection, but fair play,” he said.

Other than import tariffs in other countries, South African packaging companies are challenged with high costs for electricity and municipal services, as well as a shortage of skilled workers, said Strong, Engineering News reported.

The industry should work to develop workers’ skills, and the government should help expand the manufacturing sector in order to reduce unemployment, said Strong. Mpact makes both paper and plastic packaging.

South Africa’s packaging industry contributes about 1.5% to South Africa’s GDP, and is valued at about 43 billion rand (US$5.2 billion). Plastic packaging accounts for about 20 billion rand; paper packaging, 12 billion rand; and glass and metal packaging make up the balance.

Recycling has a strong part in the nation’s economy, and Mpact is investing in recycling projects that will significantly increase the economic value of recycled polyethylene terephthalate (PET), reported Engineering News.

South Africa’s recycling industry employs more than 100,000 people, each of who can earn 100 rand or more per day, with PET packaging materials selling for up to 2.20 rand per kilogram, said Strong. “It is a lot to people who would otherwise struggle to survive,” he said.

South Africa’s packaging industry uses materials sourced locally, which helps create jobs; and its product plays a vital role in “establishing food security, which is a global issue,” said Strong, Engineering News reported.

The primary source of this article is Engineering News, Johannesburg, South Africa, on July 6, 2012.

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