Glass Industry Set to Lose R1.5 Billion Amid Continued Liquor Ban
- South Africa's glass packaging industry may well lose another R1.5 billion in sales
- This is according to Consol's CEO, who lamented the impact of the ban on alcohol
- The first bans on liquor had seen the industry suffering losses of over R1.5 billion
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The national lockdown ban on liquor could see the nation's glass packaging industry taking another R1.5 billion knock.
Source: Getty Images
This after the restrictions returned for the third time as part of the effort to reduce the strain on the healthcare system amid the current pandemic.
The first bans collectively saw losses of over R1.5 billion in the industry alone, a massive strain over and above the challenges of the crisis.
Mike Arnold, Consol CEO, spoke to TimesLIVE to warn of another wave of job losses both at Consol and along its supply chain.
An extended ban, according to Arnold, would be nothing short of catastrophic to the company which supplies the liquor industry with packaging.
Currently, it's costing Consol R8 million on a daily basis to keep production and furnaces running despite the lack of orders.
While debt is spiralling the company is holding off on suspending or cancelling investments, which would ultimately depend on the duration of the ban.
However, a staggering R800 million has been redirected from repairing furnaces to maintaining operations instead.
This move means that the company will not be able to afford to repair furnaces at the end of their lifespans, even if demand recovers.
The slump in demand saw Consol suspending the construction of a new R1.5 billion manufacturing plant, with SA Breweries opting to cancel a R2.5 billion investment.
Arnold explained that similar moves can be expected with customers likely to experience flagging sales volumes, capital expenditure and financial stability.
Earlier, Briefly.co.za reported that the liquor industry is feeling the strain of a reimplemented alcohol ban in South Africa and are pleading with the government to lift it.
Numerous traders say that, should relief not be granted soon, the 'unconstitutional' regulation will cost the nation countless jobs.
Many warn that the industry will not be able to survive another lengthy ban on sales with this the third round of restrictions
This comes as SA Breweries launches a legal bid in an attempt to have the ban overturned, claiming that all attempts to find an alternative during consultations with the state have failed.
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Source: Briefly News
