JOHANNESBURG: The Steel and Engineering Industries Federation of South Africa (SEIFSA) said that the manufacturing industry contracted by 2.5 per cent last year as a result of power cuts by Eskom.
Henk Langenhoven, the federation’s chief economist said that the steel and engineering sector make up a significant portion of Eskom’s business clients.
Seifsa said the disrupted power supply led to a contraction of between five and 13 per cent in the rubber, structured steel and general purpose machinery sub industries.
Seifsa’s members represent about 34 per cent of the manufacturing sector and its chief economist said the power cuts are stifling growth.
Eskom has experienced major supply problems since last year when a coal silo collapsed at the Majuba Power Station in Mpumalanga which reduced supply by about 1,800 megawatts.
Stage one load shedding was implemented for the first time this year when generators suddenly broke down, forcing the power giant to cut electricity without notice.
The metals industry was hit by a five month long strike in the platinum sector and a further month long strike by National Union of Metalworkers of South Africa (Numsa) before load shedding started in November.
Eskom has warned that without additional funding to buy diesel, load shedding will be continuous and ongoing because the utility would not be able to operate its open gas turbines.
