Wasting the Nation.indd - Groundwork
Wasting the Nation.indd - Groundwork
Wasting the Nation.indd - Groundwork
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Chapter 4: The toxic cradle of productionmonomers, are carcinogenic and <strong>the</strong> mixture of chemicals in many products is likelyto be more toxic than <strong>the</strong> sum of <strong>the</strong>ir parts. Finally, <strong>the</strong>se products accumulate in vastquantities on <strong>the</strong> dump and <strong>the</strong> migrant chemicals add to <strong>the</strong> toxicity of air emissionsand leachate.Power within <strong>the</strong> industry lies upstream, primarily with Sasol but also with Safripol.While state regulation of <strong>the</strong> petrol price awards import parity pricing to Sasol’s fuelbusiness, both Sasol and Safripol impose import parity pricing on polymers whichare not regulated. Sasol is <strong>the</strong> monopoly producer of LDPE and PVC while Sasol andSafripol share <strong>the</strong> market for HDPE and PP [see Table 9 for types of plastic]. Industryanalyst Ralitza Dobreva, writing shortly before Dow’s sale to Safripol, observes that <strong>the</strong>behaviour of Sasol and Dow is “implicitly coordinated” as “<strong>the</strong>ir prices are consistentlyin line …” [2006: 9]. In short, <strong>the</strong>y operate as if <strong>the</strong>y were a monopoly and appropriateadded profit equivalent to <strong>the</strong> transport, handling and tariff costs of polymer imports.SANS and Hosaf both produce PET, and must ei<strong>the</strong>r import <strong>the</strong> PE monomer or buyit from Sasol.While profits are concentrated upstream in <strong>the</strong> industry, labour is concentrateddownstream. According to Dobreva, <strong>the</strong> plastics industry employs 35,000 people with30,000 employed downstream. At both Sasol and Dow, new investment has beenassociated with labour shedding or with dramatically increased output per worker.Sasol Polymers reports a 26% increase in production per employee from 2006 to 2007following <strong>the</strong> investment in Project Turbo.Dobreva concludes that policy should aim for <strong>the</strong> expansion of <strong>the</strong> downstream industryin <strong>the</strong> interests of job creation. This recommendation is indeed reflected in <strong>the</strong> DTI’sIndustrial Policy Action Plan [2007]. The longer term benefits are doubtful, however.Expansion would certainly be accompanied by mergers and acquisitions predicated onexpanding economies of scale and increased labour productivity. It thus appears as ashort term response that will reproduce job shedding growth over <strong>the</strong> longer term.<strong>Wasting</strong> <strong>the</strong> <strong>Nation</strong> - groundWork - 111 -