Wasting the Nation.indd - Groundwork

Chapter 4: The toxic cradle of productionmonomers, are carcinogenic and the mixture of chemicals in many products is likelyto be more toxic than the sum of their parts. Finally, these products accumulate in vastquantities on the dump and the migrant chemicals add to the toxicity of air emissionsand leachate.Power within the industry lies upstream, primarily with Sasol but also with Safripol.While state regulation of the 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 the monopoly producer of LDPE and PVC while Sasol andSafripol share the 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 thebehaviour of Sasol and Dow is “implicitly coordinated” as “their prices are consistentlyin line …” [2006: 9]. In short, they operate as if they were a monopoly and appropriateadded profit equivalent to the transport, handling and tariff costs of polymer imports.SANS and Hosaf both produce PET, and must either import the PE monomer or buyit from Sasol.While profits are concentrated upstream in the industry, labour is concentrateddownstream. According to Dobreva, the 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 the investment in Project Turbo.Dobreva concludes that policy should aim for the expansion of the downstream industryin the interests of job creation. This recommendation is indeed reflected in the 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 the longer term.Wasting the Nation - groundWork - 111 -