Glass industry defends plans to restructure supply chain

Johannesburg - The glass industry yesterday defended as proactive its bid to restructure its supply chain and invest in a hi-tech recycling plant.

The restructured model will greatly diminish the role played by Enviroglass, which has until now enjoyed a dominant position in the market as a supplier of recycled glass (cullet) to the two top glass manufacturers in South Africa - Consol and Nampak.Dave Kassel, the chairman of the Reclamation Group, of which Enviroglass is a part, said there was no need for another glass processor.He said additional processing capacity would not increase the level of glass recycling in South Africa.

South Africa only recycles 20 percent of the estimated 500 000 tons of glass it uses annually.

Kassel would like the glass manufacturers to pay a flat rate for recycled glass and transport costs on top of that to make waste glass collection in outlying areas financially viable.
There are currently only two points for delivery of cullet - Johannesburg and Cape Town.

Mike Arnold, the group managing director for Consol, conceded that transport was a problem in its restructured industry model that needed to be solved.

However, he pointed out that the group was already paying for transport costs.

"In the cullet price there is a national distribution price of R112 a ton, so you are cross-subsidising country rates with metropolitan rates," Arnold said, adding that the figure was an actual cost calculation that fully covered the transport price.

Kassel's argument for a higher cullet price was based on energy and equipment savings associated with using cullet as opposed to using virgin raw materials

To make glass, manufacturers need to mine silica, lime, soda ash and feldspar. The manufacturers have said by relying more on cullet they will extend the lives of the mines.

Kassel said by using cullet there was also greater recovery, which meant what you put in was what you got out.

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600450 Glass industry defends plans to restructure supply chain
Date: 18 July 2003

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