Glass sector to present winning plan

Johannesburg - In a bid to sidestep the drama engulfing the legislation on plastic bags, the glass industry believes it has come up with a winning proposition for the industry and the environment.

The glass sector is pushing for an advanced repurchase system rather than compulsory deposit legislation.The government is expected to release a draft bill for public comment in the first quarter of next year.

In terms of the advanced repurchase system, the manufacturer would administer a levy on its products which, once collected, it would pass on to a non-profit, capacity building company.

The glass industry has an annual turnover of about R2.5 billion; therefore if, for example, it implemented a 1 percent levy, it would be able to direct an estimated R25 million to programmes established to create awareness and develop business skills for emerging and existing entrepreneurs in the glass supply chain.

Jaco Human, the recycling manager at Consol Glass, said the industry would be restructuring its supply chain and had been developing the new model for the past year in collaboration with Nampak, the packaging firm.

Nampak will tomorrow present this overhauled industry model to Valli Moosa, the minister of environmental affairs and tourism.

Consol, the largest glass manufacturer in South Africa, has about 77 percent of the market, while the other 23 percent is held by Nampak.

Growth in recycling glass in South Africa has levelled off - for the past five years only 20 percent of the annual 700 000 tons of glass the country uses has been recycled. Brazil recycles 40 percent, the UK about 35 percent and the Netherlands an estimated 91 percent.

Mike Arnold, the group general manager for Consol, said that although there was an increase in recovered glass over the past few years, this had not affected the growth in volumes of recycled glass, which led him to believe the money was getting stuck somewhere in the collection supply chain.

The restructuring would cut out the middle man, the glass processor, and would put processing at the manufacturing level.

The most dominant supplier was Enviroglass, which operated a virtual monopoly, Arnold said.

Bradley Sayer, Enviroglass's general manager, said the new model would not necessarily lead to more glass collection.

"It will lead to job losses and fragmentation in the sector," Sayer commented, adding it would be more helpful if glass manufacturers paid more for collected glass.

Collectors currently get paid more for scrap metal and for paper than they do for glass.

Sayer said the section 21 company was a good idea and would go a long way towards stimulating growth, but hinted it was disingenuous of the manufacturers to dress up a strategic investment as an act of public-mindedness.

"If they spent that R35 million on collector networks that would be an investment.

"In five years they would have spent the money and grown the industry but now they will have paid for an asset and caused job losses," Sayer said.

The levy on bottles should also not be seen as a contribution by the glass industry, Sayer said, since it would be the consumer who would be paying the levy and not the industry.

600450 Glass sector to present winning plan
Date: 15 July 2003

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