Stage 6 loadshedding takes its toll on smaller producers

03 May 2023

by Fredalette Uys

“With the current price of diesel and the amount that you have to burn during stage 6 loadshedding it is impossible to mill at the current prices.”

These are the words of Aubrey Terblanche from Gideon Milling, a small corporate mill in the Western Cape.

South Africans have been braving stage 5 and stage 6 loadshedding for more than a week now. According to Eskom’s most recent announcement, stage 6 loadshedding will continue indefinitely due to faults at generating units at the Tukuta, Kriel, Duvha and Kendal power stations.

Aubrey says that there are various problems when it comes to producing flour at stage 6 loadshedding.

Because the wheat must be soaked for about a day before it is ground, he must be able to plan 24-30 hours in advance whether he is going to grind or not. It is difficult to plan according to the loadshedding schedules.  

Fetching wheat from silo complexes is another problem as the time during which wheat can be loaded has been reduced to between four and five and a half hours instead of eight hours. 

“If you miss your load for the day, your mills grind to a halt, which also causes damage.”

Diesel costs six times more

During stage 6 loadshedding, the costs of diesel to keep the power generators running also do not add up anymore. Aubrey’s calculations indicate that his diesel costs at stage 6 are six times higher than his usual Eskom bill. Going forward he will have to raise the price of his product, which means he will lose his competitiveness. Additionally, larger factories are exempt from load shedding, but a smaller manufacturer like Gideon Milling is not so lucky, even though he also supplies to important markets.

According to Nico Steyn from Eureka Mills in Heidelberg in the Western Cape, loadshedding has a big impact on their mills, packaging capacity and extraction, and they have been forced to purchase a generator at a high cost as they deliver to retail groups and are fined if they miss deliveries.

“Purchasing a 44 kVA generator is one thing, but keeping it fuelled is another matter.”

He says that additional infrastructure, like fuel storage tanks and a cable from the generator to the Eskom pole, cost them a further R100 000.

“Without the generator, there would have been a massive loss in turnover, margins and especially clients.”

According to their calculations, they would have lost almost 62% of their capacity during stage 6 loadshedding without a generator. 

The cost of keeping the generator going, however, is very high. Running the generator at only 50% capacity for 45 litres per hour costs the company more than R200 000 per month.

Fresh Produce 

The effects of loadshedding can also be seen in the prices of the fresh produce markets.

According to Johnny van der Merwe from AMT, the effects of loadshedding on fresh produce can be seen directly in most prices that are currently higher than they were a year ago. He says that various aspects of loadshedding place a lot of pressure on the value chain, including losses, and this keeps the prices high for the end consumer despite demand starting to drop. 

Potato prices are currently 24% higher, and tomato prices are up by 76% while carrot and onion prices rose with 19% and 130% respectively.

“Loadshedding causes problems for the meat industry with regards to the cold chain and the processing capacity. This means a lower demand from the producer to processing and puts pressure on prices.”

Furthermore, intensive industries like the pork and chicken industry are under pressure which pushes the prices up.

Pork prices are currently about 30% higher, with chicken meat prices being about 16% higher than a year ago. Contrastingly, extensive production like that of mutton and beef is not affected as much by loadshedding on the farm level and thus prices for these products are currently lower. 

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