SMEs suffer the brunt of load shedding, says business analyst

Jeremy Lang, regional general manager at Business Partners Limited (Pic supplied: MSL Group)

Jeremy Lang says the industries most affected by load shedding are manufacturing, retail, hospitality, and businesses using cold storage.

The implementation of load shedding by the state-owned power utility Eskom has been devastating to small and medium enterprises (SMEs), said Jeremy Lang, regional general manager at Business Partners Limited.

Eskom unexpectedly began rolling out power cuts this week, taking load shedding to unprecedented Stage 4 at some point, after saying that it had lost at least six power generating units.

Stage 4 load shedding means that up to 4,000 MW of the national grid is shed, cutting off the power supply for at least four hours in Johannesburg areas. It has been reported that load shedding in South Africa at stage 2 would cost the productive economy about R2 billion a day.

Lang said in order for SME owners to limit this impact, they needed to know exactly how the lack of consistent energy supply was affecting their businesses specifically.

“For example, some businesses can accommodate producing goods and services around the load shedding schedules, however, other businesses may rely on passing trade at a specific time of the day. If this is the case, then load shedding can be detrimental,” he said.

Lang said the industries most affected by load shedding were manufacturing, retail, hospitality, and in particular, businesses that were using cold storage and refrigeration, adding that load shedding also had a severe impact on a business’ productivity.

“This is because over and above the potential loss of stock, the constant switching ‘on’ and ‘off’ can also damage the equipment which can become extremely costly to repair or replace,” Lang said.

“As electricity is generally cut for around two to four hours, SMEs could lose up to four of an eight-hour working day, which can also impact employees who are paid by the hour.”

African News Agency (ANA) saw during the week how load shedding affected businesses such as restaurants, retail, and grocery shops at shopping malls in Johannesburg during the week.

The impact of power cuts also hit institutions of higher learning, leaving students engulfed in darkness.

Lang said that because of the uncertainty the unreliable energy supply causes, small businesses may not invest in growing their business at this time, which will, in turn, restrict the growth of the economy.

He said the best option was to consider investing in backup electricity supply such as generators or an uninterruptible power source (UPS) system.

“Further to this, as the abrupt break in electricity also has the potential to damage the hardware of your computers, it is imperative that all SME owners make sure that the business’s information is backed up on a daily basis on a secure cloud-based server, where possible,” Lang said.

– African News Agency

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