Roodepoort business owners share experiences and fallout in dealing with load-shedding

The economic wheels need lubrication or risk a feeble halting of progress.

From small enterprises to large operations, the lucky draw of the load-shedding schedule has a ripple effect throughout the economy. Economists have theorised massive amounts that have been haemorrhaged from the economy, but the true effect can be best expressed by business owners on the front lines. While every business owner has unique horror stories, the foundations of their issues mirror those who walk into factories and manufacturing plants every day.

Business owners at the coal face

Raymond Risseeuw opened Westgate Gates, now Amazing Gates, in 1984 with a welding machine borrowed from his father-in-law. Although overheads are low, having paid off his premises and most assets, day to day energy costs are still exorbitant.

Peter Visser has had SA Candle Supply in Laser Park for 15 years. He rents a large warehouse where they manufacture, store and sell a variety of wax-based products. Peter employs 14 staff members and when time is tight, he even gets on the forklift himself.

Rhino Linings has occupied the warehouse in Laser Park since January 2020. Adrian Evans and Phil de Wet rent the factory units where they too manufacture chemicals and equipment on site. They employ approximately 20 people at Rhino Linings but the company also has operations in Australia.

The cost of running a business during load-shedding

Load-shedding had been a thorn in the side of business owners since 2007. Risseeuw employs ten staff members who either weld or deliver his products. Previously, Risseeuw had four smaller diesel generators but the noise and fumes in the workshop became excessive. At the cost of R160 000, he installed a 40kWh generator on his premises, but even that costs R8 000 per month or more depending on the load-shedding stage.

Nature provides a solid stream of energy but still cannot compare to the wide-scale generating capacity of the electrical grid. Rhino Linings have solar power back-ups at their factory space and while the solar power unit forms part of the rental, the current produced is not sufficient to run the power-intensive specialist manufacturing equipment on site. “The advantage is that we can still carry on with our production and admin to some extent during load-shedding,” said Rhino Linings Shareholder, Phil de Wet.

Commercial property owners have seen the value in installing back-up power units as added features for their tenants, especially in areas where cable theft and vandalism are prevalent. Visser’s generator at his warehouse had already been installed when they took occupation, however, fuel is not included and he can spend up to R1 200 per day at load-shedding’s most severe times.

Domino effects on the economy

Manufacturing comes with a reliance on suppliers, and business owners are left with balancing the absorption of costs or passing them onto clients through increased prices.

“Every single one of our suppliers is in the same boat and load-shedding drives up costs to do business which in turn leads to inflation,” stated Visser. Load-shedding also negatively impacts start-ups as increased overheads nullify any progress those businesses may be making. I really do feel sorry for the new guys getting into the market,” said Risseeuw.

The list of issues brought on by load-shedding include lost revenue due to lost sales, damage to manufacturing equipment because of power surges, corruption of server data, and the negative impact on employee productivity. “This creates challenges to customer service and deliveries. Ultimately, inflated operational expenses make us less competitive internationally and locally against imported products” said Rhino Lining’s Evans.

Even simple tasks like communicating with clients and suppliers can be troublesome as phone lines and mobile communications can be interrupted. “The cell phone coverage is abysmal, making communication difficult because even our Telkom lines are based on cellular as they do not provide traditional fixed lines anymore,” added Evans. Outages mean even the traffic lights are out, increasing time on the road to get the products from point to point.

Damned if they do, damned if they don’t

Business owners have no choice but to invest capital to maintain their standards, and not doing so would threaten their existence. The rand value of downtime is difficult to quantify except by those counting the cost on the balance sheet. “It’s hard to put a number to it but there is a very real chance our business would not survive without the back-up generator,” said Visser.

Even the entity responsible for Johannesburg’s electricity, City Power, is buckling under the pressure of the rolling blackouts. “Load-shedding has undesirable effects on the infrastructure which, by its nature was never meant to be switched on and off at short intervals, and comes with added financial pressures that we did not budget for. Incidents of vandalism and cable theft increase during load-shedding, exacerbating the already dire situation,” stated City Power spokesperson, Isaac Mangena.

Entrepreneurs have just operated through the greatest destroyer of economic output the western world had experienced in recent memory. That said, those questioned here agree that load-shedding surpasses even the regulatory response to the global health scare. “Lockdown had a significant impact on our business. The ongoing load-shedding, however, has a much more substantial and lasting impact; not just in the running of our business but also in terms of export customers that view us as potentially unreliable suppliers. These export customers then decide to purchase elsewhere, even if it means paying more,” stated Evans.

Whether running a factory or staying connected to a revenue stream via the internet, live electrical sockets are non-negotiable. Success requires consistency and while South Africa’s human capital is as limitless as it is resilient, the foundation they are operating on is perilously brittle.