Recently, the executive officer of South African glass bottle manufacturer Consol stated that if the new alcohol sales ban continues for a long time, then the sales of the South African glass bottle industry may lose another 1.5 billion rand (98 million US dollars). (1 USD = 15.2447 Rand)
Recently, South Africa implemented the third alcohol sales ban. The purpose is to relieve pressure on hospitals, reduce the number of injured patients who consume excessive alcohol in hospitals, and make more room for treatment of COVID-19 patients.
Consol executive Mike Arnold said in an e-mail that the implementation of the first two bans caused the glass bottle industry to lose more than 1.5 billion rand.
Arnold also warned that most of Consol and its supply chain may experience
unemployment. In a short period of time, any major long-term loss of demand is "catastrophic."
Arnold said that although the orders have dried up, the company's debt is also accumulating. The company mainly supplies wine bottles, spirits bottles and beer bottles. It costs R8 million a day to maintain production and furnace operation.
Consol has not suspended production or cancelled investment, as this will depend on the duration of the ban.
However, the company has once again allocated 800 million rand to rebuild and maintain its current kiln capacity and domestic market share to maintain operations during the blockade.
Arnold said that even if demand for glass recovers, Consol will no longer be able to fund repairs for furnaces that are about to end their useful life.
In August last year, due to reduced demand, Consol suspended indefinitely the construction of a 1.5 billion rand new glass manufacturing plant.
South African Brewery, part of Anheuser-Busch InBev and a customer of Consol, cancelled the 2021 R2.5 billion investment last Friday.
Arnold. said that this move, and similar measures that other customers may take, "may have a mid-term knock-on effect on sales, capital expenditures, and the overall financial stability of the company and the supply chain.
Post time: Apr-13-2021