The South African Vinyls Association (SAVA) hosted its 12th Annual General Meeting (AGM) on 22 April 2021. Despite the fact that this was the second consecutive year that the industry meeting was a virtual event due to COVID-19 restrictions, approximately 70 delegates registered to attend the session. Attendees included current and potential SAVA members, affiliated industry associations such as the Southern African Plastic Pipe Manufacturers Association (SAPPMA), the Association of Electrical Cable Manufacturers of SA (AECMSA), international bodies such as the Vinyl Institute (USA) the Vinyl Environmental Council of Japan and other interested parties.
The state of the PVC industry in SA and around the world
David Mokomela, Vice-President of Base Chemicals at Sasol, was the guest speaker at this year’s AGM and used the opportunity to offer some insights into the current state of the PVC industry in South Africa and the rest of the world.
“The global pandemic and government lockdown measures have not only severely hampered GDP growth, but also had a catastrophic impact on PVC consumption in 2020,” Mokomela said. He explained that the supply of PVC was further hampered by a disastrous Hurricane season in North America and the significant drop in commercial and industrial construction experienced last year. Although the demand for PVC rebounded faster from the Corona virus lockdowns than caustic soda, Mokomela said that outages, planned maintenance and other international events kept chlorine production low. This negatively impacted on the supply of PVC and resulted in prices reaching a 35 year high.
“We are hoping that PVC stocks in the USA will normalize by May or June 2021, although it could possibly take up to 6 months to get back in line,” Mokomela predicted. He warned, however, that supply from Europe was likely to remain tight through Q2 due to planned and unplanned shutdowns.
“Supply of ethylene-based PVC out of China is improving, but prices will remain firm in the short term due to global supply shortages and upcoming planned shutdowns in Asia. Global prices are likely to peak in May, but will then begin a gradual decline to the “New Normal”, he added.
Looking ahead at what the future holds, Mokomela said that Southern Africa has a positive market growth over recent years and future expectations indicate that demand will continue to outpace local PVC supply. Although PVC imports declined through last year, they are expected to pick up in 2021 as global supply eases.
“Unfortunately, we must acknowledge that Sasol is operating a plant that is 43 years old. Intensive maintenance shutdowns are therefore a major annual requirement, which have due impacts on our supply profile at certain periods. When unplanned outages occur, we have limited catch-up capacity on stock levels. Future market growth and capacity expansion by the conversion sector will necessitate alternative sources of PVC supply to supplement local production and meet the overall market demand profile,” he warned.
As the industry body representing the local vinyls industry, SAVA managed to achieve numerous successes over the past year despite the challenges presented by COVID-19. These include all of its members successfully completing the annual Product Stewardship Commitment Survey for 2021 and therefore receiving the Vinyl. Product Label as a sign that they are compliant with the PSC in that they are lead-free, only use additives that have been approved for high human contact applications and supports a circular economy.
SAVA also managed to grow its membership by welcoming Food Packaging System and Orchem as Full Members and introducing a new category for Individual members.
“In many respects 2020 would be remembered as a year that was painful and hard, but if you look at the number of attendees today its shows that the industry has managed to pull together and unite in a time when it was important for us to do so. We kicked of the year by adopting the theme “Building for the Future”, not only because vinyls are widely used in the building and construction industry, but also because we wanted to grow the local vinyls industry and along with it, SAVA’s reach to include the entire value chain. Looking back, we are proud to report that we have succeeded in meeting this objective”, said outgoing SAVA Chairman, George Dimond.
New SAVA Board and leadership
SAVA members were given the opportunity to vote for the new Management Committee (Manco) who would take responsibility for leading the Association the rest of the year. Debbie Munford (Isegen SA) was elected as the new Chairperson, supported by Tandy Coleman (Polyflor SA), Wessel Oelofse (Mpact), Renier Snyman (Sun Ace SA), Mubeen Siddiqi (Innovative PVC Compounds) and Rishi Madho (Sasol). Monique Holtzhausen was appointed as new CEO of SAVA, allowing Adri Spangenberg to focus on establishing VinylLoop as the Association’s new PRO that would be focussed on the collection and recycling of vinyl packaging as part of the Section 18 EPR scheme.
An exciting future head
Concluding the 2021 AGM, newly elected SAVA Chairman Debbie Munford said: “We are very excited about what the future holds for SAVA. We start our work on a strong and solid footing thanks to the excellent work done by the previous Board. The Section 18 EPR legislation presents us with exciting challenges, but also an opportunity to increase our membership base and influence team members to become active and grow with SAVA.
It is clear that both the global and domestic PVC markets are facing challenging times ahead, but we are fortunate to have access to a wealth of industry expertise to help navigate us through the multitude of economic, social, political and environmental factors through our local network of members and partnership with the Global Vinyls Council and Vinyls Plus. More than ever before, it is vital to belong to an industry association such as SAVA that fosters understanding and co-operation between suppliers, manufacturers and end users to ensure the sustainable future of our industry”.
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