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In April this year, the Newcastillian reported how Karbochem was shutting certain of its operations.
At the time, Chairman of the Karbochem board of directors, Abraham Brink explained that circumstances beyond the company’s control rendered the production of synthetic rubbers by Karbochem unsustainable. Because of this, and other external factors, the manufacturing facilities in both Newcastle and Sasolburg were closed by the end of May.
However, speculations have come to surface that the company is set to close down completely. If this is true, the shutting down of the company will have a negative impact on Newcastle’s economy. Can Newcastle expect Karbochem to close down completely?
“No, Karbochem Newcastle is not closing down completely. The rubber production facilities were indeed closed down, but a reduced number of employees will remain on site to supply utilities and services to the other companies on site, namely Lanxess, SACC and African Amines,” says Brink.
But if the company isn’t facing total shutdown, why was it necessary to close the rubber manufacturing facilities? Why are people so tense?
“It was no longer possible to effectively compete against other global producers. Fixed overhead costs, such as labour, electricity, transport, have over the past number of years consistently risen far more in South Africa, than in overseas countries against which Karbochem had to compete,” explains Brink.
Furthermore, the situation was finally precipitated by the volatility of the South African currency exchange rate. “Some 250 employees were unfortunately retrenched. This includes both Sasolburg and Newcastle,” claims Brink.
As Newcastle continues to change with the times, locals must look to the future with an optimistic outlook, as industries are simply evolving. Inviting businesses to Newcastle is most certainly the order of the day.
Are tensions merely running high after closing down of the rubber production facilities? Or is there more to the situation than meets the eye?
