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Small business may be the backbone of the South African economy, but it s bearing the brunt of the energy crisis. Paying for generators, fuel,
Small business may be the backbone of the South African economy, but its bearing the brunt of the energy crisis. Paying for generators, fuel, and inverters, employing extra staff to work in less time, and having to turn away work are some of the difficult steps this sector has had to take to survive.
The situation has gone from bad to worse, says labour lawyer Michael Bagraim. Normally at this time of year, my firm receives instructions to draft letters of appointment and contracts of employment. All weve been doing is retrenchments. Both in small and big business, retrenchment has been at an alltime high. This is purely because of load shedding. Retrenchment is now greater than it was at the height of the pandemic.
Lessa Gordon Mauerbergers laundrette, Wash World, and Supa Clean, the factory she runs with her daughterinlaw, Lauren Gordon, would have thrived in the holiday season if she hadnt had to turn down customers due to load shedding. Located in the heart of Sea Point, the businesses service hotels, guest houses, day spas, airlines, and individual customers, including tourists.
Its been an absolute nightmare, she told the SA Jewish Report. We have lost a fortune of work. We usually operate throughout the night, but power is often out for four hours every night. In addition, night staff get paid extra, but they spend most of it waiting for power. All this has a huge knockon effect.
She says she cannot invest in a generator, and a business like hers requires a huge amount of power.
Ive had to employ extra staff to do more work in less time. Weve had a fantastic season, but have had to turn down so many customers, such as kids returning from camp.
She says small business owners often bear the brunt of angry and impatient customers, and asks people to be understanding and accommodating when it comes to load shedding, for example, by packing extra clothes for the holidays.
You can either be bitter, or get on with it Weve chosen to get on with it We would be flying if we had the water and power to do it She notes that when Cape Town faced its infamous drought a few years ago, it also affected the business, yet she survived. We lived through it all, and were still standing.
Her daughterinlaw had to join the business when her late husband, Ronen Gordon, passed away suddenly eight months ago. She has had to steer the ship in the midst of the energy crisis, all while grieving her loss and learning the ropes.
We deal on a daily basis with firms who have less than employees, Bagraim says. They cant afford alternative power sources and invariably if they are involved in service or manufacturing, they cannot afford to keep open. It becomes too expensive to ask staff to come in for two or three hours a day, and it becomes impossible for staff to pay for transport to earn only for those two or three hours a day. The only alternative has been to undergo retrenchments. Normally, we would advise to put people on layoff during load shedding like we did in the past but now, unfortunately, this is a daily occurrence and layoffs arent an option.
A bakery owner, speaking on condition of anonymity, says, Our big ovens take hours to warm up and then just as we put the cakes in the electricity goes off. Theres a huge waste of paid working time and ingredients. My cold rooms get warm and iced cakes dont cool enough to travel. It would cost half a million rand for a generator to run our ovens, and it would be so big, it would take up most of our parking area. Thats before you buy the diesel, which would push the prices so high, no one would buy the cakes.
Even with a generator, entrepreneurs are struggling. Shelene Shaer, the coowner of Tanaz Hair, says Our generator pulls a huge amount of power because of the hairdryers. Its the cost of diesel thats prohibitive. Sometimes the diesel cost equals our electricity bill. Our electronic equipment is affected because of power surges.
Architect Michelle Maltz Shevelew from MS Architects says, I have had to purchase an inverter which is now struggling to recharge its batteries. The batteries dont last and I will need to layout another few thousand rand to replace them with lithium batteries.
Her largeformat plans need to be printed at a copy shop. They turn off their machines prior to load shedding, and they take a while to warm up afterwards. So If I need prints done, I need to check the schedules and prepare accordingly.
For a project on site, the contractor requires electricity for many operations. This causes delays which then have a potential cost implication for the client. If a generator is hired, its a cost for the client. Theres always an unknown factor and uncertainty.
Loadshedding has been plaguing South Africa since It has progressively intensified and is affecting businesses as
detailed in the article above.
With reference to the article, discuss the relationship between strategic risk
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