Assessing the effect of imports on refractory brick manufacturers in South Africa

Abstract

The immense competition due to international trade is bedevilling various industrial sectors in South Africa. Numerous South African manufacturing industries are bearing the brunt of this inapt predicament. While the local consumers are privileged with significant benefits due to the increased options, the plight of many local industries such as refractory producers might not be fully understood. Therefore, it was imperative for this research study to interrogate the effects of imported refractory bricks on the operations of the local refractory brick manufacturing companies in South Africa. A detailed review of the literature established the challenges faced by refractory brick producers in South Africa due to trade, and identified the gaps in the existing body of knowledge. A critical analysis of global refractory brick trade, refractory global supply chains and competitors brought the challenges faced by local producers to the fore. The literature uncovered numerous quandaries and hurdles such as shrinking local market, reduced turnover, reduction in production throughput, closure of some refractory producers, lower employment levels and capacity utilisation. The quantitative research design approach was utilised to address the research questions and meet the objectives. A questionnaire that sought to establish the effects on the various organisational value chains was issued to a sample of 50 respondents who provided an excellent response rate of 74%. The obtained data was statistically analysed to identify the correlations imports to the various organisational value chains such as sales, market share, production output, capacity utilisation and unemployment. Negative correlations were identified between the quantity of refractory brick imports in South Africa and the operational functions of the local refractory producers such as sales, market share, production throughput, refractory job market and capacity utilisation. The findings proved that an average perceived negative effect of refractory brick imports on the operations of the local producers in South Africa was a negative 76.92 percent correlation. This negative correlation is very high and ultimately unsustainable for the local refractory brick producers. The study provided recommendations for the refractory industry, government, and the private sector, and also included recommendations for future research. Recommendations for government are anchored on the need to impose protectionist policies such as harsher import tariffs on refractory bricks in order to safeguard the industry from an impending failure

and total collapse due to international trade effects. Critical recommendations for the refractory industry entailed the adoption and crafting of strategies to curb the effects of imports such as expanding into regional geographical markets in sub-Saharan Africa and the adoption of lean manufacturing principles.