Project will slim SA's waste by burning spare tyres
March 18, 2009
A plan hatched seven years ago by the tyre manufacturing industry to remove waste tyres from the environment appears about to become a reality.
Although it has taken inordinately long for the Department of Environmental Affairs and Tourism and the tyre manufacturers, suppliers and dealers to agree on the mechanics of the project, the time spent thrashing out their differences seems to have been well used as the parties have sought to ensure the project does not lead to any unintended consequences.
This is reflected in the decision not to pay for waste tyres. If the project bought used tyres, this would have given them a value and created a market. This in turn would have spawned a new industry, an offshoot of the criminal syndicates that steal copper cables from telephone installations and metal from a variety of different structures, such as the bridge guard rails over many highways and major roads.
The project will lead to some positive intended benefits, such as creating jobs and furthering transformation.
New jobs will be created in the recycling industry and at the companies that win tenders to collect and transport the waste tyres to the recyclers.
Etienne Human, chief executive of the SA Tyre Recycling Project, a non-profit company, says the transport contracts are expected to be awarded to firms with a black economic empowerment component.
However, Human indicates that the waste tyre collection and transportation contracts will not be suitable for small operators with, for instance, only a bakkie.
To win these contracts, the companies will need to have a substantial operation, financial management knowledge and ability and sizeable capital to set up the infrastructure to handle contracts.
This will include a transfer site where tyres will be sorted and mechanical equipment to handle and lift them.
Overall, the benefits of the project look extremely promising. Not only will the waste tyres be eradicated from the environment, but the energy left in the tyres can be used, for example, to fire the kilns of cement producers.
Virgin marriage teeters
The lacklustre performance of Virgin Mobile South Africa has led to a call for Cell C to pull out of its 50 percent joint venture.
Cell C and Richard Branson's Virgin Group launched Virgin Mobile SA in 2006.
Last week investment advisory firm Delta Partners said that an acquisition of Cell C would become the catalyst to disband the Virgin Mobile SA operation.
Telkom and Kuwait-based Zain have been named as potential buyers of Cell C.
It has been a challenging three years for Virgin Mobile SA. It has failed to sign up the millions of subscribers it expected and has changed chief executives twice.
Its third chief executive is Steve Bailey, a former executive at Cell C.
Cell C took the reins at Virgin Mobile SA in 2008 when Cell C chief executive, Jeffrey Hedberg, was appointed chairman of the joint venture at the end of Virgin Group's one-year tenure.
Since its inception Virgin Group has brought in its own people to head the local operations but a source said they had unfortunately overestimated the local market and failed to deliver.
According to insiders Virgin Mobile SA is selling its branded stores to focus on its core business as a virtual network operator. Once that's done it will revert to its initial strategy of focusing on the high-end market rather than the low-end market Cell C is vying for.
Cell C still believes the venture is ideally positioned to attract high-end customers, with its "strong brand to smell, look, and taste different from normal post-paid offers. Their enthusiasm can be contagious!"
Cell C said on Tuesday that, as a shareholder, it had always wanted to see a better performance, and the introduction of Bailey "has injected significant and positive changes to Virgin Mobile's operations".
It said it was committed to Virgin Mobile SA as long as the operational and financial performance improved steadily.
That begs the question: if there is no improvement, will Cell C call it quits?
Household wealth totters
With no end in sight to the destruction in wealth, people are starting to count the cost of the casualties.
Stanlib economist Kevin Lings says the wealth of US households shrank by $12.7 trillion (R126 trillion) from a peak of $78.4 trillion in the third quarter of 2007 to the end of 2008. The $11.3 trillion decline in asset values between December 2007 and 2008 was the largest ever recorded over a 12-month period.
After years of seeing their wealth expand the experience must have left American households shell shocked. Episodes of wealth destruction are rare in that country.
Lings says American household asset values have declined in only 13 of the past 228 quarters. Four followed the bursting of the tech bubble in 2002/03 and another four followed last year's bursting of the credit bubble.
Over the past year households have lost out both in terms of financial assets (a decline of $8.9 trillion, or 18 percent of the total) and property (a decline of $2.2 trillion, or 10.5 percent). Things have got worse in 2009 as residential property and equity prices have continued to fall. Shares are down 16.5 percent in the year to date. Using very rough estimates, Lings says: "It is feasible that US household assets have already declined by a further $2 trillion" in 2009.
The scale of the losses may differ from country to country, but most households around the world are much poorer than they were two years ago. While the poor always suffer most because they have so little to start with, the rich are taking a pounding too. Many have been turned into instant paupers as the absence of cash flows sent unrealistic or fraudulent structures toppling, leaving many investors destitute.
Edited by Peter DeIonno with contributions by Roy Cokayne, Thabiso Mochiko and Ethel Hazelhurst.
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