PrintFAWU pleased on the news that the chemical division of Sasol Ltd was forced to embark on divestiture programme
6 July 2010
The Food and Allied Workers Union (FAWU) is pleased on the news that the chemical division of Sasol Ltd was forced to embark on divestiture programme in which it will off-load some of its fertilizer plants to other players as part of enhancing competition by allowing new entrants into the industry.
We believe this will go a long way in ultimately driving fertilizer prices down from their all-high colluded level to reasonable levels. We hope that the resultant lowered prices will find expression in lower food prices given that fertilizer costs are the single biggest cost item for majority of agricultural production costs, even higher than labour cost at an average of 32%.
We call on the Competition Commission to ensure that the new entrants do not fall into profit-chasing and greed-driven price collusion as soon as they get into business.
We are also pleased to hear that Acelor-Mittal Ltd is facing investigation by the Competition Commission on suspicions of violating the competition law. To FAWU, the sky-rocketing increase in the surcharge by Acelor-Mittal is nothing but excessive pricing based on their dominance or abuse thereof.
Because of abuse of dominance by Acelor-Mittal, a tin of canned baked beans has 38% of the ultimate retail price is going to the actual tin-plate packaging cost more than unit cost per labour.
The common denominator from these two cases is the privatization of state-owned assets becoming bacons of aggressive profit-chase and greed-drive based on abuse of dominance and excessive pricing and on price collusion.
Given the above, as a union, we reiterate our call for the re-nationalization of all the privatized former state-owned enterprises, including Acelor-Mittal and Sasol with more urgency for the good of development and food security among other considerations.
Katishi Masemola
FAWU General Secretary
082 467 2509
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