Delta to end local operations

NELSPRUIT – With the nearing approaching elections on May 7, political parties are making promises to boost job creation, while the country’s manufacturing sector continues to struggle.

This became evident again last week when Delta Electrolytic Manganese Dioxide (EMD) announced on its website, the decision taken by its board to close down.

The JSE-listed company, which specialises in the manufacture and supply of EMD used in the production of primary alkaline batteries, recently announced the decision to limit production at its Nelspruit operation.

One of the company’s two production lines in the city is expected to be idled by the end of the month. Over the course of the year, operations are to be discontinued altogether.

Research on the performance of the manufacturing sector, a potentially large employer, done by the Small Enterprise Development Agency (Seda) in 2012, showed that the sector overall was declining due to higher labour and production costs, making certain goods cheaper to import and retail, rather than to produce them locally.

In Mpumalanga specifically, the capital-intensive nature of the manufacturing and mining sectors, has not created many employment opportunities in the past, according to the research. The job loss at Delta is estimated to be just under 200.

“The board has taken the decision, subject to approval by shareholders, to discontinue operations in a phased and orderly manner during 2014 and to realise value for the company’s assets during 2014 and 2015,”it said in a statement.

According Delta, of which the holding company is Valmont EMD, a private limited one incorporated in the United Kingdom, the decision was made following a strategic overview coupled with a reduction in supply arrangements to Duracell.

Seda’s recommendations included that new capital-intensive industries needed to be identified and pursued to create more employment in the province.