South African tyre manufacturers oppose recycling levy plan

Rubber and Wood  |  2013-04-08 07:22:06   |   By

The tyre makers of South Africa have raised stringent opposition to the government plans to charge recycling levy on tyres sold by them.

CAPETOWN (Scrap Monster) : The tyre makers of South Africa have raised stringent  opposition to the government plans to charge recycling levy on tyres sold by them. The government decision will cost the manufacturers hundreds of millions of rand each year.

The Government has set up a non-profit organization called the Recycling and Economic Development Initiative South Africa (Redisa) which is entrusted with rights to collect a levy of 2.30 rands per kilogram of tyre being sold by the manufacturer. That simply translates itself to 8-12 rands per tyre.

It is estimated that a huge sum of money will flow into Redisa’s reserves. Around 275,000 tons of tyre are sold each year in the country. If each kg of tyre is charged at the above mentioned rate, Redisa would collect nearly 632 million rands a year. Redisa plans to create collection centres around the country for tyres. These will then feed into different recycling ventures at 35 plants, recycling two-million tyres a month. The proposal would create immense job opportunities as well.

The tyre industry does not seem to be encourages by all these. The industry in turn has decided to oppose the government proposal by filing a series of law suits against Redisa and the country’s Water and Environmental Affairs Ministry.

The Retail Motor Industry (RMI) had also voiced its protests against the proposal.

Meanwhile, the High Court has ruled in favor of Redisa and has ordered that the plan should go ahead. Following the court order, Redisa had sent out its first invoices to tyre manufacturers and importers last month which will become due for payment in 90 days.

RMI has appealed against the High Court order, the hearing of which will be taken up during May. The RMI states that there are still better plans than Redisa that are being submitted for review and the best among them shall be accepted by them.