Cape Town - Dwindling demand for its products had led to Everite Group, the manufacturer of cement asbestos pipes, to close its Brackenfell, Cape Town factory with a loss of 350 jobs, Randal Godden, the managing director for manufacturing. said yesterday.
Everite, along with Group Five Construction, are the main operating subsidiaries of Group Five Holdings.
Godden said the main reason for the closure of the Cape Town factory was that the firm had been trying to run two inefficient factories to service dwindling demand.
Another reason was the national and international opposition to asbestos-related products. The firm embarked on a substitute fibre cement building material which does not include asbestos.
The manufacturing of its building material products would eventually be concentrated at Kliprivier, in Gauteng, because two thirds of the firm's market was located there rather than Cape Town.
This will be the third Everite factory to close after the ones in Durban and East London.
Godden said: "In conjunction with external international consultants we have come to the conclusion that this is the correct way to keep the business going and to make it viable to become successful domestically and in the export market.
"Everite started out as a regional manufacturer which services the local market. With global competition there is no way you can be competitive by running a commodity product in small and inefficient factories."
The firm has continuously lost money over the years and the strategic move now is to make it a successful business and obtain a return on assets.
Although there would be a loss of 350 jobs out of 500, a number of people have asked to be transferred to Kliprivier. "We're keen to do that wherever possible because we would like to keep good people and retain their skills," Godden said.