Wednesday, 15 August 2007
Consider the humble gas bottle (2)
SEEMS like Spigot struck a nerve here. LPG suppliers are not being so friendly to each other, right now. Apparently, the game is to buy competitor-bottled LPG cylinders and then send them out of the country, to Botswana. It reminds Spigot of a rumour in the industry years ago that, somewhere on a farm in Namibia ,there is a mountain of LPG bottles. Spigot used to believe that if it existed it was probably because a farmer in that vast land had figured that the cost of returning the bottles was too high to bother with. Now, he is not so sure. If this practice of attempting to destroy small operators is being done by the big LPG suppliers, then this is surely something the Competitions Board should look into?
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Oh spigot...oh spigot..... if anything i can see by the tones of your blog that you have an axe to grind. Put yourself in the shoes of the big gas companies, why on earth would an investor approve companies that they own shares in to buy items worth zero value to them only to hide them and not receive a return on such items? The problem with the "smaller new entry gas companies" is that they enter the market with a few thousand cylinders and expect to cover the entire market with them and get them back immediately. Little do they realise that they would need to invest in 100 000's of cylinders in order to sufficiently supply a small market let alone a laerge one like Gauteng, Natal or any major province in which they operate. All of the gas companies operate in the neighbouring states, so there would be no reason to pay tax at the border to move these cylinders....who is going to pay for these cylinders to be trasported so far...the trucks cost a fortune...why waste time doing that...the cometitions board would have a laugh at the idiot putting this in for scrutiny anyway.....if these smaller companies want to compete on equal footing they need to invest.... easy mathematics... do you know what the average cylinder turnaround ratio is on a LPG cylinder in SA? Thats your homework for the week. Let me know....do the sums and then come back with your allegations...
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