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The Ever Increasing Cost Of Doing Business In Africa

The ever increasing cost of doing business in Africa

You don’t need us to tell you about the ever increasing cost of doing business in Africa.

But maybe we can help you to control those costs.

We specialise in helping African Companies to Reduce Power Consumption, Save Electrical Energy and Increase Profits.

We promote the efficient use of electricity energy in Africa.

A brief History and a look into the Future

We have benefited from low electricity prices for years. But there’s much greater demand now and those days are over and have been for some time.

According to energy analyst Dirk de Vos, Electricity prices in South Africa have roughly tripled in real terms over the past decade. The 2019 approved tariff increases will see prices rise by a further 25% in the next three years.

The old prices allowed for inefficiency, and over the years 100’s of million of KW of electricity have been wasted. For businesses like yours maybe it wasn’t such a problem then.

But now it will erode profits and for some companies it will be the difference between profit and loss.

Survival or failure.

Cost control is more important that it’s ever been.

In 2015 The Energy Regulation Board approved Zesco’s application to increase electricity prices by 187%. In May 2017 prices increased by 50%. In September 2017 there was an additional 25% increase. March 2019 Zesco applied to the ERB for further 75% price increase. 

And that’s just the last few years

Zimbabwe’s power regulator recently increased the average electricity price by 320 per cent. That’s the second increase in three months

We can blame poor management of the utility companies, we can complain about above the crazy price increases. But in the end this is where we find ourselves, the business environment in which we must continue to operate.

The difference between profit and loss

Every business is different, and we’ve measured many over the years. The average loss over all companies we’ve recorded is 22%. We’ve worked with some companies that were losing as much as 40% of all their electricity. We’ve also surveyed companies who had very good power factor.

But the trouble is, you can’t know until you measure it.

ZESCO conducted their own Power Factor surveys since 1995. And according to their report “80 percent of the clients surveyed operate at a Power Factor of 0.5 to 0.8” Meaning 8 out of 10 companies measured are losing somewhere between 20% and 50% of all electricity.

Your company could be losing 40%, or your Power factor could be good. But the only way to find out is measure and test your PF. If nothing else it will give you peace of mind.

We can survey and measure your equipment for you. If you need to place an order with us, the survey fee will be refunded in full. To find out more here.

More Information

You’ll find more information about our Power Factor Solutions throughout this website.

For an informal discussion on how we can help your business and answer any questions you have, please use the CONTACT US page.

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