The impact of the presence on global markets of calcium carbide originating from China on other industry role players : the case of SA Calcium Carbide (Pty) Ltd.

Abstract

This research assesses how the presence of calcium carbide originating from China in global markets has impacted on the operations of other role players in the industry. SA Calcium Carbide (Pty) Ltd. located in Newcastle, South Africa, was used as a case study. The study spanned all markets where the company has a footprint meaning domestically, regionally and internationally. Attention was also focussed on Chinese producers themselves with the intention of fully comprehending what makes them remain competitive despite offering goods or products at prices widely deemed to be below the dictates of the markets. It is widely perceived by South African calcium carbide producers and traders that the presence on global markets of the same product originating from China has had a profound negative impact on their competitiveness. The aim of the study therefore was to discern the extent to which companies like SA Calcium Carbide have been affected by the presence of products from China on the global market with special focus being put on the competitiveness in terms of pricing of products. The study used a survey strategy, and was exploratory in nature with the study setting being non-contrived. The choice of the survey strategy was motivated by the need to collect both quantitative and qualitative data in order to meet the research objectives. As encapsulated in the title of this research, the data was gathered, with an 80 percent response rate, using a questionnaire method from more than 70 current SA Calcium Carbide customers both from the domestic and the export side of the business. In order to consider the different perspectives of the whole scenario, 10 companies involved in either manufacturing or trading of Chinese manufactured calcium carbide were interviewed, some face to face and some telephonically. The study revealed that current customers, who are predominantly from the African continent, buy product from SA Calcium Carbide primarily because of its high quality, although they consider the price of the product as expensive compared to the Chinese product. It also emerged that the Chinese manufacturers and traders believe that capabilities such as new product innovation, joint ventures, favourable government policies and raw material sourcing strategies are very essential in building competitiveness of companies in the global market. Obviously evident from the results was that the export volumes of SA Calcium Carbide were on a gradual downward trend due to loss of market share to Chinese companies.