New tariffs on the cards for South Africa
The International Trade Administration Commission (ITAC) has been requested to review South Africa’s trade policy on paper products, as local manufacturers struggle to compete with cheaper imports.
The Minister of Trade, Industry, and Competition, Parks Tau, requested the review in response to calls from local manufacturers for higher tariffs on international paper products.
These calls led to an investigation into pressure being placed on the industry in June 2026, brought by two of South Africa’s largest paper manufacturers.
The Minister requested that ITAC “review a sector-wide paper and paper products industry and recommend an appropriate trade policy instrument that can drive the industry towards sustainability and resilience.”
The request noted that South Africa’s paper manufacturing industry is facing pressure from international competition.
“The South African pulp and paper industry is under tremendous strain, particularly in the uncoated paper, newsprint, packaging, and tissue segments,” it said.
“The sector has raised concerns about the growing challenges of rising import penetration, declining demand for print paper, and the slowdown in the domestic economy.”
It said this pressure was also coming from rising manufacturing costs in South Africa, driven by high electricity and transportation costs.
“Increasing input costs, particularly electricity and transportation expenses, are placing significant pressure on local manufacturers and squeezing local producers’ profit margins,” it said.
Electricity tariffs have risen sharply in recent years, roughly doubling over the past decade due to the compounding effect of consistently high tariff increases.
“If these challenges are not effectively addressed, the economy risks losing significant industrial investments, employment opportunities, and the economic sustainability of many rural communities that depend on the sector,” the Minister’s request said.
The paper and pulp industry employs approximately 35,000 people, who may be at risk due to the sector’s challenges.
The paper manufacturing industry in South Africa has a large footprint, and the Department of Trade, Industry, and Competition estimated that R33 billion has been invested in it in the past seven years.
It said the industry had “made substantial investments in recent years and currently possesses technological innovation, sufficient installed production capacity, and over the past seven years, over R33 billion has been invested in the sector.”
Companies call for action
In August 2026, paper manufacturer Sappi said that rival imports were damaging its business and could threaten manufacturing jobs in South Africa.
This followed the company reporting a loss of roughly R2.77 billion in the last financial year, which it partly attributed to the increased competition in South Africa.
The company saw its selling price for paper products fall by approximately 5% in the last financial year, due to the increased competition.
“Profitability continued to be impacted by intense competition from low-priced imports, which placed significant pressure on selling prices,” it said.
Sappi CEO Steve Binnie echoed this sentiment at the time, saying that cheap imports were a challenge in a strong market for the company.
“South Africa remains a strong business with competitive assets and healthy demand in several of our markets,” he said.
“However, increasing levels of imported products continue to create challenges for local manufacturers and deserve greater policy attention.”
The Department of Trade, Industry, and Competition previously initiated an investigation into the need to safeguard the country’s paper manufacturing sector.
This investigation was supported by both Sappi and Mondi, two of South Africa’s largest paper product manufacturers.
At the time, the companies alleged that the domestic market was suffering as global demand for paper products declined, due to increasing digitalisation.
This would leave foreign countries with an oversupply of paper products, which they would then seek to offload in surplus-output markets like South Africa.
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