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February 2016

The start of 2016

Dear Customers

As we head into 2016 we find that as expected geyser sales are starting off a little slow, probably 20% down on an average month.

Reasons for this are obvious with the heat wave, post-Christmas finances, fewer electrical outages and the Rand plummeting.

However, winter is coming and once the local elections have been held the electricity now generated with diesel will probably stop.

This load shedding will happen at the beginning of winter!!!

Eskom are now asking for 16% increase.

This will impact on the cost of everything except gas.

Luckily our dollar/rand exchange rate drop has occurred with the current fall in the oil price. This means that the price of LPG is not going through the roof unlike the price of electricity if Eskom have their way. Having a number of gas suppliers and a control price ensures us that we cannot be held to ransom as with electricity.

One of the concerns we have is that with projected increased gas demand is that there may be gas shortages.

Advising your clients to carry a 9kg spare gas cylinder as a “bail out bottle” to carry them over any shortage period may be desirable.

Unfortunately, with the volatile Rand we will have to keep adjusting our prices more often to meet these changes.

We are currently having a new unit tested and it has passed that will be every bit exciting as our Constant Temperature unit, more on this later.

The Dewhot Team (Feb 2016)

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