Business Day, 18 November 2002, Condom supply deal creates row

THE Proudly South African campaign has taken up issue with government over the awarding of large condom supply contracts to foreign companies.

Government buys about 400-million condoms a year for distribution by the health department as part of its campaign against HIV/AIDS.

SA condom manufacturers, which have the capacity to supply 500-million units a year, have objected vehemently.

They say government has contradicted its own policies of supporting domestic companies in its procurement programmes in this case, and was contracting foreign labour instead of domestic labour.

Proudly SA head Martin Feinstein was told by the health department that some SA companies failed to meet government's quality requirements, but some condom companies were told they lost the contract due to high prices. "We are still talking to the health department, who seems willing to explain the issue," said Feinstein.

However, he said if price was the reason for government not awarding contracts to domestic companies, government might be gaining in the short term but the social cost of losing jobs would have a far bigger effect on the country's economy.

It has been reported that STX Prophylactics of Martizburg and Latex Surgical Products of Johannesburg had retrenched workers, because their multimillion-rand contracts to supply condoms to the health department were not renewed.

These contracts were, instead, placed with foreign companies, including suppliers from China and Taiwan. Proudly SA has taken up the issue with government as it falls within the ambit of the campaign, which is to promote SA companies, products and services, with the aim of assisting in the creation of jobs and economic growth.