Jim Day
The phenomenon of unions and their related investment companies making major investments in the South African economy has only emerged in the past couple of years. But in that time, unions have become major shareholders in a wide range of industries, from breweries to media outlets.
Among the best-known of unions’ ventures into business investments is their role in the National Empowerment Consortium (NEC), which purchased Johnnic. The NEC is half controlled by various non-union shareholders, the largest of which are Worldwide Africa Investment Holdings, Metropolitan Life and Siphumelele Investments.
The other half is owned by unions and their related investment companies. Of these, the National Union of Mineworkers owns just under 5% of Johnnic, the South African Railway and Harbour Workers Union owns about 3,5% and 13 other union investors control a total of about 9,5% of the company. These unions represent workers in industries ranging from clothing and textiles to food processing, from printing to construction.
Johnnic has a wide range of holdings. It owns 28% of South African Breweries, which accounts for at least 60% of Johnnic’s asset base, 27% of Premier and 43% of Omni Media, among other investments. Last year it sold its 26% share in Toyota SA.
Omni Media controls 91% of Times Media Limited, which has major interests in The Sunday Times, The Daily Dispatch, The Evening Post and other media outlets.
Outside the Johnnic dealings, the Mineworkers Investment Company and the South African Clothing and Textile Workers Union Investment Group share ownership of Francolin Investments Limited, which has major ownership of Africa on Air, and through it, Highveld Radio.
Unions have made significant investments in Real Africa Investments Limited (Rail). Investors include mine workers, textile workers and the Metal Industries Provident Fund.
Although union investors have strong interests in the media, at least one analyst believes this has more to do with high earnings potential in that area as opposed to other goals of furthering workers’ interests.
Unionists come from “alternative” backgrounds, but their main investment concern in the past two years appears to be making “hot-shot investments,” said Steven Friedman, director of the Centre for Policy Studies.