TUESDAY, 5.30PM:
THE National Productivity Institute on Tuesday said South African companies have been slow in taking advantage of the open South African economy, preferring an inward focus on the domestic market.
According to National Productivity Institute marketing management manager Grey van der Hoff, South African firms are inclined to “continue focusing on the local market for their survival”.
“Many of these companies are now finding that local market conditions are getting tougher as sales decline and market shares shrink because imports are increasing,” he said.
“Many foreign companies have opened distribution networks in this country or are forming joint ventures to sell or manufacture products under licence. This all adds up to only one solution for survival — let alone growth; start exporting or slowly die.”
BUSINESS BRIEFS
STANDARD, INVESTEC RATINGS DOWN
INTERNATIONAL credit rating agency Fitch IBCA on Tuesday downgraded the individual rating of Standard Bank, and has placed Investec on a Rating Alert. The adjustment to the individual rating reflects the deteriorating operating environment within South Africa. Fitch IBCA said the recent increases in interest rates will lead to larger bad debts, but should remain manageable. The individual ratings attempt to assess how a bank would be viewed if it were entirely independent and could not rely on external support.
3 ON PRISONS SHORT-LIST
THE Public Works Department on Tuesday short-listed three private sector companies to tender to build and run new three new jails. The tenders are for two maximum-security prisons, each with a capacity of 1,500 beds, an awaiting-trial facility also with 1,500 beds and a youth centre with 800 beds. Public Works Minister Jeff Radebe said the government has set out details of the black empowerment component it requires in the tenders.
KENYA’S TEA IS TOPS
KENYA’S bumper black tea crop in the first half of the year will set it up to oust Sri Lanka and regain its position as the leading tea exporter, commodity analysts said on Tuesday. The Pan African News Agency reports that production rose from 57,75-million kg or 71,77% to 138,22 million kg in the first five months of 1998 from the same period in 1997. Kenya gained its place as the world’s leading exporter of tea in 1996 when its production touched a record 257-million kg. Tea appears to be the only commodity that gained from the El Nino induced rains, which ruined Kenya’s long neglected infrastructure and heavily damaged the coffee crop.
NUM REJECTS ESKOM OFFER
THE National Union of Mineworkers on Tuesday rejected Eskom’s final wage offer and threatened nationwide protest action on Wednesday in support of its demands for a 13% across the board wage increase. Num spokesman George Molebatsi said Eskom had offered an 8% increase for workers in the minimum scale category, with 5,5% of the 8% guaranteed by the company.
MBEKI TO MOZ LAUNCH
DEPUTY President Thabo Mbeki leaves for Mozambique on Tuesday to attend the opening of Mozambique’s new Mozal aluminium smelter. Mozal is an international project that is hoped to strengthen relationship and regional co-operation in Southern Africa.
ROMAN GROUP BUYS DEL MONTE
ROME-based Cirio SpA is the buyer of Anglo American’s stake in the Del Monte foods group, Cirio’s parent Cragnotti & Partners confirmed on Monday. The deal has still to receive regulatroy approval in Italy, Ireland and Germany, but this is expected to be a formality. Cirio’s business focuses primarily on dairy products and tomato and vegetable products in Italy. Del Monte operates in the Philippines, Europe and South Africa, producing mainly canned fruits and fruit juices.
INFLATION WILL BEAT HOUSE PRICES
PRICES of residential houses are unlikely to increase faster than the 7,5% projected inflation rate for the year, according to Absa bank. Prior to the recent slide in the value of the rand and subsequent steep rises in interest rates, Absa had predicted house prices would rise more than 13%.
ZAMBIA GETS CUSTOMS UNION DEAL
THE South African Customs Union on Monday signed a trade agreement with Zambia, opening the union’s markets to Zambian goods. Trade ministers from customs union member states and Zambia endorsed the text of a draft agreement and the products and quotas on which the customs union offered concessions for market access to Zambia.
TOLL ROAD MEETING CALLED
TRANS Africa Concessions, the company that won the tender to build a R1,5-billion toll road between Witbank and Maputo, will hold a development conference in Nelspruit on July 21 to address issues surrounding the Maputo Development Corridor. Top businessmen and government officials from South Africa and Mozambique will attend the conference, to allow stakeholders to devise solutions to potential problems and concerns facing the business community. Speakers at the conference will include Mpumalanga MECs Jackson Mtembu and Jacob Mabena, as well as senior executives from companies investing in the corridor.
UNIVERSAL DOES THE WALKING
TELKOM Directory Services has awarded its telephone R200-million directory printing contract to Durban-based Universal Web Printers for the next five years. Universal beat Nasionale Pers, Republican POress and incumbent printer CTP Directories, to win the contract. The new deal kicks off in 2000, and involves printing more than 35-million and white and yellow page directories in full colour.