/ 8 April 2011

Walmart ‘appreciates’ DTI’s comments on foreign investment

Walmart “appreciates” the department of trade and industry’s recent comments on foreign investment in South Africa, the giant United States-based retailer said on Friday.

“Walmart appreciates the department of trade and industry’s acting director general Lionel October’s statement that the government’s recent actions do not signal opposition to foreign investment in South Africa,” Walmart said in a statement.

Financial Mail this week quoted October as saying: “It is important to stress the department is motivated by [local manufacture and jobs] and this intervention should not be construed as opposition to foreign direct investment [FDI]. FDI must assist the country in bringing in new technology.”

October, according to a report in Business Day on Tuesday, said the Walmart intervention was mainly a supply-chain issue regarding Chinese imports ousting local manufacturers.

“They [China] have such economies of scale that they can displace domestic suppliers. This has a systemic effect on the country,” he said.

Walmart said: “We agree with his view that many are looking to Walmart’s investment in Massmart as a window into this issue, and we hope to be in a position to encourage others to invest in Africa’s vibrant economy.

“We share the need to be sensitive to the local supply chain, and we are committed to working closely with local suppliers, expanding opportunities for them to source Massmart as well as Walmart’s global supply chain.

“We have a global track record of working directly with small farmers to increase their income and help them become more sustainable, and plan to bring those practices to South Africa as well.”

‘Very significant issues’
Walmart said it was “excited” about the opportunity to create jobs and was committed to partner with the South African government and key stakeholders.

“We look forward to timely completion of the Competition Tribunal process as a necessary step to our ability to contribute to the growth of South Africa, its people and its economy,” it said.

Last month, the tribunal postponed the hearings to between May 9 and May 13. May 16 is reserved for legal argument.

The departments of economic development, trade and industry, and agriculture, and fisheries and forestry wanted to participate in the merger hearings as they considered them to raise “very significant public interest issues”.

The Competition Commission has recommended that the transaction go through with no conditions. In January, shareholders voted to accept Walmart’s bid to acquire 51% of Massmart for R148 a share in a deal worth around R17-billion. — Sapa