Africa Brief: African import levies dent vehicle exports and more…
African import levies dent vehicle exports
Exports of South African produced vehicles into Africa is declining due to import levies by some countries on the continent. Loock, the managing director of listed automotive products manufacturer Metair, believes that the intention of these countries was to emphasise that they were important and had ‘structural plans” for their markets. He said that the introduction of the import duties was a strong incentive for the original equipment manufacturers to get around the table with these governments to discuss market access in the future. Metair has a strategy of establishing a manufacturing footprint in Africa before pushing ahead with transforming itself into a global manufacturer. Loock said that the group was working hard on entering into small partnerships in Africa. The import duties are not a threat to Metair because its focus is on the aftermarket regardless of where a vehicle was produced. Loock said that the impact of the unstable labour environment in South Africa had been masked by the Automotive Production and Development Programme (APDP) because in normal circumstances the strikes would have led to vehicle manufacturers ‘running way from South Africa”. Metair reported a 16 percent rise in operating profit to R319 million in the six months to June despite its operating margins being dented because of labour unrest destabilisng the manufacturing operations in its South African business.
by Roy Cokayne published in The Star, Business Report on 19/08/2014
Local efficiency and growth in rest of Africa keep KAP’s profit rolling in
Amid trying times in the local economy, countries elsewhere in Africa continued to be the source of growth for KAP Industrial Holdings, group chief executive Jo Grove said yesterday. The firm operates logistics and manufacturing divisions for Steinhoff. “We generate about 20 percent of our logistics revenue in Africa and about 32 percent of our profit comes from that revenue.” Grove said. The group’s local growth was assisted by a consolidation of operations, including the disposal of non-core assets such as food and footwear businesses in the manufacturing division. For the 12 months to June, KAP increased revenue by 9 percent to R14.7 billion. Operating profit before capital items rose by 12 percent to R1.5bn. Revenue from KAP’s logistics business increased by 10 percent to R7.7bn, while operating profit showed a 11 percent expansion to R762m. KAP said this division showed a strong commitment to growth in Africa, which was well aligned with the existing customer base. “The strategic review and restructuring plans which took place during 2012 and 2013 have continued to yield cost saving benefits during this financial year” Grove said. KAP is now focusing on the Hosaf and Feltex divisions which they believe to be their core business.
by Nompumelelo Magwaza published in The Star, Business Report on 19/08/2014
Challenge to Harare’s minimum price
The Grain Milers’ Association of Zimbabwe (GMAZ) is challenging government’s minimum prices initiative as they see it as problematic. They have filed, together with Zimbabwe’s Oil Seed Traders Association, a joint constitutional application to the court on Friday. The government’s initiative set the price for maize at $390(R4 130) a ton and also regulates prices for wheat, rapoko and millet. Maize prices were between $290 and $350 a ton before the change, Musarara said. The law disables contract farming which will result in low production of the staple crop resulting in serious food shortages which will lead to starvation and malnutrition. The new law required all companies and individuals buying grain to register with Zimbabwe’s Agricultural Marketing Authority for a $1000 fee. Raising the price of maize would create inflationary pressure and raise the prices of milk, maize meal, eggs and other foodstuffs by more than 20 percent.
by Brian Latham published in The Star, Business Report on 19/08/2014
Ivanhoe revises copper projects
Ivanhoe Mines has retained BMO Capital Markets and Morgan Stanley as financial advisers to conduct a strategic review of its Kamoa and Kipushi copper projects in the Democratic Republic of Congo (DRC). The review would focus on the potential introduction of third-party strategic investors of joint venture parties for the two projects.
by Reuters published in The Star, Business Report on 19/08/2014
CBZ to issue $200m bonds
CBZ Holdings would sell $200 million (R2.1 billion) of bonds backed by Africa Export Import Bank (Afreximbank). Afreximbank would underwrite the debt, which would pay a coupon of 7 percent. The bond would be concluded this year according to the CBZ chief executive officer, Never Nyemduza. The company has a number of projects in the pipeline says Never Nyenduza.
by Bloomberg published in The Star, Business Report on 19/08/2014
NIGERIA: Inflation rate rises to 8.3%
Nigeria’s inflation rate has advanced for a fifth month in July. It has accelerated to 8.3 percent last month from 8.2 percent in June. In the month prices rose 0.7 percent said the statistics office. The central bank cited inflation risks, including food costs, as one of the main reasons it has left the benchmark interest rate unchanged last month.
by Bloomberg published in The Star, Business Report on 19/08/2014
Automated accident-response system set for introduction to SA
A South African company is working on a new vehicle system that works like a tracking device but alerts emergency services within seconds of an accident, determining the level of response required and the damage to the vehicle. The technology is based on software (Crashboxx) used in the US to simulate motor vehicle crashes and will be adapted to local conditions. Resource tracking is the company behind the importation and is owned by former MP Vincent Gore who himself was a victim of a car accident that left him wheelchair- bound. SA has one of the highest motor vehicle accident rates in the world with an estimated cost to SA’s economy of R307bn annually. Mr. Gore says Crashboxx can determine within 10 seconds of an accident what damage has been caused, the estimated cost and whether medical assistance or other emergency resources are required. The testing of the system is about to start in SA, says Gore. ER24.com spokesperson, Werner Vermaak, said that such a system could help SA achieve the “platinum 15 minutes” response time in getting to an accident in which serious injuries have been suffered.
by Paul Vecchiatto published in Business Day on 19/08/2014