Kolok Graphic Supplies is proud to announce that they have been appointed as a HEXIS distributor in South Africa.

HEXIS S.A. is a leading manufacturer of self-adhesive films for use in various applications related to the visual communication industry.

The group’s headquarters are located in Frontignan, near Montpellier in the south of France, with production facilities in Frontignan and Hagetmau, south-west France. The company specializes in manufacturing and distribution of high-performance cast PVC, PU and latex films. It also develops innovative product ranges for digital printing professionals, sign makers, signage and vehicle marking specialists, as well as textile marking professionals.

The HEXIS product range consists of the following six major product categories:
• Products designed for plotter cutting
• Films for full wraps and decoration
• Films for textile marking
• Media for large format digital printing
• Surface protection (anti-microbial, anti-graffiti, anti-scratch…)
• Paint Protection Film

The application areas include billboards, lightboxes, signs, decoration of premises and objects, vehicle markings (cars, trains, tramways, boats, airplanes…), transfer vinyl for t-shirt printing, lamination etc.

We had been searching for a reputable brand to complement our existing product range and because HEXIS is a well-known premium brand, it just made so much sense to partner with them. Through KOLOK’s existing distribution channel, we will be able to add value to both HEXIS, our supplier, and our customers. As a new business unit within the KOLOK family,
Kolok Graphic Supplies will continue developing new markets and grow our product offering. It’s our dream to become one of the leading signage supply companies in South Africa. Watch this space for new products and more exciting news!

From left to right in the photo:
Clément Mateu – CEO HEXIS
Laure Lecoeur – Export Area Manager HEXIS
Caroline Mateu – Chairman of the Board HEXIS
Derik van Deventer – Business Unit Manager at Kolok Graphic Supplies

The photo was taken in France at the HEXIS Frontignan production facility.

Eskom: a powerless state entity

By James-Brent Styan for Fin24

A week before South Africa shut down for the December holiday, the country was hit with nationwide rolling blackouts.

Things had not been so bad electricity-wise in years.

In fact, since 2014, load shedding had disappeared as Eskom seemed to have gotten its act together.

Indeed, in May 2016 former President Jacob Zuma promised that South Africa will “never, never, ever again” have load shedding.

Alas, it turned out to be a hoax, one that could still lead to thousands of job losses and holds the very real possibility of bankrupting the country.

The Eskom disaster could not have come at a worse time as SA is struggling with high unemployment and low growth.

At the beginning of January, the World Bank released its 2019 Global Economic Prospects publication in which it stated that economic growth in sub-Saharan Africa is expected to reach 3.4% this year.

However, it’s projecting that South Africa’s economic growth will be only 1.3% in 2019.

According to the National Development Plan, in order to tackle the country’s very real socio-economic challenges, SA would need average economic growth of 5% per year by 2030.

Eskom’s problems will no doubt drive the nails even deeper into the coffin of economic growth.

In fact, while 2018 turned out to be an annus horribilis for Eskom, with stage 2 load shedding returning, 2019 may be even worse.

Eskom itself is already planning for stage 8 load shedding.

That could mean load shedding of up to 12 hours per day.

This is an unlikely scenario, but not out of the question – the level 8 load shedding schedules exist.

Eskom’s core issues

Eskom has two fundamental problems. The first is its ability to keep the power on. The second is its finances.

All the other issues – like coal problems, bad debts and political interference – simply exacerbate these two fundamental problems.

The first problem is critical for SA. If Eskom cannot guarantee that the power will remain on, SA will be unable to attract foreign investors – especially the sort we need most, those investors who want to build big factories or mines that are labour-intensive and will help create jobs.

In the past, SA managed to attract investors with the promise of cheap electricity.

Today, not only is electricity no longer cheap, it is also no longer reliable.

At the moment, Eskom has a total installed power generation capacity of roughly 45 000 Megawatts (MW).

But only about 30 000MW can be relied upon to actually work. The rest is broken or shut down.Eskom’s plant performance – or ability to keep the power on – can be measured by looking at the Electricity Availability Factor (EAF).

Ideally the number should be around 85%, with 10% kept in reserve and 5% out for maintenance.

At Eskom’s interim results for the six months to 30?September 2018, the entity stated that EAF was 75.01% to September 2018 and had dropped to 74.2% in October 2018. (Issues like poor coal and old plants contribute to the poor performance).

According to a status update from Eskom in November 2018, the number has kept plummeting to below 70%.

In response, it operates its emergency open-cycle gas turbines at ever-increasing rates to meet demand and avoid load shedding.

It is uncertain how much longer this can be kept up.

The second problem of course affects the first.

Eskom’s finances are dire. In 2008, Eskom held an A1 investment grade credit rating.

At the end of 2018, rating agency Standard & Poor’s maintained Eskom’s rating at CCC+, several levels deep into junk territory (and with a negative outlook).

This rating is unlikely to recover anytime soon and that means Eskom’s debt crisis will only deepen.

Eskom currently borrows money to repay debt. If Eskom were a private sector company it would have been closed down.

Luckily, it is owned by the government, and similar to other struggling parastatals, like SAA for example, government is still bailing Eskom out.

This, of course, comes at a cost to other vital programs.

For example, instead of providing toilets to the 4 000 schools in SA that still rely on pit toilets, the state must use money to rather keep SAA and Eskom going.

Debt is not a problem if a company makes profits and is able to service its debts timeously.

But Eskom is making record multi-billion rand losses.

Eskom suffered a net loss of R2.3bn in 2018, while the 2019 financial results will in all likelihood see the largest recorded loss in Eskom’s history.

The utility noted that a loss before tax of R11.2bn has been budgeted for the 2018/19 year to March 2019.

In September 2018, Eskom indicated that the actual final loss would be worse than budgeted.

Eskom is expecting its debt to increase from R387bn to R600bn within the next four years (as per its results presentation for the year to 31 March 2018).

In 2014, total debt was R255bn.

How are regular South Africans affected?

In 2009, Eskom was selling one kilowatt hour of electricity for 24c.

This year, it is projected to be 97c. That is a fourfold increase and excludes the added costs that municipalities levy.

These tariffs are set to continue to increase exponentially over the next few years, as it is the most viable way for Eskom to get out of its hole.

Eskom’s latest application for tariff increases is in fact happening while you read this.

Public hearings began on 14 January and will continue to 4 February.

If Eskom gets what it wants, the basic price of electricity will increase by 15% per year over the next three years, starting from April.

But even if that increase is granted, there is still no guarantee that SA will be free of load shedding over the next three years.

The increased cost of electricity will also increase municipalities’ inability to repay Eskom. Municipalities – especially in rural areas – already and increasingly cannot afford to settle their accounts with Eskom.

At the end of March 2014, total municipal debt to Eskom was R2.6bn. By the end of March last year, total municipal arrears debt had increased to R13.6bn.

The top 20 defaulting municipalities constituted 82% of total municipal arrears debt, almost 48% of which is owed by Free State municipalities.

In total, 23 municipalities of 257 in the country today have a total arrears debt of more than R100m each.

These numbers exclude the total arrears debt of Soweto. Soweto’s debt is notable because of the size and the difference in response compared to poor, rural municipalities. (It is important to note that Soweto is not a municipality and is provided with power directly by Eskom.)

The total Soweto debt, including interest, was R8.6bn in March 2015.

Total invoiced Soweto debt in March 2018 was R12bn, of which arrears debt constituted about 98%.In addition, Soweto’s debt was written off in 2003.

So this is new debt.

With SA going to the polls this year, this political hot potato will in all likelihood continue to be ignored and Eskom will be unable to collect the R12bn owed.

The crisis that’s coming

Even if Eskom gets all its ducks in a row regarding maintenance and energy availability, it cannot avoid the fact that its existing fleet is old and falling apart.

These plants were always meant to be decommissioned after 40 to 50 years, but Eskom has been running some beyond the 50-year limit.

Plans tabled in Parliament in 2015 stated that a total of 14 800MW of Eskom-owned power stations has to be decommissioned by 2030.

It appears that several units have already been taken offline at old power stations like Komati and Hendrina.

There is a chance that some of these plants could continue to operate a while longer, but at significant cost.

And it’s clear that Eskom no longer has money.

So, while it is true that a new build programme is ongoing (Medupi and Kusile), the new build programme will not be sufficient to replace the power stations that will have to be decommissioned over the next ten years.

And there is no more money to expand the build programme.IPPsOne option to address the demand for electricity is Independent Power Producers (IPPs).

IPPs go some way to reducing the country’s dependence on Eskom, which is a giant monopoly.

However, IPPs have their own problems.

Currently there is 3 774MW of IPP power operational in SA.

In April 2018, Eskom signed agreements with 27 new RE-IPP projects totalling an additional 2 405MW.

Because Eskom runs and owns the transmission grids (the power lines criss-crossing the country), Eskom buys the electricity the IPPs generate and then distributes it.

So the cost for IPP electricity must also be covered by the tariffs Eskom charges consumers.

In addition, the cost of IPP electricity is still higher than the electricity generated by Eskom.

In the 2018 financial year, Eskom purchased 9 584 GWh from IPPs at a cost of R21.3bn (March 2017: 11 529 GWh at R21.7bn).

This came in at an average cost of 222c/kWh (March 2017: 188c/kWh) that Eskom paid.

The average price that Eskom sells electricity for was 85.06c/kWh.

This means that while the IPP portion of total electricity sold by Eskom is small, it is not recoverable via the current tariffs Eskom can charge.

The other challenge with renewable power generation is availability.

In 2018, renewable IPPs in SA achieved an average load factor of 31.5% during the year.

In 2017 it was 30.7%. That means – in a nutshell – if the IPPs were needed 100% of the time, they would only have been able to provide power for 31.5% of the time.

Over the next decade, South Africans will in all likelihood enjoy very little reassurance about the state of Eskom.

But there are two final issues that may take some of the pressure off Eskom. One is the private sector, especially in terms of renewable energy, as well as businesses going off the grid as they opt not to rely on Eskom.

The other is economic growth.

If the country keeps sputtering along on 1.3% economic growth, then load shedding may be manageable, a fact that is utterly depressing.

If a miracle occurs and the economy picks up, load shedding will most certainly become a major reality moving forward.

The country simply, at this stage and for the foreseeable future, no longer has the power generation capacity to drive a growing economy.

By Alexander Winning and Macdonald Dzirutwe for IOL

South Africa turned down a request from its southern African neighbour Zimbabwe for a $1.2 billion (about R16.6 billion) loan in December, a spokesman for the finance ministry said on Monday.

“South Africa doesn’t have that kind of money,” National Treasury spokesman Jabulani Sikhakhane said.

Zimbabwean officials were not immediately available for comment.

Zimbabwe was hit by deadly anti-government protests last week after a hike in fuel prices stoked anger over an economic crisis.

Police say three people died during demonstrations that turned violent in the capital Harare and second city Bulawayo. But human rights groups say evidence suggests at least a dozen were killed.

Zimbabwean President Emmerson Mnangagwa said on Sunday that he would return home from a European tour and skip the World Economic Forum in Davos to address the crisis.

Shoprite records gloomy Christmas sales

By Robert Laing for Business Live 

Shoprite’s share price fell as much as 5.7% to R175.32 after it warned shareholders its interim results would show flat sales.

Joining the queue of JSE-listed retailers reporting disappointing Christmas sales, Shoprite said its total group sales declined 0.3% in the December quarter, the second of its financial year.

The drop in sales in December quarter followed just 0.42% growth in the September quarter, which Shoprite blamed on teething glitches in a new Gauteng distribution centre and strikes.

Shoprite is scheduled to release its interim results on February 26.

“Liquor stores remain a standout performer with 20.09% sales growth for the period,” CEO Pieter Engelbrecht said in Tuesday’s operating update.

“The group’s core business, Supermarkets RSA, achieved 2.58% sales growth for the period. Persistently low internal food inflation in SA of only 0.2% for the period marks 18 months of near stagnant prices of basic foods in which the group has a larger market share,” Engelbrecht said.

“The core Shoprite middle income consumer base remains under pressure. This was evidenced in Christmas sales in categories such as back-to-school essentials, which outperformed traditional discretionary purchases such as toys for the first time.”

Source: Cape Talk

Stationery supplier Bidvest Waltons has responded to service complaints from Cape Town parents who did not get their back-to-school orders on time.

Some parents complained about failed deliveries, lack of communication and poor customer service.

Tessa Dowling, Cynthia Makwenyaa and Andrew Williams were among those affected by the delays.

They all described to consumer journalist Wendy Knowler how the stationery supplier had no boxes prepared despite their preorders.

When they arrived to collect the stationery sets, boxes were not labelled and many parents had to wait hours or return later for assistance.

Waltons says it will refund orders that were paid for but not received by customers.

Knowler says parents should use their collective power to push schools to review their agreements with stationery suppliers that don’t deliver.

If a school recommends a system that doesn’t deliver and fails to communicate, it’s up to the parents [to ask the schools] about what pressure they are putting on the service provider to up their game.

Below is the statement consumer journalist Wendy Knowler received from Waltons:

“We accept and sincerely regret the frustrations suffered by this customer but unfortunately, we do sometimes have glitches in a logistics operation of this nature and magnitude of the back to school one. While the issue is now resolved, we have also contacted our customer to apologise for the poor experience.

We assure you that we are committed to resolving all issues brought to our attention. To this end we have a dedicated mail address for customers to communicate with us which enables us to personally deal with queries:

bts2019@cape.waltons.co.za

In addition to our normal planning for this important part of our business which starts after the end of the current season, we review any issues which arose during the last season and also share experiences with other regions in order to continuously improve our service levels. Should any boxes or items not have been received but been paid for, we would obviously refund these amounts.

We are very proud of our involvement over so many decades in the back to school market and would thus like to express our thanks to all our customers for their continued support. We try to learn and so get better every year.

Thank you too for bringing this matter to our attention as any service let down is not acceptable to us.”

Eskom expects to report record R15bn loss

By Paul Burkhardt, Bloomberg/Fin24

Eskom, South Africa’s struggling power utility, expects to report a loss of more than R15 billion in the year to March 31, a record for any state company.

The anticipated loss, revealed by Chief Financial Officer Calib Cassim at a tariff application hearing in Cape Town on Monday, will exacerbate Eskom’s already dire financial position – it is saddled with R419 billion of debt – and increase pressure on the government to help bail it out.

The utility has said its situation is unsustainable and suggested the state take some of its debt onto its own balance sheet, an option not favored by President Cyril Ramaphosa.

Eskom’s loss estimate may be on the conservative side, according to Peter Attard Montalto, the London-based head of capital markets research at Intellidex, a research company.

“We are now expecting a loss closer to R20 billion for the year, despite a reduction in the investment pace,” he said.

The loss of about R15 billion was targeted notwithstanding that Eskom may need to spend more on capital expenditure and maintenance, the utility’s media desk said in an emailed reply to questions.

A turnaround plan is currently being discussed with the government, and will be made public once the process has been concluded, while talks are being held with a number of lenders to secure required funding, it said.

The Department of Public Enterprises, which oversees the utility, didn’t immediately respond to messages seeking comment.

Eskom has proposed that it be allowed to raise tariffs by 15% annually for three years to help it bring its debt under control, but Attard Montalto sees it as unlikely that South Africa’s power regulator will grant its request because it abides by a strict formula when determining how costs should be allowed to feed into prices.

“With Eskom likely to get a lower award than asked for, it is likely to run a significant loss in the next fiscal year as well,” he said.

Source: Supermarket & Retailer

The National Minimum Wage Act (NMWA) provides for, amongst others, a national minimum wage; the establishment of a National Minimum Wage Commission; a review and annual adjustment of the national minimum wage; and the provision of an exemption from paying the national minimum wage.

Who does the NMWA apply to?

The NMWA applies to all workers and their employers, except members of the South African National Defence Force, the National Intelligence Agency, the South African Secret Service; and volunteers who perform work for another person without remuneration. It applies to any person who works for another and who receives, or is entitled to receive, any payment for that work whether in money or in kind.

What is the national minimum wage?

The national minimum wage is R20 for each ordinary hour worked. There are, however, certain exceptions to the national minimum wage amount of R20 per hour.

Farm workers are entitled to a minimum wage of R18 per hour. A ‘farm worker’ means a worker who is employed mainly or wholly in connection with farming or forestry activities, and includes a domestic worker employed in a home on a farm or forestry environment and a security guard on a farm or other agricultural premises, excluding a security guard employed in the private security industry.

Domestic workers are entitled to a minimum wage of R15 per hour. A ‘domestic worker’ means a worker who performs domestic work in a private household and who received, or is entitled to receive, a wage and includes: a gardener; a person employed by a household as a driver of a motor vehicle; a person who takes care of children, the aged, the sick, the frail or the disabled; and domestic workers employed or supplied by employment services.

Workers employment on an expanded public works programme are entitled to a minimum wage of R11 per hour from a date that will be determined by the President in the Government Gazette. Expanded public works programme means a programme to provide public or community services through a labour-intensive programme determined by the Minister. And funded from public resources.

Workers who have concluded learnership agreements contemplated in section 17 of the Skills Development Act 97 of 1998 are entitled to the allowances contained in Schedule 2 of the NMWA.

Employer’s should note that, within 18 months of the commencement of the NMWA, being 1 January 2019, the National Minimum Wage Commission, will review the national minimum wage of farm workers and domestic workers, and within two years, determine an adjustment of the applicable national minimum wage. The national minimum wage in respect of workers in the expanded public works programme will be increased proportionately to any adjustment of the national minimum wage.

How is the national minimum wage calculated?

The calculation of the national minimum wage is the amount payable in money for ordinary hours of work. It excludes:

  • any payment made to enable a worker to work including any transport, equipment, tool, food or accommodation allowance, unless specified otherwise in a sectoral determination;
  • any payment in kind including board or accommodation, unless specified otherwise in a sectoral determination;
  • gratuities including bonuses, tips or gifts; and
  • any other prescribed category of payment.

‘Ordinary hours of work’ means the hours of work permitted in terms of section 9 of the Basic Conditions of Employment Act 75 of 1997 (BCEA) (currently 45 hours per week) or in terms of any agreement in terms of section 11 or 12 of the BCEA. worker is entitled to receive the national minimum wage for the number of hours that the worker works on any day. An employee or worker who works for less than four hours on any day must be paid for four hours on that day.

This is applicable to employees or workers who earn less than the earnings threshold set by the Minister over time, presently being R205,433.30. If the worker is paid on a basis other than the number of hours worked, the worker may not be paid less than the national minimum wage for the ordinary hours of work.

Any deduction made from the remuneration of a worker must be in accordance with section 34 of the BCEA, provided that the deduction made in terms of section 34(1)(a) of the BCEA does not exceed one quarter of a worker’s remuneration.

Does a worker have a right to the national minimum wage?

Every worker will be entitled to payment of a wage not less than the national minimum wage. Employers will be obligated to pay workers this wage. The payment of the national minimum wage cannot be waived and overrides any contrary provision in a contract, collective agreement, sectoral determination or law.

Must a worker’s contract of employment be amended in light of the NMWA?

The national minimum wage must constitute a term of the worker’s contract, unless the contract, collective agreement or law provides for a more favourable wage. Employers should thus, where applicable, amend their contracts of employment to make reference to the national minimum wage. An employer should note further that a unilateral change of wages, hours of work or other conditions of employment in connection with the implementation of the national minimum wage will be regarded as an unfair labour practice.

When does the provisions of the NMWA come into effect?

The NMWA will came into operation on 1 January 2019. Section 4(6) of the NMWA, which prohibits the payment of the national minimum wage being waived and further provides that the national minimum wage takes precedence over any contrary provision in any contract, collective agreement, sectoral determination or law, operates with retrospective effect from 1 May 2017.

Can an employer be exempt from paying the national minimum wage?

An employer or employer’s organisation registered in terms of section 96 of the Labour Relations Act 66 of 1995 (LRA), or any other law, acting on behalf of a member, may apply for exemption from paying the national minimum wage. The exemption may not be granted for longer than one year and must specify the wage that the employer is required to pay workers. The exemption process provided for in the regulations to the NMWA must be complied with when doing so.

An employer or a registered employer’s organisation may assist its members to apply to the delegated authority, for an exemption from paying the national minimum wage.

The application must be lodged on the National Minimum Wage Exemption System.

An exemption may only be granted if the delegated authority is satisfied that the employer cannot afford to pay the minimum wage, and every representative trade union has been meaningfully consulted or if there is no such trade union, the affected workers have been meaningfully consulted. The consultation process requires the employer to provide the other parties with a copy of the exemption application to be lodged on the online system.

The determination of whether an employer can afford to pay the minimum wage must be in accordance with the Commercial, Household, or Non-Profit Organisations Financial Decision Process outlined in Schedule 1 of the Regulations to the NMWA.

The delegated authority may grant an exemption from paying the national minimum wage only from the date of the application for the exemption. The exemption must specify the period for which it is granted, which may not be more than 12 months.

The delegated authority must specify the wage that the employer is required to pay workers, which may not be less than 90% of the national minimum wage.

The delegated authority may grant an exemption on any condition that advances the purposes of the NMWA.

An employer exempted from paying the national minimum wage must display a copy of the exemption notice conspicuously at the workplace where it can be read by all employees to whom the exemption applies. Further, a copy of the exemption notice must be given to the representative trade union, every worker who requests a copy, and the bargaining council.

Any affected person may apply to the delegated authority for the withdrawal of an exemption notice by lodging an application on the online system in the prescribed format. Before the delegated authority makes the decision to withdraw an exemption notice, the delegated authority must also be satisfied that the employer has been consulted, and the representative trade union or affected workers have been given access to the application lodged.

If an exemption notice is withdrawn, the delegated authority must issue a notice of withdrawal on the Exemption System.

What is the role and responsibility of the National Minimum Wage Commission?

A National Minimum Wage Commission is established by the NMWA. The Commission must review the national minimum wage annually and make recommendations to the Minister on any adjustment of the national minimum wage. The recommendations must consider: inflation, the cost of living and the need to retain the value of the minimum wage; wage levels and collective bargaining outcomes; gross domestic product; productivity; ability of employers to carry on their businesses successfully; the operation of small, medium or micro-enterprises and new enterprises; the likely impact of the recommended adjustment on employment or the creation of employment; and any other relevant factor.

Jacques van Wyk is director and labour law specialist at Werksmans Attorneys.

By Kgomotso Modise for EWN

The Competition Commission has urged schools to adhere to the uniform guidelines aimed at curbing anti-competitive behaviour.

The commission is calling for uniforms to be as generic as possible and obtainable at as many suppliers as possible for exclusivity to be limited to items that the schools regard as necessary such as badges and for competitive bidding to process to be followed.

The commission also wants schools to appoint more than one supplier in order to give parents more options.

The commission says school uniforms should not make it difficult for pupils to receive an education.

Spokesperson Sipho Ngwema says: “The contracts that are valid must also be short-term so that they’re renewable and suppliers can then compete.

“That shows that quality is good standard because if you don’t have competition, one supplier must charge higher prices.”

As inland public schools across the country reopen for the 2019 academic year, guardians have spoken about how buying new uniforms affects them.

Scores of parents lined up outside uniform and stationery shops for last-minute preparations as the school year begins.

Lines of people lead out onto the pavement outside uniform shops as guardians prepared for the new school year.

Children were trying on school jerseys, blazers and shirts as shop assistants rushed to get different sizes for them.

One woman said that the schools can make it easier for parents.

“It’s going to be easier if the schools can cancel the brands and then it’s going to be easier since we can go to any shop to buy school uniform. It’ll save us lots of time than to come here and stand in long queues.”

Parents say exorbitant prices of specific brands that are required puts financial pressure on them.

140 000 jobs at risk as Edcon flounders

Source: Business Live

A few weeks ago, the FM reported that Edcon, an iconic SA retail brand that began life in 1929, was facing an imminent cash crunch. This weekend, news emerged that Edcon had written to its landlords, asking for a two-year “rent holiday” of 41% for all its 1 350 stores.

The reality may be less dramatic than the “Edcon crashes” headlines suggested, partly because its stores are still open and trading. But there’s no denying that these are dire times for SA’s largest clothing retailer.

That’s not surprising. Last month, CEO Grant Pattison admitted to the FM that new funding was needed. “The current process we’re under is looking for shareholders, new and old, to inject new capital into the business,” he said.

Now, a letter dated December 11 and sent to Edcon’s landlords spells out details of how this new “restructuring plan” will work.

What is apparently on the table is that the retailer’s existing funders would convert R9bn of their debt into equity, while injecting another R700m. Then, the Public Investment Corp will inject another R1.2bn into Edcon.

For this to happen, the lenders have stipulated that Edcon’s 31 key landlords (like Hyprop and Growthpoint) must agree to the two-year “rent holiday”. This would equate to R1.2bn worth of support, for which Edcon plans to give the landlords a 5% stake.

It’s a tough call for the landlords, especially since Edcon plans to shut a number of stores until 2022. But if they reject this deal, Edcon could end up defaulting on leases anyway.

The bigger issue is whether bailing out Edcon will create a stronger retailer able to compete, or whether it will be akin to an SAA bailout — where the money vanishes up a chimney, with no value created. It’s a tough call, since Edcon has been shrinking every year. Since 2012, it has lost 22% of its clothing and footwear market share; it once held more than 50% of the sector.

Disturbingly, there aren’t too many specifics on the turnaround plan. There are promises to close some stores and improve trading densities (sales per metre), get more stock through its tills, expand its financial services side (credit and insurance, primarily) and reduce IT costs.

There’s nothing ingenious in that, though. And it’s one thing to put those goals on a PowerPoint presentation, another to make it happen.

Still, the letter to landlords contains some interesting revelations.

First, it says that since March, advisory firm Rothschild & Co has been trying to sell Edcon, but has found no takers. It adds that unless there is a further “intervention”, liquidation is “highly likely”. Fortunately, Pattison seems to have a plan, likely to be announced in the next few days, to prevent that. Which is just as well, considering the 40,000 employees who would be affected.

Of course, Pattison hasn’t helped himself by repeatedly bungling the communications around Edcon.

He denounces the reports as “misleading”, without saying exactly what was wrong. At the same time, he admits that when asked to comment by the Sunday Times, he declined.

There has been a consistent pattern of refusing to comment, then blaming the media for publishing what happened, when greater introspection might have been the wiser approach.

Unfortunately, it goes hand in hand with Edcon’s years of displaying a profound lack of respect for customers and, it seems, staff.

Hopefully, a much stronger Edcon will emerge from the ashes, one that can restore the principles and market position it once held, selling things that people actually want to buy.

By Jason Felix for IOL

In a first gut punch for consumers for 2019, Eskom is asking the National Energy Regulator (Nersa) for a 45% electricity increase spread over three years.

Public hearings on Eskom’s demand for a 15% electricity tariff increase over the next three years will start in Cape Town next week and advocacy groups are seeing red, saying government’s timing was a clear sign that it wanted increases pushed through.

This increase is on top of the 4.41% hike that was already granted to Eskom by Nersa. Eskom has argued that this 15% increase was needed to ensure that it maintained its stability and growth trajectory.

But Energy Expert Coalition’s Ted Blom said Eskom’s application should be scrapped as the still-captured and corrupt utility should not be granted any increases until a full forensic audit was completed.

“As we now enter 2019, Eskom is rudderless. The Eskom board has proved to be dysfunctional and required ministerial intervention on several occasions. Although appointed 12 months ago, they were unable to carve out a credible turnaround plan despite the use of expensive outside consultants,” he said.

Last year, President Cyril Ramaphosa intervened in the crisis at Eskom by appointing a team of eight to steer the board in the right direction by January 31 this year.

“The many futile interventions point to an unsalvageable and bankrupt Eskom. In fact, the pillaging is still continuing, this time by another ‘third force’ which has replaced the Zupta gang. Questions remain as to why no one has been prosecuted and no monetary recovery has occurred,” Blom said.

Nersa said it had received Eskom’s third Multi-Year Price Determination Regulatory Clearing Account (RCA) Year 5 (2017/18) application totalling R21 million and fourth Multi-Year Price Determination application totalling R219 billion, R252bn and R291bn for the 2019/20, 2020/21 and 2021/22 financial years respectively.

The energy regulator said that it would assess Eskom’s applications following due regulatory processes.

Eskom said that it continued to implement a short-to medium-term 9-point recovery programme that would see steady and sustained improvement in plant performance and coal stock levels.

It added that steady progress was made with regard to fixing coal stockpiles as 35 new coal contracts were concluded in the last year.

It also said the probability of load shedding remained low until January 13.

Stop CoCT founder Sandra Dickson said the timing of the public hearings showed that the increases should be rubber stamped.

“It is the worst decision to hold public hearings so early in the January. We also need to state that consumers cannot pay these exorbitant increases. It just does not work.

“The average family earns about R15 000 and more. For all that money to go to the City and to Eskom is absolutely criminal. People cannot survive,” she said.

Dickson said although Eskom had problems, its cash flows remained important. “They should get an increase but nothing above the current inflation rate… We need Eskom to run properly but cannot expect people to pay such high rates,” she said.

Public hearings on the increases will be held on January 14 at the Southern Sun Cape Sun Hotel in the city between 9am and 5pm.

         

           

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My Office News Ⓒ 2017 - Designed by A Collective


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