Tag: investment

Source: Ford

Ford Motor Company has announced an investment of R15.8-billion in its South African manufacturing operations – marking the biggest investment in Ford’s 97-year history in South Africa. It also represents one of the largest-ever investments in the South African automotive industry, boosting Ford’s production capability and creating new jobs.

“This investment will further modernise our South African operations, helping them to play an even more important role in the turnaround and growth of our global automotive operations, as well as our strategic alliance with Volkswagen,” said Dianne Craig, president, Ford’s International Markets Group. “Ranger is one of our highest volume, most successful global vehicles. This investment will equip our team with the tools and facilities to deliver the best Ford Ranger ever, in higher numbers and with superior quality.”

Ford announced the investment at a media briefing attended by South African President Cyril Ramaphosa, as well as several key government leaders, including Trade, Industry and Competition Minister Ebrahim Patel, Department of Public Enterprise Minister Pravin Gordhan, Gauteng Premier David Makhura, City of Tshwane Executive Mayor Randall Williams, and senior Ford executives.

With this investment, Ford’s Silverton Assembly Plant is expected to generate revenues exceeding 1.1 percent of South Africa’s gross domestic product.

The annual installed capacity at the Silverton plant will increase to 200,000 vehicles from 168,000, supporting production of the all-new Ford Ranger pickup truck for the domestic market and export to over 100 global markets. The plant also will manufacture Volkswagen pickups trucks as part of the Ford-VW strategic alliance.

The expanded production will help create 1,200 incremental Ford jobs in South Africa, increasing the local workforce to 5,500 employees, and adding an estimated 10,000 new jobs across Ford’s local supplier network, bringing the total to 60,000.

The overall investment includes US$686 million (R10.3 billion) for extensive upgrades to the Silverton Assembly Plant that will increase production volume and drive significant improvements in production efficiency and vehicle quality.

These include construction of a new body shop with the latest robotic technology and a new high-tech stamping plant, both of which will be located on-site for the first time. Both facilities will modernise and streamline the integrated manufacturing process at Silverton while contributing to higher quality and reducing overall cost and waste.

The new stamping plant will use a high-speed line to produce all the major sheet metal components for the new Ranger. It includes a fully automated storage and retrieval system for stamping dies, which will be housed innovatively in the roof of the facility, thus eliminating related labour-intensive processes. In addition, a modern blue-light scanner system that scans surfaces for imperfections will ensure the highest-quality final product leaves the stamping plant.

Extensive upgrades also will be made to the box line, paint shop and final assembly to improve vehicle flow within the plant, along with the expansion of the container and vehicle yards.

Ford also will build new vehicle modification and training centres – the latter developed to ensure all Ford employees are equipped with the knowledge and skills required to maximise the efficiencies of the enhanced Silverton facilities.

“The extensive upgrades and new state-of-the-art manufacturing technologies will drive efficiencies across our entire South Africa operation – from sequenced delivery of parts direct to the assembly line, to increased vehicle production line speeds and precision of assembly to ensure the world-class quality that our customers expect,” said Andrea Cavallaro, director of Operations, Ford’s International Markets Group.

Island mode

The new investment program builds on the recently announced Project Blue Oval renewable energy project, which aligns with the company’s global target of using 100-percent locally sourced renewable energy for all its manufacturing plants by 2035 and achieving carbon neutrality by 2050.

The first phase of Project Blue Oval already is underway with the construction of solar carports for 4,200 vehicles at the Silverton plant.

“Our aim is to achieve ‘Island Mode’, taking the Silverton Assembly Plant completely off the grid, becoming entirely energy self-sufficient and carbon neutral by 2024,” Cavallaro said. “It will be one of the very first Ford plants anywhere in the world to achieve this status.”

Modernising our supplier base

Ford also will invest US$365 million (R5.5 billion) to upgrade tooling at the company’s major supplier factories.

“Supporting our suppliers with this new tooling will ensure we modernise together to deliver world-class quality for the all-new Ranger at higher volumes for our domestic and import customers,” Cavallaro said.

Economic growth

“As part of our extensive investment in the Silverton plant, we also are building a new Ford-owned and operated chassis line in the Tshwane Automotive Special Economic Zone (TASEZ) for this new vehicle programme,” said Ockert Berry, vice president, Operations, for Ford Motor Company of Southern Africa.

“Having this new line and our major component suppliers located adjacent to the Silverton plant in the TASEZ is key to expanding our production capacity, as parts will be sequenced directly onto the assembly line,” Berry added. “This will significantly reduce logistics costs and complexity, improve efficiency and allow us to build more Rangers for our customers.”

In addition to its representation on the TASEZ board, Ford also is working closely with all three spheres of government and relevant state-owned entities such as Transnet, in developing the Gauteng Province – Eastern Cape Province High Capacity Rail Freight Corridor. This will be a full-service line linking the Silverton Assembly Plant and the TASEZ with Port Elizabeth, which is home to Ford’s Struandale Engine Plant and the Coega Special Economic Zone.

The GP-EC High Capacity Rail Freight Corridor will channel all of Ford’s inbound and outbound logistics exclusively through Port Elizabeth to support the higher production volumes. It is projected to create thousands of jobs within the value chain.

“Ford’s investment in our South Africa manufacturing operations underscores our ongoing commitment to deliver ever-better vehicles to our customers in South Africa and around the world, while providing opportunities for our own employees, new team members and our communities,” said Neale Hill, managing director, Ford Motor Company of Southern Africa.

In addition to the inevitable jobs and livelihoods lost due to the Government’s ban on alcohol, South Africa has also lost R13.3-billion in investments.

SAB

  • SAB has put R5-billion worth of capital investment projects on ice
  • South Africa’s largest brewery is cancelling R2.5-billion in investment for 2020
  • An additional R2.5-billion in investment is being reviewed for 2021, due to the ban
  •  Distell has said that the industry had already lost 118 000 jobs, and projections showed that a nine-week ban now would cost another 84 000 livelihoods
  •  The tax loss from the first six-week ban on alcohol sales came to R15.4-billion
  • If the current ban remains in place for nine weeks, another R13-billion would be lost

Consol

  • Glassmaker Consol has suspended construction of a R1.5-billion glass manufacturing plant that it was due to build in Erkhuleni, Gauteng
  • In additon, Consol has halted R800-million worth of furnace upgrades
  • Consol maintains that the alcoholic beverages industry accounts for about 85% of glass sales, and that the South African glass industry will see a 15% decline over the next 12 months
  • The new manufacturing plant would have added 130 000 tons of glass production to Consol Glass’s capacity
  • It was anticipated to create 120 direct job and approximately 2 600 additional employment opportunities across the value chain

Heineken

  • Heineken, the world’s second-largest beer brewer, has shelved R6-billion in planned investment
  • A new brewery was to be built on the KwaZulu-Natal north coast
  • It was expected to create more than 400 permanent jobs

PIC has 15 days to recoup AYO billions

By Sibongile Khumalo for Fin24

The PIC says it has appointed Gwina Attorneys to assist it in recovering the R4.3bn capital it invested in AYO Technology Solutions.

The state asset manager confirmed on Tuesday that it was issued a compliance notice on February 21 which requires it to recover the capital investment made to AYO within 15 business days of the date of the notice, and provide the commissioner of the Companies and Intellectual Property Commission (CIPC) with confirmation.

According to the notice, it must also recover any interest that may have accrued on the investment within six months.

The CIPC stated that based on the available turnover figures, the PIC did not act in good faith and in the best of interest of the company when “it decided to invest the disproportionate amount of R4.3bn in AYO”.

The watchdog added that the PIC failed its fiduciary responsibility and put the PIC in jeopardy. According to the CIPC, failure to comply with the notice may result in prosecution, with a maximum fine or 12 months imprisonment.

The PIC said it was looking into the matter.

On Tuesday afternoon, AYO said it believed there were no grounds for the CIPC to order the PIC to recoup its investment in the company.

It said it had not seen the compliance notice, but added that it believed the notice was possibly influenced by a disinformation campaign of “media houses and individual journalists”.

In a notice to shareholders on Tuesday afternoon, AYO said: “Both the PIC and AYO should have been consulted and had sight of the notice.”

It added: “AYO further believes that CIPC, by failing to inform and provide it with a copy of the Notice to the PIC, has acted contrary to the provisions of the Promotion of Administrative Justice Act.”

The CIPC was established under the Companies Act to assist with registering companies, monitoring disclosure of information on business registers, licencing business rescue practitioners, and monitoring compliance with relevant financial legislation, among other things.

AYO is linked to businessman Iqbal Survé, the executive chairman of Independent News Media, who holds an indirect stake in AYO through African Equity Empowerment Investments. Survé once described Matjila as a friend, according to evidence by PIC Assistant Portfolio Manager, Victor Seanie.

SA’s FinChatBot startup secures R7m investment

Source: Tech Financials

South African venture capital firm Kalon Venture Partners and Mauritius-based Compass Venture Capital announced on Monday that they have invested $500 000 (over R7-million) in financial services chatbot provider, FinChatBot.

FinChatBot develops chatbots to help financial service providers acquire and retain customers through artificial intelligence-powered conversations.

It has proven in less than two years that the acquisition of new customers via automated chat conversations have a much higher success rate than any other channel.

FinChatBot will utilize the investment to continue its rapid growth and expand its client pipeline.

Founded in 2016, FinChatBot has developed and services chatbot experiences for more than ten top-tier insurers and banks in South Africa.

“By implementing our chatbots, financial services providers are able to increase their conversion rates, reduce operational costs and gather more data about customers which can be used for product innovation and customer retention.,” said Antoine Paillusseau, FinChatBot cofounder.

Reflecting on the significance of this investment by two of the southern hemispheres most respected venture capital firms, Paillusseau said: “It’s a significant vote of confidence in our vision for FinChatBot and I am extremely excited to learn from and grow with our partners.”

Citizenship-by-investment is on the rise globally with over $2.4-billion spent each year derived mostly from China, the Middle East, and Russia, with South Africa not far behind. This is also a reason to apply for EB 5 Visa, meaning international investors gain permanent United States residency in return for making a qualified real estate investment.

Next Generation Equity (NGE), global specialists in second citizenships and residency options, says South Africa is increasing at an alarming rate.

“Recent media reports highlight an increase in applications by a staggering rate of 229% since 2017.

“And, the number continues to grow with our head-office inundated with applications,” says Paul Heijsman, Head of Sales at NGE.

Defined as citizenship granted to an individual or immediate family on the premise that they invest into the country, NGE notes the application age to lean heavily towards the 40+ mark, mostly with families, from across the Cape Town, Johannesburg and Durban regions, with a smattering of retirees and farmers now applying for second citizenship.

“Over the past 25 years we have seen our fair share of client success stories, and they generally boil-down to the same rationales.”

NGE shares five reasons why South Africans are applying for Citizenship-by-Investment:

  1. Security – with many countries experiencing turmoil, residents are now seeking ways for themselves and their families to find relief and safety;
  2. Investment scope – a second citizenship provides more investment, trades and travel opportunities;
  3. Travel freedom – for the frequent business traveller, it can be a time-consuming and expensive process to apply for a visa. Citizenship-by-Investment alleviates these challenges making business travel both a pleasure and a way to increase income;
  4. Tax relief – a 0% corporate income tax rate and the benefit of other low rates within the country of choice, make dual or second citizenship the perfect reason;
  5. Property – local property prices are very high with mortgage rates abroad generally stable and lower, making it easier to purchase a property.

“Applicants apply because they are frequent travellers and a second citizenship makes travelling easier. In addition to this, they are also troubled by the status of political and financial standing within their own country,” says Heijsman. The South African numbers have increased drastically over the last year because the main criteria in eligibility is financial, “if a South African has the means, then they will most likely be approved.”

The most popular destinations for locals are Malta, Cyprus, Portugal and Ireland due to proximity to South African shores and climate conditions. He continues to say that European residency only takes a few years to be granted an EU passport, and Cyprus is the only country in Europe that offers a fast-track EU citizenship, in less than 6 months.

The South African passport also dropped another two rungs in the Passport Index published last week, continuing a long slide in the global rankings since 2008. “The ranking measures the power of passports by the number of countries the holder can access either visa-free, or with a visa obtainable on arrival, and I imagine this will continue to drive citizenship demand.”

One of the most important findings of Rand Merchant Bank’s (RMB) seventh edition of Where to Invest in Africa is that the continent could find itself hovering on the brink of disaster if it continues to depend on its current economic fundamentals and does not usher in economic diversification. Where to Invest in Africa 2018 highlights those countries that have understood the need to adapt to the prolonged slowdown in commodity prices and sluggish levels of production growth – and those that haven’t.

The theme for Where to Invest in Africa 2018 is “Money Talks” and this edition “follows the money” on the African continent to evaluate aspects crucial to each country’s economic performance. The report focuses on the main sources of dollar revenues in Africa, which allows it to measure the most important income generators and identify investment opportunities.

“Over the past three years, some African governments have had to implement deep and painful budget cuts, announce multiple currency devaluations and adopt hawkish monetary policy stances – all as a result of a significant drop in traditional revenues,” says RMB Africa analyst Celeste Fauconnier, a co-author of Where to Invest in Africa 2018.

“Some countries have been more nimble and effective than others in managing shortfalls,” says Nema Ramkhelawan-Bhana, also an RMB Africa analyst and co-author of the report. “But major policy dilemmas have ensued, forcing governments to balance economically prudent solutions with what is politically palatable.”

“The last three years have sounded an alarm, amplifying what is now a dire need for the economies of Africa to shift their focus from traditional sources of income to other viable alternatives,” says RMB Africa analyst Neville Mandimika, a contributor to Where to Invest in Africa 2018.

“These years have exposed a number of African nations to severe economic stress – especially that of liquidity shortages. Unfortunately, there is no quick fix to infuse into a context as complex as this, and traditional forms of revenue will remain a reality for many years to come,” says RMB Africa analyst Ronak Gopaldas, also a co-author.

In this edition of Where to Invest in Africa 2018, RMB’s Investment Attractiveness Index, which balances economic activity against the relative ease of doing business, illustrates how subdued levels of economic activity have diluted several scores on the index when compared with last year, resulting in some interesting movements within the top 10.

Notable omissions from the top 10 this year are Nigeria and Algeria, which have fallen from numbers six and 10 to numbers 13 and 15, respectively. Ethiopia and Rwanda, on the other hand, have climbed three and four places, respectively.

But probably the most notable change is that South Africa has fallen from first place for the first time since the inception of the report, ceding its place to Egypt, which is now Africa’s most attractive investment destination.

Egypt displaced South Africa largely because of its superior economic activity score and sluggish growth rates in South Africa, which have deteriorated markedly over the past seven years. South Africa also faces mounting concerns over issues of institutional strength and governance, though in its favour are its currency, equity and capital markets, which are still a cut above the rest, with many other African nations facing liquidity constraints.

Morocco retained its third position for a third consecutive year, having benefitted from a greatly enhanced operating environment since the “Arab Spring” that began in 2010. Surprisingly, Ethiopia, a country dogged by sociopolitical instability, displaced Ghana to take fourth spot mostly because of its rapid economic growth, having brushed past Kenya as the largest economy in East Africa. Ghana’s slide to fifth position was mostly due to perceptions of worsening corruption and weaker economic freedom.

Kenya holds firm in the top 10 at number six. Despite being surpassed by Ethiopia, investors are still attracted by Kenya’s diverse economic structure, pro-market policies and brisk consumer spending growth. A host of business-friendly reforms aimed at rooting out corruption and steady economic growth helped Tanzania climb two places to number seven. Rwanda re-entered the top 10 having spent two years on the periphery, helped by being one of the fastest-reforming economies in the world, high real growth rates and its continuing attempts to diversify its economy.

At number nine, Tunisia has made great strides in advancing political transition while an improved business climate has been achieved through structural reforms, greater security and social stability. Côte d’Ivoire slipped two places to take up 10th position. Although its business environment scoring is still relatively low, its government has made significant strides in inviting investment into the country, leading to a strong increase in foreign direct investment over the years and resulting in one of the fastest-growing economies in Africa.

For the first time, Nigeria does not feature in the top 10, with its short-term investment appeal having been eroded by recessionary conditions. Uganda is steadily closing in on the top 10, though market activity is likely to remain subdued after a tumultuous 2016 marred by election-related uncertainty, a debilitating drought and high commercial lending rates. Though Botswana, Mauritius and Namibia are widely rated as investment-grade economies, they do not feature in the top 10 mostly because of the relatively small sizes of their markets – market size has been a key consideration in the report’s methodology.

Where to Invest in Africa 2018 also includes 191 jurisdictions around the world, and measures Africa’s performance relative to other country groupings. The unfortunate reality is that African countries are still at the lower end of the global performance spectrum, which continues to be dominated by the US, the UK, Australia and Germany.

Source: Business Day 

Montblanc invests in South Africa

Although South Africa’s faltering economy has eroded consumer spending, the luxury goods market has been bolstered with the opening of the revamped Montblanc boutique in Sandton City Mall, Johannesburg, this week.

Owned by South African billionaire Johann Rupert’s Richemont, Montblanc is one of the world’s leading brands of luxury writing instruments, watches, jewellery, leather goods, fragrances and eye wear made mostly in Germany and Switzerland.

President for Montblanc’s Middle East, Africa and India region, Eric Vergnes, says the sluggish economy was an opportunity for Montblanc to reinvest in the brand.
“When times are tough you either cave in, wait and do nothing. Or you invest and gain market share. We are focused on the latter,” says Vergnes.
Vergnes noted how Montblanc was growing in South Africa where it was a highly recognised brand with four stores.
“We are growing because our range is wide. We have entry level items that are affordable and we have high end items,” says Vergnes.
Through the revamped store, Montblanc was hoping to improve customer experience with the first neo concept 119m² in its Middle East, Africa and India region.
Customers for the revamped store are likely to be the wealthy individuals.
South Africa 2016 Wealth Report by New World Wealth released last month indicated that there were 38 500 high-net-worth individuals in the country with a combined wealth of $159 billion (R2.16 trillion) at the end of last year.
But the number of high-net-worth individuals had declined by 10 percent during the period between 2007 and last year as some wealthy individuals left the country.
Vergnes says that “the idea is to be a luxury store but being less intimidating and more welcoming”.
South Africa is important as there are four Montblanc stores.
“We are delighted to open the region’s first neo concept boutique in Sandton, an important shopping district, and the historical location of Montblanc’s first boutique in South Africa.
“The sophisticated and contemporary boutique invites existing connoisseurs and new generations of customers to discover the Maison’s rich heritage and enjoy the wide selection of products showcased,” Vergnes says.

By Dineo Faku for www.iol.co.za

Inhibiting your employees’ sense of purpose – in a static, go nowhere environment – is a sure-fire way to obliterate any sense of team morale or job satisfaction. It’s the death knell for productivity and overall profitability for any business. You feel compelled to grow your business; why shouldn’t your employees feel compelled to grow as individuals? That’s why we can think of no better way to improve your business’s bottom line than to improve the skills of your employees.

Upskilling your employees not only boosts productivity by instilling confidence, making employees less reliable on external resources and generally allowing for more work to be done, but promotes business growth and employee satisfaction. These are all indicators of a successful business. But what so many employers and entrepreneurs so often get wrong is the types of skill enhancement they focus on, ultimately achieving a poor ROI (return on investment).

With a business to worry about, frivolously spending resources on skills transference will only put you in the red. You need to be strategic about how you provision training and focus on achieving tangible results from your investments. That’s why skills enhancement should always begin with a good induction for new employees, not just because it requires very little in the way of expenditure but goes a long way to establishing the right attitude and work ethic in employees from the get-go.

A formalised, structured induction will let employees know what is expected of them and establishes the short-term skills necessary to start working immediately. Crucially, it should assist in preparing new employees for the culture of their new workplace – acclimatising them and assisting their integration into new teams.

Another fairly cost effective but potentially very beneficial consideration is to focus skills enhancement initiatives on an employee’s weaknesses, as opposed to concentrating on what they’re interested in or already good at. Employees will naturally educate themselves in the fields that interest them. But supplement that by encouraging them to subscribe to relevant content like webinars or seminars, read more about their interests, and spend free time researching those topics.

Working on their weaknesses and ironing out the pain points that inhibit optimal productivity means generating a potentially huge ROI. Solving problems by eliminating their cause rather than attending to the symptoms is a far more productive, efficient way to go about your day. Compliment this practice by identifying future supervisors and leaders and give them the tools necessary to fill those positions within their teams. If they’re effectively able to communicate and lead a team, they will be able to put out fires – should they occur – without you needing to step in.

Modern businesses are increasingly flexible, innovative and adjustable to meet new customer demands, or alternatively, disrupt the market with entirely new products or services. Rather than outsourcing those skills, incentivise employees who take on those new responsibilities with soft skills that might benefit their new position, then ultimately promote them to a permanent role. As skills investments go, it’s going to directly affect your bottom line, improving productivity and preventing reliance on external, often far costlier, skills.

There are other relatively inexpensive methods of skills transference worth considering. One-on-one mentoring, for example, lets new and junior level employees have close working relationships with more experienced staff members. It doesn’t even have to be a formal program. All that is required is a commitment to set aside some time each week or month to provide feedback, assist with decision-making and direction, and offer general support and encouragement. Think of it as an extension of onboarding.

Perhaps the most effective solution to permanent skills enhancement is creating a workplace culture that encourages learning. Because it requires relatively little monetary investment, it affords an optimal ROI.

A continuous program of ongoing skills development is a popular choice because it means catering your spend to adjust to what’s required from employees on the fly – a flexibility that should match your business. Remember that skills quickly become obsolete in the modern digital era, and front loading your employees with an impressive list of skills, while certainly beneficial, is costly and may eventually prove pointless if they aren’t always put to use.

In the end, it’s all about effective communication – that you communicate with your staff as much as they want to communicate with you. That way you get a sense of what is required while they’re updated on what is expected and, together, you can fill in the holes with appropriate skills. It means building the right attitudes, encouraging leaders to step forward and boosts team morale by encouraging collaboration – something that mentorship will echo.

By Pieter Scholtz – leading business and executive coach and South Africa’s Co-Master Licensee for global franchise company, ActionCOACH

UK banking group Barclays Group has made firm its intention to sell its 62,3% stake in Barclays Africa Group (formerly Absa).

The global banker listed as part of its rationale for the sell-down that, despite a strong returns profile locally, Absa’s contribution is significantly diluted at Barclays Group level.

The bank also carries 100% responsibility with only 623% benefits, it said at its results presentation.

Barclays said the sell-down will lead to further simplification of the group, resulting in cost reductions.

Barclays said it intends selling its African business over the coming two to three years “to a level which will permit us to deconsolidate it from an accounting and regulatory perspective”.

The intended sale is subject to shareholder and regulatory approvals.

Barclays Group said Absa is a well-diversified business and a high quality franchise.

“However the stake in BAGL presents specific challenges to Barclays as owners, such as the level of capital held in respect of BAGL, the international reach of the UK Bank Levy, the GSIB buffer, and MREL/TLAC and other regulatory requirements.”

Barclays Gropup Africa on Tuesday reported a 17% return on equity for 2015 in its standalone local currency results versus the 8,7% return reported for Africa Banking in Barclays’ results, the group said.

Source: www.fin24.com

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