|November 11th, 2010, 11:42 AM||#1|
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#ECONOMY: Western Cape
Mayoral delegation returns from China with new commitment to sustainable growth
The delegation’s primary purpose in visiting China was to attend the Expo 2010 Shanghai China, a World Expo developed around the theme ‘Better City, Better Life.’ However, the delegation accomplished a great deal more, and returns with new momentum for Cape Town’s urban and economic development plans and programmes.
In particular, the Alderman Plato and his team noted that it was effective leadership that gave rise to development progress in places such as China and Singapore. “It is clear that the City must therefore develop a constructive environment for effective decision–making, and the environment must be created to enable sustainable, innovative and new thinking,” says Plato. “Leadership decisions must be consistent and shared so that choices are made with the best interests at heart.”
Alderman Plato launched a ‘Winter in Cape Town’ exhibition in Singapore, to promote the mother city as a premier tourist destination during its off-peak winter months. “At the moment, Cape Town’s tourism industry is navigating a very challenging period, with low occupancy levels and a cautious outlook going into the peak season,’” he said.
Leading figures in Singapore’s business sector, members of the South African expatriate community, and officials from the office of the South African High Commission in Singapore attended the launch. During his address, Alderman Plato explained that Cape Town and Singapore have an opportunity to create mutually beneficial business relationships with one another. ”I’m very excited about the relationship between South Africa and Singapore. There is a great opportunity to learn from one another and there is significant room for expanding our import-export channels, with a focus on quality wine and fresh produce.’
While in Asia, the City also concluded exploratory talks with Global Sources – one of the world’s leading sourcing companies – in Hong Kong. Global Sources provides buyers and sellers across the world with business-to-business trading opportunities through various platforms. The City’s Executive Director for Economic, Social Development and Tourism, Mansoor Mohamed, led the discussions with the Chairman and Chief Executive Officer of Global Sources, Merle Hinrichs. “The City solicited opportunities for Cape Town manufacturers to showcase their products to reputable buyers on a truly global platform. The main purpose behind these talks was the stimulation of export-led trade in Cape Town, with a clear objective of job-creation and economic growth,” said Mohamed.
Further, the City of Cape Town’s knowledge-sharing trip to China and other Asian cities has meant renewed commitment to designing progressive policies for development. “It is important that in a fast moving globally competitive world, the City carefully considers the relevance and appropriateness of its existing and proposed policies and practices,” notes Alderman Plato.
In addition, the trip gave the City insights into new source markets for international tourists. The traditional source markets are the UK, Germany and the USA. Europe and the USA have also been strong trade partners for South Africa. However, China is becoming a global economy of significance with an appetite for investment, increasingly in Africa. The City of Cape Town, through the office of the Executive Director, Economic Social Development and Tourism, will influence the business plans of both Cape Town Tourism and Wesgro so that a more proactive strategy to stimulate trade, exports and tourism between Asia and South Africa can be implemented.
The City team took careful note of the benefits of higher-density development in Asia and in Singapore in particular, and now recommends that a detailed feasibility study be undertaken to assess the appropriateness of high rise and high density housing in Cape Town and to incorporate the findings into the long-term housing programme. Singapore and other Asian cities have illustrated how low-cost commercial trading opportunities have been created in existing and new housing settlements, and inspired by these successes, the Economic Development and Housing departments will develop an integrated plan to introduce low-cost commercial opportunities in existing and new housing settlements.
The City of Cape Town also conducted a strategic engagement session with Singapore GP PTE Ltd, a company based in Singapore, to provide insight into how the City could respond to numerous proposals on hosting a F1 Grand Prix. The team visited the Public Utilities Board (PUB) of Singapore to understand and gain insight into how they manage water security and reclamation of waste water for potable use, and also visited the City of the Future Exhibition and Solutions Centre, in Singapore, a focal point for city management officials from across the world, to share best practices and experience a suite of innovative technologies for city management and sustainable living.
|November 11th, 2010, 01:23 PM||#2|
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Cup runneth over for wine industry in Western Cape
November 11 2010 at 10:48am
Comment on this story
The Western Cape wine industry is playing an important role in attracting foreign tourists and investment, according to Brand South Africa, the organisation set up by the International Marketing Council eight years ago to project a positive image of the country.
Our top wines are becoming increasingly successful overseas and our wine estates are attracting growing numbers of holiday visitors.
According to Francis van Wyk, the director of advisory services at PricewaterhouseCoopers, primary wine producers who grow the grapes contribute about R12.2 billion a year, or 7.3 percent, to the Western Cape’s economic activity.
Van Wyk said yesterday that in spite of the gloomy worldwide economic situation, about 70 percent of South Africa’s wine cellars had maintained or improved their financial position this year.
He said their success was partly due to making use of business intelligence systems that enabled them to make decisions on volumes and prices, “ensuring a quick reactive response to market changes. The ability of wine cellars to realise good prices directly affects the financial position of the primary producers.”
Admitting that about 17 percent of cellars had serious financial problems and cash flow deficits this year, Van Wyk anticipated that “amalgamation will take place in the medium term, resulting in cellars being able to focus on top performing brands and appoint the best marketing talent”.
Brand SA is making use of the growing success of South Africa’s best wines in overseas competitions. It hosted a lunch for 200 wine critics and other industry roleplayers from 21 countries at the annual World Wine Symposium in Italy this week, where six of South Africa’s best wines were served.
A spokesperson said it was intended to “showcase South African wines on the same stage as some from other, more respected, regions and raise perceptions in the minds of the industry elite. We also intended to showcase South Africa as a tourism and investment destination.”
Meanwhile, the Steenberg wine estate in Constantia won two awards, for its wine and its tourism facilities, at the annual Best of Wine Tourism Awards held by Great Wine Capitals of the World in Christchurch, New Zealand, last week.
Cape Town is one of nine members of the Great Wine Capitals Global Network, a body formed to co-operate and exchange data in the wine and tourism industries. The others are Christchurch, Spain’s Bilbao-Rioja, Bordeaux in France, Florence in Italy, Mainz in Germany, Mendoza in Argentina, Porto in Portugal and San Francisco in the US.
Steenberg won the global award for wine tourism for its restaurant, accommodation and variety of services and the national award for its architecture and gardens. - Audrey D-Angelo
|November 11th, 2010, 02:00 PM||#3|
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Western Cape growth languishes
Nov 11 2010 08:43
Cape Town - Economic growth in the Western Cape has come to a standstill, according to economists.co.za economist Mike Schüssler, the compiler of Sake24 and BoE Private Clients’ Western Cape Barometer.
Massive state expenditure has slowed for now, but growth is still seen in the sectors for property, business and financial services, as well as in the commercial sector.
Sectors in decline are agriculture and construction, as well as manufacturing which, although showing growth year on year, has been treading water for the past three months or so.
The Western Cape Barometer’s main index rose 5.6% in September to 108 index points, compared with a year ago. Against the previous month, and in the three months to end-September compared with the previous three months, growth had been only 0.5% and 1.3%.
The barometer's growth index itself rose 6.2% year on year, but month on month it had contracted by 1%, and on a three-month basis showed no movement.
Schüssler attributed this to the slowdown in global economic growth in recent months.
China, for instance, had produced 11% growth in the first quarter of this year, but only 8% in the third quarter.
The Western Cape stress index – which reflects economic stress factors like inflation, interest rates, unemployment and summonses for debt – was almost unchanged and, compared with the previous month and the three-month period fell more than 1%.
Consumers were benefiting from the lower interest rates, but the only issue preventing the stress index from coming down was unemployment.
Schüssler pointed out that third-quarter unemployment in the Western Cape was 23.1%, as against 22.2% a year ago. As a percentage of the total number of adults in the province, 51% had jobs in the third quarter compared with 53.1% the year before. This looked relatively good compared with the 40.5% of adults in employment countrywide. The number of people with work in the Western Cape was currently 1.754m, against 1.79m a year ago.
Lisa Brown, an economist at Western Cape trade promotion agency Wesgro, confirmed that in recent months there had been definite growth in the service industries, especially in communications, business and financial services. Over the past year these sectors had also enjoyed most of the direct foreign investment, which characterises the Western Cape economy. The services sector was still the biggest contributor to provincial GDP, said Brown.
With regard to the slump in the agricultural sector, Brown said agricultural output had been impacted by lower commodity prices, lower production prices and the strong rand.
|December 16th, 2010, 03:34 PM||#4|
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Western Cape Government and business delegation to strengthen trade ties and stimulate investment with Gulf region
The Western Cape Government and business delegation met with the Abu Dhabi Department of Economic Development and the Abu Dhabi Chamber of Commerce and Industry on the 15th December 2010. Premier Helen Zille is leading the delegation on its one week visit to the Gulf region; aiming to strengthen trade ties and stimulate investment between the Gulf region and the Western Cape Province.
Zille said Western Cape exports to the United Arab Emirates totalled (ZAR1.2bn) Dhs644m in 2009, but this figure could easily be trebled. "Western Cape business should utilise Abu Dhabi's strategic positioning for the entire region", Zille said.
The Western Cape has a well balanced bilateral trade relationship with the United Arab Emirates, primarily due to the fact that the Western Cape is a leading exporter of fresh fruit, which has a high demand in the Region. However this is not the only exports from the Western Cape. A diverse array of companies formed the business delegation, including the agri-processing and technology industry, leaders in defence technology, financial services sectors and the real estate and mining. They received a warm reception from Abu Dhabi businesses, and many areas for collaboration were identified.
Gerrit van Rensburg, Western Cape Minister of Agriculture and Rural Development informed Abu Dhabi delegates that the Western Cape thoroughbred industry offers many opportunities for Gulf investors. "Western Cape bred horses are well known in the UAE. This is reflected in the fact that horses from the Western Cape have been awarded the Dubai Horse of the Year award four times in the past ten years. It is also five times cheaper to stable and train race horses in the Western Cape than in the UK. We offer quarantine and veterinarian services of international standards, making the Western Cape the logical location for Gulf horse owners during the hot Gulf summer months".
Van Rensburg said the Western Cape is hosting an Inaugural Yearling Sale in the Cape Town Convention Centre in January 2011. This will be followed by an international Cape Town horse race in 2012. "These opportunities, as well as hosting all equestrian events during a South African hosted Olympic games are possible due to Cape Town being the only African Horse Sickness free zone in South Africa".
|December 17th, 2010, 11:36 AM||#5|
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World Economic Forum on Africa
Cape Town, South Africa
4 to 6 May 2011
The event was hosted in Tanzania in 2010, and will return to Cape Town in 2011.
|December 20th, 2010, 10:30 AM||#6|
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Cape Town will host a new South African bloodstock sale in January
PICTURE: Racing Post
New yearling sale for South Africa
By Bloodstock World Staff 4:04PM 19 DEC 2010
CAPE TOWN, winter holiday location of choice for many racing and breeding folk from Britain and Ireland, has a new attraction in January - an event billed asthe world's only indoor, city-centre bloodstock auction.
The inaugural Cape Premier Yearling Sale, on January 27-28, will be held at the city's convention centre, a short walk from the waterfront, on the two evenings before the running of the one of South Africa's greatest races, the J&B Met at Kenilworth.
Bloodstock, business and pleasure, moulded around one of the world's favourite holiday destinations, are the elements being stressed by Bloodstock South Africa, the promotion arm of the country's Thoroughbred Breeders Association, which has helped to select 300 yearlings for sale over the two sessions.
A month of activities begin with group-class racing at Kenilworth from January 2, but the pace picks up with two events hosted by Klawervlei Stud - a premier sale lunch, on Darley lines, on January 23, and a golf event at Pearl Valley, home of the South African Open, the following day.
Evening racing at Kenilworth on January 25 and a premier sale dinner the next evening lead into the auction business, which Klawervlei Stud racing manager Grant Knowles is already generating enormous interest.
Knowles, who returned to his native South Africa after spells as manager of Plumpton and Newcastle racecourses, said: "The catalogue is the equivalent of a select sale, and 35 per cent of the lots are represented by our three top stallions - Jet Master, Captain Al and Silvano.
"These horses would normally have gone to the National Yearling Sale later in the year, and farms were at first a little nervous about having to prepare their horses earlier, but they realise we have to capitalise on the fact that a lot of visitors, involved in business and racing, and especially from Britain, are in Cape Town at this time of year.
"Previously, owners and potential owners never got to go to the sales with their trainers, but now they can get involved in their own right."
A special website has been created at capepremiersale.co.za, with details of available accommodation and travel, stud visits and the catalogue.
|December 21st, 2010, 03:07 PM||#7|
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Western Cape Trade Mission
Submitted by RWilliams on Thu, 2010-11-04 14:00
INVITATION TO ACCOMPANY PREMIER HELEN ZILLE ON AN OUTWARD MISSION TO THE KINGDOM OF SAUDI ARABIA, THE STATE OF QATAR AND THE UNITED ARAB EMIRATES – 10 DEC TO 15 DEC 2010
The Premier of the Western Cape Provincial Government, Ms Helen Zille accompanied by the Provincial Minister for Agriculture, Mr. Gerrit van Rensburg, and the Minister of Finance, Economic Development and Tourism, Mr. Alan Winde will embark on an official visit to the Gulf Region from 10th to 15th December 2010.
The outward mission will commence in Saudi Arabia (10th - 12th December), Qatar (13th December) and will be concluded in the UAE (14th – 15th December).
Wesgro is the official investment and trade promotion agency for the Western Cape, funded by the Western Cape Provincial Government and the City of Cape Town and mandated to attract investment into the province. The Agency promotes exports and markets the Western Cape as a competitive business location.
In line with the above mandate, Wesgro, on behalf of Premier Zille, cordially extends an invitation to businesses in the Western Cape, to respond to her call to participate in this investment and trade promotion mission. The visit presents an opportunity for Western Cape companies to network, consolidate existing co-operation with Gulf businesses and seek new business opportunities in that region. Companies are encouraged to have project proposals for possible collaboration in specific areas. Kindly be advised that participation on this outward mission would be for the company’s own account.
This drive will essentially be sector-focused and will include government officials and business representatives as follows:
Royal Kingdom of Saudi Arabia (Jeddah and Riyadh)
Agriculture and Agribusiness
Saudi Development Funds
Oil and Gas
State of Qatar (Doha)
Education (Research co-operation)
Banking and Finance
United Arab Emirates (Abu Dhabi)
Agriculture and Agribusiness
Oil and Gas
Should you be interested in further country information, please view the country briefing documents on the Wesgro website
The final programme is subject to confirmation by the Directorate: International Relations in the Department of the Premier. The Directorate will also share with your company proposed flight plans in order to ensure that the delegation arrives at the same time. It would thus be appreciated if you could provide us with the company representative who would likely form part of the delegation, as well as their passport numbers for logistical reasons.
We are pleased to confirm that South African Oil & Gas Alliance has been identified to participate in this outward mission. We have attached, for your information, a briefing template and an example of a company profile that is required, (see attached below), should you accept this invitation. Kindly note that the company profile is requested by the coordinators to arrange a programme that ensures your company meets with the appropriate stakeholders in each country.
As you will note, the travel date is imminent, therefore email confirmation (firstname.lastname@example.org) of your intention to participate as well as your company profile, is essential by no later than Monday 08 November 2010.
Chief Executive Officer
AttachmentSize AttachmentSize Company Template for Premiers trip to Gulf Region _2 Nov 2010_.pdf41.25 KB Requirements for Premiers trip to Gulf Region _2 Nov 2010_.pdf252.46 KB
|January 25th, 2011, 11:19 PM||#8|
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The Year That Was - And The One To Come
THE past year certainly rattled a number of Cape-based economic sectors – so much so, that after a long reprieve, the region again faced the spectre of corporate casualties.
But let’s be frank, the Western Cape is currently grinding along with – perhaps – only the financial services sector and retailers showing a degree of vibrancy. A shake-out of certain industries – especially those that expanded aggressively during the boom years between 2005 and 2008 – was always on the cards.
Construction has been hit by a slowdown in residential and infrastructural development, the exporting segments have been smacked by a strong(er) rand and consumers have largely concentrated on essential spending.
Then there was the prolonged hangover from the World Cup – which effected more than just the hospitality, leisure and travel segments.
Meanwhile in the background, business had to also cope with some confusing policy statements from government – ranging from the New Growth Path (including a more than subliminal commitment to weaken the rand) to the obfuscation around nationalisation and calls to form a state-owned bank.
Still, with a series of interest rate cuts and a realisation that SA’s economy is a lot better off than some European countries, there was – at the end of 2010 – a sense of hope for the year ahead.
Let’s have a look at what the region’s economic sectors face in 2011.
Hotels & Leisure
The collapse of the Queensgate Hotels and Leisure before a ball was kicked in the World Cup pretty much set the tone for the local hotels and leisure sector.
The sector - in a word – looked ‘overtraded’ – especially at the top-end of the accommodation market.
Vacancies in top Cape Hotels like the Table Bay were rather alarming, and showed the effect of a handful of new luxury and boutique hotels opening up ahead of the World Cup.
Certainly 15 on Orange – a really opulent development at the edge of town – has come under some pressure. Meanwhile CBN notes that things hardly seem settled at Sol Kerzner’s One & Only development with reports that a few General Managers have been in and out of its doors.
CBN wonders what trading is going to be like in the top end of the Cape Town luxury hotel market in the new year if huge chunks of Europe (where so many of our visitors come from) are under austerity regimes.
Having said that, it is perhaps significant that hotel owning specialist Hospitality is still pursuing its acquisition of the Arabella properties in Cape Town. That must signal some sort of longer-term confidence in the Western Cape’s status as a tourist destination.
Another development that will bear watching in the new year is the so-called rescue of Queensgate, an exercise that involves the reversing of assets owned by property group Realcor into the listed shell.
Realcor, which reportedly carries a fair bit of debt, owns the Blaauberg Hotel.
The Cape diamond mining sector saw a casualty in the form of junior diamond miner Kimberley Consolidated Mining (KCM), which – at the time of going to press – was facing termination from the JSE.
Interestingly, KCM is still operational, and mining on a contract basis. But frustrated KCM shareholders have been unable to determine the contracting arrangements or the financial status of the company.
The year ahead should be intriguing for KCM as shareholders have found a new enthusiasm to determine whether there is any value left in the Waterfront-based KCM after news of a rare pink diamond find was leaked into the market.
At the end of 2010 KCM was served an interdict by a grouping of shareholders to preclude the sale of any of the valuable pink stones. Perhaps a shareholder coup – remembering one such effort was initially fended off in late 2010 – will take place in the early months of this year?
Things still look a bit iffy for Parow-based diamond miner Trans Hex, which was cut away from the Remgro group earlier in 2010 as part of an unbundling exercise.
Production has been hot and miss, and Remgro’s decision to unbundle the company suggests there’s not too much faith in the much vaunted Angolan ventures.
CBN gets the feeling that the market could abandon Trans Hex if production from the Angolan ventures does not improve dramatically this year.
While the news generally is not too encouraging on the diamond mining side, at least local readers – who are traditionally enamoured with marine diamond ventures – can watch the progress of Canadian miner Afri-Can on the West Coast of Namibia and SA.
Clothing & Textiles
Somehow Seardel, the largest clothing and textile conglomeate in SA, is still standing. Recent results show that the textile cluster is marginally profitable, but that the mainly Cape-based clothing cluster is still deep in the red. There’s not much that sits in favour of clothing and textiles, and CBN would not be surprised to see Seardel – which has already closed down certain of its Frame operations as well as its bra manufacturing facility – cutting away further operational capacity (with further tragic job losses).
CBN does note an effort by Seardel (albeit late in the day) to branch into retail via a concept store built around the Speedo swimwear brand. This effort will bear watching in 2011, as will Seardel’s efforts to unlock value from its sprawling industrial properties (which has seen the company forming a property company).
Also worth watching in 2011 will be Brimstone’s ongoing efforts to turn its clothing manufacturer House of Monatic to profit. Like Seardel, HoM owns a valuable property which probably provides the main value underpin. Brimstone may well be tempted to pursue a deal that shifts HoM out of the listed vehicle – perhaps as part of a management buyout or a deal that is premised on property development.
The Cape’s premium media entity e-tv pulled through 2010 in fine style with only a small crimping in turnover and profits. The performance, one must remember, came during a period in which the World Cup took centre stage, and for a good few weeks changed local viewing patterns and ‘adspend’ dramatically.
The fact that e-tv pulled through this period relatively unscathed speaks volumes about the brand and the management of the television station. Going forward, things won’t exactly get easier for e-tv with new pay stations coming on stream and D-STV looking to retain its market share.
But the company has shown some inspired moves on the African news front of late, and 2011 may well see another set of inspirational moves (hopefully involving sports broadcasting).
The Cape agri-business segment was dominated in 2010 by PSG controlled agri-business investor Zeder. Not only did Zeder snap up a major stake in fruit exporter Capespan, but the company looks set to pull off a major corporate coup by backing a deal that will see Pioneer Foods swallow up liquor producer KWV. There seems to be some excellent synergies in merging KWV (turnover R800 million) into Pioneer’s Ceres Beverages Company (turnover R2.4 billion) – most notably the improved distribution footprint, larger marketing muscle and the ability to break into the profitable RTD (ready-to-drink market).
For Zeder the deal means an ability to consolidate its two biggest investments.
CBN can say with certainty that KWV’s faithful shareholders won’t like the deal – unless the price offer is really generous. But the transaction will probably go ahead because Kaap Agri – in which Zeder holds a major stake – will probably back the proposal.
The year ahead may also continue at a frenetic pace if Zeder opts for a rights issue to raise further cash for acquisitions. The share price on the JSE is looking firm, and it could be a good time to raise cash for well priced and distressed agri-business opportunities.
Naturally the KWV/Pioneer merger will take centre stage during the first months of 2011.
But CBN will also be watching to see whether Cape Town-based liquor specialist Brandhouse – which distributes Amstel, Heineken and Windhoek – can keep taking premium market share from SABMiller. History will show that SABMiller does not like having its froth blown away by uppity competitors, and the ensuing marketing war suggests the brewing giant has every intention of reclaiming lost ground.
On a related topic, CBN also wonders whether Stellenbosch-based Distell will continue to win market share with its cider and RTD brands. The company recently increased production capacity, and long hot summer (with cricket tours etc) could more than justify this capex.
What will also be worth watching in 2011 is whether KWV (presuming it is tucked into Ceres Beverage Company) makes its long awaited shift into RTDS. Significantly, Ceres already manufacture the Hooch RTD –which, although fairly small, could catch fire if the KWV boys are enthusiastic.
The awarding of the tender for the Wineland N1 and N2 project will probably be the key event in the early part of 2011.
Presumably local aggregate players like Afrimat will be hoping to score a decent slice of this major project, while the chaps at Portland – which is being bought back from WG Wearne by management – will presumably also throw their name into the hat.
With Murray & Roberts closing down Cisco all eyes will be on the more expansive construction sector players like aluminium and steel specialist Mazor, who will hopefully find new niches to ply in 2011.
Mazor, which still has plenty cash in the bank, could well pick up a few more niche acquisitions in the year ahead – most probably bulking up its glass division.
If we were to predict a possible deal for 2011, perhaps we would wager a few bob that Argent Industrial – largely a steel specialist – makes a move to sell off its Cape-based cement operation and its Villiersdorp Quarry. Certainly these business are not proving as resistant as Argent’s core steel businesses.
Of course, we would not bet against Afrimat – which is a really good predator when it comes to picking up weak-but-promising businesses – making an acquisition of two this year.
After the corporate activity of recent years robbed the Cape of many of its flagship property companies (Monex, Spearhead, Paramount, Prima etc), there will probably be a good deal of attention focussed on newly listed Vividend.
Although Vividend is not restricted to the Cape, CBN suspects there could be a few local acquisitions this year.
On the development front Ingenuity’s foreshore activity should be keenly gauged, but perhaps much more interesting will be
Trematon’s efforts to unlock value from its slew of land in Mykonos.
Trematon recently bought out most of the minorities in Club Mykonos Langebaan. With full control of the company Trematon may well start making investments in developing land with view to selling off coastal developments as the residential property market (touch wood!) starts to pick up again.
Naturally the most keenly anticipated event of 2011 will be the official word on Sun International’s exclusivity over the Cape Town casino market. Sun International – which runs the GrandWest casino – will in all likelihood face the prospect of the local government granting another casino licence in Cape Town to an existing Western Cape licence holder.
The smart money reckons the Mykonos casino – which is controlled by Tsogo/Gold Reef Resorts (with Trematon as a minority shareholder) – will be allowed to shift its licence to Cape Town.
No matter which entity is allowed to transfer its licence, the major debating point is where to locate such a casino.
Apparently local government are keen on a high-class venue, which suggests somewhere on the V&A Waterfront.
In any event the official reasons and motivations for a new casino will be interesting to gauge – especially the impact on job creation and tax revenues for Cape Town.
And if there is a gaming contender to watch in 2011, CBN would recommend Grand Parade Investments. The company has lately been feisty in establishing itself as an operational entity rather than a passive investment company. If there are any surprises in 2011, you can be sure these will probably come from GPI.
|February 15th, 2011, 10:08 AM||#9|
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15 Feb 2011: Cape Seeks Opportunities In Middle East
As national government prioritises job creation and economic growth, the Western Cape Trade and Investment Promotion Agency (Wesgro) is seeking to stimulate the Western Cape economy and facilitate job creation through trade with the Middle East.
Wesgro, with Premier Helen Zille and a delegation of provincial officials and selected companies in export embarked on an official visit to Dubai in the United Arab Emirates (UAE) and Abu Dhabi in December. Now building on the relationships and opportunities that were established, Wesgro is assisting 14 local food companies that will be visiting the Gulf Foods National Pavilion in Dubai from February 27 to March 3. The group is among 40 South African companies to visit the exhibition with the Department of Trade and Industry (DTI).
Wesgro will also lead a trade delegation of local companies to Dubai in April in order to seal and sign any potential deals that could have come of the Gulf Foods exhibition.
In preparation for the trip, Wesgro hosted an advanced export development seminar in Cape Town on February 9 for a host of local companies mainly in food production and preparation, addressed by Wesgro CEO Nils Flaatten.
Flaatten said it was time for South Africa and the Western Cape in particular to recognise the importance of export of a key driver of economic growth and job creation.
“Export has become a silent partner to economic growth in the province. We need to wake up in this country and make export a priority,” said Flaatten.
The province also needed to elevate the role of exporters and importers, and had to be become more aggressive in branding its products as “Western Cape”.
Flaatten said the Middle East offered great opportunities for local exporters, especially of food products, and Wesgro provided dedicated services to help local businesses achieve it.
Flaatten said the time was right for the Western Cape to link into opportunities around South Africa joining the BRIC (Brazil, Russia, India, China) group of strong emerging economies. It needed to defend old markets (mainly in Western Europe), but seek out new high growth markets such as the Middle East. These new markets would want to reap opportunities in trade with SA as a BRICSA member.
|March 3rd, 2011, 12:27 AM||#10|
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03 Mar 2011: West Coast A Priority For Cape
The West Coast could see major development of its public transport system and oil and gas industries, it was revealed at the quarterly members meeting of business-led think tank Accelerate Cape Town.
Accelerate Cape Town chief executive Guy Lundy said the West Coast economic corridor, including Atlantis and Saldanha, was an area that was likely to see big development over the next few years.
Lundy said it was important to see the area stretching from Cape Town to Saldanha and up to Worcester, and not only the Cape Town CBD, as the main economic zone in the province.
Three speakers gave presentations on future development of the West Coast. Kylie Hatton, media manager for the City of Cape Town, shared information about the City’s new Bus Rapid Transport (BRT) System route to connect the West Coast to Cape Town. South African Oil and Gas Alliance (Saoga) executive director Warwick Blyth spoke in his personal capacity about opportunities in upstream activities (exploration, drilling, production and support services) in the oil and gas sectors on the West Coast. Economist Jacyntha Maclennan, senior manager of Wesgro IQ, the Western Cape Investment and Trade Promotion Agency’s economic intelligence unit, spoke about trade and investment opportunities in the West Coast and the feasibility study she was overseeing for provincial government into setting up an Industrial Development Zone (IDZ), the South African version of a free zone, on the West Coast.
Hatton said the City had strategically chosen to develop the West Coast bus route before addressing the need for a similar service in more populated areas such as Mitchells Plain and Khayelitsha. The reason for this was that the dynamics of the West Coast route and consultations with taxi groups and other affected parties on the route were far less complex than would have been the case on a major public transport route. The City therefore had an opportunity to iron out any difficulties in its ambitious new public transport network before rolling it out on a large scale. The West Coast area was also not serviced by any form of commuter rail network.
Hatton said the West Coast route would be developed over the next 20 years and the first phase was scheduled to be launched in early May.
Hatton said the City of Cape Town had chosen the BRT system over building a new rail network, because it had the reliability of a rail system, but it had existing infrastructure and was flexible and cost efficient. For the same amount of money (R7 billion) the City could build seven kilometres of underground rail, 14km of elevated rail, 40km of light rail or 175km of BRT.
Blyth said the offshore area from Saldanha up to the Orange River Basin was an important area for oil and gas exploration and showed great potential for development. An even larger opportunity for the West Coast is the provision of support, services and equipment to the oil and gas exploration and production activities in the sub-Saharan region. Unlike oil and gas operations themselves the supply industries serving these projects could be very labour intensive; the ship and rig-repair business in particular had great potential to expand and create many jobs. Cape Town was also an attractive place for international companies in the oil and gas services industry to set up regional head offices.
Saldanha Bay, because of its available land, deep water port and established engineering community, had the potential to develop significantly as a hub for regional oil and gas activity, much like the Australian Marine Complex near Perth has for their oil and gas activities.
Blyth said the recent finalisation of licenses for the West Coast blocks means that exploration and development activities are likely to pick up over the next 18 months with Forest Oil’s Ibhubesi project potentially leading with a large offshore development, pipeline to shore and a gas plant and power station near Hondeklipbaai.
Especially harbour maintenance and ship and rig repair were labour-intensive and could create many jobs. Over the next few years Saldanha could overtake Cape Town as the maritime maintenance and repair hub of the Western Cape, Blyth said.
Saldanha had the potential to develop significantly, much like the Australian Marine Complex near Perth, as it had a lot of available land, it was a natural deep water port, it had an established engineering community, the quayside was fairly well developed and it already had a small airstrip.
Maclennan said the West Coast was the fourth fastest growing region in the Western Cape, after Cape Town, the Cape Winelands and Eden. It needed to leverage its economic growth off the growth of Cape Town.
Maclennan said the West Coast economy was mainly driven by the manufacturing sector, while Cape Town was stronger in services. During the recession, the Western Cape economy was buoyed by the strong services sector, which meant that the economy kept on growing despite the decline in growth in other areas of the economy. The development of industry and the port in Saldanha Bay could strengthen the manufacturing sector and consequently the services sector on the West Coast.
Maclennan said if the West Coast was to grow economically, it would need direct foreign investment (FDI). Over the past seven years the region received only two FDI projects. The Western Cape government was now exploring setting up an IDZ to meet the challenges of globalisation, attract FDI, provide infrastructure, overcome administrative hurdles and develop linkages between local and international companies.
Wesgro IQ is tasked with researching the viability of an IDZ. As Saldanha was an environmentally sensitive area, various environmental implications were also being taken into consideration. “The feasibility study should be finished by the end of the year,” Maclennan said.
|March 15th, 2011, 10:25 PM||#11|
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16 Mar 2011: World Trade Center Comes To Cape Town
Cape Town is set to be the launch pad for a sub-Saharan African initiative to accommodate and expand trade with the rest of the world.
This follows a private sector initiative by top business executives from 13 countries in sub-Saharan Africa to establish a number of World Trade Centers on the continent. As such, Cape Town has become the first city in Africa to give rise to the process.
According to Julius Steyn, CEO of the World Trade Center Africa, the first foundation for these African World Trade Centers was already laid in Cape Town and they are now ready to start doing business in all earnest.
Introducing the World Trade Center Cape Town to the media at Century City, he said that it all revolves around stimulating trade in Africa.
Research indicates that the compounded growth rate of sub-Saharan Africa will amount to 4% per year from 2011 to 2020, which will add about $2,8 trillion to the region in value. The centers aim to facilitate up to 1% of this growth within five years, which will amount to about $70 billion. This will be three times more than the annual donations made by the G8 countries to Africa and 16% more than what is needed to eliminate poverty.
“A World Trade Center basically consists of a building wherein all business and trade activities of different countries are assembled to promote trade between private sector entities.
“Such a center is completely neutral to politics and rests on the principle that people want to do business in a face-to-face manner. It is a process that cannot be fully accommodated by e-commerce.
“For Cape Town this will mean that local business people can make contact with overseas colleagues on home ground, while foreign business people can in turn acquire local contacts,” Steyn said.
A World Trade Center consists basically of three components, of which the first relates to the travel arrangements of people intent on trade between countries. This consists mainly of trade missions where contact is established between specific people. A World Trade Center provides the infrastructure to accommodate this process.
Secondly, a World Trade Center offers business people the opportunity to showcase their products. With what is planned for Africa, the continent will be in a position to showcase its products as part of the World Trade Center network in more than 300 cities worldwide.
Steyn emphasised that the World Trade Center is complementary to efforts by government and semi-government organisations to promote trade. Because it is a private sector initiative however, the center is able to provide for greater volumes in trade and is more commercial in nature. Any business entity can participate in the center’s business activities.
The third component consists of facilitating the trade process. This relates mainly to the physical conclusion of transactions between clients of trade centers, which can comprise the facilitation of a simple transaction between two parties to more complex transactions where financing of the respective transaction is involved.
Also of great value for business people is the market research shared real-time between centers and which is made available to clients of such a center. This information is usually not older than 24 hours and contains, for example, all the trade agreements between countries worldwide. It consists of some 22 000 trade contracts between countries whereby more than 20 000 line-items are involved.
This type of information helps executives to establish trouble-free transactions and to avoid problems that may arise from sundry trade requirements that may have fines involved.
“With the establishment of a World Trade Center in Cape Town an effort has begun to bring together the private sectors, with the support of their governments, in a politically neutral way of 13 sub-Saharan countries in the SADEC and NEPAD regions to establish a trade block with the rest of the world,” Steyn said.
The countries involved are South Africa, Botswana, DRC, Zimbabwe, Uganda, Kenya, Rwanda, Tanzania, Zambia, Mozambique, Madagascar, Namibia and the Republic of Djibouti.
|March 16th, 2011, 08:32 AM||#12|
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Savor the taste of bottled sunshine
Last year's World Cup gave Japan the opportunity to discover more about South Africa than just vuvuzelas: In 2010, packaged wine exports from South Africa to Japan grew by an impressive 11 percent. While the noise of the hornlike instrument is happily fading away, the impression left by the country's wines might prove to be more enduring, not least because they represent excellent value in these straightened times.
Fruity: Eben Sadie's Columella Syrah- acc Mourvedre blend 2004 is a great example of a complex South African wine.
The end of apartheid heralded the beginning of the revitalization of the country's flagging wine industry. Boycotts on South African goods had prevented the country gaining an international reputation, but once the oppressive regime collapsed, the industry was able to set about making a name for itself.
During the 1990s, flying winemakers led the charge in revolutionizing their craft. These overseas producers introduced new hygienic techniques that led to increasing sophistication in what had been a rather rough, rustic product.
The most important changes came in the vineyard: Where previously vines had been planted with an eye to quantity rather than quality, that philosophy was now reversed. Instead of planting bush vines, the vines were now trained and the varieties of grapes that were grown proliferated.
An arcane quarantine system had made it nigh-on impossible to import new varieties before this time and, as a result, the country's wine output was dominated by the Pinotage and Chenin Blanc grapes. In the '90s, it became possible to import Chardonnay, Sauvignon Blanc and Merlot: all grapes that have performed extremely well in the country's warm climate.
But it takes time for new root stock to really come into its own. As the vines age and put their roots further down in the soil, the wines they produce begin to increasingly acquire interesting characteristics. And since many of these new plantings were made in the '90s, they are now really beginning to develop the qualities that are rightly putting South Africa on the map.
Chardonnay thrives all over South Africa and is an increasingly popular grape. Glen Carlou Chardonnay 2002 (¥2,380 from California a la Carte's Rakuten store, ) grown in the Paarl Valley, is a good example of a refined South African Chardonnay that encompasses both old-world French elegance and subtle new-world flavors. A wine of similar age and quality from California and France would be prohibitively expensive, so my advice is to snag this one while you can.
Sauvignon Blanc is also a variety that has showed up well in South African hands. The cooler south and east areas of South Africa's most illustrious wine region, Stellenbosch, appear to provide the requisite conditions to produce the fresh levels of acidity necessary for a good Sauvignon Blanc. Thelema Mountain Vineyards Sauvignon Blanc 2009 (¥1,480 from Wine Japan,) is a nice place to start: This zingy number goes well with tempura.
If you're looking for a reasonable white that will match well with the subtle flavors in Japanese food then Chenin Blanc is a good option.
Moving on to the reds, we have to sound a note of caution. Many wine experts have detected some extremely unflattering characteristics in some of the worst of South Africa's reds. These include burned rubber flavors and baked fruit. While the latter can be put down to an unusually hot year or a tardy harvest, the reason for the former defect remains somewhat of a mystery. Many accuse critics of singling South Africa out with a particularly harsh description of an acrid flavor that's prevalent in poorly made wine the world over.
Whatever the cause, it's important to be a little careful when buying a red. There are some excellent wineries out there that haven't been tarred with this brush, so a little research before you buy goes a long way.
Like Chardonnays, South Africa's Cabernet Sauvignons are really coming into their own with each passing year. A nice one to try is Rietvallei's Cabernet Sauvignon (¥2,380 from Vinos Yamazaki Online Shop, )
Another red that comes highly recommended, for those who want to really splash out, is Eben Sadie's Columella Syrah-Mourvedre blend 2004 (¥12,000 from Jeroboam). With a complex palate that includes rich blackcurrant and blueberry flavors, the wine has well-developed tannins and a delicious savory edge.
Finally we come to South Africa's most maligned variety: Pinotage. I find Pinotage makes a welcome break from heavier Euro-centric wines.
A cross (not hybrid) of Cinsault and Pinot Noir, the grape combines the light fruitiness of Pinot Noir but also has richer notes reminiscent of a Co^tes du Rho^ne wine. Typically drunk young, lighter fruity wine styles are similar in taste to Beaujolais Nouveau, making it a nice match with yakitori (grilled chicken skewers). Seijyu makes an extremely cheap South African Pinotage (¥780).
Kanonkop, which has the dubious distinction of being the world's most expensive Pinotage, can age anywhere between 15 and 20 years. Grown on 56-year-old bush vines, the wine could arguably be said to be the true expression of South African wine style. Unfortunately this wine is no longer sold in Japan, which is a pity, as it makes a nice break from your run-of-the-mill varietals.
It's heartening to see such massive improvement in viticulture in South Africa, sparked off by the social revolution in the 1990s. Following on from the resounding success of South African wines in Japan in 2010, lets hope the range of wines available at retailers continues to grow.
|April 6th, 2011, 08:24 AM||#13|
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06 Apr 2011: Boost For WCape Economy
The establishment of a World Trade Center in Cape Town will contribute significantly to the economic growth of the Western Cape.
Through its membership of the World Trade Centers Association based in New York, it will provide the local business community with access to a global network of businesses in 334 cities in more than 100 countries with linkage to more than a million business leaders.
Of major benefit to local companies will be access to shared real-time market research between World Trade Centers. This information is usually not older than 24 hours and contains, for example, all the trade agreements between countries worldwide and information about 22 000 trade contracts between countries pertaining to more than 20 000 line-items.
This is part of a comprehensive and centralised range of services provided by such a centre to businesses in the region and that are focused specifically on the promotion of trade.
Services by a World Trade Center also include trade promotions, assistance to clinch trade transactions, import and export management, travel and accommodation services, organising international contact and networking opportunities for business people, as well as office services.
This is according to World Trade Center Africa CEO, Julius Steyn, who spoke at the VIP launch of Cape Town’s World Trade Center at the Crystal Towers Hotel in Century City.
The launch follows a private sector initiative where the top business people from 13 sub-Saharan African countries partnered to establish 15 World Trade Centers across the continent. This process has now been set in motion and contracts have been signed with 13 African participating cities, with Cape Town being the first in Africa to lead the initiative. A World Trade Center is also in the pipeline for Johannesburg.
Steyn said that while the focus is on trade with the rest of the world and especially Africa, the initiative also holds great benefits for the region where the World Trade Centers are established.
|May 30th, 2011, 01:17 PM||#14|
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‘Cape Town property stronger’
May 30 2011 at 12:01pm
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Table Mountain looms over Cape Town's Waterfront district.
There has been sustained improvement in market activity across all price ranges in the Cape Town residential property market during April, according to Pam Golding Properties.
First National Bank's home-buying estate-agent survey for the first quarter of 2011 shows that there was a mild strengthening in residential demand, due to summer generally being a seasonally stronger period, and with the Reserve Bank resuming interest rate cutting in September and November.
Pam Golding Properties area manager Basil Moraitis says the Atlantic seaboard was among the top-performing areas in the region. According to Moraitis, sales have been strong in sectional titles since the beginning of the year, but April showed a marked improvement in the housing market.
“Our agents sold over 100 million rand in full-title properties on the Atlantic seaboard in April. It was also noticeable that a number of properties that have been on the market for an extended period, but which are offering good value, are starting to move again,” he says.
Another Pam Golding Properties area manager, Howard Markham, says there has been high sales activity in Cape Town's southern suburbs since the year began, with April seeing this trend continue.
“Rondebosch, and Newlands in particular, have seen high demand. Since the start of 2011 our agents have sold 14 properties in central Rondebosch at an average of about 3.2 million rand per home. Seven homes in Rondebosch Park Estate, averaging about two million rand per sale, were sold. Newlands has seen 13 sales average closer to four million rand,” Markham says.
Laurie Wener, the Pam Golding MD for the Western Cape metro region, says access to bond finance remains a challenge for buyers, particularly in the lower price brackets, and notes that April saw a high number of cash buyers in the Western Cape metro region. She adds that it will be interesting to monitor these trends into the winter months, traditionally a quieter period in the Cape Town property market.
“The one area where we anticipate seeing renewed interest regardless of seasonality is the western seaboard. The long-awaited opening of the Bus Rapid Transit route from Table View into the central city has cast a new spotlight on this area, making it particularly appealing for professionals and young couples wishing to work in the city while living closer to the beach,” Wener says. - I-Net Bridge
|July 8th, 2011, 01:37 PM||#15|
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Western Cape economy set to benefit from major oil find off Namibian coast
July 8 2011 at 08:59am
An oil rige berthed in Cape Town Harbour. The discovery of huge reserves, estimated at 11 billion barrels, off the Namibian coast is set to bring new opportunities locally for engineering industries. Photo: Cindy Waxa
A MAJOR oil find off the Namibian coast could substantially benefit the Western Cape economy before planned production in 2015.
Namibia’s Mines and Energy Minister, Isak Katali, announced the find, expected to yield 11 billion barrels of oil reserves.
Adrian Strydom, an executive with the SA Oil and Gas Alliance (Saoga) tasked with skills development and training, said:
“If it’s legitimate, it will have a huge impact on the Western Cape because of the service hub we’ve been able to establish (here).”
A recent study commissioned by Saoga indicated that the West African offshore oil and gas market would expand strongly between 2009 and 2013, with expected investment in the maintenance and repair operations in those five years to accumulate to more than $150 billion.
Although the Western Cape does not yet have the required skills, Strydom said the “lead time” of four years would give the industry time to expand the skills base, but funding was needed for this.
He said South Africa was favourably suited to benefit from the African oil and gas industry.
“Africa will become an important oil and gas source and that will benefit us,” said Strydom.
The president of the Cape Chamber of Commerce, Michael Bagraim, declared the discovery a “game-changer” that would benefit the nearest industrial ports in Cape Town and Saldanha.
“It will bring new opportunities for engineering industries servicing the oil rigs and production facilities. It will mean more jobs for the Western Cape and the growth of the Namibian economy, as the foreign investment pours in. (It) will also create trading opportunities.
“Perhaps even more significant
is that the discovery gives credence to the theory that the West African oil fields extend southwards into our waters. It also means further gas discoveries are likely and the potential for efficient gas-fired power stations in the Western Cape is enhanced,” Bagraim said.
Table Bay port manager Sanjay Goven said the port was stretched to capacity.
“There’s no doubt that when it comes to oil rigs and larger vessels, we don’t have enough quayside space.”
According to the provincial government, a single repair job on a vessel typically generated more than R200 million for the regional economy, employing around 2 000 people.
“We’ve been asking the industry to look at Saldanha because we’re completely hemmed in,” Goven said.
Expanding the port by building another quay would not make “business sense”.
“Saldanha has space, but no- one wants to go there because all the engineering companies and suppliers are based in Cape Town,” Goven said.
|September 12th, 2011, 06:40 AM||#16|
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|October 25th, 2011, 09:00 AM||#17|
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Location: Cape Town
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SA may designate Saldanha IDZ by September 2012
By: Terence Creamer
24th October 2011
A feasibility study into the creation of South Africa’s fifth industrial development zone (IDZ), at Saldanha Bay, in the Western Cape, estimates that the development could yield between 4 240 and 8 930 direct jobs over a 25-year period and add between R11.2-billion and R31.6-billion in yearly revenues to the regional economy.
The report, which was produced jointly by the Department of Trade and Industry (DTI), the Western Cape government, the Saldanha municipality and Wesgro, calculates the total number of jobs that could be created at between 11 900 and 29 000.
Western Cape Finance, Economic Development and Tourism MEC Alan Winde said the study, which was released for public comment on Monday, sought to present a “holistic” view of the potential socioeconomic benefits, costs, risks and impacts of a designated IDZ in Saldanha Bay.
The report would remain open for comment until end November 2011, following which the feasibility study would be finalised in December.
The intention currently was to complete a business plan by March 2012 and to then make an application to the DTI in April for the zones’s designation and licensing. The designation process, which also required Cabinet approval, was expected to be completed by September next year.
The study highlighted five sectors as offering particular potential, including offshore oilfield services and marine repair; titanium and zircon beneficiation; wind-turbine blade production; solar geyser manufacture; and the production of hot briquetted iron.
Local Government, Environmental Affairs and Development Planning MEC Anton Bredell argued that, while the proposed IDZ had the potential to catalyse industrial development on the West Coast, it would also need to operate within the constraints of a yet-to-be-finalised environmental management framework.
A Saldanha Environmental Protection Agency might also be formed to ensure that the initiative took account of the region’s scare water resources, as well as ensuring that air quality standards were maintained.
Water, waste, power and transport infrastructure would be required and the study estimated that the public sector would need to invest between R5.12-billion and R14-billion to support the IDZ. But such an investment could, in turn, attract private sector capital of between R17.25-billion and R90.82-billion, on 1 440 ha of available land.
The proposed IDZ could also be the first to emerge following a broad-ranging review of the IDZ concept and how it had been implemented at Coega, East London, the airport zone in Johannesburg and in Richards Bay.
The DTI review highlighted a number of shortcomings of the IDZs in promoting domestic and foreign investment in estates surrounding harbours and airports and led to the drafting of new legislation, which would also be published soon.
The new Dedicated Special Economic Zones Act would enable government to establish new special economic zones, or SEZs, in areas that were not necessarily physically associated with an airport or a seaport.
An IDZ would then emerge as a type of SEZ, which would be purpose-built industrial estates that seek to leverage both domestic and foreign direct investments in value-added and export-oriented manufacturing industries and services.
|November 6th, 2011, 05:54 PM||#18|
Join Date: Aug 2007
Location: Cape Town
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Was only a matter of time before this happened. Look which province is singled out as delivering!
Redefine slams weak local councils
Nov 06 2011 11:58
Johannesburg – One of South Africa’s largest listed property groups has decided to stop investing in areas where local authorities do not function properly.
Redefine’s decision to adopt a firm stance against questionable and poor management by local authorities could have far-reaching financial implications for such malfunctioning municipalities.
Not only has Redefine Income Fund [JSE:RDF] decided to stop investing in areas being poorly managed, but it has also decided to no longer make acquisitions in such areas or effect improvements to properties it already owns in such areas.
For local authorities this could ultimately mean the loss of millions of rand in municipal taxes and service fees.
In an interview with Sake24 last week Redefine chief executive Marc Wainer said that poor service delivery had got completely out of hand and he was sick and tired of being a cash cow for local authorities. He expects no favours from the authorities – only fair treatment.
He said against the background of a combination of poor infrastructure and a lack of service delivery in those areas property values will decline over time.
“We don't have many options with regard to the properties that we already own in such areas, but we can pick and choose in terms of new investments.”
He identified the Kopanong Municipality in Hammanskraal as one of the culprits.
Over the past year Redefine developed a Shoprite alongside the existing Kopanong shopping centre, at a cost of R36m. The store is due to open on November 15.
The project was delayed unnecessarily by sundry demands by the authorities and at one stage Redefine was expected to pay bribes to certain individuals. The company refused and it was then threatened with destruction of the building, said Wainer.
That is why Redefine will no longer undertake any development there. The plan had been to spend a total R110m to R120m on establishing another 22 to 26 additional shops.
Wainer said the Western Cape had the only local authorities in the country whose doors were “open for business”.
Redefine would like to invest more in that province, but the smaller economy offers limited opportunities.
The company also has the option of further investing offshore through its foreign subsidiary, Redefine International.
Professor Francois Viruly, a lecturer in property studies at the University of Cape Town’s school for Construction, Economics and Management, agrees that if conditions in South Africa become more oppressive many property developers could look beyond the country's borders for future business.
He said it was a pity that the smaller municipalities did not actively strive to attract investment so as augment their tax and service-fee base, but instead did the opposite.
The extent to which property companies are being “milked” by local authorities can be seen in their financial results.
Redefine, which last week announced its results for the year to end-August, said its property tax and electricity costs had increased by an astronomical 40% in the financial year.
These increases were sending the operating costs of commercial property companies sky-high and putting their net revenue margins under pressure.
Norbert Sasse, chief executive of Growthpoint, said not only were property tax, service fees and electricity costs rising faster than rentals, but companies were getting less and less service from the authorities.
“The lack of service delivery results in property owners having to pay out of their own pockets to compensate.”
According to a recent report by the Investment Property Databank commissioned by the South African Property Owners Association, electricity costs in the commercial property sector in the first six months of this year climbed to 29% of total operating costs for the sector, and property tax and service fees to 21%.
|November 23rd, 2011, 05:24 PM||#19|
South Straddie QLD
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EIA public notice in paper on Friday for new cement factory and quarries in Sahdahna bay with cement factory next to smelter, road/rial/conveyer to quarry
Build High-The Pixies
|May 16th, 2012, 06:42 PM||#20|
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Consumers drive Western Cape economy
Cape Town - Things look better in the Western Cape economy, at least compared to some of the other provinces forming part of the Sake24 and BoE Private Clients Barometer.
Economic growth is however largely being driven by consumer spending, according to Economists.co.za economist Mike Schüssler, who compiles the barometers.
Rising fuel and electricity prices, as well as anticipated increases in water prices, will nevertheless put serious pressure on consumer confidence, and consumers' ability to buy and growth will slow down, Schüssler warns.
In March the Western Cape barometer, which measures business activity in the province, was 1.3% up on a year ago at 114.5 index points. The growth index rose 4.1% to 126.7 index points.
An encouraging trend is that in March most of the province's economic sectors grew – both on an annual and a monthly basis.
The only exceptions year-on-year (y/y) were the electricity index, which fell 3% to 107.7 index points, and the construction index, which was 13% down on the previous year at 84.5 index points.
Schüssler reckons the decline in electricity consumption should not be regarded as a reflection of weaker economic activity, but rather as part of individual and factory efforts to save energy.
The construction index was 30.9% down on three years earlier, but on a monthly and three-monthly basis showed an improvement of 1.6% and 4% respectively.
Schüssler is unwilling to express an opinion on whether this is a sign of an eventual turnaround in the embattled construction industry, because house sales have not yet recovered significantly. The construction industry will again be able to show strong growth only when housing demand picks up, he believes.
In March the province's stress index was slightly higher at 2.8%. This is partly owing to rising inflation, but also to the steep 47% rise in summonses for debt, although the latter carry less weight in the index.
Schüssler believes what counts in the Western Cape's favour is that it is not experiencing the same problems as other provinces which have relied strongly on the struggling mining industry.
The Western Cape mining index constitutes only 0.3% of the whole barometer and mining activity consists mostly of quarries for building material, such as sand and gravel.
Western Cape factories don't look bad, and in March the manufacturing index rose 7% y/y. This is already 10% higher than three years ago.
The trade index lifted 8.1% helped by the entire wholesale sector, which rose 12.1%, and the retail sector, which was 7.7% up.
Motor sales in the Western Cape were 7.5% higher, and hotels and restaurants had 6.2% more visitors.
Wine sales rocket
March wine sales rose sharply. In March the Western Cape barometer's agricultural index was 4.3% up, compared with the previous year.
However, this is till 4.6% down on three years ago.
The big contributor to the index's growth in March was wine sales, which shot up 43%.
Meat sales were however 28.2% down. Schüssler attributes this largely to a decline in beef sales.
According to the industry, there was an oversupply of red meat in the market because of high prices, and dealers are now struggling to dispose of their stocks.
Wheat sales were 15.5% up, but fruit only 0.8%.
The fishing industry saw an 11.5% rise, based on the number of fishing boats leaving harbours.
The Western Cape tourism industry, Schüssler said, is also doing well, according to arrival figures at the Cape Town and George airports.
In March these were 6.2% up, and have been showing y/y growth for the past 28 successive months.