JOHANNESBURG - South African companies are better placed than foreign investors to understand the environment in Zimbabwe, Prime Minister Morgan Tsvangirai told South African business and government officials in July. (Pictured: Morgan Tsvangirai)“Instead of attracting foreign investment from Europe and other places, we believe that South African companies can operate in an environment that is almost similar (to their own),” he said, adding that they were in a position to understand the “politics, economics and potential of the country”. That message is taking time to sink into the minds of new investors. Pioneers such as Anglo American Corporation and Barlow Rand still retain interests in Zimbabwe although they have reduced the range of their investments during the last decade.
Pick n Pay best placed
Mining, engineering and agriculture were the pivots around which South Africans spread their holdings. Today, however, food and retails goods are the mainstays. Pick n Pay is probably best placed to expand despite writing down its investment in 2008 from R64 million to R9 million and having not received a dividend for four years. It has been established in Zimbabwe for more than 10 years with a 25 per cent shareholding in TM Supermarkets, a subsidiary of the locally- and London-listed Kingdom Meikles Africa group. TM is the countrys largest supermarket chain with 37 outlets. The South African group is planning to open more outlets through its Pick n Pay and Price Rite brands. Its largest rival, Shoprite Checkers, is planning to catch up quickly and is negotiating a take over of OK Bazaars.
Executives from Shoprite Holdings, South Africas largest food retailer, have toured branches of OK Zimbabwe after the company said it was in talks over an undisclosed transaction, according to Bloomberg News on September 8. Bryan Weyers, marketing director for Johannesburg-based Shoprite, said the supermarket group currently had no additional comment to add to that made on August 28, when contacted by Bloomberg. The company said last month that it would consider buying businesses in Zimbabwe. OK is Zimbabwes second-largest supermarket chain after TM Supermarkets and has a market value of US$241 million.
Shoprite, which posted a 27 per cent jump in profit this year, operates 102 stores in 16 countries outside of South Africa, including a retail outlet in Bulawayo. Chief Executive Officer Whitey Basson said on August 25 that they were in talks to open 14 more stores in Nigeria and two in Angola, and was considering investing in Mauritius and Madagascar. Woolworths did have franchised outlets in Bulawayo and Harare, but these closed and it is unclear whether they will be reopened.
Edcon protects employees
Clothing retailer Edcon Holdings deputy chief executive, Mark Bower, said through his spokesperson, Jennifer Cohen, that Edcons financial investment in Zimbabwe stores had been written off in 2003. Edcon donated 27 per cent of its shareholding to an empowerment trust for the benefit of the staff of Edgars Zimbabwe, leaving a 40 per cent stake for Edcon in the listed entity, Cohen said. While there are no longer any financial consequences for Edcon in this investment, we obviously have significant concern for the wellbeing of our employees, our customers and our good name.
Like all stores in Zimbabwe, the Edcon outlets were operating with very limited stock, said Cohen. Clothing was made from local fabric. Kingdom Meikles Africa also has long established interests in clothing through its Cotton Printers subsidiary in Mutare, and retail department stores Meikles, Greatermans, and Barbours. The group also holds the local franchises for Clicks and Dischem.
Most South African fast food franchises have survived the last decade led by Nandos, which is held by locally quoted Innscor, which is also known for developing food courts at petrol stations. Wimpy is the longest established, while Steers, Kentucky Fried Chicken and Debonairs Pizza all have a presence.
Post published in: Economy