South Africa Archives - Page 9 of 20

South Africa’s AMCU union launches strike at Sibanye’s Kroondal mine

27 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – Workers began an indefinite strike at Sibanye Gold’s Kroondal platinum mine in South Africa on Friday to demand transport because they were being attacked after working night shifts, their union said.

“The company doesn’t want to provide transport for its employees and these are basic conditions of employment,” Joseph Mathunjwa, president of South Africa’s Association of Mineworkers and Construction Union (AMCU) told Reuters.

AMCU is the main union at the Kroondal mine located in the Rustenburg platinum belt and has about 7,000 workers.

Sibanye’s spokesman James Wellsted said the gold and platinum producer would seek a court order to stop the strike because it was negatively affecting output.

“With metal prices being low for AMCU to now go on strike over issues that are being dealt with is irresponsible. This poses a threat of to the viability of the mine,” he said.

AMCU led a record and sometimes violent five-month wage strike at three major platinum producers in 2014.

Unions and platinum companies are expected to start wage talks in the next few weeks.

Sibanye acquired the Kroondal mine when it bought Aquarius Platinum in October last year for $295 million.

(Reporting by Zandi Shabalala; Editing by James Macharia)

South African retailer Foschini posts 18% profit jump

26 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – South African clothing retailer Foschini Group reported an 18 percent rise in full-year profit on Thursday, boosted by last year’s acquisition of British chain Phase Eight.

Foschini, which is expanding outside South Africa as consumer spending tightens in its home market, said that headline earnings per share (EPS) rose to 1,056 cents for the year to March 31, from 898 cents the previous year.

Headline EPS is the main profit measure in South Africa and strips out certain one-off items.

“The group’s overall gross margin has improved from 47.3 percent to 49.7 percent, mainly as a result of the higher Phase Eight clothing margin,” the company said.

South African clothing retail relies heavily on in-store credit cards, but more stringent affordability measures in Africa’s most advanced economy led to a slowdown in the second half of the reporting period, Chief Financial Officer Anthony Thunstrom told Reuters.

Foschini has instead focused on increasing cash sales, which accounts for less than half of turnover excluding Phase Eight but was boosted to 58 percent by the British retailer, making the group less vulnerable to the credit cycle, Thunstrom said.

The company said it plans to open at least 50 more Phase Eight stores this financial year.

Sales also benefited from the inclusion of the British retailer and rose 31.2 percent to 21.1 billion rand ($1.4 billion). Excluding Phase Eight, the increase was 11.6 percent.

The retailer extended its push into the northern hemisphere, buying British high street chain Whistles in March, as consumers in South Africa rein in spending because of higher interest rates, rising energy costs and unemployment at more than 25 percent.

Foschini has been the best performer among South Africa’s listed fashion retailers this year, with its shares rising more than 17 percent, against a 6 percent decline for larger rival Mr Price.

Shares in Foschini were up 2 percent at 141.85 rand by 1357 GMT, paring gains of more than 3 percent before the release of its annual results.

($1 = 15.5615 rand)

(Reporting by TJ Strydom; Editing by Susan Fenton and David Goodman)

ArcelorMittal South Africa says Saldanha steel plant will keep operating

25 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – ArcelorMittal South Africa’s Saldanha plant will keep operating, its chairman said on Wednesday, after the facility was placed under review earlier this year due to low steel prices and rising costs.

The plant, north of Cape Town is the newest in the company’s fleet and was opened in 1998 to focus specifically on steel exports, but low steel prices and high electricity and transport costs made it unprofitable last year.

“As the board, we are comfortable that we will have a Saldanha that is a good, healthy, performing business for a long period,” said ArcelorMittal South Africa Chairman Mpho Makwana.

The weaker rand and a pickup in West African steel demand have since ensured the plant’s viability, said acting Chief Executive Dean Subramanian.

South Africa’s currency lost about a quarter of its value from end of May last year until now, providing relief to some of the nation’s exporters.

Subramanian and Makwana were speaking at the release of report on ArcelorMittal’s contribution to South Africa’s economy, which also stated that the plant was responsible for 16 percent of the steel produced in Africa’s most industrialised country.

ArcelorMittal will start maintenance at Saldanha in August, which Subramanian said would increase the plant’s life by up to five years.

(Reporting by TJ Strydom; Editing by James Macharia)

South Africa’s Ascendis Health buys two European firms, shares rise

24 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – South Africa’s Ascendis Health Ltd said on Tuesday it bought two European companies as part of its plan to expand globally and diversify its pharmaceutical products, sending its shares higher.

The health and care company will buy Cyprus-based pharmaceutical firm Remedica Holdings Ltd for between 260 million euros ($291 million) and 335 million euros and sports nutrition company Scitec International for 170 million euros.

Ascendis shares rose 2.95 percent to 23 rand.

The firm – which bought Spanish pharmaceutical company Farmalier S.A. in August last year – said it received the backing of 63 percent of its shareholders for the acquisitions which will be funded through a combination of debt, shares and proceeds from a rights issue.

Shareholders and new investors supported Ascendis’ proposed rights offer of 1.8 billion rand, the company said.

($1 = 0.8926 euros)

(Reporting by Zandi Shabalala; Editing by James Macharia)

South Africa buys most U.S. wheat since 2011

20 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

CHICAGO (Reuters) – South Africa made its biggest purchase of U.S. wheat in nearly five years last week, U.S. Department of Agriculture data showed on Thursday, as drought reduced African grain output and low prices made U.S. supplies attractive in global markets.

USDA said South Africa bought 45,000 tonnes of hard red winter wheat, a variety used primarily for milling bread flour. The sale, for delivery during the upcoming marketing season beginning on June 1, was the first purchase of that variety since 2012 and the largest one-week sale of any variety of U.S. wheat since the week ended July 14, 2011. [EXP/WHE] [USDA/EST]

“It’s unusual and interesting,” one U.S. trader said. “HRW (wheat) is quite price competitive, and will garner business.”

Traders have been looking for signs of increased grain imports in South Africa, with the El Niño weather pattern contributing to blistering drought that was likely to cut their maize harvest by 30 percent and winter wheat crop by 18 percent.

K.C. July wheat futures, which reflect the approaching U.S. winter wheat harvest, tumbled to a contract low of $4.41-1/4 per bushel last week, enticing some buyers. Total sales last week of U.S. HRW wheat for shipment in the 2016/17 season were 293,932 tonnes, a marketing season high.

U.S. hard wheat export premiums have gained as demand improved, and as rains in U.S. growing regions could potentially delay the earliest phases of the harvest.

South Africa could purchase more high-protein wheat if prices stay low, another U.S. wheat trader said. “It’s a one-off sale for now,” he added.

(Reporting by Michael Hirtzer; Editing by James Dalgleish)

South Africa cbank keeps key rate unchanged, sees tepid growth

19 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

PRETORIA (Reuters) – South Africa’s Reserve Bank left its benchmark repo rate unchanged at 7 percent on Thursday, with the governor saying that moderating pressures to long term inflation left it room to pause in its tightening cycle.

The Bank had raised lending rates by a total of 100 basis points at its previous three meetings, as it fought to keep headline inflation within its target band of between 3 and 6 percent as severe drought and a weaker currency weighed.

The rand turned slightly weaker after the decision, easing to 15.9735 against the dollar.

Governor Lesetja Kganyago said the bank lowered its inflation forecast for the next three years, and noted that the country’s economic recovery would be slow.

He said that while headline consumer prices would average 6.7 percent in 2016, up from previous forecast of 6.6 percent, inflation in 2017 and 2018 would moderate.

“Although the inflation forecast has shown a moderate improvement over the medium term, the risks are still assessed to be on the upside,” Kganyago said.

“The MPC remains focused on its inflation mandate, but sensitive to the extent possible to the state of the economy.”

Inflation in Africa’s most industrialised country stood at 6.2 percent in April versus 6.3 percent in March, data showed on Wednesday.

“The MPC will not hesitate to act appropriately should the inflation dynamics require a response, within a flexible inflation targeting,” Kganyago added.

Twenty-two of the 32 economists polled by Reuters had expected the South African Reserve Bank (SARB) to hold interest rates at 7.00 percent this month.

(Writing by Mfuneko Toyana; Editing by James Macharia)

Starbucks arrives in South Africa

18 May 2016 Comments (0) Africa, Business, Featured Like

Hundreds in Johannesburg line up on opening day of the coffee giant’s first store in sub-Saharan Africa.

The U.S. coffee giant Starbucks opened its first cafe in sub-Saharan Africa – a store in an affluent Johannesburg suburb – and the company plans to open at least a dozen more stores South Africa in the next two years.

Many people waited overnight and hundreds of people lined up before the opening to get their first taste of Starbucks while #StarbucksSA trended on Twitter on opening day.

Previously, Starbuck’s only African locations were in Morocco and Egypt. The global corporation has about 23,000 stores in the Americas, Europe and Asia.

Starbucks founder Howard Schultz said the company might eventually open as many as 150 stores in South Africa.

Second store opens soon

A second location is set to open soon at another Johannesburg shopping mall, but there are no plans to expand to other countries in the region.

The new stores are being launched through a licensing partnership between Starbucks Coffee Company and Taste Holdings, a South African management group and leading licensor of international brands.

“We are proud to be bringing Starbucks to South Africa,” said Kris Engskov, president of Starbucks for Europe, Africa and the Middle East. “We’re going to deliver a great Starbucks experience. The coffee market here (in South Africa) is vibrant and growing fast – we want to be part of that growth.”

Taste Holdings operates stores

Under the agreement, Taste Holdings gains exclusive rights to open Starbucks outlets in South Africa. It will own and operate the stores.

Carl Gonzaga, chief executive officer of Taste Holdings, said the partnership is committed to development of local suppliers and Taste Holdings has a program to increase employment among unemployed South Africans, who will benefit from new opportunities at Starbucks.

Engskov said young people have been the key to Starbucks’ success. With most of its workers aged 17 to 25 years old, “talented youth has always been a priority,” he said.

Taste Holding’s also holds a licensing agreement for Domino’s Pizza in South Africa and the company owns and operates Zebro’s Chicken, the Fish & Chip Co., Maxi’s Restaurants and St. Elmo’s Woodfired Pizza.

Hundreds line up for coffee

A line at the new Starbucks location in Johannesburg

At the April 21 Starbucks opening in Johannesburg’s Rosebank district, a long line of customers was waiting when the store opened at 7:30 a.m.

Mohamed Mala, a 19-year-old student, said he waited for 12 hours to be the first customer. ” We wanted to be the first customers at Starbucks, and we were,” he said.

“Starbucks has been one of the things missing from the South African scene,” said Norma Cooper, a bank employee.

Starbucks will compete with many established locally owned coffee brands and independent coffee shops.

Gonzaga said the menu was designed to reflect local customer tastes including local products such as Rooibos tea.

Some of the coffee beans are sourced from nine African countries, including Kenya and Burundi, he said.

South Africa attracts U.S. food chains

With the most developed economy on the continent, South Africa has seen recent openings of several U.S. food chains, including Krispy Kreme Doughnut and Burger King.

Starbucks’ Engskov noted that significant quantities of Starbucks coffee products from Africa, Ethiopia, Rwanda and Tanzania, where the company has established farmer support networks.

The support centers opened after Ethiopia and the company settled a dispute in which that nation and Oxfam accused Starbucks of trying to block Ethiopia from obtaining trademarks for two of the country’s best-known coffee beans – Harrar and Sidamo. A third coffee, Yirgacheffe, was trademarked in the U.S. in 2006.

Under the agreement, Starbucks was allowed to promote and sell the three brands in markets where they are trademarked as well as where they are not while recognizing the integrity of the Ethiopian coffee brands.

South Africa’s NUM union says rejects power firm Eskom’s wage hike offer

18 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – South Africa’s National Union of Mineworkers said on Wednesday its members had rejected a 5 percent wage hike offer from power utility Eskom, and demanded increases of up to 18 percent.

The union demanded an increase of 18 percent for the lowest paid workers and 15 percent for the highest paid workers.

(Reporting by Stella Mapenzauswa; Editing by James Macharia)

Recession looms as South Africa’s manufacturing, mining contract

12 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – South Africa’s manufacturing output resumed its decline and mining production contracted as weak global demand pushed the country’s ailing economy closer to a recession.

Manufacturing production shrank 2 percent in March and mining output plunged by 18 percent – the most on record – figures from Statistics South Africa showed on Thursday.

“The economy is very weak, and with these set of figures, we’re looking at the possibility of a contraction in the first quarter,” said Dennis Dykes, the chief economist at Nedbank.

South Africa’s economy grew 1.3 percent last year and 0.6 percent in the fourth quarter, and in its February budget, the National Treasury lowered its forecast for 2016 to 0.9 percent from 1.7 percent. The International Monetary Fund has cut its outlook for 2016 to 0.6 percent.

All three major ratings agencies have cited weak growth and policy upheavals as major risks to South Africa’s investment-grade rating.

Last Friday, Moody’s maintained the country’s Baa2 rating but with a negative outlook. Fitch and Standard & Poor’s rate the country’s debt just one notch above sub-investment grade and are due to revisit the ratings in June.

“You go back to brass tacks and ask if government is sending the right signals when it comes to a stable policy environment. But you look at sectors like mining and agriculture and the policy environment there is terrible,” Dykes said.

Last year, South Africa recorded its lowest annual rainfall since comprehensive records began in 1904, as an El Nino-driven drought ripped through the region, putting millions at risk of food shortages.

The government and mining companies have been deadlocked for years over proposed changes to the Mining Charter that will require the companies to keep black ownership at 26 percent.

South Africa, one of the world’s biggest metals producers, has been hit by a slide in commodities prices that has come on top of widespread labour unrest among miners.

“We need to be cognisant that our mining sector is under pressure and that it’s a global theme,” said Elna Moolman, an economist at Maquire First Securities. “We need to look for alternatives. And given that we are very strong in the services, this is an area we need to focus on.”

Moolman said an increased focus on tourism, which has already benefited from a weaker currency, and upping the export financial and business services would help lift the economy.

(By Mfuneko Toyana. Editing by James Macharia, Larry King)

South Africa’s mining output plunges the most on record in March

12 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters Like

JOHANNESBURG (Reuters) – South Africa’s mining output fell the most on record in March, a result of last year’s ramp up in mining activity after a five-month strike two years ago, a statistics body said on Thursday.

Total mining output plunged 18 percent in March year-on-year compared to an 8.3 percent drop the previous month.

“It’s the biggest year-on-year drop ever,” Statistic South Africa statistician Juan-Pierre Terblanche said. “It’s a base effect of last year when there was a big spike after the mines recovered fast after the strike.”

Platinum mining companies Anglo American Platinum, Impala Platinum and Lonmin are still reeling from effects of the record 2014 pay strike and sustained low commodity prices.

(Reporting by Zandi Shabalala, editing by David Evans)

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