Defy's sales badly hit, but it is not closing down

2009-04-10 00:00

Durban-based appliance manufacturer Defy South Africa, a major KZN employer, has dismissed astonishing allegations that the company is on the verge of shutting its doors.

Defy SA’s MD, Ross Heron, told Weekend Witness that the National Union of Metalworkers of South Africa (Numsa)’s assertion that the company is teetering on the brink of going bust is utter “nonsense”.

However, he said year-on-year sales volumes were down by a staggering 20% during the first quarter of this year.

He said the decline in 2009 is particularly alarming given the fact that 2008 was a difficult year.

The company is planning 21 days of short-time up to the end of June this year.

Weekend Witness has learnt that the crunch has affected local appliance retailers.

Ian Blomeyer, MD of the appliance retail division at Blomeyers, said they have experienced a 30% year-on-year decline in sales.

Defy SA, with 2 900 staff nationwide, still employs about 916 workers at its main stove factory in Durban, down from just over 1 000.

About 690 workers are on strike at this facility. Numsa has issued notice to embark on a secondary strike in Defy branches throughout the country next week.

Numsa national spokesman Mziwakhe Hlangani told Weekend Witness they are unhappy with the outcome of the company’s five-month-long restructuring process, which has resulted in 88 retrenchments at the Jacobs plant in Durban and 84 voluntary retrenchments across the company.

The union argues that the company should have scaled down “lavish benefits” at supervisory and management level rather than implementing retrenchments.

However, Heron said they have streamlined the company in a responsible manner, adding that they actually delayed the retrenchment process by a few months at the request of Numsa.

Heron added that workers at the Jacobs facility earn about 30% more than the average industry rate.

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