How will PMB do in 2014?

2014-01-18 00:00

THE recent massive electricity tariff hike imposed by Msunduzi Municipality has caused great concern among city businesses. The thought on many businesspeople’s minds now is: “What does 2014 hold in store for us?”

The Witness spoke to a number of established companies in the city about what they felt lay ahead in 2014, and we asked them what they felt about doing business here. The response was mixed and many pointed fingers at the management of the city.

Somta Tools, which has been based in Pietermaritzburg for 60 years, sees positives and negatives in doing business from the city.

Managing director Allan Conolly listed the stable workforce here as well as the relatively short travel times in the city as positives and included the “beautiful setting for PMB” as a factor. “It may sound silly,” he said, “but many of our international guests comment on this.”

He said, however, the “increasing filth of the city creates a very negative impression to visitors. In manufacturing, they say that you determine the state and wellbeing of a company by its cleanliness”.

The limited number of good hotels for international guests, a lack of high-end skills, decaying services infrastructure, an inefficient municipal workforce, and uncompetitive electricity tariffs compared with many surrounding municipalities, were all weaknesses that threatened business here, he said.

“Without trying to be negative I would say that we have an overall declining level of confidence in PMB as a business location, but it is not irredeemable and can be addressed — this largely lies in the municipality’s hands,” he said.

PDC, a supplier of brass, aluminium and zinc castings to local and international markets, and another firm that has been based in the city for over 60 years, was generally upbeat about 2014.

“PDC is looking forward to a good, but tough year as we reconfigure our business to take Asian imports head-on by increasing factory productivity [including automation] and train employees,” said managing director Mike Wolhuter.

He was, however, concerned about having to fight another year of excessive electricity increases and the possibility of labour strikes “and of double digit wage increases”.

He said, however, PDC “is excited about the possibility of piped gas coming to PMB, the government MCEP [manufacturing competitiveness enhancement program] kicking into gear, and the implementation of the government’s strategy of supporting industry with a preferential pricing system for raw materials, such as brass and aluminium, to increase beneficiation”.

Law firm Tomlinson Mnguni James (TMJ), which has been in the city since 1921, said that like other businesses it has felt the effect of the economic slump of recent times.

Managing director Michael Browning said this had been exacerbated by increasingly having to compete with other entities — such as collections agencies, legal advisors, financial institutions and fiduciary service providers — for work previously reserved exclusively for attorneys.

He said, however, that there are signs of a property market revival, “certainly in the building sphere”. “There is no shortage of legal expertise in Pietermaritzburg,” said Browning, “and the fees charged by Pietermaritzburg practitioners are generally lower than big-centre counterparts. Our outlook for 2014 and beyond in Pietermaritzburg is unquestionably a positive one.”

Perhaps a good anecdotal indicator of business activity in a city is how busy caterers are.

“We have had an incredible year and have experienced positive growth in both companies that we own, in 2013,” said Wade Coetzer of CHC Catering and Calderwood Hall Guest House. “We don’t see why this shouldn’t continue in 2014. The Midlands is increasingly a popular wedding destination,” he said.

Industrial waste water management and treatment company Talbot & Talbot admitted to 2013 having been a difficult year for them, but were looking forward to a successful 2014.

“We have expansionary budgets in all three of our PMB-based divisions and our operations in East Africa,” said director Frank Urbaniak-Hedley. “We have also planned a major capital investment for the laboratory.”

He said a positive of being in the city this year was improved air travel from Pietermaritzburg Airport, after the opening of the new airport terminal and the increased number of flights.

City Printing Works (CPW), a resident Pietermaritzburg business since 1913, too found 2013 quite difficult.

“Margins were reduced due to stiff competition for available business, requiring cost increases to be absorbed rather than passed on to customers,” he said, adding that in 2014, “despite improved efficiencies and tight cost control, higher prices will have to be passed on to customers to maintain a sustainable business,” said the company’s financial director Robin Barnes.

A lack of confidence in our current infrastructure, and the effect of labour unrest on productivity and income were a major concern for Bridget Jones, the managing director of Pronel Personnel.

Hulamin, the city’s largest employer outside of government, said it “looks forward to continued engagements with the Pietermaritzburg Chamber of Business, the municipality and other stakeholders, with the objective of contributing to developing the city into a preferred investment destination,” said corporate affairs director Hector Molale.

Pietermaritzburg Chamber of Business chief executive officer Melanie Veness said what most excited her about the coming year was that the South African Cities Network would establish a City Development Commission to formulate the Msunduzi City Development Strategy.

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