Somta workers get a stake

2011-03-16 00:00

THE Edendale-based manufacturer of cutting tools, Somta Tools, has launched an empowerment initiative through the establishment of the Somta Employees’ Trust, which will give the company’s 500 employees a collective 7,5% stake in the company.

Managing director Allan Conolly told The Witness that the deal is part of the company’s broad-based black economic empowerment strategy in its attempt at initiating its own “African Renaissance”.

“This truly makes employees feel like they’re part of something great.

“This all began late last year when we completed a management buy-out, and restructuring of the company, from the main shareholder, Standard Bank.

“We wanted the employees to have a stake in the company and we formed the Trust.

“It creates a sense of ownership. We believe that real empowerment should happen on a broad spectrum.”

Conolly said there are other benefits for the employees.

“They will share in the gains the company makes and dividends on an annual basis.

“If the company lists [on the JSE] or is sold, they will benefit from that as well.

“This is the first time in the company’s history that it is owned by its people.”

Conolly said the company has embarked on an education programme to ensure that employees have reasonable expectations of the plan.

Somta Tools specialises in the design and manufacture of drills, reamers, milling cutters, toolbits, threading tools and custom tools for industrial sectors such as automotive, mining and aerospace, and the DIY market.

It is one of the largest cutting tool manufacturers in the southern hemisphere.

The company was established in 1954 in Sheffield, England, and the Pietermaritzburg plant now exports to 72 countries, primarily in Europe. Exports represent about half of the company’s turnover.

The company was hard-hit by the recession, shedding jobs and recording a loss in 2009. However, demand has picked up and Somta boasts a healthy order book.

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