Struggling business asks for municipal help

2017-05-31 06:05

MSUNDUZI Municipality said it will continue assisting struggling city businesses as a strategy for business retention and attraction.

This emerged last week at the executive committee meeting where the spotlight was on the challenges facing the city’s largest cutting-tool manufacturer, Somta Tools, and their request for assistance to avoid closure.

The company in Mason’s Mill employs 250 people, injecting R50 million per annum in wages and salaries into the city’s economy.

Somta Tools is currently running at a loss of R10 million a year, and the shareholders have indicated they will close the plant should they not be successful in attracting an investor to inject the capital required to re-capitalise the plant. Due to the increasing new technologies in high speed steel manufacturing, the company has fallen behind its international competitors, and needs a major recapitalisation of its plant and equipment to recapture its share of the tooling market.

Acting municipal manager Sizwe Hadebe said the municipality is willing to assist businesses that comply with government regularities including the Broad-based Black Economic Empowerment (B-BBEE) initiative.

“The municipality is stressing transformation as a condition for our support. Companies must have BEE-rating certificates and other transformations that ensure contributions are made to support the integration of black people into the economy. We want to see more of our people getting into the manufacturing sector, by assisting we are not buying jobs,” he said.

Hadebe said as part of their strategy to retain and attract investments into Msunduzi Municipality, the mayor was crisscrossing the length and breadth of the city to find out issues facing business people and how they can be assisted.

“As part of the strategy we are also revitalising and elevating bilateral relations with the Pietermaritzburg Chamber of Business,” he said. Somta Tools has asked the municipality to either cap their increase in service charges and rates for a period of two years or freeze the demand charge for electricity, which large users pay.

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