North West Premier Job Mokgoro does not seem convinced that Ditsobotla Local Municipality had nothing to do with Clover’s decision to close shop in Lichtenburg and relocate operations to KwaZulu-Natal.
The municipality seeks to distance itself from the dairy group’s claim that it shut down its biggest cheese factory in the country due to water and electricity supply disruptions, as well as poor road infrastructure.
While the premier expressed his government’s intention to get to the bottom of the real reasons for Clover’ exit, he could not look past the possibility that Ditsobotla Local Municipality may be in the wrong.
“One thing we can’t deny [is that] Ditsobotla is one of the embarrassing municipalities. It is an open secret; we can all see it... We must also acknowledge our weaknesses, our faults,” he said in a statement released on Wednesday.
“[Ditsobotla’s] record of delivering services is a dismal one. We must accept that, otherwise we won’t self-correct if we don’t.”
The provincial government has made an attempt to convince the company to reconsider its decision and save more than 300 jobs.
The municipality, meanwhile, insists that Clover’s decision to shut down its Lichtenburg operations had nothing to do with its failures.
“The mayor of Ditsobotla Local Municipality, councillor Tsholofelo Moreo, has noted with great concern some media reports that Clover SA will be relocating its cheese factory from Lichtenburg to Queensburg in Durban, KwaZulu-Natal, with effect from next year. Moreo says the reasons cited by Clover for its departure from Lichtenburg are misleading and devoid of truth, to say the least,” said municipal spokesperson Pius Batsile in a statement.
News24 reported on Tuesday that Clover said “ongoing poor service delivery” by the municipality – citing water and electricity disruption which resulted in large losses – was reason for its decision to move base.
“For years, the Lichtenburg factory has been experiencing water and power outages and the surrounding infrastructure has not been maintained by the municipality. Despite numerous efforts to engage the municipality on these matters, the issues have not been resolved,” Clover was quoted as saying.
“This has negatively impacted production, which requires a continuous process, and it is no longer feasible for the business to operate in Lichtenburg.”
The municipality argued that “water provision to Clover has not been an issue because there is a specific bore hole which the municipality designated for the provision of water to the Clover factory to increase the volume of water supply for its production. The municipality wants to put it on record that the cheese company has been receiving electricity directly from Eskom and not from the municipality as was reported in the media.”
“As far as the terrible state of Beyers Naudé Drive is concerned, the municipality has been in constant engagements with the department of roads and transport management about the refurbishment of the road as it belongs to the department. Furthermore, the municipality has been doing its utmost best to maintain the road.”
Speaking on TV news channel Newzroom Afrika on Friday, Moreo said Clover was moving due to “its own challenges”.
“It cannot be true that they are leaving because of service delivery,” he said.
He also said that the company was getting 350 000 litres of milk for daily use at its Lichtenburg operations from KwaZulu-Natal and only 100 000l from the North West.
This is enough to make a strong suggestion, he said, that the company is moving to KwaZulu-Natal because it is already getting a large volume of its milk from that province.
Meanwhile, Mokgoro, who this week sent a delegation of four MECs to engage Clover management in Lichtenburg, said they were going to do their best to save jobs.
“Clover employs about 380 permanent employees and about 40 temporary employees. It further employs about 20 general workers, 20 truck drivers and truck cleaners, [while] other employment opportunities emanate from enterprise development programmes such as sub-contracting.
“We believe that the municipality cannot afford to allow Clover to close and relocate its operations as this would have devastating effects on more than 300 employees and their dependants,” he said.
Meanwhile, North West Cooperative Governance, Human Settlements and Traditional Affairs MEC Mmoloki Cwaile is also not convinced that Clover’s decision is purely based on service delivery challenges.
He said the company engaged Ditsobotla over service delivery issues in November 2020, but “Clover had already closed its first plant and announced that in early 2021 it would close its second one”.
“This could be just purely a business decision. We have reached out to the chief executive’s office to seek engagement and we know this has been their long-term plan. But if they can review their decision to relocate, it will be good for us,” Cwaile said.
“If not then we must explore other avenues,” he said, adding that the state could acquire the plant which Clover will leave behind and form cooperatives with former employees to run the plant and save jobs.
Clover had not responded at the time of publishing this article.
The company’s communications consulting company said Clover had not said anything since announcing its decision earlier this week.