Industrial action has been turned on its head in the KwaZulu-Natal town of Newcastle and its surrounds, where 85 factories went on strike against a law that sets minimum wages. Unlike most businesses, the Chinese- and Taiwanese-owned factories are not afraid to play hardball and closed their doors.
This rapidly brought the government to the negotiating table, with the result that late yesterday afternoon the factories said they would open today in good faith after promises of government intervention.
As with so many other problems in South Africa, the troubles in the town are the legacy of apartheid South Africa - although they have taken on a life of their own. Newcastle's manufacturing sector was born of the National Party's desire to decentralise industry to provide employment close to rural areas and moderate the influx of people (illegally at that point) to the urban areas. In the 1960s it started offering incentives in the form of cash grants and tax concessions to attract factories away from major urban areas.
Without the incentives manufacturers may have located in urban areas, and the people of Newcastle would have found their way to the cities in due course. Another rationale for locating close to rural areas was access to cheap labour.
Now incentives are long gone and the cheap labour with the help of a bargaining council isn't cheap enough to sustain the factories' operations, the owners claim.
The situation highlights the danger of creating artificial incentives. They create businesses where there is no compelling business case to do so. In time the incentives become unsustainable and when they fall away the businesses crumble.
One of the things the ANC government shares with its predecessors is its desire to have a finger in as many pies as possible. Unable to make state-owned industries work, the government believes it knows what's best for the private sector.
Sun International
After two World Cups in which Fifa's accommodation agency, Match, booked rooms only to hand them back at the last minute when it was too late to market them - first in Germany and, this year, in South Africa - hoteliers in Brazil are unlikely to run the risk of having it happen to them when their country hosts the event.
Sun International was among those that supported South Africa's bid to host the tournament by committing a large number of rooms to Match and, as a result, occupancy rates at Sun City and its Table Bay Hotel in Cape Town suffered. It was also hit by the earthquake in Chile which damaged its casino and hotel at Monticello, near Santiago, causing the complex to be closed for four months almost immediately after an encouraging start.
These are among reasons its pretax profit fell 15 percent for the year to June.
Despite the fact that chief executive David Coutts-Trotter does not expect a rapid recovery for the tourism industry after the recession, Sun International is resuming dividend payments of R1 a share. The company is also going ahead with refurbishing the Wild Coast Sun and expanding Port Elizabeth's Boardwalk. Both projects will provide hundreds of badly needed jobs in the depressed Eastern Cape.
The group expects its investment in Chile to achieve substantial profit in the current year and a bigger return from the Federal Palace hotel and casino in Lagos, of which it now owns 49 percent compared with a 29 percent investment previously held as an associate, that contributed only R11 million in revenue in the past year.
Most of the company's revenue comes from gaming rather than its hotels and restaurants and, although income from this was affected by the recession the drop was comparatively slight, from R6.23 billion to R6.21bn in the year to June, and it is making a tentative recovery.
Coutts-Trotter said the group was "comfortable" with the level of debt from its capital expenditure, with borrowings reduced by R217m to R6.3bn.
African Rainbow Minerals
Patrice Motsepe, the executive chairman of African Rainbow Minerals (ARM), is an optimist. How else do you explain him buying old, loss-making gold mines from Anglo American and then turning the mines around, using only a cellphone and his car as an office?
Yesterday, as he presented ARM's year-end results, he waxed lyrical about the mining prospects in Zimbabwe.
Although ARM is not yet involved in any projects in that country, it would seem that it is just a matter of time.
Motsepe told his audience that Zimbabwe had the best ore bodies in the world and that things in the country would continue to improve significantly.
"We need Zimbabwe to do well and I am confident that it will," he said.
Maybe Motsepe is right after all.
Yesterday, there was a report that Zimbabwe's bloated and bankrupt central bank is to retrench 85 percent of its staff to help move back into the black and function as a reliable national bank.
The report said lay-offs would mark the end of what analysts say was the use of the bank to prop up President Robert Mugabe's party after years of misrule exhausted the country's finances and led to economic collapse in 2008. "There about 2 600 employees at the bank but the board will reduce staff to around 400," Finance Minister Tendai Biti was quoted as saying in the state-run Sunday Mail newspaper.
He said the slashing of staff was the result of new legislation to restrict the bank's operations to managing monetary policy, monitoring the banking industry and to act as lender of last resort.
Biti confirmed that the bank, under governor Gideon Gono, owed $1.1 billion (R8.06bn). To pay back the debts, it has been forced by creditors to sell assets.
Under Gono, the bank confiscated hundreds of millions of US dollars from the accounts of major companies and non-governmental organisations.
Edited by Peter DeIonno. With contributions from Ethel Hazelhurst, Audrey D'Angelo and Wiseman Khuzwayo.