Trade Tatler
“Buying the right computer and getting it to work properly is no more complicated than building a nuclear reactor from wristwatch parts in a darkened room using only your teeth.”
Dave Barry



THIS ISSUE:     29 Mar - 04 Apr

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Shoprite  Capitalism

Shoprite has been informed by one Capital Group Companies that it (Capital) has acquired a beneficial interest in Shoprite’s securities, of which it now holds a fair old chunk representing 11.59% of the total. As far as we can tell, this means “a stake held by Capital on behalf of its investors.” Capital is a venerable US investment house which was founded in 1931 and has distinguished itself through offshore investments. Unlike the various bandits, pirate, swashbucklers, rogues and scallywags who have of late sought to bring the world economic order to its knees, Capital prides itself on a more conservative approach, packing in the research, taking a long-term view of its investments, and making sure that market sentiment as reflected in the share price is aligned with the actual value of the asset in question.
Comment: Which is why, presumably, they have taken so material an interest in The Big Red One.

Tatler Reporter 02/03/12

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Cashbuild  Constructive discussion

Heck of a business you got there, Cashbuild sir. SA’s largest retailer of building materials and associated manly stuff,  revenue up 9% to R3.3billion for the year to December ‘11, gross profit up 11% to R740million with gross margin hovering north of 22%. While South Africa is the main contributor at 87%, Malawi and Botswana are also looking healthy for the business, which is currently committed to a strategy of store expansion, refurbishment and relocation, having opened six new stores since July 2010.  But Cashbuild, you say, with their aisles of hammers, electrical supplies and bags of cement, are hardly the stuff of the Tatler. And you would be right, except that in the current rash of reckless speculation about mergers and acquisitions, it has been mentioned that Shoprite were looking for a local retailer on which to spend some of the R8billion they are raising in their stocks and bonds issue, they could do worse than drop some of it on Cashbuild.
Comment: Which would get right in amongst SPAR and Massmart, wouldn’t it?

Finweek 05/04/12, Business Live 22/03/12

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Pick n Pay  Organic growth. Greenfields, even.

We assumed that Trade and Industry Minister Rob Davies would do his shopping down at the co-op, in solidarity with the old constituency or something. How wrong we were. There he was, in his tailor-made Madiba threads wheeling a trolley with the best of them at Pick n Pay’s Hurlingham flagship. In fairness to Cde Robert, and indeed to Pick n Pay, he was there to lend his support to Pick n Pay’s pioneering initiative to provide dedicated shelf space to organic produce in 50 stores nationwide, as part of its efforts in fostering the small local supplier. To this noble end, its buying teams have been working closely with the Ackerman Pick n Pay Foundation and other bodies such as the IDC, NEF and the confusingly-acronymed Dti itself. The Big Blue has recently embarked on a project with small farmers in Tzaneen to up their capacity, volume being an ongoing challenge in this sector.
Comment: Nice one, that bearded cadre. And you too, PnP.

BizCommunity 27/03/12

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Masingita Group  The wild south west

Malls in Soweto are hardly news these days. “They like shopping there! And they’ve got money!” But let’s revisit a little here. Four of Soweto’s top five malls – Jabulani, Diepkloof, Bara and the soon to be opened 30,000m2 Protea Glen mall are owned by one business, the Masingita Group, whose founder Mike Nkuna has had plans for retail development in Soweto since the 1980s. Protea Glen, which will boast a Shoprite, a Cashbuild, a Pick n Pay and a Clicks inter 90 alia, is situated in a burgeoning middle class hub on the R558 between Krugersdorp and Lenasia. Masingita’s partner in the development is Nedbank, and the roof wetting was attended by such luminaries as Gauteng Premier Nomvula Mokonyane and the minister of national planning, Trevor Manuel.
Comment: They’ve got cars there, you know. 02/04/12

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Pharmaceuticals  Mother’s little (no-name) helper

Over 50% of South Africans are slipping out of their immaculately tailored and enticingly packaged brand-name pharmaceuticals and donning the cheaper albeit more mommyish generic numbers. Ten years ago, just 30% of us were opting for the less expensive stuff. Which is good news for Pharma Dynamics, who make a lot of it, and who reliably inform us, looking at their spreadsheets, that generic medicines are on average 50% cheaper than the originals. As a member of the WTO, South Africa extends 20 years of protection from generic competition to brand name medicines and their key ingredients, but after that, you’re on your own, buster. The likes of Aspen are feeling the competition keenly, although to be fair also throwing their own generics into the old medicine cabinet.
Comment: Free enterprise is hell, especially when it’s regulated.

IOL 29/03/12

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Fruit  And you thought everything was peachy...

There is a conference called “Cool Logistics Africa”, and that is all you need to know, surely. But if you insist on reading on, a prominent industry body has warned, in the lead-up to this conference (which we think means “before this conference”) that South Africa’s fruit producers are in for a hell of a time unless they get their A into G vis-à-vis export supply chain services and costs. This from the evocatively named Fruit South Africa, which has pleaded with the perishable logistics and transport sectors to rise to the current challenges in tandem with SA’s fruit growers and exporters. Reading between the lines, the latter are dissatisfied with the current performance of the former, and hope to use the “Cool Logistics Africa” conference to start a dialogue aimed at setting it all to rights.
Comment: “Cool Logistics Africa”. See you at the after party.

Bizcommunity 30/03/12

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Money  Fanplastic

South African punters are slowly learning to love the debit card, according to Visa’s 2011 Global Payment Tracking Survey, with 42% of us in possession of plastic now routinely using debit cards as opposed to the other more dangerous kind. The bad news is that South Africa shares the distinction with India and Indonesia of having the highest proportion of naked consumers who don’t have a card of any sort, at 20%. The use of debit cards is a driver of GDP growth, taking costly inefficiencies out of the value chain. The survey showed that purchases at Point of Sale (POS) with debit cards increased by 7% to 68% over an admittedly unspecified period, but that most consumers preferred to use cash for purchases under R200.
Comment: So there you go.

BizCommunity 30/04/12

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Woolworths  ...and then, occasionally, the story just writes itself.

Woolworths, having dealt with the fake old-school ginger beer thing and breathing a sigh of understated, gentlemanly relief has been blindsided by a new scandal of, well biblical proportions: its hot cross buns are halaal! They’ve been personally blessed by the ghost of Osama Bin Laden and are unfit for Christian consumption, according to the crazier reaches of the twitterverse. What with this and the threat by the 250,000-strong hunting community (their figures) to “deal with” Pick n Pay, it’s an interesting time to be in retail right now.

Tatler Reporter 03/04/12

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