Factory fire burns up Astrapak’s profits

Johannesburg - Astrapak would close down more companies in its flexibles division as part of its turnaround process after it reported steep declines in earnings for the six months to August, chief executive Robin Moore said on Friday.

Headline earnings a share fell 51.4 percent to 10.7c in the six months to August, compared with 22c a year earlier.

The listed plastics company was unable to fully recover from a fire at one of its factories and has since closed down its packaging unit.

It has undergone a number of “reduction programmes” and staff restructuring as part of its two-year recovery programme. Moore said the flexibles part of the business required restructuring as it was not profitable.

Astrapak managing director Manley Diedloff said acquiring many businesses “was the right strategy at the time”.

“We were able to build a good footprint,” he said, adding that the company should have started evaluating the acquisitions two years ago.

It now plans to sell off more of its companies, following the sale of its packaging company, Alex White, and the Durban packaging unit, Packaging Consultants.

“The flexibles have been underperforming for a while now. We are restructuring the entire division,” Diedloff explained.

The fire at its East Rand Plastics factory resulted in damage to R56.3 million worth of fixed assets. Before the fire, the factory had generated almost half of the flexibles division revenue and disruptions to production were crippling the already struggling division.

The company made a loss related to exceptional items of R35m in the six months to August from the R4.8m loss last year. This sum included losses from insurance and impairments related to the closure of the East Rand operation.

Profit fell 13.9 percent to R252m in the period from R292m a year earlier.

The group’s shares have shed 15 percent this year and earlier this month reached their lowest level in more than five years.

Moore said the company had not fully recovered from fire damage but that it was on the road to recovery. The benefits of the programme would be seen in the next year.

The company also made significant senior staff changes in the past year to create a turnaround strategy and instil tighter control. “This is a two-year programme and we have created our own targets that we are comfortable we can meet,” Moore said.

Overall volumes in the flexibles and rigids divisions fell by a combined 5.4 percent while the average selling price slid by 6.6 percent. Revenue in the rigids division increased by 15.1 percent to R893.7m while the flexibles divisi on posted a decline of 23.7 percent.

36One Asset Management analyst Jean Pierre Verster said low consumer confidence and associated low consumer spending was causing packaging companies to close down.

“The closing down of local manufacturing capacity does not bode well for job creation, economic growth and self-sufficiency,” he said.

The flexible plastics industry was highly competitive and lacked pricing power.

“The fire at East Rand Plastics has opened a window of opportunity for them to accelerate the rationalisation process, since they will probably not invest the same amount of capital as what was employed by East Rand Plastics before the fire.”

By Zandi Shabalala


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E-tolls 10 times more than fuel levy

E-tolls 10 times more than fuel levy.

 

To find out the real difference, don’t trust Sanral – do the sums for yourself, says Brendan Seery.

 

Johannesburg - Now that the president has given the go-ahead for e-tolling, the SA National Roads Agency Ltd (Sanral) and its cronies are going all out to convince the public that electronic collection is so much better than applying a fuel levy to pay for Gauteng’s improved highways.

Sanral is running a campaign to trash the fuel levy idea, much of which is misleading or inaccurate. At the same time, it accuses critics of spreading misinformation and getting their facts wrong.

So, let’s play the numbers game – something few people have done.

Let’s compare the real-world impact of a fuel levy versus e-tolling on the pockets of ordinary motorists. 

The latest Sanral ads cite research done last year by economist Mike Schussler on behalf of the Road Freight Association. Schussler calculated that the industry would be better off paying the toll fees than a fuel levy.

He said a levy would cost an additional R700 million, whereas toll fees would cost R400m. 

Schussler’s research apparently related to a national fuel levy. Given that Gauteng accounts for 60 percent of the country’s economic activity and that, reasonably, freight operators would pay 60 percent of that national levy in Gauteng, a Gauteng-only levy would cost them R420m. This brings the real difference between a fuel levy and e-tolling a lot closer than Sanral would have you believe.

The government’s budget revenue for 2013/14 is R985.7 billion (according to economist Kevin Lings, who analysed the annual budget earlier this year for Stanlib). Of that amount, the fuel levy accounts for 5.2 percent or about R51.2bn. 

The fuel levy is currently R2.12 a litre for petrol and R1.97 for diesel. Raising that by 10 percent, roughly 20c per litre (much higher than the level Schussler calculated would be necessary), will bring in an additional R5bn a year, if applied nationally. 

If applied only in Gauteng (in a “user pays” scenario), the fuel levy would still generate an extra R3.1bn (60 percent of the national figure). Assuming a generous 5 percent loss to administration expenses, a Gauteng-only extra fuel levy of 20c a litre will still generate R2.95bn in revenue, more than enough to pay off the exorbitant R20bn cost of the roads in 10 years.

Remember that this money could be applied directly to the debt owed, rather than being sent abroad to pay for the cost of collection of the tolls.

Now, how will e-tolling affect you and how might you be affected through a fuel levy of 20c a litre? At first glance, Sanral’s e-toll charges (with an e-tag) look reasonable: about 15c a kilometre after discounts.

That compares fabulously well with the outrageous charges on the N3. For example, you will pay R50 to travel between Villiers and Warden – a saving of 9km over the alternative route. But when you look at the e-tolls in direct comparison to the fuel levy, Sanral’s Gauteng charges don’t seem too reasonable at all. 

Using the example of someone who commutes from Joburg to Pretoria to work (N1 14th Avenue to N1 Lynnwood in Pretoria), e-tolling will cost R450 a month, because that is the cap for light vehicles. 

(You can calculate your own costs by using Sanral’s website – www.sanral.co.za/e-toll/.) 

Travelling that route, 130km a day return, five days a week, 20 days a month, a typical light car will use 208 litres of fuel at an average 8 litres/100km. Paying 20c a litre extra as a fuel levy, the motorist will therefore pay an extra R41.60 on the fuel used to make those journeys.

That’s a difference of over R400. The e-toll will cost you 10 times what a fuel levy would. You would have to adjust the fuel levy upwards to more than double the current levy to make e-tolling cheaper.

That’s something Sanral probably doesn’t want you to think about. 

By Brendan Seery  

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Popular resistance could be undoing of e-tolls in Gauteng

Popular resistance could be undoing of e-tolls in Gauteng.

THE controversial e-toll bill signed into law last week is set for another legal challenge with the Freedom Front Plus (FF Plus) claiming it was incorrectly processed in Parliament, making it unconstitutional.
The party is heading to the North Gauteng High Court after obtaining a legal opinion earlier this year that found the bill had been improperly tagged and processed, making it unconstitutional.

President Jacob Zuma signed the Transport Laws and Related Matters Amendment Bill into law last week after waiting more than three months, during which time speculation ran high that the unpopular bill would be held over until after next year’s election. The bill was signed on the same day the Opposition to Urban Tolling Alliance (Outa), the civil society grouping that has been fighting e-tolls since last year, concluded its argument in the Supreme Court of Appeal.
Anton Alberts, an advocate and spokesman for FF Plus, said the party’s legal opinion was valid. "We have sent the opinion to the president, to our advocates, and they are busy studying it and they are preparing to launch an application to declare the bill unconstitutional," he said.
"We have been advised that we have a good prospect of winning should we go to court. We are also waiting for the outcome of the Outa case as well. If they are successful then launching (our) application would not be necessary," Mr Alberts said.
The bill was a "section 75 bill — a regular bill — which means it does not have to go through the National Council of Provinces", but "we are saying it was a section 76 bill and must go through the provinces".
The FF Plus is also seeking the legal opinion that Mr Zuma relied on to inform his decision to sign the bill into law. The Presidency "seem quite reluctant to give that to us. We might have to make an application under the Promotion of Access to Information Act to get hold of that as well," Mr Alberts said.
Department of Transport spokesman Tiyani Rikhotso said this week the bill was now an act of government and there were no issues surrounding its legality.

He said the department was working to publish the tariff schedule as well as the regulations within two weeks. Once these had been published, a 30-day period would start, allowing for public comment.
Outa chairman Wayne Duvenage said on Wednesday he doubted tolling would begin this year. "If the history of their launch dates is anything to go by, I very much doubt they will launch this year. But even if they do, launching is one thing … running a successful e-toll collection process on a sustainable basis is something else.…"

One of the issues that the FF Plus has with the E-toll Act is the power granted to the Minister of Transport to "amend the contents of the SANRAL Act". It is this power that the FF Plus will allow the Minister to create a new force of peace officers to enforce the payment of toll fees.
Mr Alberts said the Act also indicated that it is unlikely that the toll road programme will rely on the Criminal Procedure Act as there is recognition that the number of enforcement violations generated by the toll roads would overwhelm the courts.

Mr Alberts said state prosecutors were already unwilling to prosecute Aarto offenses and had indicated they had little appetite to prosecute what is expected to be an enormous volume of violations created by the non payment of toll fees.
With about 900,000 daily transactions expected to be recorded by the road’s toll system and a best case scenario – based on international best practice of mature tolling systems of between 80% and 90% compliance –
Mr Rikhotso said the department was not contemplating any other enforcement system apart from the use of the CPA, which is what is contained in the Sanral Act for enforcement purposes.

by Nicky Smith


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6 ways to save on insurance premiums

How to save on insurance:

There are things – within your control – that can be done to offset imposed premium increases.

South Africa’s weakening currency, the number of recent local natural disasters and the increase in vehicle accidents have put the insurance industry under pressure to implement premium increases. However, consumers have some power to resist the blow to their budget, says Auto & General’s CEO, Leon Vermaak. 

Insure your vehicle for the correct value:  
Drivers of older vehicles must ensure that they are not over-insuring their cars. Not all insurers take into account the vehicles depreciated value so make sure your vehicle is insured for the correct value.

Update your home contents policy:  
When it comes to home contents insurance, opportunities to reduce coverage could lie in carefully and regularly updating household inventories.
Review your household inventory every six months and adjust the total insured sum accordingly.
When you calculate the insured amount of your home contents, make sure you are using replacement values and not market values.
Remove old and discarded items that no longer need to be insured from your inventory list. Why should you pay for cover on a computer that stopped working in 2011? 
Similarly, the costs of some appliances and gadgets have come down in price so you really shouldn’t be paying to insure an item that was more expensive when it first hit the market than it is nowadays.

Don’t duplicate coverage:  
If your short-term insurance company offers free roadside assistance, you needn’t opt for the same benefit from your medical aid provider, and if your cellphone is insured under your home contents, you shouldn’t be paying for separate cellphone cover.

Increase your security:  
Your short-term insurance premium is calculated based on your risk profile.  Your risk profile is based on a number of things such as where you live, the type of car you drive, and the security interventions you have in place, amongst others.
You could reduce your car insurance premium if you’ve fitted your car with additional safety features such as a tracking device or an alarm, for example.
You could receive a reduction on your home insurance premium if you’ve invested in new alarm system for your home or if you’ve moved to a safer neighbourhood.

Don’t claim unnecessarily:  
Keep your insurance for real catastrophes which result in unexpected large losses and avoid claiming for small events that you could cover from your own pocket. When you claim for every little scratch, your insurance provider will raise your premium to reflect the higher risk you pose.

Increase your excess:  
You could save some money on your insurance by increasing the excess you pay when you claim.
Ideally, you want to pay the lowest excess you can in the event of a claim. However, opting for the lowest excess might make your premium too expensive for you. Best practice is to find a balance where you’re paying a reasonable premium and your excess is not too high that you won’t be able to cover that amount should you need to make a claim.
Vermaak recognises that insurance is a grudge-purchase so it is very often one of the first items to be scrapped from the monthly budget. However, he advises those who are thinking of cancelling their insurance to think wisely before they do.

“Burglaries, robberies, hi-jackings and petty theft are also on the up so insuring your valuables has become a necessity. Aside from the risk of having your car or any other possessions stolen, there is the possibility that something else could go wrong, such as a burst geyser or even a fire.
“Not many people have the cash in-hand to replace a stolen car or furniture and appliances ruined in a fire. Those who think that insurance is an unnecessary cost should consider the costs of not being insured before cancelling their short-term insurance,” concludes Vermaak.

Source: Auto&General


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Westgate attack: Cape Town’s ‘gentle giant’ laid to rest

Cape Town’s James Thomas, 57, was one of the 67 people confirmed killed in the terror attack on Nairobi’s Westgate shopping centre. His body was returned to Cape Town last weekend for burial. At an emotional funeral service in Cape Town on Wednesday, family and friends spoke movingly of a man who seemed to touch the lives of an extraordinary number of people.

 

Funerals are usually occasions where the very best of a person’s character is remembered and celebrated. But even for those who never met the man, it was hard not to leave the funeral of James Thomas, gunned down at 57 years old in Al Shabaab’s 21^st September terror attack, without feeling that Thomas must truly have been a remarkable human being.

The evidence of Thomas’s exceptional life was everywhere: in the over 1,300 people who packed the Bishops chapel and overflow rooms to bid him farewell; in the presence of Archbishop Desmond Tutu; in the raw emotion of those present; and in the words they used to describe him. A thinker, bridge-builder, adventurer; a stiller of storms and an owner of dodgy cars.
“He really spent his entire life working for others,” a man sighed before the service began. Shaking his head, he said: “He was just a mensch.”
James Thomas was born and bred in the city his family had lived in for three centuries, Cape Town. A lifetime abhorrence of violence led him to become a conscientious objector to compulsory Apartheid military service, and a keen awareness of social injustice saw him devote most of his life to attempting to help lift others out of poverty through a vast range of business and entrepreneurship training schemes.
Thomas had a particular empathy for the situation of the unemployed. His longtime friend and business partner, Margie Worthington-Smith, said on Wednesday that he had experienced unemployment himself in the 1980s, and she recalled the thick file of his job applications and subsequent rejections that filled up depressingly. “So he went out and made his own contribution,” Worthington-Smith said.

Thomas founded the Triple Trust Organisation, an NGO dedicated to “the alleviation of poverty in South Africa through making markets work for the poor”. But though he was involved in many diverse projects, his speciality lay in developing business training tools. The most successful of these was a business skills programme called ‘BEST (Business Expenses Savings Training) Game’, which won numerous development awards. Developed in Khayelitsha, it is now licensed worldwide and used in 75 countries.
Worthington-Smith said that Thomas recently found out that the tool had been used by 1,100 Chinese trainers to teach 4,5 million learners. Of these, 85% had started businesses, each employing around five people. Thomas phoned Worthington-Smith with enormous excitement and pride to say that he had done the maths, and it appeared that over 11 million Chinese people had been impacted by his Khayelitsha-developed training tool.
Another of Thomas’s successful projects saw small-scale farmers in townships like Nyanga and Khayelitsha bring their excess produce into Cape Town’s more affluent kitchens. His now well-established ‘Harvest of Hope’ scheme sees Southern Suburbs dwellers buy vegetable boxes weekly from primarily women-run micro-farming groups. The project, it seems, had all the hallmarks of a Thomas idea: a way to bridge divides between communities while providing income and occupation for those in need.

The words “visionary” and “genius” were heard several times in the course of Wednesday’s funeral. Thomas once mastered a complex programming language overnight, Worthington-Smith recalled. When Microsoft Excel arrived on the scene, he became adept “instantly”. He was a “veritable encyclopaedia”, with expertise in a surprising array of subjects – “he was an excellent seamstress,” Worthington-Smith said, to laughter.
Not all of Thomas’s schemes worked out. Reverend David Meldrum said he was struck by the fact that Thomas’s CV included a section titled “Nice Ideas I Tried That Didn’t Work Out”. One of them was a plan to introduce airships with tour guides and musicians, to take tourists all over Cape Town. He had neglected to consider Cape Town’s wind problem.
“Honestly, who puts failures on his CV?” Meldrum chuckled. “If you knew James, you had almost certainly been exposed to one of his mad ideas.”
But aside from his entrepreneurial energy, his family and friends also remembered a man who loved fun and laughter. “There’s always an excuse for a party,” was one of his catch-phrases. His son-in-law, Scott Lee-Jones, said that Thomas would never allow a family birthday to go by uncelebrated without fairy-lights and a crazy dress-up theme. Thomas “could bodysurf any wave he chose…until his belly hit the sand,” Lee-Jones said. He never missed a choir performance of his two daughters, Julie and Sarah, or a rugby fixture of his nephew, Sipho, who lives with the family. He used to say that he loved his wife, Colleen, “pathologically”.

Thomas was in Nairobi on the weekend of the Westgate attack because he was carrying out entrepreneurship training for young Kenyans. Kenya was just one of the African countries in which he worked. He had wandered away from his friends in the mall when the attack started, and is thought to have been one of the first to be killed. Lee-Jones told journalists after the service that the final autopsy revealed that Thomas had been shot four times.
Thomas was so renowned within his community for his ability as a peacemaker that his sister, Mary-Jean Thomas-Johnson, told the funeral that during the anxious hours after the shooting when the family was unsure of Thomas’ fate, they hoped he might be negotiating with the terrorists. But even Thomas’s inimitable spirit could not safeguard him against the Al-Shabaab shooters.
“As I stand here today I do not intend to preserve my dignity and reputation,” his wife, Colleen, told the packed chapel. “I do not intend to pretend that the murder of James has not rocked my entire world.” She was filled, she said, with anger. “The death of James and so many others is evil and we have the right to be angry about this.” Colleen Thomas asked the audience to join her in a shout of “NO!” - a lament, she called it, for James.
But Colleen said too that she was deeply moved by the outpouring of support for her family since the shooting, which she said had come from every corner of the globe. “Instead of accepting that this was yet another senseless murder, we must move on to recognising his life’s work,” she said.
The Thomas family had said in advance that it was important to them to have an interdenominational presence at the funeral. The Imam of the Claremont Main Road Mosque, Dr Rashied Omar, was on hand to deliver the condolences of the Muslim community and to condemn the “unconscionable and inexcusable” attack at Westgate. “We need to use this tragic moment to recommit ourselves to working even harder at educating our communities with regard to the need to affirm each other’s full human dignity and to respect the sanctity of life irrespective of religious affiliation,” Omar said.
Omar concluded his message with Islamic words of sorrow and condolence to the family. He was embraced by Reverend Liz Thomas - James Thomas’s sister - and the audience rose to its feet in applause.

Several representatives of the Kenyan community were also present. Robert Wanjohi, of a diasporic organisation called WaKenya Pamoja (‘Kenyans Together’) told journalists after the service that they felt it important to attend. “For us here in Cape Town, the Kenyans, we felt so sad about what happened in our backyard,” Wanjohi said. “This attack happened to all of us. We can unite again.”
More than one friend and family member of Thomas’ said that, driven by his strong religious faith and his personal belief in the power of reconciliation, Thomas would have been able to forgive the Westgate attackers. What would Thomas’s likely response to Westgate have been? a journalist asked his son-in-law, Scott Lee-Young.

“He would’ve wept, and then he would have gone out to find people to hug,” Lee-Young replied. DM

By REBECCA DAVIS.


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Absa to sell insurance products online

     Absa to sell insurance products online

ABSA has introduced online insurance products accessible to its 1.3-million internet banking clients in a few minutes.
Clients can buy short-term and life insurance and investment products on Absa Online in a simple, seamless process, Absa Financial Services CEO Willie Lategan said on Wednesday.
As South Africa’s big four banks battle for market share, the fight has moved into the digital realm.

"Our research has shown that digital innovation is going to be the key area of change in the industry … so it’s essential that we offer clients a unique and holistic digital experience," Mr Lategan said.
According to PwC’s 2013 banking survey, the big four banks plan to spend R3bn-R5bn on technology in the medium term as innovation was critical to compete.
Some banks had grown revenue in South Africa by migrating customers to electronic channels, the report added.

Absa was the last of the big four banks to launch a banking app for mobile devices.
But Mr Lategan said it was the first bank to introduce a "genuine, fully-integrated, online offering" in the South African bancassurance market.
Absa clients can apply for short-term insurance policies to cover residential buildings, household contents and vehicles. They will also have access to life insurance, funeral cover and credit protection.
As the bank already has most of the customers’ information, there is no need to complete long applications forms.
Applicants answer a few questions relating to their health and risk. Based on this, they get a quote which they can accept immediately.

Mr Lategan said this process took about two minutes.
Once the cover is in place, clients can manage their policies online as well as claim online.
Absa plans to make online insurance available to non-Absa clients and to roll it out to other digital channels such as cellphones. This is essential if Absa expands the product to its bancassurance businesses in Botswana, Mozambique and Zambia where more people have access to mobile phones than the internet.

Absa head of digital channels and payments Adrian Vermooten said Absa Online was launched in July 2012 as a more integrated platform to replace internet banking. About 70%-80% of the bank’s internet customers have migrated to Absa Online.
Since its introduction in April, Absa’s banking app has been downloaded 200,000 times, with customers using it on average 28-34 times a month, said Mr Vermooten.
He said the app was used most frequently at 10am on Saturdays.

by Gillian Jones, September 04 2013,  

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The Game, Drake help cover funeral costs for people who died in house fire

The Game, Drake help cover funeral costs for people who died in house fire.

American rappers The Game and Drake will be funding the funeral of a family who lost their lives in a fire accident- generosity hailed by many fans.

According to tmz.com the two rappers will assist Anna Angel bury her family members after they died in a tragic fire accident in their home. Angel’s five children and boyfriend all burnt to death after their family home burst into flames, and they couldn’t get out because they were trapped.

After hearing about the disastrous news, the Celebration and Best I Ever Had rappers are planning on donating a large sum of money (over R220 000 to be exact) to Angel, reported hiphopblog.com.

"I can deal with a lot of things but people losing their children is something that kills me every time," Game wrote on Instagram as he posted a photo of the family, reported hiphopdx.com.

According to tmz.com Drake later tweeted about the plans to donate money, and that they would do this through The Game’s “Robin Hood Project”, which recently pledged to give R10m to people in need.

Drake tweeted:

"What [The Game] is doing will never be forgotten. Honored to be able to help people along side my brother."

The Game is doing a lot of good deeds lately, as he recently donated R100 000 to the family of a little girl who was shot and killed outside her home in Los Angeles, America.

Tiana Ricks, who was six years old when she died, was killed by two men who came to her house in Moreno Valley and opened fire, hitting her and her father, reported hip-hopvibe.com

The little girl’s funeral was held on 14 September and the police were still on the hunt for the killers. 

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