By Mike Cohen

Feb. 22 (Bloomberg) — South Africa is considering spending more than 600 billion rand ($78 billion) on new nuclear plants, another coal-fired plant and a hydropower project in the Democratic Republic of Congo to stave off power shortages in Africa’s largest economy.

In the 2012 budget released today, the National Treasury allocated 844.5 billion rand toward new energy, transport, housing, telecommunications and water projects in the three years through March 2015. The budget lists 43 infrastructure programs worth a total of 3.2 trillion rand that are in progress or under consideration for implementation by 2020.

“No good project will be short of funding,” Finance Minister Pravin Gordhan told lawmakers in his budget speech in Cape Town. “South Africa has deep and liquid capital markets through which long-term capital can be raised at competitive rates.”

President Jacob Zuma announced plans for a “massive” infrastructure drive in his Feb. 9 state-of-the-nation speech to help spur invest and support growth in Africa’s biggest economy.

Proposals to spend 300 billion rand on nuclear plants with the capacity to generate 9,600 megawatts of energy by 2029 are in the “final stages of consideration,” the Treasury said. The government may also build a new 111 billion rand new coal-fired plant, in addition to the Medupi and Kusile plants under construction.

Grand Inga

An investment of 200 billion rand in Congo’s 40,000 megawatt Grand Inga hydropower project is at the “assessment stage,” while a study into a 200 billion-rand solar park is due for completion this year.

Transport projects being considered include a 37 billion- rand upgrade of Transnet SOC Ltd.’s rail line transporting coal from the eastern Mpumalanga province to the port of Richards Bay. A 300 billion-rand high-speed rail line between Johannesburg and the eastern port of Durban is still at a conceptual stage, the Treasury said.

The government is also considering a proposal for state petroleum company, PetroSA, to build a 200 billion-rand, 360,000 barrel-per-day refinery at the eastern port of Coega.

Public-sector borrowing will start “rapidly rising” after 2015 as infrastructure investment accelerates, Gordhan said.

The government has been struggling to implement capital projects, spending just 68 percent of the 260 billion rand allocated in the year through March 2011, Gordhan said.

Selling State Assets

“In addition to long delays, we have often experienced significant cost overruns,” he said. “We shall step up the quality of planning, costing and project management so that infrastructure is delivered on time and on budget.”

The government is reviewing its investment in a number of state-owned companies and may sell non-priority assets, the Treasury said.

New regulators may also be established to oversee the water and transport industries, to ensure the services they provide are correctly priced, while the Department of Energy is reviewing of its power-pricing policy, it said.

–Editors: Gordon Bell, Nasreen Seria

To contact the reporter on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

Article source: http://www.businessweek.com/news/2012-02-22/south-africa-considers-building-nuclear-coal-fired-power-plants.html

The 2.7 per cent figure, cited by Finance Minister Pravin Gordhan as he presented South Africa’s 2012-13 budget, reflects close links between South Africa and struggling industrialized nations.

Global growth this year is expected at 3.3 per cent, led by Asian developing countries that are expected to grow by 7.3 per cent, and sub-Saharan Africa by an average of 5.5 per cent. South Africa, with markets for many of its products in Europe, will lag, but still be ahead of advanced economies that are expected to grow at only 1.2 per cent. Growth in South Africa has averaged about 3 per cent a year since 2009.

South Africa has to do more business with the rest of the continent, and better position itself as Africa’s economic gateway, Gordhan said.

“To succeed in this environment, we have to seize the opportunities presented by this changing world,” he said.

He added South Africa’s mining sector, weakened by years of under-investment and other problems, should be benefiting more from high commodity prices, and that the country should take better advantage of rising demand for agricultural and factory goods.

“Some 85 million manufacturing jobs in China will shift to other countries over the years ahead,” he said. “Do we have the right policies, conditions and boldness to enable South African businesses to gain from these immense shifts in the patterns of production and trade?”

Gordhan also gave some details on an infrastructure development plan President Jacob Zuma announced earlier this month that is meant to spur growth and create jobs. Gordhan says his government is looking to private investors to help pay for some projects, and will borrow and raise some taxes.

Gordhan outlined total spending of 969.4 billion rand (about $125.9 billion) in 2012-13.

He predicted the 2012-13 budget deficit of 4.6 per cent of GDP, and said he hoped to reduce that to 3 per cent in 2014-15. He expected public debt to stabilize at about 38 per cent of GDP.

Article source: http://www.canadianbusiness.com/article/72181--south-africa-s-economic-growth-lags-behind-african-average-reflecting-close-ties-to-europe

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By Stephen Gunnion and Renee Bonorchis

Feb. 22 (Bloomberg) — The FTSE/JSE Africa All Share Index fell for the first time in four days, declining 0.4 percent to 34,006.52 by the 5 p.m. close in Johannesburg.

The following were among the most active equities in the South African market today. Stock symbols follow company names.

Anglo American Plc (AGL SJ), a diversified miner that makes up about 9 percent of the index, slipped 1.4 percent to 325.10 rand. Copper for May delivery declined 0.9 percent to $3.809 a pound.

BHP Billiton Ltd. (BIL SJ), the world’s biggest miner, declined 0.7 percent to 252 rand.

Impala Platinum Holdings Ltd. (IMP SJ), the second-biggest producer, fell for a second day, sliding 1.3 percent to 161.01 rand. Deliveries of the metal to customers may be about 50 percent less than usual at its largest mine, which remains closed after an illegal strike, the company said.

“It’s an absolute guess, because it’s too early to know,” Derek Engelbrech, Johannesburg-based Impala’s marketing executive, said by mobile phone today.

The company may also lose more than 100,000 ounces of platinum production due to recent disruptions in South Africa, Credit Suisse Group AG said in an e-mailed report today.

Massmart Holdings Ltd. (MSM SJ), a retailer controlled by Wal-Mart Stores Inc., fell for the first time in four days, declining 0.6 percent to 181.51 rand. Profitability is under pressure because of expansion costs, the company said in a regulatory filing today.

Mpact Ltd. (MPT SJ), the South African packaging company spun out of Mondi Group, advanced the most in two weeks, jumping 2 percent to 15.13 rand. Basic earnings per share for the 12 months to Dec. 31 increased to between 52 cents and 56 cents from 22.4 cents a year earlier, the company said in a trading statement today.

Old Mutual Plc (OML SJ), Africa’s largest insurer, dropped the most in three months, falling 1.6 percent to 19.02 rand. The insurer said Togo’s Ecobank Transnational Inc. accepted its preliminary offer for Nigeria’s Oceanic Life.

O-line Holdings Ltd. (OLI SJ), a maker of cable ladders, anchors and mechanical supports, climbed to its highest in a week, adding 4.2 percent to 1.23 rand. Germany’s OBO Bettermann GmbH Co. KG planned to offer shareholders 1.30 rand a share for 100 percent of the company, it said after yesterday’s market close.

PSV Holdings Ltd. (PSV SJ), a supplier of pumps to mines, rose the most since Dec. 7, gaining 25 percent to 20 cents. PSV announced plans to sell five of its pump businesses for 54 million rand ($7 million) to pay off debt, build working capital and return cash to shareholders.

Rolfes Technology Holdings Ltd. (RLF SJ), a color pigment manufacturing company, gained the most in more than a week, adding 1.9 percent to 3.31 rand. Earnings per share rose 16 percent to 17.1 cents in the six months through December, the company said in a regulatory filing today.

–Editors: Linda Shen, Peter Branton

To contact the reporters on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net; Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Article source: http://www.businessweek.com/news/2012-02-22/south-african-stocks-anglo-bhp-implats-massmart-old-mutual.html

Article source: http://www.boston.com/business/articles/2012/02/21/un_climate_chief_turns_to_ceos_for_action/

The initial initiatives, which will be rolled out during 2012, will focus on the areas of education, unemployment, particularly youth unemployment, and corruption, where BLSA plans to harness the collective power of its members to make a “systemic impact”.

The organisation currently has 85 members, comprising the largest JSE-listed companies and multinationals, as well as some of the big State-owned companies operating within South Africa.

Chairperson Bobby Godsell says BLSA has already moved to endorse the Congress of South African Trade Union’s (Cosatu’s) Corruption Watch initiative, which has been launched as a new platform to support whistle blowing, as well as to shine a light on corruption and those who act corruptly.

In the area of education, BLSA will work with Cosatu and government in support of President Jacob Zuma’s call for teachers to spend a full seven hours a day teaching, while harnessing the R1.75-billion its members spend collectively in support of education to improve the teaching and learning experience.

However, the big business group will also continue with its traditional advocacy initiatives with immediate plans to make direct input on the proposed changes within the Broad Based Black Economic Empowerment Amendment Bill, as well as a possible new local business tax being proposed by the South African Local Government Association.

It is also preparing to speak out against a proposal to ban labour broking, which Godsell describes as being as “crazy” a notion as denying that there are abuses within the temporary employment environment.

Power price increases will also come under scrutiny, with BLSA now concerned that South Africa could “price itself out of competitiveness”.

However, Setiloane stresses that as much effort would be given to supporting government and other social partners in ways that he hopes will provide better visibility of business’ societal value.

Article source: http://www.engineeringnews.co.za/article/big-business-unveils-beyond-advocacy-plan-for-sa-2012-02-21

By Stephen Gunnion

Feb. 21 (Bloomberg) — The FTSE/JSE Africa All Share Index advanced for a third day, rising 0.1 percent to 34,142.37 by the close in Johannesburg.

The following were among the most active equities in the South African market today. Stock symbols follow company names.

Anglo American Plc (AGL SJ), a diversified miner that makes up about 9 percent of the index, climbed for the second time in three days, adding 1.3 percent to 329.56 rand. Copper rose in New York, heading for the highest in more than two weeks, after a second bailout for Greece reduced concern the euro-region debt crisis might crimp growth and metals demand.

BHP Billiton Ltd. (BIL SJ), the world’s biggest miner, increassed 0.7 percent to 253.69 rand.

Aspen Pharmacare Holdings Ltd. (APN SJ), the largest maker of generic medicines in the southern hemisphere, edged up for the first time in three days, rising 1.5 percent to 105.21 rand. Fiscal first-half earnings per share rose 24 percent to 30 percent compared with a year earlier, the company said in a trading statement.

DigiCore Holdings Ltd. (DGC SJ), a company that makes vehicle-tracking devices, added 5.2 percent to 3.05 rand, its first gain in 11 days. Profit increased 4.9 percent in the six months through December, the company said in a regulatory filing today.

Gijima Group Ltd. (GIJ SJ), a South African computer- services company, rallied to its highest in almost two weeks, rising 3.6 percent to 57 cents. The company returned to profit in the first half, it said in a regulatory filing.

Litha Healthcare Group Ltd. (LHG SJ), a pharmaceutical developer and wholesaler, advanced to the highest since its 2006 listing, jumping 6.2 percent to 3.10 rand. The company agreed to buy Pharmaplan Proprietary Ltd. from Montreal-based Paladin Labs Inc. Separately, Litha said earnings per share in the year ended Dec. 31 rose 20 percent to 40 percent.

Metair Investments Ltd. (MTA SJ), a company that makes motor vehicle components, increased to the highest level on record, rising 5 percent to 21.70 rand. Earnings per share for the year through December probably increased at least 20 percent, the company said in a trading statement.

MMI Holdings Ltd. (MMI SJ), the South African insurance company that was created last year from the merger of Metropolitan Group Ltd. and Momentum Group Ltd., closed at its lowest in more than two weeks, dropping 0.8 percent to 18.98 rand. The stock was cut to “underperform” from “neutral” at Credit Suisse AG, with a 19 rand price estimate.

Shoprite Holdings Ltd. (SHP SJ), South Africa’s largest retailer by market value, closed at its highest in more than a month, up 1.4 percent to 134.50 rand. Net income advanced to 1.4 billion rand ($183 million), or 2.80 rand a share, in the six months ended Dec. 31, from 1.2 billion rand, or 2.34 rand a share, a year earlier, the Cape Town-based company said today in a stock-exchange statement.

Super Group Ltd. (SPG SJ), a logistics company, surged to its highest in more than three years, advancing 12 percent to 13.30 rand after saying earnings excluding one-time items climbed 63 percent to 244 million rand in the first half.

–Editors: Ash Kumar, Peter Branton

To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net;

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Article source: http://www.businessweek.com/news/2012-02-21/south-african-stocks-anglo-bhp-aspen-shoprite-super-group.html

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By Jana Marais

(Updates with minister’s comment in second paragraph.)

Feb. 21 (Bloomberg) — South Africa’s government said it’s concerned power costs are hurting household and industrial users as the regulator studies raising prices further amid stoppages by smelters to curb demand on an overburdened electricity grid.

“Government understands the need for the separation of our role as a policy maker from that of the independent regulator but we’re worried about the cost of power generation in this country and the cost at which it’s getting to the end user,” Energy Minister Dipuo Peters said in a speech in Johannesburg.

The National Energy Regulator of South Africa will this year decide on tariff increases for state power producer Eskom Holdings SOC Ltd. from 2013 to 2016. Gains exceeded inflation in the past three years to help fund 500 billion rand ($65 billion) of expansion needed to prevent a repeat of power cuts in 2008.

The government understands higher tariffs are necessary to fund growth, and industry will subsidize households to “cushion the poor against these rising costs,” she said today. At the same time, the nation needs to curb business costs, Peters said.

Eskom, supplier of about 95 percent of electricity in South Africa, is building power stations as it tries to avoid a repeat of a shortage that halted mines in 2008. This year, Xstrata Plc and BHP Billiton Ltd.’s Samancor unit has shut furnaces in the country to curb electricity use and help stabilize the grid.

Eskom, whose biggest customers include Anglo American Plc and AngloGold Ashanti Ltd., was awarded tariff increases of 27 percent last year, 25 percent in 2010 and 31 percent in 2009, after saying prior increases lagged behind generating costs.

“Energy efficiency is our best hope in the short term to balance supply and demand,” Peters said. Municipalities should be “encouraged to get old power stations working again” and be refunded for lost revenue from electricity savings, she said.

A committee will “very soon” give feedback to Cabinet on the 9,600-megawatt nuclear build program, with a decision due this year and the first plant operational by 2024, she said.

–Editors: Tony Barrett, Alex Devine

To contact the reporter on this story: Jana Marais in Johannesburg at jmarais@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Article source: http://www.businessweek.com/news/2012-02-21/south-africa-worried-about-power-costs-as-increases-studied.html

Articles

• 
  

  Litha, Paladin labs in strategic partnership
  

• Litha earnings to be 20-40% higher
  

It is also a bold and decisive move by the Litha Group to create competitive differentiation in the fast-growing South African pharmaceutical market which is estimated to be worth around R30 billion. 

In terms of the deal, a number of indivisible agreements have been signed which will result in Paladin becoming Litha’s largest shareholder and international strategic partner.  Litha will acquire 100% of Pharmaplan, Paladin’s South African based pharmaceutical operations, which will then merge with Litha’s Pharma Division.

The group will achieve a key milestone in its pharmaceutical strategy of rapidly growing its Litha Pharma Division through acquisitions and will now be the Litha’s second largest division by revenue and largest by earnings.

“With business interests spanning pharmaceuticals, vaccines and medical devices, the enlarged group will now deliver on its stated strategy to acquire pharmaceutical businesses in order to possess enhanced commercial scale and portfolio breadth within its pharmaceutical operations.

“The acquisition will give the Group the appropriate critical mass across all three divisions namely pharmaceuticals, vaccines and medical devices which will enhance Litha’s capacity to negotiate with suppliers on a bigger scale as a diversified company.

“The Group will continue to synergise and solidify its business model in South Africa and develop its long term strategy to expand its African footprint in the sub-Saharan African healthcare market,” Litha says.

With a proven track record in the specialist prescription medicine market, Pharmaplan has had a 24.7 % Compounded Annual Growth Return over the past four years which is double that of the South African pharmaceutical market (12.9%) for the same period.

“The merging of our Pharma Division with Pharmaplan will not only boost our current product portfolio revenues, but also broaden our access to international RD pipelines and improve our current platform for expansion into new markets including biogenerics, oncology and aesthetic medicine. Pharmaplan will also benefit from the additional opportunities which the synergies across the group’s business operations will provide, which include our relationship with the Department of Health through our Public Private Partnership (PPP) at The Biovac Institute,” explains Kahanovitz.

“We are confident that with our skills and expertise, coupled with Pharmaplan’s exclusive international supplier agreements, we will bring long-term value to the Group which is not only empowered but has long established relationships with government and a sizable public healthcare marketshare,” says Dr. Gert Hoogland, CEO and Founder of Pharmaplan.  

“This strategic partnership with Litha will become a commercial powerhouse to extend our footprint in Sub-Saharan Africa,” says Mark Beaudet, Interim President and Chief Executive Officer of Paladin Labs Inc. “Paladin will benefit from Litha’s locally empowered business, as well as experience in dealing with the public healthcare sector through its vaccines business, as it seeks opportunities in the rapidly growing African markets of interest to us.  Our combined focus on business development, sales and marketing and our unprecedented customer reach via pharmaceuticals, vaccines and medical devices will make us a formidable competitor for the long run on the African continent,” concludes Beaudet.

The deal provides many opportunities for all parties and the merging of the two ‘entrepreneurial style’ pharmaceutical businesses will ensure a like-minded model for integration and continuation of the business culture.  As a listed company on the Toronto Stock Exchange, Paladin will play an active role in opening up international prospects from a product pipeline and investment perspective, as well as provide their business and industry experience as members of the Litha Board of Directors. 

Dr Hoogland will head up the entire Litha Pharma Division which will include all Litha’s pharmaceutical interests within the group. This will ensure the continuation of these businesses with no foreseeable change in leadership or key personnel within Litha Group’s operational business model.  Together with Paladin’s Interim President and CEO Mark Beaudet and its VP of Business and Corporate Development, Mark Nawacki, Hoogland will join Litha’s Board of Directors, effective from the closing date.

Article source: http://www.businesslive.co.za/southafrica/sa_companies/2012/02/21/deal-adds-scale-to-litha-s-portfolio

By Stephen Gunnion

Feb. 21 (Bloomberg) — The FTSE/JSE Africa All Share Index advanced for a third day, rising 0.2 percent to 34,162.35 by 12:02 p.m. in Johannesburg.

The following are among the most active equities in the South African market today. Stock symbols follow company names.

Anglo American Plc (AGL SJ), a diversified miner that makes up about 9 percent of the index, rose for the second time in three days, adding 1.3 percent to 329.68 rand. Copper gained for a second day as European finance ministers agreed on a second bailout plan for Greece. Zinc, lead and nickel climbed.

BHP Billiton Ltd. (BIL SJ), the world’s biggest miner, advanced 0.8 percent to 253.98 rand.

Aspen Pharmacare Holdings Ltd. (APN SJ), the largest maker of generic medicines in the southern hemisphere, rose for the first time in three days, climbing 1.5 percent to 105.25 rand. Fiscal first-half earnings per share rose 24 percent to 30 percent compared with a year earlier, the company said in a trading statement.

DigiCore Holdings Ltd. (DGC SJ), a company that makes vehicle-tracking devices, added 3.5 percent to 3 rand, its first gain in 11 days. Profit increased 4.9 percent in the six months through December, the company said in a regulatory filing today.

Gijima Group Ltd. (GIJ SJ), a South African computer- services company, climbed to its highest in almost two weeks, rising 3.6 percent to 57 cents. The company returned to profit in the first half, it said in a regulatory filing.

Metair Investments Ltd. (MTA SJ), a company that makes motor vehicle components, advanced to the highest level on record, rising 4.7 percent to 21.62 rand. Earnings per share for the year through December probably increased at least 20 percent, the company said in a trading statement.

MMI Holdings Ltd. (MMI SJ), the South African insurance company that was created last year from the merger of Metropolitan Group Ltd. and Momentum Group Ltd., headed for its lowest close in almost three weeks, dropping 1.4 percent to 18.86 rand. The stock was cut to “underperform” from “neutral” at Credit Suisse AG, with a 19 rand price estimate.

Super Group Ltd. (SPG SJ), a logistics company, surged to its highest in more than three years, advancing 8.4 percent to 12.90 rand after saying earnings excluding one-time items climbed 63 percent to 244 million rand ($31.8 million) in the first half.

–Editors: Peter Branton, Ash Kumar

To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net;

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Article source: http://www.businessweek.com/news/2012-02-21/south-african-stocks-anglo-bhp-aspen-digicore-super-group.html