As inflation rate in Zimbabwe peaking over 300% and still not showing any reprieve, the less said about the economy. For the South African companies, which have heavily invested in the debt ridden country, it is a double whammy. South African corporations, which have large exposure in Zimbabwe have to face the economic onslaughts both in the home country and host country. Some of them are hard hit.
The report emanating from the corporate circles puts that of the 355 South African countries, which are listed in Johannesburg Stock Exchange (JSE) , 20 are notably affected. They are all caught up in the wrap trap of demand compression, hyperinflation, foreign exchange shortages, power outages, hikes in fuel prices, erratic fuel supply, currency devaluation and what have you. Worst still is the growth decline forecast for 2020at 7.1%, which would cast its shadows on the economy.
Amidst that there are some trend busters also, which are doing extremely well mainly the corporations engaged in platinum mining, which of late, has become a lucrative business. Those companies include Tharia, which has an interest in the newly declared special economic zone (SEZ). In Karo Zimbabwe, a local company, Tharisa has a 27% indirect stake. The company is engaged in platinum mining in Great Dyke, an area the expensive mineral is available in abundance. The Zimbabwean government is also giving extensive fiscal incentives for platinum mining.
The other South company that stands to benefit is Impala Platinum, which has 87% stake in Zimbabwean company – Zimplats. The company reported a profit of US$144 million for the year ended June this year. Other south African companies, which stand to benefit are Mimosa, a 50:50 venture between Implats and Sibanaye –Stillwater, which is betting high on platinum. Anglo-American Platinum, which owns the Unki platinum mine in Zimbabwe, again a joint venture between South African company and Zimbabwean enterprise is another stakeholder. Unki seems to be thriving as it reported record platinum metal production for the half-year ending June and operating profit for the same six months was R488 million, up 15% from the prior half-year.
The worst affected South African companies operating in Zimbabwe are Nampak, which is into packaging, PPC Zimbabwe, which manufactures cement, Barloworld, the equipment distributor and automotive company, Pick n Pay, the super market chain and Pepkor another supermarket chain.
