South Africa

Businesses concerned over COVID-19

Businesses concerned over COVID-19
Local businesses are concerned as the country's biggest trading partner, China, struggles to contain COVID-19. 
With more than 2000 deaths and thousands more infected globally, the effects might soon be felt. 
Palesa Phili, Chief Executive Officer of the Durban Chamber of Commerce and Industry, said the Durban Chamber was deeply concerned about the outbreak as the country received large volumes of shipment from China daily. 
She said that the tourism and hospitality sectors were hard hit as domestic and international air travel had been suspended by the Chinese government. 
“Local businesses are exposed to the COVID-19 to some extent across their value chains. According to a recent gathering by the Durban Chamber of Commerce and Industry's Durban Port Committee , the virus has not fully impacted Durban's shipping industry as yet,”said Phili. “In South Africa, OR Tambo and Cape Town International Airports are the only ports of entry with direct flights from Asia and we are assured by the government that, at all ports of entry, there is an enhanced screening process in place for all international travellers from China.”
Bongiwe Ntuli, Chief Financial Officer and Executive Director at the Foschini Group, said they were in daily contact with their suppliers in China. She said the group which comprises brands such as Totalsports, Sportscene, Duesouth, the Fix, Foschini, Colette among others, sourced over 20% of their goods locally but China remained key, especially for heavy winter products. 
“For the current season, we are not impacted as most merchandise was in water already and we do tend to carry buffer stocks to ensure business continuity for long lead merchandise,” said Ntuli. “If the current situation continues for longer than currently communicated by the Chinese government, our revenues later in the year might be affected.” 
Matthew Warriner, Head of Investor Relations and Corporate Communications at the Mr Price Group, said they needed a few more weeks before a full impact analysis could be done. 
Mncane Mthunzi, Chief Operations Officer at Edcon, said so far there had been minimal impact on the sales of the Edcon Group but delays were anticipated due to port congestion once all industries were fully operational.
“Edcon is in a fortunate position as we do have a large base of local and regional suppliers which we utilise. Further, our offshore offices in Shanghai enables us to better manage the supplier process in this time to proactively mitigate any risks,” he said. 
Xiahong Bower, manager at the Durban China City in Springfield Park said foot traffic had not been affected by the outbreak as yet. 
Bower said February was the mall's quiet time as it was soon after the Chinese Lunar New Year and most tenants returned late from the celebrations. However with the outbreak, there had not been further declines and that most tenants had local suppliers. 
“We had a few tenants return from China recently and they were not allowed back at the mall immediately. Each person had to be home for an additional two weeks after being cleared of the virus,”she said. “We still have a shop closed as the tenant is still at home as a precautionary measure.”