Aveng warns on impact of SA strikes
18 March 2013
South Africa faces “serious challenges” including sometimes violent strikes that are impacting profitability, according to Aveng CEO Roger Jardine.
Mr Jardine said its construction and engineering subsidiary Aveng Grinaker-LTA had been particularly affected by labour disruption, reporting a ZAR 150 million (US$ 16 million) year-on-year drop in revenue for the six months to the end of December, 2012.
“Since the middle of last year, our company and many others across the mining, construction and transport industries have been negatively impacted by a series of un-procedural and sometimes violent strikes,” Mr Jardine said.
“While I acknowledge the right of employees to strike as part of the collective bargaining process, or when their rights are violated, the levels of violence and disregard for established dispute resolution processes are self-defeating and cannot be justified.
“Our country faces a serious challenge of growing unemployment in general, and youth unemployment in particular, which could contribute to social instability if left unchecked,” he added.
Mr Jardine called for a stabilisation in South Africa’s labour relations environment in order to encourage an environment more conducive to investment, economic growth and employment creation.
Overall, Aveng said its revenue had grown +30% year-on-year for the six months to December 2012, while operating profit jumped +56%. It said its order book stood at ZAR 40 billion (US$ 4.4 billion) at the end of last year.
“We are particularly pleased that some of the large African infrastructure projects outside of South Africa are now reaching implementation stage,” Mr Jardine said.
“We have made inroads on large contracts in Mozambique and Mauritius. Despite labour disruptions in the local mining industry, Aveng Mining posted a good performance off the back of strong mining activity across the continent.”
Investigation
Mr Jardine also commented on the South African Competition Commission’s investigation into anti-competitive practices in the country’s construction industry. Aveng has been implemented in a wire mesh cartel.
“The Aveng group has proactively engaged and co-operated with the Competition Commission. The matter has not been finalised, and Aveng’s view remains that the investigation must be completed as soon as possible in order for the industry to move forward.”
Mr Jardine added that the company had made provisions for a potential settlement with the Competition Commission.
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