Remgro has said it will not take one of the most difficult operating environments it has ever faced in South Africa lying down and will work with the government to tackle the country’s major problems.
Remgro warned yesterday that the country faces increased social instability due to the current economic environment and stagnant growth.
Remgro issued this warning during the company’s financial results presentation for the year ended 30 June 2023.
“The current economic environment is troubling. The disruption in business operations directly impacts consumers and runs the risk of increased social instability due to the undoing of livelihoods and rise in poverty levels,” the company said.
“With low levels of expected economic growth – combined with the breakdown of state infrastructure relating to energy, transport and logistics, and the slow pace of economic reforms to date – the urgency to address these issues cannot be overstated.”
Remgro emphasised the negative impact of consistently elevated levels of load-shedding, high inflation and interest rates, electricity price increases, exchange rate volatility, geopolitical tensions, and crime and corruption.
These structural constraints erode the confidence of both local and international investors.
“All of these features, compounded together, have created what is probably one of the most difficult business environments to operate in since Remgro’s inception.”
Remgro’s CFO, Neville Williams, agreed that it is one of the most difficult environments the business has faced in his 30 years at the company.
“It is a very, very challenging business environment. It seems like a perfect storm for some of our investee companies,” Williams told 702.
However, there are positive signs that things are starting to change in South Africa for the better, particularly with the government enlisting the help of the private sector in tackling some of the country’s major crises.
“We are not going to sit on the sidelines. We are not going to lie down. These are big challenges, but these challenges can be solved,” Williams said.
He added that Remgro is tackling many of South Africa’s challenges daily through its own companies.
Remgro is implementing several strategies to mitigate against the negative impact of load-shedding and inefficient logistics.
“It is very difficult in this environment to grow our companies. But, we are doing everything we can to grow the economy and provide goods and services for our customers,” Williams said.