Durban - One of South Africa's largest truck and trailer building companies, Serco, said it started 2022 with its lowest order book since the financial crisis in 2008.
Serco said this was because of the large-scale looting and burning in KwaZulu-Natal last year that damaged business confidence in the province.
Serco chief executive and president of the Durban Chapter of Entrepreneurs Organisation, Clinton Holcroft, said 2021 had been a tough year for business in KZN.
“I believe the unrest took the wind out of our company’s sails, evident in that our usual end of year peak period failed to materialise. I attribute this to a large extent to the loss of business confidence and the extensive property damage which resulted in many businesses not being able to resume trading by the end of the year, if at all,” Holcroft said.
“Restoring confidence through introducing and announcing steps to prevent a re-occurrence of the violence and theft should be a priority for creating growth in KZN.”
On the impact on South Africa of the invasion of Ukraine by Russia, Holcroft said he believed it would harm the economy with increases in the price of fuel and raw materials for some key components already being seen.
“Price increases will put added pressure on business and, to some extent, be passed onto the already stretched consumer,” Holcroft said.
He said there was a lot of uncertainty about the year ahead in terms of business prospects in the transport industry. Companies that had delayed capital expenditure over the last two years would experience mounting pressure to replace older equipment due to higher maintenance and breakdown costs.
“Clients wanting to replace vehicles have, however, had some difficulty in securing truck chassis as suppliers are still battling to keep up with demand due to global shortages of silicone chips. Unfortunately, I think the war in Ukraine will put further pressure on supply chains and prolong the parts shortages,” Holcroft said.
“Planning at least six months in advance will help alleviate some of the challenges when sourcing new commercial vehicles, including truck bodies, fridges, tail lifts and similar items, as well as help ensure on-time delivery.”
Holcroft said that on a positive note, there had been a promising increase in inquiries for new vehicles during March and into April as customers re-examined their vehicle replacement programmes, which augured well for a better year ahead.
“Serco is grateful to have recently been awarded a significant tender to build refrigerated bodies for Imperial Logistics. This will go a long way towards restoring order volumes and has enabled us to create jobs for a further 56 operators at our KZN manufacturing site - a small but significant step towards rebuilding South Africa’s economy,” Holcroft said.
In July 2021, KZN premier Sihle Zikalala said preliminary estimates suggested that the impact on eThekwini’s gross domestic product would be about R20 billion following civil unrest in the province.
Their assessments revealed that the eThekwini Metro and uMsunduzi Municipality remained the hardest hit, and they estimated that the unrest would affect eThekwini in the loss of stock of more than R1.5 billion, damage to property and equipment of more than R15bn, more than 50 000 informal traders affected, more than 40 000 businesses affected and more than 150 000 jobs at risk.
Information also indicated that a number of key centres of the economy were negatively affected, such as 139 schools, 89 malls and shopping centres, 89 liquor outlets, 88 ATMs, 45 warehouses, 37 delivery trucks were burnt, 22 factories, eight banks, eight liquor distributors, and one hospital.
Daily News