While the COVID-19 pandemic has widely stymied South Africa’s economic activity, some of the country’s largest conglomerates say there is a silver lining.
A standout example, the third annual South Africa Investment Conference in Sandton, Johannesburg, heard on Wednesday, is Aspen Pharmacare.
Two years ago, the company vowed to invest R3.4 billion – the single largest pharma investment ever in the country – for further development in the company’s steriles capabilities.
Stavros Nicolaou, Aspen senior executive, said this has proven to be a sought-after capability during the COVID-19 pandemic.
“The capability was original and aimed at manufacturing anaesthetic products – general, regional and topical. This is all complex to manufacture and will turn Port Elizabeth into the world’s single biggest manufacturing hub for anaesthetics.
“It is quite an achievement for the country,” Nicolaou said.
Aspen Pharmacare built a new pharmaceutical manufacturing plant in Nelson Mandela Bay, which was one of the first investment pledges at the inaugural conference.
In a joint spin-off of the collaboration with pharmaceutical giant, Johnson & Johnson, the company has already manufactured 300 million doses of the COVID-19 vaccine candidate.
“All is going well with the clinical trial… [It is a] vote of confidence in South Africa’s capabilities. Johnson & Johnson are a large multinational and partnering with a South African company speaks volumes, and it shows that the globe is starting to see us differently,” said Nicolaou.
However, Airports Company South Africa (ACSA) chief executive, Mpumi Mpofu, said the global aviation industry had not been spared the effects of the pandemic’s economic fallout.
“Since 2019, the sector has lost $104 billion and the forecasts indicate a reduction in passenger revenue of 60%,” Mpofu said.
In the face of these challenges, the company has had to rethink its business approach. The recovery plan, Mpofu said, has been guided by the lifting of the national lockdown levels.
“Principally, we’ve had to think about a tactical strategy that has helped us to recover the aviation sector in South Africa,” said Mpofu, adding that they have had to cut capital projects.
During last year’s SA Investment Conference, ACSA committed to investing R15 billion in its network of airports. This, however, has nearly ground to a halt due to the pandemic.
“We’ve literally had to cut down to R1 billion per year as a result. We have also had to cut our operational expenditure, and position the company to respond with resilience to what is a complex aviation sector,” she said.
Among the interventions the company is considering is diversifying its revenue.
Telkom chief executive, Sipho Maseko, said the company experienced “a high level of innovation” during the pandemic.
“We’ve seen both the capabilities of the private sector and the State being brought together to disrupt the pandemic. For instance, from Telkom, we’ve made our experts, our data scientists, available. They worked with the Department of Health and developed a solution to track the disease,” Maseko said.
The company has also seen how agile and resilient the private sector can be.
“Instead of shutting down, we’ve seen the economy move from the CBD into our neighbourhoods - where you have to run your big corporates from the comfort of your home. That’s where Telkom and our counterparts in the ICT sector have had to provide network connectivity and a backbone for the economy to stay resilient,” he said.
Stefano Marani, CEO of emerging natural gas and helium producer, Renergen, said the company had begun construction of the first phase of the Virginia Gas Project, a pilot project that is expected to come online 2021.
Renergen was awarded production rights in 2012.
“That is probably the key take away message that South Africa needs to grasp and tackle if it is to be serious about bringing natural resources in the energy sector online,” said Marani.
He bemoaned what he described as “a lot of red tape”, saying this made it difficult to get things done.
“This nine-year journey doesn’t even capture the eight years before that in getting the production rights. Although it’s great that we are getting these gas finds, it’s a very long process. Getting rid of the red tape is significant if we are to get these assets on line,” he said.
On a positive note, Marani believes South Africa is massively naturally endowed with “fantastic opportunities”. - SAnews.gov.za
