Cutting costs moves up the agenda

It is not business as usual for South African companies recovering from the impact of the 2009 recession and global economic meltdown, says Garth de Klerk, CEO of Coface South Africa. “There are changes to spending and paying patterns and along with that some very definite changes in the business climate,” says De Klerk. “For the first time in many years we are seeing aggressive and violent attacks on government by the labour sector. The prolonged civil servants’ strike most recently is unlike anything we have seen and it is a very clear message that is being sent. Workers are saying no more, this is what we want Government to deliver.” He said the impact of the strikes and labour action could already be seen in the private sector with BMW in the process of looking at ways to restructure its plants in the country, while Isuzu has closed plants down with no intent of re-opening them again. “Cosatu has also been very vocal about Wal-Mart trying to get a foothold in the country and are trying to block them.” De Klerk said all of these factors play a role in the business environment. “We have also seen debtor behaviour change along with the attitude towards debt and the promptness of payment.” He said with more liquidations taking place it had become clear that cash flow was now more important than ever before. “But unlike in the past there is now a major focus on productivity gains. In other words the same amount of cash is available but more must be done with it.”