Knysna firms need help af­ter in­ferno

The Star Early Edition - - BUSINESS NEWS - Joseph Booy­sen

A CALL has been made by a fi­nan­cial firm to as­sist small busi­nesses in Knysna fol­low­ing South Africa’s big­gest nat­u­ral dis­as­ter last month.

Ac­cord­ing to Re­tail Cap­i­tal, a com­pany that pro­vides work­ing cap­i­tal to small busi­nesses, the out­look for those who were unin­sured and are poor was un­cer­tain, with nearly 10 000 res­i­dents evac­u­ated and homes, schools, struc­tures, power and com­mu­ni­ca­tion lines de­stroyed. Dam­age is es­ti­mated at more than R4 bil­lion,

The firm sent a team to the fire-rav­aged sea­side town last week to speak to busi­ness own­ers across var­i­ous in­dus­tries, in­clud­ing re­tail, hos­pi­tal­ity, au­to­mo­tive and build­ing, and has pro­vided sta­tis­tics.

It showed that be­tween 38 per­cent and 50 per­cent of lo­cal con­sumers were not in­sured, lead­ing to cash-flow is­sues, with many forced to take money from their busi­nesses to fund home re­pairs.

The evac­u­a­tion and dis­place­ment of 10 000 res­i­dents have led to lower ex­pen­di­ture in stock by the re­tail and hos­pi­tal­ity sec­tors, both need­ing to be pre­pared for the Knysna Oys­ter Fes­ti­val that is un­der way and the year-end hol­i­day rush.

The stats also showed that sec­ondary dam­age from smoke or wa­ter had limited or elim­i­nated trad­ing, while busi­nesses that were in­sured have to wait for as­sess­ments.

This had led to low or zero turnover as own­ers were un­able to pro­cure, or­der or pay for or­ders that are es­sen­tial for high-sea­son prepa­ra­tions.

The fires also led to 2 500 jobs be­ing lost, mostly in the hos­pi­tal­ity and do­mes­tic sec­tors, putting fur­ther strain on the lo­cal econ­omy.

In ad­di­tion, wa­ter short­ages be­cause of the drought and spray­ing of fires had put pres­sure on tourism – the “lifeblood of the town”.

The West­ern Cape gov­ern­ment said about 30 tourism es­tab­lish­ments had been af­fected by the fires, re­sult­ing in the sub­se­quent loss of 300 to 400 beds, with only 4 000 avail­able, which has had a neg­a­tive im­pact on the econ­omy.

The stats also showed that the boost in the con­struc­tion in­dus­try, due to re­build­ing of more than 700 homes and re­pairs to many more, had put pres­sure on busi­nesses need­ing emer­gency cash flow to fund the need for stock and the short-term in­crease in the ser­vices of ar­ti­sans such as plumbers, elec­tri­cians, builders and brick­lay­ers.

Karl Westvig, chief ex­ec­u­tive of Re­tail Cap­i­tal, said many small busi­nesses were in des­per­ate need of short-term fund­ing to bridge their ini­tial cash­flow short­ages and as­sis­tance with re­build­ing the econ­omy.

Photo: Halden Krog / AP

A he­li­copter with a wa­ter bucket helps to ex­tin­guish fires that ripped through the coastal town of Knysna last month, re­sult­ing in sev­eral fa­tal­i­ties, de­stroy­ing homes and forc­ing the evac­u­a­tion of up to 10 000 peo­ple.

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