R1BN YEKANI FACTORY CUTS JOBS
State hits back at firm’s attempts to ‘blackmail’ and ‘arm-twist’ support MKHULULI NDAMASE and TED KEENAN
Just over a year after opening its doors promising to employ more than 1,000 people, the 100% black-owned Yekani manufacturing plant in East London is instead retrenching more than 200 workers.
The R1bn information and communication technology plant was punted as the largest of its kind in southern Africa when it was launched in June 2018 to much fanfare by then trade and industry minister Rob Davies and former Eastern Cape premier Phumulo Masualle.
The company confirmed that 166 permanent staffers and 40 contract workers would be without jobs at the end of November.
In an e-mailed comment, Yekani group CEO Dr Siphiwe Cele blamed the state for their failure, saying countless investment conferences would not solve the country’s unemployment — but supporting local businesses would.
“It is high time that our government and politicians alike started walking the talk.
“Populist political soundbytes are not going to combat the twin scourge of unemployment and poverty.
“The support of local businesses which create jobs, which in turn leads to people being self-sustaining is what is required. While the investment drives and conferences are appreciated, what grows the economy more is if we produce locally, because that is where beneficiation and value add is.
“For example, if products that are available in SA are ordered from outside the country, this would mean that jobs are being created and/or sustained outside the country when these are needed most inside the country with the unemployment rate now sitting at 29.1%,” he said.
Eastern Cape premier Oscar Mabuyane hit back, describing Cele’s comments as bordering on “blackmail”, and education MEC Fundile Gade said they would not be arm-twisted into supporting businesses struggling to manage their affairs.
Cele’s comments come as President Cyril Ramaphosa addressed an investment summit in Johannesburg on Wednesday in his drive to raise R1.2 trillion in five years.
Cele’s comments on buying local could be seen as taking a swipe at the provincial education department amid speculation in business circles that it had bought tablet devices for R900m from a company that imported them from China.
But Gade, who met with Cele to discuss possibly buying devices from Yekani, dismissed the speculation as untrue, saying they had only acquired laptops from Vodacom.
The retrenchments will contribute to the jobs bloodbath in the Eastern Cape, which has the highest figures of unemployment in the country at 36.5%, and push up the national figure from 29.1%.
Mabuyane said Yekani was one of the businesses they had fully supported. “The fact that they were given a fully built factory talks to our commitment to support businesses.
“I don’t think the CEO should be blaming the government for the collapse and poor management of the company.
“He must own up and appreciate all the support he has been given by the government and other people. We won’t be blackmailed,” he said.
Workers at the factory have borne the brunt of the firm’s failure to make profitts — some say they have gone unpaid for months and others have been on short time since August.
They asked to remain anonymous for fear of being targeted when retrenchments are effected. “We are neck-deep in debt,” one worker said. “Our accounts are accumulating interest and whenever you are called back to work after being on short time you are forced to borrow money from people, which sinks us further into debt. It’s bad and depressing what we have gone through at Yekani. We don’t know what to do.” Another worker agreed. “We have been looking for jobs elsewhere, but with no luck so far.
“Families have been negatively affected by this, especially the older people.”
I don’t think the CEO should be blaming the government for the collapse and poor management of the company
Mabuyane said they were concerned workers would lose their jobs because “we don ’ t talk only about job creation”.
“There has to be job retention as well.”
In the internal letter, Cele told the 392 workers the company had considered every avenue before resorting to the retrenchment process — which he said was a last resort.
These, he said, were to apply for funding from the troubled Public Investment Corporation, which is being investigated for impropriety.
Yekani also failed to convince a bank to grant it a loan.
He said their engagements with Bhisho about making the company financially sustainable were ongoing.
Mabuyane confirmed the ongoing talks.
“But we can’t just take millions and recklessly pump them there.
“We must do this within the law, or else when the auditorgeneral comes we will be found wanting,” the premier said.
In future, Mabuyane said, Yekani would have to create products that would meet their specifications “because we want to use the money in the Eastern Cape to support businesses in the Eastern Cape”.
Yekani produces the newgeneration DStv Explora, cellphones and other devices.