Not seeing the light

Meanwhile, at the other end of the spectrum, you find the companies for whom the focus is not so much on taking on the world as on making it through the year without being interrupted by the bailiffs coming to repossess the boardroom furniture.

This is the bottom of the food chain, where the faltering economy is putting enormous pressure on small companies that are engaged in a mighty scrap for survival.

The South Ocean Electric Wire Company was founded in King William’s Town in the Eastern Cape in 1989, with strong connections to Hong-tai Electric Industrial Co, a listed Taiwanese cable manufacturer.

In 2001 the company moved up to Alrode in Alberton to be closer to its customers and suppliers, and it listed in 2007. In the same year it bought Radiant, an importer and distributor of light fittings, lamps and electrical accessories, and the story was typical of a small manufacturer finding a niche and growing a tidy business.

Sadly, this is just the sort of company that has felt the brunt of the wobbling economy, with SA industry struggling to compete with the developed world on quality, and with the developing economies of Asia on price.

South Ocean’s revenues dropped by 15.2% in the six months to June, leading to a loss before tax of R43m. Market conditions were extremely tough, leading to a competitive environment that put extreme pressure on margins. Radiant meanwhile suffered from pressure on consumers’ disposable income, and the survival of the company depends on the continued support of its bankers.