Non-essential companies put their lockdown plans into motion

Mr Price, Wilson Bayly Holmes-Ovcon and Hulamin stop operations for the 21-day lockdown.

Wilson Bayly Holmes-Ovcon

Wilson Bayly Holmes-Ovcon said in a statement that it has implemented the necessary plans to ensure the start-up and continuity of its South African operations post the lockdown period. 

The lockdown will affect the company’s South African operations and it said that, in these uncertain conditions, the protection of cash reserves is deemed necessary by the board. 

The company said that it will continue to monitor the impact of Covid-19 on its operations and remain committed to considering the continuation of the dividend history in future financial periods, once circumstances permit. In line with this, the company has withdrawn the cash dividend which was due to be paid on 20 April.

Mr Price

When Covid-19 first hit South Africa, Mr Price implemented extensive precautionary measures to ensure that its stores were safe for customers. 

Initial concerns were about supply as factories in China, which represents about 47 percent of Mr Price’s order book, closed due to the outbreak and spread of the virus.

Before President Cyril Ramaphosa’s first announcement on 15 March, supply concerns shifted to demand and sales grew 8.6 percent. For the period between 16 March and 24 March, sales progressively deteriorated and fell 22.1 percent.  

The company said in a statement that demand for apparel and homeware merchandise has been significantly impacted as consumers prioritise hygiene and food-related goods. “This trend has been seen around the world as social distancing initiatives have negatively impacted discretionary spending.”

Following the President’s announcement on 23 March of a 21-day lockdown, Mr Price’s stores, e-commerce, head office, distribution centre and call centres will all be closed between 27 March and 16 April. As a result, the company said that it anticipates making no sales in South Africa over the lockdown period. 

The retail brand will be focusing its energy on managing the order book as effectively as it can to avoid a stock build-up. “Due to the lockdown, it will be impossible or impracticable for orders already placed for delivery between 27 March and 16 April to be manufactured and delivered and received per the terms of the original orders.” The company plans to renegotiate delivery dates with trusted partners.

Hulamin

Hulamin supports over 1,700 employees and many more suppliers and contractors from local communities. In these areas, there are many people with chronic disease and malnutrition. 

The aluminium supplier and exporter company said in a statement that it is unclear the extent to which health care will be able to cope with a high-volume outbreak of the disease. 

For this reason, Hulamin fully supports the 21-day nationwide lockdown, and has started the orderly shut down of its operations. 

Glencore

Glencore, which operates worldwide, has been working with governments around the world to understand the impact of each country’s restrictions in response to the Covid-19 outbreak on the company’s operations.

The commodity trading and mining company said that, to date, its larger operations have not been materially impacted, but that a number of its smaller assets have had to restrict or stop operations. 

  • In response to South Africa’s nationwide lockdown, Glencore has come to the following understandings with government officials:Its ferroalloys operations in South Africa will transition to care and maintenance with effect from 26 March. 
  • The majority of its South African coal operations supply Eskom. Glencore will continue to supply coal to Eskom under the guidelines issued by the department of mineral resources. Any export of coal has to be approved by the department. 
  • As of midnight 26 March, Glencore’s Middleburg and Graspan coal operations were put into care and maintenance, supported by skeleton crews to maintain essential services

Kumba Iron Ore
Kumba Iron Ore CEO Themba Mkhwanazi said:

“Kumba’s priorities are the safety, health and wellbeing of our people and all those who interact with our business around the world. We also have a clear responsibility to protect the integrity of our business and assets so that we are ready to restart and ramp up any affected operations safely and as quickly as possible once permitted to do so. This approach will enable us to minimise any interruption of supply to our customers and support what will be a vital economic recovery phase for South Africa.” 

The company will continue to provide essential services to local communities and, in line with government requirements, has started to implement measures across its operations with a focus on de-densification of the workforce and rigorous health screening and isolation where needed. 
Kumba will continue with a 50 percent level of workforce during lockdown to support the export of iron ore. It will also continue to provide a number of essential services, including security, mine maintenance, facility management, water treatment and supply, accommodation provision, health and safety response, as well as critical head office services.

“Our operations play a vital role in many of our host communities, including in terms of jobs and the provision of a number of essential community services, including access to water, health care and emergency medical services. We are wholly committed to supporting the country’s effort to combat Covid-19, including continuity of such services, and will continue to work with government and across the industry to provide all possible support,” Themba added.