Friday, June 23, 2017

Thursday, June 22, 2017

South Sudan Is In The 4th Year Of A Bloody Civil War


From Bad to Worse

The South Sudan military shelled civilian areas, torched houses and killed civilians between January and May, forcing thousands of ethnic minority Shilluk residents to flee their homes, according to a new report from Amnesty International.
The mass displacement was shocking “even considering South Sudan’s history of ethnic hostility,” the Associated Press quoted the human rights agency as saying this week.
South Sudan is now in the fourth year of a bloody civil war in which both government and opposition forces stand accused of war crimes. But the plight of other ethnic groups like the Shilluk has largely been ignored due to the focus on the Dinka and Nuer groups that make up the warring factions, the AP noted.
Separately, a dozen South Sudanese soldiers facing criminal charges associated with an attack on foreign aid workers last year pleaded not guilty on Tuesday, the AP reported.
Nine soldiers are charged with murder, rape and looting in the assault on the Terrain hotel compound in the capital, Juba, in July. The other three face charges including looting, trespassing and theft.

Monday, June 19, 2017

How SABMiller Turned Constraints Into Global Strengths

How SABMiller turned constraints into global strengths

Jun 19 2017 07:34 
Professor John Luiz

The development trajectory of SABMiller peaked with the 2016 $104bn merger with Anheuser-Busch InBev. Behind it lies an extraordinary journey, writes Professor John Luiz.
On 28 September 2016, the shareholders of South African born international brewer, SABMiller, approved the company’s acquisition by Anheuser-Busch InBev for $104 billion (R1.5trn). The deal paved the way for the creation of what is now by far the world’s largest brewing company.

For a company that started out selling beer to miners in Johannesburg during the gold rush of the late 1800s, it’s been quite a journey. But how did a brewing company from a developing country rise to compete with the multinational brewing behemoths from the developed world?

A series of interviews with senior executives and managers who presided over the growth of what was then South African Breweries’ (SAB) rapid expansion during and after the 1990s are revealing. After building up a monopoly-like position in the beer market in South Africa, the company went in search of new markets. It used its experience in South Africa in its entry strategies abroad.

SAB’s path reflects the differences between multinationals from developed and emerging markets in terms of location choices, sequencing, time horizons and motivation.

A two-phased expansion path emerges to explain the remarkable success story. The first pillar to SAB’s international expansion was a focus on developing markets. Coming from a developing country itself, the company would cope better with emerging market conditions than brewers from the developed world. These ventures became a powerful base for SAB to take on developed markets.

The second was to expand into developed countries. This became necessary as it became clear the company was over exposed to emerging markets.

The first phase of expansion

After a few early forays into South Africa’s neighbouring countries prior to 1993, SAB executives realised that the company could exploit its knowledge of institutional shortcomings in its home country. It would use this experience to adapt more easily than its competitors to conditions in developing countries.

And so began the first part of its internationalisation strategy: a rapid expansion into emerging markets worldwide.

Through a series of acquisitions and joint ventures throughout the 1990s, SAB gained a foothold in various countries in Africa, Eastern Europe and Asia. Although many were geographically distant (like Hungary, Czech Republic, China and India), they echoed South Africa in terms of their socioeconomic development. Eastern Europe, for example, was still emerging from political reform in the wake of communism, and infrastructural, institutional and economic weaknesses persisted.

By expanding into countries that shared socioeconomic characteristics with South Africa, SAB was able to make use of its experience to turn a perceived drawback – institutional weakness – into a strength. As one respondent explained:

"To be quite frank, we actually accepted that we would live with the political risk and poor institutions. We didn’t really shy away from high-risk countries unless, of course, there was a raging civil war that we would have to wait to subside."
Once it had established this expansion plan, SAB diversified into developed markets such as Italy and the US. As one interviewee put it:

"Investors became sceptical of companies whose only business was in emerging markets."
In 2002 it took a step closer to consolidating its position as a multinational brewing giant when it acquired US-based Miller Brewing Company. It became SABMiller.

Turning weakness into strength

The advantages that SAB gained from its experience in its home country are many. One was employee aptitude.

SAB employees had built up an extraordinary resilience, flexibility and entrepreneurial spirit through their exposure to the unsteady South African environment of the 1980s. As one executive said:

"They survived labour trouble, survived interest rates at 25%, inflation at 16% to 17%, survived political disorder, political violence… That toughened you, toughened us."
This robustness, combined with an ability to connect with many different cultures, gave the company a valuable flexibility in its risk, location and investment choices.

Another strength was its ability to turn around neglected breweries and businesses. The experience it gained in South Africa, with its large rural population and pockets of poor infrastructure, meant that finding innovative ways to overcome challenges was embedded in the company’s DNA.

Another advantage the company gained was brand development and marketing ability. SAB was developed into a major operation without reliance on strong, globally-recognised brands. Using its home experience the company took brands it acquired in distant countries and built them into powerful national brands.

These became a base from which it launched into premium brands such as Grolsch and Peroni through acquisitions. This offset being over-invested in domestic brands.

SAB also had a philosophical edge over many competitors. It’s risk appetite was much bigger. By comparison a company like Anheuser-Busch  had a conservative approach to risk and international expansion.

For example, Anheuser-Busch didn’t react to the rapidly changing global brewer consolidation until it was too late. And when it did, it realised that it had little emerging market experience.

This weakness meant that in 2008 Anheuser-Busch was unable to avoid a  hostile takeover by InBev. This gave rise to AB Inbev, then the world’s largest brewer. AB Inbev, in turn, was compelled to make an offer for SABMiller to acquire complementary emerging market presence.

SABMiller’s long journey from the mine heaps of Johannesburg to global brewing colossus may appear to have come to an abrupt end after its acquisition by Anheuser-Busch InbevAB Inbev in 2016. But what’s clear is that its extraordinarily successful approach continues to hold many lessons for aspiring global companies from the developing world.

* This piece was adapted from an academic article by John Luiz, Dustin Stringfellow and Anthea Jefthas that first appeared in the February 2017 issue of Global Strategy Journal, Volume 7, Issue 1 (83-103).
John Luiz, Professor of International Business Strategy and Emerging Markets, University of Cape Town
This article was originally published on The Conversation. Read the original article.
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Saturday, June 17, 2017

A Moment Of Kindness 26 Years Ago In Durban, South Africa Is Touching Many People's Hearts

Everyone I'm really touched at the wonderful response that I'm getting in South Africa about my act of defiance 26 years ago. A colleague and I made a habit of taking "a person of color" to a previously all-white bar. It's good to see that this moment that could have been easily forgotten is remembered by so many people reading News 24 . I have touched a lot of hearts. This makes me feel wonderful. Here is the article again:
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A Racist Bar In Durban, South Africa 26 Years Ago
15 June 2017, 16:44
Some people on Facebook are wondering if the Golden State Warriors should accept President Trump's invitation to come to the White House. The argument against accepting the invitation is that they will be going to see a president that a lot of people see as a racist.
At the end of Apartheid in 1991 I worked for a South African company with offices in Johannesburg and Durban. Our office manager in Durban was a beautiful white woman with blond hair named Shona. Her best employee was a woman who was part African and part white. In South Africa such people are described as "coloured." Under Apartheid people of this racial group received the same bad treatment as Africans did.
When I was in Durban, Shona and I would take this wonderful woman to a bar frequented by Apartheid supporters and racists. (We would call this type of venue "a red neck bar" in the USA.) When you walked in there each male sitting at the bar had a bulge in his pants from the pistols they were carrying.
Under the new legal regime this bar was required to give service to customers of any race. We would walk into this bar and sit at a table. After a long wait we would grudgingly get service. We got all sorts of nasty looks from the other patrons there. Sometime there would be cat calls or other signs of displeasure.
We sat there with dignity and ignored all of the hostility. We were giving these people a message that we were not intimidated by hate and racism.
Golden State Warriors go to the White House and hold your heads up high. Be dignified.

Friday, June 16, 2017

Hardly Noticed-South Africa's Brilliant Film Industry

SA film sector creates 21 000 jobs, contributes R5.4bn to GDP

Jun 16 2017 07:52 
Lameez Omarjee

Johannesburg –  South Africa's local film industry is becoming a serious economic player, having contributed R5.4bn to the gross domestic product (GDP) during  the 2016/17 financial year.
This is according to an Economic Impact Assessment study commissioned by the National Film and Video Foundation (NFVF). The findings were released on Wednesday, at the Nelson Mandela Foundation.
“We are not just here to entertain and influence society. We are here to contribute to economic growth in this country… We do not always want to be a sector begging for soft money,” said Zama Mkosi, chief executive of the NFVF.
The research was commissioned by the NFVF to create an understanding of the business of film and to ultimately help shape policy direction and strategy for the sector, explained Mkosi. “We want to show the film industry is a significant contributor to the economy of this country.”
The current study follows on from the baseline study conducted in 2013, which shows the film industry contributed R3.5bn to GDP. During the 2016/17 financial year, the film industry generated production worth R12.2bn.
For every R1 invested, it resulted in a multiplier effect of 4.9 jobs created. Over 21 000 jobs were created, the study showed.
“We want the film sector to be taken seriously, with investors clamouring over us to fund the projects we want to make,” said Mkosi.
Government remains the primary funder of projects through the Industrial Development Corporation and the Department of Trade and Industry. However, there is increasing interest and investment by the private sector.
For the industry to grow and be sustainable, we can’t have the majority of the funding be from government, said Mkosi.  
Chika Chitambala, senior development economist at Urban Econ, which conducted the study, explained that government funding has been slightly declining and private funding has been increasing. “The government sector still remains the biggest funder,” she said.
Private sector funding increased at a 52% compounded annual growth rate, while the government funding increased 11% on a compounded annual growth rate.
The study showed that feature films and documentaries are the largest segments of the sector (27.3%). Animation is the smallest sector (3%) mainly because there is a lack of technology and skills to produce this content, explained Chitambala. The remainder of the sector is dominated by TV series and TV films.
Film industry segments

Film operations have been concentrated in the Gauteng province at over 55%. This is followed by the Western Cape with almost 25% of activity and KwaZulu-Natal, just under 10%. Filming activity is picking up in Limpopo, also just under 10%.
The remaining provinces, including North West, the Free State and Mpumalanga, have film activity taking place, however this activity is not income-generating, explained Chitambala.
Film activity across provinces in South Africa
Infrastructure development
Mkosi explained that there should be more investment, by government and the private sector to develop infrastructure in other provinces to shoot films. Once there is existing infrastructure, then the industry won’t have to “parachute” from the dominant provinces to shoot films.
“Most films which account for economic development in Gauteng are shot in those other provinces,” she said.
The study recommended that the film sector must focus on transformation as well as skills development among black film makers.
Mkosi explained that there were opportunities for entrepreneurs within the industry, not necessarily as directors or producers, but to provide other services such as accommodation and food for film makers. “There are gaps that can be tapped into.”

Actress Florence Masebe, who was part of a panel discussion, explained that another problem in the industry is that there aren’t enough exhibition platforms to make film accessible to South Africans. “We need to create different spaces to display South African film,” she said.

These audiovisual centres could be similar to the Fan Parks created during the 2010 FIFA World Cup where games were screened. Further, viewings could be hosted in community halls.

Masebe recalled a time where mobile screens were trucked into communities and were sponsored by businesses like Unilever. “We can go back to those models and see if they still work for South Africa.”
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Thursday, June 15, 2017

The South African Foreclosure Rip-Off

General Motors To Exit South Africa