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Ford to Spend $1 Billion in Biggest South Africa Investment

The move comes after Ford announced last month that it will cease production in Brazil after a century of building cars there, closing three factories and retrenching 5,000 workers

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American multinational automaker Ford Motor Company has announced that it will invest $1.05 billion into the Silverton plant in Pretoria, South Africa, which is its biggest-ever investment in the country as the company cuts back in other regions including Brazil and Europe.

The upgrades to the Silverton plant in Pretoria will boost the site’s annual capacity by almost a fifth to 200,000 units and will create about 1,200 direct jobs, according to a statement issued by the company. The outlay will also support the production of a new Ranger pick-up truck, starting in 2022, for both domestic and export sales.

The move comes after Ford announced last month that it will cease production in Brazil after a century of building cars there, closing three factories and retrenching 5,000 workers. The Automaker Company has also eliminated thousands of positions in Europe as part of a sweeping $11 billion global reorganization and culled about 1,400 salaried employees in the United States in 2020.

In a speech at the Silverton site, South African President Cyril Ramaphosa said: “This will help to expand and transform our country’s manufacturing base.” The plan is “a clear statement of the company’s confidence in this development and its ambitions for its South African business.”

In an interview, the director of operations at the carmaker’s International Markets Group, Andrea Cavallaro said “Ford’s investment is tied to prospects for the Ranger, one of the top three light commercial vehicles sold in South Africa last year.

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He further said “the country’s trade agreements and the government’s willingness to listen to infrastructure requirements also factored into the move.”

In addition, Cavallaro said “the transformation here in South Africa is not just about the next model.” “We want it to be a huge hub for the export of this product; it is a global product and is hugely successful. It was an easy decision.”

Ford’s fresh investment and jobs will come as a welcome boost to Africa’s most industrialized economy, where almost a third of the workforce is unemployed.

The country has been hit hard by the coronavirus pandemic, with lockdowns and a resurgence of infections weighing on activity, and 2020 economic output probably contracted the most in at least nine decades, ultimately plunging the country into recession.

Yet, the auto industry has been one success story, with international carmakers including Toyota Motor Corp., Volkswagen AG, and BMW AG operating plants in the country. The companies are also benefitting from a manufacturing-incentive plan that runs through 2035, and Nissan Motor Co. and Daimler AG’s Mercedes-Benz are among those to have announced additional local investment in recent years.

South African government is helping Ford to strengthen its supply and logistics chain, according to Cavallaro. That could include a means to transport finished vehicles from outside Pretoria by rail to the coastal town of Port Elizabeth for export, according to President Ramaphosa.

Production at the Silverton plant, which also makes the Everest SUV, will include VW pick-ups as part of a strategic alliance between the carmakers. VW’s Amarok will be the first vehicle produced in South Africa under the deal.

The partnership agreement was signed in June, almost two years after it was first announced, and was eventually expanded to include electric and self-driving cars.

Updates to the Silverton factory will turn it into a “backbone plant” with the ability to attract future models, according to Cavallaro. Ford also said Silverton will operate entirely off the grid by 2024, thereby protecting it from South Africa’s regular power outages.

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West Africa Business News

Nestlé Nigeria Posts N39.35Bln Profit in 2020

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Nestlé Nigeria Plc has reported revenue of N287.08 billion for the 2020 financial year.

The company’s audited result released on the Nigerian Stock Exchange showed that the revenue was higher by 1.1 per cent in contrast with N284.04 billion recorded in 2019 comparative period.

Gross profit for the year stood at N 119.21 billion compared with N128.15 billion achieved in the corresponding period of 2019.

Also, the company posted profit after tax of N39.25 billion during the review period against N45.68 billion in 2019.

The board in addition to N25 per share interim dividend already paid in December 2020, proposed an additional dividend of N 35.50 per share making for a total dividend of N60.50 for 2020.

The proposed dividend would be submitted for approval at the company’s Annual General Meeting on June 22.

Commenting on the results, Mr Wassim Elhusseini, Managing Director and CEO of Nestlé Nigeria, said that the company strengthened market leadership across its categories.

“Amidst a very challenging business environment in 2020, we strengthened market leadership across our categories. Thanks to our high performing team, we successfully continued to provide our consumers with high-quality affordable foods and beverages to enjoy every day.

“In line with our purpose of unlocking the power of food to enhance quality of life for everyone today and for generations to come, we broadened our portfolio in 2020 to help our consumers fulfil their nutrition needs.

“Our latest innovation is the new GOLDEN MORN Multi-Cereal, fortified with iron and other vitamins and minerals,” Elhusseini said.

Speaking on future outlook, he said that the company would remain committed to supply of high-quality nutritious foods and beverages to consumers.

“Going into 2021 – which portends to be another challenging year – we will continue to focus on keeping our people safe, continued supply of high-quality nutritious foods and beverages to consumers as well as caring for our communities and the planet.

“We will also keep supporting our business partners as we strengthen our operations to adapt to the rapidly changing reality,” he said.

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East Africa Business News

Zambian High Court Cancels State Acquisition of CEC Company Power Lines

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Judge Elita Phiri-Mwikisa of a High Court in Zambia has quashed last year’s decision by the Minister of Energy, Matthew Nkhuwa, to declare a private company’s electricity transmission lines as a common carrier.

By declaring infrastructure owned by the Copperbelt Energy Corporation (CEC), Zambia’s leading supplier of electricity to the mines, as “common carrier”, Nkhuwa effectively placed the company under obligation to provide its facilities to any entity that wished to use the transmission lines – provided they agreed the terms and conditions set by Zambia’s Energy Regulation Board (ERB) with CEC.

However, CEC dragged the Zambian government before the courts, arguing that Nkhuwa’s decision amounted to “expropriation” of its infrastructure.

In her ruling, Judge Phiri-Mwikisa of the Lusaka High Court said the Minister’s decision to declare CEC’s transmission and distribution lines as common carrier through the passing of S.I No.57 of 2020, took away CEC’s rights to negotiate terms and conditions of use of its infrastructure in view of the fact that any enterprise can use CEC’s infractructure at the wheeling charge that ERB has set, which CEC had argued was not cost effective.

“In fact, KCM has abrogated its contractual obligations under the Power Supply Agreement (PSA) to pay the debt owed to CEC amounting to USD 144 million. I agree with CEC that S.I No. 57 of 2020 is too wide in its application, in that it affects all the applicant’s transmission and distribution lines instead of only affecting lines supplying power to KCM,” Judge Mwikisa said.

She added, “The respondent’s decisions were illegal and tainted with procedural impropriety. All in all, I find that the applicant has succeeded on all grounds…I accordingly quash the decision of the minister of 29 May 2020, to declare the applicant’s transmission and distribution lines as a common carrier.”

Analysts had argued that the move was meant to aid Konkola Copper Mines (KCM), the local unit of Indian mining giant Vedanta, which has been under control government control since May 2019.

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Okonjo-Iweala’s First Day at Work as WTO Director-General

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As Nigeria’s Dr. Ngozi Okonjo-Iweala resumes her role as the Director-General of the World Trade Organisation (WTO), the former Nigerian Finance Minister went straight into business, as she was at a meeting of the Congress of the WTO.

She makes double history as the first woman and first African to be in the role.

In her first day in office, the former former World Bank Vice President said she’s in one of the most important institutions in the world. She indicated her readiness for the huge task ahead of the organisation.

Okonjo-Iweala saw off competition from several strong contenders before becoming the chosen candidate for the top office of the WTO.

She’s an experienced economist and one of the most respected Africans in the world.

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