27 of 2023

Newsletter No 27/14 July 2023                              


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New Nike Springbok playing jersey revealed

The nine-month long wait to reveal the new Nike-designed Springbok jersey finally ended on Tuesday when the Springboks’ new Castle Lager Rugby Championship jersey was revealed.

The six-year partnership was announced in September since when the design and development of the new jersey and accompanying lifestyle collection has been kept top-secret.

The wait ended today when Nike revealed a playing kit that provides the team with the latest in innovation and design while heeding the team’s wishes to respect the traditions of the green and gold.

“The launch of a new jersey is always exciting, but the anticipation and expectancy around today has been building for months,” said Rian Oberholzer, CEO of SA Rugby.

“We are immensely proud of what Nike has provided and the feedback from the team has been great since they were kitted with the training gear recently. The new jersey honours the traditions of the Springboks in its design and construction while adding subtle nuances to set it apart. We couldn’t be happier.”

Elite players require a kit that provides comfort, durability, and support; these insights informed the design and craft of the new Springboks kit.

The jersey was engineered to serve the needs of the athlete and what the Springboks will experience on the field is a jersey that keeps them dry and cool, provides reinforcement and mobility allowing them to move with less friction.

The Nike designers worked closely with the team to design a kit that reflects the history of the team and South African culture.

The classic ‘green and gold’ jersey has been reimagined to include a traditional collar with the underside of the collar giving a nod to the South African flag. As an acknowledgment of the team’s spirit, the phrase “Stronger Forever” is inscribed on the inside collar.

The bold new alternative jersey pays homage to the local cultural through the patterned print and the colourway was inspired by and celebrates the hues of the local nature.

Ventilation mesh panels in key areas of the kit also improve performance by increasing air circulation to the players’ bodies and regulating their temperatures.

“We involved the senior team leadership group in the approval process, and they were immediately appreciative of what Nike were trying to achieve in design and construction,” said Oberholzer.

“We are looking forward to seeing the jerseys in action over the coming weeks, including the alternate jersey which will make its debut in Buenos Aires next month.”

South Africa’s other national teams will also appear in new Nike-designed apparel. The Springboks’ Rugby World Cup jersey following the same design will be unveiled next month.

Completing the collection is an assortment of lifestyle products that will serve the needs of the players off the field.

The primary and alternate jersey as well as the lifestyle collection will be available from Friday (7 July) in Nike stores and major retailers.

Manufacturing getting to grips with load-shedding

By Isaah Mhlanga

Production volumes have held up since the recovery from the Covid-19 impact started

Given the increased intensity of load-shedding in 2022 and especially the first half of this year, one would have expected overall manufacturing production volumes to have contracted a lot given that the manufacturing sector is a heavy user of electricity.

However, this is not the case as production volumes have held up since the recovery from the Covid-19 impact started. We ask three questions about the manufacturing sector that are of interest for investors and provide our thoughts.

Some brief contexts of how critical the sector is in the economy. Manufacturing is a R513bn sector in real gross value-added terms and constitutes 11.2% of the economy in the first quarter of 2023, down from 15% in 1995. It is the fourth biggest sector in the economy, employing nearly 1.2-million people according to the first quarter of 2023 quarterly employment statistics, the latter of which is a survey of formal business establishments.

Employment levels are 44,450 jobs lower compared to the peak reached in March 2019. According to the quarterly labour force survey — a survey of households — manufacturing employment sit at just over 1.4-million people, the difference with the quarterly employment statistics being accounted for by the informal sector. In terms of gross earnings, the manufacturing sector is an R85bn sector, the fourth after community services (R273bn), business services (R235bn), and trade (R113bn). The manufacturing sector is therefore a critical sector of the economy, which has been shrinking over time with negative employment and income consequences.

How far is the manufacturing sector recovery from the Covid-19 impact? 

The manufacturing production volumes are yet to fully recover, at 6% below 2019 levels. However, not all subsectors of the manufacturing sector have not recovered. Food and beverages is 4% above the 2019 levels, Within this subsectors only other food products remain below pre-Covid levels, 4% lower to be specific.

Textiles, clothing, leather and footwear is about 10% below 2019 levels. Within this, only footwear has fully recovered while other subsectors have not. Wood and wood products, paper, publishing and printing also remain 10% below 2019 levels, with one subsector — products of wood having fully recovered to 4.0% above the 2019 level.

Petroleum products, chemicals products, rubber, and plastics products remain 17% below 2019 levels with three of the five subsectors — basic chemicals, rubber products, and plastics having fully recovered while coke, petroleum products and nuclear fuel, and other chemical products continue to struggle.

Glass and non-metallic mineral products, basic iron and steel, nonferrous products, metal products and machinery are nearly recovered but not there yet. Furniture and other manufacturing divisions remain 7% below 2019 levels. Electrical machinery, motor vehicles, parts and accessories, and other transport equipment as well as radio, TV and communication apparatus, and professional equipment have fully recovered.

While the overall sector remains below pre-Covid levels, it is clear there are divergences within the sector which might have to do with a combination of demand dynamics and the impact of load-shedding, the latter of which should have had far more of an impact if historical trends held. But the manufacturing sector has remained resilient.

Why isn’t manufacturing nosediving even though load-shedding has intensified? 

From what we can see from capacity utilisation data, the sectors that increased capacity utilisation throughout 2022 compared with 2019 levels are some of the heavy users of electricity. We believe the reason for this is adaptation and building of resilience through investment in own electricity generation that the corporate sector has been embarking on, which suggests that the impact of load-shedding will incrementally become less damaging over time.

Which sub-sectors have built resilience and which ones continue to struggle?

While the overall manufacturing sector continues to build resilience, there are winners and losers. Capacity utilisation data shows that capacity increased to above pre-Covid levels in textiles, printing and publishing, electrical machinery, and glass and ceramics. Jointly, these account for 40% of the manufacturing sector. Sectors that are close to trend, accounting for 25%, include food and beverages, plastics, autos, parts and accessories and basic chemicals. The remaining sectors account for 35% and are still struggling include petroleum, rubber, basic iron and steel, furniture and radio, TV and professional equipment.

All said, the manufacturing sector remains below 2019 production volumes overall. But there has been building resilience such that future load-shedding is likely to have less of an impact and thus benefiting output and profits. It is not all doom and gloom. In the load-shedding adversity the corporate sector has been adapting and and finding solutions. BD

• Mhlanga is Rand Merchant Bank chief economist and head of research.

SARS to host BRICS Customs meeting

Tshwane, 12 July 2023 – BRICS Heads of Customs and Customs experts will meet this week at the Cape Town Convention Centre, 13-14 July 2023. The purpose of the meeting is to discuss ways to deepen cooperation in Customs matters with a view to improve trade relations for the mutual benefit of member states. The meeting will be hosted by the South African Revenue Service (SARS), as South Africa is the current BRICS Chair. This BRICS Customs meeting precedes the 15th BRICS Summit to be held in Johannesburg later this year.

Heads of customs will meet in closed sessions to discuss, amongst others matters, developing trade-related policies and agreements such as the BRICS Authorised Economic Operator programme, BRICS Customs Enforcement Initiatives and SMART Borders. Heads of Customs will also exchange views on strengthening cooperation and enhancing the work of training centres. These focus areas will inform strategies to be adopted to improve various customs administrations. It will look at how best to optimally utilize data and intelligence in decision-making and implementation in these areas will result in an increase in the fiscus, combat illicit financial flows and facilitate legitimate trade.

SARS Customs is proud to lead the discussions this year. This partnership aligns with our strategic objective 8, which seeks to work with and through stakeholders to improve the tax system of each of the BRICS members states.

For further information please contact SARSMedia@sars.gov.za

TFG – board changes

The Board announced the appointments of Mr Jan Potgieter and Mr Nkululeko Sowazi as independent non-executive directors of the Company with effect from 10 July 2023 and 1 January 2024, respectively.

Jan will also serve as a member of the Audit and Risk Committees.

The bikini was named after the island Bikini Atoll, where the US military was testing its bombs in World War 2.  It was so named because its creator, Louis Réard, believed the revealing suit would create a shock like that of the atomic bomb


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