SERCO STILL RIDING OUT IMPACT OF LAST YEAR’S LOOTING
Serco, one of South Africa’s largest truck and trailer building companies, has started this year with its lowest order book since the huge financial crisis of 2008!
Clinton Holcroft, Serco’s CEO and President of the Durban Chapter of the Entrepreneurs Organisation, puts this down to the large scale looting and torching of businesses and trucks in KwaZulu-Natal last year which severely damaged both business confidence and balance sheets.
“I believe the unrest took the wind out of our company’s sails, evident in that our usual end of year peak period failed to materialise. I attribute this to a large extent to the loss of business confidence and the extensive property damage which resulted in many businesses not being able to resume trading by the end of the year, if at all,” he said.
Holcroft added: “Restoring confidence through introducing and announcing steps to prevent a re-occurrence of the violence and theft should be a priority for creating growth in KZN.”
However, July 2021’s unrest is not the only factor that is presenting challenges for Serco.
Holcroft said he believed that the impact of the invasion of Ukraine by Russia would be felt in South Africa with the economy again negatively impacted by the resulting increases in the price of fuel and raw materials for some key components. This was already being seen.
“Price increases will put added pressure on business and, to some extent, will be passed on to the already stretched consumer,” he observed.
With this in mind, Holcroft said there was a lot of uncertainty about the year ahead when it came to the longer term business prospects within the transport industry.
Companies that had delayed capital expenditure over the last two years would experience mounting pressure to replace older equipment due to higher maintenance and breakdown costs, he pointed out.
“Clients wanting to replace vehicles have, however, had some difficulty in securing truck chassis as suppliers are still battling to keep up with demand due to global shortages of silicone chips. Unfortunately, I think the war in Ukraine will put further pressure on supply chains and prolong the parts shortages.”
He also noted: “Planning at least six months in advance will help alleviate some of the challenges when sourcing new commercial vehicles, including truck bodies, fridges, tail lifts and similar items as well as help ensure on time delivery.”
On a more positive note, Holcroft said that there had been a promising increase in inquiries for new vehicles during March and into April as customers re-examined their vehicle replacement programmes. This augured well for a better year ahead.
“Serco is grateful to have recently been awarded a significant tender to build refrigerated bodies for Imperial Logistics. This will go a long way towards restoring order volumes and has enabled us to create jobs for a further 56 operators at our KZN manufacturing site – a small but significant step towards rebuilding South Africa’s economy,” he added.