'Recent Ramatex loss is a reality of
the world in which we operate'
WHILE EASTERN Cape businessmen have blamed the national government for the loss of the Ramatex textile plant from their area to Namibia, finance minister Trevor Manuel has warned the country to guard against going overboard in any way to attract foreign investment which enables investors to play the country against its neighbours.
Politicians have joined businessmen in the East London region in taking the government to task for the loss of the R1-billion Malaysian group's planned investment, which was expected to generate up to 18 000 jobs. The investors turned their back on the proposed site when they found Namibia's offer of a 20-year tax holiday, free wharfage, free earthworks at the factory site, and free electricity infrastructure up to the site, far more attractive.
The East London (Buffalo City Council) offer was of 100ha at the old Bisho airport site for R250 000 and reduced wharfage fees. The cabinet is understood to have rejected a more generous investment package, including a six-year tax break, proposed by the negotiators.
Now Manuel, speaking in parliament last week, referred to the Ramatex move and cited the example of southeast Asia, where sectors such as textiles had been marked, as he called it, 'by footloose investment decisions.'
The same thing, said Manuel, had happened in the former bantustan states in South Africa.
"Investors will milk the incentives for as long as they can and the day the incentives dry up they leave. Then there is even greater destitution in some of those areas. We are going to win some and lose some, and that is the reality of the world in which we operate," he said.
Meanwhile the Ramatex builders are already active in Namibia. Bulldozers and other heavy equipment have moved onto the site in Windhoek where the plant is to be established. It is intended that the plant will be up and running in early 2002 with the operators aiming at benefits to be enjoyed from the US AGOA agreement. All of its products will be exported to the US.
Trevor Manuel... Investors will milk the incentives for as long as they can
