15 October 2009
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Johannesburg — DATATEC is planning a foray into China as the next step in its ambitions to become a truly global technology supplier. It is "just a pinprick" in Asia, but CEO Jens Montanana is confident the group can tap into that large and rapidly growing market through joint ventures or acquisitions.
Datatec may find the market tough, as the Chinese have a reputation for supporting home- grown products rather than embracing imported western goods. But Montanana says it is a divided nation.
"In the communist days everybody wore the same clothes and used the same toothpaste, and while there is still a dynamic to buy Chinese, there are racy consumers with an almost insatiable appetite for branded goods."
The same is true in the business world, so Datatec believes it can bring in global brands, such as Cisco, and find willing buyers.
Its strategy is supported by Frost & Sullivan analyst Spiwe Chireka, who believes moving into China could be a substantial source of growth. Relatively high barriers to entry do, however, make for some risk. "No one can deny the potential it offers due to the huge, addressable market .... Datatec would be the first among its key South African competitors to enter this market, so all eyes will be on the group to see how it fares," she says.
WITH the deadline for Xstrata to "put up or shut up" on its proposed merger of equals with rival Anglo on Tuesday, speculation is rife that it will likely decide to walk away -- at least for now.
UK regulators last week gave Xstrata until next Tuesday to make a formal offer or walk away from its bid for six months.
There is speculation that bullish Xstrata CE Mick Davis will walk away from his bid to create a merger to rival BHP Billiton and Rio Tinto. He may decide to take a breather until April while plotting his next move.
Rumour has it there is not enough support for the nil-premium merger proposal from Anglo shareholders, who so far have been unimpressed by it.
Xstrata will need to put up an attractive premium to convince sceptical Anglo management, and there are doubts it has the cash for that -- giving currency to the idea that Davis would walk away.
The Bottom Line is edited by Colon Anthony
A hostile takeover bid is largely seen as a non starter and not a viable option for Xstrata.
There is also talk that Xstrata may abandon its bid for Anglo entirely and swoop on another target. Lonmin , in which Xstrata already holds a 25% stake, has been touted as a candidate.
However, given the wall of secrecy around Xstrata since news of its ambitions broke in June, it is possible that it may surprise and come up with an offer. Earlier this week Xstrata announced the sale of its stake in a Chilean mine for 465m, in what some read as a move to raise capital for a premium offer to Anglo.
BOTSWANA goes to the polls this week and although the ruling Botswana Democratic P arty seems set to win another five-year term, the election may hold clues about the effects of the recession on African voters -- not only in one of Africa's most stable and prosperous democracies but elsewhere . The recession was dire for Botswana, which is reliant on diamonds. Estimates are that the economy shrank a brutal 11%.
Botswana's fate somewhat mirrors that of other small, single- dominant commodity African nations. Yet the difference is its long history of effective management of public accounts, including a history of budget surpluses and a strong currency. But the fact that the party was seemingly able to weather this storm demonstrates just how much trust has been built up over years, and the party can now cash in on that.
President Ian Khama, a British-trained army officer, makes an odd and sometimes autocratic president and consequently he may lose some votes to the opposition. But overall, the ruling party's 77,2% majority in the previous election will probably not be seriously dented.
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