Moneyweb reports that aluminium semi-fabricator and exporter Hulamin is under scrutiny following a profit warning last week and plans for retrenchments within the group.
Speaking on Thursday, Chris Logan of Opportune Investments, a shareholder activist and vocal critic of Tongaat Hulett, noted that when the group listed on the JSE in 2007 it had a market cap of around R8.6 billion, but its market cap has now plummeted to around R740 million. “While Hulamin doesn’t have accounting irregularities, the Hulamin story is just as sad as Tongaat Hulett. It is basically a culture issue and the company has seen similar factors on the management side affecting it, which I believe include a massive misallocation of capital, poor cost controls and a bloated top management and board,” Logan commented. He also bemoaned Hulamin’s “misalignment of incentives” for its executives, saying the company seemed to have an “entitlement culture” around executive pay in the same vein as Tongaat Hulett. According to Hulamin, it was “aggressively addressing manpower-related costs, including contractors, consultant and employment costs”. Responding last week to queries around the planned retrenchments, Hulamin’s Noma Kanyile confirmed that an invitation to consult had been sent to all staff. She could not confirm how many jobs were on the line, indicating that Hulamin “is still at the consultation phase with relevant stakeholders” and that discussions were not yet “conclusive”. The company employs some 2,000 staff, mainly in Pietermaritzburg and Johannesburg.
- Read the full original of Suren Naidoo’s report on the above at Moneyweb
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