THE BOTTOM LINE
Plain wrong that a company like Dawn goes down the toilet
Outfits aimed specifically at water reticulation and sanitaryware should not be struggling as they are
When a company like Cashbuild posts a 12% drop in operating profit, you know it’s tough out there. So it’s little surprise to see that Dawn, owner of branded goods like Vaal Sanitaryware and Cobra taps, appears to be in a last throw of the dice to survive SA’s economic downturn.Dawn has been in turnaround mode for what feels like forever, and 2018 was officially earmarked by new management as the first of a three-year recovery plan. That was delayed when Dawn released results for the year ended March in July and it has now been forced to implement deep cuts to the business as conditions since its year end have worsened.
Its new plan is, as might be expected, bad news for SA’s increasingly fragile jobs market. More than 700 employees are about to get the chop, including those at Dawn’s head office where both the size of its board and fees paid to directors have been cut.
Dawn’s woes are certainly historic and partly of its own making – high fixed lease costs and poor working capital management are two key issues with which it continues to grapple, for example.
But in a country where school children routinely die in pit toilets, where government clearly has both a moral and developmental obligation to roll out water and sanitation services, companies like Dawn that locally produce and distribute products aimed specifically at water reticulation and sanitaryware should not be struggling as they are.
President Cyril Ramaphosa’s new dawn is a meaningless catchphrase while government continues to prevaricate over the provision of desperately needed infrastructure delivery.