By Simon Nare
The South African Federation of Trade Unions (SAFTU) has warned that the country is being reduced to what it terms a “warehouse economy”, as multinational companies move production offshore while retaining distribution networks and selling imported goods locally.
The federation raised concern following British American Tobacco South Africa’s (BATSA) announcement that it plans to close its production plant in Heidelberg, east of Johannesburg, while continuing to sell its products in the country.
SAFTU said the decision would deal a severe blow to workers, with jobs lost at a time of deepening factory closures, retrenchments and deindustrialisation.
The union federation said BATSA’s move adds to a growing list of international companies — including tyre manufacturers Goodyear and Bridgestone, as well as firms in the clothing, textiles, electronics and manufacturing sectors — that have exited local production but maintained sales operations in South Africa.
Speaking alongside its affiliate, the Food and Allied Workers Union, at a press conference in Johannesburg, SAFTU warned that the closure would worsen the national employment crisis.
It said the planned shutdown would result in the loss of about 200 direct jobs, with thousands more at risk across the supply chain, noting that each worker often supports an extended family.
SAFTU is demanding that manufacturers selling products in South Africa be required to base their production operations locally.
“If you want to profit from the South African market, you must produce in South Africa and employ South Africans. No more warehouses, no more hollowed-out towns, no more exporting jobs,” the federation said in a statement issued after the briefing.
“South Africa does not need more distributors. Corporations want South Africa as a consumer market, not a productive economy. We reject that completely.”
The federation said South Africa has been steadily reduced to a warehouse economy since the advent of democracy, as multinational corporations closed local factories, relocated production to neighbouring countries or overseas, and continued selling imported goods back into the domestic market.
SAFTU also demanded to be included in negotiations between BAT and the government regarding the company’s intention to close its operations.
The federation called for legislation to prevent companies from shutting down production facilities in South Africa while continuing to trade in the local market.
“We are no longer appealing for voluntary corporate goodwill. Corporations will not protect jobs unless the law compels them,” SAFTU said.
“What we are witnessing is the wholesaling of South Africa’s productive capacity — factories shut, jobs exported, imports replacing production and profits extracted. This is economic strip-mining and it must be stopped by law.”
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