capricorn insights
Capricorn Society to Cease
South African Operations
Capricorn Society has announced it is ceasing its operations in the
Republic of South Africa (RSA) and trade credit will not be provided
beyond 14 March 2014. All affected Capricorn members, suppliers
and employees in South Africa have been told of the decision.
C
apricorn Society group chief
executive officer, Greg Wall,
says,
“The decision to cease operating is a
painful one but was only made after all
other possible alternatives were exhausted.
Capricorn would need to make significant
further investment in computer systems,
processes and of capital if it wanted to
maintain and grow its RSA business. Such
investment cannot be justified on behalf
of all Capricorn Members, including those
in Australia and New Zealand, based on
historical or expected future performance.
“I would like to thank the Capricorn
Members and Preferred Suppliers so far for
their understanding regarding this decision.
Editor’s Comment:
When I was advised in early March
of Capricorn Society’s decision,
I was devastated. Devastated for
Capricorn’s members, devastated
for Capricorn’s suppliers and
devastated for Capricorn’s staff in
South Africa. But I also understood
the reasons for the decision, a
decision that was made for sound
business reasons including not
being able to achieve a satisfactory
return on investment which is
not assisted by the increasingly
diminishing value of South Africa’s
once proud currency.
We have been advised that many have
already started to make alternative
arrangements to assist with a smooth
transition. I would also like to re-assure
Members that their investment in Capricorn
is secure.
All of their shares and reward points will be
paid to them. Capricorn has also always
guaranteed Supplier payment and although
we have made this difficult decision
to cease operations, that commitment
remains steadfast.”
Capricorn will make an orderly and planned
transition from its RSA operations. It will
remain in RSA well into the future as part
of this commitment. All RSA Members will
have their Member entitlements re-paid
I refer to my editorial on page 2 of this
issue, under the Phoenix banner, whereby
I warn that a weak Rand is not necessarily
good news for the South African
automotive industry. Whilst it does help
importers, it does have ancillary effects,
of which the current Capricorn scenario
is a good example. When Capricorn
Society invested in South Africa in 2002,
the exchange rate of the Rand to the
Australian Dollar was 3 to 1. Now, a mere
12 years later, it is 9,70 to 1. A significant
depreciation. To put it into perspective, for
every Rand earned in 2002, it translated
into 30 Australian cents on the Capricorn
Society balance sheet. Today, that Rand
earned is only 10 cents. Thus, Capricorn’s
investment in 2002 has devalued three
times in a tad over a decade.
It saddens me to realise that all the
investment in time, effort and money
has come to nought, and I am sure this
| words in action
76
april 2014
to them after their final statement has
been settled and all payments due to
RSA Preferred Suppliers will also be made.
The transition will be made in a way
that protects the interests of Members,
Preferred Suppliers and Capricorn.
Importantly, Capricorn will be doing
everything it can to ensure the transition
is as smooth as possible for Capricorn
RSA Members, Preferred Suppliers and
employees.
The office will remain open and staffed
until May 2014 to assist Members and
Suppliers transition and make new
business arrangements. Capricorn
Head Office in Perth will then manage
Capricorn’s operations from that point.”
sadness is shared by our Australian
friends. In my search for a silver lining,
I have come to the conclusion that
apart from the numerous friendships
established these past 12 years,
Capricorn Society has shown us the
benefits of a co-operative society, and
I trust that this l esson will be taken
forward by all concerned. I also wish to
express my gratitude to Capricorn for
the wonderful series of articles that aBr
has been able to write these past five
years about how the Capricorn model
has helped both member and supplier,
and my personal appreciation of how
co-operation improves business and
relationships.
You shall not be forgotten, and all
of the best for the future.