Former Exxaro Resources Chief Executive Officer Sipho Nkosi is investing in a South African maker of electrical equipment in an effort to create more jobs for disabled and unskilled people.
Nkosi partnered with Akhona CEO Noluthando Gosa to buy 33% of family-owned Lesco Manufacturing with the goal of turning the maker of switches and plugs into a R1 billion ($74 million) company over the next five years, Nkosi said on Friday.
They want to eventually list the company’s shares on the Johannesburg Stock Exchange, while giving opportunities to those who struggle to find work, he said.
“The unskilled should be developed and the disabled should be afforded life-changing medical interventions where possible,” said Nkosi. “Like many developing countries, our country has an abundance of unskilled labour. We need to invest in companies that can absorb this labour pool.”
The duo are seeking to meet a need in a country struggling to make gains against an unemployment rate of almost 27% and an economy still largely in control of the white minority, 24 years after the end of racial segregation. The deal feeds into South Africa’s push to put more businesses in the hands of the country’s majority black population in an effort to spur equitable economic growth.
The transaction will help Lesco, which sells its products directly to retailers, expand into other African countries and better compete with cheaper Chinese imports, CEO Jonathan Shapiro said.
Nkosi, who is also a former president of South Africa’s main mining-lobby group, will become chairman of Lesco. Gosa, whose Akhona owns a stake in steelmaker ArcelorMittal South Africa, will be deputy chairwoman.
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