Firms divided on 2010

Johannesburg - Forty-five percent of South African companies believe the 2010 World Cup will create new business opportunities, according to the results of a KPMG survey released on Thursday.

"A total of 45% companies recently surveyed believe that the World Cup will create new business opportunities with 35% believing it would have a disruptive effect on their business," the company said in a statement.

A small part of the sample was of the opinion it would be business as usual in the country during the event.

The survey was conducted on KPMG clients across business sectors and targeted chief executive officers, chief financial officers and chief operation officers.

According to the survey, Eskom's proposed electricity price hikes were seen by 65% of respondents as having a potentially negative effect on business with consequent increases in inflation and interest rates.

"Ten percent of the sample indicated that they might have to resort to actions such as retrenchments to absorb the cost increases."

KPMG director Carol Read said the figure might be a lot higher in some parts of the economy.

"Clearly there are some sectors that are more energy-dependent than others. In those sectors there is likely to be higher levels of retrenchment and other measures to reduce exposure."

Some 61% of respondents favoured public-private partnerships as a mechanism to raise funds for Eskom.

KPMG said there were some encouraging findings with all respondents of the view that future growth opportunities do exist in the business environment despite the economic downturn.

Forty-one percent indicated they were considering opportunities on the African continent.

A broad trend in the survey was that South African businesses were looking to developing markets to expand rather than developed markets.

"Perhaps our most exciting finding was that companies appear to have recognised the importance of developing and implementing an environmental strategy," said Read.

"Of the 67% of respondents who said they had an environmental strategy, only 6% indicated that they had a strategy but are not implementing it."

- Sapa