The more I think about it the more obvious it becomes that Nampak CEO Andre de Ruyter was a shoo-in for the job of Eskom CEO, despite the wide lead former Eskom and Shell executive Andy Calitz had over him among the shortlisted candidates in terms of experience and leadership.
De Ruyter is not perfect. But he’s credible. And, what’s more, he’s going to fit into the government’s way of thinking about economic problems perfectly. He’s a bit of an industrial policy guy. Calitz strikes me as more technical, a projects guy. I feel for him. He would have been an outstanding SA leader. He has been in the country and will now go “home” to London and take up any of the many offers still on his table.
But when the four ministers who interviewed the final candidates spoke to De Ruyter, it would have been like talking to one of their own. Trade & industry minister Ebrahim Patel would have been particularly excited.
Patel, together with Pravin Gordhan, Gwede Mantashe and Thoko Didiza, met the final candidates, all of whom were interviewed face-to-face.
They were asked seven questions —why they thought they were right for the job; what they thought about the future of new nuclear, coal-fired and gas-fired generation in SA (Mantashe, my guess); how they would partner with the unions; what they would have done had they entered Eskom after the Kusile and Medupi decisions had been taken; how they would have handled state capture; which bits of (Gordhan’s) Eskom road map announced recently they might not agree with; and finally, what their pay expectations were.
De Ruyter’s record at Nampak, especially the precipitous share price fall over the past five years, has been used to hammer him since the announcement. But he is senior enough to have been a candidate to become Sasol CEO back in 2011 when he was pipped to the post by David Constable, and once you’ve lost that sort of race you sort of have to leave.
Being the CEO of Nampak, whatever its share price, is a big deal so we can safely assume De Ruyter is an executive of substance and resolve and that the government has been lucky to get him. Nampak, before his arrival, had made expensive and calamitous investments in Angola and Nigeria before both economies were devastated by the fall in the price of oil. Nigeria makes it difficult if not impossible for foreign investors to get their dollar profits out of the country.
That he is an outsider at Eskom is a strength. The place is a dysfunctional club of engineers who have each other’s backs and would no more try something new in the face of danger than fly to the moon. De Ruyter is an English, psychology and law graduate from Pretoria University.
Unlike engineers, arts graduates don’t always look for answers in obvious places. He’s been managing engineers for years and he will read them better than they might want.
Having said that, he is involved in something called the Manufacturing Circle, a body that takes an almost magically optimistic view about SA’s ability to reverse its rapid deindustrialisation. The government, naturally, thinks it is just a matter of aligning a few upstream and downstream linkages, beneficiating our natural resources at home and all will be well.
I oversimplify, of course, but here are excerpts from an address De Ruyter gave to the Manufacturing Circle about two years ago on the theme of our “premature deindustrialisation”: “For our stage of development, manufacturing’s GDP contribution should be at double current rates and is lagging behind other emerging markets. If manufacturing were to have an appropriate share of GDP (28% to 32%) for SA’s developmental stage, 800,000 to 1.1-million jobs could be created.”
Rob Davies, wherever he is, would be beside himself. The solution to our industrial travails (recently brought home by the decision to shut down Saldhana Steel), he said, was to “stimulate demand for local goods, via preferential procurement, protecting local industries through more assertive trade policies and support for localisation initiatives such as Proudly SA”.
That is more or less EFF economic policy and De Ruyter is a strong proponent of the government’s black industrialist programme. The ministers who interviewed him will have been enraptured.
I’m also an industrial romantic but I wonder whether we have not got to the point where reverse is no longer possible. There is simply too much to fix and the state is not interested in the ideas of outsiders. Why would any investor build a factory to make things here? The internal market is tiny and poor and the dollar cost of our labour is not competitive in export markets. Car industry jobs are heavily subsidised by the state.
It’s an argument for the future though, and maybe I will have an opportunity one day to test myself against someone who thinks as passionately about our industries as De Ruyter does. Running Eskom will stretch every sinew he has and help him discover new ones. He has to keep it afloat financially and technically, split it into three and answer constantly to an impatient and angry public.
Gordhan says Eskom is too big to fail. De Ruyter’s job, if this is not too cryptic, is to make sure it isn’t.
• Bruce is a former editor of Business Day and the Financial Mail
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