Family businesses 'likely to grow in importance in South Africa?
Many of South Africa’s wealthy entrepreneurs are likely to pass their businesses on to family members or retain some family control of the enterprises, according to a leading academic.
Dr Margaret Cullen, co-director of the Nelson Mandela Metropolitan University’s Family Business Unit, said there is a strong history of family businesses in the country and this is likely to continue.
“If you look at the Afrikaans culture, there is definitely a culture of passing on the family business or retaining family control. With regards to black business, a lot of these are new entrepreneurs. The black culture is one of networking and looking after one’s own and based on that, I would predict they would keep it in the family,” she said.
Her comments follow the publication of the country’s latest rich list, which features a number of families in the top 10.
Lakshmi Mittal, the Indian family business tycoon, took second place in the South African Sunday Times Rich List – not linked to News International’s UK-based Sunday Times - because of his shareholding in steel company ArcelorMittal SA, which has generated a fortune of R20.87 billion (€2.87 billion) for him.
Nicky Oppenheimer, with R11.1 billion, took the third position, although his wealth estimate did not include the Oppenheimer family's 40% interest in De Beers.
Both Mittal and Oppenheimer also featured in the UK’s Sunday Times 2011 Rich List, with fortunes of £17.51 billion (€19.92 billion) and £2.9 billion respectively.
The Rupert family, which owns the luxury holding company Richemont, and the Ackerman Family Trust were in the South African top 10, alongside entrepreneurs including FirstRand founder Laurie Dippenaar and Aspen Pharmacare’s Stephen Saad.
Patrice Motsepe, who has stakes in African Rainbow Minerals and Sanlam, topped the list with R22.99 billion.
The role family businesses play in South Africa has yet to be fully researched, but drawing on smaller studies, Cullen estimated that about 65% of the country’s wealth is generated by family companies and she said this was likely to continue growing.
The global economic downturn has made going into the family business more attractive, she added.
