Buco joins business exodus
The economic downspin has forced one of Middelburg's biggest businesses from its premises, due to steep rent increases and a fear of retrenchments.
Buco officially opened in 2003 on a 4,2 hectare property which has become one of the town’s landmarks.
“All I can say is that the past two year have been less than prosperous,” Buco MD, Mr Hennie Lottering, told the Middelburg Observer on Thursday.
He says that since Growthpoint bought the building from Tiger Stripes Investments for just over R20 million six years ago, the rent has systematically gone up to the point where it has now become unaffordable, running into hundreds of thousands of rands each month.
Growthpoint is much larger than Buco’s holding company Iliad, which in turn was taken over by Steinhoff in December last year.
The great trek will start mid March and Mr Lottering says they plan to open for business at the new premises, under development by the Alzu Properties, situated next to the Middelburg Mall.
Presently Buco is situated in a 7000m² building, excluding its outer lumberyard. Of the 6000m² under roof building, the 1000m² upper office floor, most of which is empty, has become redundant.
“We’re thus moving to a 6000m² premises without the redundant office space,” Mr Lottering explains. He says the move is eliminate to curb entrenchments.
“There’s two ways a company can save, either by cutting jobs or alternatively downscaling on fixed costs, such as rent, which we have done,” Mr Lottering says.
“We’re simply severing ties with a national corporate, opting now to support local developers,” he says, adding that the 170 personnel in Buco’s employment will all keep their jobs.
“The rumour mill has it that we’re retrenching, we’re not,” he said. “Businesses are all well aware of the economic downspin in town, mines are closing at a rapid rate, adding to unemployment which culminates in less expendable cash, and everyone is feeling the pinch”.
The decision was also taken on strategic merit, which will now afford Buco the opportunity to break into the DIY market, opposed to the predominant contractor base.
The existing Buco building is now up for sale.
Buco’s roof plate and trusses factory will remain where it is in Rand Street, and production will not be halted by the move. The new Alzu development will comprise a franchise restaurant, Alzu Pet ‘n Vet, Alzu’s executive offices, Mahangu Mininig offices, Gideon du Plessis Attorneys and Expanda, among others. Buco will however be the anchor tenant.
