BPO INVESTMENT IN SOUTH AFRICA HITS RECORD HIGH

Mergers, Acquisitions and Financial Results

The contact centre and business process outsourcing (BPO) industry in South Africa has enjoyed unprecedented growth during 2005.

According to new research conducted by Deloitte, there are now 167 contact centre and BPO operations in just one Province, the Western Cape, employing a total of 14,345 people. This represents growth in 2005 of 39% in the number of agent positions and 43% in the number of staff.

Calling the Cape, the Western Cape’s inward investment agency, has also attracted new investment in 2005 worth GBP45m, up 19% from the GBP38m secured in 2004. 76% of this investment originated from the UK. New BPO investors in 2005 in Cape Town include Asda, Amazon.com, and STA Travel.

Other provinces are also reporting strong levels of inward investment and growth. Recent investors into Gauteng, South Africa’s commercial heartland, reported by local agency ContactinGauteng include IBM, FujitsuSiemens, and Sykes. A recent deal between involving ABN Amro to outsource a significant percentage of its global call centre business to IBM worldwide, including IBM South Africa’s Integrated Delivery Centre based in Johannesburg, is testimony to the growth in complex services being offshored to South Africa.

Mfanu Mfayela, CEO of SACCCOM, the national industry body which includes CallingtheCape, ContactinGauteng, KZNonSOURCE, says South Africa’s attrition rate of 14% remains well below international norms, and is particularly impressive in an industry that has grown in some areas by as much as 70% in two years.

Mfayela is confident that the industry will continue to grow through 2006. “South Africa is fast developing an international reputation for high quality of service and is attracting high calibre international investors, while offering increasingly complex and sophisticated BPO services. The labour market continues to be extremely accommodating of rapid growth and the industry has extraordinary potential to develop the South African economy. “