INTERNATIONAL CALL CENTRE INVESTMENT BOOMING IN CAPE TOWN

Computing

Eleven new operations from the international market, representing a total committed investment estimated at R380 million, have established call centres or business process outsourcing (BPO) operations in the Western Cape during 2004. Further significant investment has already been clinched for 2005.

That’s according to Luke Mills, Executive Director of CallingtheCape, a Government-backed specialist development agency that promotes the Western Cape as a destination for national and international investors.

Mills says: “This has been a year in which the talk and promise of growth in the contact centre and BPO sector has become a reality. There have been new investments and strong growth in outsourcers, which is starting to win its share of international business. South Africa is on the map for international investment in this sector and the pipeline is looking strong.”

High-profile international companies such as Ambition 24, Budget Insurance, BSC SA, STA Travel/Lufthansa Process Management and Sales Engine invested in call centres and BPO units in Cape Town during 2004. They joined already established companies such as Dialogue, Northern Communications and Aerocorp.

Wesgro CEO, Ismail Dockrat says the presence of companies such as these indicates that Cape Town now has a track record. “Call centres and BPOs that have invested in the Western Cape are staying here and developing their businesses. This sends a strong message that we provide not only skills and competitive labour rates, but a stable environment that encourages growth.”

He says the working relationship between Wesgro, the official trade and investment promotion agency for the Western Cape and CallingtheCape is a “best practice model for collaboration” between the trade and sector-specific functions they perform. 

“This has contributed to us being able to attract a significant level of investment in the call centre/BPO sector. Through Wesgro, CallingtheCape, Provincial Government and the City of Cape Town, we have sent a strong signal into the market that we support the industry and its growth. I believe we are on the brink of a significant flood of investment in the next two to three years,” says Dockrat.

As a result of the International Offshore Customer Management Conference held in Cape Town in early November, two new deals with international companies have been signed with Cape Town-based outsourcers. The conference was strategically important as it showcased the best of what Cape Town has to offer and it was well received by the industry and opinion-makers.

The conference also attracted 10 international journalists, resulting in coverage on the BBC, in The Times, The Telegraph and The Independent, as well as a number of trade publications.  Mills says this coverage stimulated a lot of interest and generated three or four new leads with major international companies.

One of the main benefits of European companies “off shoring” is the number of jobs it is creating in South Africa. At last estimate, over 11 000 people were working in the industry. There are 110 operations in the Western Cape and it is sure to accelerate next year, says Mills. This year alone, more than 1000 jobs were created. In addition to international companies, there are at least 32 local outsourcers, 25% of which are black-owned companies.

Mills says apart from the new investments, 14 of the existing operations expanded during 2004, adding a total of almost R44m to investments.

“There is also an unprecedented level of interest in CallingtheCape and in the industry generally, witnessed by a hotly contested election for board representation, and extensive support of conferences, including a conference organized by CallingtheCape focusing on Voice over IP on 27th January 2005 in Cape Town.