Monday, February 7, 2011

Virgin and Branson keen on South Africa

A week after Virgin Group founder Richard Branson gave South Africa the thumbs up as an investment destination, Virgin Group chief executive Stephen Murphy has said the group has major plans for the country.

"We see South Africa as a key territory for the group," said Murphy in an interview with Fin24 on Monday.

Murphy has been the head of Virgin since 2005 and was responsible for navigating the group through the financial and economic crisis, part of which included identifying key markets.

One such market is South Africa, where Virgin now has six operating businesses which employ more than 5 600 people.

Murphy said South Africa has made "terrific progress" and has evolved into a stable economy. He said that this was not always reflected in the global capital markets, which continue to apply an "unrealistic discount" to South Africa.

He also praised the local banking system as "first world".

Murphy said that the Virgin businesses in South Africa were creating intellectual property which was exported to the rest of the world.

These included the Branson Centre of Entrepreneurship and the health and wellness businesses which export intellectual property into the US market.

The concept of the Branson Centre of Entrepreneurship was first tested in South Africa and is now being replicated in the Caribbean.

When asked about onerous regulatory issues such as labour markets and limited competition in telecoms and financial services, Murphy said South Africa was not the hardest place for an outsider to do business in.

He said that with the financial crisis still fresh in people's minds, regulation in the US and UK - particularly around banks and financial services - was extremely challenging .

"People should reappraise their views of regulation - prudent regulation is essential," said Murphy.

In five years' time Murphy said he would like to see the South African businesses continue to be disruptive in the markets they play in, and to focus strongly on championing consumers.

- Fin24