By Helmo Preuss

Manufacturing firms located in KwaZulu-Natal and Gauteng have been the hardest hit by the impact of the HIV/Aids pandemic on their profits, while retail firms based in the Western Cape have seen the smallest impact, the results of a comprehensive independent survey shows.

The survey was carried out in October and November 2003 by the independent Bureau for Economic Research and the South African Business Coalition on HIV and Aids (SABCOHA).

The survey piggybacked on the BER's existing survey of firms in the manufacturing, retail, wholesale, motor trade and building and construction sectors and almost a third of firms responded.

Responses of the 1,006 firms - the largest on the issue to date - found that 9% reported a "significant" adverse impact on their business from the disease, while 43% expected this to happen within five years time.

To track the spread of the disease and the firms' responses to it, SABCOHA with funding from the UK's development arm, DFID, will conduct this survey on annual basis for at least the next ten years. The aim is also to produce an AIDS Impact Index to allow easy assimilation of the information.

Future surveys will also track the impact in the financial services, mining and transportation sectors.

South Africa has the highest number of people living with HIV/Aids in the world, with more than one in 10 of the population of 45 million infected.

HIV prevalence amongst antenatal clinic attendees has risen from only 0.7% in 1990 to 4.0% in 1993 to 17.0% in 1997 and 26.5% in 2002.

The 2002 provincial split varied from a low of 12.4% in the Western Cape to a high of 36.5% in KwaZulu-Natal. The prevalence rates for the other provinces were 15.1% for Northern Cape, 15.16% Limpopo, 23.6% Eastern Cape, 26.2% North West, 28.6% in Mpumalanga, 28.8% Free State and 31.6% in Gauteng.

"HIV/Aids is undoubtedly a bottom line issue for business, as it impacts on production costs and consumer markets, but more needs to be done with only a quarter of firms surveyed having an HIV/Aids policy in place," SABCOHA spokesman Dr Leighton McDonald told a briefing in Sunninghill.

"Approximately a third of the companies surveyed indicated that HIV/Aids has reduced labour productivity or increased absenteeism, and raised the cost of employee benefits," McDonald said.

Around 30% of the firms reported higher labour turnover rates, 27% indicated they had lost experience and skills, and 24% incurred recruitment and training costs from the epidemic.

"Manufacturers are likely to be better prepared for the impact of the epidemic, with 42% having implemented an HIV/Aids policy. Disappointingly, only 9% of retailers and 15% of building and construction companies surveyed have implemented an HIV/Aids policy," McDonald said.

The corresponding figures for wholesalers and motor dealers werer 26% and 31% respectively.

The better response of manufacturers is probably due to the fact that they perceive the impact of HIV/Aids to be grater than other sectors with 42% seeing a bottom line impact currently rising to 62% in five years time, while only a quarter of retailers see a current profit impact rising to 48% in five years time.

Manufacturers are most likely to appoint extra employees to compensate for the effect of Aids on productivity and absenteeism with 28% compared with only 10% for retailers and 18% for the average of all sectors.

Most South African firms have so far failed to respond to the epidemic,  with only a quarter of all those surveyed having a formal HIV/Aids policy, while less than a fifth had a voluntary counselling and testing programme.

Of all companies surveyed, only 14% have conducted research to asses the impact of AIDS on their labour force, 8% on their production costs and only 6% on their consumer base.

The epidemic was nonetheless receiving a high priority with 69% of the respondents being the owner or CEO. The respondents consisted of 51 large (more than 500 employees) firms, 165 medium (between 100 and 500 employees) and 790 small (less than 100 employees).

Most large firms had a specific designated Aids manager who looked after this issue on a full time basis, while in other firms this issue tended to be dealt with by the human resources department.

The differences in terms of firm size was highlighted in the provision of anti-retroviral therapy (ART) with 39% of large firms supplying ART, 9% of medium firms and 2% of small firms.

The provincial breakdown in HIV prevalence rates was reflected in both the impact and response data with the Western Cape having both the least impact and smallest response, while KwaZulu-Natal had the highest impact.

Of the Western Cape firms surveyed only 18% reported lower labour productivity/increased absenteeism due to HIV/Aids compared with half of KwaZulu-Natal firms surveyed, while only 11% of Western Cape firms had a HIV/Aids care, support and treatment programme in place compared with 15% of KwaZulu-Natal firms.

"However, business in the Western Cape should not take these results as a reason for complacency, as the Western Cape's epidemic is still at a relatively early stage of development. Results from the latest antenatal clinic survey by the Department of Health suggests that HIV prevalence in the Western Cape is currently increasing at a faster rate than in the other provinces," McDonald said.

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