PART A (38 marks)
, A1: Eight ESG Factors Evident from the Scenario (16 marks)
(2 marks each: 1 for identification, 1 for discussion)
1. Economic – High Unemployment and Low Household Income (Limpopo
Province) Limpopo Province has a high unemployment rate and low household
income. This limits the purchasing power of consumers and may negatively affect the
volume of KT's beverage sales, particularly for premium organic juice products.
2. Economic – Overreliance on a Single Foreign Supplier (Supply Chain Risk) KT
sources its plastic bottles predominantly from a supplier in China, creating
significant foreign exchange exposure and supply chain vulnerability. Any disruption
(geopolitical events, rand depreciation, shipping delays) could halt production.
3. Social – Potential for Local Job Creation The proposed plastic bottle
manufacturing facility could create employment opportunities in a province with very
high unemployment. This is a social responsibility consideration that may attract
government support or incentives.
4. Social – Credit Risk from Low-Income Customers (40% credit sales) A
significant portion of KT's sales (40%) are made on credit to wholesalers,
supermarkets, and spaza shops in a low-income province. This increases the risk of
bad debts and cash flow challenges.
, A1: Eight ESG Factors Evident from the Scenario (16 marks)
(2 marks each: 1 for identification, 1 for discussion)
1. Economic – High Unemployment and Low Household Income (Limpopo
Province) Limpopo Province has a high unemployment rate and low household
income. This limits the purchasing power of consumers and may negatively affect the
volume of KT's beverage sales, particularly for premium organic juice products.
2. Economic – Overreliance on a Single Foreign Supplier (Supply Chain Risk) KT
sources its plastic bottles predominantly from a supplier in China, creating
significant foreign exchange exposure and supply chain vulnerability. Any disruption
(geopolitical events, rand depreciation, shipping delays) could halt production.
3. Social – Potential for Local Job Creation The proposed plastic bottle
manufacturing facility could create employment opportunities in a province with very
high unemployment. This is a social responsibility consideration that may attract
government support or incentives.
4. Social – Credit Risk from Low-Income Customers (40% credit sales) A
significant portion of KT's sales (40%) are made on credit to wholesalers,
supermarkets, and spaza shops in a low-income province. This increases the risk of
bad debts and cash flow challenges.
