By Lucia Mutikani
EAST LONDON, South Africa, Jan 22 (Reuters) - German car makers, among South Africa's biggest investors, are spending big money on drugs, treatment and education to fight an AIDS pandemic ravaging their workforce.
The German projects -- expected to be highlighted by visiting Chancellor Gerhard Schroeder on Thursday -- represent the kind of socially-responsible business South Africa hopes to promote as it seeks to become an industrial base for increasing numbers of foreign companies.
Through the HIV/AIDS programme, the companies also hope to reduce costs related to lost production because of absenteeism; the hiring and training of new workers; as well as claims on their insurance funds.
For any investor in South Africa, AIDS is a major concern.
The country has more people living with HIV/AIDS than any other -- an estimated 5.3 million, equal to 13 percent of the world total -- and its government has been accused of moving too slowly against the disease.
Local subsidiaries of German auto giants DaimlerChrysler AG , BMW AG and Volkswagen have set up major HIV/AIDS programmes, encouraging voluntary testing of employees and offering support and treatment to those infected.
DaimlerChrysler South Africa (DCSA) whose motto is "HIV/AIDS Is Everybody's Business" spends about three million rand ($420,000) annually to provide anti-retroviral (ARV) drugs to the estimated nine percent of its workforce already infected.
The company employs about 6,000 people and retrenched workers receive AVR therapy for two years after redundancy.
"We decided on giving anti-retroviral drugs to our employees because of the government's policy at the time. It (the government) wasn't providing AVR therapy ," Mike Folan, DCSA group human resources manager told Reuters.
"The management board of DCSA gave a guarantee to people who were retrenched from the company that they and any of their family members registered on the programme will continue to have benefits for two years and hopefully the government's programme will be in place."
SECOND-LARGEST INDUSTRIAL EMPLOYER
President Thabo Mbeki and other officials have questioned the severity of the HIV/AIDS crisis. But the government bowed to pressure in November and approved a national drug treatment programme to tackle a disease estimated to be killing 600 South Africans a day.
This has yet to be implemented. Volkswagen South Africa (VWSA) with am estimated workforce infection rate of six percent, has a similar programme to DCSA with an annual budget of about three million rand.
The Department of Trade and Industry (DTI) has acknowledged the role played by the three German manufacturers in stepping up South Africa's fight against AIDS.
"Several of the motor vehicle assemblers in South Africa have indicated a willingness to increase the outreach of these programmes," said the DTI's Gustav Meyer.
"We are aiming to roll out the HIV/AIDS programmes by the vehicle assemblers to the supplier base as well as the community. This will maximize the impact of efforts against HIV/AIDS."
Since 1998, German auto makers have invested close to seven billion rand in South African plants -- mostly to take advantage of a government incentive programme to boost vehicle exports.
The auto sector is South Africa's second-largest industrial employer, contributing about 5.7 percent of the country's 975.1 billion rand ($106.1 billion) gross domestic product (GDP) in 2001 and employing some 281,500 people.
DCSA, which in 2000 was awarded a contract to produce the right-hand drive model of the 'C' class Mercedes Benz, is bidding for a deal to manufacture the new 'C' class model - a major technical step forward for the South African operation.
"We are in competition with plants in Germany. We have put in a bid and there is no doubt that we have proven ourselves as a reliable supplier," said Niels Andersen, divisional manufacturing manager.
A decision on the bid is expected sometime this year. The DCSA plant in East London produces about 200 units a day and between 70 and 80 percent of the vehicles are exported to the United Kingdom, Japan, Australia and the rest of Africa.