Page 10 - IDC

10 CITY PRESS, 22 NOVEMBER, 2015

news Tony Abbott: For small businesspeople, less paperwork means

higher profits, boosted sales and more time with the family

A
PROJECT IN The IDC’s

PARTNERSHIP manufacturing
WITH THE industry funding
IDC Number of businesses 706

funded since 2010:
Number of businesses 137
funded in 2014/15:
Total investment since 2010:
R25.872 billion

Total investment in 2014/15:
R5.067 billion

created since 2010: 48 071
Number of jobs
created in 2014/15: 7 009
Number of jobs

24 511 Number of jobs saved since 2010:

= 1 000
3 431 Number of jobs saved in 2014/15:

COUNTING THE COST Integrated aviation manufacturing company Aerosud has survived the tough times, but had to shed jobs to do so PHOTO: LEON SADIKI

Mixed fortunes Businesses owned by women = 100

Number of
businesses funded:
R463.9 million
Total 49
investment:
for Aerosud Where those factories are:
Gauteng
Number of businesses: 265
Investment value:
R12.53 billion
Jobs created and saved: 35 501

Free State
Payment delays and technical problems nearly sank the company, but Number of businesses: 7
Investment value:
R952.1 million
thanks to intervention by the IDC, it is now in recovery mode Jobs created and saved: 1 554

North West
Number of businesses: 15
Investment value:
ZINHLE MAPUMULO R128.9 billion
From grass to grace Had to work twice as hard Jobs created and saved: 729
zinhle.mapumulo@citypress.co.za
very month, Aerosud produces 4 500 parts Limpopo
for Boeing aircraft, 10 000 for Airbus, Number of businesses: 17
25 000 parts for Safran Labinal Power Peter Ditsele Lydia Ledingwane Investment value:
Systems and 50 000 for Spirit Aerosystems. R1.01 billion
But five years ago, the company nearly Ten years ago, he was a security guard and Ledingwane grew up poor. Sometimes she Jobs created and saved: 1 143
Ecollapsed, leaving more than 800 lived in an informal settlement in and her three siblings, children of a bus-
employees jobless. Soshanguve. Today, he owns the driver father and unemployed mother, KwaZulu-Natal
Formed in 1990, Aerosud manufactures aviation-specific company that provides security services would come home from school and Number of businesses: 136
parts covering everything from structural fabrications, to multibillion-rand aviation parts there would be no food. Investment value:
composites, thermoplastics and airline interior systems to manufacturer Aerosud. Ledingwane (33) was determined to R3.46 billion
cockpit linings, cargo linings, wing tips and galleys – 98% Ditsele (38) began working for work hard so that one day she’d take Jobs created and saved: 10 626
of which are exported. The company has an annual Aerosud in 2005, earning R1 200 a her family out of poverty. After matric,
turnover of more than R1 billion. month. Now he is responsible for securing she studied to be a heavy-current Mpumalanga
Aerosud found itself in a major financial mess in 2010 the company’s premises – a sprawling electrician at Pretoria West College, hoping it Number of businesses: 25
after work on delivering components for the A400M collection of office buildings and workshops. would be her ticket out of poverty. Investment value:
military transport to the French Air Force stalled. Ditsele is the owner and managing director of Ratabatho Security But after the three-year course, she struggled for two years to find R572.2 million
Managing director Johan Steyn said: “This had to do Services, which employs 15 men and women. He attributes his rise “from a job. Jobs created and saved: 1 637
with issues of bringing a really complex system such as grass to grace” to the management of the company, who believed in him. Then she learnt of an opportunity for an apprenticeship at Aerosud.
an aircraft into being. It simply took much more effort “I loved my job not only because it was putting food on the table for The company was looking for young people willing to study aircraft Eastern Cape
than what they anticipated and they literally had me, my wife and two kids, but because it gave something to look sheet metal structure at Centurion College. She knew nothing about Number of businesses: 45
hundreds of suppliers worldwide designing such a forward to,” he said. “I wanted to live a better life.” the subject, but grabbed the chance. Investment value:
product in a real-time collaborative design space.” Last year, Ditsele registered his security company. Armed with various Ledingwane excelled and, by November 2005, was employed as a R2.8 billion
The French Air Force awarded Aerosud a massive short-course qualifications in security, which Aerosud had sent him on process operator assembling aircraft parts. Soon after, she was sent Jobs created and saved: 4 334
tender in 2006 to produce its fuselage linings, cockpit over the years, he felt ready to be the boss. to the Denel Centre for Learning and Development as part of an
linings, galleys and wing tips for the full lifespan of its In May, he resigned, but not before submitting his proposal to artisan apprenticeship programme. Western Cape
A400M. Aerosud worked together with local companies management. He promised to do things differently: proper access She returned to Aerosud a year later as a qualified artisan, one of Number of businesses: 184
Denel Aerostructures and Cobham SA, as well as other control, searching all cars, escorting visitors to reception and searching 20 a year the company was training. Investment value:
international companies in the deal. staff as they left for the day, as “sometimes things would go missing”. She worked her way up the ranks and today is a facility manager at R3.442 billion
“This was one of the biggest deals we had ever “I knew the 10-year contract between Aerosud and the existing the company – one of two women in managerial positions. Jobs created and saved: 17 058
received, not only because of the capital involved but security company was coming to an end and leveraged the opportunity.” But her rise to the top has not been easy. “I have had to work
[because of] the fact that we were a risk-share partner in Management was so impressed that they gave Ratabatho Security twice as hard ... because the job I do is dominated by males,” she said. Mali Russia
the A400M program – meaning that should anything go Services the contract. Ditsele and his team began work on June 1. “I guess what made me go forward was knowing where I came Number of businesses: 1 Number of businesses: 1
wrong, it would affect us negatively as well,” said Steyn. Ditsele says that, for the first time in his life, he is not worried about from and what I wanted in life. Investment value: Investment value:
“We did our best in delivering as per the contract, but what his family will eat. They have moved out of their shack into an “I know my parents did the best they could for us under the R159.1 million R95.8 million
due to the high level of borrowings on operating capital eight-room house he built in Soshanguve. circumstances and I am forever grateful to them. But to ensure that
for the A400M programme during 2007 and 2010, a Aerosud managing director Johan Steyn says they could not resist the vicious circle was broken, I had to study and work even harder.”
significant risk was realised in 2010. This was when the Ditsele’s proposal. “We saw an opportunity for enterprise development in Ledingwane thanks her bosses and colleagues for pushing her.
programme was delayed by three years due to design uplifting Peter to step up and form his own small business. We provide “If they had not seen what was inside of me and allowed me to
and technical development issues.” certain services to him, such as human resources and financial grow, I would not be sitting at board meetings with top management
Jaco Olivier, financial director at Aerosud, describes the [assistance] and he was coached in running a small business.” deciding on important matters for the company.”
delay, which “nearly caused Aerosud’s death”.
The company defaulted on an accumulated loan of
R55 million from the IDC, which they took to finance
their expansion programme. SA manufacturing must boom again
Fortunately, said Steyn, “the IDC understood what was
happening and it sort of gave us a ‘holiday payment’,
allowing us time to recover”.
“Between 2011 and 2012, the company managed to get The manufacturing sector employs about 1.75 million people, manufacturing sector employed nearly 360 000 fewer workers
a fair settlement with the customer and was then able to and last year accounted for 55% of the national export basket. than it did at the start of 2008. Despite this, it still accounted for Ethiopia
resume the repayments,” said Steyn. But the sector’s contribution has declined since the 1990s, 11.4% of overall jobs. Number of
Although the A400M project nearly caused Aerosud’s unlike other developing regions, where manufacturing’s share in It is therefore crucial for local manufacturers to expand their businesses: 1
death, it also taught it valuable lessons. overall gross domestic product (GDP) is more than double that of global reach beyond traditional export markets. Investment value:
R157.4 million
“After the turbulence in 2010, we came out stronger on ours. South Africa’s trade with the rest of the world remains highly
the other side and learnt to be more efficient. This Last year, manufacturing accounted for 13.3% of South Africa’s concentrated, with the products of the 10 largest manufacturing Rwanda
period forced us to focus our strategies and set positive GDP. sectors accounting for almost 70% of exports. Last year, the top Number of businesses: 1
growth targets,” said Steyn. It is imperative that the downward trend in manufacturing’s 10 accounted for 63% of manufacturing exports, dominated by Investment value:
Unfortunately, this included retrenchments. From a contribution be arrested and reversed. motor vehicles and basic iron and steel. Manufactured exports R95.8 million
staff of 850, including engineers, technicians, aerospace The sector’s performance has been hindered in recent years by mainly go to the rest of Africa, the EU and the US. Namibia Mozambique
artisans and skilled machine and process operators, 660 weak demand from global markets and increased competition According to IDC estimates, South Africa’s exports to the rest Number of businesses: 3 Number of businesses: 3
people remain. from imported products. of Africa totalled about R290 billion last year, involving 241 000 Investment value: Investment value:
The IDC now has a 26% equity stake in Aerosud A weaker currency should lead to improved competitiveness direct jobs in the South African economy. R92.1 million R232.7 million
Holdings and its subsidiaries, Aerosud Aviation and and export performance, but with continued economic weakness The manufacturing sector’s role in accelerating economic
African Non-Destructive Testing, a move that allowed in the Eurozone, demand for South African goods has remained growth and contributing to transformation is recognised in the Lesotho Swaziland
them to make 200 black employees equity shareholders muted. Local consumption is also under pressure. National Development Plan and the New Growth Path, and Number of businesses: 1 Number of businesses: 2
in the organisation. With weak economic growth, a deteriorating consumer manufacturing enterprises are benefiting from strategic support Investment value: Investment value:
. This series is reported by City Press and sponsored by environment, strikes in key sectors, rising operating costs and under the National Industrial Policy Framework and its three-year R1.7 million R338.8 million
the IDC low business confidence, by the end of last year the rolling Industrial Policy Action Plans. – IDC THEUNS KRUGER, Graphics24