Page 22 - IDC

6 CITY PRESS, 12 JUNE, 2016

business The IDC’s Textiles Book
The IDC’s Chemicals and Pharmaceuticals Book

202 Number of businesses funded in the past five y ears 297 Total number of businesses
22 439 Number of jobs created and ssaved
11 924 Number of jobs created and saved
R3 278 923 286 Total investment
R3 618 888 013 Total investment
39 Number of businesses majority
57 Number of businesses majority o wned by black men owned by black men

1 Number of businesses majority o wned by black women 15 Number of businesses majority
owned by black women

WHERE THOSE BUSINESSES ARE WHERE THOSE BUSINESSES ARE

Eastern Cape North West Eastern Cape
Number of businesses: 10 Number of businesses: 11 Number of businesses: 15
Investment value: R304 003 335 Investment value: R98 206 457 Investment value: R193 833 234
Jobs created and saved: 532 Jobs created and saved: 348 Jobs created and saved: 1 1 23
Free State Northern Cape Free State
Number of businesses: 3 Number of businesses: 1 Number of businesses: 1

Investment value: R8 440 161 Investment value: R34 667 000 Investment value: R1 500 000
Jobs created and saved: 31 Jobs created and saved: 135 Jobs created and saved: 55

Gauteng Western Cape Gauteng
Number of businesses: 87 Number of businesses: 35 Number of businesses: 52
Investment value: R2 226 647 074 Investment value: R347 617 669 Investment value: R375 264 279
Jobs created and saved: 6 2 61 Jobs created and saved: 1 0 44 Jobs created and saved: 937
KwaZulu-Natal Botswana KwaZulu-Natal
Number of businesses: 35 Number of businesses: 1 Number of businesses: 99

Investment value: R551 250 069 Investment value: R166 074 955 Investment value: R1 440 476 982
Jobs created and saved: 1 9 86 Jobs created and saved: 6 8 58
Zambia
Limpopo Number of businesses: 1 North West
Number of businesses: 7 Number of businesses: 1
Investment value: R146 312 323
Investment value: R160 730 848 Investment value: R1 600 000
Jobs created and saved: 662 Zimbabwe Jobs created and saved: 0
Number of businesses: 3
Mpumalanga Western Cape
Number of businesses: 9 Investment value: R17 903 436 Number of businesses: 129

Shakeel Meer, t he IDC’s d ivisional executive r esponsible Investment value: R141 809 242 Investment value: R1 269 448 791
for chemicals, pharmaceuticals and textiles portfolio Jobs created and saved: 965 Jobs created and saved: 13 446
COBUS PRINSLOO, Graphics24

Textiles turn the tide

HOPEWELL RADEBE
hopewell.radebe@citypress.co.za
t has been teaching small and medium-sized businesses how world A
markets work to help them remain current and relevant, and now the
Industrial Development Corporation (IDC) is slowly reviving the country’s
textile sector, and growing the obstinate chemical and pharmaceuticals PROJECT IN
industries.
I Shakeel Meer, the IDC’s divisional executive for chemicals and textiles, PARTNERSHIP
says he is “cautiously optimistic” about these industries because they have
turned the tide. WITH THE
“We may not be another Bangladesh or China in terms of production of goods
such as clothing, but we have carefully worked with local business to identify BEST
certain unique niches where South Africa is beginning to be competitive within IDC DRESSED
the country and internationally. In those niche areas, opportunities are beginning These
to bloom for the South African clothing and textile sector,” Meer says. designs by
“Potential entrepreneurs need to identify where the gaps are in the sector and Bongiwe
deliver to satisfy the retailers, and blow away the end user with unique fashion Walaza were
products,” he says. presented at
Meer says that the IDC may not be able to keep the textile sector’s entire value Mercedes-
chain “vibrant, but we are certainly succeeding in building and tailoring some Benz Fashion
segments to revive it”. Opportunities Week last
He and his team are now identifying entrepreneurs who are eager to roll up year
their sleeves and participate. For those who are interested in getting involved,
Meer says gaps exist throughout the value chain from farming raw materials to are beginning to
spinning yarn, as well as in finishing and dying fabric, and producing end
products like clothing. bloom for the South
The value chain stretches from the farmer to the processor, and from the
manufacturer to the retailer. The IDC is targeting local partners to take advantage
of opportunities on offer and gets them to upscale, buy new equipment or African clothing and
improve and redesign their production lines to help them become more
competitive and cost-effective.
He says entrepreneurs need to track fashion trends and identify, for example, textile sectors and
the season’s hottest colours and styles to enable the value chain to quickly adopt
them. The IDC is encouraging and funding companies willing to venture into the entrepreneurs need
so-called fast fashion business – a contemporary term used by fashion retailers
who buy products from designers and order clothing that moves quickly from
the catwalk to the retail floor. to sew up their
Fast fashion clothing collections are based on the most recent fashion trends
often presented at trendy events around the world twice a year. It is not
restricted to clothing only, but includes accessories as well. advantage
“The clothing sector has proven to be very competitive, not just locally but
particularly on the international front, which puts a lot of pressure on the
margins. Unless you have identified a good niche for your business, it is very
hard to compete,” Meer says.
Although the textiles sector may be a tough one, some parts of the chemicals
sector can be tougher to crack, because of high barriers to entry.
The sector is divided into two units at the IDC. The first is the basic and
speciality sector, which involves the bulk supply of unprocessed products, which
are beneficiated downstream, such as ethanol and acids in their raw form. BUY LOCAL – IT’LL SAVE THE INDUSTRY
The second unit involves processed chemicals and pharmaceuticals.
Although the basic and speciality sector is difficult to enter, entrepreneurs
choose to join sections of the value chain by focusing on end-user products,
such as plastics, households cleaning products and cosmetics. This is where most HOPEWELL RADEBE collaboration, then business will not meet the retailers’
entrepreneurs jump in, and the IDC finds ways to fund or partner with them. hopewell.radebe@citypress.co.za CHALLENGES FACED BY needs or deadlines, and it will collapse.”
The chemical sector often contains highly specialised skills and is dominated ENTREPRENEURS Meer admits that the industry has been under a lot of
by larger companies that focus on providing huge volumes of product. A number The IDC has been working with clothing and textile pressure from other factors as well, such as illegal
of these are multinationals targeted by the IDC and the department of trade and union Sactwu, related business sectors and government . It is crucial to do some basic research, including talking imports, so it has roped in the authorities, including the
industry to come into South Africa to invest and create jobs. to forge a common plan to rebuild the country’s to potential customers and retailers, Meer says. SA Revenue Service’s customs unit, to improve the
The IDC has established that there is room in this complex and well- textile sector. . You should not assume that customers will simply want policing of illegal imports.
established industry for highly specialised smaller companies – either stand-alone “It’s a known fact, and every stakeholder appreciates to buy anything you manufacture. However, the last step in reviving the local textile
firms or locally based subsidiaries of large multinationals – to produce niche or that it has been in serious trouble,” says Shakeel Meer, “Customers are the starting point and successful business sector lies with the South African consumer.
speciality products. the IDC’s divisional executive for chemicals and textiles, finds ways to convince customers that their products are “The industry needs consumers to buy locally
On the pharmaceutical front, Meer says the sector needs a lot of technical adding that it involved retailers, unions and the unique,” Meer says. manufactured clothes. They are a critical element in the
expertise because the products are often medicinal and the business department of trade and industry in its discussions. . You must understand the customer. You should strive to sustainability of this sector,” he says.
environment is fraught with regulation – for good reason. Meer says the IDC has been managing a specific respect their tastes and preferences, and ensure that you Meer believes companies have stepped up to the plate
The industry has high safety standards and many products require specialised department of trade and industry budget, which is talk to people and retailers, and get them to try your and are beginning to produce quality products that
licences that detail strict specifications, technical requirements and skills, as well designed to revitalise the textile industry. samples. compete with the best in the world.
as the ability to handle, package and transport the products. The main focus has been on ensuring that businesses . You should bear in mind that the process may be slow, “We have excellent designers in South Africa whose
However, in the area of chemical products used by households, there are become more competitive through improved equipment and a plan is needed to survive the first three to five years. products are in demand internationally,” he says.
many that can be manufactured in a garage – which is how entrepreneur and processes and incorporate international best Research locally and internationally has proven that most The IDC has become involved in the clothing and
Herman Mashaba established Black Like Me. practices. companies fail within two to three years of being textile sector because the banks have been reluctant to
While this is not typically what the IDC would fund, says Meer, he A significant and strategic shift was needed to established. finance it.
acknowledges that it has been a starting point for some entrepreneurs who have improve the country’s competitiveness if the local textile . The IDC is looking for entrepreneurs who have done the “The sector was undoubtedly going down, but the
grown into formidable businesses. industry was to be saved from total collapse. basics and know exactly what businesses they need to initiatives over the past few years have brought
Meer says that if an entrepreneur starts with just a single piece of “We believe that the unions are on board because establish, and you should be prepared to change your stability,” he says.
equipment to produce a single product for a particular customer, they should do they understand that if the textile industry does not plans or approach should the world change. “Hopefully, we will sustain this momentum and make
their utmost to be consistent, and ensure quality and a reliable supply to compete on an international stage, many workers will “You might need to modify your plan in line with the it grow. Not forgetting this difficult economic path, we
customers. be out of a job,” Meer says. changing business landscape,” Meer says. – Hopewell are convinced that companies in South Africa are
“Compared with the basic and speciality chemicals sector, consumer products “Local suppliers of materials and textile Radebe becoming more competitive, and retailers are realising
are fairly easy to enter, but they are very difficult to sustain,” he says. manufacturers know that if there is no buy-in and the value of products made in South Africa.”