Collaboration in LEPHALALE: Big Business Collaborates to Unlock SMME growth

Lephalale’s economic prospects changed dramatically after Eskom’s Medupi power station came to town. Since 2007, the vast construction project has attracted thousands of workers to the Limpopo settlement, formerly known as Ellisras, searching for income and future spin-offs from the multibillion rand coal-powered station as well as the expanded Grootegeluk coal mining operations of diversified resources company, Exxaro.

Less publicised but equally important than the might of Medupi to generate jobs and electricity, is the collaboration of big name corporates with local black entrepreneurs to create sustainable businesses in the region.

The likes of Anglo American, Mitsubishi Hitachi Power Systems Africa (MHPSA)and Exxaro together with Shanduka Black Umbrellas (SBU) are supporting 100% black owned businesses to achieve their goal of self-sufficiency using collective corporate muscle to produce inspired and sustainable results at the Lephalale Enterprise Development (ED) Centre.

 

The Lephalale ED Centre is a co-branded, multi-functional business hub and SBU incubator partnership with the Sebenza Fund (run by Anglo American’s enterprise development arm, Zimele) together with MHPSA and Exxaro.

It is one of eight nationwide incubators, supported by over 300 funders, serving 100% black owned businesses, who receive office infrastructure, bookkeeping, assistance with compliance, training, mentoring and access to networks, markets and finance in exchange for a subsidised fee and the actualisation of viable employment-generating businesses.

Enterprise Development Manager at Shanduka Black Umbrellas’ Lephalale incubator, Abel Tshimole says, “There has been positive job creation from companies like Thlokapelaelo Projects and Plants, Hula Minerals Processing, Sunglide 68 CC, Keagile Trading, and Setumishi Building Construction and Enterprise to name but a few.”

Says Abel: “Being associated with a national brand like Shanduka Black Umbrellas gives these businesses a market presence and access that may not otherwise have been readily available. It also creates opportunities to think differently about their businesses, including less reliance on one client by diversifying their revenues.

“We have businesses that are generating more than R1.5 million per year, and some that have moved from less than R10 000 per month to R200 000 and more. This is accompanied by the creation of 75 permanent jobs over a 6 to 8 month period.”

Companies like Sunglide 68cc, the brainchild of entrepreneurs Elliot and Elizabeth Senwamadi, have directly benefited from their SBU incubation and its paradigm of collaboration. The company specialises in the supply and servicing of portable toilets to large projects as well as the provision of general construction material and maintenance to its clients.

Elliot says: “Exxaro awarded us a three-year contract and we also approached Hitachi who applied for funding on our behalf from Anglo American’s Zimele”. The company currently has 20 employees and Elliot foresees great opportunities within the manufacturing sector into the future.

Speaking on behalf of Anglo American’s Zimele, Managing Director  Hlonela Lupuwana explains: “The partnership at Lephalale is a great enterprise development model for the country. It is collaboration at its best. We do supplier development for Exxaro and work together with the local government and entities to capacitate and train SMMEs. Our partnership has already created over 75 new permanent jobs in less than a year.”

Lupuwana says: “Zimele has provided working capital funding to Sunglide 68cc at developmental interest rates, as well as mentorship support in many areas such as commercial aspects, compliance, governance, marketing, strategy and accounting. Our funded businesses leverage off the strong association with Anglo American’s Zimele and the good track record Anglo American has built over more than 25 years of enterprise development.”

The all-important goals for South Africa’s economic development are the establishment of sustainable businesses and the creation of jobs in order to drive economic growth both regionally and nationally. Business incubation is an essential tool in the SMME development armoury as it offers all the buffers against failure so common to start-ups.

“The advantage of this collaborative approach is that it lends itself to economies of scale and removes wasteful duplication, thus allowing all role players in an area to achieve their common goal of socio economic development in a more meaningful and effective way,” says Ramesh Chhagan, Exxaro’s Group Manager for Community Development.

 

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