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Why Is It Important To Grow Manufacturing?

Manufacturing Indaba will take place at the Sandton Convention Centre in Johannesburg on the 19th and 20th of June, 2018 and will be facilitated with the collaborative backing and strategic partnership of the Department of Trade and Industry (the dti) and the Manufacturing Circle, a corporate association of manufacturers.

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One of the aspects of the conference will be to focus on South Africa’s manufacturing as a fundamental driver of GDP growth and associated with direct employment, as many services sectors are likely to increase their employment capacity on the basis of an increased GDP.

Newly elected President Cyril Ramaphosa delivered his maiden State of the Nation Address (SONA 2018) and alluded to addressing the decline over many years of South Africa’s manufacturing capacity, which has deeply affected employment and exports. As a result, poverty levels have risen, economic growth has weakened, with the President stating that it has become imperative to re-industrialise on a scale and at a pace that draws millions of job seekers into the economy. Unemployment levels have risen due to looming investment downgrades; hence he emphasised the need for a focus on local manufacturing and production.

Nicholas Kaldor (Zalk, 2014) developed a set of hypotheses to explain the central role of manufacturing in the process of economic development. He contended that manufacturing reveals a unique characteristic: The capacity to generate ‘dynamic increasing returns’, displaying a positive correlation with GDP growth while other primary and tertiary sectors generally do not. That is, indicating that the faster the rate of growth of output in manufacturing, the faster the rate of growth of both manufacturing and economy-wide productivity (Thirlwall, 1983, as cited in Zalk, 2014). Thus, clarifying that manufacturing is the core driver of GDP growth and employment while other sectors, particularly many services sectors are only likely to grow on the basis of the growing demand derived and resulting from an increasing GDP. Therefore, growth and employment in most services sectors follow rather than lead growth in GDP (Zalk, 2014).

Related: Aluminium Door And Window Manufacturing

In accordance with the vital importance of this sector’s encouraged growth, the President undertook to promote greater investment in key manufacturing sectors through the strategic use of incentives and other measures. Accordingly, and further stimulating manufacturing by forging ahead with the localisation programme, through which products like textile, clothing, furniture, rail rolling stock and water meters will be designated for local procurement. Ramaphosa also reiterated that the country had spent more than R57 billion on locally-produced goods that otherwise might have been imported from other countries.

The Industrial Policy Action Plan (IPAP) 2017/18 – 2019/20 report as part of the National Development Plan (NDP) 2030 outlines sector specific goals and a vision for South Africa to be achieved by the year 2030 and referred to inherent structural challenges within the economy that remain difficult to overcome. These challenges include weak growth and domestic demand reflecting and contributing to persistent unemployment, resulting in unsustainable race and gender-based inequality and rural marginalisation. Value-add in manufacturing lagged behind the economy as a whole from 2008, and investment in manufacturing has declined since the global credit crisis. The IPAP report also indicated that investment as a share of GDP is also below the 25% level required for sustained economic expansion.

In light of this aspect, Ramaphosa at SONA referred to the special economic zones that will remain important instruments that SA will use to attract strategic foreign and domestic direct investment and build targeted industrial capabilities in order to establish new industrial hubs. He also emphasised that the process of industrialisation must be underpinned by transformation, and that through measures like preferential procurement and the black industrialists programme, a new generation of black and women producers will be able to build enterprises of significant scale and capability.

The objective industrial financing and incentive support has played a key role in supporting private sector investment and black economic empowerment in critical industrial areas. Another example and a high point of 2016/7 has been the Automotive Investment Scheme with R8.7bn on investment leveraged through 2 new projects with an estimated investment value of R548.9m, projected to create 1 140 jobs. Included in this buoyant mix is the Manufacturing Competitiveness Enhancement Programme (MCEP) which has reopened a R1bn loan component with 270 projects supported, and R8.24m disbursed thereby supporting R3.38b of investments & 62 2353 jobs.

Related: What steps do I need to take to start manufacturing toilet paper?

Bearing these examples in mind, and Ramaphosa’s affirmation at SONA that, “…at the centre of our national agenda in 2018 is the creation of jobs, especially for the youth”, Philippa Rodseth, executive director, Manufacturing Circle (2016, in The importance of Manufacturing for SA’s economic growth), stated that in order to promote a resilient, sustainable manufacturing environment, three goals were identified in order to secure the long-term sustainability of South Africa’s manufacturing industry.

Hence, these following aspects will ultimately contribute to the economic growth of the country-: the achievement of a competitive manufacturing environment, the attainment of a supportive international trade position and the advancement of the reputation of SA manufactured goods.

These issues and other pertinent topics relating to Manufacturing in South Africa and the continent will be considered, evaluated and debated at the upcoming prestigious Manufacturing Indaba conference in June, in this year of “hope and renewal.”

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Entrepreneur Today

Stormers’ Siya Kolisi: On Being An Entrepreneur And Employer In SA

Many sportsmen only begin thinking about other sources of income after their professional sporting careers draw to an end, Springbok Siya Kolisi has opted for a head start.

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Stormers captain Siya Kolisi has branched out into small business ownership with Frankees: A designer underwear brand with a South African spin. This is Kolisi’s first business venture, which adds him to the ranks of many South African ‘slashers’ who have alternative sources of income to their day jobs. With a current unemployment rate of 26.7%, SME business owners play an increasingly important role in uplifting South Africa’s economy and tackling unemployment.

Ahead of Workers Day on 1 May, Kolisi chatted about being an entrepreneur and employer at the Cape Town Live Better Talks sponsored by Capitec Bank – a bank that partners with business owners to offer smart banking solutions to employees. In SA, SMEs comprise 90% of formal businesses currently and could catalyse 90% of all new jobs in the country by 2030 – especially if President Ramaphosa delivers on his promise to remove current barriers to small business growth. So ventures like Frankees have the potential to make a big difference.

Related: 8 Lessons Rugby Can Teach Us On Achieving Peak Performance In Business And Life

Here’s what Kolisi had to share:

Tell us a bit more about your new business venture and why you decided to found it?

SK: I founded Frankees, a designer underwear company, with my former class and teammate Tim Whitehead. He originally approached me to be the face of the business, but when I looked closer at the business model I saw the opportunity that existed and brought my full skillset on board in exchange for 50% ownership.

It was an easy decision because Tim and I have walked a long road together, I can trust him, and, after a good business model, trust is the most valuable business commodity.

How do you balance playing rugby and managing a business?

SK: I’m not going to lie, it’s tough. You’d think that investing your money in a good business model is sufficient but that’s only the starting point. I’ve learnt that you have to work hard to make your money work for you.

Tim and I split up our roles based upon what comes naturally to us – this makes it less taxing. I focus on marketing and networking. It’s taught me perseverance and persistence. Having someone famous post a picture in your underwear on social media can have a big impact, but they are also usually very busy so it takes a lot of effort to get the photo out of them.

It sounds like you’re learning a lot along the way, what has been your biggest lesson?

SK: You need to set boundaries about who you listen to. There’s a lot of negativity out there and if you’re not careful people can talk you out of your business idea. I’ve chosen a select few people to walk this journey with me and their advice is the wisdom I value.

Do you think an employer has a responsibility to financially upskill employees?

SK: I do, but only if they’re open to having the conversation. I think there’s a lot to be said for transparency: As an employer, you need to be open about what’s working and what’s not. When things fail, you need to talk about the lessons you learn from the experience. From a financial perspective, I try to ask my staff about their future plans – whether they want to start their own business or pursue an educational venture of some kind, etc. – and offer gentle advice from my own experiences, if they’re open to this. I think, as always, there’s a lot to be said for leading by example. I talk about the way my family is saving and investing in our future. I also am open about the company finances: The importance of cash flow, plus insurance, emergency funds and all those key components to getting a new company off the ground.

Related: 5 Things Businesses Can Learn From Rugby

What role do you think SME’s play in the economy?

SK: Small businesses are very important not only for providing job creation, but they drive innovation and efficiencies in our economy. They have the largest potential to move people out of the poverty cycle of structural unemployment but one must be brave starting up a business because it’s not easy.

Personally I’ve been driven by the need to ensure I can always provide for my young family, even after I hang up my boots. I’m also passionate about being a change maker – running a successful business at scale will result in the ability to employ more staff thus creating jobs and empowering people.

What’s one lesson you hope to impart to your employees and other hopeful entrepreneurs?

SK: Always be on the lookout for creative ways to diversify your income; it is possible to hold down more than one job or to begin something small on the side to add to your income. Don’t wait until you’re confronted with a problem – begin now and be proactive.

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Entrepreneur Today

Attention Female Entrepreneurs In SA – Fairlady And Santam Are Looking For Entries!

Entries are now open for the FAIRLADY Santam WOMEN OF THE FUTURE 2018 Awards.

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FAIRLADY and Santam are once again calling for female entrepreneurs: three amazing women who have taken the leap to work for themselves and are now creating opportunities for others – and boosting our economy!

‘South African women are such an impressive bunch – each year I’m blown away by what our entrants have achieved, and not only in “traditional” female businesses like design and PR. They’ve done everything – from starting giant construction firms to filling transport gaps with innovative ideas and a whole host of other genius businesses along the way. They are amazing,’ says FAIRLADY editor Suzy Brokensha.

Related: Funding And Financial Assistance For SA Women Entrepreneurs

The FAIRLADY Santam Woman of the Future 2018 award goes to an entrepreneur, 30 years of age or older, who has overcome the challenges of the first three (3) years as an entrepreneur and made it beyond 1 000 days in business. The prize comprises R50 000 cash, an invaluable mentorship session with one of the judges, an Issey Miyake fragrance hamper worth R6 990, an IMM Graduate School short course worth R15 000, a Michel Herbelin watch worth R10 500, a Karissa Biz Bailhandle and Spinner from Samsonite worth R7 298, a Madrid ladies handbag and purse from Jekyll & Hyde valued at R4 799, a Cross pen worth R2 500 and one media training session.

Mokaedi Dilotsotlhe, Chief Marketing Officer at title sponsor Santam says, ‘As a company that has been in the business landscape for 100 years, we support entrepreneurship as it is vital to the growth of the country’s economy. Entrepreneurs are the bloodline of economic growth – they are the source of job creation and engines of innovation. We value our partnership with FAIRLADY in the Women of the Future initiative – now in its fourth year – as it gives us a platform to honour entrepreneurs who are positively impacting our nation.’

The FAIRLADY Santam Rising Star 2018 Award goes to an entrepreneur between the ages of 16 and 30 whose business is older than six months but still within its first 1000 days of business. The prize comprises R20 000 cash, an invaluable mentorship session with one of the judges, a Issey Miyake fragrance hamper worth R6 990, an IMM Graduate School short course worth R15 000, a Michel Herbelin watch worth R10 500, a Karissa Biz Bailhandle and Spinner from Samsonite worth R7 298, a Madrid ladies handbag and purse from Jekyll & Hyde valued at R4 799, a Cross pen worth R2 500 and one media training session.

‘There’s a new optimism in South Africa, but at FAIRLADY we have always been optimistic. We’re all about the future, and we believe in the extraordinary power of women to create the future we want for ourselves and our children in this country. We award success, but we also award potential (the Rising Star award). This year I’m delighted to say we’re also including the social entrepreneurs who are using their businesses to contribute to their communities.’ says Brokensha.

Related: 10 Successful SA Women Entrepreneurs’ Top Advice On Balancing Work And Family

The FAIRLADY Santam Social Entrepreneur 2018 Award goes to an entrepreneur whose business is making a real difference in her community. She must be 30 years or older, and her business must have survived its first 1 000 days in business. The prize comprises R20 000 cash, an invaluable mentorship session with one of the judges, an Issey Miyake fragrance hamper worth R6 990, an IMM Graduate School short course worth R15 000, a Michel Herbelin watch worth R10 500, a Karissa Biz Bailhandle and Spinner from Samsonite worth R7 298, a Madrid ladies handbag and purse from Jekyll & Hyde valued at R4 799, a Cross pen worth R2 500 and one media training session

Entry forms and terms & conditions are available on www.womenofthefuture.co.za.
Entries close on 8 June 2018.


fairlady-magazine-cover-for-mayThe general public can now nominate a female entrepreneur for entry into the Woman of the Future,
Rising Star or Social Entrepreneur Awards. Nomination forms can be found on https://www.womenofthefuture.co.za/nominate-now/

For full details, get the latest issue of FAIRLADY magazine, on sale now!

Follow FAIRLADY on Facebook www.facebook.com/fairladymag, @FairladyMag on Twitter, and @Fairlady_Magazine on Instagram.

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The Big Issues Facing SA’s Small Business

There’s no lack of entrepreneurial spirit in SA, but start-ups and small businesses need skills, social capital and a supportive environment in order to succeed.

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It’s a popular misconception that funding is the biggest hurdle in the way of small business success: in fact, knowledge and networks may be more important. This is according to small business experts and members of the Small Business Expo expert advisory board, speaking ahead of South Africa’s premier small business development platform – Small Business Expo 2018.

The expo, taking place from 6 – 8 September at the TicketPro Dome is an annual opportunity showcase and knowledge-sharing platform for local small and medium sized businesses, is presented by Reed Exhibitions in partnership with the Eskom Development Foundation. It is further supported by the Randburg Chamber of Commerce and Industry, and Minara Chamber of Commerce; endorsed by the Black Management Forum (BMF) and approved by AAXO.

Related: The Next 5 Steps To Take After You’ve Been Denied A Small Business Loan

According to Langa Manqele, FinTech businessman and chairman of the Black Management Forum (BMF) in Gauteng, entrepreneurial spirit is flourishing across South Africa, including in the townships and rural areas.

“A trend we’re seeing emerging is for entrepreneurs to launch small scale manufacturing and agro-processing operations around the country.” This is in line with the government’s hopes for a more industrial economy, and presents many opportunities for job creation, he notes.

“Unfortunately, though, many start-ups are failing to break through into big business, and many are failing to comply with testing and safety standards. This may be partly due to a lack of awareness and information, and also because safety and standards infrastructure is out of reach of rural business, as well as being prohibitively expensive.”

Manqele believes that stepped up information sharing, skills development and networking, such as that available at the Small Business Expo, may help these start-ups break through into the big business league.

“This is why the BMF is endorsing the Small Business Expo,” he says. “Because of its focus on the development of black business in particular, along with its three days of in-depth workshops and opportunities to network, we believe it’s an invaluable platform for small businesses to gain the knowledge and social capital they need to grow. Capacity building is a major challenge, and the number of startups able to be absorbed by incubators doesn’t meet the national needs; therefore events like these fill the gap for critical business skills development.”

Linda Blackbeard, CEO of the Randburg Chamber of Commerce and Industry (RCCI), which represents businesses in Randburg, Fourways and Lanseria, echoes this sentiment. “Small businesses need partner networks in order to grow. Joint ventures, for example, allow them to take on bigger projects than they might manage alone. And through partnerships with large business, they stand to gain viable income streams.” But many do not know how to tap in to this ‘social capital’ or partner networks.

Blackbeard says belonging to an industry body such as the local Chamber of Commerce is a key first step to expanding partner networks. Another is to participate in industry events.

Related: Get Your Small Business VAT-Ready Without The Headache

“The Small Business Expo is a very important platform for networking, learning and skills development,” she says. “No matter how long you’ve been in business, systems and markets change and there’s always something new for us to learn so that we can operate more effectively.” She notes that marketing is another area where many small businesses fall short, making the networking and exposure opportunities at the Small Business Expo invaluable for small businesses.

BMF and RCCI will be present at the Small Business Expo, where small business can discover the benefits of joining the organisations.

Carol Weaving, MD of Reed Exhibitions, says building social capital and business capacity is the primary function of the Small Business Expo and co-located #BuyaBusiness expo. “Empowering small businesses to grow, has always been the focus of this event, which is closely aligned with the work of show partner, the Eskom Development Foundation. As the expo has evolved, we have increased our efforts to deliver a practical development forum that delivers tangible results for all participants. This year, the programme has been shaped with input from business experts across small business umbrella bodies, chambers of commerce, banks and entrepreneurs, all working towards a common goal of growing businesses in South Africa.”

Small Business Expo will include multiple development forums and workshops, including the Creative Business Cup, Nedbank Money Matters Workshops; Standard Bank Women in Business Theatre; Eskom  “Powering your World Indaba” and a Business Services Theatre.  In addition, the expo will showcase the Business Services Expo & #BuyABusiness Expo as well as offersa #THEClub VIP investors’ programme, business speed dating, online business matchmaking and dedicated networking areas.


About the Small Business Expo

The Small Business Expo, showcasing the Business Services Expo and #BuyaBusiness Expo, is devoted to the development of small and medium sized enterprises, providing an invaluable platform for small and medium businesses to market themselves, network and connect with entrepreneurs and interact with prominent business leaders and representatives from a number of corporate companies. The Small Business Expo is presented by Reed Exhibitions in partnership with the Eskom Development Foundation and will be held from 6 – 8 September 2018 at the Ticketpro Dome, Northgate.

The expo is supported by the Randburg Chamber of Commerce and Industry and Minara Chamber of Commerce, and is endorsed by the Black Management Forum (BMF) and approved by AAXO.

For more information, visit https://www.smallbizexpo.co.za/

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