MTHEMBU TISSUE CONVERTING
MTHEMBU TISSUE CONVERTING
Epic To
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KwaZulu-Natal’s Black-owned Mthembu Tissue Converting (MTC) has come from zero to the point where it is ready to challenge the market giants. For its former township boy founder and CEO, General Thembinkosi Mthembu, turning challenge into success is the story of his life. 2 / www.enterprise-africa.net
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INDUSTRY FOCUS: MANUFACTURING
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Africans need to consume what they make, and make what they consume. The recent rallying call from Transnet Engineering’s Thamsanqa Jiyane, is also a fervent theme of one of South Africa’s most remarkable manufacturers - General Thembinkosi Mthembu, CEO of Kwa Zulu Natalbased, Mthembu Tissue Converting. “I am not happy with South Africa being a country that consumes when there’s an opportunity for manufacturing,” says this 2017 All Africa Business Leaders Awards (AABLA) ‘Industrialist of the Year’. “This will not turn our economy round. If we continue to be a consuming nation, we are not moving forward. If you consume you are not creating jobs.” Mthembu is the entrepreneur who bought the company that retrenched him - Nampak Tissue’s Durban operation - moved on to establish the 100% Black-owned Mthembu Tissue Converting (MTC), and turn R6m losses of his old employer into a turnover of R240m–plus. Twelve years on and MTC is producing one and two-ply toilet paper, serviettes, kitchen and paper
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// YOU CANNOT BUY NEW MACHINES AND STILL HAVE A STRATEGY FOR GROWTH IF YOU LEAVE PEOPLE BEHIND. A BUSINESS WITHOUT PEOPLE IS NOT A BUSINESS // towels, wipes and facial tissues. With a staff of 110 and a 10-15% yearon growth, its sights are firmly on achieving world-class status. WHERE IT BEGAN It’s all a long way from Umlazi, the KwaZulu-Natal township where General Thembinkosi Mthembu was born. This is a Horatio Alger story, the 19th century American writer of young adult novels about impoverished boys, and their rise from humble backgrounds to lives of middle-class security and comfort through hard work, determination, courage, and honesty. For this South African township boy, growing up was tough. Setting out for school his mother would give him a pack of biscuits to sell during break time. “She would say, if you don’t sell there will be no money to buy your school uniform.” At weekends, the young
Mthembu sold fruit at the local railway station. Graduating from high school, he went to work as a dayshift packer in a production line at Nampak Tissue where his father worked. Home at 3pm, the teenage nascent businessman began to look for out-ofhour’s opportunities. Noticing there was no food truck at a next-door clinic, he researched what people would like to eat, “and from there, I had a business plan.” With a bank loan he bought a caravan. Business boomed. He then bought a pickup truck, installed seats and used it as a taxi. Within two years he had saved enough to buy a minibus which he also operated as a taxi. The young entrepreneur was on a roll. In 1995, while still working at Nampak, Mthembu bought a petrol station. Unsurprisingly, his enterprise did not go unnoticed at his day job, winning promotion to plant manager
MTHEMBU TISSUE CONVERTING
// I AM NOT HAPPY WITH SOUTH AFRICA BEING A COUNTRY THAT CONSUMES WHEN THERE’S AN OPPORTUNITY FOR MANUFACTURING //
pay. But his self-belief and resolution never wavered. “The biggest lesson in my entire journey is to remain focused, always follow business goals, and have systems in the business that work well.” His faith was backed by the Department of Trade and Industry, whose pivotal support for the installation of new machines and
modern technology has enabled MTC to triple production and upscale manufacturing capability. And two months ago the DTI was back with a R13m-plus grant from its Black Industrialists Scheme one of over 100 businesses that have benefited from BIS since its launch in 2016 – and targeted at the launch of MTC’s Cloud Nine brand portfolio.
at the Durban Nampak facility. But the operation was running at an annual R6m loss, and along with 70 employees, Mthembu was made redundant. Invited to move to manage its Pretoria plant, the local boy making good, declined. “I was born in KZN and couldn’t see myself living in Gauteng. I don’t believe that to succeed you must move to Gauteng. You can progress anywhere as long you work towards your goals. “After two weeks, Nampak came back to me and said ‘what about you buying these machines, converting the same product and selling back to them?’ We were left with no option since the business was losing money closing down.” CHALLENGE AND RESPONSE But this was no desperation plunge: Mthembu understood the operation and was confident he could achieve profitability. After two months of financial analysis, the papers were signed and in 2006 Mthembu Tissue Converting emerged, a BEE initiative in a challenging market. A blessing in disguise? “Yes I think it was. It was never my plan to work for a boss until I died, and this opportunity came through at the right time.” The early years were tough; recruitment was difficult, old Nampak suppliers pulled out, inherited machinery was inefficient, and for three years Mthembu worked without
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“I firmly believe that Mthembu Tissue Converting will continue to contribute significantly to building the local economy of this region,” said Deputy Minister of Trade and Industry, Bulelani Magwanishe. For Mthembu, the BIS injection is a “dream come true. It has given us an opportunity to get in equipment that gave us the speed we were looking for, and helped a lot in making sure the business could move to the next level, and so compete with the big guys in the market.” Prominent among the Big Guys is the ‘Baby Soft’ brand, manufactured at Kimberly-Clark South Africa’s plant at Springs, Gauteng. “While we produce at the level of ‘Baby Soft’, the only
disadvantage is that ‘Cloud Nine’ is a new brand as opposed to’ Baby Soft’ which has been on the market for something like 50 years.
General Thembinkosi Mthembu Founder and CEO
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GIANT SLAYING “We are fighting a giant, and so it’s not easy to make an impact. However, by persistence, and
MTHEMBU TISSUE CONVERTING
ensuring our processes and systems are delivering a quality product, I have no doubt that we will definitely meet that challenge.” The recent ‘Platinum Technology Award, for Quality and Best Trade Name’ from the Paris-based Otherways Management Association, suggests MTC is fast off the block. “Yes, we are rather proud of this award, and it gives us the opportunity to be recognised in the commercial world, which is very good for a growing company like ours.” As an innovative and skillsdriven organisation, MTC invests continuously in state-of-the-art machinery, product research and development. “Last year we invested about R47m in equipment, and have another five to six million coming in. “However, I think we will then put a little bit of a break for 18 months, and look at expansion by having a full range in our basket. After that we will be looking at how things are going in the economy, and then hopefully, going full stream on further investment in our business. “Continuous investment in this industry is essential. Things change so quickly in this market, and if you don’t invest, you die.” Recruitment and training are among other key drivers. “There are not enough skills coming into the business to ensure its stability going forward. This is our biggest problem, and our response is to develop our own people once we have taken them on. “We put a lot of emphasis on training and furthering careers in the company, and this year alone we are looking at investing R800,000 on training and development.
// MY VISION WAS THAT BY 2020-23 THIS WOULD BE A BILLION RAND TURNOVER BUSINESS //
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“We want to make sure our people are well equipped. You cannot buy new machines and still have a strategy for growth if you leave people behind. A business without people is not a business. It is also our policy to help small, emerging companies that have good business ethics, to grow and choose them as our preferred suppliers, and as a company, give back to the community.” THE RAMAPHOSA EFFECT Earlier Mthembu had spoken about forward planning and keeping an eye on the South African economy. Does he feel more confident about prospects since the arrival of President Cyril Ramaphosa? “Oh yes, there’s no doubt about that. Where we are right now is the misery of what has happened in the past. “The Rand is still struggling of course, and petrol prices are rising almost every month, which is not good for the economy. An extra 25 cents a litre takes unbudgeted money out of salaries and wages and slows down the economy even further. “However, we are quite confident that things will turn around; it’s
just a matter of us holding on. The Government we have right now is determined to wipe off the corruption - which is the biggest problem in this country. Once this has been cleared I do not think we will struggle to do well in the economy.” EXCELLENCE AND DIVERSIFICATION Meantime MTC continues to grow, with an eye on diversification, and pursuing its mission – ‘Together re-defining excellence – every time; on time.’ “My vision was that by 2020-23 this would be a billion Rand turnover business. But looking at how the economy is likely to perform from now and through the next five years, I cannot see that this will happen. “So in that sense we have delayed it a bit, and we are now aiming at a R1b–R1.5b world class ISO business by 2028. “Whenever I think about business, I’m always thinking four, five, 10 years down the line.”
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