SA Business Integrator - Volume 10 l Issue 1 by Media Xpose

9 772411 292008

24012

R75.00 Incl. VAT

A B U S I N E S S I N T E R A C T I O N P U B L I C AT I O N

Volume 10 | Issue 1 January 2024

The disintegration of the STEEL

needs privatisation for economic revival

INDUSTRY

Auxiliary

National

PROJECTS are essential

logistics crisis

to rural infrastructure development

Is business

transformation

working?

CHECK OUT FLIP

E’lique Advisory

A B U S I N E S S I N T E R A C T I O N P U B L I C AT I O N

Volume 10 | Issue 1 | January 2024

Enabling

GROWTH for SMEs COVER FEATURE

Information

9 772411 292008

24012

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Innovation

Inspiration

JOBURG LOOKING UP: COJ COMMITTED TO DRIVING GROWTH IN

Information

Innovation

Inspiration

Transformation

The newly renovated Cape Point Vineyards boasts beautiful views of the Atlantic Ocean, fynbos and vineyards. It is the perfect venue to host your corporate event. We can accommodate up to 300 people. +27 (0)21 789 0900 l www.cpv.co.za l

Ed's NOTE

Dream Big

Conquer the Digital realm We're more than a company We're a driving force that propels dreams into digital reality. -

Tashne Singh

South African Business Integrator

2024 a year of hope There is no doubt 2023 was a challenging year for many. It seemed as if every week there was a different crisis, and as South Africans we have no option but to illustrate high levels of resilience and forge on. Looking back on 2023, the questions that arise include: For how much longer can businesses and individuals remain resilient? Will there ever be true accountability for the crises we face as South Africans? What is required to rectify the challenges we face?

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The last question is particularly critical, as not all hope is lost. South Africa has always been and remains a country with immense potential. However, the connection between the public and private sector falls flat. The private sector has the capacity and talent to make things happen, effectively and efficiently. This could be attributed to higher levels of accountability. The public sector has some decent policies that seek to bridge divides on socio-economic levels, but for the most part is notoriously poor at implementation – and is known for high levels of corruption. But, how can this collaboration between the two be strengthened? The private sector cannot fully thrive if certain policies and bureaucracy hinder plans for growth, which is the responsibility of government. There is still time for us to collectively choose progress and work together for the benefit of all. Let 2024 be a year of action.

Tashne

SANDILE XULU

KWAZULU NATAL OFFICE

151 Linden Road Essenwood Berea, 4001

Telephone:

+27 31 207 0000

SMX is a 100% Black-owned and Black-managed firm of chartered accountants and registered auditors founded in June 2010. Founder, Sandile Xulu has led SMX to the heights of success based on a transformative, client-centric approach.

The firm consists of SM Xulu Inc., SM Xulu Consulting (Pty) Ltd, and SM Xulu Advisory Services (Pty) Ltd. The company has grown over the years to offer a wide range of services including assurance, accounting, risk advisory services, tax services, business advisory services, and corporate finance services.

Founder Sandile Xulu is well-qualified with an extensive track record in business and is driven by a passion for public professional practice. Xulu is a member of the SA Institute of Chartered Accountants, the Independent Regulatory Board for Auditors, the Institute of Internal Auditors in South Africa, and the Institute of Directors in Southern Africa.

Xulu has worked on a variety of audit assignments in the private and public sectors. He has also carried out numerous tax assignments, and has financial reporting experience gained by working at one of the big four financial institutions.

www.smxulu.co.za

CONTENTS

8 COVER FEATURE: E’lique Advisory Enabling growth for SMEs 14 Investment and transformation: a balance between two imperatives 16 The disintegration of the steel industry 20 National logistics crisis: our own inconvenient truth 22 Navigating troubled waters 24 SA needs privatisation for economic revival 26 Auxiliary projects are essential to rural infrastructure development 28 ADVERTORIAL: ITHUBA ITHUBA uplifts local communities through their housing initiative 4

sabusinessintegrator.co.za

46 30 Entrepreneurs are born, not made 34 Agricultural entrepreneurship: a solution to enhance food security 36 Building a thriving education and entrepreneurial hub from the ashes 40 Is business transformation working? 46 SA companies must gear up for human rights and environmental due diligence in 2024

CREDITS South African Business Integrator @SABImagazine A B U S I N E S S I N T E R A C T I O N P U B L I C AT I O N

9 772411 292008

24012

R75.00 Incl. VAT

A B U S I N E S S I N T E R A C T I O N P U B L I C AT I O N

Volume 10 | Issue 1 January 2024

The disintegration of the STEEL

EDITOR Tashne Singh editor@sabusinessintegrator.co.za

needs privatisation for economic revival

INDUSTRY

Auxiliary

National

PROJECTS are essential

logistics crisis

to rural infrastructure development

Is business

transformation

working?

CHECK OUT FLIP 24012

R75.00 Incl. VAT

A B U S I N E S S I N T E R A C T I O N P U B L I C AT I O N

Information

SUB-EDITOR Tessa O’Hara tessa.ohara@gmail.com CONTENT MANAGER Wadoeda Adams artwork@mediaxpose.co.za DESIGNERS Anja Bramley artwork1@mediaxpose.co.za Shaun van Heerden-Mays artwork2@mediaxpose.co.za

Volume 10 | Issue 1 | January 2024

Enabling

GROWTH for SMEs COVER FEATURE

9 772411 292008

E’lique Advisory

PUBLISHER Elroy van Heerden-Mays elroy@mediaxpose.co.za

Innovation

Inspiration

JOBURG LOOKING UP: COJ COMMITTED TO DRIVING GROWTH IN

Information

Innovation

Inspiration

Transformation

IMAGE CREDITS: 123rf.com

EDITORIAL CONTRIBUTORS Elias Moagi The South African Association of Freight Forwarders Ian Pettey Nicholas Woode-Smith Nomsa Mbere Paula-Ann Novotny Keah Challenor ADVERTISING SALES MANAGER Rashieda Wyngaardt rashieda@sabusinessintegrator.co.za ADVERTISING SALES Rene van Heerden rene@mediaxpose.co.za

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6 Carlton Crescent, Parklands, 7441 Tel: 021 424 3625 Fax: 086 544 5217 E-mail: info@sabusinessintegrator.co.za Website: www.mediaxpose.co.za Disclaimer: The views expressed in this publication are not necessarily those of the publisher or its agents. While every effort has been made to ensure the accuracy of the information published, the publisher does not accept responsibility for any error or omission contained herein. Consequently, no person connected with the publication of this journal will be liable for any loss or damage sustained by any reader as a result of action following statements or opinions expressed herein. The publisher will give consideration to all material submitted, but does not take responsibility for damage or its safe return.

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Q&A: E’LIQUE ADVISORY

Enabling

growth for SMEs E’lique Advisory is a South African accounting and advisory firm, passionate about providing clients with the best accounting, tax, and advisory services. Lornelle Jonas, Founder and Managing Director at E’lique Advisory shares some insights about how real time accounting is critical to help enable sustainable growth for SMEs. LORNELLE JONAS | MANAGING DIRECTOR E’LIQUE

A large number of SMEs fail within five years. In your experience, what is the most prevalent reason for this? There are a number of factors that influence the success of an SME. Some of these are related to if they have the right product, the right customer, and the right service. It also depends on if the SME has the knowledge and skills to be able to run a startup. Most businesses need to have a founder that is competent with the right experience to be able to run a business. 8

sabusinessintegrator.co.za

It is important they understand their numbers and use the right tools to do this. For example, having either an accountant or accounting software to record this information, and to be able to decipher what the numbers mean so that they can manage issues like cash flow. The startups or the SMEs that do succeed are the ones that have gone the extra mile to broaden their skills and knowledge using different tools to be able to grow their business.

Q&A: E’LIQUE ADVISORY

What are some aspects that negatively impact SMEs from a financial management aspect? Not all SMEs prioritise the finance function of their business. I've held multiple master classes and whenever I ask the entrepreneurs in the room whether they have financial records that show their business performance, most of them indicate that they don't. Most indicate that they record, if at all, things manually. They record things on paper and most of their financial information is scattered. This demonstrates that they do not steward the company finances well. They do not have a clear picture of how their business has performed in the past and are unable to take appropriate action to move their business forward. Most business owners think that they can do their own accounting by simply recording transactions from a bank statement, and assume that this is a true reflection of their business performance.

How does E’lique Advisory’s service offerings assist SMEs in driving sustainable growth? We offer accounting, tax and advisory services. Our accounting and tax services are very popular with SMEs. Our accounting service offering is that of an outsourced accountant. We provide these services at a cost -effective rate for SMEs due to our use of cloud accounting software. SMEs should use an outsourced accountant, as it provides them with the necessary skills and experience at a reduced cost. It also provides the SME with a cost-effective way to keep their costs down in the initial years of them growing the business. A professional accountant can assist SMEs to manage their finances, drive growth and execute strategy. SMEs play a significant role in the economy and in reducing the high unemployment rate in our country. However, they are in my opinion one of the most unseen communities. These are your everyday businesses that we see in our own communities. The impact that SMEs make is tangible in our economy and can be seen. As an example, if we can enable 600 SMEs to each employ between 10 -15 people, the impact on the job market as well as their families will leave a lasting impact. We've chosen to partner with SMEs to really make a positive impact in the economy, even though the odds are often against them.

As an entrepreneur yourself, how does this give you an edge when assisting SMEs on their business journey? I can definitely see the difference between how I used to advise my clients when I was running E’lique as a side hustle, compared to now. Being an entrepreneur, and being in the trenches myself, has allowed me to put myself in my client's shoes. It has also changed the way I solve their problems and how I advise them. Being an entrepreneur requires you to have a deep sense of belief in yourself. I act as a sounding board for my clients and support them wherever needed along their journey, fostering a sense of community.

What are some of the key interventions undertaken by E’lique for clients that have enabled progressive growth? We identified a significant gap in most entrepreneurs knowledge when it comes to all the aspects of running a sustainable business. This includes a lack of understanding of their financial performance. The solution I had was to host master classes for entrepreneurs to educate them on the gaps in their knowledge that I was encountering daily while dealing with SMEs. We also partnered with other brands in the industry, which share our vision for bridging the gap in entrepreneurs knowledge to enable them to run sustainable businesses. Other positive interventions include digitising some of our clients’ operations, and using the tools we have to advise them on how to predict cash flow balances in the future. We also help them manage relationships with their suppliers, customers, and sometimes even negotiate with some of our corporate clients to get them to use more favourable terms when settling invoices for SMEs.

Do you think there's sufficient support to enable SMEs to have sustainable growth? I don't believe there's sufficient support. From a legislative perspective, I dont think that SARS has fully explored all the possible solutions available through our tax laws that could support SME growth. Most SMEs do not have sufficient knowledge about their responsibility to be compliant with SARS. As an example, sabusinessintegrator.co.za

Q&A: E’LIQUE ADVISORY

if a business is dormant, you still need to submit your tax returns to SARS. Non-submission is also noncompliance. SARS introduced admin penalties as a way to get individuals and SMES to submit their returns.

software enables you to automate a large part of the manual aspect of your work.

I think that this rather penutive approach does not improve the relationship that taxpayers have with SARS and being compliant.

Accountants are going to have to become an advisor to their clients if the software is able to automate most of the transactions that we would do every day.

How do you see the field of accounting or auditing evolving as a result of technology?

I believe that a lot more can be done at a basic level to support SMEs. Funding isn't the only answer to all the challenges that they face. We need to educate them and provide them with the tools they need to be able to run successful businesses on their own.

It means we have to ask ourselves how we can be more of a strategic partner to our clients? What that means is taking the financial information available and helping clients be able to make educated and informed decisions about growing their businesses.

According to reports, SA is facing a talent shortage in financial skills. How do you see this impacting industry and businesses at large?

At E’lique Advisory we are always looking for new technologies to make it easier for us to serve our clients, and how we manage our day-to-day tasks. We also look for key technologies that can help us understand more of our clients’ data to be able to give them more insights to enable better decision-making.

We have a lot of graduates that are not adequately trained on how to adapt to a working environment. We have also seen some of the individuals within the industry struggling with applying their knowledge to real life problems. Some of the professionals in the industry have also indicated that the standard has dropped in what they are getting from their workforce. This impacts accounting practices significantly in what they can offer their clients as services and their ability to scale. It's very important for us to understand that finance skills are critical to the growth of our country. It's important for us to encourage people to study accounting. There's a lot of technological innovation that is taking place in the industry.

How are technological advancements enabling efficiencies from an accounting and auditing perspective?

The cloud accounting software that we use daily is Xero. We are a xero platinum partner. Additionally, we are also the first female owned firm, as well as the first female of colour firm to have achieved this status in South Africa. We also use Syft Analytics, a reporting tool that enables us to provide great insights to our clients on their businesses, benchmarking them against their peers in the industry, and helping them really grow their businesses.

What are some of your key successes? Our growth, for one! In May 2021, I left my corporate job and went into business full-time. In August 2021, we launched E’lique Advisory, and moved into our first office space in Rivonia. In August 2022, we moved into our new offices in Sandton.

The introduction of cloud accounting software such as Xero and other technologies have made a huge impact. The biggest impact has been the efficiency with which we can do our work. It has also given us an opportunity to redefine how we are perceived in the market as advisors.

The most impactful project we’ve been involved in has been the AFAWA #FundHer programme, an initiative of the African Development Bank led by PAWA Africa. The programme involved onboarding 200 womenowned SMEs onto an accounting software and curating a financial literacy module for entrepreneurs.

It also means business owners are now able to have more of a work-life balance as you don't have to record millions of transactions manually. Cloud accounting

Additionally, we recently concluded a financial literacy module that we curated internally and delivered to women entrepreneurs.

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Q&A: E’LIQUE ADVISORY

What are some of your key projects in 2024? Some of our key initiatives in the new year will be digitising our internal processes. This will make it easier for clients to engage with us, and decrease the time from lead generation and conversion to a client.

corporate job did. It's because as an entrepreneur, you're a vision carrier. It's really important that you take care of the vision carrier to ensure that the vision carrier is still able to carry out the vision for many years to come.

We will also be hosting more master classes and expanding them to other provinces. Furthermore, we aim to get our internally curated content for entrepreneurs accredited.

Having the right people around you to help you stay on course is also essential, as is having the right relationships from a business perspective and establishing those relationships.

Tell us a bit about your personal journey as an entrepreneur?

What are the greatest lessons you have learned?

My journey as an entrepreneur has been very interesting.

• I always have an open mind. Never think that you know everything. Always have the mindset of a learner. Always ask for feedback from your team. Surround yourself with the right talent. • Don’t sit and wallow when you make the wrong decision; understand that it's a lesson. • Not everything about entrepreneurship can be taught from books. Some of the things can only be taught through lessons. • The gift that entrepreneurship has given me is the gift of knowing myself and not doubting myself as I did before. It’s about being relentless in understanding my passion and purpose and the impact that I make; and being able to stand firm in what I'm doing. • But most importantly, unlocking the potential in each and every single entrepreneur and business owner to help them to achieve their greatest potential. 

I have the ability to see a problem and create solutions. A successful businesswoman once told me that an entrepreneur can pick up a newspaper and see solutions where others see problems and make money from it. That is how I see myself. My time in the corporate world prepared me for my entrepreneurial journey. Partnerships play a pivotal role in us achieving the success that we have, but I would add that having an overwhelming belief in myself is what drove me forward in the face of opposition. As an entrepreneur, you will not always have people backing you or believing in you. You will also be tempted in the early years of your business to give up when things get tough. That's when you really have to ask yourself what your purpose is and be very clear about it. I really know what it is that I want to do with E’Lique. I really understand the impact that I'm having on the businesses I work with, and ultimately, the greater impact that we will have on our economy. These are the things that wake me up and drive me every single day. Additionally, my grit, my ability to overcome and to persevere in the most challenging situations is something I've learnt to do with ease. You also need to prioritise yourself. Entrepreneurship has really taught me about self-care more than my

About Lornelle Jonas Lornelle Jonas is registered as an AGA (SA) with SAICA, a registered General Tax Practitioner with SARS, and a member of Xero's Partner Advisory Council (XPAC). She has over 10 years of experience in internal auditing, external auditing, financial reporting, risk management, compliance, and governance in various industries. Some of her awards include the First Black Femaleowned Xero Platinum Partner, the Dazzling Auditor Award: 2nd Runner Up – FirstRand Group Internal Audit (GIA), GIA Innovation Awards: 1st Runner up – Liberty Group Innovation Committee and the PwC Experience Award: Putting yourself in the client’s shoes. sabusinessintegrator.co.za 11

WE PROVIDE SERVICES IN: ACCOUNTING Outsourced Accountant – Three packages; Pioneer, Growth, Established

TAXES We are specialists in taxation for: • Trusts • Corporate Taxes • Individuals We assist with tax dispute resolutions, tax planning, SARS Audits, Tax Due Diligence for mergers & acquisition, and filing of all tax returns for all tax types.

COMPANY SECRETARIAL & FIDUCIARY SERVICES Company Secretarial: • New company registrations (Private Company, Non-Profit Company) • Annual Returns • Name Reservations • Change of company name • Change of Directors • Change of financial year end • Company de-registrations • Company Share Register and Minute Book Fiduciary Services: • Estate Planning • Wills; one single and joint without testamentary trust • Wills; one single and joint with testamentary trust • Living Trust registration

REAL TIME ACCOUNTING FOR YOU & YOUR BUSINESS.

ADVISORY SERVICES & ASSURANCE Business Development Support and B-BBEE* Advisory:

• Traditional enterprise and supplier development support • BEE strategy guidance • Advise on supply chain optimisation (supplier development) • Advise on supply chain absorption improvement (enterprise development)

Assurance:

• Agreed upon procedures • Internal audits • Independent reviews

Advisory:

• Company valuations • Strategic planning

Training Interventions:

• Corporate & SME Training (finance & management of business) non-accredited

SETA Compliance:

• WSP (Workplace Skills Plan) submission • Ensuring Compliance and Mandatory Grant applications and skills needs analysis • Discretionary Grant funding applications

Project Management:

• Resource centre setup (training venue) • Internship placement • CSR spend project management.

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MERGERS

Investment and transformation:

a balance between two imperatives

Much has been said about the interplay between the need for investment to enhance socio-economic development and transformation in South Africa. These are both critically important for the growth of the South African economy and its stability. Partners at Webber Wentzel, Candice Meyer, and ClareAlice Vertue, unpack legal developments and possible implications of the amended draft public interest guidelines (draft guidelines) relating to merger control. Although the draft guidelines are not legally binding, they provide a clear indication of how the Commission intends to assess the applications for merger approvals, which will have a marked impact on transformation and foreign investment.

Encouraging investment and an inclusive, competitive market Investors typically expect commensurate control of the businesses in which they invest, to protect such investment and the anticipated returns. "Therefore, in practice, depending on the level of investment made, they may want a commensurate level of ownership. That means they will seek to protect their investments by taking up controlling stakes in the business in terms of the number of voting shares they acquire to enable them to maintain a level of control over operations. “They may also want to appoint board members so that they have some control over the board’s decision-making processes," says Meyer, who advises on corporate and commercial transactions, and Broad-Based Black Economic Empowerment (BEE). According to Vertue, who advises investors in respect of merger approvals, this concept of taking a controlling stake in a business is precisely the juncture at which competition law comes into play. In South Africa, as is common in several jurisdictions, competition regulators are tasked with assessing whether the introduction of a new controlling company is going to have an unwarranted impact on the market. What international investors may be less familiar with, are the public interest considerations taken into account by South African regulators.

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MERGERS

Spread and increase of Black ownership While public interest has been part of South African competition law since its inception, there has been greater emphasis on the effect of mergers with regard to certain public interest factors since the 2019 amendments to the Competition Act. The main objective of the 2019 amendments is to address elevated levels of concentration and the racially skewed spread of ownership of firms in the South African economy. In particular, public interest provisions were amended to promote ownership by historically disadvantaged persons (HDPs) and workers in firms, and to support the participation and expansion of small businesses and HDP ownership in the economy. Other public interest factors focus on employment, the effect of a merger on a particular region or industry, and the ability of national industries to compete in international markets. As part of its assessment, explains Vertue, "the Commission will compare the level of [HDP and worker] ownership prior to the transaction, to the level of ownership after the transaction.” Even if a company currently has an employee share ownership plan through which Black employees own a certain percentage of the company, the existence of current empowerment may not be accepted as sufficient. To obtain merger clearance, investors should expect to provide both qualitative and quantitative evidence that the pending transaction will have some benefits to Black ownership and/or worker ownership. Vertue reminds investors that on the Commission's current approach, "the benefit to public interest has to be one that is related to the transaction and not simply [a benefit of] the company’s empowerment actions prior to the transaction". Meyer explains that if a target company already has Black owners, the extent of Black ownership in the ensuing transaction would likely need to increase, which means there would be less equity available for a foreign investor. This may deter foreign investment in South Africa, given investors' desire for ownership and control which is commensurate with the investment made.

Limited market for Black-owned equity Meyer highlights that the intent of existing BEE legislation and public interest considerations in competition law, is, among other things, to enhance the extent of Black ownership in South African businesses. However, Black owners who may wish to dispose of their investments, could be burdened with less liquid shareholding as a merger approval may be made conditional on maintaining, or even increasing, the level of black ownership, making the disposal of shares by Black owners more complex. Meyer's concerns were raised by South African business in 2021 in the context of the Burger King SA deal. Although that transaction predates the Draft Guidelines, the approach followed by the Commission in that case is largely reflected in the Draft Guidelines. The Competition Commission prohibited ECP Africa’s acquisition of Burger King SA and Grand Foods on public interest grounds alone because Black owners would dispose of their stake, resulting in the HDP shareholding decreasing to 0%. At the time, a few Black investment fora objected, describing it as a limitation of the ability of black shareholders to manage their investments as they see fit. According to the Commission, the proposed merger could not be justified on public interest grounds due to its substantial negative effect on the spread of ownership. However, following a reconsideration application, the Competition Tribunal conditionally approved the merger, subject to significant public interest commitments.

Balancing investment and transformation According to Meyer, public interest considerations may carry with them significant additional costs for transactions, another deterrent to investment. “The reality is that we still have to balance these costs against the fact that BEE has been in force for about 20 years and that SA is not yet at the desired stage of transformation within our economy. For that reason, these initiatives to drive transformation through public interest considerations are critically important to ensure access to the economy for Black South Africans. “We need to obviously balance this against the dire need for investment and stimulation of the economy and job creation. This is a fine balance indeed, but they are not mutually exclusive,” concludes Meyer.  sabusinessintegrator.co.za 15

OPINION

THE DISINTEGRATION OF THE

steel industry

The steel industry is the backbone of any economy, it forms the foundation of any modern economy and is essential to every single sector. Without a healthy and vibrant local steel industry, South Africa will simply not be able to integrate and develop itself or the rest of the continent. By Elias Moagi, President of SEIFSA

16 sabusinessintegrator.co.za

OPINION

The steel sector – and South Africa – urgently needs clarity on policies, consensus on action plans and realised deliverables on the ground in order to instil confidence in the viability of the country to boost competitiveness and attract both local and foreign direct investment. The announcement [in 2023] by ArcelorMittal South Africa on the potential closure of its operations in Newcastle and Vereeniging, as well as ArcelorMittal Rail and Structural presents a major set-back to the base of the industrial sector and industrialisation more broadly. This development also raises the sharp question whether the grand aspirations of the Steel Master Plan (SMP) to reindustrialise the steel industry are beginning to disintegrate under our watch.

The SMP was pitched as the platform through which all the stakeholders, namely; government, business and labour, who have a direct and vested interest in seeing this industry prosper, would come together and work collaboratively to meet this end." Lofty goals set by the SMP are becoming increasingly illusive The unfortunate reality is that the lofty goals set by the SMP to charter a roadmap to re-energise the sector, expand production and demand across the steel and fabrication value chain are becoming increasingly illusive. There is a growing sense on the part of industry that the SMP has collapsed. The SMP was pitched as the platform through which all the stakeholders, namely; government, business and labour, who have a direct and vested interest in seeing this industry prosper, would come together and work collaboratively to meet this end. The plan was sold as a deviation from the old and unproductive approach where government directs the path which industry should take and one where different stakeholders lobby the government toward their respective ends in an unstructured way. It was

meant to be a unifying platform, where meaningful and active collaboration took place to arrest the rapid decline currently being experienced by the industry through short-term interventions and to grow the industry through longer dated interventions. Importantly, it was also meant to open avenues of communication and collaboration between all stakeholders.

SEIFSA committed itself to the SMP when it was launched The metals and engineering industries, and particularly the constituency I represent through the Steel and Engineering Industries Federation of Southern Africa (SEIFSA), fully committed itself to the SMP when it was launched in 2021. SEIFSA was a signatory to the founding document and nominated a number of captains of industry to lead various workstream. The SEIFSA team has invested considerable resources to the work of the SMP, unlike some of the nay-sayers that wrote-off SMP at the outset. Over the last year, SEIFSA has made numerous formal requests for a meeting with the Minister of Trade Industry and Competition on the scrap metal export ban and other much wider and arguably more important and strategic industrial policy concerns. Disappointingly, the meetings have not materialised, and our requests have fallen on deaf ears. We understand and acknowledge that Ministers leading key departments and portfolios are extremely busy, but what we cannot accept is the lack of decisive leadership from the DTIC, resulting in numerous decisions being strung out and not forthcoming.

Public consultation processes undertaken, even though a decision has already been made That said, it is ironic that some decisions, like the ban on scrap metal exports – with all its adverse implications – received priority preference and relatively fast decision turn-around times. A further concern to business is the delays in appointing permanent staff to critical decision-making roles. A significant number of DTIC staff, in key decisionmaking roles, hold them in an acting capacity and this in part contributes to the delays on decision-making. sabusinessintegrator.co.za 17

OPINION

Public consultation processes on regulations are often undertaken when it is seemingly clear that a decision has already been taken. This suspicion on the part of business is supported by the unwillingness of the ministry to engage industry on a more in-depth basis on some of the more rational proposals submitted by industry, as in the case of the scrap metal export ban. Moreover, relating to the same scrap metal export ban there has been a concerning shift in the goal post where the motivation to extend the export ban is now leaning to input cost support for the scrap-based mills and the country’s decarbonisation efforts, whereas the original reasons used to force the decision through were of a security nature and protection of infrastructure.

SMP has become a platform to rubber-stamp and legitimise decisions Introducing industrial policy by stealth and misleading economic signals as in this case, renders the SMP as a platform to rubber-stamp and legitimise decisions, including those that do not enjoy support and alignment by a significant block of employers. Overarching all of this is the fact that the SMP was meant to deliver a comprehensive industrial policy framework, where a total industry perspective would be taken and complementarities across the value chain enhanced. Sadly, what we are witnessing is the opposite, wherein policy is implemented in a fragmented manner, with a short-term view and with pockets of industry being pit against one another. The scrap metal export ban is one such divisive and market distorting development. The industry is quickly losing faith in the SMP process, and it is obvious but worth mentioning that the withdrawal of this constituency from the SMP would virtually render the plan moot. Industry simply cannot continue to invest the amount of time, effort and resources as it has done thus far for altruistic reasons, particularly when the experienced reality is one of a continued deterioration of the business and operating environment, company closures and job losses. 

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LOGISTICS

NATIONAL LOGISTICS CRISIS:

truth

our own inconvenient By The South African Association of Freight Forwarders

National logistics, a sector of transcendental importance to the national economy, has experienced watershed moments in 2023.

The situation intensified in the third and fourth quarters, when capacity issues at all key ports reached crisis point, resulting in severe backlogs of freight and costly delays, impacting the complete supply chain – to name but two of many other severe consequences. In the main, the impacts are due to high inefficiencies and infrastructural collapse. “The national logistics crisis is our own ‘inconvenient truth’,” says Dr Juanita Maree, Chief Executive Officer of the South African Association of Freight Forwarders (SAAFF).

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" To be sustainable, the approach requires a complete overhaul of the strategy and operational approach to the management of port and rail infrastructure..."

LOGISTICS

“The full extent of the position must be fully understood, and, at the same time, it is equally important to know that the issues are being addressed by the government and the private sector as a matter of national importance of the highest priority, from a platform of shared responsibility. “Without a functioning logistics network, 60% of our economy is at risk, since trade in goods represents the major portion of our national economy and demands the uninterrupted movement of goods,” she adds. “Leaders from across the logistics, supply chain and transport sectors have supplied exhaustive detail of the situation to business and the nation, generating wide media coverage. The message from industry highlighted the issues, while at the same time underscoring solutions which are, by and large matters covered in the logistics roadmap to recovery and the work of the National Logistics Crisis Committee (NLCC).

To fix the fundamental issues requires time and significant resources “This is all work in progress, thanks to the collective focus. But it is no secret that to fix the fundamental issues requires time and significant resources,” says Dr Maree. “To be sustainable, the approach requires a complete overhaul of the strategy and operational approach to the management of port and rail infrastructure – these are matters at the top of the agenda at parliamentary, institutional, national, and regional levels. “The reality is that the issues are now with us and impact indiscriminately all sectors of the economy; the people of South Africa, other African countries, regional economies and indeed our international partners are all affected. This conversation must continue but it must be accompanied by immediate action,” she adds. “Over the last decade, our terminal efficiency has declined by 28% compared to our internal targets. Benchmarked against globally recognised best practices for ports of a similar size, current throughput at 84% of demonstrated capacity is 50% below norm. “While the knock-on impact of the situation cannot be underestimated, I am greatly encouraged by the stage

we have reached; the open conversation has widened the collaboration; great courage and determination has been apparent across all the platforms,” says Dr Maree.

Logistics sector fully committed to solutions and transformation needed The logistics sector is passionate and fully committed to the solutions and wholesale transformation that are required. This is evident in the way representative bodies have come forward and leaders from across every sub-sector are standing up, calling for reform, driving corrective action, with the government right behind the movement. Beyond the crises of today, fundamental changes are required for South Africa to reclaim its rightful place as the continent’s top, trusted enabler of intra-Africa trade here and a key player across global markets. The fix demands much more than bricks, mortar and machinery, it also calls for a revolutionary approach and that is the need to rebuild logistics on new foundations. Intra-port competition is a practice we need to embrace. This approach will bring about important, new dimensions; introducing greater efficiencies through the dynamics of increased competition and structured collaboration between all the national ports – Durban, Cape Town, Ngqura, Gqeberha, Richards Bay – while enabling the opportunity to benchmark performance among our ports, on-the-fly and in line with new world standards.

Logistics is the oxygen that breathes life into the national economy The renewal of an efficient multi-modal logistics network and the rehabilitation of the rail system, alongside the upgrade and maintenance of the port infrastructure and equipment are critical priorities to offer reliability of service, a principal KPI in the drive for excellence and indeed, based on the principle of shared infrastructure and shared responsibility – a KPI shared by private sector and Government alike going forward. People are at the heart of the reconstruction. Excellence through capacity building, skills development, and a focus on enabling integrated technology are recognised as essential strategies for the country’s economy to rise again.  sabusinessintegrator.co.za 21

PORTS

Navigating troubled waters In the ever-evolving landscape of global trade and logistics, the efficient functioning of ports is critical to the economic well-being of nations. By Ian Pettey, Managing Director of Crown Relocations South Africa

At the heart of the issue is the cumbersome nature of the procurement process. Port equipment, spares, and replacement parts are indispensable for the swift replacement and refurbishment demanded by the industry. However, the bureaucratic hurdles imposed by

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the Public Finance Management Act (PFMA) requirements are hindering the timely acquisition of these essential components. The consequence? Recently a mounting backlog of 60 000 containers in Durban, a backlog that was projected to take an alarming 18 weeks to clear.

PORTS

The lifeblood of a nation’s economy Well-functioning ports serve as the lifeblood of a nation’s economy, playing a pivotal role in facilitating the smooth flow of goods, both domestically and internationally. Efficient ports contribute to the reduction of transportation costs, minimising delays and ensuring the timely movement of goods. They enhance trade, stimulate economic growth, and attract foreign investments. It follows that well-maintained ports create employment opportunities and foster the development of ancillary industries, from logistics and transportation to warehousing and manufacturing.

A country’s competitiveness on the global stage is intricately linked to the effectiveness of its ports, as they form the backbone of a resilient and interconnected economy. In essence, the significance of well-functioning ports extends far beyond their physical boundaries, reaching into the heart of a nation’s economic prosperity. Considering the challenges our ports face, all is not lost – with swift action there are pragmatic suggestions to extricate Transnet from the entanglement it finds itself in.

Streamlining planning and improving people management

Revitalising the railway network

Prioritising maintenance of infrastructure

Embracing maritime digitalisation

Similar to this country’s power parastatal, the maintenance of gantries and equipment at the port has been overlooked, causing delays in loading and offloading ships.

In a world moving towards digitalisation, our South African Port Authorities must keep pace with the global maritime digital age. Implementing digital solutions will enhance planning capabilities, resource management, and communication, mitigating port congestion and ensuring alignment with the dynamic demands of the supply chain.

The root cause of the delays lies in inefficient planning and ineffective people management within the port authorities. Streamlining these processes is imperative to alleviate the bottlenecks. Unhappy staff members contribute to the delays, necessitating a comprehensive approach to address the issues at the core.

The over-reliance on trucks for container transportation is a bottleneck that needs urgent attention. The railway network, if revamped, has the potential to carry a substantially larger number of containers directly into the harbour, significantly reducing road congestion. Recent instances, such as the line of coal trucks at a standstill outside Richards Bay, underscore the urgency of upgrading our rail systems.

A rigorous maintenance schedule is imperative to ensure that these essential components operate seamlessly, contributing to a more efficient port ecosystem.

Urgent need for comprehensive solutions The challenges faced by Transnet are formidable and underscore the urgent need for comprehensive solutions. The path to resolution is clear: tackling inefficiencies in planning and people management, reinvigorating the railway network, giving due priority to infrastructure maintenance, and adopting maritime digitalisation are not mere strategies but imperative steps towards ensuring the resilience and efficacy of our ports.  sabusinessintegrator.co.za 23

OPINION

SA needs privatisation

for economic revival

By Nicholas Woode-Smith: Economic Historian, Political Analyst, and Contributing Author for the Free Market Foundation

The overwhelming belief across the South African government and prominent political parties seems to be that the private sector is bad, and that economic development should be state-led and, as much as possible, centrally planned. Recently, the Minister in the Presidency, Khumbudzo Ntshavheni, even claimed that the private sector “has no interest in developing the country” and “wants to collapse the government.”

Dangerous rhetoric This is dangerous rhetoric, and typical of a failing power wanting to throw blame at anyone to avoid accountability. The truth of the matter in South Africa is that the government is the fundamental cause of most of our problems. Either because they aren’t taking the correct action to fix the issues plaguing our society, or that they are exacerbating them with ill-considered policies, sabotage, and corruption. More and more, the latter is becoming the case. The private sector is actively impeded by the government, regulated into obscurity, sabotaged by racial quotas and political appointments (masquerading as BEE partners), or crushed by greedy unions with political backing. 24 sabusinessintegrator.co.za

All the while, state-owned enterprises run the country into the ground. Eskom continually fails to expand electricity production, while the grid itself decays, and municipalities fail to collect payments necessary to fund the parastatal. Transnet has overseen the demise of our infrastructure, causing catastrophic shipping blockages and railway collapses. This is not to mention the SABC, which has actively lobbied to regulate and destroy streaming services because it can’t keep up with the times. There are cavalcades of state-owned enterprises in South Africa. A handful function fine. But the most important perform their services inadequately, are dangerously incompetent, and it’s all at the expense of the taxpayer. And the solution to this problem is a process of privatisation that will have tangible and marked benefits for South African citizens.

OPINION

Virtues of privatisation Across the board, privatisation will mean lower government spending, which will allow for a more responsible budget that can either redirect funds to more important projects (like policing) or ease the burden on the taxpayer. The funds made from selling off state-owned enterprises can also go a long way towards debt repayment. But ridding the budget of these costly entities isn’t the only benefit of privatisation. The private sector inherently performs better than government-owned businesses. Without getting too bogged down in the economics, private enterprises have three things that the government does not: proper incentives, access to market signals, and accountability. If a private sector business fails to perform well, it makes a loss. If it does well, it profits. When a state-owned company performs badly, it gets subsidies and more money. This is a perverse incentive for government that rewards failure. Private sector businesses have to do a good job, or they fail. The private sector also has access to market signals. These are pieces of information that come in many forms, like rising prices, supplychain shortages, skill-shortages, and so forth, that help businesses make informed and good decisions. The government tends to lack these, as they do not have to worry about supply or skill shortages, and muddles along with inadequate physical and human resources. The government only ultimately cares about electoral outcomes. Finally, businesses are easier to hold accountable. If a business is competent or makes bad decisions, consumers will stop supporting it. They will lose money and then bankruptcy threatens. And if they fail and close down, this is sad for them, but ultimately doesn’t hurt the consumer – as a competitor will form to fill in the gap. Competition keeps businesses accountable and forces them to keep performing better and better.

How can privatisation fix South Africa? It is clear that anything the South African government manages turns into a corruption-laden, incompetent cesspool that can’t fulfil a basic task. The solution is to rid the government of as many of its ostensible responsibilities as possible. Eskom has already had its burdens eased by allowing an increasing number of micro-generators to feed into the grid. But even this is not sufficient. Eskom needs to be unbundled and its assets sold to as many responsible, competent private sector businesses as possible. Additionally, regulations must change to allow the complete privatisation of the electricity industry, and to allow competitors that will hold each other accountable. With a vibrant private electricity industry, there will be no more risk of grid collapse. Companies will be incentivised to produce electricity reliably or go bankrupt. Loadshedding will become a thing of the past. The same must happen to Transnet. Our infrastructure is far too important to leave in the hands of corrupt cadres now. Ports and railways need to be sold to private companies, and the responsibilities of Transnet must be outsourced to the private sector as much as possible – if not completely taken over. The shipping delays will ease and disappear as the private sector fixes supply blockages and expands infrastructure, as it is within their interest to process as many containers as possible to get paid. This will lower prices across the board for consumers, and lead to becoming a globally competitive shipping destination. SABC, and others like SAA, are easy to privatise, as they aren’t performing a public good. SABC should be privatised and forced to compete with the more dynamic private sector. Either they perform well, and the privatisation proves successful, or they fail,, which would also be good, as we shouldn’t be propping up failing enterprises that would collapse without parasitising the taxpayer. The same goes for SAA – government has no business running an airline. The private sector fulfils that task admirably already. Privatisation doesn’t only save money – it also leads to competence and sustainability. The sooner we privatise more and more of the government’s functions and its failing stateowned enterprises, the faster we’ll be able to start our path to recovery.  sabusinessintegrator.co.za 25

INFRASTUCTURE

Auxiliary projects

are essential to rural infrastructure development Infrastructure development in rural areas goes beyond meeting basic needs such as water, sanitation, energy, transportation, and communication. To truly improve the quality of life for rural residents, infrastructure projects must also address their social, recreational, and safety needs. This requires a collaborative effort between government and the private sector. Roelof van den Berg, CEO of the Gap Infrastructure Corporation (GIC), highlights the complementary roles of the public and private sectors.

26 sabusinessintegrator.co.za

“While the government has an abundance of workers and funding, the private sector brings the technical expertise and project management planning that is often lacking,” he says. “However, project expectations have evolved over the past few years as government and infrastructure developers collaborate more closely in the interest of broader community transformation, recognising the importance of sound environmental, social, and governance initiatives.”

INFRASTUCTURE

Goes beyond the scope of basic service provision Auxiliary projects play a crucial role in supporting primary infrastructure initiatives and adding value to the community. These projects go beyond the scope of basic service provision to address the unique needs and aspirations of rural residents.

Engage in partnerships and collaborations with other developers and public sector or community partners to better determine local needs, drive local support for auxiliary projects, and improve auxiliary project deliverables."

When taking on major projects, such as providing rural communities with water and sewer reticulation, in-home water connections and meters, and widescale roadworks, GIC also searches for smaller auxiliary project options with which to add value to the overall projects and boost the community’s morale. “In the past, for example, as a means to further enhance the project, we have sought to install numerous isolation valves, fire hydrants, and precast concrete manholes with heavy-duty covers which directly relate to the primary project,” notes van den Berg. “These additions to wider infrastructure projects represent the collective commitment of the public and private sectors to pursue improved sustainable community development and the highest safety standards.”

Kickstarting greater auxiliary project delivery Van den Berg notes that with the goal of improving and increasing auxiliary project delivery in rural communities, both private sector infrastructure developers and government or local municipal entities can take steps to encourage one another and change lives.

Private sector infrastructure developers can suggest to the public sector the following suggestions in their tender phase:

Propose the addition of auxiliary projects during the tender application process, and showcase how auxiliary projects can improve the overall quality of life for rural residents and contribute to community development. It is also beneficial to showcase examples of successful projects that the developer has implemented in the past, and how these have directly impacted the community.

Government and municipalities can:

Establish guidelines or policies that mandate the inclusion of auxiliary projects in rural development plans. By making it a requirement, the government can ensure that auxiliary projects receive equal consideration and are integrated accordingly.

Provide incentives and funding opportunities for private sector developers that include auxiliary projects in their proposals. This can include tax benefits, grants, or subsidies.

“By taking these additional steps and going beyond project requirements, the government will effectively create an enabling environment that encourages private sector investment in auxiliary projects, and in which developers can make a deeper impact in the rural communities they serve, truly transforming lives for the better,” he concludes. 

sabusinessintegrator.co.za 27

ITHUBA UPLIFTS LOCAL COMMUNITIES THROUGH THEIR HOUSING INITIATIVE ITHUBA, South Africa’s National Lottery Operator, is proud to showcase its second national housing initiative. As part of the outreach efforts for 2023, ITHUBA embarked on a multi-provincial roadshow over the festive season in December 2023, handing out keys to 20 new homeowners.

ITHUBA CHANGING LIVES ONE FAMILY AT A TIME DURING THE FESTIVE SEASON ITHUBA’s journey has been a fulfilling and exciting one to

His excitement is palpable, “I feel so fortunate to have been

watch since its tenure as the National Lottery Operator in

chosen by ITHUBA to receive a new home. I will forever be

2015. Having successfully reinvigorated the National Lottery,

grateful to them for the gift of dignity.”

ITHUBA has continued to display transparency and tenacity, going from strength to strength, solidifying its position

Starting in Gauteng, ITHUBA travelled across the country,

as the top operator in Africa. From humble beginnings to

handing over new homes and paving the way forward for

extraordinary success, the ITHUBA journey is a remarkable

lasting change and spreading the festive cheer. A home is more

tale of innovation, excellence, and philanthropy.

than simply a shelter, but rather a place where dreams can transform into reality, changing the future of the individuals

The undeniable force of Ubuntu lives strong in the ITHUBA

receiving the homes and future generations to come.

company values. It is the driving force behind their CSI initiatives, with their CEO Charmaine Mabuza always looking

ITHUBA took special care to ensure that these homes cater

for innovative ways in which the company can localise their

to the beneficiaries’ unique needs, with Mabuza drawing on

initiatives to have a measurable impact. Passionate about

her experience as a mother. She emphatically believes that

playing a part in ensuring that more South Africans have a

a solid home foundation provides the nurturing environment

home to call their own, Mabuza says, “Addressing the housing

children need to thrive.

crisis is of paramount importance to us at ITHUBA – we firmly believe that providing families with secure housing lays the

“Every person deserves to have a roof over their head and

foundation for their future success and well-being.”

a place they can call home. This is a big challenge for South Africans but one I believe we can overcome if we work together.

ITHUBA has long played a hand in addressing the housing crisis,

At ITHUBA, we want to show people we are committed to

starting with an internal housing project for staff members in

improving their lives. We want to live the saying, ‘umuntu

need before moving their focus toward larger housing projects.

ngumuntu ngabantu’ - a person is a person because of other

In December 2022, ITHUBA provided newly built homes for

people. This proverb is a core value of my organisation and to

several families who had lost their homes due to unforeseen

me personally. Our roadshow took a few steps towards that

tragedies and widespread water-ravaged disasters, such as in

vision of a better society. Every journey starts with just a few

KwaZulu Natal. In 2023 ITHUBA decided to give away more

steps, and we plan to take several more until the people most

homes to those who need it most and the make the festive

in need can enjoy the sense and safety of a home,” says Mrs

season a greater reason to celebrate. For the houses handed

Mabuza.

over in December, ITHUBA partnered with Disabled People South Africa (DPSA) to provide homes for beneficiaries who

ITHUBA encourages all South Africans to take the opportunity

are differently abled.

to pay it forward this new year - no matter how big or small their contribution is. “It is inspiring to see the positive impact

These beneficiaries now finally have access to facilities that

our initiatives have on the lives of the beneficiaries. My

make their lives unimaginably easier, such as Harold Ntsoto,

advice to fellow South Africans is to recognise the power each

a paraplegic who has been wheelchair-bound for the past

individual has to make a difference.”

32 years. Due to Ntsoto’s situation, he needs easy access and his own bathroom, which is possible in his new home.

ENTREPRENEURSHIP

Entrepreneurs

are born,

not made From humble beginnings, Grace Thovhakale always had a tenacious drive to pursue her goals. This tenacity led to her establishing and leading a successful and sought-after cement manufacturing company, Tiger Build Group, which is a 100% Black- and womanowned company. She chats to SOUTH AFRICAN BUSINESS INTEGRATOR about her entrepreneurial journey… GRACE THOVHAKALE | TIGER BUILD GROUP

I have a special passion for the business industry. I am very passionate about developing women and youth in the SMME environment to encourage them to tap into the country’s economic mainstream."

30 sabusinessintegrator.co.za

ENTREPRENEURSHIP

“I always knew I wanted to be an entrepreneur,” says Thovhakale. “My first business was actually selling cool drinks, which paid for my tertiary education at the University of Venda where I studied music and education. After graduating I worked as a teacher, however, the urge to establish my own business remained. "To pursue my entrepreneurial goal I met with a prominent cement manufacturer in Gauteng in 2009 to learn a bit more about the industry, and ascertain the feasibility of venturing into this field,” she explains. “Between 2009 and 2012, I made some inroads in the cement industry, but I still had a lot to learn. For a period, I worked and served as an executive director in various industries, including farming, logistics, tourism, and commodities around Louis Trichardt. This enabled me to build a strong network and enhance my knowledge of running a business,” she adds. "By 2018, I felt I had a solid grasp of the cement industry and its supporting value chain such as logistics, mining, wholesale and retail business. I then established my own cement brand, Tiger Build Cement, and registered the Tiger Build Group (Pty) Ltd in Westonaria, Gauteng. I am not sure about now, but when I started the business, I was known as the only female-owned cement company in South Africa,” she says. “For many people it can be quite surprising that a woman would want to venture into what is considered a maledominated industry. Not every woman wants to wake up and get their hands dirty, but for me this was dream.

Navigating the entrepreneurial journey and being open to opportunities “Entrepreneurship is not always a smooth journey. It takes guts, vision and a go-getter attitude – particularly in a male-dominated industry. As an entrepreneur, you always have to be on the lookout for opportunities. I knew that being a 100% Black, female-owned company would enable opportunities from a Broad Based Black Economic Empowerment (BBBEE) perspective. However, it is not enough to just look good on a BBBEE scorecard – you have to deliver to ensure sustainable growth and maintain good client relationships. “At Tiger Build Group we have invested heavily in developing and retaining a skilled and qualified staff

component. Our team ensures that we produce highquality cement made from environmentally friendly materials, which passes tests conducted by the South African Bureau of Standards (SABS) and adheres to South African National Standards (SANS),” adds Thovhakale. “As a team, we are also open to exploring and diversifying our operations. As change is constant, we are always looking at ways to improve and enhance our offerings. “Thus far it has been a very exciting journey – while we started in South Africa, we have expanded to service other African countries as well. "Africa’s infrastructure challenges present opportunities for our Group and for communities. It is important for us as a Group to not just be a business, but a socially responsible entity that makes a positive impact on all stakeholders. One of the ways we add value to communities is through establishing project-based collaborative partnerships with locals, youth, military veterans, etc. As we grow, so too does communities in which we operate and invest in.”

Developing the next generation of entrepreneurs “Coming from humble beginnings should not be a deterrent. It can serve as a motivator. I was not made an entrepreneur – I was born an entrepreneur,” says Thovhakale. “When I look back on my journey, it was not without challenges, but there will always be challenges in any area or industry. The important thing is to have the courage to look ahead and seize opportunities despite hardship. These are some of the lessons I want to impart to the next generation of entrepreneurs. “I have a special passion for the business industry. I am very passionate about developing women and youth in the SMME environment to encourage them to tap into the country’s economic mainstream. I want to create a platform for other women to enter the economic space by establishing business ventures, particularly the cement industry. The vision is to create a flagship black womanowned cement manufacturing company that will traverse South African borders and provide services to the SADC region and beyond,” concludes Thovhakale.  www.tigerbuildcement.com sabusinessintegrator.co.za 31

Established in 2019, Tiger Build Group is a Level 1 BBBEE contributor and a 100% Black Woman Owned company specialising in the cement industry.

PRODUCTS AND SERVICES: Cement production and distribution Suppliers of fly ash and bottom ash Supplier of gypsum Supplier of tile cement Built environment: roofing, flooring, painting, fencing, plumbing, brickwork, drywall partitioning, shop fitting

Call 910 728 2262 | www.tigerbuildcement.com

ENTREPRENEURSHIP

Agricultural entrepreneurship:

a solution to enhance food security

Recent global conflicts such as the Ukraine-Russia War continue to send shockwaves throughout the world. Their impact has laid bare the critical need for developing African markets, such as South Africa, to strengthen food production capabilities and agricultural supply chains. Prioritising the needs of millions of children at risk of starvation and malnutrition is paramount as a response to any global crises.

Disruptions in the supply of essential goods, materials, and services has resulted in increased food prices, kicking South Africans while they're down and grappling with historical food insecurity and deeply entrenched inequality.

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In response to this threat to food security, Afrika Tikkun, a leading advocate for sustainable youth development in disadvantaged communities, highlights agricultural entrepreneurship as a vital part of the solution.

According to the Global Report on Food Crises, 139 million people experienced acute food insecurity in 2021, up about 40 million from the previous year, as a result of armed conflict and other security risks. Economic shocks (which plunged 30 million people into a crisis), and weather extremes (an extra 23 million) were other significant causes of food insecurity.

ENTREPRENEURSHIP

Benefits of agricultural entrepreneurship extend beyond food security “Nations that are vulnerable to global market volatility must protect their poorest from the threat of food becoming scarce or completely unaffordable,” says Afrika Tikkun Group CEO, Marc Lubner. “Agripreneurship (agricultural entrepreneurship) offers a viable pathway to enhance food security, promotes self-sufficiency, and mitigates the risks associated with supply chain disruptions. Empowering individuals and communities to cultivate their own food and establish agribusinesses, can reduce SA’s reliance on external sources and build a robust agricultural sector capable of meeting domestic demand,” adds Lubner. By investing in agriculture and supporting aspiring entrepreneurs in the sector, SA can unlock its potential as an agricultural powerhouse, contributing to the overall socioeconomic development of the nation. The agricultural sector can foster economic growth, create employment opportunities, and promote sustainable development. “As an emerging African market with proven competitive advantage in the local and export market, SA has the resources to leverage agripreneurship to enhance food self-sufficiency. Through collaboration between industry players and community builders these resources should be channelled towards inclusive and innovative solutions that give underprivileged youth the skills and platforms to bring farming into the future” says Lubner.

Afrika Tikkun's youth agricultural training initiative Programmes such as Afrika Tikkun's youth agricultural training initiative demonstrate that when government, financial institutions, and development organisations collaborate to provide aspiring agricultural entrepreneurs with access to land, capital, modern farming technologies, and relevant training, lives can change and the road to food security through sustainable agribusinesses begins. “It is critical that farming, agriculture, nutrition and environmental sustainability are introduced at a young age – as early as at an ECD level, and continue to be taught, reinforced and developed throughout a child’s schooling and thereafter in order for realise the full potentials of agripreneurship in SA," says Lubner.

Afrika Tikkun incorporates agricultural activity at all levels of education from its Garden-to-Kindergarten programme for preschoolers at an ECD level, to tertiary education programmes. Their child development programme teaches young learners the wonders of farming and gardening while laying the foundation for the future of growth through practical sustainable farming. In a small farm plot outside Diepsloot, Johannesburg, dozens of disadvantaged young people between the ages of 20 and 30 years old have spent the last year gaining the skills to run their own farm-to-table style agribusiness by turning 300m2 into a sustainable micro business that can feed their family and their future.

"As an emerging African market with proven competitive advantage in the local and export market, SA has the resources to leverage agripreneurship to enhance food self-sufficiency." Encouraging innovation and technology adoption The Micro Farm Regenerative Agriculture initiative forms part of Afrika Tikkun's award-winning Cradle to Career development model, which tackles the social ills that hold back poor communities holistically with the goal of fostering independence and life-long learning. "We envision a future where embracing technological advancements, such as precision farming, hydroponics, and vertical farming, can significantly increase productivity and resource efficiency in agriculture. Encouraging innovation and technology adoption in the sector will create a more inclusive and sustainable local food market," says Lubner. According to Lubner one of the keyways SA can achieve this is by building future farmers and agripreneurs through basic, as well as agritech vocational training. “By harnessing the potential of the agricultural sector and supporting aspiring entrepreneurs, we can build a more resilient, self-sufficient, and prosperous nation.”  www.afrikatikkun.org sabusinessintegrator.co.za 35

ENTREPRENEURSHIP

Building a thriving education & entrepreneurial

hub from the ashes

South Africa is replete with sad anecdotes of thriving communities that have seen their neighbourhoods turn into desolate ghost towns when a mining operation, which is the economic anchor of mining towns, closes. The one million-strong community of Dr Kenneth Kaunda District Municipality, particularly Matlosana Local known as Klerksdorp in the North West province, was facing this grim reality when the mines that sustained it were facing closures over 10 years ago. The imminent closure of the mines exerted immense pressure on the Dr KK Kaunda municipalities, which like many municipalities across South Africa, lack the resources and capacity to provide basic services to tens of thousands of unemployed households, which often don’t have any means of income outside of the social grants.

“As a social entrepreneur and someone who is passionate about education, I saw an opportunity to use the legacy infrastructure left behind by one of the mining companies to create a hub that would enhance educational outcomes for the high schools in this community and create sustainable and viable entrepreneurial and work opportunities for the community,” says Daddy Khuselo, Founder and Managing Director of Mbuso Management Solutions. 36 sabusinessintegrator.co.za

Khuselo proposed that the mine donate an 11-hectare site that was derelict and in dire need of repairs to his company to be repurposed into an education, skills development, and manufacturing centre. The site was an eyesore that was crawling with illegal miners who were stripping off the building and the underground copper. Though the structural integrity of the building was still sound, the buildings on the site had no electricity or water supply, the plumbing and electricity system required a complete overhaul, and the windows, doors, and other amenities needed to be replaced at a cost of R50 million according to the quantity surveyor’s report. Undeterred, Khuselo invested part of his savings in refurbishing some of the buildings on the site and roped in fellow engineer friends to assist in fixing the electricity and plumbing issues. Khuselo even cashed his savings in a money market investment and borrowed R1 million from his mortgage which he ploughed into the refurbishment of this facility. Additional funds were still required to fund the refurbishment of the facility, Khuselo engaged with some of his close friends to assist with some funding to advance more development. “There is nothing in my life that I started with resources at hand. Being a spiritual person, I believed that God would help me to conquer this Goliath. What also gave me the edge is that I am a qualified engineer and therefore have the technical know-how to make this facility habitable. I took a staggered approach and sought to fix the facility in stages,” he explains.

ENTREPRENEURSHIP

A preferred venue for Grade 12 camps The investment sacrifices that Khuselo made were not in vain – after he completed the refurbishment of one residential block, one of the school principals in the area proposed that the facility host Grade 12 learners for the final year examination camp. The request was soon followed up by nine other principals in the area, which led to the hub hosting 1 300 Grade 12 learners for a school camp. “The learners achieved great results when the results were published in 2020, and they pushed North West province to third position in the national results. The positive publicity we received was overwhelming,” says Khuselo. The success of the facility as an examination hub earned it a strong reputation from the Department of Education as one of the preferred venues for Grade 12 camps.

"In 2020, using his own capital, Khuselo started a textile hub and factory that would absorb local women in the sector."

Centre diversifies its operations The Covid-19 outbreak also opened a gateway for the centre to diversify its operations. The economic devastation precipitated by Covid-19 compelled the hub to live up to its original name, “Itireleng”, which is a Setswana word for the phrase, “Do it yourself”. In 2020, using his own capital, Khuselo started a textile hub and factory that would absorb local women in the sector. He applied for additional grant funding from the Industrial Development Corporation, which was subsequently granted after a rigorous screening process. Over time, the North West sabusinessintegrator.co.za 37

ENTREPRENEURSHIP

Department of Economic Development also bought the factory additional specialised machines and even hosted Khuselo on an international benchmarking tour in Istanbul, Turkey, in 2022. The factory has grown exponentially since its inception and is starting to enjoy the support of local mining operations and now employs over 100 women who produce protective clothing for surrounding firms. The hub has also teamed up with the Energy and Water SETA to train 50 young people across the city in cable jointing and termination. In addition, the hub has established an asphalt factory that provides material for road building and pothole filling to municipalities. Plans are in place to finalise a foundry and fabrication factory at the facility as well. Khuselo says Mbuso Management Solutions has signed up 150 learners from five municipalities across the North West in partnership with the South African Local Government Association (SALGA), on a one-year water treatment and reticulation learnership. “South Africa is a water-scarce country, and some provinces like the North West are the hardest hit. We 38 sabusinessintegrator.co.za

believe that imparting these critical skills to these young people will also give them the tools to treat underground water from mining operations to alleviate the water shortages the country is currently experiencing,” says Khuselo.

Providing students with 4IR skills to futureproof their skills base He says Mbuso Management Solutions is driven by the need to equip young people with the skills that will make them employable and to create their own enterprises. This, in turn, will help to stimulate the local economy and grow the small and micro enterprises in the area. “We are working with the government to ensure that we provide eligible students with Fourth Industrial Revolution (4IR) skills to future-proof their skills base and ensure that they contribute meaningfully to the district development model. “As we move into the future, it is important that young people from townships and rural areas are not left behind. We have an opportunity to give them the tools to change their lives and the fortunes of their families. I am proud that I am part of the social entrepreneurs doing just that,” Khuselo adds. 

TRANSFORMATION

Is business

transformation WORKING? Analysis from global consultancy Kearney has found that over half (56%) of executives say their current business transformations aren’t working.

Despite businesses moving from a focus on resilience during Covid to a new perspective of ‘regenerative,’ currently, only 43% of businesses effectively operate in this way. More is needed and more is yet possible.

What is a ‘regenerative business’? Embedding new digital models and advanced analytics, while making supply chains and people models sustainable for business and society is now mission critical. Businesses that wish to fulfil these commitments will require a longterm approach to becoming truly ‘regenerative.’ This means looking beyond resilience and proactively asking where value can be added back into society and the wider world. Instead of optimising for efficiency, the next generation of businesses will regenerate for speed, using external data plus analytical and advanced AI to see and make sense of what’s happening outside their own four walls quickly and accurately. By regenerating the entire business system, from supply chain to customer experience and organisational culture, both business and the public sector can ensure that our teams, companies, and the broader environment can reach and sustain their full potential. 40 sabusinessintegrator.co.za

TRANSFORMATION

The view from the C-Suite Kearney’s research report Regenerate: For a Future that Works for Everyone surveyed 800 C-suite business leaders from across the globe and found that 99% of global business leaders thought that becoming a regenerative business was important. However, more guidance is needed on this new business paradigm, as only 43% reported that their companies were already operating this way effectively. This is a meaningful gap to close. Similarly, only 40% of businesses reported effectively implementing a regenerative culture and 45% said they were already operating a regenerative supply chain. Attitudes across the C-suite differ, too. Almost half (48%) of CEOs globally say that their business is very effective

Which industries are leading the way? Although 92% of C-suite leaders believe in the responsibility of business to create ‘a future that works for everyone’, Kearney’s research found that the retail sector is ahead of the curve in making this happen. Over half of retail businesses (53%) are operating regeneratively and over a third (35%) are doing it very effectively, in part by relying on technology to help limit waste of energy and materials. For example, the energy sector is also following suit and taking a regenerative approach to sustainability, with 46% of C-suite leaders in this sector reporting that they are already operating regeneratively very effectively. Alongside changes to the supply chain, energy leaders believe the greatest opportunity for regeneration

Unexpected is the new expected, there is no normal as we navigate these necessary self-disruptions."

"The research shows that regenerative business is also influencing the leadership style of the C-Suite globally."

at operating regeneratively. Whilst COOs broadly agree that their companies are operating regeneratively, 58% say there is still further progress to be made. The research shows that regenerative business is also influencing the leadership style of the C-Suite globally. A very small minority (2%) of CEOs said they don’t see any need to factor the regenerative model into their leadership, but almost half (47%) say they are currently doing so effectively.

lies with systematic changes to their business model, including leveraging a responsible and deepened view of advanced analytics.

Businesses want to shift from a merely resilient strategy to a fully regenerative one “The results of our survey make it clear that businesses want to shift from a merely resilient strategy to a fully regenerative one that is more transformative at its core, whether that requires truly digitising their obsolete global supply chains, embedding analytics into the entire operating model or upgrading the way they develop and inspire diverse and sustainable workplaces,” says Alex Liu, Managing Partner and Chairman at Kearney. “Unexpected is the new expected, there is no normal as we navigate these necessary self-disruptions. More is needed and more is possible. “A regenerative business model plugs this gap and takes businesses a step further, by facilitating fundamental change, at the core. Businesses must take a step back and review their business models and assess their products or services and drive maximum value for all stakeholders and the broader ecosystem that they operate in.” sabusinessintegrator.co.za 41

TRANSFORMATION

Need to move past ‘responding’ and put effort into being ‘regenerative’

Important that businesses don’t lose sight of the end goal “While our research confirms that businesses are edging closer to regenerative models, it is equally important that they don’t lose sight of the end goal while on this journey,” adds Abby Klanecky, Partner and Chief Marketing and Client Services Officer at Kearney. “Becoming regenerative is not just about restructuring and ironing out the pain points. It’s important that any plan sets the pace for long-term success, breaks down internal silos to share expertise, and really adds value back into the world in which we operate. “Businesses must build on their strengths and identify new opportunities for growth and impact in the future. Resilience was the watchword of the past few years, now it’s going to be ‘regenerative’.“ Reference: https://www.cnbcafrica.com/2022/embracing-sustainable-business-is-key-to-accelerating-africaseconomic-growth/

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“Africa has shown time and time again how resilient it can be, even during the worst times of the Covid-19 pandemic. The continent is the world’s biggest growth market, and our youthful population demographic means that we hold enormous potential. But we, too, need to move past ‘responding’ and put our efforts into being ‘regenerative’,” comments Theo Sibiya, Partner and Managing Director Africa, Kearney. “It’s clear that organisations, both the public and private sectors in Africa, need to think and act in a new way rather than default to familiar norms. Instead of juggling multiple discrete transformation projects and the constant trade-offs that these necessitate, it’s about applying continuous and conscious effort to unpick and reengineer activities along the entire value chain.”  www.kearney.com

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SA’s Largest Plastics PRO Investing in South Africa’s Plastics Recycling and Collection Industry, on behalf of over 650 members.

01 Project Investments

Polyco invests in the project divisions; Large lnfrastructure Projects, Packa-Ching® and Enterprise Development Projects. We aim to grow the collection and recycling of plastic packaging in South Africa to the extent that it meets the legislated targets.

02 Waste Picker Integration

Our EPR service fee goes toward the compensation for waste collectors, pickers and reclaimers, as outlined in Section 5A (1) (p) of the Regulations. As an extension we also support women in waste in collaboration with the Western Cape Department of Environmental Affairs and Development Planning (DEA&DP) on its “Give Dignity” campaign.

www.polyco.co.za

admin@polyco.co.za

+27 21 276 2096

People. Purpose. Plastics. At Polyco we work to not only grow the plastics packaging collection and recycling industry, but we aim to end plastic pollution in the environment by investing in recycling infrastructure and initiatives in South Africa as well as by educating both the industry and consumers about recycling.

OVER

R115 MILLION INVESTED

OVER

280 000

114

TONNES OF GROWTH ACHIEVED

PROJECT PARTNERS

03 Municipal Support

Our various project investments are located across South Africa, with our flagship project in Buffalo City, we positively impact various municipalities in these areas, with many developments underway to collaborate even more directly with municipalities through municipal engagement and training.

04 Education & Awareness

Polyco treats education and awareness as one of our core pillars in growing the plastic recycling industry in South Africa, this is evident with Polyco having reached over 2500 schools and engaged over 2 million learners and educators as it continues to focus on both the industry and the South African consumer.

05 Stakeholder Relationships

We have a dedicated Stakeholder Engagement Team responsible for member services, including Polyco’s Member Working Groups, set up to establish a closer working relationship with our members.

CORPORATE SUSTAINABILITY

SA companies must gear up

for human rights & environmental due diligence in 2024

South African businesses that fall within the supply chain of large companies in the European Union should gear up for human rights and environmental due diligence in 2024 when the Corporate Sustainability Due Diligence Directive is expected to be adopted. By Nomsa Mbere, Partner; Paula-Ann Novotny, Senior Associate; and Keah Challenor, Associate, from Webber Wentzel The European Commission adopted a proposal for a Corporate Sustainability Due Diligence Directive in February 2022 (CSDDD). The CSDDD is a legislative framework designed to enhance corporate accountability by imposing legal requirements on business enterprises operating in the European Union (EU) to conduct human rights and environmental due diligences and report on their ESG impacts.

46 sabusinessintegrator.co.za

CORPORATE SUSTAINABILITY

The CSDDD will require entities within its scope to undertake due diligence on their own activities and that of companies across their value chains, and to identify and prevent, end, or mitigate any adverse impacts of their activities on human rights and on the environment. The CSDDD requires member states to mandate the following activities by companies: • making a policy commitment to human rights and the transition to a climate-neutral and green economy to restrict global warming to 1.5°C in accordance with the Paris Agreement, by having a due diligence policy that includes a code of conduct for the company’s employees and subsidiaries; • conducting risk-based human rights and environmental due diligence; • identifying actual or potential adverse impacts arising from their own activities or those of their business partners throughout their global value chains; • preventing and mitigating potential adverse impacts, bringing actual adverse impacts to an end, and minimising the extent of the harm; • monitoring and verifying the effectiveness of their due diligence policy; • publicly communicating on their due diligence process, the adverse impacts that have been identified, and the actions taken in response to those adverse impacts; and • consulting and engaging with affected stakeholders in a meaningful way.

The European Parliament plenary session voted to adopt the amendments put forward by the JURI on 1 June 2023. The next step is for the three versions to be debated during the trilogue negotiations with a view to settling on a final version of the text. It is expected that the EU will formally adopt the CSDDD by the end of 2024, and thereafter, member states of the EU will have two years to implement the requirements of the CSDDD into their own national legislation.

Based on the deviating positions of the European Parliament and the Council with respect to the Proposed Directive by the Commission, the following points are likely to be negotiation issues: • The applicability of the CSDDD to the financial sector i.e., whether the financial sector should be substantially excluded from the CSDDD; • The conditions for civil liability under the CSDDD; and • The introduction of a director’s duty of care and the consequences of such duty.

Negotiation

issues

Companies that fail to comply with these requirements may face sanctions which will be imposed based on a company's turnover. The law-making process in the EU requires that the European Parliament and Council of the EU agree with the Commission's proposal. To this end, the European Parliament, and the Council each tabled proposed amendments to the text. Each of the three institutions' proposals is compared and an attempt at resolving the differences between them will occur through a process of negotiations known as "trilogue" discussions between their representatives. The Council published its proposed amendments in December 2022. On 25 April 2023, the European Parliament’s committee on legal affairs (known as the JURI) adopted the JURI Report, containing its proposed amendments to the CSDDD.

Notably, the Parliament's proposals decrease the turnover threshold and employee count for companies to fall within the scope of the CSDDD and remove the references to high-risk sectors. High-risk sectors include, amongst others, the manufacture and wholesale trade of textiles and clothing, agriculture, forestry, and fisheries, the manufacture and wholesale trade of food products, the extraction and wholesale trade of mineral resources, and the manufacture and wholesale trade of certain metal products.

sabusinessintegrator.co.za 47

CORPORATE SUSTAINABILITY

If proposals are accepted, more SA companies will need to comply If the Parliaments proposals are adopted, a greater umber of South African companies will fall within the scope of the CSDDD, if such companies: enerated a net worldwide turnover of more than G €150 million, provided that at least €40 million was generated in the EU in the financial year preceding the last financial year, including turnover generated by third party for royalties; or

Are the ultimate parent company of a group that had 500 employees and a net worldwide turnover of more than €150 million and at least €40 million was generated in the EU in the last financial year for which annual financial statements have been prepared, including turnover generated by a third party for royalties.

2 Smaller SA companies could also be affected Aside from those South African companies that directly fall within the scope of the CSDDD, some smaller South African companies may feel the effects of the CSDDD because it requires in-scope companies to evaluate their value chains and operations for adverse human rights and environmental impacts and conduct the respective due diligence into their entire value chain. As a result, in-scope companies may be required to mitigate any adverse impacts caused by any entities in the value chain by providing support to small and medium-sized entities (SMEs) or contractually seeking assurances from suppliers. As soon as a South African company does business with an in-scope company, the in-scope company will have to analyse the companies that the South African company is, in turn, doing business with if it is relevant to the in-scope company's supply chain, regardless of where in the world those suppliers operate. For example, where an in-scope grocery chain in Europe imports fresh produce from South Africa, the grocery chain will have to conduct human rights and environmental due diligence into both the South African 48 sabusinessintegrator.co.za

supplier and any company from which the South African supplier purchases fertiliser to grow the fresh produce.

SA companies will have to provide more info South African companies will have to provide more information on their own ESG performance to in-scope companies than was previously the case, which invariably requires human rights and environmental due diligence to be conducted whether subject to the above proposed legal obligations or not. South African companies may see these requirements attract obligations and liabilities through other avenues too, such as being asked to provide contractual assurances that they will comply with the in-scope company's human rights code of conduct and environmental policies or have conducted human rights and environmental due diligence themselves. If it emerges that a South African company has contravened the CSDDD and has taken no measures to remedy or mitigate its actions, in-scope companies might terminate the business relationship for fear of the penalties and sanctions imposed by the CSDDD. The legal avenues to liability would expand depending on the severity of human rights and environmental impacts or violations that have occurred. 