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Rise of black industrialists is opportunity for ‘Africans to solve African challenges’

Velaphi Ratshefola 600x300

Velaphi Ratshefola, MD of ABI Bottling

“The rise of a new generation of black industrialists should not only herald good news for South Africa, but for the continent as a whole. It is time for Africans to solve African problems, and benefit from the solutions that are created.”

So said Amina Patterson, head of business development at enterprise and supplier development specialists, Edge Growth. Speaking at a roundtable event in Johannesburg, Patterson said the new Black Industrialist policy is designed to work in tandem with existing government initiatives, such as the Industrial Policy Action Plan and broad-based black economic empowerment legislation to create new opportunities for job creation. “For example, the contribution to GDP of the manufacturing sector has declined from 20% in 1994 to only 12% in 2013. As a key driver of job creation, it is imperative that we breed and enable a new generation of black industrialists to help repair our unenviable unemployment figures.”

Programme faces challenges

Patterson was joined by Velaphi Ratshefola, managing director of ABI Bottling (Pty) Ltd, who highlighted two main challenges facing the establishment of a vibrant black industrialist sector. “Access to finance has been articulated as one of the chief constraints confronting black entrepreneurs in the attainment of shared and inclusive growth. In addition, the lack of required networks and track records to facilitate market access has often proved to be a barrier to entry.”

Patterson added that there are two key aspects that industry and government need to consider to ensure the success of the Black Industrialist Programme. “It is critical that we define the term ‘black industrialist’ accurately to ensure the selection process is clear and transparent, or the Black Industrialist Programme will fall victim to the criticism of previous empowerment schemes. Secondly, the nature, composition and timing of the support offered must be carefully considered on a beneficiary-by-beneficiary basis, or we risk undermining the black industrialist’s success.”

She says that entrepreneurs in essence are able to innovate in times of adversity, adapt when conditions change and succeed where most businesses fail. “An industrialist can do so successfully in a multitude of environments. If the conditions are too conducive for a budding entrepreneur, how would we know that they can truly perform in a volatile, highly-competitive market? For the black industrialist initiative to succeed, the support provided to them should not diminish their appetite for creative problem solving and success.”

A movement to inspire

Ratshefola gave the example of DDK Merchandising, a niche supplier to ABI Bottling (Pty) Ltd. “DDK was one of a number of suppliers of merchandising solutions to ABI. Such was the desire to harvest the potential of the business, former employee of DDK, David Ramela took the decision to sell his home in order to purchase a 60% share in the business. Soon after, he acquired the remaining 40%. Over the course of a few years, he grew the company from R18m turnover and 56 staff in 2005, to R135m turnover and a staff complement of 3000 today. Through its offering to ABI, DDK has also been able to build a track record of success that has allowed market access to other opportunities. He is a prime example of a successful black industrialist.”

According to Patterson, there is an opportunity for a broader movement to inspire positive change. “We need to breed a nation of aspiring, competitive, collaborative and innovative entrepreneurs and to do so we need our children to not only want to study further to get a job, but to become creators of jobs. The term ‘black industrialist’ should therefore be inspiring and motivational.”

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