NEF R4,2m lifeline to business expansion deal
THE NEF has invested considerable resources in ventures towards the promotion of efficient systems to help SMMEs reach optimum levels of production, ensure successful expansion programmes and create sustainable jobs..
The development financier has extended a R4,2 million loan to a 100% black owned manufacturer of domestic and industrial cleaning chemicals for retail and wholesale, to invest in automated machinery and equipment to expand the business.
Entrepreneur Edward Moshole approached the NEF for assistance in ensuring that his company, Ebinter, overcome isolation and limiting machinery and was able to reach new collective competitive advantages in South Africa’s retail landscape. Mo- shole, who graduated from being a cleaner on a factory floor, started the business in 1999. Through hard work and the assistance from NEF the company now supplies the largest retail shopping chains, municipalities, government departments and parastatals.
“Before NEF assisted us we were using manual machinery which had an up-time production capacity of 655 200 litres. Due to the high level of manual intervention required with the old machinery, we achieved an annual production capacity of 112 050 litres of chemical products which amounted to only 17% capacity of the machinery. This resulted in lost orders and increased operating costs and operating inefficiencies,” he said. Mosholo said as a re- sult of the low output the business, at the time, lost two big clients, Dischem and Spar. And there were challenges to plans by Pick n Pay which wanted to extend Ebinter’s product reach by distributing their products in other provinces, outside Gauteng.
Through NEF assistance to acquire new additional automated machinery, the business was able to introduce an additional manufacturing line, which freed up capacity on the manual machinery, leading to higher volumes, better quality and profits. “The funding by the NEF in- creased production efficiency and thus overall production capacity,” Mosholo said.
Ebinter’s current product range includes Dish wash liquid, all-purpose cleaner, petroleum jelly, pine jelly, bleach and bath foam. The products are marketed and sold as Chemfresh and Lemo-lux brands, which are Ebinter’s registered trademarks. The enterprise is listed with Pick n Pay as Foundation Supplier for enterprises with turnover less than R3 million through the Pick n Pay Incubator programme.
“The entrepreneur approached the NEF for funding to the amount of R4, 2million to fund additional automated machinery and equipment and as well as working capital requirements associated with the expansion” confirms Nhlanhla Nyembe, head of the NEF’s iMbewu fund. He added that the NEF was always looking to support enterprises in high impact manufacturing industries. The entrepreneur had signed a supply contract with Pick n Pay and enjoyed preferential small supplier terms, which included cash payment within 7 days from delivery date. Ebinter has been a supplier to Pick n Pay for over three years, which proves the product success as Pick n Pay delists a supplier within three months if their products do not sell.