Un­earthing good busi­ness prospects

There are op­por­tu­ni­ties out there for in­trepid en­trepreneurs, but some­times you need to know where to find them. The In­dus­trial Devel­op­ment Cor­po­ra­tion’s David McGluwa un­packs the best op­por­tu­ni­ties in North West, writes Gayle Ed­munds

CityPress - - Business -

Most peo­ple as­so­ciate North West with min­ing. Though, in­creas­ingly, the base of op­tions for driv­ing eco­nomic growth in the province is grow­ing. What would you name as the five big­gest op­por­tu­ni­ties en­trepreneurs should look for in the province over the next two years? Firstly, min­ing still re­mains the key driver of eco­nomic growth and job creation in the province. How­ever, there are many other sec­tors that pro­vide op­por­tu­ni­ties for in­vestors and en­trepreneurs in North West.

Se­condly, the tourism sec­tor ar­guably pro­vides the big­gest num­ber of op­por­tu­ni­ties in the province. It boasts two promi­nent na­tional parks, namely Pi­lanes­berg and Madikwe, which are both home to the Big Five.

Also, there is a lot of tourism ac­tiv­ity based around Hart­beespoort Dam, Sun City, Bloemhof Dam Na­ture Re­serve, the Taung Her­itage Route, Taung Dam and Mahikeng.

Thirdly, there are also op­por­tu­ni­ties in man­u­fac­tur­ing – not only in min­ing sup­plies, but in au­to­mo­tive com­po­nents as well as in the lo­cal­i­sa­tion of im­ported goods, and in the area of cre­at­ing cul­tural arte­facts.

Fourthly, in the agro­pro­cess­ing sec­tor, there are op­por­tu­ni­ties to be ex­plored as sun­flow­ers, veg­eta­bles and an­i­mal feed are all grown in the province. Also, smart en­trepreneurs should ex­plore projects such as the Taung ir­ri­ga­tion scheme and the es­tab­lish­ment of agri­parks.

The fifth would be the grow­ing green econ­omy, where there is space to grow so­lar power. Waste col­lec­tion, bal­ing and pro­cess­ing are al­ways needed ser­vices. The whole coun­try faces un­em­ploy­ment and stag­nated eco­nomic growth. What spe­cific chal­lenges do busi­nesses in North West have to over­come and how does the IDC help them?

The In­dus­trial Devel­op­ment Cor­po­ra­tion (IDC) has in­vested a sig­nif­i­cant amount in the econ­omy of North West. Ex­po­sure grew from R1.4 bil­lion [2008] to R6.3 bil­lion cur­rently, thereby cre­at­ing 21 455 di­rect jobs [on the fac­tory floor].

I think the big­gest chal­lenges busi­nesses are faced with in North West are the is­sues around the cost and re­li­a­bil­ity of elec­tric­ity, in­sta­bil­ity of labour and dys­func­tional mu­nic­i­pal­i­ties. The IDC has funded 52 projects in the province. Which of th­ese did you find to be a sur­pris­ing fit for a province de­fined by min­ing in the mind of the pub­lic?

We have a di­verse port­fo­lio of projects rang­ing from min­ing and tourism to agri­cul­ture, man­u­fac­tur­ing and health­care. Dur­ing the past two years, we funded youth-owned busi­nesses in North West to the tune of R124 mil­lion, cre­at­ing 109 di­rect jobs. We also funded a sub­a­cute hos­pi­tal, Care Cure Thaneze in Mahikeng, which is ma­jor­ity owned by black women and is do­ing well. What are the spe­cific ben­e­fits North West of­fers en­trepreneurs who are look­ing for op­por­tu­ni­ties in the province? For ex­am­ple, the North­ern Cape has all the space to fill with so­lar pan­els and the coast has all that wind to drive en­ergy.

The Plat­inum Val­ley Spe­cial Eco­nomic Zone near Mog­wase [close to Sun City] will cer­tainly pro­vide op­por­tu­ni­ties for the ben­e­fi­ci­a­tion of plat­inum group met­als.

Also, the North West Devel­op­ment Cor­po­ra­tion owns nu­mer­ous fac­to­ries with avail­able elec­tric­ity across the province and parts of Gaut­eng [Ga-Rankuwa, Ham­man­skraal, etc] for com­pa­nies that re­quire fac­tory floor space for their man­u­fac­tur­ing op­er­a­tions.

Op­por­tu­ni­ties also ex­ists at the planned agri­parks across the province. If suc­cess­fully im­ple­mented, this will open op­por­tu­ni­ties for agro­pro­cess­ing and will po­si­tion the province at the fore­front of the agri­cul­tural value chain. A con­stant in any dis­cus­sion around the econ­omy is driv­ing ben­e­fi­ci­a­tion in min­ing. Do you see more open­ings for clever en­trepreneurs to get into this busi­ness? What have been the most ex­cit­ing ben­e­fi­ci­a­tion pro­grammes you’ve been in­volved with since the IDC opened of­fices in the province in 2008?

The Plat­inum Val­ley Spe­cial Eco­nomic Zone will cer­tainly boost the ben­e­fi­ci­a­tion ini­tia­tives in the province. Hy­dro­gen SA, based at North-West Univer­sity’s Potchef­stroom Cam­pus, is work­ing on ex­cit­ing game-chang­ing ini­tia­tives that will fur­ther boost ben­e­fi­ci­a­tion in the province.

The province also boasts the only plat­inum in­cu­ba­tor in the coun­try, named the Seda Plat­inum In­cu­ba­tor. It has pro­duced many en­trepreneurs in the jew­ellery man­u­fac­tur­ing space, such as Van Bels De­sign, Amile Di­a­mond Jew­ellery and Dit­sala De­signs and Cre­ations. One of the IDC’s ma­jor con­cerns is en­sur­ing that com­mu­ni­ties ben­e­fit from the deals that are done, not only in terms of job creation, but also re­gard­ing com­mu­nity own­er­ship.

Yes, the IDC funded Mo­men­tous En­ergy, a so­lar farm out­side of Rusten­burg. This so­lar farm is 17% owned by the com­mu­nity around Marikana. Also, the IDC funded a 26% stake on be­half of the Bak­gatla-Ba-Kgafela com­mu­nity in Sed­i­belo Plat­inum. What is the North West branch do­ing to ac­tively em­power youth, women and black-owned busi­nesses in the province? Of the 52 projects you’ve funded in the past five years, how many have been youth owned, how many owned by women, and does the province boast a num­ber of black in­dus­tri­al­ists yet?

The IDC has re­cently set aside R4.5 bil­lion over the next five years to fi­nance youth-owned en­ter­prises in South Africa. Of that, R1 bil­lion will be of­fered at prime less 3%. In the past two years, we have ap­proved R124 mil­lion to youth-owned en­ti­ties. We have an in­ten­tional and fo­cused strat­egy to fund many more youth-owned en­ti­ties in the province.

The IDC has also funded 13 projects in the province in which women have a sig­nif­i­cant stake.

Also, the IDC in­tends to dis­burse R23 bil­lion to black in­dus­tri­al­ists over the next five years. Cur­rently, 90% [R5.6 bil­lion] of the IDC’s fund­ing goes to black-em­pow­ered com­pa­nies in North West. How much money has the province put aside for projects in the next two years?

The IDC plans to dis­burse R100 bil­lion over the next five years into the South African econ­omy. Un­for­tu­nately, the IDC doesn’t al­lo­cate an amount per province. It is the pre­rog­a­tive of the pro­vin­cial of­fice to en­sure that the province gets its eq­ui­table stake. North West cur­rently con­trib­utes 6% to South Africa’s gross do­mes­tic prod­uct and I am con­fi­dent that we can dis­burse a min­i­mum of R6 bil­lion into the North West econ­omy over the next five years. What are your top five tips for en­trepreneurs in the province who are about to walk into your of­fice to ask you to fund their idea or help them up­scale their busi­ness?

1. En­trepreneurs must spend time and re­sources to test the fea­si­bil­ity of their projects. Do your home­work, and make sure you un­der­stand the busi­ness model and the risks in­volved.

2. Iden­tify mar­ket gaps and come up with in­no­va­tive solutions to ad­dress those mar­ket gaps. Stop copy­ing ideas/ini­tia­tives from other prov­inces or other en­trepreneurs. Con­stantly look for those game-chang­ing op­por­tu­ni­ties.

3. Get lever­age from the nat­u­ral and avail­able re­sources in your area. We don’t have an ocean in North West, but we do have a lot of sun, min­er­als and nat­u­ral beauty.

4. Suc­cess­ful en­trepreneurs have used their ex­pe­ri­ence, skills and net­works. Avoid ven­tur­ing into a busi­ness where you don’t have the rel­e­vant skills, ex­pe­ri­ence or net­works.

5. Be care­ful when some­one wants to sell his/her com­pany. Al­ways try to es­tab­lish the real rea­son they want to sell. No­body sells the hen that lays the golden egg.

MIN­ER­ALS The IDC funded part of Sed­i­belo Plat­inum mine on be­half of the Bak­gatla-Ba-Kgafela com­mu­nity

WEALTH The Seda Plat­inum In­cu­ba­tor has pro­duced jew­ellers such as Dit­sala De­signs and Cre­ations

NAT­U­RAL BEAUTY Taung Dam on the Harts River near Taung is a pop­u­lar tourist des­ti­na­tion

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