A fast route to the market
Black entrepreneurs are being given a helping hand establishing themselves in the lucrative and fast-moving consumer goods (FMCG) industry.
A beneficiary of this initiative by the National Empowerment Fund (NEF) is TMAC Distribution, a Buffalo City metro-based company distributing Nestlé FMCG to informal traders in the area.
The NEF has funded the business to the tune of
R2 240 000, leading to the creation of 19 jobs, including the owner manager.
NEF chief executive Philisiwe Mthethwa says the decision to fund business ventures in the FMCG industry is driven by the development financier’s commitment to changing the face of all industries in the country.
“The majority of people who support the FMCG industry are black, but when it comes to ownership the industry remains white.
“Funding initiatives such as TMAC also show our level of versatility when it comes to promoting black participation in the country’s economy. To this end we are prepared to fund companies that are visionary enough to see synergies between the formal and the growing informal business sector,” she says.
The 100% black-owned TMAC Distributors was founded in 2016 by Thamsanqa Zuko Booi, who holds a BCom degree from the University of Fort Hare. He approached the NEF for funding to buy vehicles, stock and for working capital requirements.
Booi’s career highlights include working on a Route to Market project, which entailed developing a strategy on how best to tap into the growing informal trade in South Africa.
Companies such as TMAC were born out of the realisation that for FMCG companies to protect their brand strength and profitability – while taking advantage of the growing informal trade market in the country – they had to come up with innovative marketing strategies.
The distributor model – as employed by Nestlé and several other large FMCG companies – has proved to be the most effective.
The model entails employing distributors – such as TMAC Distributors – to service informal traders directly by sending their sales representatives to the spaza shops to take orders and then delivering the required stock sources directly from Nestlé warehouses, eliminating the cost of buying from wholesalers.