Com­bin­ing fire with pas­sion

‘We wanted to suc­ceed as busi­ness­men, not em­ploy­ees’

Finweek English Edition - - Business Strategy - SIKONATHI MANTSHANTSHA

THAT THE SPRAWL­ING TOWN­SHIP of Davey­ton didn’t have fire and dis­as­ter man­age­ment in­fra­struc­ture for most of the time Des­mond Moloto was grow­ing up there hasn’t stopped him from mak­ing a ca­reer out of such in­fra­struc­ture. The fact that some of his co-share­hold­ers de­serted him at one dif­fi­cult stage dur­ing the for­ma­tive years of the com­pany was also not enough to force him to throw in the towel and join the ev­er­grow­ing num­bers of job seek­ers.

Moloto’s Fire & Emer­gency Ve­hi­cle com­pany is now a man­u­fac­turer of dis­as­ter man­age­ment equip­ment to a grow­ing num­ber of South Africa’s mu­nic­i­pal­i­ties and some large cor­po­ra­tions. The com­pany de­signs, man­u­fac­tures and main­tains fire en­gines, am­bu­lances and other dis­as­ter man­age­ment equip­ment from a small work­shop in Eden­vale, east of Jo­han­nes­burg, pro­vid­ing em­ploy­ment to 20 peo­ple.

Fire & Emer­gency’s flag­ship prod­ucts in­clude state-of-the-art mo­bile dis­as­ter com­mu­ni­ca­tions equip­ment built for the Sed­ibeng mu­nic­i­pal­ity in 2008. “They were go­ing to buy it from Brazil for R4,5m but we did it for R2,5m,” says Moloto. The ma­chine has a mounted cam­era that can take a pho­to­graph from around 12km away and can be used at mass gath­er­ings. Other prod­ucts in­clude weather pre­dic­tion equip­ment, a pub­lic an­nounce­ment sys­tem and mo­bile In­ter­net ca­pa­bil­i­ties.

The com­pany was formed in 2003 af­ter Moloto and 20 of his col­leagues lost their jobs when Emer­gency Ser­vices Hold­ings, which op­er­ated a com­pany named Benoni Fire and Emer­gency Ser­vices, went bust. “It had grown too quickly,” says Moloto. When he joined the com­pany in 1998 he was the 12th em­ployee and six years later the staff had grown by 140.

While still em­ployed at Emer­gency Ser­vices Hold­ings, Moloto and eight of his col­leagues started pool­ing their money – R50/ per­son/week – to fund the soon to be launched com­pany. They were aware Emer­gency Ser­vices was in trou­ble, he says. “Elvis Silinda, an older col­league, came up with the idea of start­ing the com­pany (he’s still part of it).”

The busi­ness started in Moloto’s tiny kitchen in Davey­ton, on Gaut­eng’s East Rand, but soon moved to a rented garage nearby. Moloto con­tin­ued to “visit” his mother dur­ing the day with a se­cret list of tele­phone num­bers to phone when his mother wasn’t watch­ing her pre-paid tele­phone line.

In Septem­ber 2005 Fire & Emer­gency won its first con­tract – worth R348 000 – from the Nkan­gala District Mu­nic­i­pal­ity. The R45 000 profit went to buy of­fice fur­ni­ture. An­other R300 000 con­tract came two months later, also from Nkan­gala.

Through their di­verse skills its share­hold­ers tapped their con­tacts for help. Law firm Bow­man Gil­fil­lan came in with its le­gal ser­vices ex­per­tise at no cost: while the Busi­ness Op­por­tu­ni­ties Cen­tre pitched in with its ex­per­tise on small and medium en­ter­prises. At their pre­vi­ous em­ployer, Dikeledi Let­soko worked as hu­man re­sources man­ager, Caiphus Ngidi as pro­duc­tion man­ager and Rudy Moloi as sales and mar­ket­ing man­ager, while Nomvula Langa had the fi­nan­cial man­age­ment port­fo­lio. They’re all from var­i­ous town­ships on the East Rand.

But Moloto and his co-share­hold­ers weren’t draw­ing any wages. Says Moloto: “Four (other) share­hold­ers were em­ployed (else­where) and sup­port­ing the com­pany fi­nan­cially. That was their con­tri­bu­tion.” He says those were peo­ple who couldn’t sur­vive without a salary, due to fam­ily cir­cum­stances. The strat­egy of “de­ploy­ing” them out­side helped, as the busi­ness couldn’t have coped without their fi­nan­cial as­sis­tance. As for Moloto, his younger brother and mother were tak­ing care of his fam­ily of five chil­dren. So there wasn’t any im­me­di­ate pres­sure to per­son­ally gen­er­ate in­come.

Why would a man with such skills as his be happy with no in­come? Af­ter all, he grad­u­ated with a me­chan­i­cal en­gi­neer­ing diploma from Vaal Tech­nikon in 1998 and trained as a fire­fighter and was al­ready em­ployed at Emer­gency Ser­vices Hold­ings. “It was all about am­bi­tion and vi­sion. It was a case of see­ing the light at the end of the tun­nel,” says Moloto. “We wanted to suc­ceed as busi­ness­men, not em­ploy­ees.”

That’s ex­actly how things turned out. Moloto and his col­leagues ded­i­cated their en­er­gies to grow­ing their own busi­ness with the skills they’d learned from their pre­vi­ous em­ployer. The re­sults have been pleas­ing so far. Af­ter a “small” loss in 2006, Fire & Emer­gency Ve­hi­cle turned over R2m in 2007 and is looking at R10m turnover in its cur­rent fi­nan­cial year. Its big­gest con­tract to date is worth R5m: to build fire en­gines for the Emalahleni (Wit­bank) mu­nic­i­pal­ity. Moloto de­signs the equip­ment with which the com­pany is mak­ing a name for it­self. Fire & Emer­gency has won 5% mar­ket share in SA (its two com­peti­tors with the bulk of the mar­ket share have been around for 30 years). “It’s been an up­hill bat­tle, but we have come a long way,” Moloto says.

In March 2008 the com­pany be­gan pay­ing salaries and Moloto re­ceived his first pay in three years. “That’s the mark of a proper en­tre­pre­neur. You for­get about all those ma­te­rial things,” Moloto told fel­low en­trepreneurs at an Um­sobomvu Youth Fund gath­er­ing of loan ben­e­fi­cia­ries in Novem­ber. “Your pas­sion as an en­tre­pre­neur should be the prod­uct, the ser­vice you pro­vide – not how much money you per­son­ally make or what car you drive.”

Um­sobomvu pro­vides the com­pany with

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bridg­ing fi­nance for the equip­ment it im­ports, which is set­tled when it de­liv­ers to its clients. The 36-year-old Moloto says Um­sobomvu came in to help when other fun­ders “re­quired lots of pa­pers”. Al­though Fire & Emer­gency has had much sup­port from pro­fes­sion­als, Moloto says it couldn’t wait to sort out “the many pa­pers”. He says: “We need money to buy parts and ma­te­ri­als be­fore we get paid and there are strict de­liv­ery dead­lines.” Fire & Emer­gency buys trucks and mod­i­fies them into fire en­gines and am­bu­lances or re­fur­bishes old ones.

Now the com­pany is on its feet – with large cor­po­rates Sa­sol, PetroSA and Eskom, plus some ma­jor mu­nic­i­pal­i­ties (Rusten­burg and Cape Town) as clients – the en­tre­pre­neur in Moloto is al­ready talk­ing about new chal- lenges. But be­fore that he’ll have to im­part his skills to the di­verse pool of tal­ent Fire & Emer­gency has re­cruited. Of the en­tire work­force, Moloto is the only trained me­chan­i­cal en­gi­neer. And true to his word he’s busy trans­fer­ring his skills to his fel­low share­hold­ers.

sikonathim@fin­week.co.za

Des­mond Moloto

Pas­sion is prod­uct, not money.

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