Af­ter over five years at McKin­sey & Com­pany, Nhlanhla Dlamini quit his job to start his own agri-pro­cess­ing busi­ness. Rather than tak­ing on the dom­i­nant play­ers in the sec­tor, his com­pany iden­ti­fies gaps in the mar­ket and then part­ners with those big comp

Finweek English Edition - - FRONT PAGE - By Buhle Nd­weni

armed with an MPhil in De­vel­op­ment Stud­ies from Ox­ford Univer­sity, an MBA from Har­vard Busi­ness School and a wealth of ex­pe­ri­ence from global man­age­ment con­sult­ing firm McKin­sey & Com­pany, both lo­cally and in­ter­na­tion­ally, Soweto born and bred en­tre­pre­neur Nhlanhla Dlamini de­cided to leave his job as a con­sul­tant to try and start his own busi­nesses. Through his Maneli Group, Dlamini hopes to cre­ate busi­ness op­por­tu­ni­ties in South Africa’s agri­cul­tural sec­tor through op­er­at­ing in ar­eas of the in­dus­try that big busi­ness tends to over­look.

What does Maneli Group do?

Maneli Group is a 100% black- owned com­pany that looks for op­por­tu­ni­ties to build and ex­pand busi­nesses in the food and agri­cul­tural sec­tor. We have two sub­sidiaries, Maneli Pets and Maneli Com­modi­ties. Maneli Pets, cre­ated six months ago, man­u­fac­tures pet foods us­ing game and os­trich by- prod­ucts. We plan to start ex­port­ing these prod­ucts to a whole­saler in the US to­wards Au­gust. We have two fac­to­ries, one in the Western Cape and an­other in Gaut­eng. We col­lect raw ma­te­ri­als from abat­toirs and man­u­fac­ture the pet foods. The pack­aged fin­ished prod­uct is be­ing pi­loted in the US and mass pro­duc­tion will com­mence in Au­gust 2016. Maneli Com­modi­ties is a grain trad­ing busi­ness, one of the first ma­jor­ity black-owned grain trad­ing busi­nesses in SA. We sell soft com­modi­ties like maize, sugar, wheat and soya to large food com­pa­nies in SA. Maneli Com­modi­ties ag­gre­gates raw ma­te­ri­als for big food com­pa­nies that do not want to source raw ma­te­ri­als from small farm­ers or co-op­er­a­tives. They would rather deal with a com­pany like us, ag­gre­gate raw ma­te­ri­als from across the coun­try, man­age qual­ity and de­liver to clients as per their pro­duc­tion needs.

What did you do prior to start­ing your own busi­ness?

I grew up in Soweto and went to school in Jo­han­nes­burg. I grad­u­ated with a Bach­e­lor of Com­merce from Wits Univer­sity, then went on to do a Post­grad­u­ate Di­ploma in Man­age­ment at the Wits Busi­ness School (both cum laude and top of my class). I joined McKin­sey & Com­pany in 2006, and worked for them in South Africa, Europe and in the US. Fol­low­ing the com­ple­tion of my MBA in 2012, I came back to SA, still with McKin­sey, where I stayed un­til April 2015.

Where did you get seed cap­i­tal to start the busi­ness?

I used a com­bi­na­tion of savings I ac­cu­mu­lated while work­ing and some ini­tial start-up cap­i­tal from small busi­ness in­cu­ba­tor and SMME in­vest­ment com­pany, the Awethu Project. Awethu plays in a very unique and im­por­tant space be­cause it in­vests in en­trepreneurs be­fore most for­mal in­sti­tu­tions would like to get in­volved. For one of the Maneli sub­sidiaries, I had to bring in co-in­vestors to aug­ment Awethu’s seed cap­i­tal. In SA the ven­ture cap­i­tal in­dus­try is still quite thin (es­pe­cially out­side of the tech space) un­like Europe and the US. En­trepreneur­ship is tough for ev­ery­one, but I think to a cer­tain de­gree it’s tougher for young black peo­ple. We don’t have a strong net­work of older black en­trepreneurs who have al­ready made it and are now the “God­fa­thers”, so to speak, or an­gel in­vestors for the younger en­trepreneurs com­ing through. I’m try­ing to build my net­work and I hope to play that role for other peo­ple in a cou­ple of years.

How has t he one- year j our­ney in en­trepreneur­ship been?

It’s a roller coaster. If you’re not one for highs and lows then en­trepreneur­ship is not for you. The lows are def­i­nitely more ac­cen­tu­ated than you would find in cor­po­rate and, con­versely, the highs are highly re­ward­ing. But there’s never been a month where I found my­self think­ing that I was on the wrong path. I’m work­ing with some­thing that aligns with my pur­pose, and at the same time I’m mak­ing a big­ger dif­fer­ence than I would un­der the em­ploy­ment of some­one else.

What have been the big­gest dif­fi­cul­ties you’ve had to over­come?

In no par­tic­u­lar or­der, I’d say it was dif­fi­cult be­com­ing ev­ery­thing and ful­fill­ing ev­ery role in the busi­ness. I started the busi­ness on my own and built ca­pac­ity as I went along, but ini­tially I had to multi-task as the mar­ket­ing, fi­nance, op­er­a­tions and ad­min per­son, which is dif­fer­ent from cor­po­rate where there is spe­cial­i­sa­tion within the team. I also had to learn to man­age my re­ac­tion to events. There were weeks when I felt like I had cracked it and could be mak­ing money the fol­low­ing week, but then some­thing would hap­pen the next day to nul­lify what I thought would bring in money. Re­silience is a virtue in most in­dus­tries, but even more so in en­trepreneur­ship be­cause plans can go a lit­tle slower than ini­tially an­tic­i­pated. You need to be con­fi­dent that your plan i s go­ing to work. If you aren’t con­fi­dent, try­ing to sell it to fun­ders, em­ploy­ees and part­ners be­comes im­pos­si­ble.

Big­gest les­son learnt?

You need to bring in part­ners and have a team around you that can help share the load. In the be­gin­ning it will come at a cost be­cause you don’t have a lot of money to go around. You need hands-on ex­pe­ri­ence with man­ag­ing money. Your grasp of cash flow and numbers and pro­ject­ing where the com­pany will be in three to six months’ time, is the lifeblood of the com­pany. And I’m more aware that bad fi­nan­cial man­age­ment can put your com­pany in jeop­ardy, so that skill I’ve had to hone a lot more. Be­com­ing a sales­per­son is a skill I didn’t get to prac­tise much while grow­ing up, but it’s an im­por­tant skill to have when try­ing to con­vince in­dus­try bod­ies, em­ploy­ees and fun­ders to buy into a busi­ness con­cept or idea.

Re­silience is a virtue in most in­dus­tries, but even more so in en­trepreneur­ship be­cause plans can go a lit­tle slower than ini­tially an­tic­i­pated.

How tough is com­pe­ti­tion in your sec­tor, and what dif­fer­en­ti­ates your prod­uct/ ser­vice from others?

The com­pe­ti­tion in the South African in­dus­trial sec­tor is ex­tremely tough. It’s dom­i­nated by large com­pa­nies with deeper pock­ets, stronger re­la­tion­ships, and they can be hos­tile to new en­trants. Tak­ing them on is not ad­vised and I have not tried to do that. My strat­egy is to part­ner with them to get into ar­eas they may not be giv­ing enough at­ten­tion. Or serv­ing where I think I can do very well and make de­cent money and de­cent mar­gins.

Right now I’m lucky in that there’s a need for the in­dus­try to be trans­for­ma­tive, so it is more re­cep­tive to smaller or new part­ners com­ing on board. Since I had wanted to ven­ture into en­trepreneur­ship for a while, I read a lot about com­pa­nies that make it and ones that don’t make it and of­ten the com­pa­nies that don’t make it are the ones that tried to take on the big busi­nesses, so I de­cided not to fol­low that path.

How many peo­ple do you cur­rently em­ploy?

At the Maneli Group in Jo­han­nes­burg there’s three of us. Maneli Com­modi­ties will be em­ploy­ing about 10 peo­ple in the next four months. And Maneli Pets will be em­ploy­ing about 30 to 40 peo­ple by the end of the year.

What is the best busi­ness ad­vice you’ve ever re­ceived?

In food man­u­fac­tur­ing, cash is king. You can have great ideas, but if you do not have the cash the lifeblood of the com­pany is com­pro­mised. Also: The el­e­ments that make up a suc­cess­ful busi­ness are a good idea, plus a good plan and team and rig­or­ous im­ple­men­ta­tion.

What was un­ex­pected?

Peo­ple are the most un­pre­dictable vari­able. Peo­ple’s sen­ti­ments of­ten change, which then af­fects their mo­ti­va­tions and be­hav­iours. Or there are changes in their lives and your project is no longer a big pri­or­ity; so of­ten it’s nav­i­gat­ing changes in peo­ple. I re­ally en­joy work­ing with peo­ple nonethe­less. Be­yond peo­ple, en­trepreneur­ship in gen­eral comes with a lot of curve balls and un­cer­tainty. I al­ways leave 20% to 30% slack in my sched­ule ev­ery week for un­ex­pected events that in­evitably oc­cur.

How do you stay mo­ti­vated?

I take time out to re­fresh, not as much as I should, but I try to ex­er­cise or play sports four times a week. And I have a strong cir­cle of fam­ily and friends. I’m present and en­gaged in their lives. It’s im­por­tant that I have a job that is a means of sup­port­ing them too. I feel priv­i­leged and also have a great sense of re­spon­si­bil­ity for what I’m meant to do in the time that I’m here and I never want to feel like I wasted a month or a year not be­ing as pro­duc­tive as I could have been.

What are your non-work habits that help you with your work-life bal­ance?

I love sports. I try to put in three to six hours of ex­er­cise or sports per week. I try and learn some­thing new ev­ery week, even if it’s some­thing triv­ial, by read­ing, lis­ten­ing to pod­casts or hang­ing out with peo­ple that I wouldn’t nor­mally hang out with. I en­joy trav­el­ling, but it’s a bit tough with where the rand is at the mo­ment. But trav­el­ling has proven valu­able be­cause it gives you a fresh per­spec­tive of your coun­try and cul­ture.

How would you mea­sure suc­cess for the group?

The hard met­rics should be around the com­pany’s per­for­mance i n terms of the rev­enue and prof­its, and our re­sources and re­serves for fu­ture growth, among other things. Go­ing for­ward, I’d like to segue into re­lated in­dus­tries like green en­ergy in about five years’ time. Fast-for­ward 10 years or so: I have as­pi­ra­tions for us to be the largest black­owned in­dus­trial com­pany.

In food man­u­fac­tur­ing, cash is king. You can have great ideas, but if you do not have the cash the lifeblood of the com­pany is com­pro­mised.

Nhlanhla Dlamini Man­ag­ing di­rec­tor of Maleni Group

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