Baubles, ban­gles, beads – and suc­cess

From hum­ble be­gin­nings, Max Lich­aba de­fied the odds by build­ing up Lich­aba Cre­ations, which now has an an­nual turnover of over R240 mil­lion

Destiny Man - - ENTREPRENEURS -

Grow­ing up in a dis­ad­van­taged fam­ily in Saaiplaais in Vir­ginia, Welkom, the CEO and founder of Lich­aba Cre­ations spent his child­hood help­ing his mother sell fruit and veg­eta­bles to sup­port their strug­gling fam­ily.

“My par­ents couldn’t af­ford to send us to school as trans­port was very ex­pen­sive,” says Lich­aba. One day his mother told him and his brother that she’d found them a free school which also pro­vided free lunch and trans­port. “She hadn’t re­alised that it was a school for chil­dren with spe­cial needs,” he re­calls “Un­for­tu­nately the school I was at­tend­ing only went up un­til Grade 10 and that’s when I left.”

He even­tu­ally stud­ied jew­ellery-mak­ing at Har­mony Jew­ellery School through a pro­gramme spon­sored by Har­mony Gold Mine and be­came one of its best stu­dents, spend­ing three years there be­fore be­ing ap­pointed to join Royal Man­u­fac­tur­ing in the

Free State. “There were only two of us cho­sen to join the com­pany. I worked there un­til it closed down and we were re­trenched,” he re­calls.

Armed with this ex­pe­ri­ence and a qual­i­fi­ca­tion in jew­ellery, Lich­aba started his own bead­work business, with dreams of de­vel­op­ing it into a big enterprise. He in­vested his last R500 into the ven­ture. “I had to use what­ever I had at that time, as I couldn’t af­ford ma­chines to make jew­ellery. How­ever, be­fore long, peo­ple started buy­ing my prod­ucts to wear to wed­dings and other oc­ca­sions,” he says.

In 20016, af­ter al­most four years in op­er­a­tion, Lich­aba re­ceived fund­ing from SAB Kick­start. He then fo­cused on start­ing Lich­aba Cre­ations, which spe­cialises in pre­cious me­tals ex­change, in­clud­ing sil­ver, gold, pal­la­dium, plat­inum and di­a­monds.

“Af­ter get­ting the SAB Kick­start deal, we part­nered with the Free State De­part­ment of Tourism. When­ever they had ex­hi­bi­tions over­seas, they’d take our prod­ucts to dis­play there. Even­tu­ally, af­ter peo­ple started ask­ing ques­tions about our brand, the de­part­ment be­gan tak­ing us along to those ex­hi­bi­tions,” he re­calls. In this way, he vis­ited France and the USA, which helped his com­pany mar­ket it­self in­ter­na­tion­ally. It’s since been ex­port­ing its prod­ucts to more than seven coun­tries.

Lich­aba’s now ex­panded his business um­brella to in­clude Lich­aba Cus­tom Rides Kwa-Lich­aba res­tau­rant in Soweto and Le­sotho, a prop­erty in­vest­ment com­pany and plans to start a me­dia pro­duc­tion com­pany.

“Lich­aba Cus­tom Rides deals in cars, which are a huge pas­sion of mine. We have a ware­house and we buy new ve­hi­cles, cus­tomise them and sell them. We also re­fine gold,” he ex­plains.

How­ever, his en­tre­pre­neur­ial jour­ney hasn’t al­ways been smooth. At one point, he was ad­vised to in­vest in train­ing and pro­vide learn­er­ships for govern­ment. He duly used money from his ini­tial business to in­vest in a school, on the same premises as his ven­ture. How­ever, Lich­aba didn’t re­alise that govern­ment doesn’t pay promptly – which caused him such se­vere cash flow prob­lems that he was forced to put his business up for auc­tion, since he couldn’t pay the rent.

“I in­vested more time and ef­fort in the school as I was told I’d be paid within 60-90 days of each stu­dent en­rolling, but that didn’t hap­pen – in­stead, pay­ment only came through a year later.”

His split fo­cus proved dan­ger­ous, as the jew­ellery business – which was cov­er­ing the costs for the school – also had a cash flow prob­lem and couldn’t cover the rental ex­penses. Two months later, the land­lord closed the doors and auc­tioned his equip­ment to cover the rental costs.

“It was a dark time for me. My fam­ily helped set­tle my debts and get me get back on my feet. I sold my fur­ni­ture and slept on a ma­tress on the floor, as I was try­ing to raise cap­i­tal to buy my old jew­ellery equip­ment back.”

He even­tu­ally bought his ma­chines back and, eight months later, was able to start trad­ing again, al­beit on a smaller scale. Work­ing from his flat, he ex­ported his work to In­dia and the UK.

Mat­shidzula’s love af­fair with the Lit­tle Bar­net Farm in Alexan­dria, East­ern Cape, be­gan in 2007, when – at just 19 years of age – he was brought onto the beef farm as a train­ing man­ager. The farm had been ear­marked as a land re­form project jointly owned by 18 black ben­e­fi­cia­ries from the com­mu­nity and it was full of prom­ise.

But six years of mis­man­age­ment saw the stock dwin­dle from 300 cows to just over 120. Through the Bar­net Business Trust, Mat­shidzula and his men­tor, Walter Biggs, were brought in to over­see the man­age­ment of the ail­ing farm, where their first strate­gic de­ci­sion was ex­pand­ing it into a dairy farm.

Mat­shidzula, who was studying at the time, wasn’t per­ma­nently based there. He of­fi­cially re­joined the farm in 2013, af­ter ac­quir­ing a 40% stake in the business.

By that stage, 16 of the orig­i­nal 18 com­mu­nity ben­e­fi­cia­ries had sold their stake to two re­main­ing mem­bers who part­nered with Mat­shidzula to form Mat­shi­bele (Pty) Ltd.

The farm was de­liv­er­ing a steady turnover, but Mat­shidzula had big cash flow prob­lems. He was over­drawn with a 25-year loan with the Land Bank and a sec­ond loan he’d taken out to buy the business.

With a na­tional drive to cre­ate a new gen­er­a­tion of black com­mer­cial farmers high on the govern­ment’s agenda, you’d think there’d be fewer bar­ri­ers for farmers to ac­cess fund­ing, but Mat­shidzula says this couldn’t be fur­ther from the truth.

“If you think about it, this is a 100% black-owned business – I’m the guy who ticks all the right boxes for govern­ment to fund. I ap­proached dif­fer­ent govern­ment agen­cies, but that fund­ing never ma­te­ri­alised,” he says.

In hind­sight, how­ever, he be­lieves this was a bless­ing in dis­guise, as he was forced to ex­plore al­ter­na­tive op­tions. He sold half of his stake in the business to raise cap­i­tal that matched the net value of the com­pany. This cash in­jec­tion en­abled him to boost milk vol­umes from 2 000 litres per day to an im­pres­sive 17 000 litres per day.

He’s proud of the string of ac­co­lades he’s re­ceived over the years, in­clud­ing AgriSA/ Toy­ota East­ern Cape Young Farmer of the Year and the pres­ti­gious Man­gold Tro­phy for the best-con­served farm in the Bathurst re­gion.

He em­ploys 17 per­ma­nent work­ers and sea­sonal work­ers – all older than he. He’s also upped the em­ploy­ment cri­te­ria, mak­ing it manda­tory for all farm work­ers to hold a ma­tric cer­tifi­cate. Lit­tle Bar­net is the only farm in the area to do this.

He also at­tributes his suc­cess to mean­ing­ful men­tor­ship, which is of­ten lack­ing in lo­cal govern­ment projects.

Look­ing to the fu­ture, his fo­cus is on im­prov­ing the qual­ity of the milk he pro­duces. Through the Coega Dairy

Plant, where the milk’s pro­cessed, Lit­tle Bar­net Farm is part of a sup­ply chain for the Sho­prite-Check­ers Group’s pri­vate-la­bel milk.

He’s also com­plet­ing the next phase of his de­vel­op­ment strat­egy – the con­struc­tion of new pro­duc­tion fa­cil­i­ties, which will un­lock a fur­ther 35% growth over the next year.

MILK­ING IT In just over a decade, farmer Tshilidzi Mat­shidzula (30) turned a loss-mak­ing beef cat­tle farm into a suc­cess­ful dairy farm that now boasts an an­nual turnover of R22 mil­lion

THE REAL ES­TATE DE­VEL­OPER Obin­wanne Okeke’s abil­ity to see op­por­tu­ni­ties in chal­lenges helped him build a business with an an­nual turnover of $2 mil­lion

Born in Nige­ria, Okeke has trav­elled ex­ten­sively and es­tab­lished his busi­nesses in places fac­ing chal­lenges on many lev­els.

He founded In­vic­tus Group, a con­glom­er­ate in con­struc­tion, real es­tate de­vel­op­ment, oil and gas, agri­cul­tural de­vel­op­ment and en­ergy op­er­at­ing in Nige­ria, SA and Zam­bia with an an­nual turnover of $2 mil­lion. Hav­ing started the group with lit­tle more than a com­puter, to­day it em­ploys hun­dreds of peo­ple.

Within just a few years of ex­is­tence, the oil and gas op­er­a­tions of the com­pany have made sig­nif­i­cant strides in Nige­ria. They work with en­ergy part­ners, in­vestors and con­trac­tors to as­sess their as­sets, port­fo­lios and in­vest­ment strate­gies and to de­velop tech­nolo­gies.

The group has also iden­ti­fied new ar­eas of growth in the agri­cul­tural sec­tor through St Kilda Farms, which con­trols most as­pects of its poul­try pro­duc­tion process. It hatches, raises and pro­cesses chick­ens and tur­keys, as well as man­u­fac­tur­ing its own feed, run­ning its own re­frig­er­ated trucks and op­er­at­ing pro­cess­ing plants across Nige­ria.

In the past two years, Okeke’s ex­panded his pro­file, be­com­ing one of Africa’s youngest and most sought-af­ter pub­lic speak­ers on en­trepreneur­ship and in­vest­ment in the con­ti­nent.

His tra­jec­tory be­gan af­ter com­plet­ing his Mas­ter’s de­gree in in­ter­na­tional re­la­tions and counter-ter­ror­ism in Aus­tralia, when he re­turned to Nige­ria and iden­ti­fied a mas­sive business op­por­tu­nity. “I set­tled in Abuja, but it was ex­tremely dif­fi­cult to find ac­com­mo­da­tion,” he re­calls. “Houses were over­priced, de­mand was high and the struc­tures be­ing built weren’t what peo­ple were look­ing for.

“That same year, I went into real es­tate de­vel­op­ment on a small scale, with a few projects. The next year, we de­vel­oped about 17 build­ings for residential oc­cu­pa­tion. By this time, peo­ple were be­com­ing aware of the In­vic­tus Group.”

Dur­ing this pe­riod, in­suf­fi­cient power sup­ply was a big chal­lenge in Abuja.

This pre­sented Okeke with an­other op­por­tu­nity to ex­pand his business: he be­gan build­ing en­ergy-ready houses pow­ered by so­lar pan­els.

“I trav­elled to China and Ger­many to do re­search and find part­ners who would man­u­fac­ture these dwellings with me. We then di­ver­si­fied our business to the en­ergy in­dus­try [ie, sup­pli­ers of so­lar pan­els].”

How­ever, he says his en­tre­pre­neur­ial jour­ney has had its share of bumpy patches, in­clud­ing com­pet­ing with big cor­po­rates who had all the re­sources needed to deal with red tape when do­ing business in other coun­tries.

“All my busi­nesses had started as a one­man show, but I re­alised that this wasn’t fea­si­ble. I started hir­ing skilled peo­ple who spe­cialised in cer­tain ar­eas.” These in­cluded ad­min­is­tra­tion, rev­enue and business law.

His achieve­ments in­clude be­ing nom­i­nated for the 2017 All Africa Business Lead­ers Awards.

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