Massmart and Absa join forces to support black entrepreneurs
- Comments Off on Massmart and Absa join forces to support black entrepreneurs
Massmart and Absa today announced a partnership to assist Lethabo Milling, a black-owned milling company, to acquire a mill in Ventersburg, Free State which will lead to the creation of 40 permanent jobs.
Lethabo is a participant in the Massmart Supplier Development Programme and will receive an order from Massmart to produce 10000 tons of Massmart’s private label Econo Super Maize Meal as part of the deal.
The deal which is worth R9.8m is made up of an R8.2m loan provided by Absa Enterprise Development. Massmart has acted as guarantor for 50% of the loan and has in addition issued a R1.6million grant to Lethabo to upgrade the facilities and to put a new packaging line in place. Lethabo will use the loan to purchase the mill, equipment and upgrades. Absa has also set up a working capital facility to assist with the initial cost of the setup.
This partnership marks an important shift in focus for us, said Massmart Supplier Development Executive Mncane Mthunzi. “We recognise that reviving key industries and developing much needed skills continues to be an important mandate in the South African context. We believe we have entered into a mutually beneficial partnership with Lethabo and Absa that will result in black representation in a key industry, create jobs and also put our Econo house brand on the shelves,” he added.
Lethabo Milling CEO Xolani Nzaba said “This deal has managed to cut out all the administrative barriers most small businesses face when attempting to secure financing agreements. It is difficult to obtain finance for these kinds of projects without production commitments from big companies such as Massmart. We will also be milling our own Lethabo brand and we hope to distribute our products across the country in the coming years.”
Speaking about Absa’s involvement, Head of Business Banking Barclays Africa, Roy Ross said: “Absa recognises the importance of the SME sector as an engine to drive economic growth, which in turns leads to job creation.”
“As the financial partner of the Massmart Supplier Development programme, Absa will serve the needs of the SME suppliers involved by making funding available to them. In addition to this, we will provide market access and business linkages through our Procurement Portal and provide non-financial support through our network of Absa Centres of Entrepreneurship located across the country,” further attributed Ross.
Having identified the need for practical business courses and leadership training for our suppliers, Massmart, together with the Gordon Institute of Business Sciences (GIBS) have partnered in an enterprise development programme to enhance the business and leadership skills of entrepreneurs supported by the Supplier Development programme. Nzaba is one of the 48 entrepreneurs who were selected by Massmart to participate in the 12-month business management programme which began earlier this year.
Massmart’s supplier programme continues to gain traction with more than 193 suppliers in different industries currently participating in the programme. The programme successfully launched another manufacturing project in Stutterheim, Eastern Cape last month. Local company Ikusasa Green began manufacturing cooler boxes for Massmart’s private label, Camp Master.
“We have a strong pipeline of projects in the manufacturing sector and remain committed to creating opportunities for suppliers,” concluded Mthunzi.
Massmart is a managed portfolio of four divisions, each focused on high volume, low margin, low-cost distribution of mainly branded consumer goods for cash, through 376 stores in 12 countries in sub-Saharan Africa.
About Massmart’s Supplier Development Programmes
Since its inception in 2011, Massmart’s Supplier Development programme, an investment worth R242m towards developing Massmart’s South African-based small suppliers that are either black-owned, black-empowered or local manufacturers of products continues to make headway and has to date deployed funding to 183 black-owned suppliers to the Group. The fund supports suppliers in agriculture and manufacturing.
For more info refer to SDF Annual Report: http://www.massmart.co.za/wpcontent/uploads/2014/03/SDF-2013-Condensed-Report.pdf
About Lethabo Milling and Xolani Ndzaba
Lethabo Milling is a 100% South African black owned maize milling business and a new player in the maize milling industry. Lethabo Milling (Pty) Ltd is positioned in the market at the same competitive level with the industry’s main players on price, product quality and service delivery. We believe in building customer value and lasting business relationships driven by good service, mutual beneficial trust and integrity.