2. lawrence.dhlamini@gmail.com
www.sowetogameskin.com
CK: 2007/030964/24
CONTENTS
Page
EXECUTIVE SUMMARY……………………………….…………………………...... 1
BUSINESS OVERVIEW…………………………………….…………………………. 1
1. Business Profile………………….…………….………………….………………….. 1
2. The product or Service ……………………………….………………………………1
3. Location, premises and product facilities ………………….………………………. 2
4. Production and technology ……….………………………….……………………… 2
5. Business’s past achievements, strengths, problems, weaknesses and critical
success factors ……………………….………………….…………….…………….. 2
COMPANY MANAGEMENT ……………………….………………….…………….. 3
1. The entrepreneurs ……………………………………………… ……….………….. 3
2. The management structure of the business……….………………………………... 3
THE MARKET ………………………………………………………………………… 4
1. Industry analysis …………………………………………………………………….. 4
2. Market analysis ……………………………………………………………………… 4
SALES AND MARKETING STRATEGY …………………..……………………….. 4
EGAL AND REULATORY ENVIRONMENT ……….………..……………………. 5
SWOT ANALYSIS AND RISK ASSESSMENT …………………………………….. 5
3. -1-
EXECUTIVE SUMMARY
The business focuses on buying raw hides and skins (a by-product of meat
industry) from abattoirs and hunters, sent them in for processing, thereafter
sell to prominent buyers in the market.
A demand for hand made, unique, original product is increasing along with a
greater appreciation for the hand made elements.
BUSINESS OVERVIEW
1. Business profile
Through love of art the owner of the close corporation appreciated the beauty of
hides and skins and decided to pursue his dreams of buying and selling them to
earn a living.
The business started in 2007 supported and founded by owner who embarked on
a thorough research on the product and the competitors. From selling small
items of crafted art which he bough from crafters and some of which he designed
himself which was followed by selling of one or two hides mainly from Nguni
cows. As soon as sales from hides were on demand he opted for wild animal
skins and hides like zebra, jackal, springbuck, gemsbuck, wildebeest, and
giraffe.
The business is made out of three people, the Managing Director who is also
responsible for sales and marketing, the Client Liaison officer and the
Administrator.
Presently the company’s focus is to target big buyers in order to supply large
quantities of refurbished hides and skins, mainly for providing nature’s beauty
and style to sophisticated consumers in African homes with exclusive leather
texture and game skins; that provides the ultimate underfoot comfort and
interior deco, traditional costumes, leather rugs, African masks and art.
The company, after developing a sound client base, will venture into tanning,
cutting, preservation and conditioning. This will require machinery, chemicals,
and vehicles for transportation as well as manpower for exporting purposes.
4. -2-
2. The product or service
Collection of hides and skins is a necessity, because otherwise they would
become a serious environmental threat. Hides and skins mainly consist of water
and proteins which like all protein products putrefy if not properly treated.
Burying or burning hides and skins is not an option because of the huge quantity
that is produced daily.
Why should one destroy hides and skins anyway considering the fact that they
have a great economical and social value.
Each type of hide and skin has its own peculiarities because of size, weight,
thickness and grain characteristics which distinguish each category from the
other.
As indicated above the business is focused on buying and selling for décor
purposes at this stage. Unlike most of dealers who are buying to make clothes,
shoes, bags, belts and industrial use, etc. The business sells hides uncut to
provide our customers leisure to do as they please with the product.
With good preservation and conditioning hides and skins are durable.
3. Location, premises and production facilities
The business is located in one of South Africa’s most popular townships Pimville
in Soweto. There is no production at the moment due to the fact that hides and
skins are collected from abattoirs and hunters then send direct to tanneries for
processing then returned back for distribution.
4. Production and technology
In olden days, people used their hands, salt, chemicals, knives and rocks to tan
skins. In modern industry sophisticated machines are now being used to preserve
leather. This conversion process, called tanning, requires knowledge of
Chemistry, Biochemistry and Microbiology.
5. Business's past achievements, strengths, problems, weaknesses and critical
success factors
In the fast growing deco trends of the up-market Soweto suburbs, already the
business has facilitated entrepreneurial experience and knowledge through
5. growth in the domestic sector, through a diverse product range that appeals to
and services different markets.
-3-
The skills and social capital development contribute to promotion of craft and
design in South African resource. Already prominent business people from
Soweto are placing orders for different kind of hides. Tourists who are visiting
the township are also buying from the premises.
COMPANY MANAGEMENT
1. The entrepreneurs
The Managing Director has skills in the field of sales, operations, finance, HR and
admin which he acquired at various leading retail industries. He worked for
Woolworths, Edgars and Score in different managerial positions.
The Client Liaison Officer has worked as a stock controller in the building
industry for five years. He use to ensure that orders were placed on time for a
speedy delivery for an efficient work flow
The Administrator has a vast experience in office administration having worked
for the Municipal office for a number of years. Communication with clients was
an order of they day.
2. The management structure of the business
Managing Director
Running of the business
Sales & Purchases
Negotiation
Budget
6. -4-
THE MARKET
1. Industry analysis
The SA hide market is a free market, dominated by a few big traders: African
Hide/Springbok Trading, Hidskin, EAC, Cape Produce Company (CPC), Brits Huide
en Velle, Richard Kane and Hart. These large merchants account for more than
80% of the hide and skin trade, the balance is from small abattoirs and slaughter
houses in the rural areas.
Annual collection level of hides is about 2 million pieces per annum, with 70%
export and 30% local sales. Major markets for export are Italy and the Far East.
Grading is from 1 to 7. The tannery runs print correctness and damaged ones are
rejects, weights are categorised according to the following; (15/16kg) for light,
(19/20kg) for medium, and (23/25kg) for heavies, with approximately 60% of
South Africa’s total annual hide production is suitable for automotive upholstery.
Future plans for the business is to expand the product to international market
starting with SADEC countries as well as Western countries by means of
exhibitions locally and international.
The only problem will be trying to access countries with cultural beliefs that are
against animal killing and will lead to certain people not buying hides and skins.
Another critical problem facing this industry is diseases, felt fires caused by
lightning, natural causes like drought and volcanoes as well as economical
problems.
2. Market analysis
Opportunities in domestic and international tourism market increases as SA
maintains its ‘flavour’ of the month, especially 2010 Soccer World Cup. The
developing Proudly South African patriotism boosts local market as does
increasing consumer base with disposable income.
Client Liaison Officer
Liaison with clients
Selling of product
Stock Control
Administrator
Payment of accounts
Managing the office
7. -5-
SALES AND MARKETING STRATEGY
Prices of our products are relatively low as compared to prices of processed
leather because of low production cost. Buying raw hides and skins is quite
reasonable as you can negotiate prices and you can choose the size and colour of
product that your customers are interested in. The only cost to the business is
the processing which is done elsewhere; therefore, the business is able to adhere
to low prices to enhance customers.
The business is capable of growing extremely fast with the potential market that
is available in the modernized black community who are becoming more aware
of the fact that African culture has more to do with hides and skins as well as a
large number of tourists visiting the townships. A possibility of getting funding
will also help the company to reach its full potential as orders are coming
through.
LEGAL AND REGULATORY ENVIRONMENT
The business is registered under the Close Corporation Act of South Africa. It is
set to establish a quality assurance framework that ensures quality standards,
fair trade and regulation, encourage environmental awareness and sustainability,
and fosters ethical business relations.
8. -6-
SWOT ANALYSIS AND RISK ASSESSMENT
Strengths
The highly motivated and experienced team is aiming at taking the business
higher by promoting tourism while explaining African culture at the same time.
State of art products are sold to consumers at an affordable price due to low
cost of end product. Diverse range of product that appeals to and services
different markets, flexible production capacity, and potential financial viability.
Weaknesses
The business is faced with the following challenges: lack of utilization of product
design resources, lack of focus on and confidence in local design, lack of
relations between production and design and matching designers to crafters and
markets, supply and not demand driven, lack of access to raw materials and
finance, lack of market information, lack of SMME support services for startup
and micro-enterprises.
Opportunities
Demand for hand made, unique, original products will increase along with a
greater appreciation for the hand made element; sophisticated consumers, in
terms of quality and aesthetic move away from mass production and the high
street brands.
There is a need to exploit South African market as well as Southern African
Developing countries as well as international markets. Cheaper prices will secure
larger buyers and contracts.
Threats
Unforeseen circumstances that could affect animals, like diseases, drought,
floods, restricted hunting, economic problems like recession.
Positioning
Our prices are very low due to direct supply from abattoirs and hunters thus
having the competitive edge over other competitors.
