Entrepreneurial development - Tshikululu Social Investments workshop 2010


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Presented during Tshikululu's first Serious Social Investing workshop, which took place on 25 and 26 February 2010. Nick van Rensburg (head, Anglo Zimele Empowerment Initiative) discusses entrepreneurial development.

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  • Vaalkrantz Colliery based in Vryheid, KwaZulu-Natal, is managed by a black-owned enterprise - Leeuw Mining and Exploration. Without the financial and technical support of the Fund, the operation would have shut down due to the delayed transfer of funds by a creditor bank. This would have been a huge loss for the local community, living in an isolated area with higher than the average unemployment rate and no real alternative for income generation. Since 2004, the mine’s progress has been remarkable, with it almost doubling its staff and contractor complement in the past two years; 85% of which are local people. Its impressive and consistent growth is cause for confidence for the 269 permanent employees and 207 contractors. Twenty-eight of the employees are female, with six women working underground. All employees undergo technical, skills and safety training. There are also five apprenticeships for local people every year. In addition, the mine supports a health clinic on site, employing two nurses who attend to the needs of staff and their families.
  • Entrepreneurial development - Tshikululu Social Investments workshop 2010

    1. 1. ANGLO ZIMELE Anglo American’s Enterprise Development Initiative 26 February 2010 By Nick van Rensburg – Managing Director Presentation to TSHIKULULU SOCIAL INVESTMENTS WORKSHOP
    2. 2. Anglo Zimele’s Vision <ul><li>To bring about sustainable black economic empowerment through the creation of small and medium enterprises </li></ul><ul><li>To develop and nurture commercially viable and economically sustainable businesses </li></ul>
    3. 3. Background of Anglo Zimele <ul><li>Formed in the 1980’s to promote small business activity in the rural areas </li></ul><ul><li>Change of focus for business development within the Anglo American group in 1989 </li></ul><ul><li>Early focus on procurement and outsourcing non-core services </li></ul><ul><li>Bridge gap between big and small (concept of dual logic economy) </li></ul><ul><li>Transformation of supply chain – Mining Charter </li></ul><ul><li>Entered into the junior mining sector in 2003 with establishment of Anglo Khula Mining Fund </li></ul><ul><li>In October 2007, Small Business Start-up Fund founded, along with Small Business Hub network </li></ul>
    4. 4. <ul><li>Year 2000 – name changed from Small and Medium Enterprise Initiative to Anglo Zimele </li></ul><ul><li>Zimele is a Zulu and Xhosa word meaning “ To be independent ” or “ stand on one’s own feet ” </li></ul>The meaning of ‘Zimele’
    5. 5. Anglo Zimele Management Model Anglo Zimele Management Services Managerial/Legal/Company Secretarial/Accounting/Corporate Governance/ Safety, Health & Environment/Marketing & PR Supply Chain Development Anglo Khula Mining Fund Anglo Zimele Communities Fund Anglo Zimele Olwazini Fund Supply Chain Transformation (Minority Equity) Enterprise Development Enterprise Development (Minority Equity) Technical Support Small Business Hubs Formal Training & Development Enterprise Development Loans (6%) Enterprise Development Loans (6%)
    6. 6. Supply Chain Fund <ul><li>How Anglo Zimele works </li></ul><ul><li>Minority equity position </li></ul><ul><li>R5m equity limit per transaction, leveraged with debt </li></ul><ul><li>Leverage off the Anglo Zimele name </li></ul><ul><li>Business development managers - also directors of investee companies </li></ul><ul><li>Anglo Zimele do shareholder and loan agreements </li></ul><ul><li>Continually review exit strategies </li></ul>
    7. 7. Ikhwezi Fleet Services Supplies industrial vehicles with drivers and transportation of goods on a short-term rental basis. <ul><li>Established Aug 2007 </li></ul><ul><li>Shareholders: 4xIndividuals, AZ </li></ul><ul><li>AZ investment: R1,6m (equity & loans); </li></ul><ul><li>AZ Shareholding: 30% </li></ul><ul><li>Em ploy 21 people </li></ul><ul><li>T/O in 2008: R2,6m </li></ul><ul><li>Major Client: Highveld Steel & Vanadium </li></ul>
    8. 8. Kenny’s Strata Bolt Testing Perform monthly pull tests on installed roof bolts. <ul><li>Established March 2008 </li></ul><ul><li>Shareholders: 1xIndividual, AZ </li></ul><ul><li>AZ investment: R0,5m (equity & loans) </li></ul><ul><li>AZ shareholding: 20% </li></ul><ul><li>Employ one person to date, with scope to employ and develop more. </li></ul><ul><li>Forecast T/O in 2008: R0,9m </li></ul><ul><li>Major Client: Anglo Coal </li></ul><ul><li>Currently done by mines. Close to core, but great opportunity for independent quality control and empowerment. </li></ul>
    9. 9. Anglo Khula Mining Fund
    10. 10. Junior Mining - Anglo Khula Mining Fund <ul><li>R200m fund – Anglo American / Khula Enterprise Finance joint venture Similar financing model to Anglo Zimele </li></ul><ul><li>Value-adding investments in viable black-owned SMEs in junior mining arena </li></ul><ul><li>Main area of funding in ‘high risk’ end prospecting up to completion of bankable feasibility study </li></ul><ul><li>Comply with acceptable corporate governance and SHE requirements </li></ul><ul><li>Up to R20m per project </li></ul><ul><li>Mostly coal investments to date with 2 successful exits </li></ul>
    11. 11. Leeuw Mining & Exploration
    12. 12. Asambeni Mining
    13. 13. Small Business Hubs and Anglo Zimele Communities Fund
    14. 14. Anglo Zimele Communities Fund BUSINESS LOCATION OF CURRENT INVESTMENTS Kumba Iron Ore Anglo Platinum De Beers Kathu 29 Western Limb Eastern Limb Mogwase 41 Rustenburg 80 Mokopane 38 Atok 38 Burgersfort 48 Emalahleni 44 Middelburg 46 Secunda 39 Vaal 47 Note: Johannesburg Total = 497 transactions 12 Hubs in SA 29 176 271 15 <ul><li>Planned hubs </li></ul><ul><li>Bushbuckridge </li></ul>Anglo Coal 6 Kimberley 6 Thabazimbi 26
    15. 15. <ul><li>How the Communities’ Fund works </li></ul><ul><li>Sustainable businesses not necessarily dependent on mining industry </li></ul><ul><li>Entrepreneurs must be local residents / local community </li></ul><ul><li>Loans incur interest at 6% </li></ul><ul><li>Assistance is in the form of loan funding and business skill transfer </li></ul><ul><li>Business hubs assist enterprises with business plans, tender process, access to infrastructural facilities e.g. meeting areas, internet access, printing, photocopying etc. </li></ul><ul><li>Enterprises are introduced to the local mining operations </li></ul><ul><li>Mentoring and support </li></ul>Anglo Zimele Communities Fund
    16. 16. <ul><li>Brick-making </li></ul><ul><li>Building construction </li></ul><ul><li>Car wash </li></ul><ul><li>Dressmaking </li></ul><ul><li>Medical Practitioner </li></ul><ul><li>Fencing </li></ul><ul><li>Fire wood </li></ul><ul><li>Mobile phones </li></ul><ul><li>Funeral parlours </li></ul><ul><li>Restaurants </li></ul><ul><li>People transport </li></ul><ul><li>Photo printing </li></ul><ul><li>Plumbing </li></ul><ul><li>Road construction </li></ul><ul><li>Signage boards </li></ul><ul><li>Shuttle services </li></ul><ul><li>Wood furniture </li></ul><ul><li>Catering </li></ul><ul><li>Farming </li></ul><ul><li>Events management </li></ul>Anglo Zimele Communities Fund Types of Enterprise
    17. 17. Drs Mattelaar and Mamphutuma Medical Practise <ul><li>Business: Medical Practitioner </li></ul><ul><li>Location: Burgersfort, Limpopo </li></ul><ul><li>Loan R800 000 </li></ul><ul><li>Revenue R2.6m p.a. </li></ul><ul><li>Employees 16 </li></ul><ul><li>The practice serves both private and general patients, and is a preferred service provider to the Anglo Platinum Health Scheme </li></ul>
    18. 18. Bakgokathabafi Projects <ul><li>Business: Civils and plant hire </li></ul><ul><li>Location: Atok, Limpopo </li></ul><ul><li>Loan R1m </li></ul><ul><li>Revenue R3.8m p.a. </li></ul><ul><li>Employees 5 </li></ul><ul><li>Ore removal service </li></ul>
    19. 19. Ulwazi Computer Training Centre <ul><li>Business: Computer training </li></ul><ul><li>Location: Kriel and Witbank </li></ul><ul><li>Loan R66 000 </li></ul><ul><li>Revenue R692 000 p.a. </li></ul><ul><li>Employees 7 </li></ul><ul><li>Provides basic, intermediate and advanced training on Microsoft suite products </li></ul>
    20. 20. Reditsego Transport <ul><li>Business: Collection and delivery service </li></ul><ul><li>Location: Witbank, Mpumalanga </li></ul><ul><li>Loan R555 000 </li></ul><ul><li>Revenue R1.4m p.a. </li></ul><ul><li>Employees 6 </li></ul><ul><li>Transports lab samples for Anglo Coal Central Laboratory </li></ul>
    21. 21. Vukani Musa Construction <ul><li>Business: Building and civil works </li></ul><ul><li>Location: Kathu, Northern Cape </li></ul><ul><li>Loan R680 000 </li></ul><ul><li>Revenue R9.2m p.a. </li></ul><ul><li>Employees 14 </li></ul><ul><li>Various projects including upgrade of buildings and construction of a grade R facility at a local primary school </li></ul>
    22. 22. Firewood & Compost <ul><li>Business: Environmentally friendly business that removes invader plants and processes them into firewood </li></ul><ul><li>Location: Sishen (near Kumba Iron Ore) </li></ul><ul><li>Loan R150 000 </li></ul><ul><li>Revenue R3m p.a. </li></ul><ul><li>Employees 38 </li></ul>
    23. 23. Anglo Zimele Entrepreneurial Training & Development Initiative & the Anglo Zimele Olwazini Fund “ Be Independent… through Knowledge.”
    24. 24. <ul><li>Job creation and poverty alleviation </li></ul><ul><li>Social and economic upliftment through skills training and development at grass-roots level </li></ul><ul><li>Promote entrepreneurship through business funding to qualifying individuals </li></ul><ul><li>Training programme for NQF Level 2 accredited qualification for new venture creation </li></ul><ul><li>Target market is BEE youth, women and physically disabled in Anglo’s mining communities </li></ul><ul><li>Partnerships with NGO’s, government, training and other service providers </li></ul>Objectives
    25. 25. How it Works… Entrepreneur Sourcing Entrepreneur Assessment & Selection Entrepreneur Training Submission of business plan to Anglo Zimele Loan award for successful business start-up Accredited NQF Level 2 Certificate Evaluation of business plan Entrepreneurial Training & Development Initiative Anglo Zimele Olwazini Fund Successful Businesses Business Plan Repeated over multiple training intakes…
    26. 26. <ul><li>Relationships with > 300 entrepreneurs established; on target to train 60 entrepreneurs March 2010 </li></ul><ul><li>Partnerships with Nedbank, Neosho 119 and Maccauvlei Learning Academy </li></ul><ul><li>Grant funding of R 500,000 (50/50 contribution from Anglo Zimele and Nedbank) committed to facilitate training and initial costs </li></ul><ul><li>Entrepreneurs mentored throughout learning process via Vuka Mentorship Programme </li></ul>Entrepreneurial Training & Development
    27. 27. <ul><li>Initial capital allocation of R5 million allocated from Anglo Zimele </li></ul><ul><li>Maximum deal size at R20,000 per proposal, unsecured </li></ul><ul><li>Loans to be granted at 6% p.a. </li></ul>Anglo Zimele Olwazini Fund
    28. 28. Photos provided courtesy of Neosho 119 Entrepreneur Assessment and Selection Process
    29. 29. Recruitment Workshops held in Vereeniging
    30. 30. <ul><li>Business: Brickforce manufacturing </li></ul><ul><li>Location: Evaton, Gauteng </li></ul><ul><li>Revenue R240 000 p.a. </li></ul><ul><li>Growth ambitions: </li></ul><ul><ul><li>R5 million p.a. turnover in 5 years </li></ul></ul><ul><ul><li>120 individuals employed </li></ul></ul>MCC Vic Trading Photos provided courtesy of Neosho 119 “ My reasons for wishing to attend the Vuka mentorship programme are simply that I need the proper skills required to sustain my business and providing for the right market.” – Victor Mazibuko, Owner
    31. 31. <ul><li>Business: Ceramics and pottery design </li></ul><ul><li>Location: Sharpeville, Gauteng </li></ul><ul><li>Revenue: R188 000 p.a. </li></ul><ul><li>Experience: Over 10 years in fine arts industry </li></ul>Academe Manufacturing & Supply CC “ I'd like to succeed in eventually exporting my work to other countries and acquiring a larger space to work in… and be able to meet big orders from large retailers such as @home.” Mabitle Machobane, Owner Photos provided courtesy of Neosho 119
    32. 32. Sharpeville Khulumani Cooperative <ul><li>Business: Traditional beadwork, sewing, clothing and textiles </li></ul><ul><li>Location: Sharpeville, Gauteng </li></ul><ul><li>Revenue: R76 800 p.a. </li></ul><ul><li>Employees: 15 </li></ul><ul><li>Originated from the Khulumani Support Group for victims and survivors of the 1960 Sharpeville massacre </li></ul>“ My hope for the future is that our products reach both the local and international markets. I draw my motivation from the fact that the craft work is part of the healing process for the survivors.” – Mary Malefu, Khulumani Support Group Founder Photos provided courtesy of Neosho 119
    33. 33. Ratanda Thobelani Cooperative “ I want this project to grow so that it can create more income and especially more jobs, as jobs are hard to come by.” - Elizabeth Nompi, Cooperative Member <ul><li>Business: Clothing, textiles & accessories manufacturing </li></ul><ul><li>Location: Ratanda (Heidelberg), Gauteng </li></ul><ul><li>Revenue: R302 000 p.a. </li></ul><ul><li>Employees: 6 </li></ul>Photos provided courtesy of Neosho 119
    34. 34. “ My hope for the future is to provide the community with a radio station that can educate, entertain and attract the youth since there is no form of such entertainment for the youth in this community… a platform for the community and the municipality alike, opening up communication between the two.” Daniel Lehlohonolo, Forum Director <ul><li>Business: Community radio station </li></ul><ul><li>Location: Ratanda (Heidelberg), Gauteng </li></ul><ul><li>Revenue: R48 000 p.a. </li></ul><ul><li>Employees: ~15 </li></ul>Lesedi Media Forum Tricia Govender Petrus Nhlapo Daniel Lehlohonolo
    35. 35. Sithole Welding & Supplies “ I know that I just need a good start and I will be successful!” Moshwe Sithole, Owner <ul><li>Business: Welding, light steel products manufacturing. Also sells live chickens. </li></ul><ul><li>Location: Ratanda (Heidelberg), Gauteng </li></ul><ul><li>Revenue: R36 000 p.a. </li></ul>
    36. 36. Current Investments – 19 February 2010 33% 30% 20% 28% Youth 39% 7% 33% 26% Gender – Female 119 132 75 326 Funding – Rm Total Supply Chain Anglo Khula Mining Fund Anglo Zimele Communities Fund (loans only) No. of current investments 548 40 11 497 Staff employed 9894 4468 810 4616 Turnover – Rm 1976 575 786 615
    37. 37. <ul><li>Anglo Zimele’s enterprise development model is very flexible and adjustable to particular circumstances and situations </li></ul><ul><li>Not a ‘one size fits all’ approach </li></ul><ul><li>Requires an extensive support network as well as people with a passion for innovation, development and transformation </li></ul><ul><li>Funding and capacity building go hand-in-hand </li></ul>Lessons Learned
    38. 38. <ul><li>Flexibility </li></ul><ul><li>Equity stake by supply chain fund and AKMF </li></ul><ul><li>Largely unsecured loans </li></ul><ul><li>Co-sharing of risks </li></ul><ul><li>Hand-holding/incubator approach - provision of business development support & transfer of business & technical skills </li></ul><ul><ul><li>Business plan development </li></ul></ul><ul><ul><li>Guidance on best business practice and corporate governance </li></ul></ul><ul><ul><li>Secretarial, legal and admin matters </li></ul></ul><ul><ul><li>Strategic, technical and financial skills transfer </li></ul></ul><ul><ul><li>Market development and expansion </li></ul></ul>Success factors of Anglo Zimele Model
    39. 39. THANK YOU www.anglozimele.co.za