Taking auto suppliers to the next level

VW B-BBEE Initiatives Trust funding and mentoring of black firms pays off

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For many black South African entrepreneurs, setting up and running a business is in itself both a challenging and rewarding pursuit – but the real test comes when the business is provided with capital funding.
Receiving capital funding has proven to be an inhibitor for many start-ups with a poor business model.
Because with capital comes increased accountability and a demand for ethical corporate governance, particularly within the competitive SMME sector.
However, the four suppliers funded through the VW B-BBEE Initiatives Trust are breaking through this barrier.
The businesses, namely; Acoustex, Yenza Manufacturing, Production Logix and KPL Die Casting have, to date, collectively been funded about R70.9m of VWSA’s R86m committed investment.
Acoustex Trim and Yenza Manufacturing are both VWSA suppliers, while Production Logix and KPL Die Casting are part of VWSA’s Ntinga Project – an 18-month intensive mentoring and coaching programme.
KPL Die Casting owner Sally Sphamandla Ndawonde Marengo said the support the business received from the trust had propelled production and enabled her to achieve leading-edge technical capacity, unlocking new markets.
“We are fortunate in that our businesses have been able to be developed to the point where we have outgrown the challenges many new businesses face.
“The loan from VWSA could not have come at a better time.
“We know what we want and need to do – we have been in this game for 21 years.
“But we are not entirely dependent on VWSA, but they have enabled us to become a better-quality and globally competitive business,” she said.
The board of trustees of the B-BBEE Initiatives Trust hosted an event in Uitenhage on Wednesday to present the report on the performance of the trust since its establishment in 2016.
Entrepreneur and trustee Sphamandla Ndawonde said for up-and-coming black suppliers being a funding recipient was not always easy.
Ndawonde said black entrepreneurs needed to undertake in-depth introspection to critically evaluate their personal skills as well as what their businesses could offer industry.
“You can’t underestimate how difficult it is for specifically black-owned businesses to do business with a global entity like Volkswagen.
“Not only are you having to compete with local suppliers and national suppliers, you also have to meet global standards.
“But there is access to capital, such as the B-BBEE Trust, which does give you an opportunity to at least get into the game,” he said.
Eastern Cape finance MEC Oscar Mabuyane, who delivered the keynote address, said the province welcomed the programme’s outcome.
He said the initiative was in line with the province’s plan to grow the local economy.
“Our government is working on aligning the curriculum of TVET colleges with the requirements of original equipment manufacturers, like VWSA, to ensure we develop the right skills that are required for our economic growth.”
VWSA managing director Thomas Schaefer said VW was fully committed to the transformation of the supply chain of the automotive industry.
He said it was critical for OEMs to collaborate in developing new black suppliers to ensure their businesses were sustainable and competitive.
“We appreciate the sterling work and contribution that the board of trustees has achieved in a short space of time.
“We are also grateful for the ongoing support from the DTI [department of trade and industry] and Eastern Cape government,” Schaefer said.

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