09 Nov IDC boosts young rural entrepreneurs
Siyabonga Tshabalala and Nomuntu Ndhlovu took the decision to leave their corporate jobs in Gauteng and go back home to their rural village of Steenbok in Mpumalanga, to start a business. Both aged 27, the pair now run SiyaBuddy, a recycling and waste management company.
Armed with just a business plan, the two young entrepreneurs applied to the Industrial Development Corporation (IDC) in 2016 for a business loan to purchase machinery to get their business off the ground. “Our application was successful and we used the loan to buy the machinery we needed to get started,” said Tshabalala, who is founder and Operations Director at SiyaBuddy.
SiyaBuddy collects waste from nearest malls and other public waste dispensing places, and then processes them in accordance with waste management handling. The processed waste is then sold to manufacturers according to their specifications. The 541 indirect employees are residents who collect additional waste on behalf of SiyaBuddy, at a fee.
The R4.6 million loan from IDC was used to purchase two baling machines, a forklift, three scales, a truck and office furniture for the start-up company. From generating revenue of R10 000 per month in early 2016, SiyaBuddy has now grown this to more than R200 000 per month. The business provides a source of income to 541 local people who work as independent waste collectors. “The business is growing and we are happy, especially because we have started to break even,” Tshabalala said.
To ensure real empowerment of their employees, the two young business partners took a decision to establish a workers’ trust for their staff. The 25% stake given to employees in the business was to ensure that employees are also shareholders in the company. Because of this workers’ empowerment initiative, the IDC provided a further R4.5 million grant to the business in order to support the empowerment initiative, “We have provided training to the trustees and will also assist them to develop an operational policy that will outline how their business income will be used to the quality of the lives of employees,” said Stuart Bartlett, Head of Developmental Impact Support at IDC.
“We are going to use the grant to increase our production capacity and ease our transportation constraints by getting a bigger truck for waste transportation,” said co-founder Nomuntu Ndhlovu, who is also the company’s Business Development Director.
Zama Luthuli, IDC’s Executive for Corporate Affairs, said the corporation will continue to play a meaningful role in transforming the economic landscape of South Africa by supporting rural-based businesses and youth-owned enterprises. “We are encouraged by enterprises that create sustainable jobs in rural communities, and it’s more compelling when the business has initiatives that seek to empower workers, such as in the case with SiyaBuddy,” Luthuli said.
Ndhlovu and Tshabalala added that they plan to expand the business to other municipalities in the Mpumalanga province, venture into other provinces and find ways of turning waste into energy, “As a start, we have already started the ground work to expand our business into the Gauteng and Eastern Cape provinces.” Ndhlovu added. As part of their expansion preparations, the business has applied for ISO 14000 at the South African Bureau of Standards (SABS).
The SABS provides standards that enhance the competitiveness of South Africa, and which are the basis for consumer protection, health, safety, environmental issues, and compliance with international standards. Tshabalala said they derive satisfaction from realising the positive impact the business is having on their poor, rural community.
The IDC approved an additional application of more than R4 million in 2018 which will be used to purchase three new trucks for SiyaBuddy Workers Trust, under Early Realization of Benefits Initiative using Spatial Intervention Fund. This is to ensure that the Workers Trusts beneficiaries realise early benefits from their investments. The trucks will be owned by the trust and be leased to the company SiyaBuddy Pty Ltd.
“The business is addressing social issues such as unemployment, environmental pollution and social exclusion,” he said. Their advice to aspiring young entrepreneurs, is to have determination and resilience. “They must not give up and should continue until they meet partners and funders who can help them grow their businesses. For us, we never lost hope and we are happy to see ourselves where we are now. With hard work, the future is bright,” they said.