The Department of Economic Development and Tourism’s (DEDAT) agri-processing support programme has helped small businesses in the Western Cape grow sales and profitability, increase cash flow and create new jobs.
At the end of 2017, 22 SMMEs were selected to join the programme and receive support in various forms last year.
Small businesses and entrepreneurs key to healthy economy
The Western Cape Government’s Project Khulisa identified three sectors with high growth potential for job creation and economic expansion. The sectors identified were agri-processing, tourism and oil and gas.
Project Khulisa targeted support for small businesses in agri-processing as a key lever for growth.
The programme was aimed at fast tracking development and growth in the 22 SMMEs by helping to improve their systems and positioning them to take up market opportunities.
Minister of Economic Opportunities, Beverley Schafer said: “Entrepreneurs and small businesses play an incredibly important role in the economy and in job creation, and by supporting them through targeted programmes like the agri-processing support programme, we really are able to help them grow and to flourish.”
Selecting areas of improvement
The agri-processing supplier development programme assisted businesses through a structured process, identifying key issues limiting growth, and those required to improve business models and operations.
Target areas included:
- Operational improvements
- Assistance in the acquisition of key resources
- Strategic sales and marketing support
- Brand building interventions
- Competitiveness enhancement relating to pricing, brand visibility, capacity improvements and industry accreditation
- Product development and commercialisation
Role players were invited to a closing event on 5 February, titled Gearing for Growth, where they discussed investment readiness, inter-buying and supplying between members of the group and funding opportunities.
Successes recorded by the group included:
- 73% of the businesses have acquired new clients and increased their customer numbers.
- 68% of the businesses launched and commercialised new products onto the market.
- 36% have entered new market segments to reach new and more customers.
- 55% of the companies are now represented in new geographic markets/regions.
- Twelve of the companies surveyed could provide mid-year sales information. Of these, 75% indicated that their sales figures have increased.
One of the businesses, Naturals Beauty has seen an increase in its teen range sales through online platforms. Brands targeting the adult skincare market have seen an increase of 33% in in-store sales through the Wellness Warehouse chain. The programme has also helped the brand enter the market in Gauteng, in three new Wellness Warehouse stores.
Data on profit performance was provided by eight of the companies. Of these, 75% indicated that their profitability had improved.
At Herbal View Hydroponics, the migration from primary agricultural produce to value added processed items created an estimated 20% increase in sales.
At this stage 28 new jobs have been created, with businesses confident that more people will be employed in the next 6 months due to increased demand of supplied products, or to the stimulation of new demand. Highest employment counts are at Oh-Lief (5); House of Natural Butters (6); Ubusi Beekeeping (4) and Freyers Cove (4).
Of the companies visited, 82% said they had direct experience of operational efficiencies where operating improvement interventions had been conducted.
Oh-Lief Natural and Organic Products improved testing and product research and development, and through the use of new technology and machinery, were able to improve efficiency and reduce wastage.
“We have seen excellent results with this programme in the past. In 2016, we supported 21 businesses out of which 14 increased turnover by a combined total of R15.9 million, and created employment for 89 additional staff members. The initial results from the 2017/18 group are positive and exciting and we wish these businesses and their staff well as they continue to develop and grow from this experience,” Minister Schafer said. – Press release