The Department of Economic Development and Tourism (DEDAT)’s Agri-Processing Support Program has helped small businesses in the province grow their sales. profitability, increase cash flow and create new jobs.
At the end of 2017, 22 SMEs were selected to be part of the programme and receive support in various forms throughout 2018.
The Western Cape Government’s Project Khulisa growth strategy identified three sectors with high growth potential. Our focus is to grow the economy and create new jobs. The sectors are: agri-processing, tourism and oil and gas.
In the agri-processing sector, Project Khulisa identified offering support to small businesses as a key lever for growth.
The support programme was aimed at fast tracking the development and growth of the 22 SMMEs by helping to improve their systems, and better 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 programs like the agri-processing support program, we really are able to help them grow and to flourish.”
The Agri-processing Supplier Development Program assisted businesses through a structured process, identifying key issues hindering or required to enhance business models and operations.
Some of these were in areas such as:
- 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 & achieving industry accreditations.
- Product development and commercialisation
The cohort were invited to a closing out event on Tuesday 5 February, titled “Gearing for Growth” where they discussed investment readiness, inter-buying and supplying between members of the group and funding opportunities. Businesses and funders were given the opportunity to meet, through dedicated, one-on-one consultations at the event.
Among the successes the group recorded:
- 73% of the businesses have acquired new clients and increased the number of customers they have.
- 68% of the businesses launched & commercialised new products into 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 sales of its teen range through its online platforms and while they’ve seen this increase in their order book, the increase still needs to be quantified. However, it’s brands geared at the adult skincare market have seen an increase of 33% in in-store sales through the Wellness Warehouse chain. The program has also helped the brand enter the market in Gauteng, in three new Wellness Warehouse stores.
Eight of the companies could provide data on profit performance. Of these, 75% of the businesses indicated that their profitability had improved.
At Herbal View Hydroponics, the migration from primary agricultural produce to value added processed items created an estimated an increase of around 20% in sales. whilst maintaining a steady cash flow due to the higher margins attained.
Thus far 28 new jobs has been created, with many confident that more will be employed within the next 6 months due to the increased demand they can supply or due to new demand being created. The clients with the highest employment counts are Oh-Lief (5); House of Natural Butters (6); Ubusi Beekeeping (4) & Freyers Cove (4).
Of the companies visited, 82% indicated that they are directly experiencing operational efficiencies where operating improvement interventions have been conducted.
Oh-Lief Natural and Organic Products improved testing and the R&D of products, and through the use of new technology and machinery, were able to improve efficiency and reduce wastage.
“We have seen excellent results with this program in the past. In 2016, we supported 21 businesses and saw 14 of them increasing their turn-over by a combined total of R15.9 million, creating employment for 89 additional staff. 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.