NEDBANK_ KZN DEPARTMENT OF - PARTNERING FOR GROWTH – NEDBANK_ KZN

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NEDBANK_ KZN DEPARTMENT OF - PARTNERING FOR GROWTH – NEDBANK_ KZN Powered By Docstoc
					     PARTNERING FOR GROWTH –
NEDBANK, KZN DEPARTMENT OF ECONOMIC
    DEVELOPMENT AND GIJIMA KZN
INSIDE: NEDBANK BUSINESS BANKING DEVELOPS BUDDING BUSINESS WITH GIJIMA KZN • SWAYIMANE SMALL CANE SEES
GROWTH • NEDBANK BUSINESS BANKING’S ENTERPRISE DEVELOPMENT PROPOSITION • CORRIDA SHOES RECEIVES A THREAD
OF HOPE FROM NEDBANK AND GIJIMA KZN • ININA CRAFTS A SUSTAINABLE FUTURE • IKUSASA FORESTRY GROWING FAST!

Foreword: Dr Zweli Mkhize, MEC for Finance and Economic Development.      We have made substantial progress in achieving growth and we are
Since the dawn of democracy, we have successfully                         confident that despite global economic challenges facing our country
presented investment packages to foreign investors                        and the continent, we will continue to put in place projects that will
                                                                          soften the impact of the current economic meltdown.
during outward and inward missions; including
international trade and investment conferences                            Because a democratic order founded on human rights principles has now
and exhibitions.                                                          been entrenched, our task now is to build a caring society that brings
                                                                          about material improvements to the lives of all South Africans,
The success of these programmes is best demonstrated by the               especially those living in poverty. We all know that levels of poverty
R603 million in new investments which have been facilitated by Trade      are extremely high in various municipalities, even though the past
and Investment KwaZulu Natal during the 2006/07 financial year. We        5 years have witnessed economic growth in the major economic hubs
                          can say with confidence that this province      made up of the eThekwini-Msunduzi-uMhlathuze triangle. In view of
                                   is characterised by growth, and        this, our efforts have been directed to all corners of the province,
                                          employment equity, built        obviously being guided by our industrial development strategy derived
                                               on the full potential of   from the Provincial Growth and Development Strategy.
                                                   all its citizens.
                                                                               Our European Union sponsored LED programme, Gijima KZN
                                                                                     has contributed significantly to the promotion of
                                                                                         economic activity in all municipalities. We are
                                                                                            confident that the impact of this programme will
                                                                                               be felt across the province as we surge forward
                                                                                                 to 2014.

                                                                                                      We are mindful of the skills shortage
                                                                                                       experienced by cooperatives and SMMEs
                                                                                                       that are involved in various sectors such as
                                                                                                       agriculture, construction, clothing and
                                                                                                      textile, and ICT. Government is committed
                                                                                                     to providing leadership in this regard. There
                                                                                                   are a number of legislative frameworks in place
                                                                                                 including the country’s Human Resources
                                                                                               Development Strategy. The declared mission of this
                                                                                           strategy which was adopted by Cabinet in 2001 is: To
                                                                                      maximise the potential of the people of South Africa,
                                                                               through the acquisition of knowledge and skills, to work productively
                                                                          and competitively in order to achieve a rising quality of life for all, and to
                                                                          set in place an operational plan, together with the necessary institutional
                                                                          arrangements, to achieve this.
OUR EUROPEAN UNION SPONSORED LED                                             in rural poverty to better conditions in rural areas rather than to out-
                                                                             migration of the poor. So, contrary to common perceptions, migration
PROGRAMME, GIJIMA KZN HAS CONTRIBUTED                                        to cities has not been the main instrument for rural poverty reduction.
SIGNIFICANTLY TO THE PROMOTION OF                                            Agriculture is a source of livelihood for an estimated 86 percent of
ECONOMIC ACTIVITY IN ALL MUNICIPALITIES.                                     rural people. It provides jobs for 1.3 billion smallholders and landless
                                                                             workers. Agriculture can be a source of growth for the national
We want to develop a cadre of entrepreneurs who will respond to the          economy, a provider of investment opportunities for the private sector,
challenges of underdevelopment in rural areas. Agriculture is our main       and a prime driver of agriculture-related industries and the rural non-
target. The World Bank attributes more than 80 percent of the decline        farm economy.




       NEDBANK BUSINESS BANKING DEVELOPS
        BUDDING BUSINESS WITH GIJIMA KZN
            THIS PARTNERSHIP HAS ALREADY BROUGHT IMPROVEMENTS IN THE LIVES OF MANY PEOPLE IN THE PROVINCE.


Nedbank is using innovative methods to assist                                programme, which receives funding from the European Union.
                                                                             Nedbank, as a member of the Gijima KZN Funding Forum, is one of
emerging businesses and entrepreneurs transform
                                                                             eight financial institutions that have been considering the financing of
their dreams into reality. With a firm understanding                         Gijima KZN-generated projects on a programmatic basis.
that all businesses are unique, Nedbank endeavours
to develop all-encompassing, flexible solutions                              Nirmala Reddy says that Nedbank Business Banking is aware of the
capable of helping individuals overcome their                                problems faced by emerging businesses, especially with access to
                                                                             finance and capacity-building. Reddy maintains that Nedbank is
particular sets of challenges.
                                                                             committed to assisting growing businesses reach their full potential.
                                                                             "A crucial component of creating an enabling environment is through
In the spirit of assisting as many up-and-coming entrepreneurs as
                                                                             collaborative initiatives, such as Nedbank Business Banking’s
possible, Nedbank has signed a Memorandum of Understanding
                                                                             involvement with the KwaZulu-Natal Department of Economic
(MOU) with the KwaZulu-Natal Department of Economic
                                                                             Development and Gijima KZN. We are able to consolidate mutual
                              Development and Gijima KZN, a local
                                                                             strengths, thereby intensifying the impact of initiatives designed to
                                     economic development support
                                                                             assist and guide businesses to becoming sustainable, job-creating
                                                                             enterprises,” Reddy stressed.

                                                                             This partnership has led to the implementation of the Swayimane
                                                                                 Group Farming Project, which sets out to establish sustainable
                                                                                    sugar cane production with three co-operatives, as well as the
                                                                                      Ikusasa Forestry Project, which seeks to establish a Black-
                                                                                        owned timber grower’s co-operative and marketing agency.
                                                                                         More recently Nedbank and Gijima KZN have also made
                                                                                          a difference by granting funds to the Thread of Hope
                                                                                          Shoe Export Expansion Project, which aims to maintain
                                                                                          the growth of footwear manufacturing business,
                                                                                         Corrida Shoes.

                                                                                        The MOU has already brought about improvements in the
                                                                                     lives of many people in the province. From the formation of
                                                                                  business plans through to the granting of implementation
                                                                              funding, every step is crucial to ongoing business success and growth,
                                                                             which is critical to improving the lives of individuals and uplifting the
                                                                             economic conditions of entire communities.

                                                                             Left: Thandazile Magubane, the Inina Manager and Lodewijk Briët, the EU Ambassador
                                                                             to South Africa, model an Inina product.




                                                                         2
        SWAYIMANE SMALL CANE SEES GROWTH
           PROJECT WILL SUPPLY 14 400 TONS OF SUGAR CANE PER ANNUM TO THE NOODSBERG MILL, WHICH MEANS THE
                                   SUGAR CANE WILL GROSS APPROXIIMATELY R1,8 MILLION PER YEAR.


Mention KwaZulu-Natal and one of the first things                          as well as the establishment of training for managing the institutional
to come to mind is sugar cane. Sugar cane farming                          entities.

and production is one of the main resources for
                                                                           The introduction of bio-fuels has increased the demand for sugar cane,
which the province is known.                                               so new cane growers have an increased demand for product. The
                                                                           Swayimane Group Farming Project will supply 14 400 tons of sugar
It is a crop suited to small-scale production and grows well in            cane per annum to the Illovo Noodsberg Mill, which means that the
Swayimane, an area 30 km from the Illovo Noodsberg Sugar Mill.
Small-scale farming operations are carried out on approximately
800ha of land in this district, which, due to its proximity
to the mill, has emerged as a prime sugar cane
production area.

The Swayimane Small Cane Growers Project
was developed in order to address several
problems within the area. Sugar cane
production had dropped from more
80 000 tons during the mid-1990s to
just 14 000 tons by 2004. The
decline is largely attributable to
constraints on small-scale farmers,
such as cash flow constraints, the
high costs associated with
accessing credit and a lack of
management and technical capacity.

The project was created and then
received a R3,8 million injection from
Gijima KZN and loan finance from
Nedbank amounting to more than
R1,7 million, effectively addressing these
constraints and allowing small farmers to enter
into commercial production as a means of alleviating
poverty in the Swayimane area. The initiative involves the
members of three co-operatives – Ukhaloluhle Sugar Cane

THE INTRODUCTION OF BIO-FUELS HAS                                          sugar cane will gross the Swayimane Project approximately
INCREASED THE DEMAND FOR SUGAR CANE,                                       R1,8 million per year. This money will be ploughed back into the
                                                                           community through land rentals estimated at R1 500 per hectare,
SO NEW CANE GROWERS HAVE AN INCREASED
                                                                           annually. The project will create a minimum of 44 sustainable jobs in
DEMAND FOR PRODUCT.                                                        farm management, administrative support and farm labour. This
                                                                           project will generate a further 40 temporary jobs and bring in
Trading Co-operative, Okhasini Sugar Cane Trading Co-operative and         development contractors, creating sustainable economic growth in
the Okhalweni Sugar Cane Trading Co-operative. Along with                  what was once a disadvantaged area.
developing the physical infrastructure and preparing the land for
planting, the support given is intended to ensure that the project’s
activities remain sustainable. This includes providing farm
management support, project management and agricultural support,           Above: Work starts on the Swayimane cane fields.




                                                                       3
  NEDBANK BUSINESS BANKING’S ENTERPRISE
       DEVELOPMENT PROPOSITION
     THROUGH OUR ASSOCIATIONS WE ARE ABLE TO OFFER BUSINESS MENTORSHIP, CAPACITY BUILDING, TRAINING AND OTHER
         TECHNICAL ASSISTANCE PROGRAMMES TO HELP ENTREPRENEURS IMPROVE THEIR BUSINESS MANAGEMENT ACUMEN.



Nedbank Business Banking provides innovative ways                             Nedbank has created a unique and independent ‘enterprise
to help develop emerging business and entrepreneurs.                          development forum’ specifically with this in mind. The forum
                                                                              considers lending requests based on the principles of providing
The solution is all-encompassing and flexible to
                                                                              easier access to credit to emerging and developing enterprises in
meet the specific needs and different challenges                              South Africa. Nedbank’s lending solutions include a suite of
that businesses experience as they go through the                             products that are designed to ensure that the client’s individual
stages of starting up, growth and expansion.                                  requirements are met. Capital payment holidays, extended
                                                                              repayment periods and interest-free loans are some examples of
Our unique approach to enterprise development is complemented by              ways in which we can apply flexible and carefully thought-
business support and technical assistance programmes designed to              through lending structures that are aligned to your enterprise’s
                                accommodate the ever-changing                 specific trading needs and cashflow cycles.
                                         needs of the entrepreneur.
                                                                              CAPACITY BUILDING AND SUPPORT
                                                                              A business owner needs to be able to fulfil many roles. At the
                                                                                 same time it is important not to lose focus on growth and
                                                                                           cope with the pressure of an ever-changing
                                                                                                marketplace. We understand that finance is only
                                                                                                    one component of business success and the
                                                                                                       role of non-financial support and expertise
                                                                                                          is crucial for ongoing business
                                                                                                           sustainability.


                                                                                                             Through our associations we are able
                                                                                                             to offer business mentorship, capacity
                                                                                                             building, training and other technical
                                                                                                             assistance programmes to help
                                                                                                            entrepreneurs improve their business
                                                                                                          management acumen. The mentorship
                                                                                                        service is aimed at guiding, counselling and
                                                                                                     providing specialist and technical advice
                                                                                                 to the entrepreneur, through the assistance of
                                                                                            informed and experienced business mentors. The
                                                                                    specialist advisory service includes legal aspects, tax
                                                                              matters, human resources and marketing. These services are
                                                                              especially important to entrepreneurs who need vital information
                                                                              unique to an area of expertise outside of his/her sphere or ability.


                                                                              Clearly, the needs of the entrepreneur and the enterprise evolve
EASIER ACCESS TO FINANCE
                                                                              and change dynamically. This is why at Nedbank Business Banking
Given that many entrepreneurs do not always have an established
                                                                              we pride ourselves on the partnerships we have with our clients –
track record, with limited financial history, we acknowledge that in
                                                                              partnerships that see us providing ongoing support when it is
certain instances lending requests must be judged on other criteria.
                                                                              most needed!
Examples of such criteria are entrepreneurial profile, background and
experience as well as the viability of a sound business case supporting       Above: Corrida Shoes factory where Gijima KZN-funded machinery has
the lending request.                                                          been installed.




                                                                          4
CORRIDA SHOES RECEIVES A THREAD OF HOPE
     FROM NEDBANK AND GIJIMA KZN
    THE OPERATION IN LIDGETTON CURRENTLY PROVIDES 150 EMPLOYMENT OPPORTUNITIES, GROWING TO 180 IN PEAK SEASON.
        THROUGH EXPANSION, THE TOTAL NUMBER OF JOBS PROVIDED BY CORRIDA SHOES COULD EVENTUALLY GROW TO 821.



The Thread of Hope Shoe Export Expansion Project                           The Thread of Hope Shoe Export Expansion Project, which is part of
is a market-led initiative which serves to maintain                        an overriding initiative run by Corrida Shoes, is creating many new
                                                                           employment opportunities within the local community as a result of
the growth of a high-performing footwear
                                                                           the outsourcing of certain aspects of the manufacturing process to
manufacturing business.                                                    women in the rural Lidgetton area.

Ensuring the development of this project will also address rural
                                                                           The operation in Lidgetton currently provides 150 employment
development and equitable growth in South Africa. The Thread of Hope
                                                                           opportunities, growing to 180 in peak season. Taking into
project is supported by Nedbank and Gijima KZN, with Nedbank
                                                                           consideration the extra 150 employment opportunities to be created
providing a medium-term loan of more than R1,7 million, to be repaid
                                                                           in Lidgetton through the expansion project and the 50 more to be
in 60 months, and Gijima KZN making available R3,8 million for
                                                                                                                created within the core manufacturing
the initiative.
                                                                                                                           component of Corrida Shoes
                                                                                                                                  in Pietermaritzburg,
The project aims to expand the existing Corrida Shoes
                                                                                                                                       eventually the total
export business by 30% through continued growth
into export markets. To achieve such growth
there is a need for skills development, the
consolidation of certain parts of the
supply chain and the development of
outsourced component suppliers.
Corrida Shoes is the manufacturer of
the Tsonga brand, which is an
innovative market leader in the
South African shoe industry.


In spite of a downturn in the South
African shoe industry, during the past
23 years Corrida Shoes has grown into
a booming business. Due to the general
decline in the sector, the company’s
supplier of soles has been unable to invest
in new equipment and technology, making it
necessary for Corrida Shoes to lower its risk by
consolidating its supply chain. This will be
                                                                                                                                         number of jobs
achieved with the assistance of the Thread of Hope
                                                                                                                                    provided by Corrida
                                                                                                                             Shoes will increase to 821,
INSPITE OF A DOWNTURN IN THE SOUTH
                                                                                                                    all as a direct consequence of the
AFRICAN SHOE INDUSTRY, DURING THE PAST 23                                                     implementation of this project. This will undoubtedly
YEARS CORRIDA SHOES HAS GROWN INTO A                                       improve the well-being and economy of the community and spur
BOOMING COMPETITIVE BUSINESS.                                              Corrida Shoes to greater heights in the years to come.


Shoe Export Expansion Project, which will reduce and improve Corrida
Shoes’ competitiveness on a global scale, thereby strengthening the
company’s market position.                                                 Above: View into the factory where the Gijima KZN-funded machine has been installed.




                                                                       5
            ININA CRAFTS A SUSTAINABLE FUTURE
     THE ININA CRAFT AGENCY IS CONSIDERED A HIGHLY SUCCESSFUL EXAMPLE OF RURAL ENTERPRISE DEVELOPMENT, AND THE
                                           MODEL COULD BE REPLICATED FOR FUTURE PROJECTS.


KwaZulu-Natal is well-known for its rapidly expanding                         ININA HAS ALSO FORMED INTERNATIONAL TIES
arts and crafts industry, especially beautiful                                THROUGH THEIR INVOLVEMENT IN THE BRACELET
beadwork, which is how many women earn money                                  OF HOPE CAMPAIGN. THESE ARE SOLD IN
to support themselves and their families.                                     CANADA AS PART OF A FUNDRAISING INITIATIVE.
While many of these initiatives are small, the Nedbank Foundation             ‘Inina’ is a Zulu term of endearment for a group of women; a fitting
made a big contribution to the development of crafters by providing           name considering that all 147 members are women who have
R250 000 to the University of KwaZulu-Natal to support crafters in            benefited economically from the Agency. The employees are trained in
the province. This contribution from Nedbank, together with a cash            computer use and are engaged in all aspects of the Agency, from
injection from Gijima KZN and other grant donors, has allowed one             administration to the actual manufacture and distribution of their
such enterprise to grow into a thriving business, now known as the            products. Inina has also taken further steps to improve the lives of
Inina Craft Agency.                                                           their staff by implementing an HIV/AIDS workplace policy and plan.

Launched as a small enterprise known as the Ikhowe Craft Group in             The project was also closely analysed by postgraduate students from
2002, the group quickly prospered and in 2005 realised that expansion         the University of KwaZulu-Natal (UKZN). Duncan Hay, a
                                      was the only way to                     representative from UKZN who worked closely with the project,
                                              really benefit from their       describes his time with the project as one of the most rewarding
                                                    success and               experiences of his life.
                                                        continue their
                                                                                          Inina has also formed international ties through their
                                                                                                 involvement in the Bracelets of Hope Campaign. The
                                                                                                     Agency produces beaded bracelets which are sold
                                                                                                         in Canada as part of a fundraising campaign –
                                                                                                            the funds raised are then channelled back
                                                                                                              into Southern Africa for HIV/AIDS
                                                                                                                interventions. Inina leadership has also
                                                                                                                 represented the company in Norway
                                                                                                                  and Germany.

                                                                                                                  As further evidence of their success,
                                                                                                                 Inina has turned over R1,2 million and is
                                                                                                               likely to make a net surplus of R250 000
                                                                                                             in the 2008 tax year. In addition, partners
                                                                                                          in the Inina initiative received the Global
                                                                                                        Best Award by the International Partnership
                                                                                                    Network in 2008. The grant from the Nedbank
                                                                                               Foundation has turned into a really rewarding
                                                                                       relationship as the bank is now one of Inina’s customers.
                                                          growth. This
                                                     led to a R700 000        The Inina Craft Agency is considered a highly successful example of
                                                grant from Gijima KZN,        rural enterprise development, and the model could well be replicated
                                       the R250 000 from the                  for future projects. It is in this spirit that the KwaZulu-Natal
                     Nedbank Foundation, as well as financial                 Department of Economic Development has provisionally allocated
contributions from the Carl and Emily Fuchs Foundation and the Ford           R3 million over the next three years to continue support of Inina and
Foundation. The funds were then used to merge the Ikhowe Craft                the success they represent for rural businesses everywhere.
Group and four other local craft enterprises to establish the vibrant
and flourishing Inina Craft Agency.                                           Above: Handmade paper products are an important source of revenue for Inina members.




                                                                          6
                                                                                Above: Inina members, the project team and Gijima KZN representatives celebrate
                                                                                the launch of the project.




               IKUSASA FORESTRY GROWING FAST!
 THE AIM OF THE PROJECT IS THE ESTABLISHMENT OF A BLACK-OWNED TIMBER GROWERS’ CO-OPERATIVE AND MARKETING AGENCY,
  LINKED TO PROCESSING FACILITIES WHICH WILL ECONOMICALLY EMPOWER EXISTING AND EMERGING BLACK TIMBER PRODUCERS.



The Ikusasa Forestry Project opened its doors as a                              NEDBANK SHOWED GREAT FAITH AND
trading company back in November 2007 with the                                  FORESIGHT BY ASSUMING THE BUSINESS RISK
assistance of Nedbank, which provided a R1,1 million                            AND FINANCING BEFORE THE PROVISION OF
loan for the implementation of the project.
                                                                                A GRANT BY GIJIMA KZN.
Nedbank showed great faith and foresight by assuming the business
risk and financing the establishment of the business before the                 forestry technologies to its members, so improving their production
provision of a grant by Gijima KZN, which invested R488 348 in the              performance.
development of the project's business plan.
                                                                                The co-operative will assist growers with the licensing of new forests
The aim of the project is the establishment of a black-owned timber             and offer the sharing of licensing costs through collective applications,
growers’ co-operative and marketing agency. This is linked to                   while going a step further and lobbying Government and the formal
processing facilities which will economically empower existing and              forestry industry to provide training and capacity-building to emergent
emerging black timber producers through the aggregation of produce              timber growers.
and collective marketing. The looming shortage of hardwood is
addressed with the establishment of new plantations and assist                  The Ikusasa Forestry business will allow fragmented small timber
growers with licence applications. The project envisages the eventual           growers to combine their produce, conducting joint marketing and
creation of international links, by adding primary value to timber fibre.       procure inputs in bulk, thus improving their livelihoods. A long-term
                                                                                objective for the project will be to facilitate the planting of new land
The project has set its sights on economically empowering                       to timber in tribal areas, as well as on community lands belonging
its members by securing higher timber prices and greater net returns.           to land reform beneficiaries. Ikusasa will also link these newcomers
This is because higher prices are paid for larger batches of timber that        to the timber fibre market, ensuring continued economic benefits to
are delivered on a regular basis of supply, while transport costs on bulk       otherwise impoverished communities and the sustainable use of
deliveries are lower. To ensure that members remain in the forefront of         under-utilised land.
timber production, the co-operative will transfer information and new


                                                                            7
CONTACT DETAILS

Gijima KZN
Email: jay@gijimakzn.org.za

Nedbank
Email: ed@nedbank.co.za




Nedbank Ltd Reg No 1951/000009/06. We subscribe to the Code of Banking Practice of The Banking Association South Africa and, for unresolved disputes, support resolution through the Ombudsman
for Banking Services. We are an authorised financial services provider. We are a registered credit provider in terms of the National Credit Act (NCR Reg No NCRCP16).