Unearthing good business prospects

There are opportunities out there for intrepid entrepreneurs, but sometimes you need to know where to find them. The Industrial Development Corporation’s David McGluwa unpacks the best opportunities in North West, writes Gayle Edmunds.

Most people associate North West with mining. Though, increasingly, the base of options for driving economic growth in the province is growing.

What would you name as the five biggest opportunities entrepreneurs should look for in the province over the next two years?

Firstly, mining still remains the key driver of economic growth and job creation in the province. However, there are many other sectors that provide opportunities for investors and entrepreneurs in North West.

Secondly, the tourism sector arguably provides the biggest number of opportunities in the province.

It boasts two prominent national parks, namely Pilanesberg and Madikwe, which are both home to the Big Five.

Also, there is a lot of tourism activity based around Hartbeespoort Dam, Sun City, Bloemhof Dam Nature Reserve, the Taung Heritage Route, Taung Dam and Mahikeng.

Thirdly, there are also opportunities in manufacturing – not only in mining supplies, but in automotive components as well as in the localisation of imported goods, and in the area of creating cultural artefacts.

Fourthly, in the agroprocessing sector, there are opportunities to be explored as sunflowers, vegetables and animal feed are all grown in the province.

Also, smart entrepreneurs should explore projects such as the Taung irrigation scheme and the establishment of agriparks.

The fifth would be the growing green economy, where there is space to grow solar power. Waste collection, baling and processing are always needed services.

The whole country faces unemployment and stagnated economic growth.

What specific challenges do businesses in North West have to overcome and how does the IDC help them?

The Industrial Development Corporation (IDC) has invested a significant amount in the economy of North West. Exposure grew from R1.4 billion [2008] to R6.3 billion currently, thereby creating 21 455 direct jobs [on the factory floor].

I think the biggest challenges businesses are faced with in North West are the issues around the cost and reliability of electricity, instability of labour and dysfunctional municipalities.

The IDC has funded 52 projects in the province.

Which of these did you find to be a surprising fit for a province defined by mining in the mind of the public?

We have a diverse portfolio of projects ranging from mining and tourism to agriculture, manufacturing and healthcare. During the past two years, we funded youth-owned businesses in North West to the tune of R124 million, creating 109 direct jobs. We also funded a sub-acute hospital, Care Cure Thaneze in Mahikeng, which is majority owned by black women and is doing well.

What are the specific benefits North West offers entrepreneurs who are looking for opportunities in the province?

For example, the Northern Cape has all the space to fill with solar panels and the coast has all that wind to drive energy.

The Platinum Valley Special Economic Zone near Mogwase [close to Sun City] will certainly provide opportunities for the beneficiation of platinum group metals.

Also, the North West Development Corporation owns numerous factories with available electricity across the province and parts of Gauteng [Ga-Rankuwa, Hammanskraal, etc] for companies that require factory floor space for their manufacturing operations.

Opportunities also exists at the planned agriparks across the province.

If successfully implemented, this will open opportunities for agroprocessing and will position the province at the forefront of the agricultural value chain.

A constant in any discussion around the economy is driving beneficiation in mining.

Do you see more openings for clever entrepreneurs to get into this business?

What have been the most exciting beneficiation programmes you’ve been involved with since the IDC opened offices in the province in 2008?

The Platinum Valley Special Economic Zone will certainly boost the beneficiation initiatives in the province.

Hydrogen SA, based at North-West University’s Potchefstroom Campus, is working on exciting game-changing initiatives that will further boost beneficiation in the province.

The province also boasts the only platinum incubator in the country, named the Seda Platinum Incubator.

It has produced many entrepreneurs in the jewellery manufacturing space, such as Van Bels Design, Amile Diamond Jewellery and Ditsala Designs and Creations.

One of the IDC’s major concerns is ensuring that communities benefit from the deals that are done, not only in terms of job creation, but also regarding community ownership.

Yes, the IDC funded Momentous Energy, a solar farm outside of Rustenburg.

This solar farm is 17% owned by the community around Marikana.

Also, the IDC funded a 26% stake on behalf of the Bakgatla-Ba-Kgafela community in Sedibelo Platinum.

What is the North West branch doing to actively empower youth, women and black-owned businesses in the province?

Of the 52 projects you’ve funded in the past five years, how many have been youth owned, how many owned by women, and does the province boast a number of black industrialists yet?

The IDC has recently set aside R4.5 billion over the next five years to finance youth-owned enterprises in South Africa.

Of that, R1 billion will be offered at prime less 3%. In the past two years, we have approved R124 million to youth-owned entities.

We have an intentional and focused strategy to fund many more youth-owned entities in the province.

The IDC has also funded 13 projects in the province in which women have a significant stake.

Also, the IDC intends to disburse R23 billion to black industrialists over the next five years.

Currently, 90% [R5.6 billion] of the IDC’s funding goes to black-empowered companies in North West.

How much money has the province put aside for projects in the next two years?

The IDC plans to disburse R100 billion over the next five years into the South African economy.

Unfortunately, the IDC doesn’t allocate an amount per province.

It is the prerogative of the provincial office to ensure that the province gets its equitable stake.

North West currently contributes 6% to South Africa’s gross domestic product and I am confident that we can disburse a minimum of R6 billion into the North West economy over the next five years.

What are your top five tips for entrepreneurs in the province who are about to walk into your office to ask you to fund their idea or help them upscale their business?

1. Entrepreneurs must spend time and resources to test the feasibility of their projects. Do your homework, and make sure you understand the business model and the risks involved.

2. Identify market gaps and come up with innovative solutions to address those market gaps. Stop copying ideas/initiatives from other provinces or other entrepreneurs. Constantly look for those game-changing opportunities.

3. Get leverage from the natural and available resources in your area. We don’t have an ocean in North West, but we do have a lot of sun, minerals and natural beauty.

4. Successful entrepreneurs have used their experience, skills and networks. Avoid venturing into a business where you don’t have the relevant skills, experience or networks.

5. Be careful when someone wants to sell his/her company. Always try to establish the real reason they want to sell. Nobody sells the hen that lays the golden egg.