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beneficiation jewellery shoes

Beneficiation is becoming fashionable again

It seems like a pretty straight forward proposition that if developing countries like South Africa added more value to their commodities locally, rather than exporting them to other countries in a raw and unprocessed format, their key economic indicators like employment and economic growth will be enhanced. Skills would be developed locally and new industries will emerge that aid in development. It thus becomes a source of frustration for policymakers, politicians and many citizens that a country that is rich in natural resources is unable to exploit the full value chain for commodities such as gold, diamonds, agricultural produce, platinum etc. This feeds into a general discussion about local production and the decline of the manufacturing sectors we once had in South Africa.
It is no surprise that beneficiation, the process of adding value to commodities principally through design and manufacturing, occasionally rears its head in crucial policy debates as the solution to some of our economic blues. Beneficiation was included as one of the pillars of the Mining Charter – companies could offset some of the obligation to increase the ownership stakes held by previously disadvantaged citizens with projects to process commodities within South Africa. The offset/trade-off mechanisms were not articulated in the Charter and in the early 2000’s, it was difficult to come up with a model to make this happen. For every 1% equity stake that a mining company does not sell to BEE partners, how much beneficiation should it engage in to compensate for that? This was the basic question that could not be answered.
Various initiatives were attempted by mining companies to support the call to beneficiation. During the time I was involved in that industry, I thought these were still initial endeavours; a lot of effort went into them but they were nothing to shout from the rooftops about. These early efforts included jewellery manufacturing development programmes (including direct investment by mining companies), working capital financing products and design competitions. It was clear to me (as I argued in an op-ed in the Business Day six years ago) that upstream producers can only be expected to extend support in ways that do not undermine their commercial interests and that are ideally related to their existing strengths. That’s a tough call for primary extractive companies and it’s likely that beneficiation attempts will be related to projects that facilitate local manufacturing, rather than expecting mining companies to start beneficiating in-house.

Then there is the globalisation angle. There are countries that have developed competitive advantages in the value chains that we seek to enter. For instance, Italy and Turkey have developed significant gold jewellery design and manufacturing industries with all the attendant infrastructure, networks and know-how that the industry entails.

These themes emerged during my interaction with some of the stall-holders at African Fashion International’s Fashion Week that was held over the past few days. This was a fantastic event that showcased fashion talent from across the African continent – talent that has been repressed for so long. Some of the energetic entrepreneurs whose products I encountered at this platform will certainly grace these pages. I learned, at a stall selling beautiful shoes, that the shoes were designed in South Africa but that they were manufactured in Brazil. This seems to be a case of “beneficiation leapfrogging” where locals are involved in a higher-order activity such as design, but having skipped the manufacturing stage altogether. I heard a similar story at a jewellery stall where the pieces were also said to be designed in South Africa but some of the fabrication was done overseas – the diamonds were polished and cut in Britain and this was because the skills were not readily available in South Africa.
It’s no longer unusual for the activities that bring a product to market to be located in different countries. Go to any fashion capital and you will struggle to find products that are fully manufactured within that country. But one doesn’t expect the level of outsourcing in Johannesburg to be similar to that of New York or Milan. Developing countries cannot dismiss manufacturing jobs in favour of design and branding; we need a more balanced production profile that includes high levels of labour-intensive activities.
So it seems we have creative entrepreneurs in the fashion space living in a continent that’s about to take off in terms of a growing consumer class. These entrepreneurs seem poised to create new products that serve genuine needs (that is, not attracting sympathy dollars) and this should have ripple effects in terms of creating jobs in manufacturing, branding, sales, retail etc. This will happen in the context of global competition where nothing is guaranteed and access to raw materials in a determining factor in terms of decisions about the location of production. This suggests a policy focus not just on exhorting people to “buy local” but also a commitment by government, business and labour to invest in skills and enterprise development. Value addition can only take off in the context of a local business environment that is supportive of learning, innovation and risk-taking.
The resurgence of policy interest in beneficiation as a tool for economic development is now taking place in a very different climate from that which prevailed in the early 2000s. Now beneficiation is being touted as a sort of compromise solution, as opposed to some of the more radical measures that are being suggested as a way to transform the mining industry, such as nationalisation. Perhaps that will result in more tangible outcomes this time round, given the high stakes involved, though there will be tough work ahead to address some of the structural impediments to local manufacturing such as skills levels, access to finance, the prices of key inputs, including the commodities themselves (gold is at an all-time high) and the cost of labour, and trade policy.
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African Queen afro-chic fashion Leitch social enterprise

African Queen – socially conscious accessories

After viewing some art at Gallery 2 earlier today, I popped into African Queen in The Parks Centre. African Queen sells beautiful fashionable items, ranging from the most afro-fabulous leather bags, purses, belts, stationery, clothes and home-ware. The bags have it-bag potential – they are well designed and striking, some with bead details. They are all in the afro-chic mode, without being over the top.

Big Mama Red Leather

Though there are one or two bags, like the Nguni cow hide and the in-your-face animal print bags, that hearken back to dated ideas about what constitutes African design.

Nguni Big Mama

All the items sold in the store are handmade in South Africa. The founder of the business, Nicola Leitch, is also driven by a social mission. According to the store’s brochure, employees can work at home, saving on childcare and transport costs, and a percentage of turnover is donated to orphanages and feeding schemes in Southern African communities.

Mama Clutch with Tassle Silver Leather

I must mention that the sales lady in the Parkwood store is impossibly vivacious! I enjoyed the time I spent there.


African Queen stores can be found at 9 The Parks, corner of Jan Smuts and Wells in Parkwood Johannesburg and Shop 4 Gowrie Village Nottingham Road KZN Midlands.

Links
http://www.africanqueen.co.za/

All pictures by African Queen.

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hair care Mashaba mzansipreneur

Herman Mashaba – veteran mzansipreneur

Black Like Me. Before our shelves were stocked with Dark and Lovely and L’Oreal, back in apartheid South Africa, Herman Mashaba dared to build a brand called Black Like Me. A home-grown hair care line created under what must have been tough conditions in the bleak 1980s. Like too many of today’s youths, when he started out, he had no professional qualifications and had never been employed by anyone. Almost thirty years later, he has managed to build a reputation as a mzansipreneur of note.
Mashaba has recently written an article ‘Racial myths stand in the way of entrepreneurship’. In it, he debunks some myths that black and white businesspeople hold about each other, and that get in the way of cross-racial collaboration in this country. Instead he argues that:
“The country requires new partnerships. The new challenges require new solutions. We need to create a reality for ourselves where we are actors and not acted upon, where we shape the economic ground on which we walk and not depend on others to clear the way. Business must wake up to this new positioning — how we forge links, how we actively position and market ourselves favourably as players in our local economies and in the world market.
Our history has written itself in black and white. Our present and future are far more multicoloured and magnificent than we can possibly imagine. As entrepreneurs, we need to start a new chapter in our history, no longer as black and white, but as South African business asserting itself nationally and in the world.” (Herman Mashaba, Business Day).
Links
Also catch him sharing some insights at GIBS (video): Mashaba at GIBS

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Fanon mzansipreneur tenderpreneur

Where shall we begin?

We’ve heard all about the tenderpreneurs, those fat cats living off government contracts and easy money. The trade union federation Cosatu talks about the emergence of a predatory class in South Africa, a class made of up of unproductive individuals who use their skin colour and political connections to appropriate wealth without contributing to its creation. Reminds one of The Wretched of the Earth, where Fanon makes some startling remarks about the middle class in a newly decolonised country; it tends to follow the Western middle class in its “decadence without ever having emulated it in its first stages of exploration and invention…it is in fact beginning at the end. It is already senile before it has come to know the petulance, the fearlessness or the will to succeed of youth.
Of course, at the other end of the spectrum, we are warned of big, bad white capital; which resists efforts towards inclusivity and equal opportunity in the economy. Affirmative action, black economic empowerment, redistribution – these policies are said to be failing. The economy, the real economy, remains in white hands. Frustrated black professionals languish in corporate bureaucracies, unable to rise above tokenism to contribute meaningfully to the economy.
These are the narratives that we are fed every day. It seems as though we live in a society that is so absorbed in finger-pointing and sloganeering that it is losing its ability to seek and celebrate achievement and leadership. We are entertained by tales of incompetence and infidelity, of buffoonery, of a nation at a loss of what to do with itself. Meanwhile, unemployment is at heart-breaking rates, communities take to the streets and the economy stagnates.
Young South Africans are fed negative images about who they are and what they can expect of themselves. The media represents success as the “high life” constituting of throwing endless parties, speeding in imported cars and enjoying the charms of beweaved women. Entrepreneurship is being obscured by politically-tinged deal-making, emptiness and superficiality.
At mzansipreneur, we believe that this is not the full story. We believe that South Africa, like the rest of Africa, is on the cusp of a fundamental economic transformation. But first, the citizens’ productive and entrepreneurial capacity needs to be unleashed. Our daring mzansipreneurs deserve to be celebrated and supported as they develop products and services that will respectfully and profitably serve the needs of the continent’s growing consumer base. They also need to be criticised, in a constructive manner, when they do not rise to the moment.
We are here to create a space, away from the hysterical headlines, to have a genuine conversation about innovation, creativity, wealth creation, social enterprise and life in this beautiful and intoxicating country.