difference they are making,” he
says. He also likes the fact that the
company is not just about microentrepreneurs, but has “several
arrows in its quiver when it comes
to scaling up entrepreneurs".
At a basic level Awethu runs a
six-month incubator programme
for start-ups, funded by National
Treasury’s Jobs Fund. However
it has also partnered with the
Small Enterprise Funding Agency
(SEFA) to launch a more ambitious
R64 million investment fund for
start-ups with the potential to
grow bigger.
“Government talks about creating
black industrialists. But if you think
that in a few years it is possible
to grow a multi-million rand black
business from the grassroots of
a township with just advice and
training – you are setting yourself
up for failure,” says Randera-Rees.
“You have to acquire those
businesses that are already in
the supply chain. They could be
businesses that are looking for
black investors or where the owner
has no obvious successor and
wants to sell out.”
Nhlanha (Fats) Dlamini is one of the
first batch of entrepreneurs who
was exempted from the six-month
incubation course.
He isn’t your ordinary entrepreneur.
He's a Rhodes scholar, with an
MBA from Harvard. He sacrificed
a lucrative career with global
consulting firm McKinsey to start
his own business, in the process
disproving the notion that township
kids are afraid of risk and see
entrepreneurs as people who can’t
find jobs.
His ambition is plain. “The Maneli
Group, my company, aspires to
be the largest black-owned food
company in the world.”
He pitched his idea of acquiring
a food processing business to
Awethu, who, following an initial
investigation, agreed to provide
R2.5 million in capital. Dlamini
opted to use R0.5 million to conduct
due diligence on the businesses
that he had identified and partly for
his basic living expenses. The other
R2 million will be used as equity to
enable the transaction.
The ownership structure will see
Awethu, SEFA and Dlamini as joint
shareholders. His share is held in
trust and is paid over in increments
as he settles his debt.
At the moment possible acquisitions
include a small dairy, a roasted nut
factory, blueberry farm and cold
storage facility.
“Obviously not everyone that I have
approached has been interested.
I’m hoping the current owners will
stay on as minority shareholders
for two to three years to grow the
business with me. Word of mouth
has been the most effective way to
meet potential sellers or business
partners,” he says.
Once a deal is sewn up, he plans
to pay it forward. “I’d like to sell a
part of the final stake into a workers
trust. Every worker will benefit, but
I plan to develop a performance
management system where the
best performing people get more.”
As Awethu goes from strength to
strength, Randera-Rees is at pains
to stress that it is a business not
a charity. “It is a business that is
delivering real social impact, but on
a foundation of significant financial
return to our investors.” ■
Nhlanha (Fats) Dlamini is an Awethu entrepreneur and founder of the Maneli Group
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ISSUE 6 – SEPTEMBER 2015