- Astron Energy’s enterprise and supplier development programme is one of 20 biggest in South Africa
- To date, more than R100 million provided towards enterprise and supplier development offers financial aid to fuel expansion and growth
- Emerging suppliers generate sustainable new jobs
Most of South Africa’s top companies have enterprise and supplier development programmes which offer support to emerging Black-owned companies poised for growth. Accessing these programmes has the potential to be a game changer for many small businesses, and South Africa’s oil and gas industry has some of the most innovative and effective opportunities.
Astron Energy, licensee of the Caltex brand (in South Africa), offers one of the top 20 biggest enterprise and supplier development programmes in the country, according to SMESouthafrica.co.za.
“Our enterprise and supplier development programme provides financing to small Black-owned businesses who already have an on-going commercial relationship with Astron Energy. The interest-free, unsecured financing can be used as working capital and for expansion. Mentorship is offered to ensure the sustainability and growth of the businesses,” said Fabian Magerman, General Manager, Lubricants Sales and Marketing Southern Africa.
The programme has been running for three years and has provided over R100 million in interest-free loans, credit lines and deferred marketing loans to designated B-BBEE beneficiaries within the company’s procurement pipeline. In this short space of time, the many benefiting businesses have been able to create and sustain jobs in a range of different industries.
Durban is an energy hub
One such business is Holmbush Pallets, run by Durban based entrepreneur Ajan Singh, who manufactures pallets and shrink wrapping for Astron Energy’s Lubricants division.
He adds, “Astron Energy has done some great work in making its procurement chain more inclusive and sustainable by improving access to the liquid fuels sector for existing businesses that are at a minimum 51% Black-owned. I’ve been in business for 23 years and have been supplying Astron Energy directly for seven years. Being granted enterprise development funding by the company in 2017 has made a huge difference to my business.”
Singh offers this advice to businesses that want to access an enterprise and supplier development programme:
Research the client and look for a match with your business
Singh is also a 51% shareholder in a sawmill in Kokstad which provides the wood for pallets, a key product for a big company like Astron Energy that needs to transport and store inventory and equipment. He used the financing to capitalise the business, employ new staff and provide working capital.
Be solutions orientated
Small businesses have room to innovate and be flexible around the needs of the client. Astron Energy had a need to buy pallets outright (rather than rent them) and they had to be manufactured to a particular specification. Customisation and the capacity to act quickly allowed Holmbush Pallets to provide a niche service which improved the client’s efficiencies.
Grow the business with similar clients
The enterprise development funding allowed Holmbush Pallets to expand its business by offering the same service to other oil companies. This increased operational capacity has fueled new jobs, allowing Holmbush Pallets’ headcount to double from 20 to 40 jobs.
Use the advice on offer – its free
Astron Energy assisted in developing the business plan and the finance plan, which is underwritten by a major bank. This helped to move the application through the credit approval process quickly and easily.
“I live by the motto that in business loyalty is everything and trust is your insurance policy. Astron Energy has been instrumental in helping us to take our business to the next level, so we will always go the extra mile to meet their requirements and provide solutions to their problems,” concludes Ajan Singh.
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