FuelServe, headquartered in Port Elizabeth, is a nine-truck enterprise on a growth path. It’s also a textbook example of how a big business can help a small business to thrive.
The fuel logistics company was founded in 2017 by four partners seeking to carve a space for a transformed new entrant into the industry. They had one tanker truck primarily operating between Durban and the Northern Cape. The key catalyst for the expansion of the business was Astron Energy’s Enterprise Supplier Development (ESD) programme which offers interest free funding and guaranteed contracts for small suppliers.
FuelServe’s Yonela Malusi says they went through a rigorous audit and approval process with the ESD programme before gaining a contract in mid-2018 from Astron Energy (which holds the Caltex licence in South Africa) which enabled them to add two more tanker trucks to their Durban/Inland routes. Each vehicle (truck tractor and trailer combined) cost approximately R3,000,000.
In December 2018, FuelServe began transporting Jet fuel from Astron Energy’s Milnerton refinery to Cape Town International Airport. On the back of an interest-free loan, two more truck tankers were added to service that contract and a third was purchased to deliver diesel to Eskom in the province.
During Covid-19 the business expanded even further. Malusi says “Astron Energy stood surety for the loan we needed to add to our fleet; that’s the kind of relationship we have with them.”
He says that small businesses cannot expand solely on a tender basis because the bigger operators will always have lower costs. “This kind of programme is essential to enable companies like us to build a contract base and to get access to affordable capital.” Malusi also acknowledges transport giant Unitrans, which, as a contracted supplier to Astron Energy, gave invaluable assistance to FuelServe in establishing their Cape Town operation.
FuelServe now has 25 employees in Port Elizabeth, Durban and Cape Town.
Astron Energy CEO, Jonathan Molapo, believes it is an obligation on every big enterprise to make building up smaller, transformed suppliers a core part of their business model. He says the Enterprise Supplier Development programme has provided more than R100m in interest-free loans and credit lines since its inception in 2015: “It’s a genuine win-win; the small enterprise gets a foundation on which to invest and develop, and we get a sustainable, transformed partner.”