On the theme of localising and industrialising the South African economy, I’ve been working with the Franchise Association of South Africa (FASA) to enlighten Franchisors on the potential of utilising the various policies and focus points of government - including the BBBEE codes and the National Development Plan (NDP) - to strategically impact their supply chains and de-risk their businesses.
In so doing, I explored some of the massive wins some of the franchise sector corporates have had in driving a local, industrialised and diversified supply base at the 2018 FASA conference.
Here are some highlights from some franchisors putting in the effort:
33 suppliers enrolled in the Massmart supplier development programme:
- 13 provide Private Label products
- 8 import substitution projects and
- 6 export products to countries such as Botswana, Zambia, Mozambique and Chile
- 9mil liters of sauce and basting is manufactured in SA and exported to 16 countries
- All Nandos’ packaging is produced in SA
- All uniforms are manufactured by 6 small suppliers in KwaZulu Natal
- Long term procurement planning of up to 18 months
R67.7bil Local procurement:
- 2 bil BEE compliant suppliers
- 2 bil Black owned suppliers which is a R7 bil year-on-year increase
The franchise sector holds a significant responsibility in supporting local manufacturing through their large procurement spend. The 3 cases show just how much of an impact the sector can provide to growth in South Africa.
To localise and industrialise we need commitment from procurement professionals within both the private and public sector, entrepreneurs who have the ability to identify these market opportunities and the skills to build credible teams to deliver on these market demands, and capital to back the investments.
With over 200 national incentives for the industrialisation of our country, the challenge is not the availability of capital, but ensuring the right projects are investment ready and find the right capital partners.