Waste management transportation is an unlikely source for job creation and entrepreneurial development. Traditionally waste management is run by our municipalities and are often seen as quintessential public works programs; largely to the exclusion of private sector players.
In late 2012 the Inyosi Enterprise Development Investment (then called the Cadiz Enterprise Development) was considering entities into which enterprise development capital which had been raised could be deployed. The main criteria, other than black ownership, was to find sustainable models which encourages job creation while simultaneously providing a platform for entrepreneurial growth.
It was in that context that the Inyosi Enterprise Development was introduced to a most unlikely project – the waste management transport initiative contracted out by a private company in Marikana. It is important to remember that the Marikana Killings occurred in August/September 2012, and it was during that time that we took the final decision to invest into this unique program.
The concept – like so many good concepts, is relatively simple:
- secure a waste management contract for an area. These contracts pay a monthly fee for each household cleaned/area cleaned at a set rate,
- assemble a team of waste management workers (pickers and loaders) and a driver,
- add a truck to transport the waste, and
- manage the process to conclusion
All of us living in South Africa have seen the municipal trucks plying the streets, mostly on a weekly basis, following a set routine. We have also sometimes bemoaned the battered state of the trucks. Oftentimes the team is schizophrenic – part of the team is relaxing whilst the rest of the team is under the watchful eye of two or three overseers (who themselves appear to add little to the productivity or otherwise of the team). Naturally the everyday perception of waste management did not bode well for a robust investment case.
It was in this context that the opportunity was presented to us. A specialist waste management company was putting together a community based contract. In essence this model operates as follows:
- secure a management contract for an area for 3 years,
- recruit a local driver who is also the entrepreneur,
- recruit pickers and loaders from the area,
- secure funding from the Inyosi Enterprise Development portfolio with which to buy and outfit a truck,
- enrol the entrepreneur on an entrepreneurial training course over a period of 3 years,
- provide the entrepreneur with monthly accounting and management support such that he/she is provided with a monthly set of accounts from which the financial status of their business can be assessed, and
- enter into a contract with the entrepreneur such that at the end of the 3 year contract he/she becomes the owner of the truck.
This unique solution creates a dramatic shift in the mind-set of all the participants:
- the entire team is selected from the community thereby enhancing their service commitment,
- the truck ultimately becomes the property of the entrepreneur – this fact dramatically impacts on the manner in which the truck is driven and used, and
- the training and skills development of the entrepreneur during the course of the contract provides him/her with the greatest prospect of success going forward.
The outcome was highly successful. The Inyosi Enterprise Development portfolio provided funding for 6 trucks and directly resulted in the creation of 54 jobs. During the 3 year term of the loan funding, around 32,000 households enjoyed waste collection for the first time, and over 2,225 tons of waste was removed. A standout memory of this investment was the ceremonial handing over of the keys of each vehicle to the entrepreneur – which remains with us as a testament to Inyosi Enterprise Development’s innovative financing.
Inyosi Empowerment is a joint venture between Stellar Credit (Pty) Ltd (a subsidiary of Stellar Capital Partners Limited) (“Stellar”), and Mineworkers Investment Company (Pty) Ltd (“MIC”). Both Stellar and MIC are committed to providing innovative enterprise and supplier development solutions which assist black owned companies with access to finance, access to markets and access to skills. Further information about this initiative and other similar innovative solutions to everyday opportunities can be found on our website www.inyosi.co.za – click on the Waste Management video.