Welding services provider Federal Steel Company MD Phakamile Buthelezi has implemented a cost-sharing initiative that has helped to keep several small businesses in Turfontein, in the south of Johannesburg, afloat during a challenging economic start to the year for the welding industry.
Being in its start-up phase as well, having started its operations in May last year, Buthelezi notes that the past year has proven to be a challenging business environment. He explains that the local welding industry has been particularly affected by the flooding of the South African market by prefabricated steel structures imported from Asia.
“Clients come to us with a structure, such as a balustrade, that needs refurbishing; however, it is often the case that the product was manufactured in Asia and we cannot source the parts locally that are needed for the refurbishment,” he says.
Owing to this challenge, Buthelezi is heading up the implementation of a cost-sharing initiative with other small businesses that operate in the same area as Federal Steel.
“Business incubation is a dynamic business model in which businesses share infrastructure, equipment, processes and people. It is particularly useful for small businesses that are . . . starting out or . . . struggling to stay afloat financially,” he explains.
Following this model, Buthelezi has liaised with other similar small businesses that operate in the area and initiated the sharing of premises and equipment, as well as skills transfer. “ . . . we are all just trying to keep our businesses going. “Rather than competing with each other, it has proven beneficial for us to work together, especially with regard to reducing rent and advertising expenses.”
At present, Federal Steel has clients in the private and commercial spheres, although it is looking to expand predominantly into the latter sector. The company’s primary business is the fabrication of steel structures that are used in the construction industry, such as boilers and tanks, gates, windows and doors, industrial pipes and flanges, balustrades, fencing and carports. The company offers carbon, gas metal, flux-cored, gas tungsten and shielded metal arc welding, as well as cold pressure welding.
Buthelezi claims that, despite the current challenges in the industry, he is hopeful for the future, and stresses that it is important to be dynamic in one’s business approach and adapt to the opportunities that are available.
Federal Steel and steel products and services provider Sher Steel &Alloy Suppliers will collaborate on a presentation at building retailers Builders Warehouse’s head office, in Sunninghill, Johannesburg, later this year, with the possibility of securing a contract as local suppliers for the company.
Federal Steel is also investigating a possible partnership with the company to provide welding training for up to 30 trainees from surrounding townships. The companies are actively seeking support for this initiative from government and the private sector.
Buthelezi notes that one of the biggest challenges facing South Africa is a lack of skills training in artisanal trades. Federal Steel is doing its part to assist with skills development by providing basic welding training in the company’s workshop for two individuals, with a view to offering them employment once their training is complete.
The company was invited to exhibit at the first Soweto Business and Careers Expo, which was held in Meadowlands, Gauteng, on May 21. The expo provided an opportunity for Grade 11 and 12 learners to interact with businesses, universities, training colleges and government and learn about the options available to them in terms of careers, training, further education and skills development programmes.