Broad-based black economic-empowerment (BBBEE) automotive supplier Zig Enterprise owner Caiphus Mokotedi met the minimum criteria required to graduate from the Automotive Industry Development Centre’s (AIDC’s) automotive incubation centre, making him the first graduate of the programme.
The automotive incubation centre, located at automotive manufacturer Ford Motor Company of Southern Africa’s (FMCSA’s) Silverton assembly plant, in Pretoria, was established to develop and support black-owned businesses during the critical start-up phase.
The vision was that these businesses would perform value-added subassembly work for Tier 1 suppliers on the Ford Ranger assembly.
FMCSA’s Silverton assembly plant needed to transform its production process from a low- volume, multiple-vehicle line to a single-model, high-volume production facility with a yearly capacity of 110 000 vehicles.
Owing to the nature of many of the components, FMCSA explored several opportunities to reduce its overall production costs. A training and development plan, jointly conceived by FMCSA and the AIDC, led to the five-year plan to enhance the overall skills and knowledge base of automotive workers in Silverton, which would result in a globally competitive workforce.
“The AIDC built the 7 200 m² supplier incubation facility through a joint initiative between Ford, the Gauteng provincial government and the Tier 1 suppliers who directly supply Ford in South Africa.
“The incubation centre is a BBBEE initiative that has developed small businesses and aided economic growth,” highlights Ford Motor Company Sub-Saharan Africa president and CEO Jeff Nemeth.
The AIDC, in partnership with FMCSA, established five companies, which were allocated to aspiring BBBEE entrepreneurs who could supply components to FMCSA’s production line. Mokotedi was one of the first black econo- mic-empowerment entrepreneurs who joined the incubation programme in 2011.
To accelerate and maximise the growth of the BBBEE companies, the AIDC facilitated the process by establishing partnership agreements with the relevant Tier 1 suppliers already earmarked to supply components for the Ford Ranger to FMCSA.
The BBBEE entrepreneurs are housed at the AIDC-owned and managed facility, which enables them to supply directly to Ford’s production line.
Zig Enterprise partnered with logistics services provider Schnellecke SA to provide sequencing and logistics services for the Ford Ranger production line.
Speaking at the graduation ceremony, Mokotedi said he was honoured to graduate from this facility. “There have been many highs and lows over the last four years. It has been an incredible journey and a milestone in my personal and professional life,” he said.
MEC for Economic, Environment, Agriculture and Rural Development Lebogang Maile highlighted at the ceremony that private–public partnerships were instrumental in fast-tracking Gauteng’s economy under the province’s transformation, modernisation and reindustrialisation programme.
“We welcome working with vehicle manufacturers such as Ford to develop scarce skills, expand the local supply chain and provide opportunities for BBBEE companies to create jobs,” said Maile, adding that the incubation centre had demonstrated that private–public partnerships could develop BBBEE businesses.
Reducing Barriers to Entry
AIDC industry development executive Dineshan Moodley notes that the aim of the automotive incubation centre is to reduce the barriers to entry for entrepreneurs to the automotive industry. “One of the biggest challenges for entrepreneurs is start-up capital because they require a large investment to enable them to participate in the value chain,” he explains.
Moodley adds that small, medium-sized and microenterprises, which previously did not have the experience to supply components to their production lines, gained this experience at the automotive incubation centre and have been able to develop their business portfolios.
Further, AIDC CEO Dr David Masondo explains that transformation in the automotive sector is moving very slowly, mostly because of the high barriers to entry for prospective new suppliers. “[However,] the automotive incubation centre has proven to be an overwhelming success because we have reduced logistics costs of certain strategic subassemblies, while also accelerating the transformation agenda through a well-managed and sustainable incubation process,” he says.
Zig Enterprise has already been contracted to FMCSA as a logistics services provider and has created 16 additional jobs in the process.