Industrial Development Corporation
In support of transformation and economic development objectives, IDC approved funding to women empowered enterprises to the value of R12.2bn over the five – year period to March 31st March 2019 and R5.2bn to youth – empowered enterprises over the same period.
BANKING ON SMART METERING
It’s the way of the future
By Chimwemwe Mwanza
The global technology landscape is evolving fast, with disruptive technologies decimating jobs in many key sectors of the economy. With the much-punted 4th industrial revolution (4IR) beginning to take centre stage in the manufacturing industry, it’s little wonder that most companies are preparing for the next phase of technological advancement.
“You either automate your production processes or you get left out,” says Vuso. She is chief the executive and founder of the Nyamezela Group, which is a 100% black woman-owned and -managed ICT firm that manufactures smart meters for Eskom and municipalities across the country, among other clients. Nyamezela’s growth path to the top of the ICT value chain has been gradual but steady.
In fact, you could argue that Vuso is going the whole hog to break the gender stereotypes in the ICT sector. she has grown her staff complement from 10 to 50 in three years, a phenomenal achievement considering the challenging economic environment.
“It’s not easy to break into this industry because its capital intensive. You have to have the patience and sufficient capital to enable a concept to [become] a viable product,” says Vuso. Stiff competition from multinationals, which are able to undercut smaller local players, is one of the biggest barriers to entry.
Although Nyamezela’s ingenuity attests to local companies’ ability to compete with ICT heavyweights, Vuso bemoans the slow pace of technology adoption in South Africa.
Municipalities, which are [some] of our biggest clientele, are coming to the party, but, most importantly, government’s commitment to localisation is opening up new opportunities for the likes of Nyamezela.
Vuso and her management team played a key role in carving Nyamezela’s growth path, but she credits the Industrial Development Corporation (IDC) for helping turn around the company’s fortunes. “We started at the bottom of the value chain, installing meters and providing credit controls to our clients,” she says. “From there on, we embarked on an acquisition trail that saw us fold small pockets of excellent ICT companies into our stable.” It took five years of consistent growth to prepare Nyamezela for its next growth phase.
When the company successfully bid for a large tender to supply smart meters to Eskom, the power utility demanded a performance bond from Nyamezela that was worth millions of rand.
It’s normal practice to demand for a performance bond, especially from a start-up like ours,” Vuso says. “We were fortunate that the IDC provided the security requested of us and the working capital was sufficient to enable us to kick-start this massive project.
Vuso says that this gruelling experience in the bottom end of the market helped to prepare the company for its next growth phase. “Most tech startups barely survive the first five years of existence because of huge capital requirements, stiff competition and the lack of experience,” she says. “If a startup doesn’t get a leg up in the form of an acquisition or a massive project, it’s almost guaranteed to fail.”
Her advice to tech startups is that they should focus on localisation opportunities, especially those from state-owned entities.
You must remember that mainstream lenders or other financial institutions won’t fund a concept. It’s too risky to put capital into a product with unproven viability. The DTI [department of trade and industry] has structured a few financial support programs, which I think could be of assistance to aspiring techpreneurs.
In recognition of the company’s contribution to innovation, Nyamezela’s production facility was named the best factory of the year in the 2019 AT Kearney Factory of the Year Awards in the small-scale production category. “IDC support has helped us to maintain our growth curve,” Vuso says.