With the South African energy sector undergoing significant change, particularly with the introduction of the Liquid Petroleum Sector Codes currently under way, PetroConnect directors Mark Harper and Sbonelo Mbatha have called on the fuel industry to “see transformation as an opportunity and not a threat”.
Fuel Retailers Association CEO Reggie Sibiya on Tuesday highlighted that, while the sector code, which was yet to be promulgated, needed to be aligned to legislation, it also needed to enhance the operating environment, while addressing challenges within the industry.
Of these, he specifically referred to the turnover thresholds for new entrants, which was cited as being one of the biggest challenges for small businesses and fuel franchises.
Speaking at Nedbank’s Franchise Fuel Conference, Harper explained to delegates that, to address these challenges, the industry must be open to “seeing a different side of entrepreneurs”, and noted that small companies often struggled to maintain growth in the current tough economic environment.
Coupled with this is the continuing rise of the fuel price and a lack of knowledge and education within the industry.
Mbatha, however, lamented the misconception that the oil and gas and fuel sectors were “big money" businesses and that it was easy to operate in, he stated.
Nevertheless, despite the tough environment facing entrepreneurs, Harper and Mbatha told delegates that there were growth opportunities. They urged companies within the sector to focus on what could be controlled, while also becoming smarter, more critical and focusing on new marketing initiatives.
Their joint initiative PetroConnect celebrates industry transformation and is aimed at ensuring inclusive ownership is seen as a business opportunity rather than a threat.
“We share that vision by being committed to demystifying some of the misconceptions around broad-based black economic empowerment (BBBEE) and by sharing our experience, insights and balanced perspectives to help educate industry players on how BBBEE and transformation can benefit all,” they said during a panel discussion.
Through changing industry misconceptions, demystifying legislation and bringing people together, PetroConnect aims to educate and inform all stakeholders in the industry, while also helping everyone make an informed decision.
Through connecting the industry and its community with the right tools, systems, processes, knowledge and people, the industry will have a solid base on which to move ahead as one of South Africa’s key economic focus areas, while supplying the country with both key resources and employment opportunities.
However, in order to remain sustainable, industry players are often plagued with the challenge of not just achieving, but maintaining, financing solutions for their businesses.
This is where financial institutions, such as Nedbank, come into play.
In this regard, Nedbank Business Banking client value propositions head Prithivan Pillay explained that, when considering financing solutions, Nedbank looked to partnerships with oil companies.
Through partnering with the oil companies, whether they be new entrants or black-owned, Nedbank is able to engage with them to collaborate on which funding structure will be the most viable and “make sense” for the company.
Partnerships are based on companies that are serious about achieving their transformation goals, he said, adding that Nedbank also had a transformation “fund pool” from which it is able to assist.
Once an adequate and appropriate funding structure is set in place, Nedbank also considers disruptive technology and innovative solutions in the sector to ensure ease and simplicity of doing business.
In driving change in the fuel industry landscape, and opening the market up to new entrants, Nedbank on Tuesday provided PetroConnect with a cheque valued at R1-million. PetroConnect will use the funds to assist some new entrants and entrepreneurial candidates in operating within the sector.
“As a bank, which is not just focused on your traditional banking solutions, [Nedbank is] looking at the Fourth Industrial Revolution to become more competitive and offer solutions that are an industry first,” Pillay further added.
Here, Nedbank aims to assist companies with managing working capital, reducing risk and creating efficiencies through making use of its manual cash banking offers, digital and device solutions.