Initiative changing development narrative in townships, rural economies

16th February 2018

Initiative changing  development narrative in townships, rural economies

DRIVING CHANGE A partnership initiative between Dunlop and Ithala will counter the growing number of illegal, dangerous second-hand tyres being sold to consumers
Photo by: Bloomberg

A three-year partnership between tyre manufacturing company Sumitomo Rubber South Africa’s (SA’s) iconic tyre brand, Dunlop, and development finance agency Ithala Development Finance Corporation’s Small Business Growth Enterprise division will see a minimum of 25 containerised tyre fitment centres being established across KwaZulu-Natal and 100 jobs created.

According to Ithala, the face of township and rural economies, where unemployment, poverty and inequality are still rampant, is fast changing. This is a result of successful public– private partnerships, which recognise the potential for emerging enterprises to contribute towards job creation and the mainstream economy.

Further, to ensure their sustainability and competitiveness, government is intensifying its support to township enterprises. As a catalyst for job creation, small and medium-sized enterprises are seen to be the solution to the country’s unemployment woes and the achievement of the National Development Plan’s objective of creating 11-million jobs by 2030.

Sumitomo has been driving this initiative since 2013 and currently has over 100 Dunlop containers across the country’s nine provinces, says Sumitomo Rubber SA marketing and business development director Yvette Govender. “We are proud to be the only tyre company in South Africa to partner with rural and township areas to grow communities.”

She adds that the programme not only opened the economy to this sector, but counters the growing number of illegal, dangerous second-hand tyres being sold to consumers.

“Our programme has opened doors for us to partner with government and State-owned enterprises enabling all parties to play an active role in eradicating poverty and growing our economy.”

Informal tyre trading containers in townships and rural areas are transformed into Dunlop-branded containers, which provide opportunities for unemployed youth, women and aspiring business owners to be trained and mentored in tyre sales and repair. Technical tyre training and business mentorship are provided jointly by Sumitomo and Ithala.

Under this partnership, Ithala has allocated funding totalling R4.1-million over the three-year partnership agreement for the supply, branding and fitment of containers.

The initiative aims to nurture, grow and sustain small business enterprises in KwaZulu-Natal and create employment in and around the province. To date, the partnership has resulted in five container businesses being started in Estcourt, Ladysmith, Madadeni, Esikhaleni and Eshowe.

The Dunlop Container Tyre Fitment Centre programme forms part of the KwaZulu-Natal Revitalisation of Township and Rural Economies policy framework spearheaded by the Department of Economic Development, Tourism and Environmental Affairs and is closely aligned with Ithala’s mandate to develop township and rural economies.

“For far too long, micro-entrepreneurs trading in marginalised communities have been yearning to participate in the mainstream economy,” says Ithala acting group CE Themba Mathe.

“As a development finance institution, we remain steadfast in our commitment to champion development in poor and marginalised communities and investing in people to enable an improved quality of life and improved prosperity.

“We fully support the call by government to put youth, women, people with disabilities and historically marginalised communities at the forefront of the socioeconomic transformation agenda.”

He says the partnership was all-encompassing in that it promoted proper skills transfer and training, access to finance and, importantly, ensured the profitability and sustainability of enterprises.

According to the Global Entrepreneurship Monitor report 2016/17, efficiency-based economies including South Africa should be opportunity versus necessity driven. The report found that almost three-quarters of South African entrepreneurs were opportunity- driven; a statistic that is higher than the average of the other efficiency-driven economies as well as substantially higher than the average for the Africa region.

Sumitomo Rubber SA is a division of Sumitomo Rubber Industries, headquartered in Kobe, Japan. Sumitomo Rubber SA’s high-quality manufacturing plant in Ladysmith produces Dunlop passenger and light truck tyres for the local and export markets.

The Ithala Development Finance Corporation, as KwaZulu-Natal’s provincial development finance agency, is mandated to promote development within the province.

The primary development focus of Ithala is to increase the participation of black people in all sectors of the economy, and positively impact on job creation, skills development and training.