The restrictions imposed by the Covid-19 pandemic and the lockdown have taken a toll on all economic sectors in South Africa, and have presented additional hurdles for small, medium and micro enterprises (SMMEs). A survey undertaken by the Centre for Development and Enterprise (CDE) on the readiness of South African small enterprises to respond to Covid-19 implications in March 2020, revealed that 86% did not know where to go to access emergency funding, 87% were unable run their business from home and 87% were unable to support themselves or their families during the lockdown. These findings are in line with the business impact survey of the Covid-19 pandemic in South Africa, conducted by Statistics South Africa in April 2020. Key findings indicated reduced turnover (85.4%), a decrease in staff (36.8%) and temporary closure or a pause of trading activity (46.4%). Alarmingly, 30.6% of businesses indicated they could survive less than a month without any turnover, while 54% were only able to survive between one and three months.
Ensuring small business survival
As one of the country’s leading mining organisations, Exxaro has a strategic interest in protecting its investment in existing ESD beneficiaries, sustaining black-owned exempt micro enterprises (EMEs) and Qualifying Small Enterprises (QSEs) to achieve the company’s Preferential Procurement objectives, and continuing to create positive socioeconomic impact in its host communities. That said, at the beginning of lockdown, a detailed survey was undertaken on Exxaro’s ESD beneficiaries in order to gain a better understanding of which businesses were at risk and their challenges to determine how Exxaro could best assist. Limited cash reserves to pay creditors and to ensure business continuity was one of the biggest highlighted challenges, with most SMMEs either not operating at all (43%) or at a very limited capacity (57%).
Exxaro immediately implemented a plan of action to mitigate the impact of Covid-19 on these businesses in order to ensure their ultimate survival, with the following outcomes:
• 15 ESD beneficiaries successfully applied for interest-free loan repayment holidays between two to six months, totaling R13.9 million. Combined, these companies employ 690 staff members, many of who are the breadwinners of their respective families.
• Two companies, with a combined total of 262 employees, received funding totaling R2.3 million to address Covid-19 related challenges. Whilst initially these businesses were encouraged to apply for Covid-19 relief packages, accessing the funds was difficult and the application process tootimeous, especially considering the urgency of the situation.
Besides financial support, Exxaro also held a series of webinars over four weeks to provide information support to its ESD beneficiaries. Designed as closed information sessions, the workshops aimed to provide relevant, one-on-one, practical information to small businesses, with experts and business leaders providing valuable insights and observations pertinent to doing business in the Covid-19 era. Topics included how to access government and private sector Covid-19 relief funding initiatives available for SMMEs, navigating the pandemic and the national lockdown challenges faced by SMMEs, unpacking SMME payment holidays and a legal guide to deal with staff related matters during Covid-19.
One of the businesses to receive assistance during Covid-19 was Flashing Lights Photography, a company specialising in corporate event photography. The company had just secured a contract with the Pan-African Parliament when Covid-19 hit, forcing it to close its doors until such time that the contract could resume when Parliament was able to reopen in 2021. However, due to the assistance and extended support received from Exxaro, Flashing Lights was able to survive the worst of lockdown and has now started filming again – aptly filming a documentary on Exxaro’s Covid-19 SMME success stories.
While engagement with beneficiaries is still ongoing, it is gratifying to note that the SMMEs on Exxaro’s ESD programme - not only Flashing Lights Photography – have managed to weather the storm and remain operational. This is extremely good news, not only for the businesses themselves, but also for Exxaro and South Africa as a whole.
A life-changing year for ESD Programmes
There is no doubt that 2020 has been a year of extreme uncertainty and change. Adjusting to a new normal has hit everyone – hard. In the ESD space, Exxaro has noted the shift in the sector from a numbers game to an impact game. Whilst the organisation has approved R57m of funding to date in 2020 alone, what matters more is the long-term commitment of corporates to their ESD beneficiaries. It is not only this year’s beneficiaries that matter, but also those that have been in one’s programme since the very beginning. Constant communication between all parties, the provision of ongoing non-financial support and the upkeep of relationships will ultimately result in SMMEs that are sustainable and successful.
Enterprise and Supplier Development at Exxaro
Through its vision of powering better lives in Africa and beyond, Exxaro aspires to implement leading practices in ESD across its core functional areas. This initiative aims to promote economic transformation through developing entrepreneurs and suppliers and creating competitive markets for them to grow their enterprises generate more jobs and establishing sustainable communities.
Exxaro is committed to creating opportunities for black-owned, youth-owned and women-owned suppliers, service providers and entrepreneurs to encourage economic growth in the country through its operations and other ventures. These include:
• Bringing to market growth oriented enterprise support solutions.
• Meeting and exceeding regulatory and statutory standards placed by local, provincial and national government.
• Actively investing in diversifying the quantum and quality of vendors located close to Exxaro’s business operations and supporting economic transformation by growing the number and size of black-owned businesses.
This is achieved by directly and indirectly providing market access opportunities for these SMMEs and investing in nonfinancial and financial business support programmes.
Shining a light on gender equality
A 100% black, woman and youth-owned business, Stenda Trading was established by Matshidiso Dlungwane in 2016. The company provides multidisciplinary services and addresses the shortage of women-run and owned enterprises providing technical services in the mining sector. Stenda Trading is currently contracted to several mining companies, providing a range of services such as civil and concrete work, water treatment and reticulation, underground ventilation, roof support, road maintenance and more. At Exxaro, Stenda Trading provides underground civil and underground cleaning services at Matla Mine.
After it was awarded these contracts in 2018, Stenda Trading approached the Exxaro ESD unit for financial support. The company was awarded an interest-free loan of R9.2m to procure equipment, vehicles to transport material and employees to site as well as a mobile office. The business has since grown from strength to strength, and even