Mechanical Technology — August 2013
33
⎪
Manufacturing technology and plant automation
⎪
significantly, which we are determined
to develop into main stream SME busi-
nesses,” he says.
Citing a recent success story, Mor-
genrood says that Standard Bank has
done very well in providing financial
and other essential support services to
dealerships for Apollo Tyres, the hold-
ing company for Dunlop. “There are
currently 145 dealer-owned businesses
offering Apollo products in South Africa.
Size wise, they range from R2-million
upwards. “We were approached by the
holding company to develop suitable
banking solutions for the individual
dealers, and since June 2013, we have
been able to provide these to around 60
Apollo outlets. We have also been able
to offer cash handling solutions such
as cash in transit security services;
tailored insurance services and vehicle
and asset finance (VAF) for physical
equipment and vehicles. While these
outlets are not franchises, they have
common equipment needs: car lifting,
tyre fitting; wheel balancing and align-
ment systems; and computers. None
of this is cheap but it’s an essential
investment,” Morgenrood reveals. “We
have also learned that over 70% of the
transactions are credit and debit card-
based. Only 30% is cash and most of
that comes from the taxi industry,” he
adds.
Moving on to discuss manufacturing,
Morgenrood points out that, since about
2005, manufacturing’s contribution to
the South African GDP has “slumped
from 21% to 12,56%. And in Standard
Bank’s small enterprise segment, manu-
facturing accounts for approximately
4% of the broader SME portfolio. If we
track back, manufacturing has been
dropping since the 1980s and has shed
300 000 jobs since 2008. And we can
see a corresponding climb in exports
from China,” he argues.
Standard Bank sees manufacturing
opportunities emerging from the renew-
able energy sector and energy efficiency
initiatives across the country. “We have
developed banking solutions to help
renewable energy customers to start
new businesses,” he says.
In the enterprise development area,
there are also a lot of initiatives to get
corporate industries to adopt local pre-
ferred suppliers to better develop the lo-
cal economy. “We are currently working
with a wooden furniture manufacturer,
for example, helping to identify, sup-
port and contract more local suppliers.
The idea is to channel corporate social
investment funding into small local
businesses who are then contracted
as preferred suppliers to the company.
As a bank, we will provide the start-up
capital for support companies that have
secured supplier agreements from the
corporate. This is an increasing trend,
supported by Government, to encourage
localisation.
“SMEs are going to contribute an
increasing proportion of South Africa’s
GDP,” Morgenrood believes. “This is a
trend across Africa, especially in Nigeria
and Kenya, where novel cashless busi-
ness solutions have emerged through
the likes of Impeza.
“As bankers, we are changing the
way we go about helping customers.
We are now much more focused on
keeping businesses going, in particular,
through the difficult first years. It we can
keep South African businesses going
and growing, then everybody wins,” he
concludes.
q
