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 Industrial business built through relentless struggle for survival

 

 A young Sipho Radebe might have laughed in disbelief if anyone had told him that he would one day build Mbali Industrial Solutions, a R140m-a-year engineering firm. More likely, he would just have ignored such an impossible dream, put his head down and continued working.

This was how his childhood ambition to get away from poverty took shape - he worked relentlessly, but not in any particular direction. 
So when, in the ‘80s, black South Africans were allowed to take up apprenticeships for the first time since apartheid, Sipho jumped at the opportunity to become a fitter and turner, “even though I didn’t know what fitting and turning was”, he says.

It meant leaving Inkamana High, a Catholic school in rural KwaZulu-Natal, which he credits for giving him an excellent basic education despite not finishing matric. He joined his parents who were eeking out a living in Kathlehong and took up an apprenticeship at Scaw Metals.

It was the beginning of an excellent corporate career which took him to Iscor, Mondi, Ford, where he progressed to management, and finally Rocla, where he was appointed head of maintenance.

It was the turn of the century, and many opportunities were opening up for talented black managers in the corporate sector, even as levels of frustration rose among them at slow rates of transformation. Sipho found himself at the cross roads of continuing in the corporate world or starting out on his own venture.

When he met two business owners who were selling industrial pumps, he knew that he could add value to their operation by offering after-sales installation and maintenance services to their clients.

They decided to present a one-stop service to the market, but Sipho kept his interest in the joint venture in his own business. He started small, he says, with a bakkie, a laptop and cellphone, and fixed pumps in his garage. The loss of his corporate salary was hard, but the fact that his wife Anastasia worked helped to keep the young family afloat.

Sipho says he gained most of his business knowledge from his two joint-venture partners, and over several years he emerged as a business owner in his own right. 
Mbali Industrial Solutions’ first big break came in the form of a contract from Rand Water for the maintenance of pumps. This allowed Sipho to move his business out of his garage to a rented industrial unit in the same street where he today owns several industrial workshops.

Anastasia joined Mbali Industrial Solutions full-time as financial manager, allowing Sipho to focus on the operations as COO. She also took over ownership of the business which increased its BEE advantage even more.

Sipho acknowledges the importance of the BEE system in advancing black business owners, but rails against the idea that it is in any way easy an easy road. Competition is vicious, established companies are extremely entrenched and very well resourced. Every time a BEE programme helps a small, fledgling black business into the next level where the competition is even fiercer, it is as if you have to start the fight for survival over again, he says.

His greatest praise is for a simple programme that applies to all suppliers of Rand Water, not only the black-owned ones. The fact that Rand Water pays its suppliers within a fortnight made it possible for him to settle his accounts at his own suppliers early. This in turn allowed him to increase his accounts at his suppliers in line with the growth of his business.

Sipho was soon able to buy an empty plot next to his rented workshop in Alberton. Whenever his cashflow allowed it, he would buy one or two pallets of bricks, cement and other building material, and once he had a certain amount, he started building. Essentially, he acquired Mbali Industrial Solutions’ first fully-owned premises in cash.
Through such fastidiousness, Mbali Industrial Solutions was able to grow its reputation, its asset base and its clients incrementally to include other organisations such as Eskom and Acsa. But Sipho is not one to turn down an opportunity that would change his business’s orbit.

Through the department of trade and industry’s Black Industrialists Programme, Sipho was able to win a R30m grant on condition that he could raise a further R30m through a financial institution.

He knocked on several doors, and found Business Partners Limited’s (BUSINESS/PARTNERS) co-financing offer the most suitable for Mbali Industrial Solutions’ needs. He also found BUSINESS/PARTNERS’ genuine interest and involvement in his business most compelling, including several visits by top officials to his business premises during the finance application. The finance, which came through recently, was used to purchase an adjacent industrial building in which BUSINESS/PARTNERS took a minority share, and state-of-the-art machinery, as well as vehicles. 

Today, Mbali Industrial Solutions is accredited to carry out mechanical engineering projects of any size, civil engineering projects of up to R200m and general building projects of up to R40m. The recently won grant and finance is certain to lift these measures further, as well as increase the size of Mbali’s current workforce of 51. 

No doubt part of Sipho’s success is his acknowledgement that the management needs of such an operation differs vastly from the one he started in his garage almost two decades ago. He prides himself on the fact that he has employed highly qualified technicians and managers, some of whom earn a bigger salary, at least as far as their payslip is concerned, than his. 

In the immediate future, Sipho will be once again grapple with surviving on the new level into which Mbali Industrial Solutions has been propelled, by expanding the company’s client base to include the mining and agricultural sectors, thereby decreasing its reliance on state-owned enterprises for business. 

Further than that, it is hard to tell where Sipho’s keen eye for an opportunity will take him. Looking back at how he got to where he is, anything is possible.
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