R8m incentive fund saved 808 EC jobs this past year
29 May 2019 | Web Article Number: ME201914704
A three-minute business pitch in 2018 earned Mthatha-based Spotless Dry Cleaners a R180 000 portion of an R8-million incentive that assists companies in distress to save or retain jobs in the Eastern Cape.
Since its inception in 2012, the Eastern Cape Jobs Stimulus Fund, managed by the Eastern Cape Development Corporation (ECDC), has approved for disbursement R84.9 million (excluding cancellations) to businesses in the province. Total disbursements of R67.1 million (translating to 79%) were paid to 102 enterprises that saved and/or retained 6 662 jobs in targeted sectors of the Eastern Cape economy.
Between April 2018 to end of March 2019, the fund paid R8,080 million to 11 companies saving or retaining 808 jobs in the province, Spotless Dry Cleaners among them.
“The fund disbursed R180 000 to our family business to save and retain 18 jobs. We currently employ 23 people. We also created an additional new job,” said the company’s Kanyi Ntloko.
“In 2018, I was invited by the Small Enterprise Development Agency (SEDA) OR Tambo region to participate in the SEDA perfect pitch programme. I was given three minutes to present my business and present my business need. ECDC was one of the potential funders and they then approached me after the pitch to discuss the submission of a comprehensive business plan.
“The business has since been able to buy a new high-speed dryer worth R 72 000 in cash. South African minimum wages kicked in in January this year. Spotless Dry Cleaners is now fully compliant with labour laws. We were able to provide increases to bring 12 staff members to the minimum wage rate. The release in cashflow pressure has allowed us to focus more on the business than in the business. We have been able to bring in three new corporate clients,” Ntloko said.
Established in 1981, the business now operates and owns three branches, including an industrial site where full services are offered to clients. The dry cleaner does industrial washing, drying, ironing and sewing machines.
According to ECDC senior manager for development finance and business support David Mandell, most of the jobs saved or retained were in the Buffalo City and Nelson Mandela Bay metros and in the OR Tambo, Sarah Baartman and Alfred Nzo districts. The businesses operate mainly in the manufacturing, services as well as in the Business Process Outsourcing sectors.
“The incentive is available to businesses based in the Eastern Cape who have a minimum of South African shareholders. The business should be creating or retaining at least 10 jobs. A qualifying business receives a R10 000 incentive for each job saved or retained,” Mandell said.
The fund targets companies operating in agro-processing, manufacturing, tourism and hospitality, capital goods producers, services sector comprising of Business Processing and Outsourcing (BPO), and Information Communication and technology (ICT). “The business needs to be tax compliant and companies applying for the retention of jobs at risk must demonstrate through audited financials, creditor accounts or management accounts that the company is distressed,” Mandell added.
Ntloko said the incentive had also assisted in the growth of the business. Over the years the business has primarily been “self-funded” with the shareholder and various members of the family continuously contributing financially to sustain the business. Funding from the family has assisted during seasonal fluctuations in the market that would have in a normal business, resulted in them downsizing and reducing the number of employees.
Over the last two years the family has substantially contributed towards the purchasing of assets including a generator, vehicles, an industrial washing machine, dryer and two rainwater tanks with pumps.