[South Africa] Massmart supports local manufacturers through private label development
Since inception, Massmart’s Supplier Development Programme has supported as many as 32 small local manufacturers gain access to market and form part of the broader Massmart supply chain.
To date the programme has procured an estimated R290million from small manufacturers.
Massmart’s private-label brands in particular have provided new routes to market for small suppliers to produce for mass-markets which they may otherwise struggle to access given the cost and risks involved in developing a brand.
Eastern Cape-based company Ikusasa Green is a great example of how the programme assists SMMEs through private label development. The company manufactures a range of five roto-moulded cooler boxes under Massmart’s trusted private label brand – Camp Master.
The main aim of the Supplier Development Programme (SDP) is to provide opportunities for small and medium manufacturing enterprises. The programme was established following intervention from Minister of Economic Development, Ebrahim Patel, who has championed the development of local suppliers in the retail sector.
Massmart also works closely with the Economic Development Department (EDD) to identify new suppliers and help existing suppliers grow their businesses.
Minister of Economic Development, Ebrahim Patel says “The SMME sector is key to creating jobs and growing our economy. Both government and the corporate sector have a role to play in developing industrialists and entrepreneurs and making our local manufacturing sector competitive again. Interventions such as these are a good way to achieve our goals as a country.
Based in Wetton in the Western Cape, The Noodle Factory is a 100% black-owned noodle manufacturer. The company, which is owned by Mohammed Shakiel Parker, joined the Supplier Development Programme two years ago. Thanks to the partnership, The Noodle Factory now produces instant noodles for the Masscash private label brand, Econo, throughout the Western Cape.
In addition to accessing a broader market though the repeat business from Masscash stores, the Supplier Development Programme has also assisted The Noodle Factory with acquiring upgraded machinery, meet ISO compliance and certification requirements and improve their packaging to meet labelling standards.
Owner Mohammed Shakiel Parker says “With big retail onboard we have taken our job numbers from 25 to 129. Flour processed has increased from 3.2tons to 8tons per day. We still have challenges but we now run the plant 24 hours a day.
In the next 6 months we will outgrow our current line and will have to add another. This should bring at least another 70 jobs online. Bear in mind that all our volume comes from import replacement I’d like to thank Massmart and the Economic Development Department for their assistanceand installation of the new boiler. It really comes at a time when its need is greatest.”
The Supplier Development Programme currently has a portfolio of 32 small businesses manufacturing a variety of products ranging from cooler-boxes, window frames, paint and bath tubs to adhesives and furniture. A key focus of the Supplier Development Programme is to source and support small local manufacturers who provide opportunities for import substitution and of the 32 suppliers, six are import substitution projects.