Strategic changes

Mon, 23 April 2012

REPORT 4: Afrique du Sud Bidonvilles – Enterprise Development for Unemployed Women

Afrique du Sud Bidonvilles identified the need to create employment opportunities for women living in poverty in South Africa. This project originally aimed to employ 30 women through the development of 3 sewing co-operative within the townships surrounding Cape Town. The women were to attend a 17 week training course prior to the formation of the cooperative and the purchase of sewing equipment.

Activities and Outcomes

The last progress report discussed the formation of the Simunye co-operative which employs 14 women. This co-operative is actively taking orders and producing the bags to deliver on time. They have not yet been registered as a formal co-operative as they first need to ensure that all the members are committed to working within this environment for an extended period of time (+- 6 months).

Other than this co-operative, no other progress has been made in terms of how the project was initially planned to move forward. Greater Capital has been in close collaboration with the CEO of Afrique du Sud Bidonvilles to establish reasons for the delay in the progress of the project. Through these discussions it was found that an increased knowledge and understanding of this sector has resulted in the need for a change in the strategy of this project in order to meet future market demands.

The second half of 2011 saw Afrique du Sud Bidonvilles expand into fashion accessories which appears to be a highly lucrative market. This has resulted in the need to upskill the co-operatives to be able to produce these items as well as the need for additional equipment to meet the demand. Some of the existing co-operatives will now focus on fashion accessories as well as a portion of the new co-operatives which are to be formed going forward. There have been some changes to the initial objective of setting up 3 co-operatives that SASIX was going to support.

What will not change:

• The current co-operatives will continue to form the main channels through which orders are fulfilled.
• The Simunye co-operative (formed using SASIX investor funding)will continue to operate and work towards formal registration.
• 2 new co-operatives providing employment to a further 12 women will be formed by April and June 2012 respectively

What will change:

• The organisation has received a no-cost extension to complete the project objectives by July 2012. GreaterCapital’s monitoring of the project will be extended until the end of December 2012.
• The 2 new co-operatives will be smaller in size (8 and 6) as they will be developed and trained to produce fashion accessories which requires more detailed work and closer collaboration among the co-operatives members.
• Training: will include an extra 2 weeks of technical training as well as training on how to use the equipment.

There are some exciting changes happening within the Township group, which currently includes Township Patterns and Township Non-profit . A new entity entitled Township Manufacturing will be added to the group and will house the manufacturing component of the model. A piece of land has been purchased in Epping in Cape Town to house the new entity. The marketing and sales function will continue to be performed by Township Patterns and the recruiting, training and equipping of co-operatives will be the core responsibility of Township Non-profit. GreaterCapital has reviewed the market development plan, as this links directly to the sustainability of the programme, and has found that existing contracts have grown year-on-year and new partnerships and networks are underway which will ensure continued work for the co-operatives going forward.

Expenditure

The total cost of this project was R688 676 which has been paid in full by SASIX.

Description	Total Budget	Total Expenditure to date
Training consultant	99 951	103 369
Training costs	133 725	123 111
Equipment (sewing machines, ironing system)	180 000	72 839
Renovation, furniture and small equipment	120 225	22 760
Legal registration costs	12 000	0
First aid kit and other expenses	17 775	7 500
Project administration and management	125 000	95 962
TOTAL	688 676	425 541

Although expenditure is greater than a third of the project budget, the management team has ensured us that they have the additional resources they need to complete the formation of the next 2 co-operatives.

Challenges

Quality in Production: Some of the goods produced by the co-operatives have not been of the high quality that Township Patterns prides itself in selling. Township Non-profit are in the process of planning a practical training for all existing cooperative members, geared to improve quality and productivity. They believe that additional training is essential particularly if Township Patterns is going to receive large orders for fashion accessories from prominent international stockists.

Monitoring and evaluation

Township Non-profit has actively pursued to implement a monitoring and evaluation system that can be used to not only show results but also direct their strategy. They have developed this system around 4 key components, namely: Production (25%), Co-operative management (25%), Fair trade principles (25%) and Entrepreneurship (25%). Each of these components has a list of indicators which co-operatives are ranked on in order to establish how successful the particular co-operative is. Each co-operative is then ranked on a scale that places them in 3 different categories; a leading co-operative (75% plus), a sustainable co-operative (50% to 75%) and a co-operative in incubation (<50%).

The idea is for Afrique du Sud Bidonvilles to be able to track each co-operatives progress and to intervene when necessary. The system has only recently been implemented results the first round of results will follow in the next report.

Conclusions

Although there has been a considerable amount of restructuring within Township Non-profit we believe that these are all positive changes and are a direct result of a strong management team not only addressing current challenges but pre-empting potential future ones.

Township Patterns has a good market development plan which will ensure continued work for the co-operatives and the amount of money moving through the current co-operatives continues to grow year-on-year which is the sign of good sustainable business model. Although the project has been delayed, we believe this is for good reason and that the overall sustainability of the project has been increased.

In order to ensure the full completion of this project GreaterCapital has committed to extending the reporting period by a year to the end of 2012. Two more progress reports will be drafted in July and December of 2012 respectively. These will be followed by the impact report in July 2013.

First co-operative starts production

Tue, 24 January 2012

"We didn’t know how to sew. Now thanks to the training we can sew!” - Nonzwakazi, chairlady of the Simunye co-operative

REPORT 2: Afrique du Sud Bidonvilles – Enterprise Development for Unemployed Women

Afrique du Sud Bidonvilles realised a need for the creation of jobs, particularly for women, within Khayelitsha, an informal settlement outside Cape Town. This organisation trains women in sewing skills and provides them with the equipment and skills to produce garments, bags and other goods. Each group trained forms a co-operative which is then able to receive orders through a partnership with Township Patterns (a Section 21 company). This project provides for the training and formation of three co-operatives.

This project runs from November 2010 to November 2011 and this report covers the period between February 2011 and April 2011.

Activities and Outcomes

Afrique du Sud Bidonvilles has assisted in the formation of one co-operative so far. The co-operative is called Simunye and has 14 members. The following processes enabled the co-operative to be established successfully:

• The first group of women has been trained and equipped with the necessary business and sewing skills;
• Equipment for the co-operative has been purchased and given to the women. They will start to pay back part of the cost of equipment after the first year of operations;
• Premises in Khayelitsha, from which Simunye can operate, have been located and renovated; and
• The co-operative is in the process of registering with the Department of Trade and Industry.

The new co-operative is still in the incubation phase, where the support is still very high but the production and revenue generated is low. The next group of women has been identified and it will begin training in April 2011.

Expenditure

The total cost of this project is R 688, 676 of which R 465, 676 has been paid by SASIX.

Description	Total Budget	Total Expenditure to date
Training consultant	99 951	103 369
Training costs	133 725	123 111
Equipment (sewing machines, ironing system)	180 000	72 839
Renovation, furniture and small equipment	120 225	22 760
Legal registration costs	12 000	0
First aid kit and other expenses	17 775	7 500
Project administration and management	125 000	95 962
TOTAL	688 676	425 541

Additional trainers have been appointed which has increased the cost of training for this project. This will not impact negatively on the training of the two remaining co-operatives. The additional trainers ensure a high quality standard of training among the co-operatives.

Challenges

• The main business that the co-operatives receive is the manufacturing of bags for the retail and conferencing industries. The demand for these items fluctuates constantly depending on the industries’ requirements and the women struggle to understand this fluctuation, particularly when demand is low.
• Although some of the co-operatives have explored additional markets a large majority of them are still dependent on Township Patterns for orders. Afrique du Sud Bidonvilles is helping the existing co-operatives to access other markets.
• Afrique du Sud Bidonvilles’ strategy is to link the start of a new training cycle with Township Patterns’ production forecasts for bags. Township Patterns has recently launched a range of fashion garments. Although this could provide more opportunities in the long-run, the timing of this launch of fashion garments is a threat to the next training cycle, as the limited demand for bags could decrease the availability of work for members. Close consultation between Afrique du Sud Bidonvilles and Township Patterns is necessary to ensure that the switch to fashion garments does not negatively impact Afrique du Sud Bidonvilles in the medium or long-term.
• The capacity of existing co-operatives needs to increase constantly. In order to ensure that production is of high quality and that a well organised structure of labour is in place, Afrique du Sud Bidonvilles has employed an external technical consultant to assist the co-operatives directly.

Monitoring and evaluation

The main objective in terms of project monitoring is to develop a tool to evaluate how the co-operatives perform in key areas such as production and group management. This tool will help evaluate the co-operatives’ chances of developing into successful micro-enterprises but will also be used as a tool for Afrique du Sud Bidonvilles to identify needs and adjust strategy accordingly. Progress on the development of the scorecard has been made but it still needs to be finalised before implementation. The progress includes the identification of key indicators and descriptions thereof.

A social impact survey to assess the impact of the programme on the beneficiaries has been conducted. The survey showed that there was a high degree of job satisfaction among the women. They particularly enjoyed being able to manage their own business and found making decisions for the business rewarding. The income they earn is enough for them to support their families as well as to occasionally save money.

Conclusions

The launch of the new product range could provide significant opportunities for the co-operatives. However, there are some decisions that need to be made around Afrique du Sud Bidonvilles’ strategy, in terms of equipping existing co-operatives with new skills and training new groups to be able sew other garments. During this decision-making, the co-operatives’ best interests will be prioritised. This will ensure that Afrique du Sud Bidonvilles continues to produce co-operatives that are financially sustainable and operationally sound.

First group of women have started producing goods

Tue, 1 February 2011

• Thanks for having faith and confidence in us. We are now fully equipped in running a business because of your teaching.” - Beneficiary*

REPORT 1: Afrique du Sud Bidonvilles – Enterprise Development for Unemployed Women

Afrique du sud Bidonvilles aims to form three new sewing co-operatives which will create jobs for 60 women living in Khayelitsha, on the outskirts of Cape Town. This organisation will select, train and equip these women with both sewing skills and the business skills that are necessary to effectively manage their cooperatives.

Activities and Outcomes

Nineteen unemployed women participated in a training programme that started in March 2010. The training programme focused on technical skills, group management skills and business skills. Most of the beneficiaries started with little to no prior sewing experience but they all had a very high level of motivation and commitment. They are now qualified machinists.

Fourteen beneficiaries formed a new group named “Simunye”. The group has not yet been registered as a cooperative with the Department of Trade and Industry as it is still in its incubation period. During the incubation period, they started to engage in a more formal relationship with Township Patterns as a supplier and also started to operate as an autonomous entity. Afrique du Sud Bidonvilles’ involvement during the incubation phase is focused on group management and leadership development.

The Simunye group started production in August 2010 and its revenues have increased steadily over a three month period. The group generated R13 865 in August, R19 357 in September and R26 228 in October. Three more women joined existing cooperatives in Khayelitsha, while two of the graduates decided not to join a cooperative.

Many of the beneficiaries are the only source of income for their families and they are now able to provide food and other basic necessities for their dependents. Knowing that they receive a monthly income is life changing for these women as it enables them to send their children to school and generally improves the quality of their lives.

Expenditure

The total cost of this project is R688 676, of which R234 000 has been paid by SASIX.

Description	Total Budget	Total Expenditure to date
Training consultant	99 951	40 969
Training costs	133 725	52 762
Equipment (sewing machines, ironing system)	180 000	7 58 373
Renovation, furniture and small equipment	120 225	7 160
Legal registration costs	12 000	0
First aid kit and other expenses	17 775	0
Project administration and management	125 000	74 745
TOTAL	688 676	234 009

Challenges

Thus far there have been no major challenges encountered in the project. However challenges may arise in the next stage of this project. Township Patterns is launching a new fashion range, which will include women garments, fashion bags and other accessories. The cooperatives still to be formed as part of this project will specialize in these items, which will require a different approach in terms of both training and co-operative support. Timing for the start of the new group is still uncertain.

Monitoring and evaluation

Afrique du Sud Bidonvilles is in the process of developing a monitoring and evaluation tool that will evaluate the ranking of cooperatives in areas of, amongst others, production management, group management, and team effectiveness. To date a scorecard has been developed as a pilot for the monitoring and evaluation tool. This scorecard has been used over the last two months and has been submitted to external parties for feedback. A survey has been conducted to assess the impact the programme has had on beneficiaries.

Conclusions

This programme has a brilliant track record in terms of the impact it has made on the lives of its beneficiaries. The Simunye group is still fairly new but as the project progresses the positive impact on the lives of the participant women will become more evident. The model adopted by Afrique du Sud Bidonvilles works very well due to a highly effective management team. The slight shift in strategy is in capable hands which will ensure the programme’s success.