The success story of NIP Pallets is as much due to the hard work and motivation of Mongi Mnogomezulu and Stephen Sibetha as it is to the equally challenging task of keeping to the basics of running a business.
Its success is built on the importance of business support and the need for a well-managed cash flow. By getting the basics right, NIP Pallets has crossed its own Rubicon and has evolved into playing a vital down-streaming role in the community.
Creating jobs is a matter of doing good business
Business partners Mongi Mnogomezulu and Stephen Sibetha is evidence of the job creation potential wielded by small business in the manufacturing sector.
Given the opportunity to manufacture pallets for aluminium semi-fabricator Hulamin, they founded NIP Pallets in 2003. The name of the business is taken from the number plate of Bulwer where Sibetha hails from and that reflects the southern Drakensberg village’s strong timber influence.
NIP Pallets has shown astonishing growth over the past eight years – from a zero turn-over and two staff, the enterprise now employs 54 people and generates a turn-over of about R18 million.
It manufactures a range of products, including pallets, crates and skids of which 90% is destined for Hulamin and its export operations.
Of particular interest is the 10% customer split that Mnogomezulu and Sibetha is keen to develop. In this regard, plans to broaden the product range to include door frames and windows – once the construction industry picks up – highlights their entrepreneurial flair.
NIP Pallets keeps to a heavy production schedule and produce 200 pallets a day, according to Mnogomezulu.
“We tried a third shift, but that caused too many supervision problems and we find that a hard-working double shift works best for us,” he said.
In keeping with its own empowerment objectives, NIP Pallets is also playing an important downstream entrepreneurial role. Pieces of scrap wood are being converted into a range of applications, including dog kennels, benches and small tables by an entrepreneur, while wood shavings and saw dust is sold to emerging farmers as chicken litter.
“We also donate unworkable scaps of wood to the community for fore wood,” Sibetha said.
Key to their success is a deep understanding of packaging for the manufacturing sector and a close watch on cash flow.
“We are mindful of having a large inventory and make sure we have enough material to see us through the festive season as we don’t shut down,” Mnogomezulu said.
In this regard, the procurement of raw materials is a key concern that, in the context of saw mill closures and industry shortages, means price pressures.
But they are not daunted by the challenges ahead and have set their sights on buying premises rather than having to pay rent.