For many years now, ArcelorMittal South Africa has worked to improve education and skills development for young people. But when we looked at the full picture of our socio-economic contribution, we realised there was a gap. Educated, ambitious people from disadvantaged backgrounds are still struggling to create stable, successful businesses. So, with the support of the Department of Trade and Industry, in 2017 we launched an industrial incubation hub to help bridge this gap – and link the new businesses to our own supply chain.
Growing successful small businesses
After a year of planning and preparation, in February 2017, we moved 11 entrepreneurs and small businesses into their own workshop spaces in the 1,600 m2 Matlafatso incubation hub. This carefully chosen group of people represents a range of industrial businesses – from scrap metal to construction to industrial water supply. Over two years, we gave them the infrastructure and equipment that’s so critical for becoming part of the industrial supply chain. They are receiving comprehensive training and mentoring, as well as access to central workshop equipment. And just as importantly, we’re instilling a strong culture of safety, organisation and quality in the building – one that will shape them for success.
Our aim is to position these businesses over 24 months to be working sustainably without our support. As well as growing them to become part of the ArcelorMittal supply chain, we want them to be contributing to the local economy. Participants are already being offered substantial contracts as a result of their involvement the incubation hub, with one seeing a 2000% increase in business in one year. We’re finding that others need more support, and are tailoring our mentoring and training as we go. And we’re encouraging peer mentoring, with larger, more experienced businesses supporting others. Crucially, all 11 businesses are still there – this is no small achievement in a country with a typically high turnover.
Benefits beyond business
A new group of businesses will graduate from the incubation hub every two years. They will leave with good working practices, a sound business plan and active supply agreements, including a three-year contract with ArcelorMittal. We’ve also created a nearby business park – a secure eco-hub into which people can move their businesses when they outgrow or graduate from the incubation hub. All of this is creating jobs, infrastructure and mainstream economic participation for a section of society that’s been excluded for hundreds of years.
This doesn’t just help us to meet the requirements to operate in South Africa – it means we can play a proactive and constructive role in our future supply chain. We’re not the only industry looking to do this – and we’re beginning to collaborate with other sectors to more efficiently identify and support potential suppliers and small businesses. But ultimately, initiatives like the incubation hub are simply life-changing on a human level – and it’s gratifying to see the difference we’re making to families and communities. After all, what’s good for society is good for business.