Economy
Grows 3.8% in first quarter
Although
showing signs of slowing down, gross domestic product is estimated
to have grown by 3.8% in the first quarter on a quarter-on-quarter
and seasonally adjusted and annualized basis, compared to 4% in
the fourth quarter of last year. This is according to a Reuters
poll of 19 economists who believe that confidence is still strong
and demand high. This forecast seems to dovetail with Finance Minister
Trevor Manuel’s prediction that the government expected the
economy to grow 4.3% this year and continue to breach 4% for each
of the next three years. The economy grew 3.7% last year.
Smme's
to benefit from IDC and AFD loan facility
The
Industrial Development Corporation, already a leading player in
the promotion and financing of SMME’s, has taken on a loan
facility from the Agence Francaise de Developpement (AFD), a French
development financial institution whose capital is held by the French
state, to help finance SMME clients. The loan, taken at competitive
cost, will benefit projects that are directly linked to Black Economic
Empowerment (BEE) and companies belonging to historically disadvantaged
companies with total assets of less than R30 million, turnover of
less than R50 million, and less than 100 employees. The loan will
be offered in projects requiring R4 million or less and are applicable
to the following business categories. The business categories that
the loan facility is earmarked for include Tourism, Health and Education,
Food, Beverage & Agro Industries, Media and Motion pictures,
Development funding and Wholesale and Bridging Finance.
Business
partners announced new budget
Business
Partners, the small and medium enterprises investment group, has
announced an R850 million investment budget for the new financial
year, with most of it earmarked for Black Economic Empowerment (BEE)
and the funding of entrepreneurs. The budget, with its increase
of R250m over last year’s budget, will focus on assisting black
entrepreneurs across all industries and sectors and in all types
of businesses, with franchising one of the key areas through their
specialist investment fund, the Business Partners Umsobomvu Franchising
Fund which concentrates on assisting young black entrepreneurs get
into the franchising arena. According to Nazeem Martin, Business
Partners Executive Director, all efforts need to be concentrated
on nurturing entrepreneurship and giving opportunities to BEE candidates
to enter the economic arena and help with job creation and economic
growth.
Khula
to service all Provinces
Khula,
the loan and equity provider to small businesses is planning to
expand its services to cover all provinces. At present 75% of Khula’s
business is in Gauteng, KwaZulu-Natal and the Western Cape but it
plans to increase its range by 60% to cover Mpumalanga, Limpopo,
North-West, Northern Cape, Eastern Cape and the Free State. This
is in line with Khula’s strategy to assist as many small businesses,
especially in more rural areas. This will be achieved through Khula’s
partnerships with banks and institutions that are involved in SMME’s
and with provincial departments. In a deal that will see small business
opportunities in the Eastern Cape, Khula concluded a R20 million
deal with Real People, an East London based company that will provide
financial products and loans to the small business market. Areas
that Khula will be concentrating on in similar deals and also with
provincial provinces are in the manufacturing, tourism and agricultural
sectors.
McDonald's
makes money out of the healthier option
If you
thought McDonald’s introduction of salads and fruit to their
menu range was purely a move to counteract the negativity around
junk food, without any other spin-offs, think again! According to
an article in the New York Times, the simple introduction of salads
and a snack called Apple Dippers has resulted in an explosion in
the fresh fruit and vegetable industry with McDonald’s expected
to order 54 million pounds of fresh apples worth 10 billion pounds
for their stores in the United States alone, up from just zero two
years ago. In the same way that hamburgers and French fries made
McDonald’s the largest buyer of beef and potatoes in the US,
it now seems that it will be doing the same for the fresh fruit
and vegetable market. And, in the same way that McDonald’s
sets very high standards in its procurement of beef and potatoes,
it also believes that it will also start setting down specific requirements
on which types of produce are used and how it’s grown. At a
recent conference of apple growers, McDonald’s Director of
quality systems, told the delegation that if they wanted to supply
the chain they had to look at growing more Cameo and Pink Lady apples,
the preferred type of apple that McDonald uses. Since that conference,
production of Cameo apples in Washington State is up 58% in the
current crop year from a year earlier. Whilst growers are welcoming
McDonald’s move, which has seen the consumption of apples take
off after a 10 – 15 year low, there are those that predict
that a larger supply in certain varieties will drive prices down
and squeeze margins – a trade-off that McDonald’s is famous
for doing. But, for the meantime, everyone seems happy – from
the growers who supply to the consumers who are on track to becoming
healthier!
A
lesson in marketing...
In
a classic “how to take on the competition”, Amazon Café
in Philadelphia, has taken a very different marketing approach –
by not selling what the opposition sells but selling what the opposition
doesn’t. This Café, which opened in the same building
as Starbucks, decided to play an unusual marketing game. It sells
smoothies, sandwiches and snacks but no coffee. Starbucks, famous
for its coffee, doesn’t sell much else so Amazon Café
capitalizes on what Starbucks doesn’t sell. The owner’s
logic – he’s happy when he sees customers come into his
stores carrying Starbucks’ coffee, wanting to buy a snack to
go with it!
