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IDC helps timber company uplift rural community

In 2004 Annetjie Swart quit his job as a mill manager at Sappi to set up his own timber company on the outskirts of Sabi in Mpumalanga.

The company, Elegant Line Trading, was doing well but often experienced cash flow problems preventing it from growing further.

It was only in 2010, after receiving finance from the Industrial Development Centre (IDC), that the company started to realise its potential.

Following an increase in demand for his products, Swart approached the IDC, a national development finance institution under the supervision of the Economic Development Department that was set up to promote economic growth and industrial development.

“We needed to replace ageing equipment which turned out to be a huge cost factor in the production chain. Getting rid of unnecessary costs by obtaining modern plant machinery is critical to a local company’s survival because we are competing against cheap imported wood products,” said Swart.

He explained that before IDC stepped in, his company experienced severe cash flow challenges, which put it on the brink of closure.

The IDC’s funding helped the company with the new machinery, which led to the creation of jobs since demand for products had grown.

Head of IDC’s Forestry and Wood Strategic Unit Lizeka Zwane explained that Elegant Line’s funding application fell within the objectives of government’s Industrial Policy Action Plan, which aims to promote the replacement of older sawmilling technology with modern, highly efficient technology.

“The IDC funding facility has not only helped to reduce production costs but has lead to creation of new jobs,” said Zwane.

Today the company employs 120 people from the rural community on a permanent basis. It supplies timber to the furniture industry and produces bed bases and pallets. The waste from production is chipped for pressed board.

Swart’s company is one of the biggest employers in Nelspruit, a region battling severe unemployment.

Elegant Line Trading’s presence has been a major boost for the local economy as it supports close to 85 families, explained Swart.

“The employment number surges during peak season when we hire more people on a contract basis to help us ramp up production,” he said.

Zwane was very confident about the timber industry’s prospects for growth, saying the industry accounted for about 200 000 jobs.

“For us to create more jobs in rural areas, we have realised the need to create and nurture companies like this one,” she added

For more information on the IDC contact the call centre on 0860 693 888 or email callcentre@idc.co.za