Turning chemicals into cash: Initiative to boost black, female-owned start-ups

South Africa’s chemical sector is about to get a much-needed boost, to the tune of R2.5 million, with a new initiative which aims to empower black women. 

The small business development programme, created by the University of Johannesburg’s Centre of Entrepreneurship and the Chemical Industries Education and Training Authority (CHIETA), wants to grow small, medium and micro-sized (SMMEs) chemical businesses over the next few decades. 

They aim to do this through structured advisory, mentorship and coaching support, as well as creating relevant partnerships within the industry to provide beneficiaries with opportunities. 

How important are chemicals in SA?

The chemical sector accounts for 6% of the country’s gross domestic product (GDP), and uses 25% of South Africa’s total manufacturing output. 

Our petrochemicals sector comprises of more than 55% of the chemicals produced in the country, and is valued at $30 billion. 

Pharmaceuticals are also on the up, said CHIETA CEO Yershen Pillay. 

However, the country’s GDP decreased by a record 51% in the second quarter of 2020 due to Covid-19. 

The pandemic negatively affected manufacturing trade and transport – all facets in the chemicals sector integral to its survival. 

The manufacturing industry alone contracted with 74.9% in the second quarter. 

Expenditure in real GDP decreased by 52.3%.

Pillay said the chemicals industry is a catalyst for job creation, but that it needs to keep abreast of ever-growing changes within the sector. 

This as alternative, raw materials are starting to become significant in driving sustainability, and phasing out extractive and non-renewable resources. 

‘Green chemistry’

A global demand in living a more sustainable life has filtered into most sectors. 

In the chemical industry, Pillay said the availability of non-renewable resources has already begun to deplete. 

In the oil industry, Pillay noted an increase towards alternative sources of raw materials, and a shift away from crude oil. This has created new industry players whose products are not dependant on natural crude oil. 

Synthetic oils, which are man-made lubricants consisting of artificially-made chemical compounds, are starting to be used as a substitute for crude oil. 

Pillar said there was now a need for CHIETA to “completely overhaul our learning curriculum to enable the supply of emerging skills for this strategic national industry”. 

He predicted an exponential increase worldwide as the demand for “green chemistry” emerges.

“A gradual increase of ‘clean energy’ usage is required. There was a need to ensure that chemicals are produced and used in a way that has minimal adverse impacts on the environment and human health. 

“SA is growing the chemical industry where there is joint utilisation of old coal methodology and commitment to going green. 

“[It] aims to improve the safety, health and environmental performance of the sector.”

But this changing landscape within the sector means new technology, which CHIETA can assist with, to ensure that internal skills have the capacity to support the industry and take advantage of this emerging market. 

Empowering female entrepreneurs

Pillay said CHIETA wants to support entrepreneurial females of colour, especially due to the “unique challenges” they face.

This includes lack of access to funding, and “prevailing misconceptions that they are less capable of running successful businesses,” he said.

More than half of South Africa’s population is female. SMMEs account for more than 98% of the country’s formal businesses, and yet, only 34% of smaller businesses are owned by women. 

“We want to help them realise their entrepreneurial dreams.”

CHIETA’s initiative comes at a time where more than two million people lost their jobs in 2020. Only 500,000 are said to have gotten their jobs back, Pillay said. 

The initiative wants to help smaller companies become economic powerhouses, which creates employment and empowerment, both locally and overseas. 

For now, it intends to focus on SMMEs operating in the speciality and commodity chemicals spheres.

“We will start by targeting 50 beneficiaries from the greater Johannesburg area, including Soweto, Orange Farm, and Modderfontein, focusing especially on black women-owned start-ups,” Pillay said.

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