NEF invests in black-owned KZN stone mining business

FM Crushers, which has been operating for 10 years, is a small emerging rural enterprise that operates subsistence crushed stone material and sand mining in the Ingwavuma area of Jozini, Umkhanyakude District, KZN.

It supplies G4 subbase crushed stone material for road construction companies. The company holds an order to supply 302,000 tons of G4 material to the KZN Department of Transport over a period of three years, valued at over R70 million.

Facilitating expansion and capacity building

"G4 subbase crushed stone is gravel material that provides the supporting structure in any pavement design. The crushed-stone base or subbase is derived from hard, sound and durable rock. In highway engineering, subbase is the layer of aggregate material laid on the subgrade, on which the base course layer is located," says entrepreneur Fakaza Mkhize.

The NEF's regional manager for KZN, Phakamile Madonsela, says the funding "will help the company to purchase a new plant and equipment. It is also meant to finance FM Crushers' working capital requirements for commercial operations. The company is 100% black-owned with 20 local employees, two thirds of whom are women, and is the only black supplier of construction material in the Ingwavuma area". At least 10 new jobs are expected to be created from the company's expansion and increased mining capacity plans, adds Madonsela.

The business is the brainchild of Mkhize, who left a cushy job as a Ithala Bank facilitator a decade ago, in order to pursue his dream of establishing a stone quarry in the rural area.

According to Mkhize, FM Crushers operates one stone crusher with the capacity of 20 tons per hour, and additional production resources such as blasting, trucks and excavators, which are currently hired from nearby towns. The funding will increase the mining capacity to 120 tons per hour, and deliver an estimated 28,000 tons of crushed stones per month to meet its order obligations. FM Crusher will also be able to buy its own production equipment as a result of NEF funding.

Investment towards rural communal upliftment

NEF divisional executive for SME and rural development, Setlakalane Molepo, says the investment contributes towards infrastructure development in a rural and economically depressed community.

"FM Crushers will not only increase its commercial viability but will also pave the way for economic activity in the rural area of Ingwavuma. Good quality road infrastructure continues to be a deterrent for urban based businesses to invest and expand into rural areas. FM Crushers will complement government's efforts to attract business opportunities in rural areas, and increase future employment opportunities directly in the rural areas themselves. We need more entrepreneurs to identify business opportunities that can create economic value and activity within the communities that need assistance the most," says Molepo.

Established by the National Empowerment Fund Act No 105 of 1998, the NEF is a driver and a thought-leader in promoting and facilitating black economic participation through the provision of financial and non-financial support to black empowered businesses, as well as by promoting a culture of savings and investment among black people.

Since 2004 to date the NEF has approved funding to a total of 519 black businesses amounting to more than R5 billion, and has created over 40,000 jobs. At least 21% of the businesses funded are owned and managed by black women.

For more information, go to www.nefcorp.co.za.