Namibia Recycling: Rent-A-Drum's entrepreneurial journey

Assignment 1

Questions 1

Read the following case study and answer the questions that follow.

Entrepreneurship is a life-long journey

OLD as he might be in age, Uwe Rathmann puts men half his age to shame when it comes to energy, community involvement and getting things done.

Knowing how actively involved Rathmann is as a social entrepreneur, in community projects and  programmes, fearing that despite his advanced age I might not find him resting at home, as he is the sort of person who doesn't just sit around doing nothing, I called in advance. We arranged to meet at one of the town's service stations, and go from there to his favourite local eatery for a beverage.

As I drove into the petrol station, I couldn't believe my eyes. There in a corner of the car park was Rathmann with his vehicle's boot wide open, a sign visibly placed, and advertising organic fertiliser for sale. Ever the entrepreneur, the first words the lanky Rathmann said when I stepped out of my vehicle to greet him is that he decided to make productive use of the time, adding with a beaming smile that he had already sold 10 bags whilst awaiting my arrival.

Rathmann's first business venture, after leaving the safety and security of employment at Namibia's dawn of independence, was to bottle fruit juices. A malaria scare in the northern regions of Namibia resulted in him questioning why spraying chemicals on stagnant water was seen as the only prophylactic solution. This resulted in him opening a mosquito net manufacturing business.

Rathmann using every spare moment to fulfill an identified need, this one for bagging and selling natural fertiliser in a predominantly farming community, did not surprise me, for that is the nature and character of an entrepreneur. They tend to make entrepreneurship a life-long journey, always searching for business opportunities.

Retirement generally doesn't feature in the plans of an entrepreneur. Consider the late Harold Pupkewitz, who took a small family business started by his father and turned it into one of Namibia's largest business conglomerates. Until a few years before he passed away, Pupkewitz was still creating new businesses and expanding existing ones.

There are many other business stars in Namibia, some known and others not so high-profile, who display similar never-stop thinking and doing-business habits. A prime example is Rehoboth's business icon, Oom Land Benade. He is ever-present at his prime business creation, the town's most successful retailer, each and every day of the week.

Question 1

Before his health deteriorated, hardly a day passed without Navin Morar of Chelsea Fashions' fame checking out a new business opportunity or exploring how what he was already engaged in could be done better. Although not so visible these days with his business empire now run on a day-to-day basis by a management team, undoubtedly the iconic Aupa Frans Indongo still lives, dreams and oozes business.

Entrepreneurs identify opportunities, gather resources and create a business venture. They bear the risk of starting a venture, and the reward comes in the form of profits generated. They hardly ever retire, so bear this in mind when yielding to the entrepreneurial pull.

Source: The Namibian https://www.namibian.com.na/75860/read/Entrepreneurship-is-a-life-long-journey

Questions

1.1 Would you describe Uwe Rathmann an entrepreneurial venture or an SMME? Motive your answer. (10)

1.2 Rathmann is described as a social entrepreneur. What is a social entrepreneur and what makes Rathmann a social entrepreneur?

1.3 There are many other businesses started in Namibia, some known and others not so high-profile, that display similar never-stop thinking and doing-business habits. List the various reasons why entrepreneurship is important for a country such as Namibia. (10)

1.4 Explain the difference between an idea and an opportunity. Make use of suitable examples in this regard from the article. (10)

1.5 What do entrepreneurs do according to the article? (10)

Assignment 2

Question 1

Read the following case study and answer the questions that follow:

Namibian entrepreneur proves there is big business in recycling

Rent-A-Drum has a fleet of over 70 vehicles that collect recyclables from about 200,000 households a month.

Inadequate or non-existent municipal waste collection services in many African countries have resulted in large rubbish heaps alongside streets in most major urban centres. Much of the trash is made up of plastic bags and waste, which many scientists estimate could take over 1,000 years to biodegrade. Their fumes pose health hazards when burnt and those left to litter the street can clog up drains and pipes to aid the spread of disease.

Rent-A-Drum has managed to dominate the recycling market and create a large enterprise operating in four regions. The family-run company was founded in 1989 by Gys Louw, who saw an opportunity for a garden refuse collection business in Windhoek after the municipality stopped providing the service.

Today the company collects everything from household to medical to mining waste and manages commercial, government and residential contracts. It has also set up branches in Walvis Bay, Swakopmund, Oshakati and Husab – and has a fleet of over 70 vehicles collecting recyclables from about 200,000 households a month.

Namibian entrepreneur proves there is big business in recycling

In 2010 the business erected a material recovery facility – the first of its kind in Namibia – where about 2,000 tonnes of recyclables are sorted and baled monthly. “The price of different [recyclable] commodities depends on what the market wants and where you are selling to, but plastic can sell for anything between 1,500 to 3,500 Namibian dollars (around US$105 -$240) per tonne,” says Louw.

Louw says 95% of the waste collected have to be exported to South Africa to be recycled, as the volumes of material are not yet large enough to support setting up recycling plants locally.

There is money in recycling’

“The recycling volumes are increasing every year as people become more and more aware of recycling and that you can earn money from it,” continues Louw. “We are also putting up and working with small buy-back centres where you get a small entrepreneur in a community who picks up recyclables in his neighbourhood and we then collect that.” Rent-A-Drum is also expanding its business to include manufacturing energy-producing products from organic material.

“So, for example, instead of using charcoal or wood we can supply [a product made from] waste that gives you a much higher calorific value, which is the heat value of something you burn.” However, Louw notes the current economic landscape has placed strain on the recycling and waste management industry in Namibia.

“I think the greatest limiting factor at this stage is the growth rate of this country and the financial situation in the world. People don’t have money and if you don’t have money it becomes less important to spend on waste [management],” he highlights.

“I think the other thing is around legislation. There is no legislation enforced that you have to do a proper waste management or recycling programme.” While Namibia has many German and foreign residents who bring in a culture of recycling, the company is investing in educating the local populace. For example, Louw has set up an organisation to spread awareness about the benefits of recycling within communities and schools.

Source: Douglas, K. (13 July 2016) https://www.howwemadeitinafrica.com/namibian-entrepreneur-proves big-business-recycling/55086/

Questions:

1.1 In 2010 the Rent-A-Drum company erected a material recovery facility. Explain the different sources where the company could have obtained the finances to build such a big facility. (8)

1.2 Rent-A-Drum has a lot of vehicles (fixed assets). Identify the major issues related to the acquisition of physical resources. (6)

1.3 Explain how networks have contributed to the growth of Rent-A-Drum company. (14)

1.4 Name the criteria’s that can be used to screen business opportunities. (7)

1.5 To buy fixed assets sometimes requires businesses to obtain a loan from the bank. The bank will require a business plan before it approves the loan. List other different situations that will require a different type of business plan. (6)

1.6 Explain how one would adapt the standard business plan for use as a strategic document. (9)