Careers

From pet idea to market success

2017-06-12 10:28

In October last year, businessman Nhlanhla Dlamini was setting up his factory. Since then, he’s employed 30 people and next month his first shipment of pet treats is exported to the US. He discussed his growing manufacturing business with Caiphus Kgosana

Right in the heart of the Maneli Pets’ factory in Sebenza, an industrial hub east of Johannesburg, is a high-tech piece of equipment that looks like a 1960s time ­machine.

The machine is a specialised vacuum freeze dryer. While it won’t transport you back in time, it is technology that dates back to early space travel when astronauts needed food that could stay fresh for a year.

Imported from China, the gigantic machine with its own overhead rails is the centre piece of the production process at Maneli Pets, a black-owned manufacturer and exporter of high-end pet treats to the US, the EU and Japan.

Maneli Pets is the brainchild of Nhanhla Dlamini, a Soweto-born entrepreneur who studied in the US. In 2015, the 32-year-old left his plush corporate job at global consulting firm McKinsey to explore the feasibility of starting a full-on food manufacturing operation for the export market.

Last October, City Press profiled Dlamini as he was setting up his factory. Next month, the first order of his premium pet food product branded Roam will be shipped to a US client that has already placed tons of ­orders.

The Industrial Development Corporation (IDC) funded the vacuum freeze dryer and other equipment at the factory. It also helped in the conversion of the Maneli Pets factory into an export-ready facility that now employs 30 people. In the next two years, the factory will triple its employment force to around 100.

Maneli Pets buys raw ostrich, crocodile and other game cuts from abattoirs in South Africa, which arrive at the factory weekly, frozen and weighing up to 4 tons.

These are then defrosted, cleaned, cut and have a selection of ingredients mixed into them. They are then cooked using various technologies and placed into branded packages before the finished product is shipped to the US, the EU and Japan.


Dlamini says the products appeal to pet owners who are not price-sensitive but are seeking non-harmful, nutritious snacks for their pets. The appeal is that the meat these snacks are made from is from animals that were raised in their ­natural habitat.

“There is a massive movement towards cleaner and leaner proteins that don’t come from commercial feedlots like beef or chicken do, but rather duck, rabbit and game.

“We have a lot of that in South Africa. The conservation rules here force people to treat animals fairly, and consumers love that story that these animals lived a fair life and they weren’t overly harvested for the purposes of food.”

The products are meat-based snacks that are given to pets as treats. The second category of products are occupiers, which keep a pet busy or ­entertained.

Dlamini says the market for such products in the US alone is massive as more and more people migrate towards high-end nutritious treats.

“The total pet treat and food market in the US is worth about $22 billion (R283 billion) and more and more of that is moving into the premium segment. The reason for that is there are more American families with dogs than there are American families with children.

“People are increasingly seeing their pet as their child and treating them as such, and you see that being played out in their spending patterns.”

Of the 30 employees, 22 are general workers and half of the employment force is female. It is 62.5% black youth-owned, and has an 82.5% overall black ­ownership.

Before approaching the IDC, Dlamini first discussed the idea with the Awethu Project, a business incubator and seed capital financier that provided him with working capital that enabled him to meet potential suppliers, research recipes and test the market.

By the time he approached the IDC, he had technical support partners who helped with setting up the business and developing product samples. He also had an offtake ­agreement with a US wholesaler interested in stocking the product.

A project in partnership with the IDC

He recommends this path to entrepreneurs who have ideas, but no money to turn them into bankable businesses.

“Work with a small incubator first to get to a point where you have a bankable project before approaching the IDC. It’s difficult to go from the streets or a corporate job to having a fully bankable project that the IDC will look at with a lot of appetite. Phase your funders.”

He has nothing but praise for the IDC’s pre- and ­post-investment interaction with his company. His only advice is for the IDC and other development financiers to set up joint forums where entrepreneurs that have successfully applied for funding can share insights into how they made it work.

“If they asked me to come in once every four to six weeks to attend a workshop with other entrepreneurs who have also been financed by the IDC, to talk to a group of people that have applied for funding, I’d be more than willing to do that.”

Roadblocks

Knowledge

When he left McKinsey, Dlamini did not know how to design and set up a factory, the process of acquiring raw materials, exporting products and accessing markets. For all those critical things around the factory, he partnered with technical experts who understood these processes and the infrastructure investment required. They were able to reassure the IDC with their in-depth knowledge and technical know-how across the value chain.

Funding

Although he had saved up a bit while working, this would only cover the initial research and some monthly expenses. Dlamini needed access to huge amounts of capital to do the full research and development, create networks, partner with technical personnel, set up the factory and all its technical machinery, employ staff, create the products, and source export clients. That is where the Aweuthu Project and, later, the IDC came in to assist.

Regulations

The factory is now ready to package its final products and export to clients overseas. But the packaging they’ve chosen, which was designed in China, is still being assessed by US regulators who have their own stringent labelling requirements. Maneli Pets is also waiting for a full export licence here in South Africa. Regulations require that a factory must be fully operational before an export licence can be granted. They have now secured one licence and are hoping to receive the final export licence in the next two weeks.

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July 23 2017