The manufacturing industry is the backbone of any country’s economic and social growth – particularly for a developing country such as South Africa. Worldwide, over the past few years, the sector has undergone a fundamental shift, owing to the Covid pandemic, the Russia-Ukraine war, disruption in global supply chains, fuel prices and inflation.

In South Africa, over and above those challenges, manufacturing has also had to contend with a severe energy crisis, clogged harbours, flooding and riots. Add to that the effects of climate change, which are becoming more critical than ever.

It’s easy to get bogged down by challenges, but operating in a sector that is inherently problem-solving, Nedbank Commercial Banking’s focus is on helping our customers plan for the future they want  – not necessarily only from a profitability perspective, but also because this then contributes greatly to the economy, to lives and to society as a whole.

The drive behind backing the manufacturing sector is greater than banking, which is why some of the considerations prior to going out with solutions to clients to navigate this challenging terrain was to unpack and understand the client journey: understanding the day in the life of our client, what keeps them up at night, and what can we do from a banking perspective to solve those nuances.

In the context of where we are as a country, we have to take into account that we have undergone a really difficult time with regards to COVID, flooding, riots, inflation and the current energy crisis. There are a great many local and global factors influencing businesses, in different ways, and in some cases, they are deteriorating, such as our total logistics line.

Transport is expensive in South Africa, which obviously has an impact on manufacturing and our cost of production. So in addition to understanding the client journey, we need to understand the context of the sector and what the headwinds are, both locally and abroad. Offering term loans as well as chequing and savings accounts do not differentiate us bankers, as this does not make provision for the current landscape. We’re not typical bankers, because we provide tailored solutions that are specific to our clients business needs and aspirations.

We do this by being experts within the space and partnering with our clients in their journey and understanding their goals and ambition, and assisting them to achieve those while mitigating against the risks of all the headwinds that we face within the country. Gone are the days where bankers take a specific product off the shelf and provide it to a client: today, it is about how we structure a particular deal and do so timelessly to meet my needs and client requirements.

A recent example of solving problems for our clients stems from Covid:

When the first restrictions were introduced, many countries had problems accessing raw materials and clients were hesitant to travel. We went back to the drawing board and asked: how do we solve this problem for our clients?

They could not travel to vet suppliers, to ensure that the supply chain is still intact, and to diversify that supply chain.

Through our deep understanding of the nuances of the entire value chain, we develop solutions and products in partnership with key industry stakeholders to solve industry pain-points that go beyond just banking.

Through our partnership with Opportunity Network, we helped solve a networking problem by giving clients access to a safe and secure global networking platform to help them establish networks locally and abroad  and source trading opportunities for their business.

This network gives our clients exclusive access to over 44,000 international business owners that have been carefully vetted by reputable banks, giving clients peace of mind that they are trading with credible buyers or suppliers. Clients can also search for an appropriate network easily and promote their products and services to secure trading opportunities in 140 countries. It’s an easy-to-use platform that is accessible on both desktops and mobile devices, where one can match your interest in trading opportunities based on transactional type or size, industry and geography.

Any business, whether manufacturing or other, needs to focus on what can be controlled. Many businesses have streamlined their operations, had a careful look at costs and income lines. They’ve diversified suppliers and offerings, both vertically and horizontally. And through these measures, they are able to manage their cash flows and resources substantially better.

Often, clients view their banks as purely a source of financial aid or assistance in terms of loans. However, your first point of departure should not to go to your bank to seek a loan – we want to be there to assist – but it’s prudent for every business to have a look at its cost and income lines, and to minimise those before taking on any additional debt. Debt needs to be utilised for growth and sustainability as opposed to plugging holes in leaky buckets.

There’s a great opportunity in difficult times for us to also seek out those collaborative opportunities. For a country, manufacturing is a way out of difficult times and to grow the economy. Studies have shown that to solve crime, unemployment needs to be solved first, because there is a direct correlation between them.

Having the correct money expert and banking partner by your side, who sees the vision of your particular business, can go a long way in terms of driving employment. It’s not a case of a bank just offering a product; it’s more about the benefit and the solutions that are being offered. In many instances, these are not even banking related: they could be workflow related, about the layout of the operation – as a result of us being experts and being exposed to so many businesses. Our bankers have a wealth of knowledge within the manufacturing space and sector, that we can leverage to the benefit of all our clients and ultimately to the economy.

Nedbank Commercial provides tailored or differentiated offerings in agriculture, franchising, the wholesale market, the public sector and manufacturing. We are continuously evolving, refining our specialised areas of focus, and immersing ourselves in sectors, but we want to do so with proper strategic intent and execution plans.

We don’t want to be everything to everyone: we want to be partners to our clients and the markets that we have a strategic specialised focus in. DM/BM

Author: Amith Singh, National Manager: Manufacturing Nedbank