Most of the cheerful crackers decorating tables in South Africa at Christmas time are handmade in a small KwaZulu-Natal factory. Glenart Trading is run by Miles Rasmussen, whose father Rowan founded the company in 1995.
Though the business started life at 19 Glenart Road, Kloof, the factory is now located in Shaka’s Head, near Ballito on the North Coast. A severely disadvantaged area, Shaka’s Head has a high unemployment rate, which is exactly why Glenart chose to set up shop there.
The factory employs 150 women, mainly from Shaka’s Head. This means their transport costs are negligible and they can go home to their families after every shift. Many of the employees are recent school leavers who couldn’t find work, and most are under 25 in their first job.
The nature of the product means it’s seasonal work. So Rasmussen is looking to increase exports and expand the company’s product range as a way to offer longer-term employment.
At the factory, the women sit in rows, putting together the brightly coloured crackers. Another production line builds boxes, and yet more women fill these with completed crackers, ready for shipping.
The company also makes sparklers and party poppers.
“We make crackers for all the big major retailers,” Rasmussen says. “They often require their own unique packaging to differentiate them. We also sell online and do smaller orders for functions and the like.”
Glenart supplies UK retailer Sainsbury’s, but its main competition is from China — although it does get some protection from the 30% import duty on Chinese products. “Also, our product is high quality and of a better standard.”
The company doesn’t have its own printing facilities, although it does design its own packaging. Printing and cutting of the outer packaging is outsourced. The design and planning continue throughout the year, even during the manufacturing off-season.
“We make more than 120 different product lines in one year.”
The challenges are standard for small companies: cash flow and access to finance. “It is a seasonal business. We start spending in February to get our Christmas orders in, but we don’t get paid by our clients for up to a year,” Rasmussen says.
The company turned to MCEP when it began growing “We have just moved to these new premises, which the MCEP funding facilitated. By funding operational expenses, it frees up cash for other things.”
The bridging finance removed the ‘small family business’ connotations, and helped Glenart become a more professional company. “We may have reached maximum local supply.”
The falling rand helps them tap into export markets, and expansion plans are always top of mind for the young entrepreneur.
“The market is massive – for example, in the UK, three crackers are bought per person each year. That is about half-a-billion crackers a year. Our production seems big, but we are a drop in the ocean internationally. We are after a slightly bigger slice than we have.”
Giving back to the community is a priority, and he is proud that Glenart is accredited by Fair Trade, a global organisation that certifies companies for compliance to rigorous economic, social and environmental standards.
The certification is an important requirement for credibility among European buyers, says Rasmussen.
“It is a feather in our cap. It means we are treating our employees properly.”