ENTREPRENEURS: NOKWANELE QONDE and THANDO SIBISI
CIRCUMSTANCES RATHER than a grand plan led Nokwanele Qonde and Thando Sibisi to establish their company, called Wasaa Trading. After the two women left their then employment more than two years ago, they took time out for two months to evaluate where they wanted to go. With complete faith in their abilities and experience, the former colleagues decided to venture into the oil and gas sector.
Qonde was Sibisi’s boss while they were still employed. The former headed the gas subsidiary and the latter was in sales and buying. “Although she was very junior at the time, she was my right hand and we worked very well together,” says Qonde. It’s due to that relationship she sought out Sibisi when she decided she wanted to establish her own company.
Qonde had extensive experience, dating back to when she held various positions at PetroSA. She started her working life with a scholarship/internship from CDG after completing her BCom (Hons) at the University of Natal. CDG is a German non-government organisation that took mainly graduates for training. She had a nine-month stint in materials management at Motoren Werke, based in Mannheim, Germany and returned to SA in 1994, after which she joined business management software solutions applications company SAP in the Western Cape. “It was mostly due to my having worked on the system in Germany and speaking German,” she says. She then moved to SAP UK for three years to study towards an MBA at Kingston University.
Having gained in-depth knowledge of applications in various sectors, Qonde wanted to broaden her experience beyond SAP. She joined PetroSA in 2002 as trading manager for crude oil, where she was responsible for setting up a trading desk. Despite having no background in oil and gas, she succeeded and went on to hold executive positions in the organisation. She then headed to PetroSA’s newly established Johannesburg office. After that she joined a black empowerment company in the industry, where she held some equity. She realised there were opportunities in liquefied petroleum gas (LPG) and developing gas as a new business made it the first empowerment entity to trade in gas in bulk. She gave up the equity in that company when she moved on.
Qonde and Sibisi first met in 2006. The latter has been in the field throughout her career. She began in the mid-Nineties at Sasol Solvents in export and marketing before moving to Sasol Oil as bookkeeper. She had studied cost and management at Vaal Technikon (now Vaal University of Technology). She moved to other positions in Sasol before leaving in 2005 to gain more experience outside. She held various short-term positions before ending up at the same company as Qonde.
Wasaa Trading markets and distributes petrochemicals, with a focus on LPG, throughout southern Africa. Its operation involves lifting gas from refineries and delivering it to customers in bulk and packaged in cylinders. The entity mostly operates in the commercial and industrial sector, with approximately 5% going to the household market through middlemen.
Cylinders (packaged gas) only became part of Wasaa’s offering in June last year through distributors and eventually by supplying directly to end-users in February this year. Initially gas was distributed in bulk locally and to some SADC countries.
Like many other entrepreneurs, they initially struggled to garner support. “We found out no one will help you when you really need start-up capital,” says Qonde. “Banks and agencies will only engage you when you aren’t in dire need; but we felt so alone when we began.” Qonde’s mortgage was used and both women’s homes were initially used to run the business, but not as official offices for clients.
As clients came on board and a proper office was needed, they had the good fortune to secure a soft lease agreement that deferred initial rental payments for three months. Though Qonde’s husband and his partner owned the vacant property in Woodmead (north of Johannesburg) they were having a tough time where it mattered most – with suppliers. Supply deals would fall through at the last minute; sometimes they’d be quoted exorbitant prices – just to keep them out of the market. Sibisi remembers times when they’d wait until late in the evening just for someone to see them to ensure they had a secure supply.
They mostly had to source product from middlemen instead of refineries – paying a premium and, as such, pushing up costs. Despite that, Wasaa was profitable but margins low. The company opened its doors in January 2008, entering a mature market dominated by the major oil companies and Afrox.
They had to find a gap in the market. So they utilised Wasaa’s size to their advantage. They gained leverage by offering a personalised service, being able to build relationships with individuals and being highly responsive. Clients knew they had the most senior people dealing with their concerns at any given time.
Having developed a track record, the focus turned to establishing a processing and distribution infrastructure. Relying on third parties was a major problem – especially in winter, when there would be no trucks available at times, resulting in poor customer service levels.
Using a combination of shareholders (Thando and Mampho Trust), loans and funding secured from the National Empowerment Fund, the company invested in a gas filling plant, two trucks, additional Wasaa branded cylinders and recruited additional staff, an increase from two permanent and one freelance accountant to 15 permanent. Wasaa now operates from its own premises at Kya Sands (north of Johannesburg), where it has a depot.
Qonde says the company has migrated from a micro to a medium enterprise. Gas volumes have grown by 44%, turnover has increased by 59% and gross profit quadrupled. She adds that has impacted positively on client service levels.
The partners have had to sacrifice big chunks of their family time but they plan to go further by diversifying their product offering and expand the geographic footprint. Wasaa Trading is currently in Gauteng and Mpumalanga but plans to expand countrywide and into neighbouring states.
Says Qonde: “If I’d known what I know now about starting your own business from scratch I might never have done this. But every time we achieve something – big or small – I get so excited. I’m really enjoying the space we’re in.”
Early years: Newcastle, KwaZulu-Natal.
Marital status: Single.
What would you do if you had free time? Lock myself away with a good book.
Lessons learnt as an entrepreneur? You sacrifice a lot, so you have to be comfortable with the sacrifices you make in order to carry on successfully.
Relationship with Johannesburg? I jumped at the chance to be at Sasol Oil in Sasolburg to get a much-needed break from the hustle and bustle of Jo’burg.
Early years: Grew up in the Eastern Cape.
Marital status: Married, with two children.
What would you do if you had free time? Travel.
Lessons learnt as an entrepreneur? Human resources are the most difficult aspect. You not only have to find people who are skilled but they must also be a good fit. Finding that balance can be tough.
Relationship with Johannesburg? I took a position in Jo’burg for a change of scenery and to be with my boyfriend (now husband), who was relocating.