Case study: Scrap metal reclaimer Bonutrax scores big contract on back of Seriti ESD Programme

Bonutrax is an environmentally conscious scrap reclamation and industrial waste processing company, which operates in Kriel, Mpumalanga. The company was selected to participate in the Seriti Enterprise and Supplier Development (ESD) Programme in 2021 and has since secured a multi-year contract that paves the way for future growth.

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Client background

Bonutrax was established in 2016, and is managed by a young, black entrepreneur, Sizwe Morgan Mtshali. Bonutrax has a scrap reclamation site in Kriel, Mpumalanga, and a workshop in the nearby town of Ogies. The company currently employs 25 people and deals strictly with scrap metal. Its core business is the collection of scrap metal from mines in the Mpumalanga province, which it then sells on their behalf to scrap metal dealers and recyclers. Following the conclusion of a sale, the company then pays the mines a predetermined rate for the material. Bonutrax lists one of its main objectives as wanting to contribute to the South African economy through job creation, skills transfer and the development of business opportunities and wealth for youth from historically disadvantaged backgrounds.

The challenge

Bonutrax faced several challenges that prevented it from being able to expand. It struggled to secure contracts with local mines due to its inability to market its services effectively. Another significant hurdle was the company’s difficulty to manage its finances and cashflow properly, while its inability to source scrap metal in large quantities restricted its earnings and its ability to unlock greater profits. At the time, Bonutrax was also facing a significant transition, with Mtshali set to take over the running of the business from his father, who wanted to retire. While Mtshali was passionate about the company, he realised that he lacked the management skills and financial know-how to effectively run the business. In addition, Bonutrax, which at the time employed six people, was severely impacted by the outbreak of the COVID-19 pandemic. Lockdown restrictions saw the company suspend operations and grapple with the three trucks it owned and used to transport scrap metal due to mechanical problems. As a result of not being able to operate, the company struggled financially and could not afford to fix its vehicles. Mtshali realised that in order to turn the business around he would need to acquire business and management skills, and also implement adequate systems to effectively manage the company’s finances and marketing.

The solution

In 2020, Bonutrax applied and was selected to join the Seriti ESD Programme, which was designed to identify small, medium and micro enterprises (SMMEs) in the specified local communities in which Seriti operates. Seriti contracted Zevoli Growth Partners to develop and implement the ESD programme on its behalf, in line with Seriti’s commitment to support local SMMEs in acquiring essential business skills needed to expand their operating capacity. A recruitment and awareness campaign attracted more than 500 applications from nearby SMMEs. The ESD programme was a capacity and capability building and mentorship initiative, held between February and July 2021. The structured mentorship and training programme was aimed at helping SMMEs improve their operational efficiency, expand market share, grow strategically and align to a level of sustainability.

 

Bonutrax participated in the programme, which highlighted several areas within the business that needed attention, particularly related to marketing and the management of finances. Due to the nature of its business, Bonutrax needed to effectively market its ability and experience to sell scrap metal. The company received training and guidance through the Mentorship and Coaching, Business Growth Learning Programme and Digital Marketing modules. Several tools and resources were deployed for the company, including a financial system that could track its finances, create quotes, invoices and payslips at the touch of a button. It also received a project management system to manage its time, teams and projects in a systematic way. The programme also included a complete identity revamp, including an update of its logo and setting up of a website. While participating in the programme, Bonutrax secured a three-year contract with Seriti to collect scrap metal from its various sites.

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The result

Upon completing the programme, Bonutrax implemented systems that enabled it to manage its finances more effectively and this has made the company more profitable. The company’s revenue grew by 84% and its staff compliment by 75% over the ESD programme period.  The marketing tools and skills the business acquired enabled it to create a social media presence and develop a more effective marketing strategy. The contract with Seriti is the first long-term contract that the company ever secured and ensures that it will generate an income for the next three years. As a result, Bonutrax was able to hire another 19 employees. Crucially, the Seriti contract is also an effective marketing tool that the company can use to gain more clients, as it demonstrates that it has the skills and capacity to handle large amounts of scrap metal on behalf of big mining companies. Mtshali also personally benefited from the programme and feels that he now has the skills and tools in place to steer Bonutrax into a bright future.

Editorial contacts:

Zevoli Growth Partners

Malika Moloi 

Marketing Support

Tel: 0111004727

Email: Malika@zevoligp.co.za

 

Evolution PR

Charlote Hlangwane

Tel: 0768911464

Email: Charlote@evolutionpr.co.za

 

Seriti

Hulisani Rasivhaga

Communication, Media and Brand Manager

Tel: 0833702327

Email: Hulisani.Rasivhaga@Seritiza.com

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