Smoothing out cosmetics
One of the stated objectives of the IDC's Women Entrepreneurial Fund is to encourage the participation of more women business owners in traditionally male-dominated industries.
Although this may not have been the motivation of Katinka Bezuidenhout of Natural Science Labs, a contract manufacturer of personal care, skincare, fragrance and colour cosmetics, she does find it rather ironic that this sector in particular has very few womenowned businesses.
"I can think of one woman-owned manufacturer in our industry and perhaps one other that is co-owned, but the rest are all male-owned, which is odd if you think about it," she says. Undaunted by the established businesses that either produce branded or private-label cosmetics, Bezuidenhout took the plunge earlier this year to establish Natural Science Labs as a dedicated manufacturer of personal care, skincare, fragrance and colour cosmetics.
It is an industry she knows well, having represented one of the established cosmetics manufacturers for many years, and subsequently having built up her knowledge and market over five years while conducting small-scale production of these products.
She says this home-based production proved to be a good starting point and learning experience to get to grips with market needs, as well as the production process. The growing trend toward privatelabel cosmetics – which are either produced for small local brands or as self-labelled promotional products – gave Bezuidenhout the confidence to shed the home-based outfit and move into a 500m2, pre-fitted facility in Centurion.
"We started with a 100m2 facility, but were lucky enough to find a larger, pharmaceutical-grade facility that didn't require conversion to suit our needs," she says. "And we
decided that if we are going to be aserious player in the small to medium cosmetics manufacturing, we would have to start off properly, and set it up to international standards."
The need to install production equipment to bring the facility up to this standard is what led Natural Science Labs to the IDC's doorstep.
"When we started looking for funding, we were referred to the IDC. We knew there was funding available although we weren't sure if that was an option that would be open to us. But they were very excited about our plans and we pursued a loan with them from there." She adds that although there was some interest from private financiers, it was felt that the IDC option was a better fit for the business and what it is looking to achieve.
Bezuidenhout explains that the funding is being applied largely to improve capacity through the installation of specialised production equipment, of which the bulk has had to be imported. A smaller portion of the funding is to be applied to new business development, which is being used as a draw-down facility to meet needs as they arise. "We will be able to do 20 times the volume because of this machinery," says Bezuidenhout.
"This is going to have an enormous impact on our business and the type of customer we're now able to approach." Importantly, the upgrade has already made the business's entry into the export market possible and will contribute enormously to the first shipment of 55 000 units to a Nigerian customer by early December.
This represents a recent private-label contract Natural Science Labs has negotiated, with the brand owner shifting contract manufacturing from the previous supplier in the United States. It is the potential for deals such as this that attracted the IDC to the business, and that has contributed to a strong partnership between the two organisations. "The IDC were absolutely fantastic and incredibly helpful and positive," says Bezuidenhout.
"One of the real advantages in working with the IDC is that the process is very comprehensive, requiring business plans and business models that built our own understanding of the business. They push you to get processes in place; in that sense it was very positive for us to go through this process with them."
Because the majority ownership is female and the business has met other target criteria set by the IDC, Natural Science Labs qualified for a 100% loan without the need to contribute a matching amount. With the increased capacity, which will come on line by mid-October this year, the company is now set for growth, although Bezuidenhout says this not purely because of the higher volume possible.
Her focus is on strengthening her reach into the private-label market, which is not always a matter of volume – quite the opposite. "People often underestimate the market for private lines because it is assumed the big manufacturers will beat you for volume.
But that is where the opportunity lies for people like us who can still profitably produce relatively small quantities. At the moment a lot of private-label business goes to the East, so being able to meet that need locally is where we see the gap." From an operational growth point of view, Bezuidenhout says the staff is expected to increase threefold from the current staff complement in over the next two years.