Making headway in a market dominated by huge capital outlay and high labour costs and international competition from Chinese producers is no mean feat
Yet Cape Town's Mustard & Moonshine, a specialised ceramics manufacturer, is thriving, having spotted a clear place in the market for itself, despite the challenges.
"It's about identifying a gap in existing products. You then create that missing product and position it to a particular target market," says Kate Carlyle, founder and managing member of Mustard & Moonshine.
The gap she's referring to lies in creating functional art rather than the more traditional ceramic products such as tiles, toilet sinks and bathtubs.
"It would be suicidal for an entrant in this business to focus on producing traditional ceramics because of the influx of very cheap imported products.
In any case, the Chinese businesses manufacture these products at a fraction of our cost base because labour costs, which constitute a large portion of operational costs, are quite minimal in China," she says.
Since its establishment in 2002, the Mustard & Moonshine's product range has become popular in strong markets such as Europe, the United States and Brazil, so much so that exports account for about 90% of the company's revenue.
The recession has not been kind to export-focused businesses such as Mustard & Moonshine, and it had to fight to stay alive under pressure from both the downturn and errati customer orders, Carlyle says.
This was compounded by a rawmaterial malfunction in 2010 that put the company under significant pressure: its production was disrupted, which led to even greater strain being put on its already tight cash flow.
The decision was taken to approach the IDC's development funds department for assistance, and Mustard & Moonshine qualified for assistance from the Women's Entrepreneurial Fund.
This timely intervention, allied to the business's strong track record and export focus, has placed Mustard & Moonshine on a far stronger financial footing that has enabled it to ride out the economic slowdown, while growing its local and international client base, Carlyle says.
"This is not to say it's plain sailing," says Carlyle, who recognises that the South African ceramic industry is in a downward spiral, but that her company's minimal exposure to the local market has helped to steady its revenue momentum.
The returning international business, coupled with the ID funding, has enabled Mustard & Moonshine to grow its staff from 36 to 50 employees as it gears up for continued growth and expansion, she says..