Back to the kitchen

They spent years working their way into the boardrooms of some of the country’s top institutions. Now, a group of top professional black women is poised to take over in an arena you’d least expect: the kitchen.

Durban-based black economic empowerment (BEE) group Ayavuna Women’s Investments is the proud new owner of household appliance manufacturer, Defy.

Ayavuna was part of a consortium, with Standard Bank Private Equity and Defy management, which last month bought the Durban-based company for R550-million from Ethos Private Equity, the country’s largest private equity firm.

“This was a perfect deal. It resonated with us because their products are mostly used by black women,” said Hixonia Nyasulu, Ayavuna CEO.

“When I first told the women in the group [about the deal], they loved it! They said ‘Oh! My kitchen is full of Defy!’ We all grew up with Defy,” Nyasulu said.

With an annual turnover of R1,5-billion and a 40% share of the local major appliance market, Defy is Southern Africa’s leading manufacturer of white goods. Ethos bought the 72-year-old company in a management buyout from the Malbak group in 1997.

Nyasulu has declined to declare her firm’s actual stake in Defy, until the acquisition is finalised early next year.

“We had been looking around for a partner in the area of empowerment for a while and we saw a strong partner in Standard Bank and Hixonia. We are very positive about the deal,” said Defy MD Ross Heron.

The deal, Ayavuna’s first since starting up six months ago, took only three months to conclude. That’s not too surprising considering its CEO’s credentials. Nyasulu, who has been voted the most influential black businesswoman on the JSE Securities Exchange, sits on the board of a range of top, listed corporations including Anglo American, Nedcor, AECI and Tongaat-Hulett.

She spent the past 20 years running a successful strategic marketing consultancy in Durban. At 50, “with consultants and clients getting younger”, she felt it was time to move on.

Nyasulu hand-picked a team of high-flying black professionals as shareholders in the broad-based company. And where other women’s BEE ventures have drawn their leadership from community-based groups, she markets highly specialised skills to prospective partners. This has raised questions about who exactly will benefit from their empowerment deals.

“Ayavuna has a community development trust which owns shares in the company,” Nyasulu said. “Dividends earned by Ayavuna will go towards the endowment of women’s groups working particularly in the areas of skills development, education and health.”

With start-up capital from Standard Bank, which has an equity share in the company, the new investment outfit went fishing for a deal. And it wasn’t long before they had a bite.

“We were introduced to them [Ayavuna] by Standard Bank and we were very impressed,” said Heron.

Nyasulu believes BEE women’s groups in consortia are often sidelined in business negotiations. “They weren’t leading deals. We don’t want to be bridesmaids in deals, we want to lead deals.

“We also find most BEE partners negotiate a stake and then sit back and wait for dividends. We structured the group such that, as we make deals, we have women who can be deployed as board members of the companies we acquire to help management shape and grow them.”

And Defy, she said, has been very open to suggestions around company growth. What sets this firm apart from the other women’s BEE outfits is that they have set their sights on a sector without a BEE charter, which is new territory.

“This is fairly unusual,” said Reg Rumney of economic think-tank BusinessMap Foundation. “I found it interesting in that women’s groups haven’t gotten much publicity and manufacturing is not a chartered sector. It’s an example of the cascade effect, with private suppliers looking for black partners.”

Several Ayavuna shareholders have expertise attractive to companies in retail and consumer-related business.

Said Nyasulu: “We call ourselves a second-wave BEE player. The first wave was a very politically connected group, with people like [Mvelaphanda CEO] Tokyo Sexwale and [HarmonyGold CEO] Patrice Motsepe.”

The window of opportunity in the areas dominated by these kinds of players, she believes, is closing.

“BEE has evolved. It’s quite okay now to tell politically connected people to go jump in the lake if you don’t like what they’re saying,” she said. “Political influence is not essential for these deals we are doing.”

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