PPE scandal takes the bread out of SMEs’ mouths

The personal protective equipment (PPE) procurement scandal has cast a shadow over small businesses in the textile sector that ventured into manufacturing masks to survive the adverse effects of the Covid-19 lockdown.

The Special Investigating Unit is probing contracts worth more than R5-billion, over corruption allegations regarding the procurement of goods and services needed for the government’s Covid-19 response.

Sizwe Mbanjwa, the chief executive of Africa Bespoke Apparel in Durban, said government tenders were handed to middlemen who had no capacity, capability or experience to produce protective equipment.

“They do not understand the costing of the products, so they want to squeeze us to the bone because they are only interested in making a profit. They are greedy.”

He added: “We feel compromised and used by the government because, why give tenders to the middleman and then come to us and exploit factories. Yet we have so many overheads, and we employ people. This thing has been a sham.” 

Mbanjwa’s company mainly produces fashion items for the likes of TFG Group and Mr Price Group. But most of their orders were cancelled during the hard lockdown.

He saw an opportunity in the PPE business that could keep his company afloat and save jobs, and so began manufacturing masks, scrubs and overalls. 

Mbanjwa said he tried to bid for tenders, but was not successful. 

His company went into business rescue at the height of the lockdown, and he had to cut the number of employees from 450 to 320. 

Marcus Hiss is the owner of Cem Manufacturing and Hiss and Hiss Trading, which manufactures non-woven mops caps and overshoes and, before the Covid-19 pandemic, was about to start producing masks. 

He had ordered a machine from China but, because of the pandemic, delivery was delayed until June. His company, which employs 60 people, was able to produce 20 000 masks, but they are still lying in his factory. 

Hiss believes he is not getting orders because no one is buying local. “When I saw that the market has changed, I cut my losses.” 

He said he would focus on his business that produces shopping bags and the mops caps and overshoes. 

Sugen Pillay, the chief executive of BizHelp, which assists companies to access new opportunities, said they had advised at least three companies to get into the PPE business, but they too have struggled to get their products out to the market. 

He believes it’s because the playing field is not level. “I think it’s important that these types of [small] businesses are given the opportunity.” 

The Southern African Clothing and Textile Workers Union told Parliament earlier this month that Covid-19 PPE procurement is a “horror story”. It said scarce finances were being wasting on corruption and unnecessary middlemen.

It called for contracts to be ring-fenced for local compliant manufacturers and that “state monies should not be rewarding and supporting companies that break the law”.

Tshegofatso Mathe is an Adamela Trust business reporter at the Mail & Guardian

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Tshegofatso Mathe
Tshegofatso Mathe
Tshegofatso Mathe is a financial trainee journalist at the Mail & Guardian.

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