The days of taxi drivers losing money by deviating from their routes and taxi rank queues for minor service on their vehicles could soon be over with the launch of the first Bardahl South Africa Eyethu shop in the Eastern Cape at the Chatham Taxi Rank in Mthatha on Friday.
The Eastern Cape Development Corporation (ECDC) and Lutramart trading as Bardahl SA have entered into a partnership for establishing and rolling out about 30 shops which are expected to employ 300 youth at taxi ranks across the Eastern Cape. The Chatham Taxi Rank Bardahl Eyethu shop is a R3,1 million six-month pilot which will be used as a case study to develop a business plan for the roll-out of other shops. ECDC has contributed R2,5 million of this amount.
“The Bardahl Eyethu shops will be located at taxi ranks throughout the province to provide a convenience service to taxi operators. The shops will sell car lubricants, oils, additives as well as fast-moving car parts such as spark plugs, brake pads, filters and shock absorbers among other items. Taxi drivers, unlike ordinary drivers, do not have the luxury of time to go out of their routes to go to suppliers. The idea is to bring the service to the taxi rank in their area of operation while allowing them to protect and secure their position in the queue.
“ECDC has provided 80% of costs of the pilot with Bardahl providing the balance. This includes a branded shop, stock and the employment of 14 young people to sell the products at the Chatham Taxi Rank. There is a captive market that already exists without competition. We are also delighted because Bardahl is an internationally-recognised brand while its products have received awards from major motor companies in the United States, Europe and Asia. Bardahl SA has exclusive rights to manufacture, market and distribute Bardahl products in South Africa,” says ECDC head of risk capital Phakamisa George.
George says ECDC will have the first right of refusal to provide loan funding to operators to establish the 29 other shops throughout the province if the Chatham pilot proves a success. Banking giant ABSA has also expressed an interest to co-fund the roll out of these shops. In the first half of 2013, ABSA used its own resources to investigate the commercial viability of Bardahl SAs “Eyethu Route to Market” model that will create this network of licensed SMMEs to distribute Bardahl’s oil lubricants and automotive parts from partner companies.
“The exciting part is that independent operators will get an opportunity to apply to Bardahl SA for an operator’s licence to manage the rest of the shops. There is an opportunity to seek loan funding for capital and operational costs from ECDC.
“This is particularly exciting for ECDC because as a development financier, its risk capital unit consistently aims to increase investment in catalytic initiatives that unlock the economic potential of low income areas through innovation, local beneficiation and new product development. The increased investment should lead to the establishment of new viable enterprises, expansion of existing enterprises, creation and saving of jobs and sustainable economic growth in the Eastern Cape,” says George.
He says the Bardahl brand is a good quality brand that is competitively priced in relation to other suppliers in the industry. Bardahl is able to buy in bulk and provide discounts to the shops. The company has a contract with Autozone for the supply of cost-effective parts.
Autozone is the largest privately-owned automotive parts retailer and wholesaler in South Africa. The company has also expressed an interest to working with Bardahl on the roll-out of the programme at commuter hubs as well as leveraging its automotive parts, retail and training experience.
“Autozone has also registered interest in participating in the establishment of the Bardahl Eyethu Pilot shop and its subsequent roll out programme”
“Ultimately, Bardahl plans to open up a refinery at the Coega or East London IDZ to refine crude oil into these products or oil derivates such as brake fluids, clutch fluids, and additives,” says George.