Sasol's small business incubator, ChemCity, has notched up another success with the sale, for an undisclosed amount, of cosmetic wax bead manufacturer Cirebelle to a broad-based black economic empowerment consortium.
Known as Bukekayo, the consortium composes private black business Letsema Ventures (26%), trade union investment company CEPPWAWU Investments (26%), entrepreneurs Stefan Roux and Louis Klue (20% each), and a staff share option scheme (8%).
Cirebelle, which means 'beauty wax' in French, employs 18 full time workers. With an annual turnover of R11 million, the company makes speciality wax products in South Africa and markets these to the international cosmetic industry.
"Cirebelle is the only company in the country that makes wax beads and specialty waxes for the cosmetic industry. These are of such a high quality that they're sought after by international beauty giants such as Unilever," says new Cirebelle MD David Gibson.
Yet, like so many other start-ups, the company almost did not survive. Cirebelle started out in 2001 as an initiative of Sasol Wax, which saw the initiative as a way of adding value to the wax raw materials it was producing from the Fischer-Trospch petrochemical process.
But with its focus on its core business rather than on this specific small scale speciality segment, Sasol Wax decided to make this business available for ChemCity to restructure and sell to a BEE entity. ChemCity is Sasol's chemical business incubator, which focuses on small business development and job creation in the downstream chemical sector.
The sale to Bukekwayo rather than to an international interested party, is notable. Besides ensuring broad-based BEE, the sale also ensures that Cirebelle's technological development and know-how will remain in South Africa.
With 26% of the shareholding being reserved for union beneficiaries and a BEE shareholding of at least 52%, the company will also achieve broad-based empowerment status.
ChemCity will continue to support Cirebelle's new product development and testing, as well as its overseas marketing and export efforts. "We are keen to help them stay ahead in the highly competitive international cosmetic industry," says ChemCity MD DeWet Deetlefs.
"What sets our wax apart from other products is Sasol's unique Fischer-Tropsch process. This renders our products super-clean and pure," says Gibson, adding that the wax is fully bio-degradable, odourless, non-irritating and easily emulsifiable.
Cirebelle's waxes are used in a range of exfoliating and moisturising products from body washes, face creams to hair styling pomades, body sprays, water resistant sunscreens and lipsticks. "We're introducing a range of soft sphere beads that exfoliate and release active ingredients, such as tea-tree oil, when they burst on the skin," says Gibson.
"We're very optimistic about the future of our business and its various stakeholders," says Gibson, "With the experts at the ChemCity Technical Support group ensuring that our products remain on the cutting-edge, we're confident of continuously growing market share."
Letsema Ventures is a subsidiary of the entrepreneurially focused black empowerment group, Letsema Holdings. The group has interests in consulting, communications, logistics and chemicals.
CEPPWAWU Investments represents the interests of the membership of the broad-based union that is strongly represented in the chemical sector and Sasol in particular. Gibson confirms that a growth strategy has already been developed for Cirebelle, in collaboration with ChemCity.