Nationally small businesses are now being advised to prepare for future water scarcity.
With small to medium-sized businesses contributing over 65% of South Africa’s employment and 50% of the country’s GDP, their survival is essential to the economy.
The Cape Chamber of Commerce has found that many businesses are cutting down drastically on water usage and planning for the eventuality of Day Zero. Most businesses recently surveyed said they will continue operating throughout the water crisis. Almost 7% of businesses, however, plan to shut down if, or when, Day Zero comes.
A task team from Retail Capital, a company that provides working capital to small businesses, recently visited small enterprises in the Eastern Cape and were met with “very mixed” reactions towards the water crisis.
“Many small business owners are still in denial and overall, there is a great deal of confusion,” says CEO of Retail Capital, Karl Westvig. “It’s business as usual for some, whereas other businesses have been stockpiling water for up to 12 months”.
For Westvig, this is highly problematic. He believes that small businesses have the most to lose, will need to plan ahead if they want to survive.
As such, Westvig’s main concern is that many of these small businesses will not have enough of a cash reserve to start up again, once the taps start flowing, saying “These are extraordinary times, and businesses will have to look at access to funding, to keep them afloat, should Day Zero happen.”
“These are extraordinary times, and businesses will have to look at access to funding, to keep them afloat, should Day Zero happen.” – Karl Westvig, Retail Capital
When visiting water-scarce areas, Retail Capital also found that many small businesses are already innovating.
“Other provinces can learn from the Western Cape now by investing in boreholes, water tanks, planning private reverse osmosis desalination plants, importing water or harvesting water from air, chemical or portable toilets,” he urges. “Stocking up on water-saving products, reducing water usage, and changing plumbing where possible should also be put into the pipeline.”
“Some restaurants, for example, are not serving pasta, they’re recycling water, not supplying tap water unless requested as well as cutting down washing up by supplying disposable plates and utensils,” he says.
Retail Capital, established in 2011 to provide South African business owners with the opportunity to grow their businesses through access to funding, has since provided more than R1,2 billion to the SME industry in South Africa.
Other businesses, however, are unsure of how they will operate with little to no water. Hair and beauty, hospitality, and laundry industries are just some sectors reliant on a large water supply to continue to conduct business.
“We’ve seen salons asking patrons to bring their own water in for hair washing – but even this may not be a solution, when people are using what little they have sparsely, at home or at work”, Westvig says.
Spur’s chief operating officer, Mark Farrelly says “We have provided all our franchisees a blueprint with regards to water saving measures and have made provision that we will always have water for all our patrons.”
The positive news is that businesses across the board are starting to take notice and make changes. Larger corporates are also becoming more self-sufficient – one such company being Sea Harvest.
“We have taken the company off the grid completely and are selling some of the water back into the municipal supply,” says Felix Ratheb, chief executive officer of the Sea Harvest Group.
“The drought is a national concern. There will be costs and disruptions to business. This is why it is imperative that all businesses nationally strategize now to ensure as little disruption as possible in the long term,” Westvig concludes.
“The drought is a national concern… it is imperative that all businesses nationally strategize now to ensure as little disruption as possible in the long term.”- Karl Westvig, Retail Capital.
With the reality of a looming Day Zero in the Western Cape, individuals, families and corporates across the board are doing what they can to reduce water as much as possible, to avoid the taps running dry.
The Eastern Cape is also facing its own battle, with the Xilinxa dam that serves the Butterworth area at 5.2% capacity, the Mhlanga dam that feeds the Tambo district at 6.55% and the Nqweba dam that aids Graaff-Reinet at 11.4 there is very little water saving trickling through the province. One of the biggest concerns with the drop in water levels of the Kouga Dam to 7,4% capacity is the fact that it is the only source of water for Gamtoos Valley, an agricultural industry area that produces 50% of South Africa’s citrus fruits. The dam is expected to run dry by March 2018.
And in Gauteng, residents are being urged to protect their own dwindling resource.