2. background Globalisation has necessitated the need for companies to continuously innovate and employ skilled personnel in order to remain globally competitive. This has resulted in the increased use of capital (modern machinery and methods of production) in manufacturing at the expense of unskilled and semi-skilled labour. The above has impacted negatively on developing countries like South Africa in terms of employment and job creation and retention. The resulting effect is that employment figures in the South African furniture manufacturing sector for instance, have declined from a high of 44 536 in 1995 to 37131 in 2006. Most companies in the furniture industry have been impacted negatively from the increased competition from cheap imported goods in addition to the current recession that implies that people are spending less on durable goods such as furniture. 1

3. background cont. This implies that without major intervention, this trend will continue. The furniture industry can play a significant role on impacting on employment and job creation as it has the capacity to absorb abundant unskilled labour. Though, the furniture industry, like any industry in the manufacturing sector in South Africa, has been impacted by the effects of globalisation, it has experienced a fairly strong demand in recent years especially from low and middle income households and the construction sector. With the right interventions, the furniture industry can become a major contributor to the economic growth and job creation especially in the Western Cape. The strategic priority is competitiveness, not job creation. Job creation/retention in the Western Cape Furniture Manufacturers sector will be the indirect consequence of (WCFI) Western Cape Furniture Initiative success. The purpose of this WCFI business plan is to communicate the strategic intent, development approach, the programme interventions that will achieve the required improvements, organisation of roles and the resources required to build a more competitive sector. 2

4. Strengths, Weaknesses, Threats & Opportunities This strategic plan addresses the following key strengths, weaknesses, threats and opportunities for Western Cape Furniture Initiative: Strengths Government support Basis for strong management team Key first major programmes launched and completed Initial business offering/concept can evolve into range of offerings for the Industry Have the support of all major role players in the Industry Members of the board is representative of most organisations that deal with the industry Very focused management 3

5. Strengths, Weaknesses, Threats & Opportunities This strategic plan addresses the following key strengths, weaknesses, threats and opportunities for Western Cape Furniture Initiative: Weaknesses Over dependent on grants from government - Insufficient cash resources Lack of awareness/motivation amongst existing factory owners Need more marketing awareness Need to establish an up to date database Need to obtain buy in from factory owners Poor relationship of stakeholders in the value chain of the industry 4

6. Strengths, Weaknesses, Threats & Opportunities This strategic plan addresses the following key strengths, weaknesses, threats and opportunities for Western Cape Furniture Initiative: Threats Funding from Government could be reduced or completely cancelled Factory owners could not be persuaded to share the vision Economic slowdown could reduce the amount of factories in the Western Cape Retailers could move their buying power to another region Labour and skills shortages may affect the future growth potential of the cluster Looming wood shortages 5

7. Strengths, Weaknesses, Threats & Opportunities This strategic plan addresses the following key strengths, weaknesses, threats and opportunities for Western Cape Furniture Initiative: Opportunities Establish a Cape furniture brand that is globally associated with quality and craftsmanship Export markets offer great potential Retail channels seeking new local products Scope to support and educate factory owners on business management and furniture manufacturing principles The success of the Furniture Initiative in the Western Cape will depend largely on the ability of its factories to adapt to the external forces shaping the sector, namely globalization, deregulation and consolidation, technology Implement programmes that will stimulate creativity, design and innovation eg. Furniture Competition 6

8. 7 Strategy Concept Vision Develop and grow the furniture industry in a sustainable manner and to implement programmes and interventions that will improve the skills and making the furniture industry globally competitive. Purpose For the furniture and solid wood industry to reposition itself within the global environment by achieving greater efficiency and competitiveness, various interventions are required for moving up the value chain. To deliver high quality programmes that provides strategic value to our members. Fostering a partnership with all role players that will assist our members to operate profitably, with sustainable and world class furniture factories and to attract recruit and retain smart and talented employees.

9. 8 Strategic goals 1. To attract, retain and create high-value jobs and people in the province. 2. Improve productivity across the furniture industry. 3. Improve creativity and innovation through design. 4. Facilitate access to technology. 5. Provide access to international markets and exhibitions. 6. Rebuild the industry by supporting training in high quality skills. 7. Networking and strengthening relationships within the value chain of the furniture industry. 8. Building a Western Cape furniture brand with high design content.

10. 9 Approach WCFI will pursue the strategic goals above by strengthening the ability of the stakeholders in the Furniture Manufacturers Sector to work together to understand and shape the factors determining their success in future markets. The WCFI role is not the implementation of improvement initiatives but instead to act as catalyst to identify and leverage the best intellectual capital and resource opportunities available in the private sector and public sector, relevant to a particular improvement initiative. The implementation role of WCFI is strategically defined as an initiator of change (putting deals together) and subsequent programme management.

11. 9 Scope of work included Introduce WCFI processes Secure involvement of key players Understand furniture industry culture Review the value chain of the industry. Build platform for interaction between stakeholders on strategic interventions. Understanding the Furniture Industry context, issues, competitiveness, dynamics and potentials. Identifying appropriate economic development approaches, tools and methods. Facilitation of participatory planning e.g. workshops to determine priorities for improvement. Programme management of implementation, including outsourcing of as much work as possible to both private and public sector, to keep WCFI lean and efficient, and to avoid displacement. Filling temporary gaps in implementation capacity until the market takes over. Securing additional funding streams.

12. 10 Scope of work excluded Work that: can be done more effectively and efficiently by the private sector, or by other public sector bodies. is not to the benefit of the WCFI. is not agreed as WCFI priorities.

13. 11 MissionVisionGoalsBudget 2009 /10 To increase the WCFI success rate in providing innovative and industry specific solutions to the furniture manufacturing sector. Western Cape Furniture Initiative is known to provide programmes to the furniture manufacturing sector within the province of the Western Cape whose objective is to develop and promote the furniture industry. To have an established initiative that will offer above- average returns to the various stakeholders and funders. The WCFI is set to become a leading, information gateway within the furniture manufacturing sector. R 2 752 953 Programme 1DescriptionImportanceTargetsBudget Administration, Finance, HR and Corporate Governance Establish and maintain institutional capacity to facilitate industry sector development Building and enhancing institutional, administrative and financial management capacity of the WCFI and compliance with legislation Stable, competent institutional capacity that ensures that programme targets are met. R 589 953 Strategic Plan: Programmes and Activities 2009 – 2010 1

14. 12 MissionVisionGoalsBudget 2009 /10 To increase the WCFI success rate in providing innovative and industry specific solutions to the furniture manufacturing sector. Western Cape Furniture Initiative is known to provide programmes to the furniture manufacturing sector within the province of the Western Cape whose objective is to develop and promote the furniture industry. To have an established initiative that will offer above- average returns to the various stakeholders and funders. The WCFI is set to become a leading, information gateway within the furniture manufacturing sector. R 2 752 953 Programme 2DescriptionImportanceTargetsBudget Communications and Sector Promotions Monthly news letter WCFI – Website Develop and maintain industry specific database Ensure continuous dissemination of information to the various stakeholders in the sector 1.Interactive Web Site 2.Newsletters – 4 3.Number of Enquiries – 50. R 40 000 Strategic Plan: Programmes and Activities 2009 – 2010 2

15. 13 MissionVisionGoalsBudget 2009 /10 To increase the WCFI success rate in providing innovative and industry specific solutions to the furniture manufacturing sector. Western Cape Furniture Initiative is known to provide programmes to the furniture manufacturing sector within the province of the Western Cape whose objective is to develop and promote the furniture industry. To have an established initiative that will offer above- average returns to the various stakeholders and funders. The WCFI is set to become a leading, information gateway within the furniture manufacturing sector. R 2 752 953 Programme 3DescriptionImportanceTargetsBudget Networking and Partnerships Facilitation of industry workshops and networking sessions Set up meetings with other role players/partners Interviews and meetings with industry to obtain greater cohesion, coordination and cooperation from all stakeholders to improve competitiveness. Workshops are based on the principle of experience sharing--what actually does and doesn't work in the demanding environment facing every factory today. 1. Industry Events – 8.R 23 000 Strategic Plan: Programmes and Activities 2009 – 2010 3

16. 14 MissionVisionGoalsBudget 2009 /10 To increase the WCFI success rate in providing innovative and industry specific solutions to the furniture manufacturing sector. Western Cape Furniture Initiative is known to provide programmes to the furniture manufacturing sector within the province of the Western Cape whose objective is to develop and promote the furniture industry. To have an established initiative that will offer above-average returns to the various stakeholders and funders. The WCFI is set to become a leading, information gateway within the furniture manufacturing sector. R 2 752 953 Programme 4DescriptionImportanceTargetsBudget Skills Development Focus will be the development of existing skills in the industry and possible interventions for emerging and new artisans. Factory owners should have access to programs that will assist them with their entrepreneurial skills. Support demand driven skills Supply programmes addressing entry level skills acquisition Middle management skills development. Reinvigorate competitiveness of the sector through the strengthening of the capacities of the factory owners. 1.Train the basics of Furniture Manufacturing to employed or unemployed people. - 50 2. RPL - 10 3.Train Cabinet Makers L 3 – 15 4.Factory Owner / Manager Skills development programme – 30 Companies R 735 000 Strategic Plan: Programmes and Activities 2009 – 2010 4

17. 15 MissionVisionGoalsBudget 2009 /10 To increase the WCFI success rate in providing innovative and industry specific solutions to the furniture manufacturing sector. Western Cape Furniture Initiative is known to provide programmes to the furniture manufacturing sector within the province of the Western Cape whose objective is to develop and promote the furniture industry. To have an established initiative that will offer above-average returns to the various stakeholders and funders. The WCFI is set to become a leading, information gateway within the furniture manufacturing sector. R 2 752 953 Programme 5DescriptionImportanceTargetsBudget Design and Innovation The industry needs to develop unique designs and products to be globally competitive. The importance and relevance of design for the development and manufacture of furniture products needs to be understood. Companies need to be capacitated to improve the productivity and managing their operations more effectively. Knowledge on how to improve technology and equipment to make the Western Cape Furniture Industry more competitive. Strengthening the capacity of factory owners and employees. 1. Design Competition Large Furniture exhibition in conjunction with Decorex – 150 students/companies 2.Social/ Turn Around Plan (Productivity SA) – 30 companies 3.Centre of Excellence R 1 265 000 Strategic Plan: Programmes and Activities 2009 – 2010 5

18. 16 MissionVisionGoalsBudget 2009 /10 To increase the WCFI success rate in providing innovative and industry specific solutions to the furniture manufacturing sector. Western Cape Furniture Initiative is known to provide programmes to the furniture manufacturing sector within the province of the Western Cape whose objective is to develop and promote the furniture industry. To have an established initiative that will offer above-average returns to the various stakeholders and funders. The WCFI is set to become a leading, information gateway within the furniture manufacturing sector. R 2 752 953 Programme 6DescriptionImportanceTargetsBudget Transform the furniture sector through SMME and BEE Enterprise Development Support SMME & BEE activities and programmes through counselling, mentoring, industry partnerships, post incubation workshops and rural outreach programmes. Support capacity building interventions and facilitate market access opportunities for SME and BEE enterprises. 60 companies actively assisted R 100 000 Strategic Plan: Programmes and Activities 2009 – 2010 6

19. 17 ProgrammeDescriptionImportanceTargetsBudget 2009 /10 To increase the WCFI success rate in providing innovative and industry specific solutions to the furniture manufacturing sector. Western Cape Furniture Initiative is known to provide programmes to the furniture manufacturing sector within the province of the Western Cape whose objective is to develop and promote the furniture industry. To have an established initiative that will offer above-average returns to the various stakeholders and funders. The WCFI is set to become a leading, information gateway within the furniture manufacturing sector. R 2 752 953 Functions 1.Facilitate the hosting of regular industry functions between all the stakeholders including: employers, academia, retailers, suppliers, labour and government where relevant 2.Secure additional financial funding and non-financial resources from industry and stakeholders 3.Hosting of an effective interactive web-site to promote and support the industry 4.Establish, host and facilitate workshops and/or forums to develop strategies and integrated programmes for each of the following initiatives: enterprise development, skills development, BEE, SMME support, innovation/design and technology. 5.Manage and facilitate enquiries emanating from the public, industry and other interested bodies and citizens, to effective resolution. This would include maintaining a log of these enquiries in the prescribed format. Administration, Finance, HR and Corporate Governance 1

20. 18 ProgrammeDescriptionImportanceTargetsBudget 2009 /10 To increase the WCFI success rate in providing innovative and industry specific solutions to the furniture manufacturing sector. Western Cape Furniture Initiative is known to provide programmes to the furniture manufacturing sector within the province of the Western Cape whose objective is to develop and promote the furniture industry. To have an established initiative that will offer above-average returns to the various stakeholders and funders. The WCFI is set to become a leading, information gateway within the furniture manufacturing sector. R 2 752 953 Functions 6.Participate and deliver presentations in forums and discussions to stakeholders eg. Red Door, government, etc. 7.Maintain an up-to-date database of industry players in the prescribed format 8.Communicate regularly with members and industry players with regards to recent local, national and international developments and trends within the industry, distributing at least six newsletters per year 9.Co-ordinate and distribute new research and information on the industry for the purposes of keeping industry stakeholders informed 10.Submit quarterly and annual reports to funders and other stakeholders on developments and updates of the industry, including an overview of the industry, latest trends and developments, a list and description of the top 10 industry players and the status of BBBEE within the sector. Administration, Finance, HR and Corporate Governance CONTINUED 1

21. 19 ProgrammeDescriptionImportanceTargetsBudget 2009 /10 To increase the WCFI success rate in providing innovative and industry specific solutions to the furniture manufacturing sector. Western Cape Furniture Initiative is known to provide programmes to the furniture manufacturing sector within the province of the Western Cape whose objective is to develop and promote the furniture industry. To have an established initiative that will offer above-average returns to the various stakeholders and funders. The WCFI is set to become a leading, information gateway within the furniture manufacturing sector. R 2 752 953 Functions 11.Support and where required, facilitate industry meeting(s) and workshops. 12.Support, assist and participate in policy, strategy and project development with government in relation to specific issues that may arise 13.Promote and market the industry through press releases and media reports. 14.Host networking sessions with the purpose of developing, strengthening and sharing industry relationships 15.Provide quantitative and qualitative quarterly reports by the specified dates in the required templates Administration, Finance, HR and Corporate Governance CONTINUED 1

22. 20 ProgrammeDescriptionImportanceTargetsBudget 2009 /10 Monthly news letter WCFI – Interactive Website Develop and maintain industry specific database Create and maintain continuous opportunities for communication between various stakeholders in the sector. Dissemination of information on programmes and services of the WCFI and other opportunities. Interactive Web Site Newsletters – 4 Number of Enquiries – 50 R 40 000 ProjectsDescriptionImportanceTargetsBudget 2.1 Interactive Website The website is a tool to provide effective support and direction. The website should consist of several interactive features e.g. Updated Blog, Listing of unwanted machinery, Listing of unemployed artisans, any new machinery launches from suppliers etc. Through the use of the website the industry can start to establish communication and therefore build a culture of collaboration To have an appropriate designed and functional website R 18 500 Communications and Sector Promotions 2 Establishment of leadership groups in the industry. Keeping momentum by facilitating networking opportunities, relationship building, supporting multiple levels of collaboration and also very important is a significant 1 on 1 stakeholder contact…in order to establish this close unity of confidence, communication is the building block! By facilitating opportunities to interact in a meaningful and productive way the programme manager must use every opportunity to create an environment where communication can take place.

23. 21 ProjectsDescriptionImportanceTargetsBudget 2.2 NewslettersQuarterly news letters will inform the members of the progress and latest developments of the WCFI. It is a tool to effectively and transparently communicate with the industry in a very direct way At least one newsletter every quarter – 4 R 16 900 2.3 Manage enquiries from Government, Industry and Academia efficiently Manage and facilitate enquiries emanating from the public, RED Doors and other interested bodies and citizens, to effective resolution. This would include maintaining a log of these enquiries in the prescribed format. By following up and managing enquiries efficiently a level of competence is betrayed that will enhance the effectiveness of the WCFI to the various role- players in the industry Number of enquiries and referrals – 50 R 4600 Communications and Sector Promotions CONTINUED 2

24. 22 Networking and Partnerships 3 ProgrammeDescriptionImportanceTargetsBudget 2009 /10 Facilitation of industry workshops and networking sessions Set up meetings with other role players/partners Interviews and meetings with industry to obtain greater cohesion, coordination and cooperation from all stakeholders to improve competitiveness. Workshops are based on the principle of experience sharing--what actually does and doesn't work in the demanding environment facing every factory today. Industry Events - 8R 23 000 ProjectsDescriptionImportanceTargetsBudget 3.1 Industry Workshops The WCFI will invite the industry to attend a workshop that will have a practical, real-world approach. The formal workshop will provide industry specialists a platform to present various topics that will provide insightful and consequential information Industry workshops – 4 A different themed workshop will be initiated once every quarter – 4 R 10 0000 Employers and employees are not alone! As part of a network, they’ll learn about each others' experiences, share their own, and gain support. It's also more informative to work through processes in a workshop and do “mind mapping” than in individual sessions. The aim of the workshops is to establish mutual understanding of different problems and gain confidence in expressing their challenges. The outcome will be to facilitate collaboration between organizations. The workshops will offer everyone involved enough time to learn, experience, and execute new concepts adequately. The workshops will provide for more hands-on and self-diagnosis so that people no longer have to be dependent on outside consultants.

25. 23 Networking and Partnerships CONTINUED 3 ProgrammeDescriptionImportanceTargetsBudget 2009 /10 3.2 Breakfast for Business To have a regular breakfast forum consisting of three parts, Opening with a good news/success story from the Industry - employers New developments from either latest research or design - academia Special guest – e.g. supplier launching new products To keep the industry informed and motivated with relevant up-to-date information. Breakfast forums – 4 The first Thursday in every month from February until November every year – 4 forums R 13 000 ProgrammeDescriptionImportanceTargetsBudget 3.3 Meetings with Industry role players: Employers, Academia and Government To frequently meet with industry role players on a one-on-one. Build relationships and therefore trust This is necessary to get first hand knowledge on issues facing by individuals, also to establish a rapport with individuals that will further enhance the visibility of the WCFI.

26. 24 Skills Development 4 The Western Cape’s furniture and solid wood sector is not homogenous and consists of different sub-sectors and is characterized by technological unevenness, skewed development in terms of utilizing labour, different kinds of firms of varying sizes, organized as well as unorganized segments, formal and informal, factory based and home based. The Western Cape possesses a rich skills pool, networks and infrastructure etc. that could assist in creatively engaging the challenge of repositioning itself both locally and globally as a producer of high value adding and quality furniture and solid wood products. However, the industry is characterized by a systematic under-investment in human resources for all but a privileged few, which has resulted in a labour force with a racially skewed distribution of crafts skills, career opportunities, and workplace experience. The WCFI aims to engage in programmes that will provide a solution to the skill shortage that is threatening the industry through the lost of artisans leaving the industry due to retirement. There exist a whole generation of “unskilled” artisan that did not obtained a formal qualification, and various initiative will be implemented to address this irregularity. Most of the industry is small family run businesses. The owner himself or one of his sons usually performs managerial practices without factory production background. However, some of them neither have the experience to manage or the formal training to run the business in a sustainable profitable manner. The majority of those depend heavily on gained and inherited life experience and on the technical skills from the senior artisans, which could find some success in the past, but according to the dynamic changes in the global aspects of trade and competition, that will be a very old fashioned.

27. 25 Skills Development 4 ProgrammeDescriptionImportanceTargetsBudget 2009 /10 4. Skills Development Focus will be the development of existing skills in the industry and possible interventions for emerging and new artisans Support demand driven skills Supply programmes addressing entry level skills acquisition 1.Train 50 People 2.RPL – 10 3.Learnership Level 3 Cabinet Making 4.Factory Owner / Manager Training R 735 000 ProjectsDescriptionImportanceTargetsBudget 4.1 Introduction to Furniture Manufacturing The focus is to the employed or unemployed people who will be provided the opportunity to obtain certificate of competence in Basic Furniture Manufacturing. The industry requires that the basic knowledge that has been neglected in the school curriculum be transferred through a recognised industry learning institute. 1.Level 1 – Intro of Furniture making Train the basics of Furniture Manufacturing to employed or unemployed people. - 50 R 200 0000

28. 26 Skills Development CONTINUED 4 ProjectsDescriptionImportanceTargetsBudget 2009 /10 4.2 Recognition of Prior Learning There are several employees with vast experience and knowledge that never obtained a formal qualification Employees need to formalise there qualification in order to establish their skills gap RPL - 10 4.3 Train Cabinet Makers Level III Current employed “unqualified” artisans will be provided the opportunity to obtain Level III Cabinet makers qualification. The industry requires that the knowledge that has been transferred through informal “on the job” training must be solidify through a recognised industry learning institute. Train Cabinet makers Level III – 15 R 230 0000 4.4 Factory Owner Management Training Factory owners will be trained in order to assist them with improving productivity and managing their businesses more effectively. The intervention will be on three levels: 1.Industrial Engineering Principles Factory Floor layout, costing 2.Financial management Cash Flow, Break even analysis 3.Organizational Structure Job Descriptions, Score Cards, Systems Reinvigorate competitiveness of the sector through the strengthening of the capacities of the factory owners 30 companies R305 0000

29. 27 Design and Innovation 5 Increased competition from both domestic and foreign sources has increased pressure on furniture manufacturers to more efficiently target their promotional mix aimed at their various marketing channels. This increased efficiency is necessary given that the overwhelming majority of consumers are looking for variety. More efficient targeting of promotions can be gained in part through an understanding of the purchase decisions. ProgrammeDescriptionImportanceTargetsBudget 2009 /10 5. Design and Innovation The industry need to develop knowledge and experience to come up with unique designs and products The importance and relevance of design for the development and manufacture of furniture products needs to be understood. Knowledge on how to improve technology and equipment to make the Western Cape Furniture Industry more competitive  Design Competition Regional Furniture show/exhibition in conjunction with Decorex  Social Turn around R 1 265 000 ProjectsDescriptionImportanceTargetsBudget 5.1 Furniture Design Competition Regional Furniture show/exhibition in conjunction with Decorex The design competition is a 3 year thematic project, i.e. Eat – Sleep – Work. The entrants have to use the theme to design a piece of furniture that is then judge against a set criteria The Furniture show/exhibition will be a show case of locally designed and manufactured furniture The competition provides an incentive for the industry as well as full time tertiary students to design new contemporary and functional furniture The show will enable the industry to demonstrate to the public as well as major furniture retailers the capacity and capabilities of the South African furniture manufacturing industry To obtain 150 entries for the competition To liase with Decorex to co-host the annual Decorex show with one of the halls at CTICC allocated to the WCFI R 145 0000

30. 28 Design and Innovation CONTINUED 5 ProjectsDescriptionImportanceTargetsBudget 2009 /10 5.2 Social Turn Around Plan (Productivity SA) The programme is intended to provide technical assistance to different organizations and companies to increase productivity, profitability and service, as well as to save and retain the current jobs. Turnaround of the organization from distress towards profitability Collaboration between management and workers – low disputes Knowledgeable workforce re how a company operates and the role of employees towards profit & loss 10 Companies R 120 0000 5.3 Centre of Excellence To establish a Centre of Excellence in the Furniture Manufacturing Sector, it will provide a total solution with regards to training, technical and legal information as well as new innovations and design initiatives. The Centre of Excellence will be the body looking after the industry interest. The centre will guide the industry and negotiate special rates and tariffs regarding supply of raw materials etc. To establish the centre in co-operation with the DTI R 100 0000

31. 29 6.Transform the furniture sector through SMME and BEE Enterprise Development 6 Smaller manufacturers with limited administrative resources need to operate in a more user-friendly and supportive environment to allow them more time to run their businesses and less time to spend with overcoming the burden of onerous statutory and other obligations. ProgrammeDescriptionImportanceTargetsBudget 2009 /10 6. Transform the furniture sector through SMME and BEE Enterprise Development Support SMME & BEE activities and programmes through counselling, mentoring, Industry partnerships, post incubation workshops and rural outreach programmes. Set up a mentorship programme that will allow established factory owners in the industry to “adopt” a member that exits the incubation hive. Support capacity building interventions and facilitate market access opportunities for SME and BEE enterprises. It will enable the entrepreneur to ensure that sustainable job creation takes place. 60 companies R 100 000

32. the end – thank you viewing our presentation