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December 9, 2015

All Glenart's products are handmade by women from the local community

Everybody loves Christmas crackers; they just bring that festive feeling to any Christmas table. It is a sentiment on which Glenart Trading has capitalised.

“You will battle to find a better example of funding getting to those to whom it is aimed.” Chief executive officer Miles Rasmussen

“You will battle to find a better example of funding getting to those to whom it is aimed.” Chief executive officer Miles Rasmussen

The company has recently moved into its own airy factory in Shaka’s Head, next to Ballito on the KwaZulu-Natal north coast. Shaka’s Head is a severely disadvantaged area with a very high unemployment rate; which is exactly why Glenart chose it to set up shop.

“You will battle to find a better example of funding getting to those at whom it is aimed,” says Miles Rasmussen, the company’s chief executive.

Glenart employs 150 women, mainly from Shaka’s Head. This means their transport costs are negligible and they can go home to their families after every shift. Most are school leavers and have spent the last year unemployed. Most are under 25 and most have never worked before.

But the nature of the product means that it is seasonal work; after all, Christmas crackers are only needed once a year. Rasmussen is looking to increase exports and expand the company’s product range as a way to offer longer-term employment to these women.

“All our products are handmade, and this is, in effect, a production line,” he says of the rows of women quietly putting together brightly coloured crackers. Another production line builds boxes, and yet more women fill these with completed crackers, ready for shipping.

The company also makes sparklers and party poppers, although these are secondary products. “We make crackers for all the big majors,” Rasmussen says. “They often require their own unique packaging to differentiate them. We also sell online and do smaller orders for functions and the like.”

Glenart has already made a move into the UK, and supplied “a big order” to UK retailer Sainsbury’s. Its main competition is from China, but the company gets some protection from the 30% import duty on Chinese products. “Also, our product is high quality and of a better standard.”

The company does not have its own printing facilities, although it does design its own packaging. Printing and cutting of the outer packaging is outsourced. The design and planning continues throughout the year, even during the manufacturing off-season. “We make more than 120 different product lines in one year.”

The company was founded in 1995 by Rasmussen’s father. At the time, it was a home business supplying all Christmas decorations. Then one year the supplier did not deliver, and Glenart was forced to make its own crackers. “We learned we could do a better job at a better price.”

It has been streamlining and growing since then, and is now the main Christmas cracker manufacturer in South Africa.

The company turned to MCEP when we began growing. “We have just moved to these new premises, which the MCEP funding facilitated. By funding operational expenses, it frees up cash for other things.”

The bridging finance removed the “small family business” connotations, and helped Glenart become a more professional company. “We may have reached maximum local supply, and the falling rand will help us tap into export markets. We have also patented a brand new type of cracker.”

The challenges are standard for small companies: cash flow and access to finance. “It is a seasonal business. We start spending in February to get our Christmas orders in, but we don’t get paid by our clients for up to a year,” Rasmussen says.

“We still need to expand; there is always room for improvement. We need some machinery, such as a glue machine. A die cutter will also boost productivity.” A machine to add glitter to the crackers is another idea the company is exploring. And while crackers may be a seasonal requirement, they will be needed as long as people celebrate Christmas.

“The market is massive – for example, in the UK, three crackers are bought per person each year. That is about half-a-billion crackers a year. Our production seems big, but we are a drop in the ocean internationally. But we are after a slightly bigger slice than we have.”

And the company is on its way. Two months ago it was accredited by Fair Trade, an important step for credibility among European buyers. “It is a feather in our cap,” says Rasmussen. “It means we are treating our employees properly.”

He concludes: “Every day I see an improvement, which brings a smile to my face.”