It is very difficult for a small business to make it in the petroleum and diesel sector, but K-Factor founder Kabelo Mosupye took a leap of faith.
Him and friend registered the company in 2011 and obtained their licence in 2015. And the very next year K-Factor had its first customer.
It supplies petroleum, diesel, liquid petroleum gas, paraffin and oil for vehicles to public and private companies. The products are obtained from various suppliers across the country.
But as with any company, there were many challenges at the start.
“It is well known that there are big players in the industry, so we had to start by introducing ourselves and our services to clients, (and) check on the internet for any advertised projects within the energy sector,” he said.
“We started off by supplying construction companies that were doing developments in townships, since they use machinery that requires diesel. We then had to buy storage tanks that were on site and look for suppliers who would be able to transport the diesel to the client once we bought it,” he told Vutivi News.
Mosupye said that some of his company’s most best achievements included exclusivity in the industry. He does not have much competition in townships and was often used as subcontractor.
“I’ve really enjoyed the fact that not everyone has a licence to supply petroleum products in areas like the townships,” he said.
But it continues to be a rough ride.
“It’s tough for small businesses like ours. I’d sometimes secure a contract to supply, and for me to be awarded this contract I have to agree to the terms and conditions of the main contractor.”
They included bigger companies only allowing him to invoice after 30 days.
“It’s difficult because for example I would have a dipper truck and I send them to the site with the drivers who provide labour. In my case I have to supply the product for the whole month and get paid month end. So, I find myself having to fork out money from my own pocket to pay suppliers,” he explained.
“In a way, as a petroleum and diesel supplier I am financing the whole project because no machinery will be able to move or work without diesel.”
Mosupye has had to resort to applying for loans sometimes, but he said the loan providers were aware of the lucrative nature of the business and ended up charging exorbitant interest rates.
His company also had to rely on wholesalers to buy diesel as they had their own depots.
“Having your own depot makes things very easy because it means that you have your own storage, and that enables customers to fetch their own product,” he said.
“We also struggle with transportation, but we manage small loads as we have a bakkie that tows a 3000-litre diesel bowser.”
However, Mosupye continues to forge ahead. And he believes that supplying government and private institutions, as well as construction companies is a testament to his tenacity.
