William Duk had every reason to be pleased with himself as he strolled along the lovely, long pristine beach at St Lucia in South Africa’s KwaZulu-Natal province. He had celebrated the spectacular turnaround of his once-doomed business, by hiring a hotel, inviting 110 guests and marrying his bride, Briggie, in wild and convivial weekend in Umzumbe on the
south coast.
“We had a record sales month in April and I thought, ‘Great, I can I get married and have a honeymoon in peace,” says Duk.
“It was a nightmare. The honeymoon, wasn’t really a honeymoon.”
As the scores of guests clinked glasses in a final farewell at the hotel in Umzumbe, on the south coast of KwaZulu-Natal, little did Duk know that tens of thousands of transport workers in ports and depots across South Africa were going on strike for more pay. For thousands of business people like Duk, who rely on imported materials, this was going to prove a cut to the jugular.
It had been a short career as an entrepreneur for Duk, who had graduated in accounting from the University of Cape Town in 1999. He left to cut his teeth in the one of the world’s liveliest financial markets.
“I went to London for two years to work with South Africans, Kiwis and Australians in banking at Lloyds and the Royal Bank of Scotland (RBS). We were all on contract and partying every night, you had to have a South African passport to get into Fulham and Putney in those days. On bank holidays we would spend five hours in traffic just to get to the M25,” he says.
“At the end of the two-year holiday visa I was marched out of RBS—they had a change of human resources and they said I had worked longer than my time. On these holiday visas you are only meant to work 50% of your time in your chosen profession. So, I got a part-time contract in a small technology services company. I was meant to leave the country after that, but my new employers convinced me to stay for another six months and then another six months and then I rolled out four- and-a-half years later. That time was pivotal; the London business was going into Europe, employing 200 people, and I was financial director. I was opening offices in Madrid and Paris for voice and data services like PABX and call centers.”
Duk flew home to Cape Town in 2006, with a pocket full of pounds, determined to invest in his future. He had always wanted to be an entrepreneur, like his father and grandfather, this was his chance and in many ways it bore out the Chinese proverb: Be careful what you wish for.
It all began with an investment in property. Duk went to Atlantis, a small town a short drive from Cape Town, to buy a factory from the Plantation Shutter Company, which made wooden louvered shutters for windows out of rare imported hardwood. The company was going into liquidation.
“I bought the building and spent the next few weeks looking for a tenant. I got a phone call from the silent partner, who I bought the building from, he said he was coming to Cape Town and wanted to meet. I looked through the financial information he showed me and thought this shouldn’t have happened. Working in a European company, you know how much working capital can be stretched. It was down to mismanagement, more than fundamental problems with the business,” says Duk.
“I bought in for a rand and took over the debts and liabilities. I didn’t have any cash—that was all tied up in property—I used the cash I had paid into the business for the building to finance a rescue plan. This was February 27, 2006: the doors of the business had been closed; 40 people hadn’t been paid for three months; suppliers were in the courts trying to get their money; there were 49 clients who had paid 50% of their deposit and expected their shutters to be installed before last Christmas. The business was a million rand in debt. It was as bad as it can get.”
It got worse from day one, as Duk tried to salvage what he could amid angry customers. He needed every ounce of his affable nature.
“My first job was phoning my clients and saying, ‘Hi, I am William from the Plantation Shutter company’ and they were saying, ‘Have you got our lawyers letters?’ I calmed them down and said, ‘Let me explain.’”
Duk was encouraged by the fact that 39 clients still wanted shutters, even though they had already waited for five months. It took nearly six months to placate the angry 39 and fulfil their orders. It took 18 months to turn around the business and by April it was selling a 1,000 sets of shutters-a-month and turning more than R40 million-a-year ($4.6 million). It was a dramatic turnaround that helped Duk win the Sanlam Business Partners Entrepreneur of the Year Award for 2012.
So Duk could be forgiven for feeling replete as he walked on the beach in St Lucia, on his honeymoon, on a sunny May afternoon. This warm feeling evaporated in a heartbeat as the strike by tens of thousands of dock and transport workers, in support of a 15% pay rise, hit home.
“I got an SMS saying we have got a problem with our timber supply,” says Duk.
In many ways, timber was the Achilles’ heel of the business. The shutters have to be made from durable Obeche hardwood, that will not warp, from the forests of Ghana. It has to be shipped from Accra to Cape Town and then transported by truck to Atlantis. In 2010, this supply line proved highly vulnerable in the face of a strike that was to cost South African business an estimated R7 billion ($803 million).
The upshot was that the factory in Atlantis ran out of wood and angry customers once again lurked in the wings. So, Duk was on the phone, on the beach, day in day out, in a frantic bid to keep the wheels of his business turning.
“So, it was all about buying time and putting a plan in place. If we were a smaller company we could have gone down the road to buy, but we were no longer a small company. We were consuming 320,000 kilograms of timber a year. I spent the entire day phoning timber merchants and suddenly the price had gone up 25%. I ended up negotiating with a few of these, but we couldn’t get enough, soon enough. We are a 21-day turn around operation. I ended up trying to juggle production and speaking to my clients around the country. I spent the entire day on the phone trying to put a plan in place. The worst moment of that day was realizing that everything we had worked for to restore credibility, in an industry not well known for its reliability, was at risk. We couldn’t afford to make excuses. For us it was going out and getting whatever timber we could at the best prices, paying 20% more than usual,” says Duk.
To make matters worse the supply of wood that Duk needed so badly was so near, yet so far. As the strike wore on, three 40-foot containers of hardwood from Ghana bobbed in Cape Town harbor, with no one to unload it. An email from the clearing agent said it all.
“Wait, hope and pray…. Here’s hoping the comedy of errors turns into that romantic comedy with a happy ending,” says the email.
The strike ended on May 27, 2010 but that wasn’t the end of the troubles for Duk and his timber. There was a scramble to see which of the tied-up freighters was to be unloaded first on the docks of Cape Town, as frustrated customers gathered on land. Duk says the problem was that the clearing agent didn’t have the captains’s cellphone number, so there were more delays as he had to wait for information through the shipping line.
“It went from bad to worse, the strike broke on the 27th and then we had to wait another two or three days for our containers to arrive on land,” says Duk.
“After two-and-a-half weeks of uncertainty. It was absolute relief. The ball was now in our court so we could put a plan in place….”
Duk took his wife to their favorite restaurant that night, a little older and wiser than they had been when they married just a few weeks before, after the strike that could have pulled down the shutters on his business.