Hotelier risked it all to grow

2013-08-19 00:00

“I DO not want the fame or spotlight. I want to run a business. Are you sure we cannot just take a picture of the building? See, I don’t get why businesspeople want to be celebrities and have their pictures in the newspapers. I want people to come to my place on merit; because of the service they get.”

This is the last conversation I have with Siphiwe Ngcobo as I try to persuade him to agree to have my interview with him published. I tell him it is for the sake of the youngsters and people his own age who need to see that there are rewards for hard work and focus.

“Okay, I will do it, but I hope it’s not a close-up pic.”

He believes that being ready for opportunities is one reason for his success. “In life you should always be prepared because you never know when you will get the stage to perform.”

Born and raised in Imbali 1, Ngcobo attended primary school at Mfundwendle Lower Primary and at the subsequently closed Myezane Higher Primary School. He finished the rest of his primary schooling at Hlelingomusa and then went to Carter High School. He is, however, hard-pressed to find a teacher who inspired him. In 1999 Ngcobo got his first job installing telephones in rural areas, but in June he joined TUT’s engineering and technology access programme. He volunteered at Maritzburg Engineering during vacations and that is where he met Rees Chetty, who taught him many life lessons and remains a mentor.

He subsequently studied computer systems, then mechanical engineering in 2002, but stopped his studies due to financial constraints. He joined Harmony Gold Mine in Welkom in the Free State and worked in the jewellery sector. Harmony Gold sent him to study in Italy, specialising in pneumatics, which was a three-month, full-time course, which he completed in South Africa via video conferencing. Thereafter, he worked for a year as a section manager. “In 2004, I returned to Pietermaritzburg and worked at Hulamin at production operations.

“Starting IT company Ukhozi Technologies with a friend affected my job and I was fired. But I was reinstated six months later with six months’ salary back pay.” The windfall helped him start a tuck shop, because his business had simultaneously closed. He employed someone to run the tuck shop, which was in Imbali 15. “The area was being developed and I saw a need, so set up a container as a convenience shop.”

In 2007, he got a job at Mondi Forestry in Richmond, doing mechanised harvesting. “During that time, I was buying properties. I had been blacklisted when my business failed, so when I wanted to buy a house I could not get a loan. But with the Hulamin back pay, I acquired land and built for myself,” he continues.

Siphiwe would find owners of vacant land, and buy it via a private bond, which is to pay as much cash as possible and then pay the balance in instalments directly to the seller. “Initially, the land was for my personal use, but I started buying more land. I sold my car and other valuables to buy the land. By the end of 2007, I had had enough of working so I resigned.” At that stage he had 10 properties, and was living in his grandmother’s garage after deciding to stop paying rent for flats. “Every cent I earned was going into property.”

The tuck shop was earning about R1 000 daily, but then things went wrong. “I was arrested after being accused of stealing the container I ran the tuck shop from. It was impounded and my stock looted while I was in custody. I went to trial and was acquitted”.

The resilient Ngcobo identifies starting the tuck shop as the lowest point in his life because he basically had nothing and everybody shunned him. His educational background made the judgment by his peers and family worse. Having sold his car, he would take a taxi with his stock. He candidly says girls do not even consider a man in such a position. Paradoxically, he also identifies this as his highest point.

There was a boom in township property acquisitions due to the recession. He sold most of his properties. “Thereafter, I started looking for properties in Scottsville so I could rent them to students.” Siphiwe found a property in 2009, and in June started a bed and breakfast. During his travels, he observed what bed and breakfasts looked like, and used this knowledge to renovate the one he bought. He also investigated the standard of bed and breakfasts in Pietermaritzburg and found his niche. For example, he had 24-hour reception, which gave him an immediate advantage. He continues: “I raised the bar by having 32-inch TVs in the rooms. I had eight rooms and a 25-seater conference centre. Ilawu Bed ’n Breakfast is a subsidiary of my property company Ilawu Property Development and Investments.”

Explaining what helped him become successful, he says: “Being a first-born, I did all the household chores like cooking at home. Hospitality is our culture; it comes naturally.” In his first year of operations, the turnover was about R1 million. He says at that point he was doing everything, including cleaning, cooking and being at reception. He grew up in an informal-trading environment since Grade 4 as his mother sold vetkoek and fish to schools. He would work at his uncle’s shop, too.

Soon Ngcobo took over another bed and breakfast that was in distress. “I was offered Botanic Hotel because it was in distress. I called it Ilawu Hotel and it is now preferred accommodation.”

In 2012, a year later, he was offered a contract to run the Botanic Gardens restaurant, which hosts weddings, conferences and events. “Then the Regal Inn went up for sale and I pounced on it.”

By that stage, he had paid off his debts to correct his credit rating. “I had not paid my debtors because I was over-committed”.

For the first time in his life, he had to look for finance because Regal Inn is prime property. Surprisingly, the bank he’d sent millions through declined, as did several institutions, but Nedbank supported him. “My bank manager Patrick Ntuli went out of his way [to help me]. Although my financials were done by the book, banks find hotels risky.”

Although he is very hands-on, Ngcobo believes having dedicated, loyal staff has helped him focus on growing his business. He walks the talk, arriving at 5 am daily and leaving at 10 pm. In fact, you would be forgiven for mistaking him for a regular staff member. It is not easy dealing with guests, so his staff of 40, including a general manager and full-time financial accountant, are his backbone. He is currently expanding his empire with acquisitions in Zambia.

His biggest concern about South Africa is the attitude of young people. “They want jobs, but lack drive. They judge people by material things, such as cars and clothing, when there are bigger issues like empowering and educating themselves. Material things come and go, and there are always better ones. They are not building their lives from scratch.”

Pietermaritzburg has a lot of positive things to offer and that is why he has remained a patriot. “With the new management has come better maintenance of roads and fewer power outages, which benefits us as a business. I’m very happy.”

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