New Biscuit Manufacturers

Lexim (Pty) Ltd

This small factory was established in Butterworth in Transkei in August 1977 by Bakers Ltd.  The reasons for this are interesting.

In the mid-1970's the government had passed legislation which prevented businesses in the  major cities from taking on more Black labour for manufacturing purposes.   Their aim was to reduce the flow of Black people towards the cities and to encourage the growth of industry in the so-called ‘Homelands’ where most of the Blacks lived.

It was about 1976 that we were making repeated applications to the government to permit us to increase our production labour force at Isando.  Bakers needed more biscuit output and to do this it would be necessary to start a third shift on one of the existing plant lines.  Permission to engage more labour (nineteen persons) was consistently refused and each time we were asked, and almost persuaded, that we should open a factory in an outside area.

There were various benefits offered by the government to entice a move in this direction.  There was an income tax holiday for about five years.   The government undertook to erect a building to the manufacturer’s specification - he would not have to find the capital for the building but would pay a reasonable rent for land and buildings - there would be certain railage concessions to cover the cost of transport, and even a loan to the manufacturer at a very low interest rate to assist him in setting up his production facility.

There had been one or two items of news reaching us about people who, because of these incentives, had been looking into the possibility of starting a factory somewhere.   We were convinced that such a project would not be practical and could not operate financially satisfactorily.  If anyone opened a biscuit factory it would become a nuisance factor and disturb the trade for a period until it was found to be a financial flop and closed down.

We were advised that if we assisted the government in their plans by opening a factory somewhere in a recognised decentralisation area they would be more lenient in granting us the extra labour we required in the Transvaal.   We had at our Brickhill Road premises in Durban a very versatile biscuit line entirely suitable for a factory making varied lines in small quantities.  It was in excellent condition but the time had come to replace it with a dedicated line of greater capacity for the manufacture of a limited range of biscuits.  This plant would be ideal for a new small factory.    I decided therefore that we should apply to the government to open a biscuit factory at Butterworth in the Transkei and transfer this plant there.  We drew up careful plans for the building allowing for extension at a later date, and set out the financial parameters that we had to achieve.

We were granted the increased labour quota for our Isando plant.