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The Impact of Value Chain Financing on Profitability for South Africa's Edible Oil Manufacturing Companies: Raw Materials and Working Capital Approaches

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  • Kansilembo Aliamutu
  • Msizi Mkhize

Abstract

Edible oil manufacturing companies in South Africa generate significant amounts of revenue, which they do not capitalize on. South Africa has no shortage of consumer demand for commodities. The edible oil sector is hampered by poor raw material output in the nation, insufficient financing by value-chain participants, and a shortage of specific effort and understanding in growing the value chain. The research aim was to evaluate the impact of value chain financing on profitability for South Africa's edible oil manufacturing companies via raw materials and working capital approaches. Utilizing secondary data collected from the financial statements of edible oil manufacturing companies from 2012 to 2022. Throughout the research, a positivism paradigm was applied using a descriptive retrospective panel data approach. Multiple regression analysis was used to determine the connection between the value chain financing variables (raw materials as well as working capital) and the profitability of edible oil manufacturing companies in South Africa. On financing in raw material there was a negative correlation among the two variables, but it is not statistically significant (r = -0.030, p =.424). On financing in working capital, there was a positive correlation (r =.201, p =.012), the connection between financing in creditors management and profitability in the edible oil company has a positive correlation (r =.162, p = 0.09) but is not statistically significant. The research found that raw material financing and working capital financing had no statistically significant connection to the profitability of edible oil manufacturing companies in South Africa.

Suggested Citation

  • Kansilembo Aliamutu & Msizi Mkhize, 2024. "The Impact of Value Chain Financing on Profitability for South Africa's Edible Oil Manufacturing Companies: Raw Materials and Working Capital Approaches," Journal of Economics and Behavioral Studies, AMH International, vol. 16(1), pages 31-40.
    • Handle: RePEc:rnd:arjebs:v:16:y:2024:i:1:p:31-40
    DOI: 10.22610/jebs.v16i1(J).3675
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    References listed on IDEAS

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    1. Maad A. Q. Aldubhani & Jitian Wang & Tingting Gong & Ramzi Ali Maudhah, 2022. "Impact of working capital management on profitability: evidence from listed companies in Qatar," Journal of Money and Business, Emerald Group Publishing Limited, vol. 2(1), pages 70-81, March.
    2. Smith A. R. Dossou & Jean Adanguidi & Augustin K. N. Aoudji & Rodrigue C. Gbedomon, 2022. "Promotion of beekeeping: Insights from an empirical analysis of three honey value chains in Benin," Natural Resources Forum, Blackwell Publishing, vol. 46(1), pages 39-59, February.
    3. Muflikh, Yanti Nuraeni & Smith, Carl & Aziz, Ammar Abdul, 2021. "A systematic review of the contribution of system dynamics to value chain analysis in agricultural development," Agricultural Systems, Elsevier, vol. 189(C).
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