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Supplier Development Awards

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THOUGHT LEADERSHIP ARTICLE

CREATING A LASTING IMPACT THROUGH SUPPLIER DEVELOPMENT By Vusi Fele, Chief Procurement Officer at Absa Group Ltd

The business landscape will be very different post Covid 19 - whenever tha t may be - for everyone, from major corporates to the informal sector. The unprecedented disruption to entire industries means we have to imagine and build a future which is far more resilient and adaptable.

Even before the outbreak of the global pandemic, SMMEs faced numerous challenges, including access to finance; access to domestic and international markets; limited financial and business management skills; stunted innovation; and sometimes tougher regulatory environments. SMMEs will continue to grapple with these challenges. While it may not be possible for corporates to solve all these challenges, there is room for them to provide solutions that will significantly impact SMME development on the continent.

Key to a prosperous and sustainable future will be the small, medium and micro enterprises (SMMEs)

Small businesses frequently lament their lack of

sector, particularly in Africa, and the role of major

access to credible markets. Large corporates, which

corporates in helping to guide, support, and shape

spend billions annually procuring products and

this vital segment.

services, can use their procurement budgets to help SMMEs in this regard.

According to the World Bank, formal SMMEs make up 40% of GDP in emerging economies and this

Corporates are rightly wary of the risks associated

number is significantly higher when informal SMMEs

with engaging SMMEs, from issues around quality,

are factored in. Opening up opportunities for SMMEs

capacity constraints and the inability to deliver

to access corporate supply and deliver y chains is one

on contracts, but the development of the African

Business development support, including business assessment, training, mentoring, advisory and

of the most effective ways to contribute to sustainable

economy demands that corporates get involved to

entrepreneurship development.

address and work through these challenges.

become stronger businesses of the future. When

The ongoing global crisis wrought by the pandemic

Absa has designed innovative financing solutions

compelled to make changes to increase efficiencies.

has forced each of the supplier development value

specifically for the SMME sector. In 2019 alone, for

Being part of corporate supply chains also improves

chain partners, the supply chain practitioners, the

example, we made available about R250 million in

access to information, and demands technical proficiency.

information, is also key to enabling SMMEs to SMMEs interact with large corporates, they are

business strategists, and the economic development

funding specifically for the benefit of SMMEs in South

policy technocrats, to think and act differently,

Africa that supply the organisation with goods and

respond effectively, and build agile yet sustainable

services. Through such provisions, qualifying SMME

programmes going forward.

suppliers in the bank's supply chain are automatically

SMMEs equally have a lot of soul searching to do

favourable interest rates and with no collateral

in order to be co-creators of solutions, and for them

required.

eligible for assistance with cash flow finance at

Investing in entrepreneurship support can no longer be viewed as a corporate social responsibility. It also far transcends compliance to government mandates. Meaningful entrepreneurship support through supply chains deliver material benefits to local economic

to remain relevant and participate constructively in

and social reform and should therefore be seen as

economic rebuilding programmes.

good business.

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EDITORS LETTER Dear colleagues,

Welcome to the Absa Supplier Development Awards Publication, developed in support of the Absa Business Day Supplier Development Awards. The Absa Business Day Supplier Development Awards, hosted in partnership with Fetola, Cold Press Media and Arena Holdings, encourage us to bridge the gap between suppliers and corporates in South Africa. The awards recognise best practice and foster a collaborative ecosystem that lifts all ships as the tide of change comes in.

INDEX

of thought leadership: Absa

Creating a Lasting Impact Through Supplier Development

3

SEDA

ESD Growth Garage

14

SoluGrowth

Contingent Workforce Management in the New World of Work

16

Black Umbrellas

Building Back Better, Together Through ESD

20

Distell

Supporting Existing black Suppliers While Growing Support for New Black Suppliers - A balancing act in uncertain times

26

ATKV

Supporting the Local Value Chain

31

Petroleum Agency

What is Required to Secure Stability and Security of Energy Supplies

34,35

We trust you will find the publication useful and full of practical advice, and that it becomes your ‘go-to guide’ to be kept on your desktop for quick access.

Tiger Brands

ESD: It’s About Real Value, Not Compliance

37

Enjoy the read!

Cova

A Shift in Mindset

40

Trioplus

How Corporates can Support SMES in Rural Areas and bring them into their chain supplies

52

The COVID-19 pandemic has thrown the world a giant curveball and has taught us how interdependent we are, with ripples of change affecting not one, but all vital cogs in a value chain. In particular, this is the situation being faced by suppliers and service providers in the supply chains that form the vital backbone of businesses in South Africa. As a country we need to focus not only on transformation, but on recovery and rebuilding of the economy as well, under the additional threat of global economic disruption. Supplier Development presents a golden opportunity to do just this and calls for a deliberate strategy to • foster collaboration in our ecosystems (within and between sectors, between corporate and small suppliers and with government); • strengthen supply chain and small supplier resilience; • rethink and restructure value chains to maximise opportunities within South Africa; and • innovate to achieve competitive advantage and reignite growth. As a supplement to the third Absa Business Day Supplier Development Awards, this directory brings you excellent thought leadership articles, details of finalists and winners with comments from the judges about what differentiates their programmes, and access to a comprehensive network of South Africa’s leading service providers, industry specialists and corporate game-changers who are passionate about Supplier Development and are doing it right. In short, it contains all the resources you need to manage your Supplier Development needs with confidence.

Cold Press Media Director: Jennifer Potter

Fetola CEO: Catherine Wijnberg

Taryn Westoby Head: Arena Events

Agribusiness Psychological Capital Investment for Better Supplier Sustainability

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COPYRIGHT: Published by Fetola and Cold Press Media (Pty) Ltd for Arena Holdings. Copyright Fetola and Cold Press Media 2020. All rights reserved. Reproduction in whole or part is prohibited without prior permission of the publisher. All correspondence should be directed to Fetola and Cold Press Media (Pty) Ltd.


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Content

OVERVIEW

OF THE Absa BUSINESS DAY SUPPLIER DEVELOPMENT AWARDS

18 SUPPLY

CHAIN RESILIENCE

22 38

BENCHMARK REPORT

Game changers 7 steps to building

strong, transformed corporate supply chains Publication design: www.gapdesign.co.za

46 2020

WINNERS & FINALISTS

Acknowledging companies that stood out as overall leaders in the Supplier Development arena.


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OVERVIEW of the ABSA Business Day Supplier Development Awards

CELEBRATING BIG BUSINESS DOING IT RIGHT!

T

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he Absa Business Day Supplier Development Awards celebrate companies that are building a better South Africa and an inclusive economy through innovative and impactful Supplier Development initiatives. The awards, conceptualised by Fetola, seek to acknowledge and recognise corporates who go beyond the scorecard, foster learning and build a community of best practice, and encourage a collaborative spirit in industry.

Presented in partnership with Fetola, Cold Press Media and Arena Holdings, this initiative is aimed at corporates, parastatals and government institutions across various sectors, with annual turnover above R10 million, who implement Supplier Development programmes within their own supply chains and are changing the landscape in Supplier Development.

Application Process

This year, a nationwide call for applications was distributed. We received entries from a wide range of participants, including nearly 40 qualifying large organisations. A shortlist of 24 applicants, who met all competition requirements and showed merit, were invited to submit further information about their programmes. These applications were narrowed down through a technical screening process shaped by a specialist Advisory Panel.

Judging Process

The awards focus on Supplier Development itself, the initiatives that are taking place within the corporate/government entity and the suppliers being developed. On careful review, 11 finalists, who clearly demonstrated excellence “beyond the scorecard” were selected to go through to the judging round. These finalists were invited to a pitching session to convince the judges why their programme had the winning edge.

Our judges were looking for winners who have • shown commitment to building thriving and inclusive South African supply chains; • embraced Supplier Development as a long-term strategic priority and driver of competitive advantage; and • found ways to foster industry collaboration and commit to best practice in the ecosystem.

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[ OVERVIE W ]

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Advisory Panel

These key influencers in the Supplier Development and Sustainability space provided guidance and expertise, helping to ensure that the 2020 Absa Business Day Supplier Development Awards lead the sector. They include: • Michael Reddy CEO of Furntech

• Jonathon Hanks Director of Incite

• Carlo Vizzi Head: Enterprise and Supplier Development, the City of Cape Town

• Johan Louw CEO, Aguru Business Solutions

• Christoff Oosthuysen Business Development and Enterprise Development specialist, The EPI and

• Guy Harris Entrepreneurship, education, governance and mentoring specialist.

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The 10 Categories

1.

2.

3.

4.

5.

6.

Newcomer Award

Youth Development Award

Black women Development Award

Rural & Township Development Award -

Skills of the future (4IR)

Local Manufacturing Award -

Acknowledging initiatives that are achieving exceptional results in supporting rural and townshipbased suppliers.

Acknowledging initiatives that are achieving exceptional results in supporting suppliers with cutting â&#x20AC;&#x201C;edge, scarce 4IR skills.

SPONSORED BY ABSA

Acknowledging companies that have recently initiated a new strategic Supplier Development programme or project and show merit in design thinking, innovation and commitment to growth.

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Acknowledging initiatives that are achieving exceptional results in supporting youth

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SPONSORED BY COLD PRESS MEDIA

Acknowledging initiatives that are achieving exceptional results in supporting black women suppliers.

SPONSORED BY SOLUGROWTH

Acknowledging companies who have developed local South African manufacturers or value add services and products with import-substitution and/or export potential.


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[ OVERVIE W ]

The Judges

The following judges were selected based on their reputation, integrity and experience in the sector:

• Sekai Chiwandamira

• Christoff Oosthuysen

Regional Chapter Manager, ANDE

Business Development and Enterprise Development specialist, The EPI

• Karen Nadasen

• Nosipho Khonkwane

Chairperson, EFSA and CEO, PayU

Executive Manager, SEDA

• Desigan Chetty

• Sebastian Musendo

Chief Operating Officer, Property Point: A Growthpoint Initiative

Head -Supply Chain Strategy & Transformation, Transnet

• Nicola Robins

• David McGluwa – Head: Small

Co-founder and Director, Incite

Business Finance and Regions, IDC

• Dr. Rethabile Melam

• Michal Pillay

General Manager, Green Economy, The Innovation Hub

Supplier Diversity, Absa Group Limited

• Mamosa Motjope Managing Director, Wamobu Consulting

• Vusi Fele Chief Procurement Officer, Absa Group Limited

JUDGES AWARD

JUDGES AWARD

7.

8.

9.

10.

Collaboration Award

Small Supplier Award

Impact Award

Overall Winner

PARTNERSHIP WITH SEDA

SPONSORED BY BUSINESS DAY

SPONSORED BY ABSA

SPONSORED BY FETOLA

Acknowledging companies who have taken strategic action to develop industry relationships and foster cross-sector collaboration for the benefit of the wider ecosystem.

Acknowledging companies who have the exhibited innovation, leadership and authenticity in the promotion of small suppliers.

Acknowledging companies whose Supplier Development initiatives have been shown to substantially impact the value chain, provide evidence of return on investment and scale of impact.

Acknowledgingthe company that stands out as overall leaders in the Supplier Development in South Africa.

SHARING THE LEARNING The Absa Business Day Supplier Development Awards are about more than recognition. The awards showcase best practice and encourage corporate South Africa to collectively advance their Supplier Development initiatives through shared learning and collaboration. The judging process and the reasoning behind their decisions are made public so that the lessons learnt and best practice are shared – and the results are benchmarked for year-on-year comparison and collated in this report with the latest information on practices in South Africa. Together we can do more to make a lasting impact on the South African economy!

FIND OUT MORE:

www.sdawards.co.za Contact 086 111 1690 info@sdawards.co.za W W W.S DAWA RDS .CO. Z A

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THOUGHT LEADERSHIP ARTICLE

10 TIPS FOR BUSINESSES TAKING THE PLUNGE INTO THE DIGITAL DOMAIN

Insights from the Absa Business Day Supplier De(}elopment Dialogue Series hosted on April 21, 2020 By Catherine Wijnberg, CEO of Fetola

There is an awareness creeping

in that "business" as we knew it

b efore C o v i d-19 was not only

are only beginning to understand whether current

models in a responsible and socially conscious way,"

structures work even in this crisis. At the same,

said Wijnberg.

procurement professionals are recognising and

environmentally, but economically

appreciating how interconnected and dependent

Kulla said this is a shared opportunity, and key to

we are on suppliers lower down the tiers," said

SA's next stage of growth is the government, which

Ben Ngobi, panellist and global procurement

needs to last-track the availability of low-cost, high­

u nsusta ina b l e . As p opulations

sustainability lead for Accenture. "We are living in

speed data access as an economic priority.

a n d u lti m a te l y e v e n m or a lly,

globally face their personal demons

under lockdown and question their behavioural and purchasing choices ,

many are realising that not only will

things be different, but that they want

them to be different post Covid.

unprecedented times and what's happened over the last few weeks has transformed our normal." The dialogue, titled "Embracing the Digital Domain" grappled with ways to limit Covid-19's impact on the supply chain and drew insights from a panel of leading experts including Aguru Business Solutions CEO Johan Louw, The F ield Institute co-founder

These 10 guidelines were offered by panellists to businesses taking the plunge into the digital domain:

1.

Remember money follows risk: right now customers have more risks than before:

Alison Jacobson, T i ger Brands enterprise and

they have new problems, and you need

This is a critical pivot point for business and business

supplier development director Litha Kulla, anchored

to rethink how you position solutions and

leaders lace a golden opportunity to use this crisis as

by Catherine Wijnberg, Fetola CEO.

value to them. Do not forget customer

a disruption signalling a seismic shift in how things are

engagement: get the right message

done. This was the message from digital specialists

The panel examined the nature of disruption, what

delivered in right way that works for your

participating in the Absa Business Day Supplier

future digital tools and delivery models are needed in

customer.

Development Dialogue Series hosted on April 21

the supply chain to enhance efficiencies and bridge

2020, in partnership with Fetola, Cold Press Media

the digital divide, and how to innovate with purpose

and Arena Holdings, who all agreed that businesses

for a competitive future.

can pivot and rapidly realign using digital tools for a competitive and resilient future.

"It's clear there is a step-change afoot that could level the playing field as the world shifts to digital

"Companies are experiencing supply chain

marketplace, and we have an important role as

disruptions of huge magnitude globally, and some

business leaders to ensure that we develop new

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2.

Shilt your thinking: think systemically and in an integrated manner, jump from lean to agile, from linear to systemic. Get comfortable with experimentation, taking into consideration the ecosystem, and optimise the whole.


3.

Map your value chain end-to-end: focus beyond contracted suppliers, understand dependences, where they source, what their value chain is, and who is essential to

4.

the flow of products and services.

8.

enables your delivery model. Consider new technological architectures: invest i gate ICT as an enabler and

Use the power of data integration: connect

architectures like blockchain as a way to integrate and increase efficiency, establish

both to understand the value chain and

trust, bring trackability /traceability, break

its connectedness, as well as to focus on

silos and enable greater integration.

execute processes.

9.

Collaborate, connect and compliment: bring businesses into platforms for

Move from analogue to digital: enable

communal problem-solving and shared

digitisation, digital offerings, digital market

value creation, investi g a t e supply

access and access to opportunities despite

chain interconnections, find gaps, think

geographical fragmentation. Don't just

partnerships not customer/supplier

focus just on external digital inclusion: look

relationships, partner with complimentary

at measures that can be taken within your

product and service providers to compete

organisation, workforce and management

globally, engage and learn from other

team to allow access to information to

industries/ sectors that could offer tried

execute efficiently.

6.

Ensure your digital footprint is targeted: make sure it aligns with your vision, and

value streams through data integration,

customer centricity and information flow to

5.

7.

''

There are tangible solutions in this sea of challange and a willingness to act quickly that will bring us out stronger in the long run. Collaboration is key though and together we can embrace digital transformation for a better, more resilient future for us all." - Catherine W-jjnberg

and tested solutions, move from linear supply chain models to that of a network, leveraging the collective value offering of

Think about models on how to give customers access to data at your cost: unlock value and ease inclusion in marginalised communities, for small or remote suppliers and future consumers. If you want to enable your market/suppliers, you need to make sure your market/ suppliers can get to you.

the group.

10 â&#x20AC;˘

Learn from the informal economy: it has a low barrier to entry and is alive with agility, digital ingenuity and frugal innovation.

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THOUGHT LEADERSHIP ARTICLE

ESDGROWTH GARAGE By Seda acting CEO:

Ntokozo Majola

There can be no doubt that South African economy needs a strong formal small business sector for it to grow and create the jobs. Despite a plathora of legislations, strategies a n d p r o g r a m m es, e c o n o m i c transformation and participation of black people, women and people living with disabilities remains very low. Enterprise and Supplier development remains an important mechanism for bringing SMMEs, who operate in the peripher y into the mainstream of the South African economy. G overnment has created a fair regul a t o r y environment that enables investment, trade and enterprise development. However, the fragmented nature of implementation has resulted in supplier development efforts making little impact in the economy and the creation of jobs. In some instances, it's the same few beneficiaries benefiting multiple times. The reach to rural and township based SMMEs and those owned by youth and women is still minimal. The d i c h ot o m y of enter p r i s e a n d s u p p l i e r development i n South Africa i s that o n one hand

with government agencies? Is it a lack of trust or confidence in state agencies on the part of the private

Enterprise supplier development is an inexpensive way to implement broad-based black economic empowerment legislation.

partner with Seda, the agency has also embarked on the process to obtain its own B-BBEE status based on the principles contained in the Broad-Based BEE Codes of Good Practice. Seda's current status is BEE compliant and has recently developed a strategy for improving the rating over a period of two (2) years. Seda is currently repositioning itself to be a catalyst and integrator of the small enterprise development ecosystem through a district based model. Through its Enterprise & Supplier Development Programmes, the agency is gearing itself to drive economic transformation and increase par ticipation of SMME's whilst fostering a synergistic relationship between the private and public sector players within the ecosystem to embrace enterprise development as a common vision through the programmes that are implemented through its national footprint of branches and a partnership compact called

"ESD Growth Garage".

The ESD Growth Garage aims to:

• intergraded different parts of Seda's service offerings; • follow an incubation style service flow; and • a holistic and more structured support to a SMME or Co-operative (exempted micro enterprise in terms of a code of good practice on black economic empowerment - EME or qualifying

who are battling access to the opportunities in

small business enterprise - QSE) supplier in the

the private sector and the latter spending millions

core supply chains of a State-Owned-Company

of rands to find SMMEs or build a pipeline of

[SOC], Large Corporate F irms or Multinational

potential suppliers. Ironically, the consultants that

F irms.

are employed by big companies on their supplier development programmes often request the SMMEs on the databases of the state agencies. The question is why do corporate companies do not directly work

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As part of ensuring

maximum benefit for the private sector when they

extensive SMME databases of potential suppliers

Growth

- sheltered space dedicated to repair

and prepare a smme or cooperative (EME or

This is an addition to an enhancement of its technology programmes which are key enablers that can ensure that private sector partners derive maximum impact and return on investment from SMMEs taken on board.

Seda would put to use

its existing agreements with the South African Bureau of Standards [SABS] and other conformity authorities to ensure products and services are of the required standards and meet the regulations of sector. This is with a view to drive import substitution and localisation which will ultimately contribute to increase job opportunities and economic growth we desperately need. The District Ecosystem F acilitation Model will enable Seda improve its reach through Seda's vast touchpoints within its branch and incubation network and therefore, make more impact on both public and private sector initiatives for enterprise and supplier development Lastly, in the no distant future Seda, as the Ecosystem Facilitator, will put its focus on designing development of models, managing national incubation and business advisory standards, market assessments aimed at feeding opportunities to the ecosystem, influence or direct private sector and government future spend accordingly, monitoring and evaluating the entire system including ESD to name a few. We believe our role in the coming future, will not be interference but a betterment of the impact by the ecosystem and greater benefit for the small enterprises.

What sets us apart?

It's our approach to assisting small businesses. It's

The model is underpinned by two core aspects, viz: •

Garage QSE)

sector?

we have government agencies, like Seda with

- the process of increasing a smme or

cooperative (EME or QSE) in firm size

what we call the Client Journey Approach because we work with a client over a period of time, which ensures the sustainability of the business and the return on the investment of the private sector partner.


THOUGHT LEADERSHIP ARTICLE

CONTINGENT WORKFORCE MANAGEMENT IN THE NEW WORLD OF WORK By Manqoba Zungu, Client Acquisition Executive at Solugrowth

Internationally, and in South Africa, lockdowns implemented in response to the COVID-19 pandemic have catalyzed change in the workplace. Companies have adapted rapidly, enabling their employees to remain productive, reducing costs and ensuring business continuity.

'' Goodforgiggers,

goodforcompanies

Upwork recently found that 51% of US freelancers wouldn't go back to traditional work for any amount of money. It's not unreasonable to think that freelancing South Africans may also prefer this arrangement. As companies seek sustainable ways to reduce costs to weather the COVID- 19 storm and recover post-pandemic, SoluGrowth expects

The gig economy -freelancers, consultants,

contingent workforces to move up the C-Suite

independent contractors and project contingent

agenda.

employees - provides one possible solution. And it has been gathering steam. In 2019, on-demand

The most sought-after gig economy jobs in 2018

staffing platform Wonolo predicted that over half the

focused on robotics, finance, artificial intelligence

US workforce would participate in the gig economy by 2027. 1 Locally, according to lnvestec2, there were

and marketing. In 2016 the World Economic Forum stated that over one-third of skills (35%) that were

3.9 million "giggers" in South Africa in 2018, up from

considered important in the workforce will have

2.6 million the year before.

changed by 2021 due to the Fourth Industrial Revolution.3 As such, SoluGrowth expects a rise in

Despite difficulties such as pay cuts and retrenchments

contingent workforces as demand for project-based

that have driven people to take on side-hustles

skills increases.

during the pandemic, the longer-term positives of a Aourishing gig economy shouldn't be dismissed. The up sides of this type of work, including improved quality of life, efficient use of time, output or outcome-based evaluations, autonomy, and work from anywhere have long been at the forefront of discussions around employee engagement and productivity.

Companies looking to reap the benefits of a highly­

partner with the right service provider. Key considerations include access to quality skills and the ability to transfer skills. When managed well, contingent workforces translate

showed that freelancers contributed USD 1.28

The key to realising these savings is outsourcing the

trillion to the American economy in 2018, and in

right roles for the company's immediate needs, and

2013 alone, micro-businesses owned by freelancers

upskilling or reskilling fulltime employees towards

generated USD2.4 trillion.1

more valuable contributions.

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add value in the new process, the in-house team should be upskilled to take over system operations or analyse, interpret and present report insights. In so doing, both company and employees get maximum value from engaging a contingent workforce. Appointing contingent workers enables the company to scale up and down with ease, eliminating unnecessary overheads for intermittently required skills. By repurposing our delivery models and protecting the sustainability of our businesses, we can come through this pandemic safely.

employees toward the demands of 4IR, should

It's good for the economy, too. Studies in the US

I

real costs while improving speed and accuracy. To keep outsourcing costs in check and help employees

skilled contingent workforce, while developing

to much needed real and time-related cost savings.

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For example, a company may employ a contingent team to automate its reporting processes, saving

REFERENCES 7.

T h e Future of Employment - 30 Telling Gig Economy Statistics - https://www.smallbizgenius. net/by-the-numbers/gig-economy-statistics/#gref

2. Rocking the gig economy by Ingrid Booth https://www.investec.com/en_za/focus/ economy/rocking-the-gig-economy.html 3.

https://www.weforum.org/agenda/2016/01I the-10-skills-you-need-to-thrive-in-the-fourth­ industrial-revolution/


THOUGHT LEADERSHIP ARTICLE

SUPPLY CHAIN RESILIENCE AND PARTNERSHIPS KEY TO ECONOMIC RECOVERY

Now is the time to develop a supplier development strategy to bolster small supplier resilience By Catherine Wijnberg, CEO of Fetola

A key role of the state is to protect

the wellbeing of its people - most impo rtantly and visi bly du ring emergencies such as the recent

outbreak of the Covid-19. However,

amid the growing uncertainty and the fiscal weakness that SA finds its elf in, the state is unable to d o enough t o suppo rt industry and

preserve consumer spending power.

"From spending on health care to stimulus packages to fund business continuity, the government has its task cut out for it, and without the support of our smart and well-managed private sector, there is not much hope of recovery," said Peter Bruce during a panel discussion on recovery strategies for struggling supply chains post-Covid, hosted as part of the Absa Business Day Supplier Development Dialogue Series, presented by Fetola, Cold Press Media and Arena Holdings.

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"It is predicted that government debt will rise to

The IDC has also established a fund for essential

80.5% of GDP in this fiscal year. Without being able

suppliers to assist the medical fraternity with goods,

to cut debt, lend money elsewhere, realise significant

services and PPE, as well as launching the Small

savings or literally print money, the government's

Business Manufacturing Fund, which is offered at

role in softening the economic impact of Covid- 19 is

prime minus 3%.

severely hamstrung," said the former editor-in-chief of Business Day and Financial Mail.

But this is not enough.

"SMEs and the industrial sector have, and will,

Without partnerships between the public and private

continue to be hardest hit," said David M cGluwa,

sectors, the opportunity to rebuild the economy will

head of department: small business finance and

be lost, agreed fellow panellists Vusi Fele, Absa chief

regions for the Industrial Development Corporation

procurement officer, and Barbara Copelovici, SAB

(IDC).

entrepreneurship manager.

A dramatic and sudden loss of revenue for SMEs

Deloitte p ointed out, in a recent publication

severely affects their ability to function, and/ or

"Recovering from Covid- 19 - considering economic

causes severe liquidity shortages. Considering the

scenarios for resilient leaders," that decisions

limited resources of SMEs, and existing obstacles

businesses make in the near term will drive how

in accessing capital, the period over which SMEs

companies sustain themselves in the long term.

can survive the shock is more restricted than for

Leaders need to take decisive action to soften the

larger firms. To help business weather the storm, the

shocks we know are still coming as they prepare for

state has funded a R500bn stimulus package and

what may change in the months ahead.

functional state entities such as the IDC have made a R3bn funding package available to support industrial

So how do we do this? Panellists suggested that

businesses directly affected by the pandemic.

while times are challenging, supplier development


presents a golden opportunity to develop resilience

Access to finance, both relief funding and catalytic

in supply chains and strengthen ecosystems through

growth finance, are critical:

partnerships between the public and private sector as well as to corporates and small suppliers, that will deliver long-term benefits for all.

• share information with suppliers about funding relief schemes and offer support to access these by improving investment-readiness capabilities;

It starts with the development of a deliberate supplier development strategy, that aims to bolster small supplier resilience and bridge the divide.

and • take equity in value -adding small businesses in your supply chain but have an exit strategy to reduce long-term dependency.

Nine strategic imperatives were identified that draw on three levers, namely linkages, support and

Support in forms of non-financial assistance is also

finance.

key:

Linkages are a way to leverage network capital, often at no cost to the corporate:

• help small suppliers to pivot and build lean, agile and resilient operations that can compete in global and local markets;

• build solid partnerships with suppliers and support them in preparing for a competitive future; • enable collaborative market access opportunities by referral of suppliers to other companies; and • help suppliers to discover other networks and rebuild connections with former networks.

• support skills development' upskilling, multiskilling, and reskilling to prepare for the future; • stratify support to match different growth stages of a business ( from, start-up to business maturity, growth and beyond); and • commit to local procurement and support small manufacturers on the supply-and-demand side.

''

This crisis is an opportunity to improve efficiency and competitiveness. Now is the time for a deliberate strategy of strengthening our local ecosystem with meaningful collaboration within and between sectors, and with government. The sooner we realise we are in this together, the quicker our turnaround will be." - Catherine Wfjnberg, CEO of Fetola

WWW.SDAWARDS.CO.ZA

19


THOUGHT LEADERSHIP ARTICLE

BUILDING BACK BETTER, TOGETHERTHROUGH ESD By Mark Frankel - CEO Black Umbrellas N PC

Enterprise and Supplier Development (ESD) is often referred to as a combination of Preferential Procurement, Supplier Diversity, Supplier Development and Enter pr ise Development programs required in terms of the revised B-BBEE Codes of Good Practice. Unfortunately ESD is frequently approached as a "ring-fenced" exercise within supply chains with the aim of minimising disruption to "normal" supply chain activities and maximising the points attainable in terms of the B-BBEE score card. ESD is seldom seen holistically within the context of the broader supply chain activities and an opportunity to add real value. In a pre-Covid-19 world, there was no need to pay attention to de-risking supply chains through the development of local suppliers. Single sourcing from the likes of China worked. While many companies professed to have agile supply chains, a sudden disruption in supply from a handful of international suppliers quickly showed that this was not the case. As devastating as the economic impact of Covid-19 has been, it presents an opportunity to "build back better", a terminology that's often used in recovery activities following a disaster, and ESD provides the ideal tool to do this meaningfully.

decisions are made. CPOs are normally measured on how much they can save but this should rather be on how much value they can generate and risk they can mitigate. ESD is a key enabler of risk mitigation and value creation. South African companies need to think globally but act locally by reducing dependence on single sourced imported items and stimulate and re­ invigorate local manufacturing and industrialisation. This is almost a non-negotiable in rebuilding the economy and creating jobs following the economic impact of the Covid-19 pandemic. While the global competitive landscape is unequal with significant subsidies provided to manufacturers in some countries, there is a strong will by government to grow local manufacturing. With the right assistance, support and opportunities provided by industry and the corporate sector, there is no reason South Africa can't compete with other global players. In addition to the above, holistic financial (including supply chain financing) and non-financial support needs to be provided to emerging suppliers. This will enable them to scale and grow within a nurturing environment as well as facilitating innovation and increased adoption of new technologies. If carried out properly, ESD is an opportunity to enhance efficiencies and cost effectiveness and does not need to add cost. A balanced scorecard should be used to measure suppliers to include savings, efficiency, continuous improvement and innovation.

So how do we build back better using ESD? ESD needs to be a strategic imperative not only within

The

relationship with suppliers should be based on trust and value and suppliers must be seen as partners in the business.

the procurement function but within the company Too often, CPOs operate within a

If we look honestly at how E S D has b e e n

transactional rather than a strategic space and

implemented since its introduction a s a requirement

as a whole.

procurement and supply chain do not have the trust

within the B-BBEE Codes, I think many will agree

of Exco - supply chain needs "a seat at the table"

that this has been carried out lethargically and the

and must be considered as a factor when strategic

impact is far less than the potential that could have

20

WWW.SDAWARDS.CO.ZA

been achieved. We now have a chance to correct this and at the same time localise supply chains, de­ risk, increase their resilience, take out waste, reduce inefficiencies and digitise.

The likes of Toyota and

BMW have made it the right way to do business, can you afford not to?

''

Ifcarried out properly,

ESD is an opportunity to enhance efficiencies and cost effectiveness and does not need to add cost.


[ BENCHM A RK REP ORT ]

BENCHMARK REPORT STATISTICS

This report shares information gleaned from the applications submitted for the Absa Business Day Supplier Development Awards and provides valuable insights into Supplier Development programmes and the sector at large. It also serves as a yardstick for year-on-year comparison against which we will measure progress as a sector.

Now in its third year, the Absa Business Day Supplier Development Awards were targeted towards larger companies who implement Supplier Development initiatives in their own supply chains and qualify in the BBBEE scorecard as GEN businesses (i.e. those with a turnover of more than R50 million).

SEMI-FINALISTS 1. 2. 3. 4. 5. 6. 7.

Bigen BTS/Avocado Catalyst For Growth NPC Cova-Advisory Distell Group Empact Group EnviroServ Waste Management (Pty) Ltd 8. Fidelity Services 9. Gibs 10. Goodyear South Africa 11. Mustek 12. PetroSA 13. Pragmaworld 14. SAB 15. Sasol 16. Soldado T Enterprise 17. South African Energy Coal 18. SPAR Group Ltd 19. Telkom 20. Tiger Brands 21. Transformation Legacy 22. Unilever South Africa 23. V&A Waterfront 24. Vhembe College

22

W W W.S DAWA RDS .CO. Z A

Finalists 1. Distell Group 2. Empact Group 3. EnviroServ Waste Management (Pty) Ltd 4. Goodyear South Africa 5. PetroSA 6. SAB 7. Sasol 8. SPAR Group Ltd 9. Tiger Brands 10. Unilever SA

Insights:

• Again, there were slightly fewer applications than the previous year, but the calibre was higher, considering the more rigorous entry criteria • 43% of applications received met all qualifying criteria which shows us that the awards are more targeted, and companies are understanding how to articulate the merits and impact of their programmes • 44% of the applications were EME participants, 9% were QSEs, and 40% were GEN businesses - again showing we have hit the sweet spot in terms of targeting and messaging • There was a noted increase in well-established programmes compared to last year, with 25% of entrants confirming that their programmes have been running for 5 or more years • 82% of applicants indicated that Supplier Development is well established in the company as opposed to 23% in 2018, and 27% in 2019 - this is a superb indicator of organisations seeing the value Supplier Development brings

11. V&A Waterfront

43%

MET ALL QUALIFYING CRITERIA

44%

EME participants

25%

PROGRAMMES RUNNING FOR FIVE OR MORE YEARS


[ BENCHM A RK REP ORT ]

% qualifiers in the application process How are corporates implementing Supplier Development?

Applications received year on year

88,89% In-house 5,56% 5,56%

43%

Outsourced

11%

Combination

2018

• 89% of the applicants indicated that they are developing their own supply chains in-house (as opposed to 50% last year), while the rest rely on third party and intermediaries for support in implementing their Supplier Development programmes - this indicates a marked shift in corporates embracing Supplier Development at a strategic level and embedding it within their organisation • 57% of the companies reported that senior leadership steers the process of the Supplier Development strategy, as opposed to 43% in 2019 - this signals a significant uptake in the C-suite embracing Supplier Development within businesses • 32,14% of companies task procurement with implementation of their programme on the ground, with the rest a spread of responsibility • Of the applicants that indicated their total

82% INDICATING THAT SDP’S ARE WELL ESTABLISHED

4%

2019

2019 379 2020

programme value, it was noted that their expenditure on small suppliers ranged from R250 000 to R4.5 billion comprising a combination of cash, in-kind support and other trade-offs • The percentage of spend on Supplier Development as a portion of the total operational budget of companies ranged from 1 to over 70% • 1345 small businesses (comprising QSE’s and EMEs with a turnover of R5-20 million annually) were supported by our finalists • Average size of jobs created per entity ranged from 3 to 100. • 50% of the Supplier Development programmes targeted existing vs new opportunities. • 80% of the finalists’ programmes focused on growing the ecosystem of independent, small suppliers beyond their own supplier

3-10

AVERAGE SIZE JOB CREATED PER ENTITY

2018 409 2020 62*

*Note: 2020 had more rigorous entry criteria

chain with 93% of companies taking action to develop relationships in the ecosystem - evidence that a strong spirit of collaboration is now entrenched in the ecosystem • 80% of the finalists’ programmes/ projects specifically support regional manufacturing businesses and product/ service providers with 47% of businesses actively pursuing import substitution when looking for suppliers • 100% of companies said innovation is an important aspect of their strategy • There was an increase in the use of metrics used for the measurement of impact and year-on-year improvement with a whopping 94% of the applicants showing that they currently track their results through metrics/ success indicators

7 5 %

senior leadership is steering SDI strategy

1345

SMALL BUSINESSES SUPPORTED BY OUR FINALISTS

W W W.S DAWA RDS .CO. Z A

23


[ BENCHM A RK REP ORT ]

Total number of supported small enterprises/ suppliers through our finalists

1345 who are QSE's and EMEs with a turnover of R5-20 million annually.

-100

3

Range of average size of jobs created per entity.

Size of businesses applying year on year

Parties responsible for implementing the Supplier Development Programme on the ground

50 40 30

32,14%

20 10 0

3,57% 2018

2019 GEN QSE

2020

14,29%

EME BLANK

Strategic support

Leadership (Strategy - Executive) Leadership (Strategy - Executive/ Operations â&#x20AC;&#x201C; Management) Other

2018

36%

7,14% 10,71%

Procurement Department Marketing Department Sustainability Department CSI Department Intermediary Other

Age of programmes

10%

Suppliersâ&#x20AC;&#x2122; greatest areas of challenge

32,14%

25%

52%

23,08%

Scale/volumes Lack of experience

51,92%

Price

Less than 2 years (NEW) 2-5 years 5 years plus

26%

Quality Reliability

2019

Lack of funding Access to markets

43%

Companies that currently track their results through metrics/ success indicators

30%

Competition Lack of commitment

11%

Lack of equipment Basic business compliance

24

W W W.S DAWA RDS .CO. Z A

32%

2020

57%

NO

YES

6%

94%


[ BENCHM A RK REP ORT ]

9,41%

7,06%

4,71%

5,88%

7,06%

PEER SUPPORT

DESIGN THINKING

LEADERSHIP

OTHER (SPECIFY)

Performance measurement

GAP ANALYSIS

16,47%

NO

7,14%

20%

80% YES

YES

53,33%

92.86% YES

46,67% 19,05%

PROGRAMMES/ PROJECTS SPECIFICALLY SUPPORTING REGIONAL MANUFACTURING BUSINESSES AND PRODUCT/SERVICE PROVIDERS

2018

27% 50%

25%

2019 24%

18%

ROI Jobs created Jobs sustained Business growth Increase in turnover Other

Reporting cycles

2020 82%

WELL ESTABLISHED IN THE COMPANY

WELL ESTABLISHED IN THE COMPANY

WELL ESTABLISHED IN THE COMPANY

WELL ESTABLISHED, BUT TRYING SOMETHING NEW AND INNOVATIVE

WELL ESTABLISHED, BUT TRYING SOMETHING NEW AND INNOVATIVE

WELL ESTABLISHED, BUT TRYING SOMETHING NEW AND INNOVATIVE

JUST STARTING OUT

JUST STARTING OUT

JUST STARTING OUT

50,00%

23%

14,29%

ANNUALLY

BUSINESSES ACTIVELY PURSUING IMPORT SUBSTITUTION WHEN LOOKING FOR SUPPLIERS

COMPANIES THAT HAVE TAKEN ACTION TO DEVELOP RELATIONSHIPS IN THE ECOSYSTEM

OPPORTUNITIES TARGETED

PROGRAMMES GROWING THE ECOSYSTEM OF INDEPENDENT SMALL SUPPLIERS BEYOND THEIR OWN SUPPLIER CHAIN

NEW

YES

Level of establishment of Supplier Development

52%

26,19%

21,43%

28,57%

50% 50%

80%

NO

7,14% 11,90%

QUARTERLY

EXISTING

NO

The spread of metrics or success indicators used to track results

21,43%

NO

20%

There was an increased reporting in the use of metrics measuring the impact and year on year improvement. It was promising to note that a number of businesses are tailoring their indicators or using common measures of performance (jobs created, jobs sustained and cost per job, and financial questions to measure grants, loans and direct investment) to rigorously gauge their impact.

MONTHLY

11,76% MARKET READINESS

MARKET ACCESS

15,29% MENTORSHIP

2,35%

11,76% GRANTS & LOANS

MEDIA & COMMUNICATIONS SUPPORT

8,24%

Spread of support interventions on offer to suppliers

FINANCE TERMS

17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0

W W W.S DAWA RDS .CO. Z A

25


THOUGHT LEADERSHIP ARTICLE

SUPPORTING EXISTING BLACK SUPPLIERS WHILE GROWING SUPPORT FOR NEW BLACK SUPPLIERS: A BALANCING ACT IN UNCERTAIN TIMES By Charles Wyeth, LED manager at Distell

In an ideal world, every procurement and enterprise and supplier devel­ opment champion will always have enough procurement opportunities to offer their existing suppliers, whilst maintaining a healthy stream of new procurement opportunities for new targeted groups, eg. youth-owned businesses and black women-owned businesses. Unfortunately, the shrinking economy, prior to the impact of COVID-19, has meant that procurement opportunities have become much more limited, both in total value or size, as well as the total number of contracts that are available. As companies continue

we procure goods and services, a key decision often arises: Do we award the limited number of procurement opportunities available to existing qualifying suppliers, or do we invite new businesses that are still struggling to enter your supply chain, to compete for those opportunities? Speaking to SME-owners, the one thing most of them will tell you is that their biggest challenge is securing more business with their main clients. Often SMEs have the capacity and the competence to do additional volumes of work and in the process grow their businesses. The issue however, is that they are just not invited to tender for the extra work they need to achieve that growth. This is where procurement managers need to prevent themselves from falling into the trap of wanting to help numerous new businesses, at the expense of their existing qualifying suppliers.

to innovate and rethink the way they do business, become more efficient and streamlined, their need

In an era where the Department of Trade and

At Distel I our focus over the past year has been on helping our existing black suppliers in dealing with the challenges of reduced supplier opportunities and efficiency improvements within their operations. This we achieve through our 3-pronged Enterprise Development Model, focusing on ( l) facilitating access to markets, eg. the Distell supply chain, (2) promoting financial inclusion, eg: provision of zero interest loans, and (3) facilitating access to other Business Development Support (BDS) services. As Africa's leading producer and marketer of spirits, fine wines, ciders and ready-to-drink beverages, we craft distinctive alcoholic beverage brands, enhance

for more products and services will more than likely

Industry itself has been trying to help create the next

continue to shrink. This further reduces the need to

generation of (mega) black industrialists, SMEs need

go out into the market to find service providers.

more opportunities to grow from survivalist micro

Invariably, this also results in fewer opportunities for

of our people, shareholders and the communities

enterprises to growing into profitable businesses with

within which we live and work. As part of this aim,

ever-increasing revenues. In the current climate, the

we believe that supporting our existing black-owned

one thing the procurement staff in large Corporates

suppliers in securing more business with us, which

existing suppliers.

memorable moments and ins pire responsible enjoyment. The value we create enriches the lives

As Distell continues to increase the number of black­

can do for their existing black suppliers - is to help

is one the most valuable things we can do for them

owned and women-owned enterprises from which

them secure more business with you!

during this challenging time.

26

WWW.S0WAR0S.CO.ZA


DISTELL

www.distell.co.za I info@distell.co.za I Tel: 021 809 7000 Aan-de-Wagenweg, Stellenbosch, 7600

DISTELL

CRAFTING

BRANDS SINCE

1925

Creating memorable moments. Crafting a better future•••

We are therefore working very hard to transform our supply chain and contribute to meaningful development that supports a more equitable and sustainable society. We are doing this by increasing the number of black-owned and black women­ owned enterprises from which we procure goods and services. We are also empowering small business owners with the tools they need to become key partners to our business.

Our Programmes: E+Scalator and the Agri+Gator As it was a challenge to scale up the inclusion of Distell is Africa's leading producer and marketer

SM Es in our core business value chain, in 2016 we

of spirits, fine wines, ciders and ready-to-drink

launched our E+Scalator Programme, with six key

beverages. We craft distinctive alcoholic beverage

objectives in mind:

brands, enhance memorable moments and inspire responsible enjoyment. The value we create enriches the lives of our people, shareholders and the communities within which we live and work. Distell's aim is to lead supplier excellence by delighting our customers, improving product quality and optimising our supply network for scale efficiency through sustainable cost-effective sourcing. This creates truly transformed and inclusive value chains that realise a genuine shared relationship between Distell and its suppliers. We believe that Enterprise and Supplier Development

1. To incubate black-owned and black women-owned businesses 2. To discover and develop new empowered suppliers 3. To provide market access by awarding off-take agreements 4. To secure and incest enterprise and supplier development funding

company that is also 30% owned by women. The company forms part of the Bosman Adamo Group,

and has a rich history of co-operation, living and

working together for more than 5 generations on the

same land. Together, the families have implemented an innovative, progressive and profitable business model.

In 2019, Adamo Wines needed working capital

to help the newly established company with its

operational expenses during its early establishment phase. Distel/ provided Adamo Wines with a R31

million zero interest production loan, which allowed

the company the opportunity to finance its operating expenses without having to incur additional debt

during its early establishment phase. This financial support has helped the company through a ma;or

hurdle, which could have severely impacted its

balance sheet at a time when companies are their most vulnerable. In addition to the financial support, Distel/

has helped Adamo during the structuring of its deal with the Bosman family, offering, technical, financial

and business development support during that critical phase.

The establishment of Adamo Wines was born out

of trust and respect, and is the largest land reform

transaction to date in the history of the South African Wine industry. The transaction is viewed as a leading

example of successfully transforming the South African

Agricultural Landscape.

services that grow suppliers

SUCCESS STORY 2: LOUFONTEIN BOERDERY

6. To create meaningful employment opportunities This programme focused on the delivery of support

Development, as it is businesses that create

to non-agriculture clients, and in 2018, we launched

sustainable jobs and wealth creation opportunities

our Agri+Gator Programme. This programme aims to

in society. The Distell strategy is therefore based on

provide structured engagement and direct support

providing businesses with the services and support

to improve the yield, output, participation, access

that they require to help them overcome the many

to markets and growth of empowered apple and

challenges that prevent them from growing their

grape farmers within our value chain. We plan to

businesses. As part of Distell's contribution to South

scale up investment into our Agri+Gator Programme

Africa's National Development Plan, we help

in the upcoming financial year and have already

businesses to increase their capacity to create wealth

on-boarded eight new producers as part of this

and jobs.

programme.

In South Africa, entrepreneurship and the growth

The total value of our E+Scalator and Agri+Gator

of small- and medium-sized enterprises (SM Es) are

programmes by the end of March 2020 was R99.4

widely recognised as critical to achieve inclusive

million. This comprised R 6 4.3 million in interest-free

economic growth and development and stimulate

loans, R21.4 million in equity investments and R 13.7

job creation.

million in in-kind support.

DistellGroup

Adamo Wines is a ma;ority black-owned wine

5. To deliver targeted and relevant support

is the most important component of Local Economic

0

SUCCESS STORY 1: ADAMA WINES

Loulontein Boerdery is a 100% black-owned fruit

farming business that is being supported by both

Distel/ and Two-A-Day (TAD/. Loulontein Farm was

acquired through the Proactive

Land Acquisition

Strategy {PLAS/ programme of the then Department

of Rural Development and Land Reform (DR DLR/, and leased to Sewis van der Horst on a 30-year contract

basis.

The property is 132ha in extent with about 60ha of

pears, apples and nectarines. Due to the !act that

the !arm had a large percentage of old orchards, its

yields and sales income were severely compromised relatively to similar orchards in the Grabouw­

Villiersdorp region. As a result of the support provided

by Distel/ and TAD, the company has been able to

reduce its debt levels, increase productivity and overall profitability, in so doing guaranteeing the employment

of the 22 lull-time workers and over 60 seasonal

workers.

• Distell

WWW.SDAWARDS.CO.ZA

27


www.petroleumagencysa.com

I

info@petroleumagency.com

I

Tel: 21 938 3500

Tygerpoort Building, 7 Mispel Street, Bellville, 7530

To promote, facilitate and regulate exploration and sustainable development of oil and gas in South Africa etroleum Agency SA is a world c l a s s

Porganisation that promotes t h e o i l & gas potential of SA and regulates the upstream oil

and gas sector on behalf of government. The Agency

is state owned and reports to the Department of

Mineral Resources and Energy. It is the custodian of

the national petroleum E&P database The Agency

is designated in term of Section 70 of the Mineral

and Petroleum Resources Development Act of 2002,

and aims to create a vibrant environment through

its promotional activities that attract both local and

foreign investment.

PETROLEUM AGENCY HAS THREE MAIN ROLES: • To promote oil and gas exploration and production in South Africa

• To regulate the oil and gas exploration and production industry in our country

• To archive all gee-technical data produced through oil and gas exploration

direct presentations to exploration companies

and through advertisements. Part of our role is to

These roles apply to both conventional and

ensure that explorers understand the regulatory

The Agency must also advise government on issues

international norms.

unconventional resources.

regarding oil and gas exploration and production,

and carry out special projects at the request of the

regime of our country and to advise government in

The office of the Company Secretary is responsible

for providing secretariat services to the Board and

ensuring statutory and corporate governance

complian ce. The Agency subscribes to the

the formulation of regulations that are in line with

principles of "good governance" and the highest

Compliance with all applicable legislation in place to

management.

the environmental management plan. Explorers must

Responsibility (CSR) initiatives both indirectly

standard of ethics. It delivers on this mandate by

ensuring transparency, accountability and sound

Minister.

protect the environment is very important to us, and

gas sector by assessing South Africa's oil and gas

also prove financial and technical ability to meet their

through its operators, as well as directly through

Programme process requires public consultation

previously marginalised sectors of the population in

national authorities.

Agency also administers the Upstream Training Trust

The Agency encourages investment in the oil and

resources, and presenting these opportunities

for exploration to oil and gas exploration and

production companies. Our team of geoscientists study existing data to identify prospective resources.

These are then presented to investors at local and

international conferences and exhibitions, through

28

WWW.SDAWARDS.CO.ZA

rights cannot be granted unless we are satisfied with

commitments in safe-guarding and rehabilitation of

the environment. The Environmental Management

and a clear demonstration that valid concerns will

be addressed, and must satisfy both provincial and

The Agency is involved in Corporate Social

its own programmes. Production right holders must

put a social and labour plan in place that involves

the benefits Aowing from development. These plans

are approved and monitored by the Agency. The


PETROLEUM AGENCY SA

for the development of specialist skills in the natural

in disadvantaged communities and Crisis Relief

parties may view all data available including a

sciences, engineering and technology.

& Prevention Programme in the form of hampers

viewing set consisting of selected reports, seismic

distributed amongst Families in times of crisis. Through

data and associated results.

The Agency has its own CSR programme that includes

a partnership with Habitat for Humanity, the Agency

development of skills through internships, while staff

donated funds and employees participated in

The Information Services d epart ment is also

have been involved in social outreach events such as

building houses at Emfuleni in the Western Cape.

responsible for IT by providing the operating parameters for individuals and supporting use of the

house-building with Habitat for Humanity. Petroleum Agency SA invites all parties interested in becoming

The continental shelf of the Republic of South

IT systems, networks and architecture. This includes

involved in South Africa's upstream industry t o

Africa covers some 200 000km2 and the country

responsibility for conventional IT security and data

contact u s directly.

has a coastline of approximately 3 000km in

assurance. The IT D epartment ensures suitable

length. Petroleum Agency SA is responsible for

infrastructure by providing the operating network, circuitry and all equipment needed to make the IT

CSR at Petroleum Agency SA is the demonstration

the archiving and management of the national

of the values of the organisation. The initiatives

exploration database and has catalogued all of the

system work in accordance with an established

of Petroleum Agency SA's c or p ora t e social

data and reports resulting from the drilling of some

operating standard and system size.

responsibility is t o improve the quality of life of

300 boreholes and the acquisition of 22 700 line

historically disadvantaged South Africans through

km of 2-D and 9 700km of 3-D seismic data. All

Functionality is catered for by providing the capacity

skills development and educational programmes with

hydrocarbon exploration data belongs to the state.

for operating applications, storing and securing the

Licensees that carry out ex ploration activities are

electronic information the organization owns, and

required to supply all new and reprocessed data on

providing direct operating assistance in software use

As an organisation, we are deeply committed to

relinquishment to the Agency for incorporation into

and data management to all functional areas in the

conducting business in a socially responsible way.

the National Database.

organisation.

an emphasis on youth.

It is important that we contribute in establishing a foundation of skills required for our industry as well

A new block naming system has been in use since

as our country. In order to achieve this, Petroleum

1994. For convenience of reference to existing data,

Agency SA focuses on the educational projects that

the old ( 1965) licence blocks are also used since

promote Maths, Science and Technology such as:

borehole and seismic line designations refer to them. The latest degree licence block system definitions are

• Career/Science Exhibitions targeting educators

also defined as an overlay on our maps.

and learners. • Career presentations at Tertiary level on the petroleum industry. • 3-year Internship programme within the organisation that provides an opportunity for training to South African graduates. • A 3-year contribution to the University of Fort Hare for a Geological Chair.

Although data catalogues can be generated for any offshore geographical defined area, including listings of all the data available that is relevant to the assessment of each area, the data is conveniently organised into geological basins and features below: • Summary of wells by basin • Summary of seismic by basin

Petroleum Agency SA as a corporate citizen

• Generalised location maps

has an interest in the lives of the South African community at large. Other programmes chosen to

All data can be browsed and purchased through the

invest in have been: Provision of skills/ education

online portal. A Data Room has been established at

on Disaster Management to unemployed youth

Petroleum Agency SA in Cape Town where interested

0

Petroleum Agency SA

0

@sa_petroleum

VISION:

To create a diverse upstream industry contributing to energy security through sustainable growth in

exploration and development of oil and gas.

MISSION:

To promote, facilitate and regulate exploration and sustainable development of oil and gas contributing to energy security in South Africa.

OUR STRATEGY: To increase exploration and production activities in South Africa. To regulate the exploration and production environment. To acquire, archive and enhance all petroleum exploration and production data. To ensure a viable and sustainable Agency.

• Petroleum Agency SA

WWW.SDAWARDS.CO.ZA

29


THOUGHT LEADERSHIP ARTICLE

SUPPORTING THE LOCAL VALUE CHAIN Henlo Lindeque, Head of Business Events at Goudini Spa

Nestled among the spectacular Boland Mountains and magnificent vineyards, ATKV Goudini Spa is one of the Western Cape's most sought-after holiday, conference and tourist destinations with a wide variety of accommodation options, recreational - and business event facilities.

Rawsonville and Paarl has a flourish of businesses that are able to assist in the needs of the resort. Catering for 800 delegates is no small feat, thus it is vital that local suppliers understand the business and are able to assist quickly and accurately ensuring guests are kept happy and conferences can run smoothly and without interruption. With an abundance of local tourism activities around Goudini Spa, not to mention the more than dozen wine farms with some of the best wine South Africa has to offer, the resort have partnered with local tourism bodies and local establishments ensuring guests get the best experience the Breede Valley has to offer. Goudini Spa also gets involved with community projects, both large and small in scale. Goudini Spa hosts hundreds of avid mountain bike riders during the annual Gravel and Grape Mountain Bike Race, in itself a massive project which injects money into the local economy. Lastly, we also strongly believe in supporting community development projects and institutions.

With a capacity of 1300 plus guests and MICE facilities for approximately 800 delegates, Goudini Spa plays an important role in the local community p r o viding employment and other business opportunities for local businesses. Our cleaning and security services are just two of the close partnerships that have developed over the years helping Goudini Spa achieve its ambitious goals annually. A key focus of management is to ensure that where ever possible, local suppliers are

To this end, Goudini Spa is heavily involved in supporting the Breede Valley Skills Development School, where young adults and those who never finished their schooling, are trained in valuable skills such as wood working, metal working as well as vocations such as electrician to enable them to find employment. Also, the resort supports the Pioneer School for the Blind through financial assistance as well as hosting the Pioneer Rally Gala evening

''

Goudini Spa plays an important role in the local community, pro(Jiding employment and other business opportunities for local businesses

(held annually for the last 21 years, but unfortunately cancelled in 2020 due to the Covid- 19 pandemic).

utilised. The resort contracts with local suppliers and businesses for day-to-day maintenance and repairs,

Goudini Spa, and the ATKV Resorts Group, are

as well as for construction projects on the resort.

ardent believers of local supplier support and

From signage to builders to fresh produce all

help build a sustainable future in all the communities

contributing as local towns in the form of Worcester,

we do business in.

development, and we will continue to do so as we

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THOUGHT LEADERSHIP ARTICLE

WHAT IS REQUIRED TO SECURE STABILITY AND SECURITY OF ENERGY SUPPLIES By Dr Phindile Masangane, CEO of the Petroleum Agency of South Africa (PASA)

A bs a b u s i ness da y s up p l i e r

organisations enter into contracts with the state

especially long-term stability and consistency

to explore for oil and gas.

in contractual terms together with political and

Dr Phindile Masangane, CEO of

The third function is to act as the national archive

development magazine sp oke to

the South African upstream oil and gas regulatory authority, Petroleum

Agency South Africa (PASA), about

what is required to secure stability

and security of energy supply.

1 Brief/,y, the role of PetroleumAgency SA, its mission and vision

and gas exploration and production in South Africa, and to curate and maintain this data for use and distribution. Other functions include advising government on any issues pertinent to oil and gas as well as carrying out any special projects, as directed by government. Mission - To promote, facilitate and regulate

Petroleum Agency SA is South Africa's national

exploration and sustainable development of oil

regulator for the upstream oil and gas industry in

and gas contributing to energy security in South

South Africa, i.e. exploration for and production

Africa

of oil and gas both onshore and offshore.

Vision - A diverse upstream industry contributing

PASA has three main functions, as follows. The

to energy security through sustainable growth in

first is to attract investment to South Africa's oil

exploration and development of oil and gas

and gas upstream industry, in other words, investment into exploration and production of oil and gas in South Africa. We have a team

2 What is required to secure stability and security in the sector?

of geologists and geophysicists who interpret

The oil and gas exploration industry has always

data gathered through past exploration activity

been extremely volatile, being subject to global

to determine prospectivity, and use this to attract

economic forces and highly dependent on

exploration companies to South Africa.

the fluctuating oil price. In addition, oil and

The second function of PASA is to regulate the upstream industry in terms of the Mineral and Petroleum Resources Development Act, its regulations and other applicable legislation. The

34

for all data and information produced during oil

gas exploration is exceptionally risky in terms of initial, upfront capital investment with long periods before any return on investment and profit generation.

Agency has staff responsible for ensuring legal,

To counter this, oil and gas exploration

technical and environmental compliance as

companies require equitable terms, and

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independent judicial stability. Coupled with this would be a government that is committed to ease of doing business and to facilitating entry into the upstream space. Local expertise in servicing the industry's requirements in terms of human resources and services is also a strong advantage. A developed industrial economy offering opportunities for local monetisation of gas discoveries would also assist.

3 Where are the opportunities? Current opportunities lie in the development of the stand-alone Upstream Petroleum Resources Development Act, and its accompanying regulations. This rewriting of the legislation governing oil and gas e x p loration and production gives South Africa a chance to address the requirements of the industry (as above) while also ensuring an equitable deal for the South African state and meaningful participation of South Africans in the industry. The recent Brulpadda discovery and ongoing exploration in the area, as well as the potential for shale gas have both put SA on the international map in terms of a destination for investment. The oil price is making a slow but steady recovery from the 2014 crash. These factors are all opportunities for SA to move forward in developing the upstream industry.


4 What are the challenges? Challenges facing the South African upstream industry include the low oil price( now steadily recovering), uncertainty regarding terms and legislation(now being addressed through the UPRDA), environmental concerns and public negativity regarding fossil fuels, lack of local skills and public pressure on government to nationalise

Norway, and should arrive around the 12th of

be discovered. Onshore, the Agency's estimate

the Luiperdpadda) prospect which is the second

for shale gas are 205Tcf recoverable while coal

of five prospects in the group. There is an option

bed methane and biogenic gas represent a

to retain the rig in South Africa for further drilling.

further multi-Td potential resource.

The Brulpadda well discovered light oil and gas condensate, but the phase in the other prospects can only be determined through drilling. Future development of the discovery is highly

South Africa's assets.

dependent on the success of this further drilling.

A further challenge is to diversify the industry and

Possible development could see gas condensate

make it more inclusive in terms of the companies undertaking exploration in South Africa.

5 How big a role does the Agency play in the renewable energy sector; and how will you be advancing this agenda? Oil and gas are fossil fuels and by definition, not part of the renewable energy sector. Having said that, South Africa has committed to reducing its carbon foot print and natural gas can play a role in this. South Africa is currently heavily dependent on coal as a primary energy source and the substitution of natural gas for some percentage of electricity generation, as envisaged in the National Development Plan, could assist with SA reaching its goals in terms of carbon emissions. The Agency's main role in this is to attract and facilitate the activities of explorers for indigenous gas.

6 Flow important is policy- and legislation decision-making in informing how the Agency undertakes its operations? Policy and legislation are of utmost importance in how the Agency operates. The main purpose of the Agency is to implement and apply policy and applicable legislation to the upstream industry on behalf of government. The Agency's mandate is l 00% driven by policy and legislation. Its close contact with the diversity of exploration companies puts the Agency in a unique position to be able to advise government in the formulation of policy.

7 Where are the new SA O& C explorations, and can you provide details around those (such as what we can expect f,-om those, when they come onboard etc, Mossel Bay?) Offshore, there is currently ongoing exploration of the prospects close to the Brulpadda discovery. Odfjell's DeepSea Stavanger oil rig has recently arrived in South Africa from

billions of barrels of oil and multi Tcf of gas yet to

August. It will drill the Luiperd (more correctly

being piped to the PetroSA facility in Mossel Bay, but these decisions are ultimately up to the operator, Total, and its partners. Other exploration coming up offshore is the planned drilling of the Gazania -1 well off the west coast, to test a prospect close to the A-J l oil discovery made in 1988. African Energy Corporation has entered into a partnership with Azinam and Panoro in this block (still to be approved by the ministry) and have identified numerous prospects in the block. Aziman will become the operator. The well will test the gazania and Namaqua prospects. Drilling is expected in Q l 2021. Off the east coast, ENI and partner Sasol, have identified potential drill prospects in deep water, but the testing of these by drilling has been delayed due to various issues including Covid and its effect on the oil price. Once the UPRDA and its accompanying regulations are finalised, we can expect the initiation of active exploration for shale gas onshore. The true potential of this resource will only become known through drilling and production testing, but this may certainly

9 What skills and upskilling ofexpertise is still required to be manifest in SA to ensure stable and thriving on- and offshore exploration? South Africa already has the ability to provide a vast array of skills and services to the upstream industry, as represented by the membership of SAOGA. What SA does not have is specialised skills such as qualified rig crews, as the local industry is too small to sustain such specialisation. Specialised crew and t radesman trained to service the upstream industry have to be equipped with skills that can be applied cross­ industry to ensure sustainability. Professional skills such as reservoir engineers, petroleum geologists and geophysicist are also in very short supply locally, for the same reasons.

10 What is the future for gas-fired power stations... will this provide more stable power generation, and howJar away is SAJi-om introducing such? Gas to power is an integral part of South Africa's IRP2019 (the electricity supply infrastructure plan for the country to 2030). The country wants to build as much as 3000MW of gas to power ac­ cording to this plan. Additionally, the 2000MW emergency power procurement to be issued with­ in the next few weeks can also be supplied by gas-to-power.

represent a major economic boost for the economy of South Africa.

8 Do we know what the onshore and f offihore potential is, and i not what are the estimates? T h e P e t r o l e u m A g e n c y h a s a t e am of geoscientist s . Among their duties i s the determination of potential, to attract explorers, ensure that exploration is properly managed, and advise government on the potential indigenous resource to help develop energy and development policy. The offshore is for the most part underexplored, for eg there are only 4 wells drilled off SA's east coast. Current estimates indicate potential for

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I

TIGERBRANDS

I

www.tigerbrands.com esd@tigerbrands.com Tel: 011 840 4000 31 0 William Nicol Drive, Bryanston, Johannesburg

TIGER BRANDS

We nourish and nurture more lives everyday TIGER BRANDS DIPUNO FUND IMPACT M any black smallholder farmers are still excluded from larger agricultural supply chains in 2020. Tiger Brands,

through its R 1OOm Dipuno Fund, is helping to change that by encouraging smallholders to form farming collectives like the Baphuduhucwana Production Incubator (BPI) and then placing large orders for harvesting.

One success story is Kedidimetse Radebe, who took over her

family's farmer in Taung, North West after a marriage, 15

years as a professional nurse in Johannesburg, and three

children. Through training and funding interventions, the BPI

iger Brands is one of Africa's largest, listed

Tmanufacturers of fast-moving consumer goods (FMCG). Our core business is manufacturing,

marketing and distributing everyday branded food products to middle-income consumers. We also

just supplied over 3 000 tons of wheat to Tiger Brands.

With her success, Mrs Radebe has built a house, started a legacy for her children, and beams when she shows off the

brand new Toyota Hilux in her driveway.

distribute leading brands in the Home, Personal Care

and Baby sectors. We are committed to creating

shared value across our diverse stakeholder base.

Tiger Brands prides itself being a world-class

manufacturer and marketer in the FMCG categories

in which it operates and strives to consistently deliver

quality products with which consumers can have a

positive experience and enjoy.

We believe that our communities should be better

off because we are there and take an active role

in driving food and nutrition security, consumer education and food safety imperatives, in addition

to supporting the development of small suppliers to

actively compete within our supply chain.

Khayelitsha Cookies was started by 2005 as an initiative to empower women in Khayelitsha to

be entrepreneurs and hand-bake, pack and sell cookies to their communities and other local

businesses. Based on the recognition that every woman baker supports up to seven dependants in

their households, Khayelitsha Cookies has resisted the option to mechanise its biscuit production

because this would downsize the number of bakers who depend on this business to earn an

income.

Since 2009, Tiger Brands has helped ensure Khayelitsha Cookies complies with all legislative

requirements in term of food manufacturing, offered interest-free loans so the business could move to larger, more efficient facilities, and now orders hand-baked products for its Purity brand.

0 36

@TigerBrandsFMCG

0

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@TigerBrands

â&#x20AC;˘ Tiger Brands


THOUGHT LEADERSHIP ARTICLE

ESD: IT'S ABOUT REAL VALUE, NOT COMPLIANCE By Neva sh nee Naicker, Director: Corporate Communications at Tiger Brands

A genuine commitment to enterprise and supplier development (ESD) is am ong the m ost powerful and sustainable way s of trans forming South Africa's economy. Note that I said powerful and sustainable, not quick, cheap and without its challen ges. This is where many organisations lose sight of the larger goal of ESD.

and intellectual capital through workshops and training. Even then, you need to build something beyond just a transactional relationship and create an active partnership that doesn't just change the lives of your suppliers but positively impacts the way you do business.

In an effort to comply with legislation, satisfy shareholders and tell a good story, ESD programmes can quickly deteriorate into compliance exercises that no one really owns in the company.

of 2019. On the back of such sterling success, we reinvested the capital repayment back in the farming

The problem with this approach is that it defeats especially where an ESD initiative lacks proper planning and is not linked to a defined and agreed upon strategy that everyone in the organisation understands and believes in. Does it still have merit? Absolutely - even incremental improvements make

At Tiger Brands, we don't just find suppliers and

a difference. But the impact simply isn't what it

throw money at them. We invest in our relationships

could be. And since ESD is premised on transferring

with them, offering assistance where we can, and

opportunities into the hands of those who have

creating space for long-term economic growth. A

historically been left out of the mainstream economy,

case in point is our investment into black smallholder

we have a responsibility to do it right.

''

collective for future projects.

the underlying purpose of genuine transformation,

wheat farmers in Taung, North West, as part of our drive to reduce South Africa's reliance on imported

It's more than just preferential procurement and

produce. One smallholder cannot meet a large

loading "empowered" vendors onto your system. It's

order, but a collective of smallholders can, so

about creating value wherever you can: sometimes

much so that this farming collective - known as the

that's through an interest-free loan with generous

Baphuduhucwana Production Incubator- delivered a

payment terms, sometimes it's offering free expertise

100 % crop yield of 5 000 tons of wheat at the end

Compliance is important, but let it be the happy consequence ofan open-handed, active and practical commitment to driving real change in South Africa. You'llfind it doesn't only impact your suppliers but changes your entire organisations culture for the better.

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37


THOUGHT LEADERSHIP ARTICLE

7 GAME-CHANGERS FOR THE PATH TO ECONOMIC RECOVERY

Insights from the Absa Business Day Supplier De(}elopment Dialogue Series hosted on May 26, 2020 The Covid-19 pandemic is the biggest disruption to the global economy and has forever changed the business landscape. Experts agree that a global recession is imminent and is due to last for a while. Even the world's healthiest econ omies n ow face negative gr owth rates, and developing econ omies find the y lack the financial resources to accelerate recoveries.

This was debated by leading specialists Hilary Joffe,

don't make us competitive, to foster a conducive

T imes; Mariette du Toit-Helmbold, Chief Destineer of

environment for business and the private sector

Destinate; Jacob Maphuta, Chief Director of Broad­

to invest, innovate and thrive, and to support and

Based BEE of the Department of Trade & Industry;

reignite growth. The collective sense was that the crisis

and Gaylor Montmasson-Clair, Senior Economist

yields unique opportunities.

of Trade & Industrial Policy Strategies, at the Absa Business Day Supplier Development Dialogue series

Montmasson-Clair advocated for a paradigm shift

hosted on May 26 2020, in partnership with Fetola,

in favour of a green and just economic recovery

Cold Press Media and Arena Holdings.

strategy and a need to start setting up capacity and systems to build a more resilient economy and "build

Panellists agreed that our growth outlook shows a decline and that SA will come out of the Covid-19 crisis poorer, with much sharper ine quality and unemployment, and public finances depleted, leaving us reliant on limited resources to support the

SA, in particular, is already experiencing a recession

social needs of society.

du e to pre -existing financial stress, and the SA Reserve Bank forecasts that the economy will shrink

"There is no precedent for the recession and we won't

by 7% in 2020. Bleaker estimates from Business 4

get back to where we were before 2023. Our future

SA have said the decline could be between 10% and

economic prospects depend largely on how quickly

16.7%, depending on how quickly SA's economy

we come out of lockdown, how we navigate our way out, how much damage is permanent and capacity

reopens.

SO, WHAT DOES OUR ECONOMIC FUTURE LOOK LIKE IN THE FACE OF COVID-19?

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WWW.SDAWARDS.CO.ZA

enabling environment to unblock blockages that

contributing editor of the Business T imes and Sunday

lost, and essentially on our ability to recover," said Joffe.

''

back better" in the post-pandemic future.

The positive thing about the crisis is that it has brought us closer together - across sectors to focus more sharply on some of the things that need . . . . '' reprwrztzzzng. -Jacob Maphuta

"Recovery will also depend on how much attention we give to policy and fiscal reforms we have spoken

The seven potential game-changers for our path to

about for so long. The government must create an

recovery identified by panellists included:


COLLABORATION: Building partnerships and platforms for co-operation between the government, small business and the private sector, such as the Absa Business Day Supplier Development Awards.

LOCALISATION: Rethinking and restructuring of our value chains to maximise resources and value within SA. Localisation of production/manufacturing, vertical integration of supply chains, and linkages for rural and informal economic development.

INCLUSIVITY: Stimulating economic activities in marginalised areas and rural and township economies to address inequality, transformation and the participation of small businesses and black industrialists in the economy.

COMPETITIVE EDGE:

SMART INFRASTRUCTURE: Building smart systems, smart grids, rail networks, smart water and sanitation systems, and networks of infrastructure systems to meet local demand and drive job creation.

SUSTAINABILITY, CLIMATE RESILIENCE AND LOW CARBON PRODUCTION: Protecting our ecological infrastructure and communities, including access to sustainable services,

''

While there is no silver bullet and that we can't afford to go back to business as usual, the crisis presents an opportunityfor us to create a differentfuture. Key would be to build trust, be agile, efficient and effective. This is our recovery!" - Catherine W-jjnberg

such as water, sanitation and public transport; low-carbon production and renewable energy technologies, which stimulate local manufacturing and the development of local supply chains.

Being ruthlessly price efficient by reducing the cost of

DIGITAL:

production, and seizing export opportunities through

Maximising the online economy and addressing

proactive identification of demand and market gaps

the digital divide with rapid deploym ent of

to capitalise on our weak exchange rate. Link this

broadband to stimulate innovation and growth,

to sustainability and "green production" to meet

capacitate emerging businesses and fast-track equal

growing post-Covid- 19 global pressure for climate­

opportunities.

friendly production.

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39


THOUGHT LEADERSHIP ARTICLE

A SHIFT IN MINDSET By Fungai Makani, Cova Manager

It is clear that in the South African context it is ver y difficult for the majority of companies, particularly those o perating in the business to b usiness s pa c e, to remain competitive and grow without being transformed. Our experience is that many companies are under pressure from their customer s to reach specific levels of Broad-Based Black Economic Empowerment (B-BBEE) comp liance, g enerally a level 4 and above, to retain their business. Therefore, Enter prise S up p lier Development (ESD) being one of the 5 elements of the B-BBEE codes, is very much a business imperative.

and meaningful difference in what is undoubtedly a

infrastructure and business development costs that are

difficult economic environment. The purpose, meaning

necessary in the mentorship of suppliers. It provides

and impact of their ESD programmes are the drivers

support of up to R 15m per annum for a period of 3

of their actions, so much so that they do not limit their

years. In the current context of a constrained fiscus,

ESD budget to the mandatory 2% and l % of Net

the SPP grant is generous and can go a long way

Profit After Tax.

to scale the ESD efforts in the economy and it is

Corporate South Africa can play a key role in

due to a lack of knowledge.

unfortunate that such a tool is being under-utilised spearheading inclusive and sustainable ESD. Through a focus on supplier development, companies

To achieve maximum impact through ESD, it is

are able to create many mutually ben eficial

important for corporates to shift their mindsets from

opportunities which include, but are not limited to,

compliance and short-term cost savings, but to rather

increased competitiveness and innovation, continuous

focus on the bigger picture. Through intentional and

improvement and customer satisfaction, as well

well thought through ESD programmes, companies

as showcasing their commitment to South Africa's

can in fact enjoy an enormous positive impact on

economic growth and driving much needed job

their bottom-lines.

creation. The success of any ESD programme will be The government has recognized the role that

dependent on the attitude and leadership of the

corporates can play and aims to support B-BBEE

executives. It is crucial that the programmes have

policy by encouraging businesses to strengthen

the backing and support of the top echelons of the

the ESD element of the codes. To this end, they

company. Securing the buy-in of the personnel

have made available a grant called the Strategic

responsible for implementation is also key, and to

Development of a large South African corporate

Partnership Programme (SPP), which is administered

this end procurement teams should be incentivised to

and though our discussion covered a broad range

by the Department of Trade, I ndustry and

develop suppliers and ESD needs to be an integral

of issues, what resonated with me the most was

Competition (DTIC). The programme's objective is to

part of their KPls. Providing crucial business support

their refreshingly different attitude towards ESD. She

support large private sector companies in developing

is also important, as many SMEs struggle with issues

explained how they do not view ESD as merely a

and nurturing SM Es within their supply chain. The

such as access to funding and technical expertise.

compliance issue but rather as a way to make a real

incentive is a cost-sharing grant and is available for

I recently met with the head of Enterprise

Government is also making efforts to address the issue of funding faced by most SM Es, by making available a blended finance product through the Small Enterprise Finance Agency (SEFA), which will assist them in acquiring plant and machinery as well

''

as other development services.

This shift in mindsets and concerted effort by Corporate South Africa will, with time, bring about the de(Jelopment and change that is desperately needed and that we can all be proud of

40

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www.cova-advisory.co.za I info@cova-advisory.co.za I Tel: 011 568 3340 Magwa Crescent West, Maxwell Office Park, Building 1, Waterfall City, Midrand

The trusted advisor on government programmes

C

COVA ADVISORY

• Trade Agreement advisory (including Rules of Origin) • Rebate compliance

Energy and Carbon advisory services Cova is i deally placed to help companies t o understand the challenges related to going green,

o v a A dv i s o r y is a 51 % b l a c k o w n e d

• Jobs Fund

company with a specific focus o n government

• Suppor t Programme for Industrial Innovation

p ro g rammes includi n g grants and t ax

• Section 11 D Tax Allowance Incentive (for

incentives and is a proud member of the South African Supplier Diversity Council.

research and development) • Strategic Partnership Programme

and to reap the rewards of adopting a green strategy.

Accreditation: Cova Advisory is one of only 7 active inspection bodies authorised by the South African National Accreditation System (SANAS) to measure and

Cova has positioned itself as an independent

Cova offers a comprehensive service to companies

advisor on m a t t e r s ranging from Customs and

on the grants and incentives offered by the South

professionals to do this inspection work in energy

E x cise, Carbon and E n e r g y s t r a t e gy, g r ee n

African government to various sectors. This includes

Measurement and Verification (M&V) professionals

related funds, Carbon Tax a n d carbon policies,

the assessment of projects to determine the best

to do this inspection work.

and renewable energy. Cova has set up a strong

support scheme(s) available and assistance with the

local network within the private and government

preparation of applications, liaison with government

sectors. To offer a comprehensive service our team

a gencies and the vital follow-up on successful

is made up of engineers, accountants and lawyers.

applications to ensure all criteria for sustained support are met.

What we do Cova A dvisory has unrivalled expertise in 4 key

Business advisors on Customs matters

areas:

Cova plays an integral role in facilitating inward

• Providing advice on tax incentives and government grants, such as those offered

and outward investment by providing Customs and Excise advisory services to companies operating in

under the Black Industrialists Scheme and

various sectors. Our aim is to assist companies with

Strategic Partnership Programme and finance

navigating their way through the process of entering

raising which the South African Government has

new markets as well as mitigating Customs and

on offer for new projects.

Excise risks and ensuring compliance.

• Providing advice on the green landscape and government measures to encourage firms to become more energy efficient. • Customs and Excise advisory work. • Corporate finance advisory and finance raising.

Incentive advisory services Some of the incentives available to South African enterprises include: • Agro-Processing Suppor t Scheme • Automotive Investment Scheme

Our Customs and Excise services include: • Registrations with the International Trade Administrations Commission of South Africa (ITAC). • Customs dispute resolution • Customs valuation opinions • Customs registrations • Stage consignment rulings • SARS preferred trader programme

verify energy savings. Our team comprises cer tified

Our energy advisory services include: • Measurement and Verification services for the Section 121 and Section 12L Tax Allowance Incentives. • Energy audits. • Drafting of energy management plans. • Carbon related services including carbon emissions reporting and carbon policy assistance. • Carbon Tax advisory, including Carbon Tax calculations and Carbon Tax registration with government. • Carbon offset advisory.

Corporate Finance advisory Cova A dvisory can assi s t companies in the automotive sector with raising a mix of development finance and commercial funding (debt and equity) through a process of: • Opportunity assessments: Assessing the availability of development and commercial funding. • Funding strategy and deal structuring:

• Black Industrialists Scheme

• IDZ / SEZ advisory

Structuring the opportunity, project or business to

• Critical Infrastructure Programme

• Tariff opinion

access the available funding. • Project preparation (if required): Drafting business plans and compiling the associated financial models. • Raising funding: Preparing the marketing documents (pitch decks), sourcing, managing and driving negotiations with funders through to closure.

c� oov1sor8 TM

your sustarnbke serv,::e prcMder

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41


THOUGHT LEADERSHIP ARTICLE

7 TIPS FROM WOMEN LEADERS IN SUPPLIER DEVELOPMENT

Women need to raise each other up and channel the power ofcollaboration to amp lify success and imp act "Women play a vital role in achieving sustainable development through promoting gender equality and wom e n's emp owerm e n t , we of ten stand at the front line

Seyuba Kombe, head, enterprise and supplier

of women who have come before us, raise each

expert in the EU-funded Ecosystem Development

other up and channel the power of collaboration to

for Small Enterprise programme; and Sekai

amplify success and impact.

Chiwandamira, regional chapter manager of Aspen Network of Development Entrepreneurs (ANDE) SA.

communities," said Cecilia Njenga, head of the UN environment office in SA during a panel discussion considering supporting the livelihoods of women in supplier development programmes. The discussion was hosted as part of the Absa Business Day Supplier Development Dialogue Series on August 11 2020, presented by Fetola, Cold Press Media and Arena Holdings. "Traditionally we have been taught to be competitive with one another, in a man's world. That strategy doesn't work," said Fetola CEO Catherine Wijnberg, who chaired the women-led panel comprising Mamoroke Lehobye, MD of MyCFO; Mishinga

42

WWW.SDAWARDS.CO.ZA

Whether you are a corporate running a programme, an enterprise and supplier development (ESD) service

in terms of poverty, yet provide invaluable contributions to sustaining

They agreed that we need to stand on the shoulders

development at Pick n Pay; Tamiko Sher, senior

provider, a woman entrepreneur or beneficiary of a programme, here are seven fabulous tips

'' For many years, I

was not in favour of not promoting women-led businesses, but now that I look more deeply, it's evident that women run businesses in a way that has deeper and longer term impact in communities. The change women can bring about, especially in our informal economies, is immense - Catherine W-jjnberg, CEO ofFetola

from women leaders in the supplier development ecosystem realise our unique strengths to transform and enhance the ESD ecosystem:

1.

REVERSE THE STEREOTYPE THAT WOMEN DON'T SUPPORT OTHER WOMEN Research shows women in particular benefit from collaboration over competition, and women who support one another are more successful in business. Be conscious and tackle the cultural and systemic hurdles that make it harder for you to advance, such as unconscious bias. Overcoming these hurdles is to form close connections with other women, who can share experiences from women who have been there, done that.


;.-

2.

FIND YOUR VOICE

5.

Unashamedly self-promote, bringing your talents to the table, but also know your

To sustainably participate in building needs­

limitations. Know what you can do best and

based solutions for yourself and other

look outward for collaboration opportunities

businesses.

to amplify your efforts.

3.

PRIORITISE RELATIONSHIP-BUILDING

6.

are mutually beneficial to both parties, in

those experiencing similar hurdles; draw on

wealth, closing the economic gender gap,

people who understand your space - to get

and establishing generational legacies.

the support, guidance and mutual learning

CONNECT OPPORTUNITIES Whenever one of us comes across a great opportunity, whether it be around market

''

We are being given the opportunity to stitch a new garment: one thatfits all humanity and nature, one that betterfits women in this post­ Corid recovery period. " - CeciliaNjenga, Head ofthe UN Environmental Office in South Africa

particular when creating value, building

each other as mentors and sponsors; and find

you need.

HAVE A SHARED DEFINITION OF SUCCESS Ensure that the benefits of ESD programmes

Form circles of trust with one another and with

4.

UNDERSTAND YOUR VALUE CHAIN

7.

BE KIND Cut yourself and others some slack and remember that as women we have the gift of gentleness.

access, funding opportunities or linkages to leverage network capital, we immediately need to share it with one another.

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2020 WINNERS

[ WINNERS ]

Now in its third year, the Absa Business Day Supplier Development Awards celebrate businesses that are contributing to the growth and transformation of the economy through meaningful Supplier Development, building a better South Africa for all. The judges were searching for businesses that position Supplier Development as a long-term strategic priority and driver of transformation and competitive advantage, that direct Supplier Development from the C-Suite, that embrace innovation and collaboration and strive to make a lasting impact.

Absa Business Day Supplier Development Awards

NEWCOMER AWARD

Winner: V&A Waterfront - Joy from Africa to the World Programme

Sponsored by Absa Acknowledging companies that have recently initiated a new strategic Supplier Development programme or project and show merit in design thinking, innovation and commitment to growth. The V&A Waterfront is an iconic destination located in the oldest, working harbour in the Southern Hemisphere. This 123-hectare, mixed-use development comprises residential and commercial property, hotels, retail districts, and extensive dining - to leisure and entertainment facilities. It is also the operator of the newly upgraded Cape Town Cruise Terminal.

The judges were impressed with • how the V&A embedded the concept of shared value in their operating model, showing brand commitment beyond simply making a profit • their dedication to creating jobs,

The V&A Waterfront, which has over 250 SMME tenants and about 300 SMME suppliers, place huge emphasis on Supplier Development that plays a role in harnessing entrepreneurship and in creating employment. The V&A Waterfront has re-imagined the festive season into a celebration of local talent and environmental sustainability. Themed, Joy from Africa to the World, the V&A is representing an experience aligned to its purpose to collectively create the world’s most inspiring waterfront neighbourhood. They have partnered with over 140 artisans to create a vibrant wonderland made from craft, design and upcycled materials. In doing so, they aim to tell a uniquely African story that’s joyful, inspiring and shows what an African festive season is all about. They actively partnered with a number of industry stakeholders such as The Craft & Design Institute and Music Exchange, PWC and the Western Cape Department of Economic Development and Tourism who provided skills and enterprise development support and supported them in the creation and curation of the Festive showcase. Boasting, in its first year, a spend of R336 million on small suppliers representing 38% of their overall total procurement spend, an average spend of R1,1 million per small supplier.

supporting and integrating many smaller suppliers into every level of the supply chain and boosting the local ‘making’ economy • their collaborative approach to working with various ecosystem players to deliver a unique programme • how the V&A are leveraging the suppliers’ ecosystem and promoting market access beyond the retail precinct itself The V&A is well placed to use its influence and footprint to build a socially inclusive business that invests in local communities and leverages its own assets and resources to create new opportunities for the economically excluded. It’s because of this inspired, well-developed thinking that the judges felt confident that in years to come this programme will

> Runner-up: Goodyear 46

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thrive and deliver!


[ WINNERS ]

IMPACT AWARD In partnership with Business Day Acknowledging the company whose Supplier Development initiatives have been shown to substantially impact the value chain, provide evidence of return on investment and scale of impact.

Winner: Tiger Brands Tiger Brands is a leading, branded FMCG company. It is one of the largest food manufacturers and leading marketers of FMCG products in Africa and a Top 40, JSElisted company with leading brands in the food, beverages, personal care and home care categories. At Tiger Brands, Enterprise and Supplier Development is embedded in the corporate strategy of the company whose objective is to be the leading food manufacturer, driving supply chain transformation, impactful development and support of commercially sustainable black-owned enterprises in the food supply and distribution chain. Tiger Brands only set up an ESD Division in April 2018 and has since finalised an ESD Strategy that embeds (1) unlocking procurement for black-owned enterprises, (2) developing support instruments that enable building of operational and financial capacity of black businesses, (3) driving meaningful participation of black-owned farmers into agricultural supply chain, and (4) building and strengthening distribution capabilities of black distributors to drive distribution of Tiger Brands products into new markets. They have initiated a Market Access programme which supports the Tiger Brands sourcing team by providing a channel to source goods and services from black-owned, small enterprises and boast more than R150m worth of contracts to small, black businesses in 18 months since the approval of the strategy. They recently rolled out a Smallholder Farmer Development programme that champions supporting more than 50 emerging, black farmers by integrating them into Tiger Brands supply and value chain, provision of technical and business skills, and access to funding with their R100m ESD Fund. They currently spend R1,8bn on small suppliers, representing 8,5% of their overall total procurement spend, supporting 127 businesses with an average size turnover of R1 000 000.

The judges were particularly impressed with:

1. how Tiger Brands articulated and provided evidence of the impact of this new programme (including detailed results, a mature set of metrics of success and effective return on investment) 2. evidence of end-toend integration, the scale of impact and potential scalability of the model 3. how Tiger Brands use their extensive influence and sizeable position in the market to be the drivers of progress in opening of the economy to small suppliers, especially those in the Agri/ Agri-processing 4. their demonstration of how an SD programme with intention could impact across all areas of economic transformation, public-private collaboration, and nation building

YOUTH DEVELOPMENT AWARD For initiatives that are achieving exceptional results in supporting youth suppliers.

Winner: Distell In 2019/20, the focus of the Distell ESD team has been almost exclusively on helping to keep all their existing ESD beneficiaries in business and profitable. They continue to focus on the creation of healthy, symbiotic relationships, necessary for the economy to grow, and that speak to the authenticity of a brand that is committed to shared value. The judges felt that Distell particularly showed merit in their approach in transforming the youth target market through their rural development initiatives and in pushing the local manufacturing agenda quite strongly. They saw evidence of a strong, value chain focus â&#x20AC;&#x201C; on the customer-facing tavern side and farming side. Amongst others and notably, Distellâ&#x20AC;&#x2122;s Bansela Taverner Programme has 393 taverns enlisted, creating an estimated 197 jobs and their Green Up Recycling Programme boasts 124 Environmental Assistants/waste-pickers who are largely youth.

> Runner-up: Tiger Brands

> Runner-up: The Distell Group W W W.S DAWA RDS .CO. Z A

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[ WINNERS ]

RURAL AND TOWNSHIP DEVELOPMENT AWARD For initiatives that are achieving exceptional results in supporting rural and township-based suppliers.

BLACK WOMEN DEVELOPMENT AWARD Sponsored by Cold Press Media For initiatives that are achieving exceptional results in supporting black women suppliers.

Winner: the Empact Group With over 30 years of experience, the Empact Group specialise in providing quality food services and support solutions in catering, cleaning, hygiene, pest control and facilities management. The Empact Group aim to “Empact” the lives of people they touch in a world where just meeting expectations is not enough. They further believe that Supplier Development initiatives, if properly executed, can lead to meaningful business wins, in the short, medium and longer term. These wins could include any or a combination of: improved performance, reduced costs, increase in quality, innovation and establishment of best practice. Transformation is embedded in the strategy of Empact. At a programme level, they set milestones in place and measure themselves against the achievement of supplier demographic targets. They actively aim to increase the number of, and value of the business allocated to black women-owned suppliers in their supply chain. The approach is to explore, harness and complement the advantages and inherent qualities that women entrepreneurs bring to the table to mitigate the challenges experienced by them. The activities include access to resources (financial and other), market access opportunities and mentorship to help women to grow their businesses to the next level. The judges were impressed by their 30% of total procurement spend on SMMEs of which 39% is with black women-owned suppliers. They were also excited by the overall merit/ potential impact of the approach in transforming this target market and the demonstrated impact this program has had on womenowned business.

> Runner-up: V&A Waterfront

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Winner: SPAR Group Ltd for their SPAR Rural Hub programme The SPAR Rural Hub supports small-scale farmers and creates markets for their products. This contributes to job creation, income generation, infrastructure development, skills transfer and empowerment, while creating a food system that provides affordable, nutritious, fresh produce. Their first rural hub was established in 2016 with five small-scale farmers producing on 22 hectares of farmland. The rural hub has since expanded to 12 farmers and 122 ha of vegetable production. All participating small-scale farmers receive training covering all aspects of farm management and food safety, provided by an in-house team of qualified agronomists.

The judges felt that SPAR Rural Hub model was intentionally focused on rural community development and was different to other programmes in that it addresses a systemic issue such as food security. They were further impressed by • the demonstrated impact of the approach in transforming this target market – in a very impoverished sector of society • the focus on shortening the supply chain and developing suppliers of products in rural areas through a localised distribution platform • the implementation of local gap standards for small businesses • their collaboration with Food Lovers market (a competitor) for market access for emerging farmers As deserving winners of the Rural Award, the judges believe that the SPAR Rural Hub can be scaled and duplicated, and could impact across all areas of economic transformation in the long run, improving food security and contributing positively to health and wellbeing in rural communities across South Africa.

> Runner-up: Distell


[ WINNERS ]

SKILLS OF THE FUTURE (4IR) AWARD Sponsored by SoluGrowth For initiatives that are achieving exceptional results in supporting suppliers with cutting-edge, scarce, 4IR skills.

Winner: Unilever Unilever is a multinational corporation selling consumer goods including foods, beverages, cleaning agents and personal care products. Unilever are one of the few finalists who showed a strong focus on supply chain innovation, sustainability and implementing 4IR solutions for supply chains of the future and in meeting consumer and market demands. In particular, through their Isazi Farming Technology project, Unilever are providing technological solutions in the agriculture sector through the use of artificial intelligence and machine learning. If funded well, these solutions could be scalable and could contribute to further impacts in the agricultural sector. Unilever also uses an innovative, internal, online talent marketplace, which helps employees push the boundaries of their career by using an AI-powered platform to identify personalised, open opportunities across the business, in real time.

> Runner-up: Distell

SMALL SUPPLIER AWARD In partnership with Seda Acknowledging companies who have the exhibited innovation, leadership and authenticity in the promotion of small suppliers.

Winner: SAB Founded in 1895, The South African Breweries (Pty) Ltd (SAB) is part of AB Inbev, the world’s biggest brewer with more than 400 brands and brewing interests around the world. SAB recognizes that one of the major hurdles for SMEs in South Africa is the ability to gain entry into big business and form part of their supply chains. This requires a symbiotic relationship with big business working alongside smaller suppliers. The SAB Accelerator was established to develop black-owned and black women-owned suppliers. The programme is geared towards fast-tracking participants’ growth, the programme employs ten highly-experienced business coaches and ten engineers, offering tailored, business and deep technical coaching to the participants. The desired impact is transforming of SAB’s supply chain in alignment with procurement targets, improving competitiveness and sustainability of SMEs to operate in an everchanging market and contributing towards the creation of jobs. SAB’s Supplier Development strategy has an end goal of developing enterprises and suppliers to maximise exports from South Africa and minimise imports. They currently spend R125 million in supporting small suppliers, comprising 100 businesses with an average size (turnover) of R12 million. The programmes specifically identify localization opportunities within SAB’s supply chain with 97% of their ingredients sourced locally. Building on their MAP to encourage wider access to markets rather than dependency on the SAB markets alone will further increase the long-term impact within the suppliers. The judges were particularly impressed by SAB’s • highly collaborative, mature approach based on a value chain perspective • leadership and authenticity in the promotion of small suppliers in the “entrepreneurial ecosystem” • high level commitment to their 10 000 jobs target • integration of SAB Foundation efforts i.e. using social investment to spur innovation and multiple innovation models in their approach (accelerator, coaching, funding, digital, etc) • their deliberate strategy to protect the long-term success and profitability of small suppliers, especially in vulnerable, rural and women-led organisations over this post-Covid period

> Runner-up: Goodyear W W W.S DAWA RDS .CO. Z A

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[ WINNERS ]

LOCAL MANUFACTURING AWARD

Winner: V&A Waterfront

Acknowledging companies who have developed local South African manufacturers or value add services and products with import-substitution and/or export potential. The V&A Waterfront have taken a strategic decision to use their influence in the retail space to boost the local craft and creative industry through their various programmes and initiatives, most notably the Joy from Africa to the World Programme. They have successfully shown leadership in the ecosystem and built a socially inclusive business that invests in local communities and leverages its own assets and resources to create new opportunities for the economically excluded. Boasting, in its first year, a spend of R336 million on small suppliers representing 38% of their overall total procurement spend, an average spend of R1,1 million per small supplier, their collaborative approach to working with various ecosystem players to deliver a unique programme, tangible support to local makers and promotion of market access for them, locally and internationally make them worthy of this award.

COLLABORATION AWARD

Winner: Distell & Tiger Brands

In partnership with Fetola Acknowledging companies who have taken strategic action to develop industry relationships and foster cross-sector collaboration for the benefit of the wider ecosystem. The success of any SD model is based on building, supporting and forming strategic partnerships. This year, Distell and Tiger Brands clearly articulated and illustrated their long-term commitment to success, growing the ecosystem and to innovative cross-sector collaboration.

In particular, these companies both showed • clear intention to grow the ecosystem of independent, small suppliers beyond their own supply chain, equipping these suppliers for diversification, growth, and sustainability • support to the broader ESD ecosystem by providing platforms to improve accessibility to support and services • active engagement in ecosystem activities and dialogue to promote shared learning • dedicated financial support, investment and active partnerships with government to provide funding guarantee mechanisms As significant players in the South African economy we encourage Tiger Brands and Distell to continue to play a significant role in transformation and acceleration of the SME landscape to support our much-needed economic recovery and reignite growth.

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Highly Commended Finalists GOODYEAR Goodyear is one of the largest tyre manufacturing companies in the world, they started their manufacturing facility in South Africa in 1945 and, today, have a growing footprint in South Africa and Sub-Saharan Africa. They are also represented by two subsidiary companies in the country – the Hi-Q franchise, a trusted and awardwinning tyre fitment centre in South Africa, as well as TrenTyre, the #1 Service Provider for fleets. As a newcomer, Goodyear have been commended by the judges for the intentional strategy of developing a few suppliers but deeply integrating them into the supply chain and walking a journey with them that derives mutual benefit and impact. They put a strong emphasis on customer base diversification for its suppliers to ensure sustainability beyond the Goodyear supply chain. Even though this is a newcomer, this brought a different spirit compared to all applicants seen, they have potential to make sustainable impact. With rigorous metrics for reporting, transparency in showing results and very clear targets for growth, they may be strong contender in the Impact Category in 2021!

We would also like to commend the other finalists in the Absa Business Day Supplier Development Awards - Envirosev, PetroSA and Sasol who have all shown leadership and commitment to building an economic and social ecosystem where small businesses and large corporates work together and thrive. Find out more, go to www.sdawards. co.za Contact 086 111 1690 info@sdawards.co.za!


[ WINNERS ]

Sponsored by: Absa

2020 WINNER

This ultimate Supplier Development award acknowledges businesses that stand out as overall leaders in the Supplier Development arena.

The SPAR Group Ltd With buy-in from a CEO level, management and a dedicated in-house team, the SPAR Group Ltd demonstrates visible commitment to deliver their Supplier Development transformation goals and targets, supporting their vision to be the first-choice brand in the communities they serve. SPAR’s purposedriven strategy addresses real South African challenges such as food security, nutrition, job creation and transformation. Their SPAR Rural Hub model (a collaboration between small-scale farmers, suppliers, communities and SPAR stores) creates opportunities and shared value, and positively contributes to societal change, which enables SPAR to remain true to their purpose: to inspire people to do and be more. SPAR’s programme and results boast a total programme value of R 11 323 000.00

and procurement spend of R 4,6 million with small suppliers. The judges were particularly impressed by: • their recognition of the transformative potential of ‘Purpose’ and effort to position it within the company and operating model to achieve greater integration • their genuine interest in promoting suppliers backed by tough investments to this end • the evidence of suppliers assisting in market access and their willingness to develop suppliers who work with their competitors • the authenticity and innovative nature of the SPAR Rural Hub model which shows merit and impact on the ground in transforming rural, farming

communities • their effort in addressing barriers to growth, especially for export markets, helping their small-scale suppliers become GlobalGAP accredited • their commitment to collaborative action through the partnerships formed • their evidence presented in support of long-term Supplier Development success -with the outcomes, outputs and results of their programme SPAR Group Ltd are actively pursuing higher levels of innovation, efficiency opportunities and value partnerships, and thus are deserved winners of the title of Overall Winner. We look forward to seeing this initiative grow and scale nationally, and toward bolder investment in this initiative in the future!

> Runners-up: The Distell Group The Distell Group is South Africa and Africa’s leading producer and marketer of wines, spirits, ciders and other readyto-drink (RTD) beverages sold across the world

Distell have a well-developed and professionally implemented ESD strategy that is supported at the highest level in Exco. This commitment is backed by investment in financial, non-financial and market opportunities. Investment in longterm opportunities, such as farming ventures, shows that Distell see ESD as part of their long-term competitive advantage and can be applauded for this forward-thinking approach, especially in the agricultural sector which is widely considered to be un-transformed. The judges were impressed by Distell’s programme

and results which boast a 23% of overall procurement spend on small suppliers to the value of R1,8 bn. This entry demonstrated a SD programme that impacts across all areas of economic transformation and publicprivate collaboration. Their commitment to supporting the lasting success of their suppliers in these Covid times is especially noted and acknowledged. The creation of healthy symbiotic relationships such as this are necessary for the economy to grow and speak to the authenticity of a brand that is committed to shared value.

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THOUGHT LEADERSHIP ARTICLE

HOW CORPORATES CAN SUPPORT SMES IN RURAL AREAS

AND BRING THEM INTO THEIR SUPPLY CHAINS By Renico Theron, Director - Tr ioplus Development

Supplier Development is not a point­ scoring exercise, but a valid method

to stimulate economic growth and development to small b lack-owned businesses.

Corporate institutions that intend to establish an

• The cost implications of repaying an asset

supplier invoice at completion and could even

tool or piece of equipment, is substantial.

mitigate some delays linked to delivery.

• These factors impact price and, if the lowest rate

Provide feedback to the small business and allow

of a service or product is the primary determining

them to improve on their service offering. A short

factor, you will not have equal participation.

meeting with a small business owner to indicate

• Unique scopes of work may require a higher level

effective Supplier Development Programme need

of skill and experience, the risks of which should

to consider the unique challenges experienced by

not be ignored. In these cases, work adjudication

SMEs. ReAecting over the past ten years, one can

needs to align with the specific requirements.

identify some key attributes of existing supplier relationships that present barriers to entry for SMEs:

These factors significantly lower the success probability of Supplier Development programmes in

• The substantial buying power and market access

rural areas of South Africa.

that established entities have developed over several years, small emerging SME's cannot

In every supply chain, there are, however, low to

compete at the same cost level.

medium risk opportunities. A successful Supplier Development programme looks to ringfence some

• Established businesses have built strong supplier

of these opportunities for small emerging businesses.

relationships and in effect, receive discounted prices for their loyalty and sizable procurement

Allow a small business to fairly compete with other

over the years.

small businesses.

• Established suppliers have numerous clients

While this approach will lead to a higher price for

that they render services or products to, which

goods and services, it will allow SMEs to access a

provides a platform where costs may be driven

supply chain and prove themselves; thereby adding

down or shared between projects.

to to their limited list of references and taking a step closer to becoming a credible business.

• Skilled permanent workers employed in large

52

organisations cost the company much less than

Cashflow is one of the most significant hurdles

the hourly or daily rate associated with recruiting

small businesses have to overcome. Once work

a skilled freelance worker for a particular short­

commences, look to provide project funding to

term service.

address core costs of implementation or service

WWW.SDAWARDS.CO.ZA

delivery. These funds can be deducted from the

financed over several years, and renting a similar

success areas, and where improvement is necessary, will alter the outcome of the next opportunity the small business receives. One needs to look at the SME from a developmental and not only a service delivery or outcome-based perspective. Assist SMEs that are compliant and have long term contracts to acquire assets to increase their productivity and profitability. Providing interest­ free loans over the period linked to their contract term is typically an efficient asset financing model. Repayment for assets can be deducted from monthly invoices or contracted amounts. Incorporating these aspects into a meaningful Supplier Development programme allows for skills growth, economic opportunities, and asset growth.


I

I

TRIOPLUS DEVELOPMENT

www.trioplus.co.za info@trioplus.co.za Tel: 053 833 2036 Offices in Limpopo, Mpumalanga, Freestate, Northern Cape, Western Cape and Gauteng

TRIOPLUS DEVELOPMENT Developing people and communities through skills training, mentorship and entrepreneurial incubation This methodology is the combination of business

Secondly businesses that are already part of a large

mentoring and support, across sectors, provinces,

Corporate Supply Chain.

income groups racial, gender, language, culture, ·--·································--

and creed profiles. Underpinning all the above, TrioPlus Development

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prides itself, its products, and services on the emphasis of development of human relationships - between company and client, company and enterprise, and between company and community.

OVERVIEW TrioPlus Development is a nationally recognised Enterprise and Human Capital Development company with a strong locus on developing people

TrioPlus classifies two key categories within its Supplier Development Programmes:

and communities through skills training, mentorship, and entrepreneurial incubation within all regions of South Africa. The business was established in 2012 with the amalgamation of three strategically aligned business consulting companies. The merger was on basis of thirty-live years collective experience in individual and business development.

potential. The supplier orientated and readiness

(SOAR) Programme has been developed to allow alignment with the requirements of a Supply Chain and prepare the entrepreneur for the compliance, adherence, and operational efficiency expectations.

A structured mentorship and related training

(SMART) Program is used assess all the facets of a business and compile a final report to provide a clear understanding of the entity's operational classification level, business development gaps and technical

When the developmental gaps within an organisation are clear, a staged developmental plan can be implemented to assist the entity with advancing to a greater level of credibility and sustainability. This process aims to connect small businesses to allow for greater opportunity participation within the Supply Chain.

Key to this journey is the completion of a two stage Business Assessment to assess attributes, skill level

The programme time frame will be linked to the

and business acumen of any Supplier development

assessment outcome of each business. Gaps will be

candidate. The second stage comprises of a technical

evaluated, and Key Performance Indicators drafted

consultation with an industry expert. This programme addresses key aspects that was Part of this process is focused to develop and

found lacking in several active vendors and

empower Entrepreneurs and their enterprises in

subsequently hindering their growth. By addressing

becoming key to any Supply Chain and successfully

these matters prior to entering the supply chain

delivering on requirements from End-Users while

process several shortfalls are minimised and result in

growing a sustainable business.

an improved vendor profile.

@TrioPlusD

SM ME

larger organizational supply chain requirements and

methodology of developing an Entrepreneur

0

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development needs.

holistically to achieve a greater level of sustainability.

TrioPlus Development

·..._

The first is businesses with Supply Chain entrance

We approach Supplier Development with a

0

�l��n-

to measure the implementation and success of the development. Generally, this programme lasts 6 12 months, but could be expanded due to growth factors.

• TrioPlus Development

WWW.SDAWAR0S.CO.ZA

55


THOUGHT LEADERSHIP ARTICLE

PSYCHOLOGICAL CAPITAL INVESTMENT FOR BETTER SUPPLIER SUSTAINABILITY By Doli Mbambo, Corporate Services Manager, Agribusiness Development Agency - KZN

It i s n o w more than ever that businesses need to amplify its efforts towards strengthening their supplier development programmes. As we are hit by the overwhelming reality of living with the new normal due to the Covid-19 pandemic that transformed the way we do things into more digital practices, thought leadership and flexibility is key. Amongst other areas businesses need to intensively invest in psychological cap ital amongst their teams that drive supplier development programmes s o as t o stay co mp e t ent and sustainable.

This can be achieved by replacing your team's

behavioural understanding to enable all stake­

"supplier" mind-set with a "supply-partner" -coach

holders to generate the most value. One such

mentality, emphasizing the importance of total cost

perspective is to enhance and embrace the concept

of ownership, supplier performance, and growing

of psychological capital in business.

and nurturing supplier relationships. Reward your team for how many suppliers they develop, not just for finding the most inexpensive sourcing options. Supplier development is closely related to supplier relationship management and is the process of working with certain suppliers on a one-to-one basis to improve their performance for the benefit of the procuring organization. To achieve this supplier partner mentality, organisations need to invest in psychological capital internally with an outcome orientation, achievement, as opposed to what they are likely to achieve without, positive psychological as a foundation. The lour psychological resources represent what an individual is; and particularly highlight the strengths rather than weaknesses of the person.

When talking about psychological capital one refers to lour constructs, there may as well be more, however from a positive psychology perspective we talk of sell-efficacy, resilience, hope and optimism. This means the organisation who has the capacity to develop suppliers must psychological capital to engage in such a journey with the one that requires development. Conversely the one who required to be developed has to have a level of psychological capital to embark on such a journey of guidance, correction and direction.

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WWW.SDAWARDS.CO.ZA

Psychological capital is generally related to positive work attitudes, high performance and wellbeing in work situations. In addition, the ability to understand oneself and others is relevant for business leadership, resilience during unprecedented business times, customer h andling, n e t w o r king, t e a mw ork, negotiation and conflict handling. Businesses need to proactively champion supplier development programmes at a more commerce-

'' Psychological capital

is generally related to positive work attitudes, high performance and wellbeing in work situations.


www.ada-kzn.co.za I info@ada-kzn.co.za I Tel: 033 347 8600 5 Cascades Crescent, Cascades Office Park, Montrose, Pietermaritzburg, KwaZulu-Natal, 3202

AGRIBUSINESS DEVELOPMENT AGENCY

Promoting diverse, deracialised, prosperous and sustainable agri­ business sector in KwaZulu-Natal

Promoting Agribusiness through Partnerships & Knowledge

Mcfair Holdings is a

high-tech, undercover farming

operation

located at t h e D u b e

AgriZone. The business is owned by KwaZulu­ Natal born youth couple.

Mcfair Holdings operates in a 4ha greenhouse

farming facility and specializes in commercial high­

quality green, yellow, red peppers and also grows

tomatoes. Farming operations started within the Dube

Trade Port Special Economic Zone in May 2019. The intervention from ADA has enabled the business

to increase production, access better markets, and reduce time in processing through efficiency in the

operations through the forklift as well as the grading

machine and scissors chair trolley. The business

supplies directly Pick n Pay and Woolworths food

as well as various other intermediary fresh produce

and logistics operators. Employment opportunities

increased from 30 to 45 employees including

The Agribusiness Development Agency (ADA) is a

Financial Resources and Administration

provincial public entity of the K ZN Department of

Include targeted development finance and

Agriculture and Rural Development (DARD). ADA

investments and ensures good administration.

internships.

is a vehicle that facilitates the growth of a strong, transformed, diversified, dynamic, competitive and

Agribusiness Facilitation and Enterprise

sustainable agribusiness industry in KwaZulu-Natal

Value Chain Development

focusing on projects that are catalytic in nature.

Creating an environment which is favourable for

Target Audience

to markets, innovation and technologies.

agribusiness entrepreneurs and connecting them

Commercial Farmers

Women in Agrbusiness

Youth Farmers and in Agribusiness

Distressed Farmers and Agribusinesses

Infrastructure Development This includes agribusiness capacity and systems development through the establishment of physical infrastructure and investment at the appropriate scale and time.

Emerging farmers and Agribusiness Startups

the farm in 2003 through

private purchase and initiated a dairy enterprise using his own funds. The ADA initiated its intervention to

develop the dairy farm by providing amongst other

things animal feed to mitigate against the impact of

drought, construction of a 20 point herringbone dairy

parlour with bulk tank room and Vet room, supply and

installation of milking equipment and construction of

current herd size of 160 cows. The improved dairy

has resulted in increased milking efficiency. This milk

Knowledge and Comprehensive

is supplied to Creighton dairies as input stock and is packaged and processed into various products for the

Capacity Building To enhance the knowledge base and capacity

retail market. The dairy farm now has 13 employees

who are milking cows, performing farm maintenance and general work.

of the agribusiness sector through training and leadership development.

Agribusiness Development Agency - KZN

KZN. Mr. Ngcobo /66} the farm owner, bought

The farm has started obtaining higher milk yields from the improved pastures and stock watering and has peaked at approximately 2 S00L per day under the

Development Agency provides services including:

0

Donnybrook, about 20 km outside of l x opo,

stock handling facilities and access road infrastructure,

For agribusiness support the Agribusiness

is a

dairy farm located in

G) kzn_ada

0

Agribusiness Development Agency-KZN ADA-KZN

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57


THOUGHT LEADERSHIP ARTICLE

7 LOW-COST SOLUTIONS TO BOLSTER EFFICIENCY, INNOVATION AND BUILD STRONGER SUPPLIER ECOSYSTEMS

Crippled, but not dead: managing supplier development in Covid times Covid- 19 has affected the global

economy and changed the business

landscape, and many businesses,

big and small, are str uggling to

survive. Is there a place for supplier

development in these dark times?

This question was debated by specialists Litha Kulla, Tiger Brands enterprise and supplier development director; Guy H ar ris, enterprise and supplier development specialist, and Vikesh Singh, SAB supplier development manager, during the Absa

Seven vital, low-cost solutions were

Price and payment: Corporates wishing to help

identified to bolster efficiency, foster

their supply chains to weather the Covid-19 storm

innovation and build stronger supplier

can do so by speeding up payments and easing

ecosystems in companies during these

trading terms. This is also an opportunity to review

challenging times:

the value chain ecosystem to identify where there is waste and reduce costs, for example, by supporting

Supplier resilience: Corporates can improve

collective procurement (for instance buyer groups),

supplier resilience by assisting them with access to

guaranteeing supply purchases and helping suppliers

broader market networks. This can be in the form of

bring down costs by assisting with re-engineering

simple introductions or more structured solutions such

services.

as the Market Access Platform (MAP) that creates win-win relationships between high-performing,

Actively communicate: Communication is

black-owned suppliers and cross-industry buyers.

one of the most effective and least costly solutions.

MAP is used by SAB, Total, KFC, General Electric,

Increase two-way communication with customers,

Coca-Cola Beverages SA and Macsteel.

suppliers, business partners and employees to build

Cold Press Media, and Arena Holdings.

Digital priorities: This is the time to find new

and small supplier expectations through open days,

Panellists agreed that while times were challenging,

solutions. Corporates that reach out and help small

meetings and mentorship. Listen and act on feedback

suppliers with digital transformation by improving

to build empathetic dialogue and effective solutions.

data access or reducing costs of technology through

Building authentic relationships will also enhance

training and software access, can significantly

long-term loyalty, which is the cornerstone of lasting

accelerate the rate of technology adoption in the

success.

Business Day Supplier Development Dialogue series hosted on June 10 2020, in partnership with Fetola,

supplier development presents an opportunity for strengthening ecosystems that will deliver long-term benefits to corporates and small suppliers.

understanding. Bridge the gulf between corporate

supply chain, improving inventory management and fast-tracking improvements in supply chain efficiency.

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M M M M

Think local: Given SA's wave of inequality that threatens society's humanity and our economic wellbeing, we are compelled to seek oppor tunities that retain value within SA. Companies that encourage innovation from within and support the success of these spin-off suppliers can build stronger local supplier bases. These local suppliers (including IT and software) can reduce exposure to exchange rate risks and build local employment. The government's support for a consolidated and effective strategy is needed here.

African outlook: African relationships also need nurturing, so look at sourcing from African

''

There is no doubt that enterprise and supplier development will play an even more critical role in driving economic revival in the aftermath ofthe Covid-19 crisis." - Vusi Fele, ChiefProcurement Officer at Absa

countries as well as marketing to them. We cannot drive development in a continent that is failing. The government plays a leading role in extending a welcome to our neighbours, lowering business barriers and encouraging cross-border collaboration.

Bring risk management into strategy: Anticipating a new normal, climate change impact and social disruption require a deliberate strategy to manage risk. Risk conversations need to part of strategic planning to adequately prepare for future

"At Absa, we believe that opening up opportunities for SMEs to access corporate supply and delivery chains is one for the most efficient and consistent ways in which established corporates can contribute to sustainable entrepreneurship development. This will be even more crucial in the post-Covid- 19 economic recovery environment. Both corporates and SMEs need to think about doing business differently to thrive in the new normal."

'' Now is the time to

be ultra effective in business and aim to do more for less. Supplier development in 2020 is about efficiencies built through communication and collaboration. This is not the time to 'go it alone' and save ourselves the cost ofour small suppliers, but the time to take big, bold decisions, to look inward at our own country, look outward as part ofAfrica, and accelerate our path to " recovery. - Catherine W-?Jnberg

shocks.

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www.macsteel.co.za I info@macsteel.co.za I Tel: 011 871 0000 7 Brook Road, Boksburg, Gauteng, South Africa

MACSTEEL

MACSTEEL

ABOUT MACSTEEL Macsteel Service Centres SA ( Macsteel} is Africa's leading manufacturer, merchandiser and distributor of steel and value-added steel products. The company has a proud South African history spanning 116 years. Macsteel has invested in six business units and operates from a strateg ic network of more than 40 service centres, branches and warehouses. The company supplies a range of carbon steel, stainless steel, specialty steels, aluminum products and value-added processes to all industry sectors to the entire Sub-Saharan geographic region.

[CASE STUDY] The Usizo Supplier Development Programme

not sufficient to operate his business.

SOLUTION AND BENEFIT The Usizo Supplier Development Programme offered Richard Ndwandwe credit to the value of R l 00K. The provision of this credit was made possible

OVERVIEW

through Macsteel's credit facility and has assisted

The Usizo Sup plier D evelop ment Programme

with priming Richard's business for future trading

is designed t o strengthen t he c a p a c i t y of

of larger orders. Through his business Richard has

manufacturing SMMEs in the steel industry by

created eight jobs and has the capacity to handle 20

offering sustainable solutions to overcome their

tons of steel a day. He's expanded his business, now

operational limitations. In addition, the programme

boasting two branches; with the main branch based

promotes gender and racial equalities as well as

in Richards Bay and the other branch in Matubatuba

empowering youth-owned small businesses.

in KwaZulu-Natal province.

CHALLENGE

SUCCESS STORY

Richard Ndwandwe resigned from his permanent employment as a branch manager for a steel company and decided to start his own business.

However, with no starting capital and no bank willing to finance his business vision due to lack of collateral, the situation seemed hopeless.11 11

Macsteel's Usizo programme spans nationally ac ross nine p r o v i n c es. Macsteel appointed ORT SA, a leading n on-pro fit education and training organisation as their inter medi a r y partner, t o assist i n fast tracking 2 2 non­ compliant Usizo customers, SMME's that did not meet the programmes minimum supplier referral criteria. The task was to mentor and coach Macsteel Usizo customers to reach compliance of above

However, with no starting capital and no bank willing

75%. Of these 22, 19 Gauteng SMME's

to finance his business vision due to lack of collateral,

received their certificates of compliance

the situation seemed hopeless. Adding another layer

at the Macsteel annual awards ceremony

of complexity was that Richard was making use of his

in February 2020.

personal bakkie and trailer for deliveries and this was

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Macsteel Service Centres SA

O

Macsteel Service Centres SA

Macsteel has a dedicated workforce, ensuring focus on product quality, combined with reliable service and competitive prices. The company supports the 'Proudly South African' principle and recognizes that transformation is critical to the Future success of South Africa, all its citizens and the businesses which operate within the country. As part of its social initiative, Macsteel prides itself on their Skills Development Training initiatives to continuously improve career opportunities assisting Macsteel to meet their employee equity plan. In recent years, Macsteel's investment of more

than hall a billion rand on warehousing and best in practice plant and equipment, bears testimony to their unwavering confidence in

the Future of the steel industry in South Africa

and Africa as a whole.


Profile for business_essentials

Absa Business Day Supplier Development Awards 2020  

The Absa Business Day Supplier Development Awards recognises and celebrates businesses committed to building thriving, inclusive and healthy...

Absa Business Day Supplier Development Awards 2020  

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