Tiger Brands expands its B-BBEE mandate to the logistics sector

By Litha Kutta, Director for Enterprise and Supplier Development

Tiger Brands is transforming its supply chain and supporting inclusive growth by developing and supporting nascent black- and female-owned SMMEs within the logistics sector as part of its enterprise development mandate.

In his State of the Nation address, President Cyril Ramaphosa outlined how the Economic Reconstruction and Recovery Plan aims to decrease our reliance on imports by 20% over the next five years and has the potential to stimulate local production and the economy to the tune of R200 billion annually.

South Africa imports around half of its grains to feed the nation. As the country’s largest food manufacturer Tiger Brands aims to minimise our national dependence on international grain growers by implementing a three to five-year R500 million programme to stimulate the local agriculture industry by supporting small-scale black and female farmers through its Smallholder Farmer Programme, as well as aggregators through its Agriculture Aggregator model. As of 2019, the company has supported black farmers to produce in excess of 20 000 tonnes of various grains, with the aim of targeting 100 000 tonnes as part of its Import Replacement Programme.

This increase in local production and the need to transport it across the country has seen Tiger Brands form long-term partnerships with dedicated yet independent logistics companies as part of its supplier value chain. Instead of outsourcing its increasing logistics requirements to already established third parties, Tiger Brands is fulfilling its enterprise development mandate by developing and supporting nascent SMMEs, whilst creating a reliable supply chain for itself.

“We are very deliberate in benefiting as many SMMEs as possible through our Enterprise and Supplier Development activities (ESD) Litha Kutta, Director for Enterprise and Supplier Development

which are vital to our business strategy to help transform more lives every day in all that we do,” says Litha Kutta, who is spearheading the project as Tiger Brands’ Enterprise and Supplier Development Director.

“During these tough economic times, SMMEs are helping to fuel job creation and drive socio-economic development more so than many other larger business operations. They also have the potential to develop muchneeded township economies and spread the wealth across many more players within the marketplace,” he continues. This is true globally. Seventy-two per cent of multinationals expect SMME providers to play an important role in their business five years from now, according to a recent Economist Intelligence Unit survey. Half of the executives surveyed say they would prioritise hiring SMMEs over large firms, if they could strengthen their value proposition.

As of May 2020, Tiger Brands onboarded seven SMME logistics companies – all of which are black-owned and four of which are black female-owned – for three year contracts with a minimum value of R60 million. These suppliers will service the company’s factories and depots along lucrative routes between Durban and Gauteng.

“Tiger Brands’ success relies on a mutually beneficial partnership with our SMME suppliers who represent a transformed supply chain that supports inclusive growth. We are only as good as our suppliers,” says Kutta.

“While many of these logistics companies have never serviced a corporate directly, but have rather been sub-contracted by other companies, we want them to grow their businesses alongside ours. Their success is our priority,” he continues.

Tiger Brands is playing its part by assisting these SMMEs in developing viable business proposals that will attract the right funders to help them expand their fleets.

During these tough economic times, SMMEs are helping to fuel job creation and drive socio-economic development