Absa Business Day Supplier Development Awards 2021

It is critical now more than ever for corporates in both the public and private sectors to use their supply chains to help develop and grow small suppliers, who are the real drivers of economic growth and job creation.

Vusi Fele |

Chief Procurement Officer, Absa Group Limited

That’s Africanacity. www.sdawards.co.za

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Procurement Marketplace.

A simplified, single platform for prospective suppliers to access our supply opportunities.

The portal allows prospective suppliers to: 1.

2.

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Access information about our services and product procurement needs Register their details to our procurement database Identify the procurement categories and services we are actively in the market for Check eligibility for the Absa Supplier Development Programme which provides training, mentoring, advisory, business support, and more.

Working to bridge the gap by providing responsible and inclusive procurement practices. That's Africanacity.

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Three ways to develop a supply chain in a sustainable manner Supporting entrepreneurship through corporate supply chains delivers material benefits to local economic development and transformation and is, therefore, good business.

Vusi Fele, chief procurement officer, Absa Group Limited, offers advice on how to build future-fit supply chains that drive company procurement priorities and advance sustainable and social business agendas.

W

hen a number of supply chain reports were released pre-COVID-19, business leaders listed risks such as data breaches, cybercrime, IT downtime and extreme weather conditions as their main concerns, of course, a global pandemic did not feature on anyone’s radar.

The World Bank claims that formal small, medium and micro enterprises (SMMEs) make up 40 per cent of gross domestic product (GDP) in emerging economies, and this number is significantly higher when informal SMMEs are factored in. Arguably, the key to a prosperous and sustainable future – with enhanced job creation – will be the SMME sector, particularly in Africa, and the role of major corporates in helping to guide, support, and shape this vital segment.

Ultimately, especially as we navigate a new and uncertain operating environment, the importance of supplier development (particularly in the current South African socioeconomic context) cannot be underestimated. But how exactly can we as corporates make it work?

Create (meaningful) opportunities Small businesses frequently lament their lack of access to credible domestic and international markets. Large corporations, especially those that spend billions annually procuring products and services, can use their procurement budgets to give SMMEs a much-needed boost. Opening up opportunities for these businesses to access prominent supply and delivery chains is one of the most efficient and consistent ways in which established corporates can contribute to sustainable entrepreneurship development.

Transfer knowledge Skills development and capacity building are fundamental to ongoing business success. Business development support, including assessments, training, mentoring, advisory and information, is also critical in enabling SMMEs to become stronger organisations of the future. When SMMEs interact with large corporates, they are compelled to make changes to increase efficiencies. Being part of corporate supply chains also improves access to information, driving technical proficiency and industry innovation.

Provide financial support where you can As a bank, not only has Absa designed innovative financing solutions for small businesses, but it also offers SMME suppliers in the bank’s supply chain cash flow finance at favourable interest rates, with no collateral required. In 2019 alone, Absa made available about R234-million in funding specifically for the benefit of SMMEs in South Africa that supply the organisation with goods and services.

Businesses in other sectors can look at streamlining payment processes to ensure suppliers get paid on time, provide complimentary testimonials and reviews to help with new leads, or simply recommend suppliers to others in the industry.

There is no doubt that supply chain leaders are building future-fit supply chains that drive company procurement priorities and advance sustainable and social business agendas, whilst simultaneously opening and strengthening the small supplier ecosystem.

This is no easy task, however, supporting entrepreneurship through corporate supply chains delivers material benefits to local economic development and transformation and is, therefore, good business.

The ongoing global crisis wrought by the pandemic has forced each of the supplier development value chain partners, the supply chain practitioners, the business strategists, and the economic development policy technocrats, to think and act differently, respond effectively, and build agile yet sustainable programmes going forward. SMMEs, equally, have a lot of soul searching to do to be cocreators of solutions and to remain relevant and participate constructively in rebuilding initiatives.

Editor’s Letter Dear Colleagues, Welcome to this year’s edition of the Absa Business Day Supplier Development Awards Publication.

The Absa Business Day Supplier Development Awards, hosted in partnership with Fetola, Cold Press Media and Arena Holdings recognise best practice and foster a collaborative ecosystem of people passionate about growing a thriving and inclusive economy.

This has been a tricky year for most of us as the COVID-19 pandemic has thrown the world a giant curveball, reminding us how interdependent we are and affecting vital cogs in the value chain. This disruption is being faced by suppliers and service providers that form the backbone of business in South Africa. As a country we need to work together with a focus on recovery and rebuilding of the economy while enabling inclusive economic growth, building solutions to bring back jobs to South Africa and maximising the value of our supply chains.

Supplier Development presents a golden opportunity to do just this and calls for a deliberate strategy to • f oster 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 fourth Absa Business Day Supplier Development Awards, this publication brings you thought leadership articles, details of finalists and winners with comments from the judges about what differentiates their programmes. It also provides access to a 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 support your growing Supplier Development needs.

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

INDEX

Catherine Wijnberg CEO Fetola

Taryn Westoby General Manager: Events Arena Holdings

16 18

The Spar Group

The power of collaboration as a national solution

Fetola

IT’S TIME FOR A CHANGE. Billions of Rands later, efforts to transform our economy and create jobs have failed. Now what?

Business Partners

SME financing 101: Knowing your options is key to survival

20

Henley Business School Africa

True radical economic transformation is about giving people opportunities

26

ABSA

Why the mining sector is so critical to African SME development

30

AECI

Enabling successful ESD through collaboration and ecosystems

40

ABSA

Entrepreneurship the answer to post Covid economic revival

44

Merchants SA

Rethinking The Future. New Ideas for Effective Supplier Development Programmes

46

Barloworld

Developing small businesses through supplier development can result in major economic change

48

Barloworld

Basadi Automotive’s Malakaone breaking barriers for women in the automotive industry

49

Barloworld

Mogau Wheel & Tyre Group addresses youth empowerment and poverty

49

GEMS

Developing Supplier Support Program

Wunderman Thompson

The marketing and communications sector – broadening the definition of transformation

50 52

Anglo American Zimele Loan Fund

Supply chain walks and local procurement moves for SMMEs

54

ABSA

SMMEs need policy support to enhance resilience

Fetola

YES, the circular economy is a business model worth investing in

56 58

Barloworld

Where to for supplier development in a world forever changed by COVID-19?

Enjoy the read!

Jennifer Potter Director Cold Press Media

of Thought Leaderships:

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COPYRIGHT: Published by Fetola and Cold Press Media (Pty) Ltd for Arena Holdings. Copyright Fetola and Cold Press Media 2021. 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.

Contents OVERVIEW

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PAGE

The 4th Annual Absa Business Day Supplier Development Awards 2021

32 PAGE

BENCHMARK REPORT 2021

Winners

Absa Business Day Supplier Development Awards

60 PAGE

Fetola: Founding partners and Technical Lead to Absa Business Day Supplier Development Awards

TOYOTA SA MOTORS

President Cyril Ramaphosa joins Toyota South Africa to celebrate Corolla Cross Toyota South Africa Motors (TSAM) hosted the President of the Republic of South Africa Cyril Ramaphosa at its manufacturing plant in Durban in October. The President – accompanied by a delegation of public officials, including the Minister of Trade, Industry and Competition Ebrahim Patel had joined Toyota in celebrating the opening of the Corolla Cross production line in Prospecton, KwaZulu-Natal.

TSAM’s newest production line further reaffirms the company’s investment commitment to the South African economy and the local automotive sector. Established

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some 60 years ago, Toyota in South Africa has grown significantly over the years and now manufactures Hilux, Fortuner, Corolla Quest and Hi-ace at its Prospecton Plant, while selected Hino and Dyna models are produced as SKD or semi-knocked-down assemblies.

In his remarks, President and CEO of TSAM Andrew Kirby noted: “If you tally up the investments we’ve made in this plant spanning the last five years – of which Corolla Cross accounts for R2.6 billion, we arrive at a cumulative figure of over R6.5 billion.

So, we are therefore committed to further

developing and strengthening our business in South Africa and making a difference in the country, our communities, our suppliers, dealers, customers and of course in own employee’s lives.”

The introduction of the Corolla Cross model has generated a total of 575 new jobs at the TSAM plant while over 1200 direct jobs were created in the component supply base.

Another significant focus during the project was to maximise the local content for this model. This resulted in the localisation of 621 parts with 56 local suppliers – 16 of which

www.toyota.co.za

According to Ramaphosa: “I had called upon Japanese carmakers to strengthen their investment in South Africa. A few months later at the second South Africa Investment Conference, Mr Andrew Kirby came up to stage to announce Toyota’s new investment (R2,6 billion)… I am particularly pleased to see that the announcement that was made has led to the creation of so many jobs – a total of 1 775 jobs made through the announcement of the investment [of the Corolla Cross production].”

Andrew Kirby, President and CEO of TSAM

The new Corolla Cross is based on the acclaimed Toyota New Global Architecture platform, or simply the TNGA platform. As of August 2021, 32 Toyota and Lexus models are using this platform and now account for approximately 70% of global Toyota sales. From a regional marketing perspective, the Corolla Cross is produced in both right- and left-hand drive variants and is also the first model to be produced en masse on the continent. It will be exported to more than 40 countries in Africa.

Why Hybrid is a Big Deal The introduction of hybrid technology in the Corolla Cross line has required altogether new assembly processes as well as vehicle testing systems, and these are now part of TSAM’s standard operating systems at the Prospecton Plant.

Toshimitsu Imai, General Manager Africa Support Division in Toyota Motor Corporation are Black-owned. TSAM has also onboarded five new Tier-1 suppliers (all Black-owned) and 12 new Tier-2/3 suppliers. The economic contribution with TSAM’s local suppliers for this project is over R1.4 billion per annum.

To mark the official opening of this significant event for TSAM, President Ramaphosa had initially officiated a ribbon-cutting ceremony – flanked by Andrew Kirby; Imai-san; Nigel Ward; Minister Patel and other regional public officials – before addressing a number of dignitaries and other stakeholders in the automotive industry in the company’s auditorium.

For the Toyota customer, hybrid technology has the obvious benefits of lower emissions and significantly reduced fuel consumption while reinforcing the overall driving performance – but for TSAM, the introduction of the low-emission Corolla Cross in hybrid guise is significant in that it’s integral to the company’s roadmap towards Carbon Neutrality.

The launch of South Africa’s first locallyproduced, volume Hybrid Electric Vehicle not only allows many more local customers the opportunity to accelerate their own change to green mobility far quicker than what was previously possible, but also establishes the building blocks for TSAM’s long-term sustainability as a globally competitive and relevant exporter. TSAM is committed to the adoption of New Energy Vehicles in the South African market and will keep pace with

the green regulations in our export markets such as the European Union and the United Kingdom.

Kirby adds that TSAM has set a “very ambitious” target of selling more Hybrid Corolla Cross models than traditional internal Combustion Engines (ICE) models by 2025. To put this into perspective, in 2020 the local industry only sold 324 New Energy Vehicles (155 of them being HEV, 77 PHEV and 92 BEV), and this year to-date, only 322 have been sold (169 of them being HEV, 46 PHEV and 107 BEV). Incidentally, most of these have been Lexus models.

“We plan to fundamentally change the NEV landscape in South Africa from a few hundred NEV’s a year to well over 10 000 units per year,” says Kirby. His sentiments are echoed

by Toshimitsu Imai, General Manager Africa Support Division in Toyota Motor Corporation and Chief Operating Officer at Toyota Tshusho Corporation: “We are trying our best to make a significant contribution to reduce carbon emissions. We are currently proposing hybrid technology for South Africa as it is important for local vehicles to have proper range or mileage.”

As a final step towards carbon neutrality, TSAM is investigating ways to eliminate or off-set the balance of its carbon emissions, especially those originating from the use of natural gas in its production processes. The company plans to invest over R2 billion to realise these goals in the next seven years.

“This isn’t just limited to reducing vehicle emissions; our activities span the entire value chain, which includes our suppliers, manufacturing facilities, offices, parts warehouse as well as our dealer network. For example, since 2006 we have reduced our total factory carbon emissions by 34%, improved our energy efficiency by 29% and already achieved carbon neutrality at our Hino Manufacturing Facilities and at some of our other office sites…

In fact, we are targeting to be 100% reliant on renewable energy by 2028,” explains Kirby.

• To watch the highlights of the Corolla Cross Line-Off Ceremony, please click here: Corolla Cross Line-off Ceremony - YouTube

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C R E AT E . C O N N E C T. C O L L A B O R AT E

Digitised events are an exciting avenue for brands to connect with their audience.

We live in a time where technology allows us to adapt, and we believe, now more than ever, in the importance of collaborating, creating and connecting.

We’ve embraced the digital events space and introduced a series of online events to create ongoing thought leadership opportunities for our partners.

To collaborate with us, contact Melissa de Agrela at deagrelam@arena.africa

www.arenaevents.africa

OVERVIEW

The 4th Annual Absa Business Day Supplier Development Awards 2021

By Margy Nicol, Fetola Project Lead

CELEBRATING BIG BUSINESS – DIGGING DEEP! The 4th Absa Business Day Supplier Development Awards 2021 celebrates companies that are working towards a better African Continent through innovative and impactful Supplier Development initiatives.

The Awards, sponsored by Absa, acknowledge and recognise corporates who go beyond the Scorecard to open access, empower SMEs, foster learning, build a community of best practice and encourage a collaborative spirit within their industries and within the communities in which they operate.

Presented in partnership with Fetola, Cold Press Media and Arena Holdings, this initiative is aimed at corporates, parastatals and government institutions with an annual turnover above R50 million, who implement Supplier Development programmes within their own supply chains and are positively impacting the landscape in Supplier Development.

Application Process In spite of the pandemic and riots this year, our nationwide call for applications was well received and met with 117 entries from a wide range of participants. A shortlist of 55 high calibre applicants who met all competition requirements and showed merit was narrowed down through a technical screening process, shaped by a specialist Advisory Panel.

Our Advisory Panel The Advisory Panelists play a pivotal role in shaping the Awards and their expertise helped shape and refine this year’s event. These key influencers in the Supplier Development and Sustainability space helped ensure that the 2021 Absa Business Day Supplier Development Awards continue to lead the sector. They include: • L oyd McFarlane Managing Director, GSA Campbell Consulting • Mamosa Majope, Managing Director, Wamobu Consulting • Sekai Chiwandamira, Regional Manager, ASPEN Network • Lisa Parkes, Deputy Director: Cape Catalyst, WC Government • Bridget Fury, Head, Oppenheimer Generations, Philanthropy

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[ T HO U G H T LE AD ER SHIP ARTIC L E ]

Judging Process

The Judges

The Awards focus on Supplier Development strategy, projects, initiatives and integrated plans that occur within the supply chain of the corporate/ government entity. Applicants go through an initial screening to pre-qualify, and then submit a comprehensive application. On careful review of submissions, 15 organizations who clearly demonstrated excellence “beyond the scorecard” were selected as finalists. These finalists were invited to present further information to substantiate their application and answer some hard-hitting questions to convince the judges that their programme had the winning edge.

The judges were selected based on their reputation, integrity and experience in the sector. Two judging panels deliberated over the pool of exceptional finalists. The four top scoring companies ended up ranking within only 4 points of one another.

Our panel of experienced and highly competent judges were looking for winners who: • demonstrate commitment to building a thriving, transformative and inclusive supply chain; • embrace Supplier Development as a strategic priority and driver of competitive advantage; • foster cross-sectoral and industry collaboration with diverse stakeholders; and • demonstrate a quantifiable impact through their commit to best practice in the ecosystem.

The method of allocating awards is based on the following parameters: 1. Awards are designed to ensure broad recognition while maintaining a fair process.

2. Judges aim to recognise transformative and inclusive supply chains by ensuring a wide distribution of awards to participants.

3. Applicants may receive a maximum of two first-placed awards.

4. Where an applicant receives two awards, these are based on their two strongest categories.

5. The limit to two first-placed awards per applicant is designed to create an open field for other applicants.

6. Where an applicant has received more than two first-placed awards, the third category award will go to the next strongest applicant in that category.

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[ OVE RVIEW ]

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Lead Judge / Adjudicator / Quality Assurance C Wijnberg – CEO Fetola, Founder Supplier Development Awards

Judges Group A: 1. Nosipho Khonkwane – Managing Director, LEAP Enterprise Development 2. Dr. Rethabile Melamu – General Manager, Green Economy, The Innovation Hub 3. Michal Pillay – Supplier Diversity, Absa Group Limited 4. Christian Kabongo; Enterprise Development Practitioner, IDC

Judges Group B: 1. Vusi Fele – Chief Procurement Officer, Absa Group Limited 2. Ajay Kanjee – Finance Director, Henley Business School Africa 3. Mamosa Motjope – Managing Director, Wamobu Consulting 4. Elmarie Goosen – Founder: Clinic with Purpose

Judges Special African Awards Judges Group C: 1. C Wijnberg – CEO Fetola, Founder Supplier Development Awards 2. Sekai Chiwandamira – Regional Chapter Manager, ANDE 3. David Mparutsa – Head Enterprise and Supplier Development Ex SA

[ T H OUGHT LE A DE RS HIP A RTICLE ]

Catherine Wijnberg

Vusi Fele

Specialist in radically scaling impact in the economy by building businesses that last. Enabling partnerships with business growth specialists to digital scale, affordable finance solutions and scalable success for youth, women and rural enterprise.

Prior to taking up the role as Chief Procurement Officer at Absa Group Limited, Vusi held executive and senior management positions with responsibilities for procurement at AngloGold Ashanti, Danone SA, Tiger Brands, South African Airways, Sasol and Ports Authority of South Africa.

Founder of Fetola (which means Changing Together in Sesotho) which is all about building businesses that last, as a means to drive inclusive economic growth, social well-being and job creation. Fetola have a 15 year track record in the development of sustainable and empowered small and medium enterprises (SMEs). To do this we actively foster industry-wide collaboration, build scalable partnerships and implement innovative and impact-driven solutions for small business success at scale. Our focus areas are rural & township economies, women and youth-led business and sustainability (specifically circular economy).

Nosipho Khonkwane The Managing Director of Leap Enterprise Development, a management consultancy focusing on supporting growth of SMMEs, Nosipho has over 20 years experience in business improvement and enterprise development.

Nosipho set up the Seda branch network, developing their Gauteng roll-out strategy and leveraging funding from various stakeholders.

She has developed national SMME delivery models and strategies such as the Seda technology programme strategy and implementation plan, policies and operating models, Seda technology programme ecosystem facilitation model, Incubation Governance and Management Development programme in partnership with the university of Pretoria and DTI, the digital hub model responding to the priorities of the 6th Administration of the current government leadership, Female in Tech programme (FEM-IN-TECH), national business incubation standard requirements with SABS and ecosystem partners, benchmarked incubation business models internationally and ensured continuous improvement of own programmes for impactful results. A Board member of various Not for Profit entities, EXCO, investment committees and Chair of fund adjudication panels.

Dr Rethabile Melamu Dr Rethabile Melamu is a dynamic and selfmotivated professional; she obtained her PhD in Chemical Engineering from the University of Cape Town. She is currently the General Manager for the Green Economy Unit at The Innovation Hub. Before that, she acted in the position of Chief Director: Sector and Industry Development in the Gauteng Department of Economic Development. She has more than a decade’s experience in the green economy sector, spanning renewable energy and waste management sectors. She has experience in developing public sector strategies, and has led the revision of the Gauteng Energy and Green Economy strategies. She has vast research experience in the technology innovation field as it pertains to critical elements that contribute to success of emerging technologies in a developing country context including enterprise development of clean tech start-ups. She was a finalist in the caterory of Outstanding Woman of the Year in the Power and Water category at the 2017 premium African Utility Awards. In 2019, Dr Melamu was honoured by Mail & Guardian as one of the Women Changing South Africa in the Politics and Government category. Dr Melamu sits on a number of Advisory Boards in the academia and enterprise developments sectors.

Vusi is an accomplished and multifaceted professional with more than 20 years of rich experience in delivering optimal results and business value in environments that demand cross functional leadership, influencing and managing in diverse cultures and nationalities, exceptional strategic and operational planning in global and regional executive roles from diverse industrial sectors including aviation, financial services, utilities, transportation, FMCG, mining, manufacturing and services.

He specializes in supply chain (logistics, strategic sourcing, supplier and enterprise development, supplier transformation and localisation strategies; responsible sourcing (human rights compliance in the supply chain and Third-Party risk management). Vusi chaired the procurement sub-committee of the Chamber of Mines in South Africa and led the development of an industry framework for Responsible Sourcing and common guiding principles for the mining industry.

Michal Pillay Michal Pillay currently presides in the role of Senior Manager Supplier Diversity at ABSA Group Limited.

Michal’s passion for improving supply chain and growth in the market stems from her various roles within Category Management at MTN, an African Continentally positioned telecommunications organisation. Her consistency in gaining knowledge and skillsets are evident in her tertiary achievements as a member of the Chartered Institute of Purchasing and Supply.. Michal’s transition to ABSA positioned her as SNR Category Manager in Marketing and Print in 2015. Her passion for development of supply chain initiatives was capitalised on by the institution. Michal’s vision for the growth of South African businesses and upliftment of employment are evident in the initiatives and guidance she provides for the changing environment in the South African Purchasing and Supply chain programmes. Michal’s frugal mannerisms and strategic approaches in her roles have seen the institutions gain in copious savings across supply chain. Michal’s skills and knowledge are comprehensively adopted by the organisation as she oversees and manages the ABSA supplier transformation processes since 2016. The strategic and professional mannerisms of Michal have aided and promoted many businesses in growth and development in her roles over 2 major corporations in Southern Africa. Michal Pillay conducts her professional life with a strong balance in her family life raising her four children with the same vigour and passion as she rises through the corporate world.

Christian Kabongo Christian Kabongo is a Project Manager at the Industrial Development Corporation of South Africa (IDC). Christian’s portfolio includes promotion of funding for Black Industrialists as well as localisation. Christian has been involved with matters pertaining to the African continent for his entire career through several research and capacity building programmes. Christian holds a BA in Political and Economic Sciences from the University of Johannesburg and an MBA from the Gordon Institute of Business Science (University of Pretoria).

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Ajay Kanjee Ajay Kanjee (45) is Henley Business School Africa’s finance director. A chartered accountant, he completed his articles at PKF accountants in Parktown, Johannesburg, after graduating with a BComm degree from Rhodes University in Makhanda.

He spent 20 years working as an internal auditor, financial manager and financial director at listed companies across a wide range of economic sectors; Tsogo Sun, Afrox, Mpact (Mondi Packaging), Orica Mining Services and Thales Southern Africa.

He is a member of the South African Institute of Chartered Accountants, and has also undergone training at the Institute of Directors.

Kanjee joined Henley Africa in March 2020 as finance director, heading up the finance division. He is part of the business school’s executive management team.

Mamosa Motjope Mamosa specializes in conducting due diligences for development finance institutions and private equity companies. Her focus has mainly been in the manufacturing sector. Mamosa is passionate about the development and sustainability of emerging businesses.

Elmarie Goosen Elmarie Goosen has spent the last 5 years training, coaching and mentoring small business owners across a range of industries.

Coming from a Procurement and Customer Experience background in corporate, Elmarie’s main focus was to help small business owners understand how to engage with corporate clients, how to build relationships, people do business with people after all, and how to stand out above the rest.

With over 20 years’ experience in corporate and 5 years in SME development Elmarie has a unique understanding of the needs of both the buyer and the vendor. She has made it her mission to help these two groups to work better together. Her unique understanding of both sides is educating Procurement professionals to cultivate empathy for the specific challenges SMEs face whilst helping SMEs to be better prepared for what the customer expects from them.

Elmarie has trained and mentored more than 2000 small businesses since she started her own consultancy 5 years ago, and is passionate about bringing a holistic development experience to small business owners and now focusses on connecting service providers that provide practical specialist support to small business owners.

Elmarie lived in England for 17 years and moved back to South Africa in 2014 where she works in English and braai in Afrikaans. She lives on a farm in Hartbeespoortdam with her husband and accomplice of the last 23 years, 6 cats, 2 dogs, 29 chickens (at the last count) and a hadida called Frik.

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African Judges Sekai Chiwandamira Sekai is the Regional Chapter Manager at the Aspen Network of Development Entrepreneurs (ANDE) South Africa. Her diverse international experience as a Mining Lawyer, Development Specialist and Business Development Manager includes technical assistance to finance institutions, small and growing businesses, multinational companies, investors, governments and non-governmental organizations across Sub-Sahara Africa.

Sekai is passionate about both youth and women empowerment and served in Sub-Saharan Africa as an advisor to the Global Steering Group (GSG) global working group (Informal Settlements – An Impact Capital Response), part of the Impact Investing South Africa (IISA) demand-side working group, working group for United Nations Development Program (UNDP) Micro, Small and Medium Enterprises (MSMEs) to raise their awareness of the Sustainable Development Goals (SDG) Impact Standards, member of the Ethekwini Economic Council Innovation workstream and advisor for the 4th annual ABSA business day supplier development awards.

David Mparutsa As Head of Enterprise & Supply Chain Development (ESD) for the Absa Regional Operations, David is responsible for defining and implementing the ESD strategy, which looks to leverage corporate partnerships to improve access to finance for suppliers in corporate value chains. This strategy has a particular focus on financing Small and Medium sized entities with corporate offtake agreements while also ensuring the SMEs develop adequate skills to manage and grow their businesses sustainably.

Prior to joining Absa, he worked on the Credit Hybrids Desk at JP Morgan in London. He also has experience in Audit and Consulting from PricewaterhouseCoopers and Academics from the University of the North West in South Africa where he lectured Accounting.

David is a qualified Chartered Accountant, holds a Bcom Honours (Accounting) Degree, a Post Graduate Diploma in Audit, and has recently completed a World Bank certification for Banking Executives through the George Washington University.

[ OVE RVIEW ]

Categories Winners were awarded in the following categories:

1. THE NEWCOMER AWARD Companies that have recently initiated a new strategic Supplier Development programme or project (less than 2 years) and show merit in design thinking, innovation and commitment to growth.

2. YOUTH FOCUS AWARD Initiatives that are achieving exceptional results in supporting the success of youth-led small suppliers.

3. WOMEN FOCUS AWARD Initiatives that are achieving exceptional results in supporting the success of womenowned small suppliers.

4. RURAL AND TOWNSHIP FOCUS AWARD Initiatives that are achieving exceptional results in supporting the success of Rural and Township-based small suppliers.

5. LOCALISATION AWARD Companies who have successfully supported local small suppliers that have notable importsubstitution and/or export market potential.

6. EMERGING TECHNOLOGY SUPPLIER Initiatives that are achieving exceptional results in supporting technology-related small suppliers or using technology as an effective tool to support small suppliers.

7. SMALL SUPPLIER AWARD Small suppliers nominated by their corporate SD partner that have excelled in accelerating their own and their client’s success.

8. OUTSTANDING GROWTH IN A SMALL SUPPLIER AWARD (SPECIAL AWARD) Small suppliers nominated by a corporate SD partner that have accelerated their own growth to an annual turnover of more than R50 million.

9. COVID-19 RECOVERY AWARD (SPECIAL 2021 AWARD) Companies who implemented innovative and impactful strategies to ensure Supplier Development resilience during the 2020/2021 Covid-19 pandemic.

10. COLLABORATION AWARD (SPECIAL AWARD) Companies who have taken strategic action to develop industry relationships and foster cross-sector collaboration for the benefit of the wider ecosystem.

11. I MPACT AWARD Companies whose Supplier Development initiatives have been shown to substantially impact the value chain and are able to provide evidence of scale of impact. (Judges Award)

12. O VERALL WINNER The company that stands out as overall leaders in Supplier Development in Africa.

(Judge’s Award)

African Awards:

Sharing the learning

This year, nominations were received for Pan African companies and four Recognition Awards were made by a special African Judges panel:

The Absa Business Day Supplier Development Awards are about more than recognition. The Awards showcase best practice and inspire and motivate corporates in Africa to collectively advance their Supplier Development initiatives through shared learning and collaboration.

1.

Commitment to economic empowerment across the supply chain

The judging process and the reasoning behind the final decisions are made public so that the lessons learned and best practice are shared.

In addition, all results are benchmarked for year-on-year comparison and collated in this annual report with a view to making visible and accessible the latest information on SD practices in South Africa and beyond.

2. Commitment to women inclusion in the supply chain 3. Commitment to localisation of the supply chain 4. Commitment to pioneering supplier development in Mozambique

Find out more: www.sdawards.co.za | info@sdawards.co.za

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SPAR RURAL HUB: HELPING SMALL-SCALE FARMERS TO GROW AND PROSPER Small-scale farmers face many challenges such as access to markets, funding and technical and business support and often find it difficult to meet the market compliance requirements.

SPAR embarked on the journey to develop and invest in small-scale farmer entrepreneurs in 2016, with the establishment of our first Rural Hub in Ofcolaco, in the Mopani District of Limpopo. This Rural Hub model is intentionally focused on rural community development and supports small-scale farmers by providing guaranteed markets for their products and by providing relevant technical and food safety training as well as facilitating access to funding. Initially five small-scale farmers joined the first Rural Hub and the numbers have gradually increased to fifteen farmers in 2021. The SPAR Rural Hub addresses real South African challenges, such as food security, food safety, nutrition, and job creation. We’re helping small-scale entrepreneurs to enter the formal retail world by equipping them with the skills and knowledge needed to get their ‘piece of the pie’.

SPAR’s commitment to the development of small-scale suppliers was recognised in 2020, when the SPAR Rural Hub became the overall winner of the ABSA Business Day Supplier Development Award as well as the ABSA Business Day Rural and Township Development Award 2020.

FOOD SAFETY AND SUSTAINABLITIY To SPAR, food safety is non-negotiable as we believe that everyone in the country has the right to safe food. It has been difficult in the past for small-scale producers to comply with the food safety requirements of retailers. However, through the SPAR customised localg.a.p Capacity Building Food Safety Programme, introduced in 2017, small-scale farmers have advanced through the three levels of SPAR localg.a.p, to full GLOBALG.A.P certification in 2020. Small-scale farmers have been able to grow through this capacity-building programme and are beginning to compete with commercial farmers when it comes to market access. Their road to full food safety accreditation is arguably the most significant aspect to the initiative, localg.a.p. – “A Stepping Stone to Safe and Sustainable Agriculture”. Our Rural Hub packaging facility is assessed in accordance with the GFSI Global Markets Program at Intermediate Level and received a letter of recognition in March 2021.

SPAR has also purchased several tractors and implements to enable our farmers to farm sustainably. Our Rural Hub has three refrigerated trucks to transport packed fresh produce to the markets.

REFOCUS ON HIGH-VALUE CROPS Initially designed to produce vegetables for direct sales into local SPAR stores, the Rural Hub initiative encouraged farmers to plant low-value vegetables such as cabbage and spinach to meet the demand of rural SPAR stores. However, it soon became clear that margins on these crops

were too low and it became difficult for our farmers to compete with already large-scale farmers who enjoy an economy of scale on such crops. As a result, in 2020, the focus shifted to the production of high-value produce such as speciality tomatoes, peppers and baby vegetables grown under the protection of tunnels and net houses, erected thanks to the assistance provided by First National Bank (FNB) and the TYALA IMPACT FUND PROPRIETARY LIMITED. These high-value vegetables are sent to our central DC’s in Gauteng and KwaZulu-Natal (KZN) and then distributed via SPAR's centralised distribution network.

GROWTH AND SCALABILITY The Rural Hub model is now tried and tested and ready to be scaled up.

We value our current partnerships with TYALA and FNB, without which the provision of much-needed farming infrastructure and ongoing farmer technical support would not have been possible. In 2021/22 we intend diversifying into fruit production in the Ofcolaco region to complement winter vegetable cropping for a more stable, year-round revenue flow. We will continue to expand the farmer base in the winter vegetable production region of Ofcolaco as well as in the summer producing areas of Polokwane and Mooketsi in Limpopo. An additional Rural Hub is also planned for KZN where the range of crops will differ from the Mopani Hub. In order to meet the training needs of the increased number of farmers, we will be increasing the capacity of the SPAR Rural Hub’s team of agronomists.

THE IMPACT OF COVID-19 Despite COVID-19, we are encouraged by the resilience of our farmers to retain all permanent jobs created through this initiative. At farm level a total of 130 jobs were created through the SPAR Rural Hub Initiative and an additional 60 secondary jobs were created through the Packhouse Staff and Technical Support Team With SPAR's support, and the support of funding partners, these hard-working farmers managed to remain in business during the challenging COVID-19 pandemic and have made a valuable contribution to food security and job creation in rural communities.

The SPAR Rural Hub initiative remains committed to the provision of food safety training and a variety of other training interventions such as: crop planning, land preparation, planting, fertilisation, irrigation, integrated pest and disease management, harvest management and financial management. This, together with the funding provided by the TYALA IMPACT FUND and FNB to upgrade and establish new infrastructure, will enable farmers to improve their agricultural productivity and profitability, and contribute positively towards food security, job creation and increased sustainability.

This is just the beginning for South Africa. SPAR welcomes the opportunity to invite other retailers and food industry players to collaborate with us on growing this initiative, helping to empower even more small-scale farmers, and enable them to participate in formal, sustainable supply chains.

Should you wish to join us in supporting our local farmers and be a part of the SPAR Rural Hub please contact: James Lonsdale – Group Sustainability Manager james.lonsdale@spar.co.za

COMMITTED TO A SUSTAINABLE FUTURE

[ T HO U G H T LE AD ER SHIP ARTIC L E ]

The power of collaboration as a national solution

By James Lonsdale, Group Sustainability Manager, SPAR Group

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hen it comes to establishing new and sustainable supply chains in South Africa, SPAR believes that developing small-scale farmers is critical. That is why SPAR launched the SPAR Rural Hub Initiative in 2016. It contributes positively towards job creation, infrastructure development, skills transfer, empowerment, and food security.

Traditionally, smaller producers have found it challenging to enter formal value chains and face many obstacles. These include food safety compliance, funding, technical and business support, poor farm infrastructure and inconsistent crop yields and quality. Such complex, often overlapping, issues can only be addressed through a collaborative approach from a range of stakeholders, including farmers, communities, government, food manufacturers, input suppliers, wholesalers, retailers, financial institutions, and funders.

Satisfying the strict food safety requirements of our SPAR retailers has been difficult for small-scale producers. However, in collaboration with GLOBALG.A.P we have developed a customised SPAR localg.a.p Capacity Building Food Safety Programme.

Introduced in 2017, it has seen small-scale farmers advance through three levels localg.a.p to full GLOBALG.A.P certification in 2020. Through this capacity-building programme small-scale farmers are beginning to compete with commercial farmers when it comes to market access. Not many believed this would be possible when we began, but our determined farmers have proven them wrong, thanks to support from SPAR.

interventions such as food safety training, crop planning, land preparation, planting, fertilisation, irrigation, integrated pest and disease management, harvest management and financial management – all skillfully led by an in-house team of Agronomists. Training support has also relied on partnerships with research institutions, nutrition experts, local and international organisations such as the Global Alliance for Improved Nutrition (GAIN), the Amsterdam Initiative Against Malnutrition (AIM), GLOBALG.A.P. as well as local and international seed companies.

James Lonsdale, Group Sustainability Manager, SPAR Group

Through a collaborative approach, the initiative is beginning to enjoy measurable success, with tangible benefits to the farmers. In December 2020, First National Bank extended enterprise development funds to the SPAR Rural Hub initiative to help share the costs associated with the provision of technical services to our participating small-scale farmers. Within this innovative programme, all farmers are provided with a range of training

We may not be able to resolve small-scale supplier development on our own, but as SPAR’s tagline says ‘we are better together’.

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In February 2021, Kagiso – through the Tyala Impact Fund – contributed by providing both input and infrastructure funding.

This partnership has further enabled our farmers to produce commercial quality and quantities of high-value crops grown under the protection of net houses.

Although it’s been a challenging year for the SPAR Mopani Rural Hub, the farmers, their families and their workers, through SPAR’s support and that of local communities, input suppliers, financial institutions, and funders (FNB and the TYALA IMPACT FUND), these hard-working farmers have remained in business during the challenging COVID-19 pandemic and are making a valuable contribution to food security and job creation in rural communities.

The success of supplier development programmes is often measured by the number of participating small-scale farmers, but we believe there should be a shift in focus. True success should be measured by the number of small-scale farmers that graduate from the programme and move on to farm sustainable commercial enterprises with minimal support interventions, as we are beginning to see with our SPAR Rural Hub farmers.

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“The programme helped me to see importance in my life and to strive for what I want.

I shall not allow obstacles to hold me down.”

- Claudia Molifi , Youth Development programme beneficiary, Kolomela, Kumba Iron Ore Mine.

Together, we thrive. #ShapingTogether Imagine a future where all our youth are employed, and every entrepreneur and small business thrives. For more than 30 years, we have continued to work with our partners, through our enterprise development programme, Zimele, to play our part in making this future a reality.

Together, we have supported 62,949 jobs and provided over R2.22 billion in loans to 2,481 entrepreneurs. We continue to unlock the potential of our youth, entrepreneurs and SMMEs through skills development, mentorship, financial support, and procurement opportunities.

Only by working together, can we create better jobs and better businesses to support local economies. Learn more on how we are partnering to build thriving communities as part of our Sustainable Mining Plan at www.angloamerican.co.za

Together, we continue shaping a better future.

*2018 – June 2021: 7,947 jobs supported.

R891 million Anglo American procurement opportunities.

8 Zimele hubs available in our communities.

Image by: ilkercelik

[ T HO U G H T LE AD ER SHIP ARTIC L E ]

IT’S TIME FOR A CHANGE Billions of Rands later, efforts to transform our economy and create jobs have failed. Now what?

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he latest SA unemployment figures – officially the highest in the world – sent a collective shiver through our national psyche. Almost 8 million people without a job is a sobering indictment of our collective failure as a nation to create meaningful opportunities for our people, despite thousands of initiatives and billions of Rands spent trying to build inclusive economic growth.

Our main tool to drive economic inclusion, our B-BBEE laws, compel corporates to spend a percentage of their NPAT to onboard Black suppliers and support the development of small businesses, in part through Enterprise & Supplier Development (ESD) initiatives. From a transformation perspective this strategy is critical, but the numbers suggest that ESD and BEE in their current guise are not materially improving the lives of SA’s growing pool of unemployed and marginalized people. In fact, statistics show that the gulf between rich and poor has only widened.

The role of small suppliers There is widespread agreement that Small and Medium Enterprises (SMEs) hold the key to unleashing economic growth and creating jobs.

These viewpoints are echoed in our National Development Plan (NDP), which ambitiously

projects that by 2030, 90% of all jobs in SA should be created by SMEs. However, corporate South Africa is struggling to create an environment that supports the growth of a small suppliers at scale. The challenge is to do what is right for the long-term competitive advantage of the company and the supplier, whilst meeting the codes, which are often at odds with this. If we are serious about small suppliers being the job-creating machine that will kickstart our economy, we need to take some bold and practical steps in adjusting the codes to match this need.

Broaden the job creation pipeline Would our pressing needs for inclusive growth be better served if we extended a portion of the benefits of ESD (eg access to skills, markets and growth funding) to all early-stage, highgrowth job creating businesses irrespective of their ownership structure? This would mean a shift in focus from pure transformation, to a combination of transformation plus growth of the economy and jobs as desired outcomes.

Access to growth finance Access to affordable growth finance is one of the major challenges facing SMEs, especially in South Africa. Grant Prince, Head of SME

Fetola: Founding partners and Technical Lead to Absa Business Day Supplier Development Awards

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Portfolios at Fetola, notes that “this gap is particularly evident in businesses needing between R250,000 and R1million – a bracket that is too big for microfinance, too small for the likes of venture capital and too risky for banks”.

Currently funding opportunities for businesses in SA slant towards ‘unicorns’ – in this context high-risk business models with ambitious projections for rapid replacement of traditional suppliers in the supply chain. Studies show the economic benefit of creating an enabling environment for smaller, less glamorous but resilient and dependable businesses that underpin so many local economies. Many township-based businesses fall under this category, creating a dynamic environment for building inclusive, impactful businesses where they are needed most. The challenge and opportunity lies in delivering affordable earlystage finance to support the rapid expansion of 250,000 businesses that can each create 10 or 15 jobs.

It’s clear that despite pockets of success, South Africa’s current strategies around small business and supplier development are not delivering at the scale needed. We need bold solutions that support the success of all South African SMEs, accelerate growth and remove blockages. It’s time for a change.

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and confidential self-assessment today.

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[ T HO U G H T LE AD ER SHIP ARTIC L E ]

SME financing 101:

Knowing your options is key to survival

By Jeremy Lang, Executive Director at Business Partners Limited The proposed financing agreement must ensure a fair deal for both the entrepreneur and investor.

Accessible financing is key to the survival of SMEs, which will also assist with South Africa’s economic recovery. Yet a lack of awareness around available financing and a lack of business compliance and knowledge are proving to be a significant barrier to SMEs accessing the support they need.

Seek additional specialist input

Financiers have become strong advocates of SMEs, especially over this challenging period. There is a strong correlation between a business’s success when it receives financing along with technical assistance and mentorship. Experts can help SMEs avoid costly mistakes and improve the processes within their businesses.

New institutions and types of financing are introduced each year and there are a host of financing products available from the private and public sectors. This financing mainly consists of risk-free finance such as grants and risk-based finance such as debt or equity investments.

Funders include commercial institutions such as banks and SME-focused financing institutions, development finance institutions, angel investors, crowd funders, enterprise development funders and private equity firms.

At present, there are also relief programmes specifically designed to help SMEs weather the COVID-19 storm.

Before applying for financing, SMEs should consider a few factors: Get your ducks in a row

Most financiers require 12-24 month projections. They need a clear understanding of how further expenditure will produce better income for the business, which is why it is vital to detail how the business loan will be spent and how this will influence the projections.

Strict criteria for most finance applications require statutory compliance and up-to-date financial statements. Therefore, it is imperative to make sure that the administrative function of the business is well managed.

Determine the life stage of your business

Each financing option has different features that can benefit businesses at varying life stages.

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Jeremy Lang, Executive Director at Business Partners The younger the business, the more difficult it is to source financing due to the higher risk to the financier. This is why many entrepreneurs rely on family or friends for funding to open or expand their businesses.

As businesses grow and mature, they may require more capital to maintain business operations. With a lower risk profile, more financing options become available.

Customise every application

The local financing landscape can be tricky to navigate because different financiers have different mandates and objectives when it comes to social impact, employment or commercial returns. Generic applications may result in a higher failure rate. It therefore pays to do your research on all potential financiers to determine whether your business matches their specific criteria and investment preferences.

The good news is that although the lending criteria of financiers and banks have become increasingly stringent over the years, interest rates are currently low in South Africa, with reduced monthly instalments, increasing affordability for SMEs. While it might seem like you are out of options, financing is still available for SMEs. It’s just a matter of finding the right financing fit and knowing the best approach to increase your chances.

About Business Partners Ltd.

Business Partners Limited (BUSINESS/ PARTNERS) is a specialist risk finance company for formal small and medium owner-managed businesses in South Africa and selected African countries. The company actively supports entrepreneurial growth by providing financing from R500 000 to R50 million, specialist sectoral knowledge, business premises and added-value services for viable small and medium businesses. Since its establishment in 1981, BUSINESS/PARTNERS has provided business finance worth more than R19.5 billion in over 71 600 transactions facilitating over 651 000 jobs. BUSINESS/PARTNERS was named the 2019 Gold winner in the SME Bank of the Year – Africa category at the recent Global SME Finance Awards.

THERE ARE MANY BUSINESS FINANCIERS OUT THERE. BUT NONE LIKE US. So, who are we?

We’re the company that’s been supporting and financing business owners for over 40 years. That’s longer than some of Africa’s largest banks have existed. We’ve provided over R20,5 billion in tailor-made finance to small and medium businesses. Helped facilitate over 658,000 jobs and counting. With finance from R500,000 to R50 million, imagine the potential we can unlock in your business.

Apply for our specialised business finance at businesspartners.co.za

MINIMUM 2 YEARS IN BUSINESS

R500K TO R50M BUSINESS FINANCE

UP TO 100% PROPERTY FINANCE

[ D I GI TAL D IALOG U E ARTIC L E ]

BRIDGING THE

Digital Divide

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[D I GITA L DIA LOG U E A RTICLE ]

iving small g suppliers a place at the table

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he rapid advancement of digital technology is exponentially widening the divide between the digitally advanced and those without any digital skills. This leaves millions of small suppliers at risk of being left behind, frustrating the vision of a transformed, economically empowered and equal society.

Catherine Wijnberg of Fetola, growth specialists in the supplier development sector observes: “The digital divide is real and growing. It needs to be tackled if we are to deliver transformation in the supply chain and enable small suppliers to survive into this new future.”

Evidence from Africa indicates that the dearth of top-level IT skills, fear, lack of access to technology and language barriers are widening, not closing the gap.

Successful South African entrepreneur, Audrey Mothupi, CEO and self-proclaimed Chief Hustler of Systemic Logic, has grown her business rapidly using the power of partnerships, building networks and accessing lasting relationships across the ecosystem. She strongly believes in the power of confidence: “If an entrepreneur is brave enough to start a business, they can be brave enough to transition into the digital economy.”

Closing the gap globally In South Africa and beyond, large companies acknowledge their long-term responsibilities to work with suppliers to establish policies and provide solutions that close the growing digital gap. Constraints that challenge their efforts with small emerging suppliers include affordability, low literacy, infrastructure and lack of finance.

Lorenzo Bell of Ernst & Young believes: “It really boils down to policy and investment to create a digital transformation in Africa. Corporates will benefit as they build their supply chain, expand and penetrate markets, and build an ecosystem that enables viable businesses and builds communities.”

Africa is the continent with the youngest population in the world and with a population projected to double by 2050, the future of youth and digital cannot be ignored by governments wanting a secure future and corporates chasing this growing market.

Prof Barry Dwolatzky, founder of the Wits University’s Digital Innovation Precinct, is passionate about investing in Africa’s unique personality. The digital precinct links SMEs with corporates, innovators and mentors, providing a platform for youth to collaborate, exchange learning and create partnerships. Initiatives such t

Image By: ipopba

The digital divide is real and growing. It needs to be tackled if we are to deliver transformation in the supply chain and enable small suppliers to survive into this new future.”

Creating solutions together through partnership and learning

www.sdawards.co.za

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t as this provide a bubble of digital innovation and energy with which to explore solutions to the numerous problems in Africa. There is potential to develop this innovation and unique African skill-set capacity to scale and support to enable these to enter the corporate supply chain.

We are on a shared journey. And if we don’t recognise the challenges across Africa and commit to solving these together, we will all face a challenging future.”

Key learning points

Supplier Development impact At a national level, many individual corporate initiatives are doing great work in supporting small supplier success but in the greater scheme of things, these strategies are not touching sides. Unemployment is growing, economic growth is stagnant and social unrest is a looming concern. The question is how do corporates and suppliers work together to achieve greater things?

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Smart phones are Africa’s device of choice. Africa has largely skipped the laptop generation.

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obile phones already provide widespread access to technology, M information and game-changing low-tech low-data solutions.

The starting point is recognising the gap – not only between small suppliers and corporate, but between corporates, the government and the future. Collaborative initiatives such as shared market access platforms that suppliers can access to contribute to the virtual marketplace shorten that gap.

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Uniquely African creativity opens the door to digital opportunities such as animation, gaming and innovative digital business solutions.

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Partnerships are pivotal. Good partnerships support rapid scale, build capacity, pool knowledge and leapfrog growth challenges.

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Speed in the digital world is tantamount. Small suppliers can respond rapidly – paving the way for their larger corporate partners to benefit.

The challenges SMEs face are well known. They include lack of data, limited internet coverage, data costs and devices, language (and digital language) limitations, historical exclusion from meaningful relational partnerships and networks. What is often missed is the gap in understanding between the mechanisms of the corporate world and those in small business, especially in youth that have no working experience.

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Access to growth finance is critical to company growth. Supplier Development relationships that enable this create a win-win outcome.

The solutions available to corporate leaders are those that take them into the future: long-term relationships with suppliers, collaborative strategies within and across industries, provision of meaningful training, as well as support and guidance to enable small suppliers to become trusted partners in their future. Now, more than ever, corporate Africa needs the courage and humility to reach out embrace a shared future.

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As co-founder of the Business Day Supplier Development Awards, Catherine Wijnberg says: “We are on a shared journey. And if we don’t recognise the challenges across Africa and commit to solving these together, we will all face a challenging future.”

• previously published in Business Day 24

www.sdawards.co.za

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asy access platforms such as marketplace, learning portals, E communication and supplier management systems underpin future growth. Good ones are value-adding to SMEs and large suppliers alike.

Digital security and corporate compliance are barriers that need shared vision to be overcome.

Inclusive growth requires a collaborative, symbiotic journey that includes SMEs, corporates and stakeholders. The basis of this is a common language, shared vision and mutual respect.

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“As South Africans, unity is our greatest strength.”

- Nolitha Fakude, Chair of

Anglo American’s Management Board and Zimele in South Africa

Together, we win. #ShapingTogether Anglo American’s story is South Africa’s story: one of renewal, growth and ground-breaking advances not only in mining, but also in South Africa’s economy and society.

Together with our partners, we are developing better jobs, better education, and better businesses. We do this through impactful programmes that make a positive difference to lives and livelihoods. We’ve contributed over R70 billion to local businesses through procurement spend and our enterprise and supplier development initiatives over the past 18 months.

We stand together with our people, our communities and our country, and are playing our part to help reignite our economy and unlock South Africa’s growth and development potential.

Together, we continue shaping a better future.

44,700 employees 5,208 job supported through Zimele (since 2018).

Our economic contribution in South Africa amounted to R140 billion in 2020.

[ T HO U G H T LE AD ER SHIP ARTIC L E ]

True radical economic transformation is about giving people opportunities

By Jonathan Foster-Pedley, Dean and Director of Henley Business School Africa

THERE’s a wonderful African proverb that’s perhaps more relevant now than ever before: ‘If you want to go fast, go alone, if you want to go far, go together’. It’s something that’s embedded in our concept of ubuntu, defining ourselves by our relationship to one another and implicitly understanding that one person’s success is incomplete while there are others left behind.

Collaboration is the only way that we will be able to successfully emerge from this pandemic and build back better, repairing, not papering over the chasms that COVID-19 revealed. We have to work together, not just because of the moral and ethical imperatives, but also out of sheer, unadulterated pragmatism: the old normal is gone and we don’t have a playbook for that which is busy replacing it.

None of us actually have the answer, or answers,

since this post-pandemic era truly is one of volatility, uncertainty, chaos and ambiguity – the most disruptive in living memory. The only way we can begin to have an answer is by working together, harnessing our collective imaginations and talents to find something that will work faster and more efficiently than we can do alone, taking a leaf out of the vaccine development programme. When we do that, we will overcome and we will flourish.

We have to lift as we rise, as the legendary Charlotte Maxeke reminded us a century ago. We do that by creating prosperity, not just expanding and increasing jobs within our own organisations but by helping our supply-chain network do just that. It is only by assisting start-ups become sustainable small businesses and giving small businesses the opportunity to become medium-sized

We don’t have that much time left if we don’t collaborate”.

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enterprises that we will start to make inroads into this apparently intractable problem of unemployment in a sea of jobless, with people rapidly being rendered unemployable.

True radical economic transformation is about giving people the opportunities that have been denied them for so long to unlock their potential. It’s dependent upon collaboration, creating opportunities, sharing knowledge, and helping one another. It’s only by collaborating that we can create a society that lives up to the promise evinced by our founding fathers.

It was always thus. It’s just that the pandemic moved the second hand almost up to the hour on the Doomsday Clock.

We don’t have that much time left if we don’t collaborate.

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[ D I GI TAL D IALOG U E ARTIC L E ]

Future of Jobs – Employment, Skills and Workforce Strategy in Supplier Development

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ith South Africa facing the quadruple threat of low economic growth, critically high youth unemployment, the Covid-19 pandemic and a workforce that is largely unprepared for the rapid explosion of the digital age, the question of jobs has to be tackled with urgency.

This was a key theme of the Absa Business Day Supplier Development Digital Dialogue webinar, where a panel tackled the pressing topic of the future of jobs in South Africa.

As Vusi Fele of Absa asks “Where will social cohesion and social instability go to if we don’t tackle this problem?” Africa’s fast-growing youth population is largely unemployed, and lacks adequate skills of the right kind - which means that we have to respond with a changed approach if we are to build a healthy social fabric.

We need globally competitive small suppliers A transformed society requires growth-ready small suppliers. Panelist and entrepreneur Mathapelo Montsho of Why Cook, questioned the SME-sectors’ readiness to survive further major disruptions, and highlighted an alarming lack of skills to solve complex problems and a need for reskilling of the future-fit workforce.

Beyond this, to become globally competitive small suppliers must be reliable, agile and professional; and responsive to industry trends and changing client needs.

Trends in the traditional workforce, local and global value chains Jon Foster-Pedley of Henley Business School is forthright in his belief that “Covid has woken everyone up with its visible and shocking transitional change.” He continues “Africa is now at a boiling point with 45% of employees mismatched in terms of skills needed for our current economy, compared to other developing nations that switched their economies from raw production to high quality tech-based economies”. As we know, Africa has many great minds capable of radically transforming growth but we need public and private partnerships to provide access to the right education.

Many training organisations, including The African Management Institute, experienced accelerated digital adoption as a result of the Covid-19 pandemic. Workplace training has gone virtual, providing easier access to education for more people.

Africa has many great minds capable of radically transforming growth but we need public and private partnerships to provide access to the right education”

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Government’s role in skills development Government has an important role to build more responsive education solutions.

It needs to engage with the academic sector to identify and respond to skills shortages in the economy. This includes enabling the creation of entry level jobs, strategies to keep current jobs and create new ones - enhanced by on-the-job learning.

Ultimately though, Government departments will need to work more swiftly and deliver on policies that enable broad-scale, transformative solutions to create economic growth and the skillsets to drive it.

The role of corporates The huge and growing joblessness requires us to do more.

By looking across the whole value chain, leaders in supplier development can identify spaces for entrepreneurs to provide services and create shared value. The future of jobs is a shared responsibility of employment and entrepreneurship. “It’s clear that Africa cannot catch up to the rest of the world if we keep doing things the way that we’re doing them, and our economies will fail unless we address the social challenges that unemployment delivers,” concludes Fele.

• previously published in Business Day

[D I GITA L DIA LOG U E A RTICLE ]

Key learning points

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Image By: Prostock-Studio

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Africa is a continent filled with rising youth potential.

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Traditional formal education is delivering skills that are mismatched to employers’ current and future needs.

5

Covid-19 has boosted online training making access to skillsdevelopment cheaper and easier for all.

Africa’s youth need to re-focus their skills into entrepreneurship, placing future jobs in their hands.

Future-focused corporates are accelerating their drive to provide practical, on the job training to small suppliers, unlocking opportunities throughout their value chain.

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As the post-Covid economy opens up markets across borders SMEs need to ensure their products and services are world class to be competitive.

Collaboration (SMEs, corporate, academia and Government) is essential if we are to change Africa’s growth trajectory.

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Why the mining sector is so critical to African SME development

By David Mparutsa |

Head of Enterprise Supplier Development at Absa Corporate and Investment Banking

Increased profitability in the mining sector and a rebound in commodity prices is providing a powerful catalyst to small businesses as the continent emerges from the COVID-19 pandemic. It is imperative that we use the good times in this economic cycle to develop small and medium enterprises that will be sustainable when the cycle turns.

Africa is rich in natural resources and between Mining and the Oil and Gas sectors, the contribution to Gross Domestic Product (GDP) is significant. In South Africa this contribution sits at between 8 and 10% depending on the economic cycle, in oil-rich Nigeria, this is around 7% while a country like Botswana sees nearly 35% of its economic activity centred around mining – specifically the diamond sector. While there is often a focus on the mining companies themselves, many people lose sight of the downstream impact that these operations have on the broader economy and how this impacts non-mining sectors as well.

Let’s take Botswana for example: As part of a recent visit to a mining client in the region, we learnt that this mine purchases 30 000 pairs of leather gloves every year – typically imported from China and South Africa. On its own, the figure is impressive, but one then gets to thinking more broadly: Botswana has an ideal climate and operating environment for cattle farming with an estimated 2.5 million head of cattle at any point of time, much of which is being exported out of the region.

There exists a significant opportunity for Botswana to utilise its cattle industry to capacitate the supply of leather gloves that it is currently importing. One has to imagine that if they are importing leather gloves, they are similarly importing leather boots for things like the army and police, and this demand could create a whole new local industry – there simply is no local supplier at the moment, but it is encouraging to note the work currently being performed by the Local Enterprise Authority to close this gap. This is the opportunity that the COVID-19 pandemic has presented to the continent. During the globalisation era, it was a case of looking to outsource manufacturing to low-cost destinations and not need to invest in local capacity. When major supply routes were cut off in 2020, many countries began to re-evaluate the lack of local capacity.

For Africa, the recovery in commodity prices cushioned the impact of COVID-19 on certain sectors but it is now a case of building on this before the sector turns again. The Richards Bay area in South Africa is a perfect example of why this matters. Unemployment in this area runs at between 40% and 60% at any point in time and the 2 big mining operators in the region are Glencore and South32.

Tensions between the community and the operators are well documented and the lack of downstream job opportunities leads to ongoing tension.

achieve this aim is a key catalyst and a quick glance at the Anglo-American annual report shows that the company spends $3.1-billion on local procurement in South Africa and a further $610-million in the rest of Africa. These are big numbers, but the key is making these investments sustainable. To ensure sustainability, we are seeing far greater coordination of efforts amongst all role players and we expect this will lead to deeper value chains.

A good example of this would be in Ghana where the Chamber of Mines has begun to coordinate efforts across all of its members and driven them to focus on the development of local SMEs and suppliers. In its annual report released in June 2021, the industry body highlighted that 85.7% of producing members' annual expenditure was retained in Ghana, helping to fund local infrastructure development, build small businesses and capacitate social projects.

In South Africa, tourism and mining companies often share an ecosystem in places like Limpopo and Rustenburg. When the travel restrictions kicked in during 2020, many of the hotel and tour operators – who are major employers - were unable to sustain themselves as employers, and this led to tension in local communities where mining businesses were expected to pick up the slack in the region. Instead of being inwardly focused, sector representatives have looked to see how they collaborate to ensure stability in local communities through new venture creation and supplier development. With the African Continental Free Trade Area expected to be a significant driver of intra-African trade and this renewed focus on the capacitation of local supply chains, there is a very real energy behind Enterprise and Supplier Development initiatives on the continent.

Underlying confidence in the mining and natural resources sectors has given this some momentum but other sectors like telecommunications, manufacturing, and infrastructure are starting to latch onto this and we expect that it could be a big driver of economic activity and wealth building in Africa over the next decade.

Are you ready for it?

(First published in Business Day, 6 October, 2021)

The major businesses in the region are aggressively looking to deploy enterprise and supplier development budgets to establish new small businesses in the region who not only can service the mining houses but can also do business with each other and ultimately try and mitigate some of the risks the miners face at the next downturn. Many of the global mining heavyweights have committed themselves to the UN Sustainable Development Goals (SDG) and are under scrutiny to align their businesses with ESG-linked investment strategies. The development of quality work and sustainable small businesses aligns perfectly here.

This focus on sustainability is key and participants in the South African mining sector have set themselves a target of creating five non-mining jobs for every one mining job that currently exists. The utilisation of enterprise and supplier development budgets to Authorised Financial Services Provider Registered Credit Provider Reg No NCRCP7

BENCHMARK REPORT

By Margy Nicol, Fetola Project Lead

2021 Supplier Development Trends

What is changing through these tough times?

The 2021 Benchmark Report provides valuable insights into Supplier Development trends, using information gleaned from the applications submitted to the 4th Absa Business Day Supplier Development Awards. This annual report is an opportunity to reflect on year-on-year changes and to measure progress as a sector. Where possible it’s an opportunity to benchmark best practice.

Overview The Absa Business Day Supplier Development Awards attracts entries from large organisations and corporates who qualify in the BBBEE scorecard as GEN businesses (i.e. a turnover of more than R50 million) and who implement Supplier Development initiatives in their own supply chains. This year, as a first, nominations were also opened to Pan-African organisations to encourage an Africa-wide interest in the practice of supplier development.

The overall goal of the Absa Business Day Supplier Development awards is to unlock the huge potential of supplier development as a tool to enable inclusive economic growth and job creation. They do so by acknowledging excellence, fostering best practice, sharing of case studies and success stories, and encouraging industry-wide collaboration.

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The awards actively encourage the creation of a healthy ecosystem of sustainable small suppliers and as this is a corporate recognition initiative, small suppliers participate as nominated awardees, not applicants in their own right.

The continued impact of the COVID-19 pandemic, the resultant severe economic decline and further pressure caused by the riots in supply chain, led to fewer numbers of applications than in pre-covid years. A number of candidates indicated a desire to participate in the Supplier Development Awards ecosystem, but felt their performance was so badly affected by this disruption that they did not meet their own standards of excellence for awards in 2021.

Our 15 Finalists 1. Anglo American Zimele 2. Bidvest Afcom 3. Distell Group 4. Empact Group 5. Exxaro Resources Limited 6. Fidelity Services Group 7. GEMS 8. iThuba National Lottery 9. Sanlam Foundation 10. Sanofi Aventis South Africa (Pty) Ltd 11. SPAR South Africa 12. Tiger Brands 13. U yandiswa Project Management Services Pty Ltd 14. V&A Waterfront 15. Wunderman Thompson

Data and Trend Insights 2021 The past 2020/21 year has been one of unprecedented global disruption, affecting supply chains right across the world and impacting citizens in every corner of society.

In spite of this, the overall caliber of applications was notably higher than in previous years, both in the quality of first-time entrants and in companies that have entered previously. This improvement indicates growing interest in supplier development excellence and an ongoing drive towards continual improvement in the sector.

[ BE NCHM A RK Report ]

Number of Awards Applications received year-on-year

409 379

2018

2019

62

2020

117

For the first time, companies were asked if they were applying on behalf of a company-wide Supplier Development Initiative or for a discrete Supplier Development project within the broader supplier development strategy. The great majority of applicants (65%) applied on behalf of their company-wide strategy.

In 2021 22% of the applications received met the qualifying criteria. These applicants understand how to articulate the merits and impact of their strategic supplier development programmes which continue to improve in quality and reach.

Applications were received from across the industry spectrum, with a concentration in professional services, education & training, and IT, software and robotics.

2021

Supplier Development Initiative 2021

Industries represented: Sector in which the business operates Agriculture and environment

2018

2019 2020* 2021

5%

4%

-

2%

-

-

-

16%

Financial services and insurance

1%

3%

-

9%

Food and agro-processing

5%

4%

-

2%

Education and training

Healthcare industry including pharmaceutical

-

-

-

4%

6%

3%

-

4%

-

-

-

11%

Manufacturing including automotive, chemical and textiles

1%

17%

-

4%

Media, social media, broadcasting and publishing

4%

5%

-

2%

Hospitality, tourism, restaurant and conferencing IT & software including robotics and AI

Mining, petroleum and related

1%

17%

-

7%

Other (specify)

36%

24%

-

7%

Property and real estate

1%

3%

-

2%

Professional Services – business; consulting

17%

12%

-

24%

Social enterprise and non-profit

10%

7%

-

7%

35%

Discrete / specific project

65%

Company wide

65%

applied on behalf of their company-wide strategy

*No matching data for 2020

Leadership role in Supplier Development – Strategic support An important trend amongst applicants is the strong move for Supplier Development to become central to the strategic vision and competitive advantage of the company. This has moved from only 52% in 2018 to a significant 80% in 2021, which indicates an increasingly integrated adoption of supplier development by the C-suite. This move is significant as year-on-year the narrative from applicants confirms the importance of this high-level support in the securing of resources and commitment within the organization.

Executive leads the SD strategy (central to company vision)

52%

43%

80%

57%

Supplier Development not led

by Exco

46%

56%

43% 20%

2018

2019

2020

2021

2018

2019

2020

2021

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[ B E NC H M AR K R EP ORT ]

The locus of control for supplier development has also shifted, with 80% of companies implementing their supplier development in conjunction with their Procurement Department. This is a marked increased from only 32% in 2020.

Many companies reported that this responsibility is shared with ESD and transformation departments, creating cross-cutting teams.

80%

Parties responsible for the Supplier Development Programme What departments are involved in the design and oversight of supplier development?

32%

Procurement Department

2020

2021

In line with the move towards executive oversight, the planning timeline for supplier development has also expanded, with 33% of applicants in 2021 reporting a 5 year or more timeline. This appears to reinforce the view of supplier development as a long-term competitive advantage for the company, and an acknowledgement that the process is one that takes careful planning and long-term commitment.

Planning timeframes for Supplier Development 1-2 years

6 – 12 months

2-5 years

5 years plus

Doing things right is a feature within the applicant pool and 93% of applicants report the use of external verification and best practice standards in their business. This verification includes a wide range of areas pertinent to their individual business such as Governance, quality standards, Sustainability, ISO certifications and more.

Notably only one applicant voluntarily submitted an independent verification report of their supplier development results. As verification is an important way to identify and acknowledge best practice, a deeper and more probing question about standards and verification in supply chains will be asked in 2022.

Does the company align to any verification standards, audits or best practice standard, nationally or internationally 2021?

52,94% 53% 33%

29,41% 17,65% 2020

7%

2021

2020

Yes 93%

7%

2021

2020

2021

0%

2020

2021

No 7%

Applicants were asked if there were any focus areas in their strategies. The majority of applicants indicated multiple focus areas, with a concentration on localisation and digital skills for the future.

2021 Focus areas (per ten applicants) Women and Gender Inclusion

Youth >35 years

Rural and Township

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Other

Import substitution

Localisation

Regional manufacturing / products / services

Skills for the future / digital inclusion / access

None (no focus area indicated)

Spread of support interventions on offer to suppliers (per every ten applicants)

The style and method of implementing supplier development includes a wide range of support tools from concessionary finance, grants & loans, to mentorship, leadership development and market access.

Finance terms

Market / Business skills

Leadership

Grants & loans

Media & communications support

Other (specify)

Mentorship

Market access

Digital Support

Design thinking

Ecosystem Support

There was a continued trend towards applicants reporting on well-established programmes (2 or more years) and only 19% of applicants reported on new programs. This may reflect a reduction in the creation of new supplier development initiatives in these past two covid years and is a figure to watch for future.

Level of establishment of Supplier Development Established for 2+ years

82%

73%

23% 27% 2018

2019

2020

2021

Well established, but trying something new and innovative

Collaboration as a way to build inclusive thriving economies is a strong theme of the awards, so it’s exciting to note that crossindustry collaboration has continued to grow over the last four years. Applicants reporting initiatives that support the development of a thriving ecosystem of small suppliers beyond their own single supply chain grew from 43% in 2018 to 87% in 2021. This healthy trend towards supporting integrated local ecosystems by enabling SMEs to access other markets allows small suppliers to diversify their customer base and strengthen their independence. As ‘failure to launch” and dependency are both key challenges in the Enterprise & Supplier Development sector, this is a positive trend to watch.

Growing the ecosystem beyond their supply chain.

80% 87%

25% 24% 18% 2018

2019

2020

2021

43%

Just starting out – 2 or less years

23% 27%

Yes - 19%

2018

2019

2020

2021

Unknown

-

2018

-

2019

-

2020

4%

No

For the first time, companies were asked in what way they encourage collaboration within the supplier development ecosystem. Information sharing, cross-sector partnerships and market access opportunities were common strategies.

Ways the company fosters collaboration within the supplier development ecosystem (per ten applicants) Grow local ecosystem networks

Create inclusive market opportunities

Information sharing

52%

Accessible IT platforms

2018

46%

2019

56%

2020

2021

20% 13%

Cross-sector partnerships

Other

2021

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[ T HO U G H T LE AD ER SHIP ARTIC L E ]

Performance measurement Performance tracking is an area for sector-wide improvement and whilst the data indicates increased use of metrics to measure supplier development impact and year-on-year program improvement, with the exception of one or two applicants, use of metrics remains inconsistent and high level.

In all, 93% of the applicants are tracking and reporting numbers of suppliers they support and 87% are measuring the number of jobs created by these suppliers. Three quarters of applicants (73%) also reported on procurement spend, indicating that the power of procurement may not yet be fully understood as a driver of small supplier growth.

Metrics and success indicators used to track results 2021

It was promising to note that several 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 benchmark their impact.

A portion of applicants remain hesitant to report their financial data or reported it either in percentages or partially. Of those that did include financial data, annual expenditure on supplier development covers a very wide range from R830 000 to R97 million per annum.

Expenditure comprises a combination of loans, credit, training, in-kind support, and other trade-offs.

*Reported average growth in SD programs (2021) (SMEs) Notable trends include the average number of small suppliers being supported, which has increased steadily year-on-year. The trend towards female suppliers is clear, increasing from only 17.5 to 59.2 between 2018 and 2020. There was similar increase in rural suppliers from 32 in 2018 to 197 in 2020. Interestingly though, in this same period, applicants reported a reduction in the number of youth-led suppliers from 1558 to 896. The reasons for this are unclear but appears to be a lost opportunity as entrepreneurship is a vital and viable option for the high numbers of unemployed youth, to create jobs for the future.

87% 93%

73% 33%

Jobs created

Number of small suppliers supported

Procurement spend

The important indicator of percentage of procurement spend allocated to suppliers in development programs (as a portion of the total procurement) varied widely. This figure ranges from as low as 0,11% to over 38% depending on the business model, size and industry.

Average YOUTH (35 years old or younger) small suppliers supported

Average total small suppliers supported

*This data is based on information reported by the applicants.

1557.5

177.5 85.55 125.3

2018 2019 2020

960.6 896.1

Average RURAL AND/OR TOWNSHIP small suppliers supported

Average FEMALE small suppliers supported 17.5

42.9

59.2

2018 2019 2020

Other

31.75

2018 2019 2020

129.4

196.8

2018 2019 2020

Reported average growth in SD programs (2021) (jobs) In the critical area of Jobs supported by applicants there was a 27% increase from an average number of jobs per applicant of 734.7 in 2018 to 935.6 in 2020. There was an increase in youth jobs over the period, from 18 in 2018 to 83 in 2020 and increase in rural and township jobs from 31.75 in 2018 to 196.8 in 2020. The counter-trend was a reduction in female jobs from 318 to only 179 over the same period.

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1576.7 1142.7

885 935.6 734.7

613.5 318.7 291.2

179.6 18.3

10

83

2018 2019 2020

2018 2019 2020

2018 2019 2020

2018 2019 2020

Average number of jobs supported by small suppliers

Average number of FEMALE jobs supported by small suppliers

Average number of YOUTH jobs supported by small suppliers

Average number of RURAL / TOWNSHIP jobs supported by small suppliers

Image by: MangoStar_Studio

[ D igital D ialogue ARTIC L E ]

Empowering youth through entrepreneurship www.sdawards.co.za

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[ D igital D ialogue ARTIC L E ]

D

uring the Absa Business Day Supplier Development Dialogues, Joanne Joseph, observed that Africa has a real crisis on its hands. Youth unemployment averages between 45% and 60% of total unemployed Africans and in South Africa the expanded youth unemployment definition is a shocking 74%! The youth are the future and thus jobless youth represent our greatest socio-economic and political challenge.

Although there are many excellent youth support initiatives across the continent, we are barely scratching the surface. To put this in perspective, in SA we would need to create eight million additional jobs to stem this crisis. That’s 22 220 new jobs every day for a year, or in other words three new companies as big as Vodacom – which employs 7500 employees – each day. Alternatively, we would need to create 2000 new SMEs that each employ 10 people, every day for a year. The task is immense, and current strategies and initiatives are not coming close to tackling it.

Kanelani Mavundza, Supplier Diversity Champion at Absa Group Procurement, emphasised the need to nurture small business as these are catalysts for creating jobs, especially for young people, who are the consumers of the future. “As corporate supply chain and supplier development stakeholders, we need to talk about what more can be done to address the challenge of unemployment. At Absa we believe that promoting entrepreneurship could be key to growing the economy and getting more people employed,” he said.

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in South Africa the expanded youth unemployment definition is a shocking 74%!”

Farai Mubaiwa of Youth Employment Services (YES) which has over 55 000 alumni. On Youth Day, President Cyril Ramaphosa launched SA-Youth-Network which centralises “Pathways for Youth” including learning, learnerships, apprenticeships, volunteering, part- or full-time work opportunities. This is a solid first step to multi-pathway options needed for youth, designed to help them become economically active. The platform creates collaboration by centralising resources for young job seekers into Africa.

How can Africa empower youth through entrepreneurship?

How can corporates help?

Mmathebe Zvobwo, Executive ESD at Telkom, recommended that to optimise limited resources, Africa needs an approach which differentiates between empowering youth for survivalist socio-economic activity and developing entrepreneurs who can grow rapidly to scale into supply chain. Strong indicators for entrepreneurship, relate to an innovative mindset, willingness to experiment, creative problem solving, perseverance and ability to overcome fear of failure. This blended approach must prioritise resources for impact to achieve the desired outcomes.

A huge barrier to employment and entrepreneurship is lack of work experience, the ‘experience trap’, where youth cannot get work without experience or experience without work. Business needs to create a new spin on internships that are entrepreneurial, combining training, job shadowing and mentorship with relevant work exposure. “Youth are disillusioned and need a sense of hope and direction.” said

Corporate SA has the buying power and commercial imperative to give youth-owned SMEs access to markets through their procurement practices. However, corporates’ influence goes beyond technical competence to scalability and a growth plan. They need to balance mutual value for the supplier and themselves, to develop the ecosystem. By procuring from youth, while they train, support, build speed and resilience, corporates can develop the suppliers of the future. Hyperlocalised procurement develops supply from local communities, circulating wealth back into that community, rather than conglomerates.

Young local suppliers deliver localised presence, speed, innovation and agility and are ‘hungrier’ than many incumbent established corporate suppliers. Digital technology hubs like KKInnovation, match corporates with local SMEs to source and promote viable supply chain partnerships. These hubs can manage the SME’s performance through online tools and analytics, and empower them to function optimally and scale as their business grows.

[D igital Dialogue A RTICLE ]

32% 26%

65%

South African SMEs contributing 32% to unemployment

Key learning points South African SMEs contributing 26% to GDP

1 2

African SMEs contributing 65% to GDP

3 6% African SMEs contribute 6% to unemployment

What about youth entrepreneurship in Africa?

The AfCFTA, signed in January 2021, promotes free trade in Africa, breaks down barriers and promotes access to open markets and new opportunities.

A futures study looks at how to support Youth Trade Opportunities to benefit youth specifically. South Africa is trailing in the entrepreneurship stakes with SMEs contributing only 26% to GDP and 32% unemployment, while Africa’s SMEs contribute 65% to GDP with 6% unemployment. We need to optimise these emerging markets as the private sector, corporates and SMEs have never been better positioned to take advantage of the opportunities to open up the economy.

Unless our collective efforts are amplified exponentially, we all face an uncertain future. Everyone needs to do their part, whether corporate, government, organisation or individual, if Africa is to turn the tide on youth unemployment.

To join the 2022 Absa Business Day Supplier Development Awards, an initiative of Arena Holdings, Cold Press Media and Fetola, and be part of this dynamic network of people changing the future of South Africa visit www.sdawards.co.za or email info@sdawards.co.za today.

4 5

6 7

veryone needs to be a part of E the solution because everyone is impacted by the extremely high youth unemployment crisis in Africa.

Future-focused corporates must accelerate their drive to provide innovative pathways for youth to unlock opportunities throughout their value chain.

We need a differentiated approach between survivalist businesses and entrepreneurs with growth and export potential.

Business and education need to collaborate to create innovative ways to deliver work ready entrepreneurs.

Africa has rising youth entrepreneurial capacity and South African youth need to learn from them to overcome fear of failure and focus on entrepreneurship as a career option.

We can no longer work in silos.

Collaboration is needed throughout the ecosystem.

arkets in Africa are open with M many opportunities for SMEs whose products and services are competitive.

• previously published in www.statssa.gov.za https://www.statssa.gov.za/publications/P0211/P02111stQuarter2021.pdf

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[ T HO U G H T LE AD ER SHIP ARTIC L E ]

Enabling successful ESD through collaboration and ecosystems Mishack Mthethwa, Group Manager: Strategic Sourcing and Enterprise and Supplier Development, AECI Limited

“I

n the same way that it takes a village to raise a child, it takes a village to raise a business,” says Mishack Mthethwa, Group Manager: Strategic Sourcing and Enterprise and Supplier Development (ESD) at AECI.

21 permanent employees and 110 seasonal workers on 3 042 hectares (Ha) in Gauteng, Mpumalanga and North West.

“In AECI’s Sustainability Report, we detailed the alignment of our strategy to carefully selected United Nations Sustainable Development Goals (SDGs), most notably in the ESD context “Decent work and economic growth” and “Partnerships for the goals”. Our Emerging Farmers Programme emboldens our commitment to “a better world of food systems” and the SDGs of “Zero hunger” and “Responsible consumption and production,” explains Mthethwa.

“This is why we go beyond B-BBEE box-ticking, point-scoring and cheque-writing to provide a dynamic ecosystem of external partners and internal specialists, committed to scaling and supporting SMMEs that are AECI’s customers and/or suppliers of the future! As a result, we build sustainable business-to-business relationships and foster a diverse, inclusive culture that celebrates the transformational capacity of entrepreneurship to create jobs, grow the economy and make a real difference.

A case in point is the work we’re doing in the agricultural sector where we have a long, proud history.” AECI’s Agri Health businesses generated 25% of the Group’s total revenue in 2020.

A three-year pilot project provided the catalyst and framework to embark on an Emerging Farmers Support and Development Programme through the AECI ‘Good Chemistry’ Fund. The enabling ecosystem includes: • A ECI Agri Health – agricultural skills development and advisory services • AECI ‘Good Chemistry’ Fund – available financial support of R30 million • IDF Capital – Fund managers • Khula! app – market access • LEAP – sustainable business development and growth enablement

Agriculture is critically important to growing the economy.

Since the inception of the pilot project and programme, AECI and IDF have worked together to: • Assess the commercial viability of projects • Design transaction structures • Evaluate funding instruments and their pricing • Facilitate due diligence processes • N egotiate terms on behalf of emerging farmers with funders and off-takers • Prepare and review legal agreements Today, three emerging farmers are on the programme namely Farmers Hope, HempVest and Ithuba. Together, they employ at least

In the same way that it takes a village to raise a child, it takes a village to raise a business”.

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The Africa Institute for Policy Analysis estimates that a 1% contribution by agriculture to GDP produces a 2% increase in the country’s growth and a R1 million investment in agriculture generates twice as many jobs as an equivalent investment in the manufacturing sector.

According to Statistics South Africa, agriculture was the only positive contributor to the economy in Q2 2020, growing by 15,1%. In Q3 2020, it grew by 18,5%.

The South African Government has committed R1,2 billion to enabling 150 000 emerging farmers.

“It’s clear that the market for AECI will continue to grow in the future. To realise full potential, however, the success of the Emerging Farmers Programme depends on the contributions and strengths of the individuals concerned as well as their ability to work together collaboratively.”

Barloworld Siyakhula inspiring a world of difference for SMME’s

Barloworld Siyakhula is responsible for promoting transformation, Broad-Based Black Economic Empowerment, and supplier diversity within the group’s value chain, creating opportunities for Small, Medium and Micro Enterprises (SMMEs).

www.barloworldsiyakhula.com

[ T HO U G H T LE AD ER SHIP ARTIC L E ]

Entrepreneurship the answer to post Covid economic revival A viable alternative to formal employment for the multitudes of unemployed people in SA

BY VUSI FELE

T

he outbreak and global spread of Covid-19 will go down as one of the most disastrous pandemics in modern human history, with more than 178-million confirmed cases recorded globally to date and nearly 4-million people dead. The last time the world experienced a pandemic of this nature and scale was almost a 100 years ago, when the “Spanish flu” killed about 50-million people.

The Covid-19 pandemic necessitated the total shutting down of economies around the world as governments battled to contain the spread of the virus and minimise its impact.

As we count the cost it is clear that so far the consequences have been nothing short of catastrophic. The pandemic has disrupted the way we live and work, our livelihoods and brought global economic activity to a near standstill in much of 2020. As a result, global GDP for 2020 contracted by 4.3% and is expected to make a slow rebound to about 4% in 2021.

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In SA the economy contracted by more than 7% year-on-year in 2020, with an estimated 3-million jobs lost. According to the latest Stats SA employment figures for the first quarter of 2021, the number of jobless people stood at a record high of 32.6%. More people are expected to lose their jobs as we continue to feel the effects of Covid-19 and as the economy struggles to recover. Young people in particular make up the bulk of the unemployed in SA today.

The increase in SA’s unemployment rate had already been on an upward trend even before the onset of Covid-19 due to an economy that’s been sluggish for the better part of the past two decades.

This despite concerted efforts from the government, private sector, NGOs and other stakeholders to curb the trend. These sobering numbers provide fertile ground for social instability, especially in the

context of the pandemic. If not addressed soon and effectively, the humanitarian and sociopolitical effects on the country could be deep.

[ T H OUGHT LE A DE RS HIP A RTICLE ]

SA has its work cut out as far as economic recovery in the aftermath of the pandemic is concerned, and this means one thing only — we have to achieve faster and higher levels of economic growth. A multipronged approach is required to drive this required growth and increase employment and support economic inclusion and social cohesion. A part of the solution lies in fully exploring and promoting entrepreneurship, especially given that the formal economy is shedding instead of growing jobs. Entrepreneurship could be a viable alternative to formal employment for the multitudes of unemployed people.

One way of achieving this is for those in the ranks of the unemployed, especially the youth, to start considering entrepreneurship as an option, instead of looking to be absorbed by the already constrained job market. By choosing to be entrepreneurs they would

be able to create wealth and employment while contributing to the growth of the economy. Given the number of people who, out of necessity, have established small and medium enterprises (SMEs) in SA, there is little doubt that the drive, energy and creativity among our people are all there.

All that needs to be done is to harness them.

Creating an environment where entrepreneurs can thrive could lead to the rise of more SMEs, whose importance in the growth of any economy and job creation can no longer be gainsaid. In Africa, SMEs represent a significant part of the economy as they constitute about 90% of private businesses and contribute more than 50% of country employment rates and as much as 40% of GDP in most countries.

SMEs therefore play a crucial role in stimulating growth, generating employment and contributing to poverty alleviation and social development. With most big businesses in a state of flux due to the pandemic and having little room to drive faster economic growth, it is now left to SMEs to step up. This can only be possible if SMEs have the support needed for them to succeed, including access to finance, access to markets and access to business development support.

Big businesses and their large supply chains remain a crucial part of the ecosystem required for SMEs to thrive. They can efficiently and effectively deploy billions of their procurement spend to support the development of as many SMEs as they can, thereby easing their access to markets.

This is perhaps a more pressing obstacle

facing SMEs than access to funding.

SMEs often struggle to penetrate existing markets, or create new ones, especially when competing against established businesses.

The markets exist, but the linkages do not.

To help local SMEs gain access to markets, large corporates must get involved. Big businesses spend billions of rand annually procuring products and services from other companies. Recent studies have shown that small businesses grow within a few years of becoming part of a corporate supplier base.

In the African context there is significant development impact to be gained from localising procurement. Yes, it is true that a broad range of procurement challenges and constraints face corporate buyers when identifying and locating suitable suppliers.

These include concerns over the SMEs inability to deliver on contracts due to capacity constraints and underdeveloped networks and insufficient working capital, among many others. There are, of course, a few practical ways for corporates to get involved. In addition to providing access to finance, they should consider making their procurement processes transparent and easily accessible to SMEs. As we emerge from the Covid-19 pandemic it is important to note that it will largely be through creating an environment in which entrepreneurs thrive that full economic revival can be achieved and unemployment reduced in the long run. Large corporates have a big role to play in this regard.

• Fele is chief procurement officer at Absa Group, sponsor of the Absa Business Day Supplier Development Awards.

• previously published in Business Day

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[ T HO U G H T LE AD ER SHIP ARTIC L E ]

Rethinking The Future

– New Ideas for Effective Supplier Development Programmes

By Dr Sydwell Shikweni, Transformation Director, Merchants Supplier development (SD) programmes require organisations to commit to constantly reviewing and adapting their approaches to SD to ensure that they remain aligned to the rapidly shifting supply-chain landscape and are future-ready.

The need for organisations to integrate supplier development into their strategies extends beyond the B-BBEE requirements in the local context and into global best practice imperatives championed by the United Nations Global Compact. This calls for organisations to develop an impact sourcing standard, in line with the Global Impact Sourcing Coalition (GISC) and accelerate these practices, particularly focusing on SMEs to address growing unemployment and inequality.

Given the teething challenges and high failure rate experienced by most SMEs, which can pose significant risks to an organisation’s supply chain, there is a significant need for organisations to prioritise their support for entrepreneurs – in turn, setting them up for success.

There are various innovative ways that supplier development programmes can be implemented to derive maximum benefits. These include: • Selection and identification of needs: This increases the success rate of the supplier development programmes as measured by completing the development programmes, business continuity and integration of beneficiaries into the organisation’s supplier value chain, for example.

• Supplier mix plan: Organisations are increasingly expected to diversify their supply chain through an inclusive approach. Undergoing an analysis of the current mix and developing a plan to diversify the organisation’s supply chain is a positive starting point. It is imperative to find ways to include

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Dr Sydwell Shikweni, Transformation Director, Merchants

previously economic-disadvantaged individuals or groups such as black w o m e n , yo u t h a n d t h o s e w i t h disabilities.

• L ocalised support for SMEs: This enables the organisation to build strong relationships with the local communities within which they operate. Long-term relationships with SME suppliers, in turn, bring about stability, trust and can positively impact productivity.

It enables both parties to engage in mutual problem-solving and allows the organisation to share its knowledge and expertise regarding sustainability.

• S u p p l y c h a i n o p t i m i s a t i o n : Organisations can optimise their supplier development programmes by grouping smaller suppliers into cooperatives and working with ethical intermediaries to assist in tailoring the developmental interventions aligned to the specific needs of each supplier, thus increasing their success rate.

• S hare resources and knowledge: Resource sharing and knowledge exchange is an integral part of capacitybuilding efforts to ensure that SME suppliers have the necessary skills and knowledge to fulfil the organisation’s sustainability requirements. Resources and expertise can be shared through educational events, case studies, webinars, reports, templates, tools and/ or other guidance materials.

• Engage with the supplier: There are several ways for organisations to engage with their SME suppliers, including assisting in setting and reviewing their goals, providing training and resources, engaging in mentorship programmes or looking into sectorspecific initiatives for suppliers to join.

• S u p p l y c h a i n g o v e r n a n c e a n d transparency: Supplier development p ro g r a m m e s w i t h a b ove - b o a rd governance and transparency fundamentally contribute to building and maintaining trust, managing supply chain risks, assisting with reputation management and enhancing competitive advantage.

These are complementary actions that organisations can implement to achieve more sustainable supply chains through their supplier development efforts. There is a significant need for ideation of new and innovative approaches to supplier development programmes to enable South African SMEs to navigate and thrive in the current economic environment.

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Developing small businesses through supplier development can result in major economic change

By Prudence Gololo As South Africa and the rest of the continent begin to slowly emerge from the economic devastation wrought by the COVID-19 pandemic and the measures put into place to curb the spread of the virus, South Africa stands poised to take advantage of the enormous opportunities presented by the AfCFTA. Central to this project will be building capacity in the country’s SMME sector through strategic supplier development aimed at positioning businesses in this sector to increase their manufacturing capacity to supply the market of 1.3 billion plus people with a gross domestic product (GDP) of $3.4 trillion.

The importance of advancing Small, Medium and Micro Enterprises (SMMEs) as key drivers of economic growth in Africa was brought into sharp focus with the launch of the African Continental Free Trade Area (AfCFTA) in January 2021. The AfCFTA with its 54 member states is the largest free trade area in the world and it is anticipated that it will boost intraAfrican trade by 52% by 2022.

Addressing owners of Small, Medium and Micro Enterprises (SMMEs) during a webinar hosted by the Department of Small Business Development (DSBD) earlier this year, South African President, Cyril Ramaphosa, said that SMMEs are set to play a critical role in South Africa’s economic recovery post pandemic. He highlighted that SMMEs were set to be instrumental in the country’s bid to create at least 11 million jobs by 2030, and therefore focusing attention on their development is critical.

World Bank data suggests that small and medium businesses constitute up to 60% of all employment globally and as much as 40% in emerging economies. To fulfill their potential as engines for significant economic change not just in South Africa, but the broader continent,

Prudence Gololo is Managing Director at Barloworld Siyakhula (Enterprise and Supplier Development) SMMEs need substantial financial investment and capacity-building coupled with enabling policy frameworks and the inculcation of a culture of entrepreneurship. It is here that Supplier Development (SD) initiatives come into play as instruments to facilitate radical economic transformation.

Africa’s story has been written by others; we need to own our problems and solutions and write our story”.

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Supplier development allows for the cultivation of relevant skills and talent and the provision of opportunities, partnerships and access to finance which is vital to the growth of SMMEs. The World Bank says the AfCFTA “presents a major opportunity for African countries to bring 30 million people out of extreme poverty”. SMMEs and strategic SD are integral to making this a reality. In the words of Rwandan President Paul Kagame, “Africa’s story has been written by others; we need to own our problems and solutions and write our story”.

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Mogau Wheel & Tyre Group addresses youth empowerment and poverty

Basadi Automotive’s Malakaone breaking barriers for women in the automotive industry A trailblazer in a traditionally male-dominated industry, Josephine Malakaone, a young woman from Bramley, Johannesburg, has broken barriers for Black youth and women in the vehicle towing industry.

With youth empowerment and addressing poverty as their primary goal the powerful husband and wife team of Tebogo Netshivhangani (Operations Manager) and Khomotso Mokhabukhi (Director), began their journey to success in the tyre fitment sector nine years ago. In 2011 they established Mogau Wheel & Tyre in Moletsane, Soweto and later secured a license to operate as a Supa Quick franchise. The change enabled them to improve their marketability, business processes, equipment and profitability. What began as a small enterprise has since grown into a thriving business employing 19 people. They recently converted the Moletsane outlet to a Dunlop Express and have also opened two additional outlets, one in Devland Soweto, under the Best Drive Continental franchise and a Tyremart in Booysens, Johannesburg, where their head office is located. The company also has three vans that provide roadside assistance to the trucking industry while also doing onsite repairs, alignment and fitment for trucks and other vehicles.

The company services Avis Fleet within the Barloworld Group. Barloworld Siyakhula, which supports the growth of SMMEs, has provided development financing to the Mogau Wheel & Tyre Group to acquire the building they occupy in Booysens and the development of a diversified retail centre with a restaurant, carwash, butchery and a Bosch car service facility that will add mechanical repairs to their bouquet of automotive services.

Josephine grew impatient with the slow pace of transformation after working for large corporates in the automotive sector for ten years.

Frustrated by the lack of diversity and under-representation of Black women she witnessed in the industry, she established her own company in late 2019 - Basadi Automotive, which provides towing and fleet movement services. Barely 30 at the time, she was distressed by the country’s chronically high youth unemployment rate and felt compelled to do something about it by starting her own business. Undeterred by a lack of resources, she bought her first truck from an auction, repaired it, and converted it into a tow truck. She then went knocking on doors of corporates that manage large fleets and got her first break with Avis Fleet, which contracted Basadi Automotive to tow vehicles in their fleet. Even when business came to a near standstill with the national lockdown in early 2020 which halted most commercial activities, Josephine persevered, continued knocking on doors and steadily grew her corporate client base.

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Developing Supplier Support Program

By Dr Stan Moloabi

T

he Developing Supplier Support Program (DSSP) is GEMS’ flagship transformation Program. Officially launched on 10 July 2020, the vision of this Program is to encourage growth, empowerment, and sustainability among Small, Medium, and Micro Enterprises (SMMEs), while driving transformation within the healthcare sector through Enterprise Development and Supplier Development.

Since the launch of the Program, twenty beneficiaries have been involved, with representation from various sectors of the economy and including Exempted Micro Enterprises (EMEs) and Qualifying Small Enterprises (QSEs). Eleven of these enterprises are Black women-owned – demonstrating GEMS’ commitment towards impactful transformation. The objective of these partnerships is to scale up the program to expand its reach, while encouraging the sustainability of SMMEs. The beneficiaries selected for this Program are from various industries, including ICT, Catering, Consulting, Marketing, Facilities, HR Services, Healthcare, Skills Development, Media Monitoring, Asset Management, and Auditing. The beneficiaries were chosen after a rigorous selection process with assessment criteria designed for the program.

In addition to what the Program offers, a unique website was created where beneficiaries of the Program can access all required information and forms at the click of a button.

Beneficiaries are further supported through various non-monetary support initiatives. This includes Website Hosting and Development,

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Business Plan Development, and Marketing Material, to name a few.

After the launch of the program, the beneficiaries were assessed to determine the areas of support and mentoring they required.

Beneficiaries were further trained in the following areas: • Procurement • Project Finance • Contract Management • Financial Assistance • Legal Assistance

can compete with their counterparts.

The Scheme has committed and embarked on a process of transformation, and the Board of Trustees has placed this at the centre of its strategic plan.

GEMS commitment towards transformation is evident in the provision and support of both core and non-core services”. The Scheme further aims to support beneficiaries through monetary and nonmonetary support initiatives.

Dr Stan Moloabi, Principal GEMS is proud to highlight the Further Ten beneficiaries were Officer, Government Employee impact this Program has had on enrolled on the Program in Medical Scheme the 2021 Financial Year and the beneficiaries, with success the majority are on B-BBEE stories like that of Mrs Lettie Level 1. The group of thirty Marakalala of Ka-Ntle Trading. beneficiaries consists of Eight Black womenMarakalala moved from being a caterer to owned businesses, Twenty five EMEs, and opening a bakery in Pretoria North, despite the Three QSE. challenging economic times we currently face.

Through this move, more jobs were created.

Three of the beneficiaries were awarded This entity is also exploring the possibility of business contracts with the Scheme as part expanding its business to Mpumalanga, where of the Supplier Development Program. They a great need has been identified. graduated from Enterprise Development to Supplier Development, a move that shows Other success stories include that of Bantusoft GEMS’ commitment to transforming the Technology. The Director, Mr Lehabe Ralekoa, Healthcare Sector. referred to the Program as an “eye opener”.

Ralekoa further stated: “The Program has The beneficiaries have been coached and allowed me to be more of a one-stop shop mentored, and each one is given access to and changed me from being a sole owner to sixty hours of support. As GEMS continues to hiring three more assistants. This move has ensure the development and growth of these allowed me as the business owner to focus SMMEs, opportunities are created within GEMS on the strategic areas while paving the way through its supply chain where beneficiaries for continued growth of the business.”

Join a medical Scheme that understands the needs of the South African Family and enjoy rich benefits on Tanzanite One and Emerald Value Option (EVO).

The Tanzanite One and Emerald Value options are specially designed and aligned with the vision of improving access to quality healthcare.

These flagship options provide cost-effective solutions to meet your healthcare needs. On both of these options, you will also have access to a selection of private and public hospitals on the GEMS Hospital Network - without the hefty price tag!

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Use the QR Code to download the GEMS Member App

www.gems.gov.za | 0860 00 4367 | enquiries@gems.gov.za

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The marketing and communications sector

– broadening the definition of transformation

By Astrid Ascar, Chief Growth Officer, Wunderman Thompson

I

t’s not purely the global Pandemic that has forced all businesses to revisit their strategies and in many cases pivot or fasttrack their digital transformation. Changes to the way we do business, and the way in which we service our clients and customers, were already underway. The change has been industry and sector-agnostic, but in South Africa it has impacted some more than others. For the marketing and communications sector, the pressure to transform can no longer be purely about percentage commitments to Supplier Development, scorecards, ownership or team diversity; it has to include transforming hitherto traditional skillsets that served a pre-digital era characterised only by marketing across television, radio, print and out-of-home.

about far more than ownership and diversity – it’s about the economy, GDP, unlocking aspirations and staying true to the spirit of all definitions of transformation. If the larger marketing, tech and communications players reduce their definition to purely shareholding, or purely diversity, or purely inclusion, they themselves may find their businesses left behind, clinging to very traditional but certainly outdated ways of servicing their clients, with a shortage of talent who’re able to offer integrated marketing, media, technology and data insight capabilities. Their clients’ future customers have grown up with cellphones in their hands, and for whom media is not something one makes a conscious effort to sit down and consume - it’s part of their lives, woven into the fabric of everyday activities and socialising.

There’s a whole new lexicon that brands, agencies and tech firms have to navigate - customer experience, user interface design, performance marketing, martech, VR, AR, AI, account-based marketing, social commerce, dynamic creative optimisation – it can be a minefield, but it’s also evidence that marketing will never again look the same in a business landscape that has seen the convergence of the creative, media, communications and tech and data industries.

The skills future staff servicing clients will need have shifted dramatically, and they are rare, with

Building future-fit skillset training into supplier development and transformation programmes should therefore be a critical component of any marcoms sector transformation effort. It should be about ensuring sustainability for all marketing and communications players; and ensuring that outdated operating and revenue models also adapt appropriately to reflect the seismic shifts that have occurred.

multimedia, digital and related tech and data skills remaining on our country’s critical skills list.

The transformation required in the local marcoms industry still has a way to go in terms of growing a robust independently-owned EME and QSE sector – it’s seen its fair share of fronting, lip service and scorecard box-ticking – and it’s left us with significant legacy challenges. However, Supplier Development and transformation is

Supplier Development and transformation – it’s about the economy, GDP, unlocking aspirations and staying true to the spirit of all definitions of transformation.”

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As an industry, we need to do our part, not only to address the imbalances of the past by transforming the broader industry, but also to safeguard the future of all marketing and communications businesses. If the marcoms sector embraces the word ‘transformation’ in its broadest sense, across ownership, diversity, inclusion and forward-looking skillset and capability-building, it positions for future sustainability and relevance, and that would be a win-win for all.

WUNDERMAN THOMPSON

www.wundermanthompson.com/south-af rica

Wunderman Thompson’s Supplier Development programme

Setting both hard and soft goals to help transform the marketing and communications sector About Wunderman Thompson Wunderman Thompson is part creative agency, part consultancy, and part technology firm. The business’ roots lie in South Africa’s first ever digital marketing specialist agency, the world’s oldest traditional advertising a g e n c y, S A ’s f o r e m o s t s o c i a l media business, and a technology development and platform company.

It’s all come together to form a truly integrated partner for clients wanting to navigate their own digital transformation, the converged and sometimes confusing marketing and communications landscape, and the tech, data and legacy systems challenges that underpin their growth ambitions. We’re a level 1 BBBEE contributor, structured around Centres of Excellence that offer a range of services.

These include Marketing and Communications across all customer touchpoints both real-world and digital, full-service Social Media and Community Management capabilities, Media, Data & Analytics services, Technology, Development and eCommerce capabilities, and Consulting Services that help clients enhance the experiences they offer their customers and clients, both B2C and B2B.

WundermanThompsonSouthAf rica

As a large player in this sector, we have a responsibility to help transform the South African marcoms sector and nurture and grow its future talent and leaders. We need to play our part in redressing the legacy imbalances created by the past – ownership, team diversity, and developing skills that will enable all of us to be future-fit to operate across the ever-converging marketing and technology sectors. Nurturing these skills impacts not just our industry, but also the country’s 4th Industrial Revolution ambitions.

It is against this background that we embarked on a carefully designed formal supplier development programme in 2019.

mentorship, consulting advice and support services to reduce the burden of overheads.

Teams are embedded as part of our client teams, we operate as one, and they gain invaluable experience working on large client accounts. The programme is designed to help them grow.

Our efforts are championed by C-suite executives, but there’s one key factor that has been critical to success. The programme is not a one-size-fits-all; each EME partner helps design their own annual development programme, tailored for the specific challenges they are facing, and their own growth ambitions beyond pure revenue.

Our programme includes EME agencies who collaborate on client accounts for a percentage of revenue and preferable payment terms. Equally important, however, is to set softer programme goals; on-the-job training for their talent, leadership team wunthompsonrsa

wunthompsonrsa

wunderman-thompson-south-af rica

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Supply chain walks and local procurement moves for SMMEs

By Larisha Naidoo

E

very year, corporate South Africa spends billions of rands on well-intentioned programmes designed to mentor and coach SMMEs. It’s not enough. To take SMMEs to the next level, where they thrive and become employers in their own right, big business must be doing more to integrate them directly into their supply chains.

Many large companies have existing enterprise supplier development (ESD) programmes. But they don’t have enough growing SMMEs in them. Just like our young people need jobs as well as skills, our small businesses need the backing of corporate supply chains. They can do all the mentorship programmes they like, but the fact is that without that first purchase order or contract, they will never take the next step.

Making this happen starts with executive sponsorship, it requires a culture change and a business shift. Somebody senior and passionate in a large corporation needs to actively drive the process of onboarding and retaining small businesses. Businesses must have deliberate supply chain policies, practices and targets that focus on local procurement. For a successful local procurement programme there needs to specific local community procurement targets and procurement planning with accountability filtering down the organisation.

not forgetting that the work load increases within the supply chain department however there is a clear business case that is strongly linked to the sustainable development goals..

Good ESD isn’t a one-year engagement: the best results are delivered through sustained, long-term relationships, that deliver real value to both the big and small business. It is an investment that requires time and energy towards developing the small business with empowered developmental feedback that translates from a once-off purchase order to a longer sustainable contract.

Larisha Naidoo is head of Anglo American’s enterprise development arm, Zimele Providing access to markets is key – but corporates can only give opportunities to SMMEs if they know they exist, and what they can do hence getting to know suppliers is a critical step to shifting to local community procurement. There has to be strong engagement with community businesses to appreciate the issues faced by the small business owners on the ground, and their abilities and skill sets.

It’s inevitable that there will be some early hiccups in any new supply chain partnership

It is vital that small businesses are created, nurtured and sustained to become valued participants in a supply chain

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It is also vital that these small businesses are created, nurtured and sustained to become valued participants in a supply chain. To create sustainable businesses, an ESD programme needs to focus equally on mentoring and coaching entrepreneurs, igniting partnerships that create market linkages, and assisting with business loan funding.

A critical element of SMME support is understanding the essential services that small businesses need. That means having mentors who understand business problems and can provide support in areas like tax and governance and can help build capacity in areas like financial acumen, leadership, market orientation and strategic thinking.

Formation of strategic partnerships with established suppliers to the operations is also key to further supporting the development of community based enterprises and suppliers allowing them to take advantage of contracting opportunities available in the mining value chain.

Covid-19 certainly brought its own set of challenges for many SMMEs going through mentorship programmes. At Anglo American Zimele, we were teaching budding entrepreneurs classroom style – and then the world locked down and changed forever. This meant all stakeholders had to start operating differently in a short space of time and finding different ways to skill people up for the future. Online learning became common almost overnight.

The entire organisation went into survival mode. This included offering holiday payments that were interest free for SMMEs in Zimele programmes, and creating a crisis toolkit to help small businesses first survive, and then get back on the road to thriving.

While mining operations continued through the darkest days of lockdown last year, many small businesses took the opportunity to diversify and find new income streams – like doing maintenance at nearby resorts as well as their usual contracts at the mines, for example. All the various initiatives combined to contribute to a 98% survival rate of the small businesses in the Zimele stable.

In addition to a supplier development programme, which aims to develop more than 750 community suppliers by 2022, Zimele is also running an enterprise development programme, which has the ambitious goal of developing over 2 100 sustainable small businesses beyond Anglo American’s mining operations.

Our Youth Development Programme plans to have worked with about 2 500 youth by 2022 to develop their skills, get them ready to enter the job market and ensure that they too are economically active. All in all, our ambition is to create and support up to 10 000 jobs by 2022 as our contribution to Anglo American’s goal of creating three jobs off-site for everyone job on-site by 2025, and five to one by 2030.

Ultimately, it’s all about actively assisting in the development of small businesses to ensure that they can stand on their own two feet, take charge of their own development and participate meaningfully in the South African economy.

That’s a supply chain we can all get behind.

Small business support sets Limpopo entrepreneur

on the road to success Back in 2016, Sharon Mashishi started her a small construction business in the Ga-Chaba community near Mogalakwena, Limpopo. Barely five years later, she owns two companies, and business is booming.

The turning point came when Mashishi joined Anglo American’s Zimele Supplier Development programme. Zimele programme not only mentored her in key business skills, but helped her form a partnership to secure a three-year joint venture contract for pit reticulation and services from Anglo American Platinum’s Mogalakwena mine.

When Covid-19 struck, Zimele mentored Sharon using a Business Model Canvas, giving her the opportunity to re-engineer her business in response to the pandemic and develop an alternative business model to drive sustained growth.

Zimele Supplier Development programme

Building our suppliers’ skills for long term partnership success Anglo American’s Zimele programme helps small and medium-sized business owners grow and diversify their businesses, and create jobs, by responding to the procurement needs of large local buyers. The programme not only helps businesses find new opportunities: it

also provides business and financial training, and mentorship in developing a tailored growth plan and growing market linkages.

Each supplier has a business advisor to advise, support and motivate them on their business growth journey.

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SMMEs need policy support to enhance resilience SMME sector will need to be agile and resilient

BY DAVID MPARUTSA

D

espite commendable efforts and interventions by state and private sector entities, there is no silver bullet to how economies across Africa and the small, medium and micro enterprise (SMME) sector will recover from the global health pandemic.

Across the continent we see a K-shaped recovery as different economies and sectors recover at differing rates from the worst effects of Covid-19 through stimulus packages and global support funds. Countries that acted early and decisively and have the mechanisms to channel support to sectors in critical need of assistance are better placed to lead the recovery.

From a business perspective, sectors such as tech and telecoms are running ahead, while leisure & tourism and aviation have a long road to regain lost ground. One year on from the pandemic there is no linear or homogeneous road to economic recovery.

So where does this leave the critical SMME sector in Africa? According to the African Development Bank (AfDB) report “African SMEs Through Covid-19”, SMMEs account for more than 90% of businesses and almost 80% of employment in African economies.

Most of these enterprises are to be found in the informal sector. Small business owners, particularly in the informal sector, can start

afresh and pivot their business offerings according to the market needs.

However, this adaptability and agility — the very qualities that make SMEs such a feature of the African economic landscape — are also the sector’s biggest Achilles heel. Anyone with an idea, the drive and the perseverance can start a small business in support of their families and even communities, but this does not guarantee sustainability.

Borrowing money A 2020 “Catalyst for Growth” report found that the impact of the pandemic was felt to a far greater extent in emerging markets due to SMMEs in these markets being constrained by institutional inadequacies. Depending on size, when Covid-19 hit some were unable to pay their own or employee wages, others were forced to retrench and many were unable to meet financial obligations.

SMMEs with few investments or liquid assets and high gearing struggled for survival during the pandemic. It goes back to only borrowing money for necessary projects and where the business owner has a line of sight of cash flow to service that debt.

The April 2021 AfDB report stated that in addition to immediate support and relief measures governments should also “consider

Africa is a vibrant and growing economic pot, but still subject to regular economic shocks and bouts of turbulence.”

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mid-to-long term structural policies for African SMEs that would enhance their resilience after the crisis”.

Key recommendations include strengthening awareness of opportunities for SMEs, investing in skills and capacities, speeding up the adoption of digital technologies, and strengthening credit reporting institutions.

Education to support the SMME sector will be crucial, and this is where corporates play such a critical role through enterprise supply chain development programmes and supporting initiatives. Africa is a vibrant and growing economic pot, but still subject to regular economic shocks and bouts of turbulence, be that due to political instability or natural disasters.

Succession planning The SMME sector, in particular microenterprises, will have to learn the importance of contingency reserves and a culture of saving instead of a hand-to-mouth approach, which leaves zero room to manoeuvre and excessive exposure to external factors.

SMMEs can adapt to changing circumstances, but the sector needs to incorporate contingency and succession planning as critical parts of its makeup. In addition, adequately documented procedures that allow their business to

continue to operate in executives’ absence, as well as optimal stocking and resourcing levels to drive efficiency will have to become part of the fabric of the SMME sector.

Support of this critical economic sector requires multi-stakeholder involvement from the public and private sectors.

The economic green shoots of recovery can be seen all over the continent in data points such as the GDP outlook — which the AfDB predicts will grow at 3.4% in 2021, as opposed to a contraction of 2.1% in 2020 — and there has also been a solid rebound in commodity prices.

Allied to that are vaccine rollout programmes, which will help boost confidence in various economic sectors.

As a small-business owner can adapt quickly, it is imperative that SMMEs keep their ears close to the ground in terms of sector recoveries and quickly try to plug into those sectors that are potentially doing well and leading the economic recovery. Understand what a business can offer and link into the value chains of large firms in those sectors, maybe as a supplier or as a distributor.

The opportunities will be there. However, the SMME sector will need to be agile and resilient in ensuring its long-term sustainability and ability to withstand any future shocks.

• Mparutsa is head of enterprise & supply chain development at Absa regional operations. Absa is the sponsor of the Absa-Business Day Supplier Development Awards.

• previously published in Business Day

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YES,

THE CIRCULAR ECONOMY IS A BUSINESS MODEL WORTH INVESTING IN

By Catherine Wijnberg

I

n a recent online poll, 56% of respondents reported that they considered the environment when making purchases, and only 16% stated that they did not. Trends like this provide a very strong signal to corporate leaders that sustainability is the way of the future.

Circular thinking goes beyond the reduce, reuse and recycle focus in the green sector to design out waste altogether. The move towards a circular approach is increasingly visible, and 56 countries from North America, Europe, the Balkans, the Caucasus and Central Asia recently made a united call to accelerate the shift to a circular economy and greener, more responsible resource use.

This commitment appears well-founded, according to the study by Finnish Innovation Fund Sitra, which states that the circular economy could add as much as three billion euros of value to their nation’s economy by 2030.

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South Africa’s alarming waste statistics South Africa is at the embryonic stage in this journey. According to the State of Waste Report issued by the Department of Environmental Affairs, South Africans dispose of enough municipal solid waste to fill an entire football field 10 metres deep, every day. Only 10% of this is recycled or recovered for other uses, while at least 90% is landfilled or dumped. This highlights both the need for more effective waste management methods, and a huge latent opportunity for building circular economy products and services.

By embracing circular economy principles in the waste sector alone we could add up to 3% to the county’s GDP. The time to do it is now”.

Sustainable and radical transformation plans The African Circular Economy Alliance (ACEN), a government-led initiative of which South Africa is a founding member, is working to align circular economy policies and strategies across the continent. Chris Whyte, the Director of ACEN, recently said: “By embracing circular economy principles in the waste sector alone we could add up to 3% to the county’s GDP. The time to do it is now.”

In addition, the 2020 National Waste Management Strategy has created exciting potential for new circular business models. National policies such as these play a critical role in driving business and consumer behaviour.

Circular economy and employment The Global Climate Action Summit is also bullish over the CE’s job creation potential and estimates that over 65 million new low-carbon jobs will be created by 2030. Given the dire jobs shortage in South Africa this is good news.

Is South Africa ready for this change?

A key requirement for circular economy businesses to thrive is for citizens to play an active role in their consumer and lifestyle choices. Where consumers lead, business will follow, but SA is lagging behind. BrandMapp’s consumer insights research released in mid-2021 found that only 30% of mid-income South African adults recognise the climate crisis as a concern, which does not mirror international trends. According to the study, and not surprisingly given our circumstances, South Africa’s middle-class citizens are more concerned about crime, corruption, the pandemic and government incompetence, so work still needs to be done to build consumer awareness.

What does this mean for business?

Importantly, the five sectors identified for circular economy potential in Africa are food systems, packaging, electronics, fashion and textiles and the build environment. Each of these sectors are ideally suited to small business and community or township micro-enterprise and show exciting potential for job creation and economic growth.

Catherine Wijnberg Bio Cape Town-based Catherine Wijnberg is passionate about radically scaling the success of small business as a way to stimulate inclusive economic growth and job creation. Her industry-wide collaboration strategy provides motivation for working together – challenging industry stakeholders to 100x their individual company successes.

Catherine founded Fetola in 2006 with the purpose to build businesses that last. The company emphasis is on sustainability and women and youth-led, rural & township businesses.

Conclusion As South Africa battles the triple threat of joblessness, poverty and inequality the circular economy provides a powerful business opportunity with the added long term benefit of positive environmental impact. However, for the circular economy to succeed three components are needed – supportive national policies, viable circularity models and increasing consumer (and business) appetite. Given the trends, the potential for large-scale and lasting success of the sector is a real possibility.

Fetola: Founding partners and Technical Lead to Absa Business Day Supplier Development Awards

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2021

Winners

By Margy Nicol, Fetola Project Lead

Well done to all the winners of the 2021 Absa Business Day Supplier Development Awards, who have gone beyond the BBBEE scorecard to build inclusive, thriving, sustainable supply chains.

Leading by example, we hope that these companies and their inspirational success stories create a slipstream of growth for the economy as a whole. We extend thanks and congratulations to all our participants, finalists, runners up and winners.

Innovation Award

Newcomer Award This award acknowledges companies that have recently initiated a new and successful strategic Supplier Development programme or project.

The finalists are: 1. GEMS (Government Employee Management Services) 2. Ithuba National Lottery 3. Sanofi Aventis South Africa 4. Uyandiswa Project Management Services

Winner: Uyandiswa Project Management Services Uyandiswa’s CEO is passionate about using their good standing to unlock opportunities for others by supporting upcoming businesses, especially black, women-owned businesses that typically lack resources. They differentiate their supplier development efforts by letting the SMEs hold them accountable to ensure they deliver on their promises.

SD beneficiaries use Uyandiswa premises and infrastructure so that their close proximity promotes partnering, mentorship and collaboration. For Uyandiswa, supplier development is a business imperative that ensures they actively contribute towards alleviating the social ills brought on largely by poverty and lack of access.

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Absa Business Day Supplier Development Awards

This award acknowledges companies that have shown creativity and merit in design thinking and innovation in their commitment to catalyse small supplier success.

The finalists are: 1. Exxaro Resources 2. SPAR 3. V&A Waterfront

Winner: V&A Waterfront On a macro level, the V&A Waterfront’s unique differentiator is that it uses private resources to drive innovations to address problems that cities struggle with globally; prototyping and testing these innovations, learning from the failures and building on the successes, until it is able to share findings and outcomes.

On a micro level, technology in their SME and supplier development include a focus on 21st century skills for youth, SMME training webinars, e-commerce week with 5 webinars, online sales platforms, e-commerce, sales distribution, payment gateways, click and collect, a digital marketing series and social-media marketing with search engine optimisation.

Over and above the standard support like access to finance and markets, the V&A Waterfront SMME support includes research and development, design thinking, providing laboratory / prototyping space and innovation, and digital support through their SMME online helpdesk.

[ WINNE RS ]

Rural and Township Focus Award Women Focus Award sponsored by Cold Press Media

Youth Focus Award sponsored by Absa

The Youth Focus Award acknowledges companies that are achieving exceptional results in supporting the success of youth-led small suppliers.

The finalists are: 1. Anglo American Zimele 2. Ithuba National Lottery 3. V&A Waterfront

Winner: Anglo American Zimele Anglo American Zimele has undergone a major realignment – from a funder of small and micro-enterprises (SMEs) to being an enabler of growth. Zimele’s strategy focuses on coaching and mentoring entrepreneurs, with a special focus on the development of youth to provide economic opportunities in their host communities.

In the last three years, SME suppliers totalled 2 038 enterprises and youth beneficiaries in the programme, with 5 208 jobs supported.

And in 2020 specifically, Zimele supported 300 youth suppliers, all of which were township or rurally based, and collectively SMEs supported over 2 500 jobs.

The Women Focus Award acknowledges companies that are achieving exceptional results in supporting the success of womenowned small suppliers.

The finalists are: 1. Anglo American Zimele 2. Empact Group 3. Ithuba National Lottery 4. Sanlam Foundation

Winner: Empact Group The Empact Group impact lives and communities through a transformative and inclusive approach, which is deeply embedded in their strategy and culture. They actively aim to increase the value of business allocated to black, women owned suppliers and leverage the inherent qualities of female entrepreneurs.

With almost 50 women owned SMEs and over 700 female jobs supported across their SMEs, the judges were impressed by their spend of 34.9% on black, women owned suppliers, as a percentage of SME spend.

Since winning this award in 2020, the Empact Group recognize that black, women entrepreneurs support their local communities and give back wherever they can. By providing further access to supply chain, women owned businesses continue to create jobs and succeed, independently of the Empact Group.

This award acknowledges companies who have exceptional results in supporting the success of rural and township-based small suppliers.

The finalists are: 1. Distell 2. Empact Group 3. SPAR

Winner: SPAR for their SPAR Rural Hub Programme As deserving winners of the Rural and Township Focus Award, the SPAR Rural Hub model addresses a systemic issue. The SPAR Rural Hub supports small scale farmers through an aggregation hub and creates markets for their produce. This enables job creation, income generation, infrastructure development, skills transfer and empowerment, while creating a quality food system that complies with the Global Food Safety Initiative (GFSI).

November 2020 saw the culmination of four years of farmer advancement through SPAR’s customised accredited GAP programme.

Their road to full food safety is arguably the most significant aspect to the initiative. Hub farmers have progressed from producing low value/ margin crops to growing high value / margin crops for SPAR, delivered daily into 3 SPAR distribution centres.

Currently the SPAR Rural Hub supports 14 small scale farmers and has created 144 full time jobs at farm level and an additional 47 secondary jobs through the hub packhouse staff and technical support staff.

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Collaboration Award sponsored by Fetola

The Collaboration Award acknowledges companies for their strategic action to develop industry relationships and foster cross-sector collaboration for the benefit of the wider ecosystem.

Emerging Technology Award This award acknowledges initiatives that are achieving exceptional results in supporting technology-related small suppliers, or using technology as an effective tool to support small suppliers.

The finalists are: 1. Distell 2. Exxaro Resources 3. V&A Waterfront

Winner: Exxaro Resources Exxaro Resources has digitised their sourcing to payment supplier interface platform, providing an easy way for suppliers to interact with the company. Previously, Exxaro communicated via emails, with documents being stored on their systems. Service providers were not able to interact with or update their documents such as tax clearance documents. Since automating the supplier interface system, prospective and existing suppliers can access and respond to tender requests online.

Exxaro Resources provide IT support to facilitate participation. Suppliers update their documents online with the system alerting them when documents are expiring.

The system provides a full data audit trail of tenders, suppliers, documentation and procurement details, which can be filtered, audited and reported on.

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The Localisation Award This award acknowledges companies who have successfully supported local small suppliers that have notable import-substitution and/or export market potential.

The finalists are: 1. Distell 2. Empact Group 3. SPAR

Winner: Empact Group The Empact Group’s intent is to grow the local ecosystem. They believe that SMEs need to understand that working within a sustainable ecosystem offers long-term opportunities.

They maintain that because ecosystems are fragile, parties need to be respectful and fair, to make the ecosystem sustainable and rewarding for all.

Empact Group’s SMEs are expected to identify, present and report on the ways they can and do support local beneficiaries outside of Empact Group’s reach. The SMEs are encouraged to employ from local communities and pay it forward by giving back to them.

The Empact Group collaborates with local agricultural departments to bring opportunities to local farmers, straight into their local and Gauteng supply chain outlets.

The finalists are: 1. Distell 2. E mpact Group 3. E xxaro Resources 4. T iger Brands 5. V&A Waterfront

Winner: Tiger Brands Tiger Brands has acknowledged it will never have enough financial resources to achieve the scale of its supply chain transformation, thus collaboration with like-minded partners in the public sector, private sector, and civil society is part of their ESD strategy.

To achieve targets, Tiger Brands syndicates finance with strategic partners to deliver on objectives, e.g. Anglo American Platinum partnership secured through Zenzele Itereleng, to invest in Agri projects in North West.

Examples of Tiger Brands partnerships include: • assisting aggregators secure Exxaro financing for planters and harvesters; • a financing partnership with Land Bank for black farmers; • a R350m black developmental investment trust Mega Fund to support black aggregators; • a technical partnership with Crop Life and Agriculture Research Council, to support black farmers to access cutting edge scientific agriculture information to ensure land sustainability, improve yields over time and reduce land erosion.

[ WINNE RS ]

Outstanding Growth in a Small Supplier Award (Special Award)

Small Supplier Award sponsored by IDC

This award acknowledges a small supplier, nominated by their corporate supplier development partner that has excelled in accelerating their own, and their client’s success.

The finalists are: 1. Distell and Stellar Agri 2. V&A Waterfront and Mamas Flowers 3. Wunderman Thompson and Black Powder

Winner: Stellar Agri nominated by Distell Through Distell’s relationship with their supplier Stellar Wines, they partnered with Stellar Agri to create a joint venture to finance Lukas Theunissen, a youth from the local rural area to establish Stellar Agri.

Lukas’ technical competence ensured that in just three years, the venture had become a major producer of organic vegetables for local retailers like Woolworths, where supply was based on production quality and volumes.

Through Distell’s further investment of R300 000 in continuous training of Stellar Agri’s staff and management training for Lukas, he now manages the farm and most of the business operations, and works with Stellar Winery on the domestic and international marketing and business development of Stellar Agri. Turnover has grown by over 20% from R37.5 million in 2019, to R47m in 2020, and Stellar Agri has become an exporter of vegetable seeds for the international market.

The Outstanding Growth in a Small Suppliers Award is nominated by a corporate partner that has helped to accelerate the growth of a small supplier to an annual turnover of more than R50 million.

The finalists are: 1. Bidvest Afcom and Pavati Plastics 2. Distell and Stellar Agri 3. Exxaro Resources and MB Resources

Winner: Exxaro Resources and MB Resources Lerato Lelaka of MBR runs a South African contract mining and consulting business offering geological, mining, material handling, stockpile, and coal quality management services.

In 2019, in response to the pandemic, Exxaro invested and allocated R200 million to ESD transformation. MBR was one of the companies that benefitted as Exxaro provided MBR with a zero-interest loan of R25 million to acquire mining operations assets.

As a result MBR was able to create employment opportunities in the mining community of Belfast. MBR demonstrated sustained growth during this challenging period, with 94 people employed in 2018, growing to 279 in 2021 and increased revenue from R38 million to R377.4 million in the same period.

MBR’s vision is to be a world-class partner of choice for the mining industry in Africa. CEO Lerato Lelaka describes MBR’s relationship with Exxaro as a legacy partnership facilitated by common goals of powering Africa and beyond led by the next generation.

The COVID-19 Recovery Award (Special 2021 Award)

The COVID-19 Recovery Award acknowledges companies who implemented innovative and impactful strategies to ensure Supplier Development resilience during the 2020/2021 Covid-19 pandemic.

The finalists are: 1. Distell 2. Exxaro Resources 3. V&A Waterfront

Winner: Distell The liquor industry was ‘shut down’ for extended periods during lockdown, and yet Distell increased their efforts, budget and support of SMEs in their Supplier Development initiatives by “leveraging partnerships to improve livelihoods”.

Distell also focused on greater alignment of their eleven operational, enterprise, supplier development and preferential procurement programmes to the sustainable development goals, thus ensuring all round sustainability focus (SDGs).

With over R19 million invested in ESD activities in 2021 and an investment portfolio of over R100 million maintained during the liquor lockdown, the judges commend Distell for following through with their small supplier support, even during these very tough times.

Distell goes beyond being an SD player, to facilitating industry level interventions, like working with the National Department of Agriculture on the apple juice concentrate value chain.

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Judges Special Recognition Awards

– AFRICAN COMMENDATIONS For the first time since inception, the Absa Business Day Supplier Development Awards has been extended to include nominations from Sub-Saharan Africa. We believe that this will inspire African companies to join the Supplier Development ecosystem and participate in the African Supplier Development Awards in future.

The Judges Commendation for Commitment to Economic Empowerment across the Supply Chain is awarded to:

Debswana, Botswana Debswana has introduced a Citizen Economic Empowerment Policy (CEEP) to make a meaningful and lasting contribution to the Botswana economy, by enabling and capacitating citizen companies to participate in the Debswana supply chain in place of the foreign companies.

Debswana has extended contracts of over BWP1billion in funding to SMEs over the past three years using the CEEP policy.

The Judges Commendation for Commitment to Women Inclusion in the Supply Chain is awarded to

is awarded to

Safricom, Kenya

Tullow Oil, Ghana

Supplier development is aligned with Africom’s company purpose and vision of transforming lives. This means leaving no one behind when it comes to growth. This is achieved by collaboratively fixing the gaps across the supply value chain.

Over the past decade, Tullow Oil has ensured that their supplier development initiatives remain relevant and are tailored to address the needs of suppliers in the upstream oil and gas sector.

Supplier performance is improved by building the capacity of small, local and diverse suppliers, to promote innovation and flexibility of local suppliers, reduce inequality and provide opportunities for marginalised business groups to impact the local economy through job creation.

Safricom provides extensive support services to their suppliers, with a focus on SMEs and women in supply chain. Of the 205 prequalified women suppliers, 65 women SMEs received business support and contracts.

The Judges Newcomer Commendation for Commitment to a Pioneering Supplier Development is awarded to:

Vodacom, Mozambique Historically in Mozambique there is a low spend with local suppliers as SMEs lack access to opportunities to supply goods and the negative perception that SMEs cannot provide quality and speed, compared to large businesses.

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The Judges Commendation for Commitment to Localisation of the Supply Chain

Tullow Oil has worked with key contractors to award substantial sub-contracts to indigenous Ghanaian companies for highly technical scopes of work, so they have an opportunity to develop their capabilities.

The Ghana business focuses on delivering maximum value from the Jubilee and TEN fields under the Ghana Value Maximization Plan. When fully executed, the plan will see a further $4bn investment in Tullow’s Ghana operations over the next ten (10) years, which will lead to more activities and an increase in production. That means more suppliers, more supply volume requirements and more opportunities to develop local suppliers to support their operations in Ghana.

Vodacom Mozambique has successfully launched a supplier portal and access to finance programme with Absa Bank Mozambique.

The platform is still in its early stages to support the initial push for the dissemination of procurement opportunities in Mozambique and make this information available to all.

Vodacom’s partners with access to finance as a primary objective, provides non-traditional loans to Vodacom’s suppliers, a range of business banking services and access to the market.

Impact Award sponsored by Business Day

This award acknowledges a company whose Supplier Development initiatives have been shown to substantially impact the value chain and provide evidence of scale of impact.

The finalists are: 1. Anglo American Zimele 2. Empact Group 3. Exxaro Resources

Winner: Anglo American Zimele Anglo American Zimele’s revised strategy, to move from mine dependency to self-determination was launched in 2018, and is implemented through the three pillars of environment, social and governance.

They are on track to support 10 000 jobs by 2022 and aim to support 20 000 jobs by 2025. The work is carried out in sponsored “hubs” which are business nodes for ESD, with a focus on youth and job creation.

Their SME suppliers support 8 634 jobs of which 340 are youth. Market lines opened a total of R1.69 billion in new contracts, of which 70% were with Anglo American. Funding loans totalled R245.4 million with a recoverability rate of 96%. Access to funding is provided to SMEs that have the potential to scale up and create jobs, empower and change communities.

Their COVID-19 efforts facilitated R21 million in government relief with a 98% business survival rate.

Training efforts benefited 2 851 enterprises, suppliers and youth, with 16 573 receiving mentorship, of which 48% were women and 42% youth.

Their job creation youth beneficiaries numbered 2 500 work readiness, 3 000 tourism and hospitality over 3 years, 400 proofs of concept in retail and 87 future technology youth. A truly impressive record of their continuous progress and drive to make a difference.

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Winner sponsored by Absa

This award is for the company that stands out as the leader in the Supplier Development in South Africa and will be an ambassador for the Awards in 2022.

The finalists are: 1. Anglo American Zimele 2. Empact Group 3. Tiger Brands

Winner: Tiger Brands A South African company of over 100-years-old, Tiger Brands has been proactively managing their role in society by integrating their company’s purpose of “nurturing and nourishing more lives every day” into their ESD strategy 2025.

Supplier development is central to the strategic future of Tiger Brands, who aim to increase their procurement spend with black agriculture and non-agricultural enterprises, secure agricultural food supply within South Africa through localised sourcing, and develop production and financial capacity of Black-owned Enterprises through the provision of procurement access, financial and technical support.

Agri supply chain development includes agri procurement access, import replacement, funding support, land access support and agrarian technical support. Tiger Brands has established an aggregator model with strategic partners that enable micro and small holding farmers to benefit from out-grower contracts, finance and technical support, while developing black mega farmers.

Initiatives are underpinned by strong collaborative partnerships with government, colleges, mining houses and their pipeline partners. There is a focus on technology investment with an agri-eco system platform to enable registration, land, farmer, aggregator, and procurement linkages and market access.

Tiger Brands CEO has directed that in addition to quarterly ESD, social and ethics reporting, Tiger Brands EXCO visit their ESD projects.

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[ T HO U G H T LE AD ER SHIP ARTIC L E ]

Where to for supplier development in a world forever changed by Covid-19?

By Prudence Gololo Supplier development was conceptualised and persued by businesses operating in South Africa for a reason. As a country, we have one of the most unequal societies in the world.

For decades, most Small, Medium and Micro Enterprises (SMMEs), especially black-owned SMMEs, were unable to dream of supplying a national or multinational company – or even a government department. The results of this system are our legacy to bear – crippling levels of poverty, corruption and the odds stacked against entrepreneurs.

Through educating and mentoring SMMEs in essential aspects of their business, companies can partner with them to understand every facet of their business, from pricing to quality requirements. This, in turn, leads to more effective mentorship and empowers the supplier to offer more competitive pricing and services.

Supplier development, if implemented correctly, can help to address many of these issues. It seeks, to build sustainable and thriving businesses, and ultimately, to level the playing field.

But unlike countries like Singapore, the United States and China where SMMEs have successfully driven economic growth, similar results have yet to be seen in South Africa, despite the billions of rands poured annually into ESD programmes by corporates and the Government. A research study by the Small Business Institute found that there are only a quarter of a million formal SMMEs in the country, with millions of smaller ‘survivalist’ businesses that don’t create additional employment opportunities.

Small suppliers often lack the resources, skills, or experience to meet increasingly complex and demanding business needs.

In an economy battered from Covid-19, SMMEs are expected to play a pivotal role in stimulating employment.

What’s the best approach to Supplier Development considering the impact of Covid-19 on the world?

Sadly, as a result of the lockdowns and social distancing necessitated by the pandemic,

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many supplier development programmes have been disrupted, delaying progress and transformation in the SMME space.

Our current situation means that all business owners have a responsibility to acknowledge the role they play in creating business opportunities, and making them accessible to SMMEs. Going forward, there needs to be an understanding that SMME’s will need more support. Corporates must restructure their existing programmes to ensure maximum support and recognize that there is always more that can be done. Ensuring a strategic, controlled response to the impact of the pandemic on the economy.

There is no single approach to supplier development. The procuring company and supplier must develop a strategy that best suits their relationship, supply market, and industry – through partnership.

While supplier development is aimed at improving the performance of the supplier to the benefit of the purchasing company, personal relationships with the supplier can also have a positive impact on the end customer. Stronger customer-supplier relations can lead to better communication, greater efficiencies, and, ultimately, higherquality end products.

TIGER BRANDS

www.tigerbrands.com

Tiger Brands

Transforming our agricultural value chain

Lusanda Moletsane of Khumo Ea Tsabo (KET) agricultural company in a field of small white beans.

As South Africa’s largest food manufacturer, Tiger Brands is playing a key role in the transformation of the country’s agricultural sector. Inclusive growth has long been the cornerstone of Tiger Brands’ developmental mandate, with a particular focus on including black-, female-owned SMMEs (small, medium and micro enterprises) in the company’s operations, from farmers and aggregators to various suppliers across its value chain.

The company established its Smallholder Farmer Programme and Agriculture Aggregator Model to support small black and black woman-owned farming and agriprocessing enterprises.

Success Story In late 2020, Lusanda Moletsane’s Khumo Ea Tsabo (KET) agricultural company was onboarded to Tiger Brands’ agri-aggregator programme to supply the food manufacturer with small white beans by mid-2021. Through the programme KET secured a R10 million low interest loan and technical support funding. In the first season’s harvest, KET’s farmers will supply white beans to Tiger Brands for the production of KOO baked beans. tiger-brands

TigerBrandsFMCG

Case Study Through our enterprise and supplier development (ESD) programme, we develop the operational and financial capacity of blackowned and black-women owned enterprises to become part of our value chain – from sourcing to distribution.

With agricultural procurement at the centre of its supply chain, Tiger Brands intentionally develop black and black women farmers throughout the country.

“The biggest issues facing small-scale farmers are producing at the scale and at the quality standards that corporates demand. This means that farmers need to graduate from being standalone entities and develop the operational and financial capacity to sustainably compete against bigger players. This requires a great deal of development and support often spanning several years and adds complexity for corporate supply chains,” explains Litha Kutta, Tiger Brands’ Enterprise and Supplier Development Director Launched in 2019, the company’s Agriculture Aggregator model seeks to increase the number of participating small-scale farmers

while growing the number of black suppliers for the company holistically.

Aggregators work directly with farmers to provide technical and management skills. As fully-fledged business entities themselves, aggregators procure from multiple farmers and enter into commercial agreements with Tiger Brands, providing better guarantees on tonnages, delivery timeframes and quality standards.

Tiger Brands in turn supports aggregators with input finance, agrarian and technical support, business contracts and offtake agreements, with support services also extended to the black smallholder farmer.

Since its establishment in 2018, the agriculture development programme has supported 157 small black farmers under 8 aggregators, within the aggregator development model and smallholder farmer support programmes respectively and created 834 permanent and seasonal jobs in the small farmer sector.

CONTACT DETAILS: Tiger Brands Limited Tel: 011 840 4000 Web: http: //www.tigerbrands.com/ Email: Esd@tigerbrands.com Physical Address: 3010 William Nicol Drive, Bryanston 2021 Johannesburg, South Af rica

@TigerBrands

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[ DI GI TAL D IALOG U E ARTIC L E ]

What women want

Key learning points

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Women are legitimate, powerful and transformative leaders in industry and in small business.

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Sustainable long-term interventions aimed at helping businesswomen to access supply chains can add significant value and long term advantage.

3

Women leaders are able to address challenges faced by other women as they understand exactly what aspirant businesswomen are going through.

[D I GITA L DIA LOG U E A RTICLE ]

Do female entrepreneurs have the same opportunities to access supply chains as men? The panel at the Absa Business Day Supplier Development Dialogues discussed this question and came up with suggestions on how to make supply chains inclusive and transformative.

More opportunities for women to be in leadership

inclusive spaces for men and women to discuss business.

Before a woman starts a business or enters a boardroom, they fight against sexism, discrimination, cultural stereotypes and social bias. “Growing up, I was always told that women should exist under the leadership of a man,” says Michal Pillay, a Senior Manager of Supplier Diversity at Absa. “Now I know that this is one of the barriers that women aspiring for leadership positions face in our society.”

To address this challenge, Kgatile and her team hosted business dialogs in community halls that are easily accessible to most women. This solution came from women who overcome challenges of working in a male dominated industry. Ageism and sexism are rife in the business world and women are excluded because of this.

Chantal de Kock the General Manager at Fetola faced similar discrimination growing up in the Cape Flats, an environment that is harsh on women. “I come from a family where the majority of male figures were gangsters, I knew from a young age that women were not seen as leaders,” says Chantal.

The panel suggested the opening of opportunities for women to be in leadership positions because they can relate to the challenges and will come up with innovative solutions.

Business roles should not be gender specific “In the business environment, I noticed that it’s typical for men to discuss business ventures on the golf course or in bars,” says Kgatile Nkala the Executive Manager of Corporate Services for the Transport and Education Training Authority (TETA). This puts women at a disadvantage and there is a need to create

4

As funding is constrained for women entrepreneurs, transformative and inclusive funding models can unlock huge growth opportunities.

“At the age of 26, I was appointed as a leader in male dominated multinational company.

Many people asked me how I did it because it was rare for a young African woman like me to be appointed in a position like this,” Sekai Chiwandamira the Regional Chapter Manager at ANDE Aspen Institute. To overcome the notion that it’s a “man’s world,” it’s important for women to continue breaking barriers and proving that roles should not be gender specific.

Strategic peer network for women

they finally opened for her. In South Africa there are still too many industries that are male dominated and this must change.

“Female entrepreneurs benefit from business support and development initiatives that include mentorship and coaching from women they identify with,” says Chantal. Peer support amongst women is strategic and effective.

New policies need to be in place “Corporate have to be intentional with strategic objectives within the organisation to ensure women businesses have access to the market,” says Michal. She adds that Absa currently spends R1.9 billion on small women led businesses.

There is a need for the implementation of policies that directly impact the socio-economic challenges faced by women. Without new transformative policies, nothing will change.

Positive female role models

Violet Lupuwana the Founder and Managing Director of Chumile Holding started her business in the male dominated taxi industry.

“I challenged the status quo because the transport sector makes billions of rands and I didn’t understand why I could not be part of it,” says Violet.

Having positive women role models that stepped out of their traditional roles will encourage others to follow in their footsteps.

“As a woman in a leadership position I always encourage aspirant young female leaders to demand to be treated with respect, “says Sekai.

As much as society, culture and businesses needs to be more inclusive, the onus is on women to challenge male dominated sectors.

Violet knocked on doors for four years, before

The role of women in leadership positions is to lead with integrity and to use their cultural awareness and emotional intelligence to make informed business decisions.

5

Women need female rolemodels and mentors to support and coach them to unashamed success.

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Women-led small suppliers need to work together, build powerful networks and show up to claim their space in the supply chain.

• previously published in Business Day

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[ Digital D ialogue Article ]

Accessible finance for small suppliers

– A tool to boost growth

S

mall businesses are a critical component of the African economy, they make up 90% of all private firms, contribute more than 50% to employment rates and almost 40% of GDP in African countries. Globally there is recognition of the importance of small business to stimulate growth, create jobs and help alleviate poverty, and even more so in the wake of economic recovery from the pandemic. Recent discussion by panelists from business, finance, SMEs emphasised the critical need for access to finance as one of the most important (yet missing) levers for small business growth. The question that was posed is how can finance be unlocked for small suppliers and can we see inclusive economic growth without this?

As financial markets become more risk-averse, confirmed market access and confirmed purchase orders are increasingly a requirement for small businesses needing to access finance, yet small suppliers often struggle to penetrate or create markets, creating a no-win scenario. Small suppliers cannot compete with existing big business because they lack access to the working capital (and investment finance) to serve these markets.

This is an area where supplier development can play a pivotal role; where markets exist but linkages do not. Big businesses seeking to develop inclusive supply chains that allocate

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procurement spend and resources to develop, support and enable access to small suppliers make an immediate impact on the growth of those suppliers. Holistic strategies ideally unlock necessary capital required as the small, well-performing suppliers grows.

Funders can help small suppliers directly, and partner with corporates wanting to provide procurement finance. For example, ProfitShare, a counter-intuitive Fintech business, partners with SMEs to support them through the risks of delivering to corporates, by walking them through the steep learning curve. A good contract or purchase order will give SMEs access to this service, that grows SMEs to independence and bankable business viability within a year. Another corporate assists with debt collection to manage their own credit risk, mentoring SMEs to pay on time to protect their credit and run their businesses in a mature and disciplined way. Studies show that SMEs grow within a few years of partnering with a corporate supplier.

Pavati Plastics MD, Mthobisi Nhleko is a success story and example of a winning SME

/ corporate / funding partnership. Their key to unlocking value was having a corporate champion, who understood the business, vision and people and then advocated for them, using their business influence. Entrepreneurs need to develop quality relationships to build trust with these strategic partners, who invest time and money in their development and growth.

[D igital Dialogue A rticle ]

Key learning points

Entrepreneurs need to develop quality relationships to build trust with these strategic partners, who invest time and money in their development and growth” Investors look for an entrepreneur who has integrity, resilience, commitment and self-discipline to communicate, network and find the right partnerships. SMEs need to focus on the basics to build a sustainable business that has proper financial records, business model and systems and functions well.

They need margins that cover costs, diversified customers and a cashflow plan. Entrepreneurs need to package their business case for investment well, and not give up too easily, but demonstrate grit and patience, to develop key relationships and partnerships. Then matching their business with right the funder, with the help of a champion becomes a natural progression.

As we emerge from the pandemic, we need an environment where SMEs can thrive, contributing to economic revival. The scorecard initiated corporate supplier development, but it has taken on larger proportions that support a localised strategic vision and is an enabler for growing strong businesses in supply chain. We need to be part of growth across the continent to create opportunities for entrepreneurs and SMEs beyond South Africa’s borders. We have to grow our supplier base to replace imports with a domino effect to boost our economy with the ultimate objective of becoming an exporter.

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Corporates and investors partner with the entrepreneur who has the right qualities, integrity and grit.

2

SMEs need to get the fundamentals right, consistently, over time, to build a sustainable business and the rest will follow.

3

SMEs need support to develop skills and capacity, access to markets and funding, in that order.

4

SMEs need a champion to help them gain access to markets, capital and unlock value.

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SMEs can be developed into sustainable businesses, through quality relationships with key stakeholders, over time.

6

Corporates and funders must collaborate with the SME to determine the best fit solutions for their business and find innovative ways to support the business.

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SME supplier development benefits all stakeholders to recover our economy.

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We can build our economy towards being an exporter, by growing the supply chain ecosystem.

• previously published in Business Day

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DISTELL

www.distell.co.za/sustainability/

Creating memorable moments Crafting a better future…

Distell is Africa’s leading producer and marketer of spirits, fine wines, ciders and ready-to-drink beverages. We craft distinctive alcoholic beverage brands, enhance memorable moments and inspire responsible enjoyment. The value we create enriches the lives of our employees, shareholders and the communities in which we operate.

As a United Nations Global Compact participant, the Sustainable Development Goals (SDGs) are our blueprint to achieving a better and more sustainable future for all.

Our strategic approach is to create shared value and have an impact in key focus areas along our value chain where we can make the most significant difference.

society. Therefore, Distell’s strategy is to provide businesses with the services and support that they need to help them overcome the many challenges that prevent them from growing their businesses.

Our ESD programme focuses in particular on promoting decent work and economic growth (SDG 8), developing partnerships for the goals (SDG 17), and promoting Gender Equality (SDG 5).

Our Programmes: E+Scalator and the Agri+Gator

Our E+Scalator Programme provides support to non-agriculture clients and is focused on six key objectives:

Our supply chain excellence programme is geared to improving product quality and optimising our supply network for scale efficiency through sustainable, cost- effective sourcing, thereby creating transformed and inclusive value chains that realise a shared relationship between Distell and its suppliers.

• T o incubate black-owned and black women-owned businesses.

• Discover and develop new empowered suppliers.

• Provide market access by awarding off-take agreements.

• Provide and/or facilitate funding for enterprise and supplier development purposes.

• Deliver targeted and relevant support services that grow suppliers.

• C reate meaningful employment opportunities.

We believe that Enterprise and Supplier Development (ESD) is the most important component of local economic development, as it is businesses that create sustainable jobs and wealth creation opportunities in

The Agri+Gator Programme aims to provide structured engagement and direct support to improve the yield, output, participation, access to markets and growth of empowered apple and grape farmers within our value chain.

We are developing and implementing business strategies that seek to integrate sustainable environmental, social and economic impact as core elements of our business strategy.

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Lukas Theunissen (Lassie), Director and co-owner of Stellar Agri

Distell’s Mixed Cropping Pilot Project

COVID-19 has had a negative impact on the alcohol industry including our own business and that of our wine and grape suppliers.

As part of our efforts to support the rebuilding of the industry and the economy, we have invested in helping farmers to start and expand alternative crop or mixed crop farming activities, thus enabling alternative income streams for those farms.

In mid-2020, we launched our pilot project with Stellar Winery in Vredendal (Western Cape). It has helped Stellar’s BEE partner, Stellar Agri, create over 100 seasonal jobs and increase its revenue significantly through the production and export of various vegetable crops.

Stellar Agri, a majority black-owned company, is currently exporting pumpkin seeds into the European Union and selling a variety of vegetables to Woolworths and other local retailers.

This extra income has helped Stellar Agri and Stellar Winery retain all their jobs during a period when most companies have been forced to retrench staff. Stellar Agri has also doubled its non-wine/grape income in the past year.

Distell will be rolling out its alternative crop/ mixed crop support model to other pilot project sites in the Western Cape over the next 12 months and hopes to achieve similar successes.

RMA – A social insurer committed to Supplier Development and Social Impact At Rand Mutual Assurance (RMA), we subscribe to the United Nations 17 Sustainable Development Goals (SDGs) as a universal call to action to end poverty, protect the planet, and ensure peace and prosperity.

To contribute to this essential global initiative and ensure maximum impact in our sphere of influence, we have pooled, prioritised and grouped the SDGs into five impact areas most relevant to our business and our stakeholders, namely: Responsible Investing, Entrepreneurship, Financial Education and Inclusion, Innovative Skills Development and Diversity.

Supplier Development (SD), which falls under Entrepreneurship, is important to us as we understand the vital role Small Medium Enterprises (SMEs) play in contributing to the overall development and sustainability of the economy.

Supporting entrepreneurial activity drives socio-economic growth For over 127 years we have been administering the benefits for occupational injuries and diseases in Mining and Metals industries.

We are committed to developing SMEs within sectors that are central to our operations including medical practitioners, asset managers and brokers, to name a few. We also look outside this scope to include other strategic partnerships that support our deliberate approach to be socially inclusive in our pursuance of community upliftment and the development of empowered communities.

The support we provide to SMEs in our supply chain enables them to create more jobs, achieve higher revenues and reach sustainable operating levels that are independent of our support. RMA provides support in the form of salaries, office rental, IT equipment, furniture, travel, and other office operating costs.

RMA Spends R45 million on Supplier Development in 2021 Our SD and enterprise development programme supports Black Economic Empowerment (BEE). For this year RMA has committed R45 million to support new and existing projects during the formative years of their establishment. RMA is currently supporting black owned asset managers, black owned brokerages, black medical practitioners, an incubation hub for entrepreneurs and is funding scholarships for 31 young creatives from disadvantaged backgrounds to study digital content creation.

The SD focus is on assisting these entrepreneurs to grow their businesses without the pressures of operating expenses for three years. We measure our success when these recipients can operate independently after the BEE funding period. In the case of scholarships for the young content creators, we recognise that the creative economy presents vast career and business opportunities, and the bursaries will equip these black youths with skills, enabling them to participate in the economy in an industry that would have excluded them because of their financial inability.

RMA Funds First Black-owned Prosthetics Manufacturing Plant and First Mobile Prosthetics Clinic in Africa RMA has partnered with ND Madihlaba Medical Orthotist and Prosthetics to construct the first 100% black owned prosthetics manufacturing plant in South Africa equipped with the latest technology.

RMA also purchased and helped the company to custom build one of only two prosthetic mobile clinics in Africa.

The support from RMA has enabled the business to expand to seven practices with the mobile clinic providing the ability for doctors to travel to remote rural areas throughout the country and Southern Africa, giving isolated vulnerable groups much needed treatment and provision of prosthetics on the spot.

RMA partners with Africa’s Largest Start-up Campus 22 On Sloane, the largest start-up campus in Africa, is an important project for us because of the pivotal role it is playing in the development of entrepreneurs. The campus is an entrepreneurial ecosystem, home to dozens of start-ups from various industries.

Over a three-year period, we are assisting 22 On Sloane with R16 million towards the Residency Programme, to subsidise dedicated workspaces and small offices for the SMEs.We are also supporting them through the Incubator & Accelerator Programme to help some entrepreneurs with customised offerings for business development.

The campus is a one stop shop, offering a bouquet of services and amenities, including easy access to meeting rooms, high speed uncapped WiFi, opportunities for Reverse Mentoring, networking with various private and public stakeholders and access to markets.

@RandMutualAssurance

@RMAssurance

Rand Mutual - RMA

[ T HO U G H T LE AD ER SHIP ARTIC L E ]

THESE HAVE BEEN TRYING TIMES FOR SMALL BUSINESSES AND SUPPLIERS. Work with a trusted partner who will help you navigate these challenges and guide you through your business journey: BDO’s Financial Services audit, advisory and technology team. www.bdo.co.za

Copyright © 2021. BDO South Africa Services (Pty) Ltd, a South African company, is an affiliated company of BDO South Africa Inc., a South African company, which in turn is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO to discuss these matters in the context of your particular circumstances. BDO, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

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The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used, published or redistributed without the prior written consent of BDO South Africa Services (Pty) Ltd. The opinions expressed are in good faith and while every care has been taken in preparing these documents, BDO South Africa Services (Pty) Ltd makes no representations and gives no warranties of whatever nature in respect of these documents, including but not limited to the accuracy or completeness of any information, facts and/or opinions contained therein. BDO South Africa Services (Pty) Ltd, its subsidiaries, the directors, employees and agents cannot be held liable for the use of and reliance of the opinions, estimates, forecasts and findings in these documents.

JOIN THE INSIDER TRACK SERIES FOR

EXCLUSIVE REAL TIME TIPS AND TRADE SECRETS The Absa Business Day Supplier Development Insider Track Series is an exciting and interactive online series of workshops and community platform, designed for robust conversations with change makers in the supplier development ecosystem.

Members (Insiders) gain access to a series of inspirational case studies, testimonials on lessons learnt and innovative business models and strategies used to address supply chain challenges in the current economic climate.

The first episode was launched in October and Insiders got a front row seat to exclusive engagements with thought leaders, procurement executives and supplier development professionals who are serious about creating a transformed and inclusive supply chain.

Creating supportive and development structures for small suppliers to thrive is an important step towards building the ecosystem to facilitate a transformed supply chain to grow the SME sector and the economy. South Africa’s economic landscape is changing at a fast pace and informative sessions like this are impactful.

The Insider Track series provides an interactive community platform to network with other professionals and share ideas on how to build new models and strategies that address current socio-economic issues faced by entrepreneurs.

Register to join the next Insider Track Series which take place on 2nd December 2021, showcasing the Absa Business Day Supplier Development Awards 2021 Winning Small Suppliers.

Don’t miss out!

To register as an insider: https://sdawards.co.za/insider-track-workshops/

HUMAN INTEREST STORIES AT THE LAUNCH OF THE NEW INSIDERS TRACK Each Insider Track Series session unpacks different topical issues that are affecting supplier development from the perspective of a corporates and small suppliers. At the launch of the series in October 2021, the topic “People, Planet and Profits in Ethical Supply Chain” a panel of experts, gave specialist insight and commentary. Two highly successful and impactful case studies were presented, one which helped a wide range of small suppliers and another which focused on developing one single scalable start-up.

Host, Catherine Wijnberg, CEO of Fetola together with forward thinking industry leaders from Absa Group, The Ethics Institute, Tiger Brands, Centre for International Private Enterprise, and Industrial Development Corporation provided insight and commentary on the two very different human interest stories about entrepreneurs whose lives were impacted by supplier development work.

PAVATI PLASTICS

FROM BUSINESS FAILURE TO SUCCESS IS NOT OVERNIGHT! This is the personal story of Mthobisi Bruce Nhleko, son of a single mom, chasing his vision….

changes needed to create the Pavati Packaging Group. But his eye was on the prize and he was ready to pay the price.

Mthobisi reminisces with warmth about the resilience he developed as a youth taken from his family and cared for by the nuns on Nardini Convent School in Vryheid until he was old enough to go to high school. With only one pair of shoes till matric, he would operate the taxi door in exchange for ride home. Evenings he helped his mother sell AMC cookware and Tupperware door to door, to make ends meet.

The hardest was when he and his wife had to explain to their 9 year old daughter, why she was being taken to the same boarding school to be cared for by the same nuns, who had taken care of him. Those kinds of personal sacrifices were much more difficult than losing cars or almost losing their home on four occasions.

“You need to be like a racehorse with blinkers, and your eyes on the prize, not distracted by anyone or anything that can take you off course.”

It’s hard to reconcile this impoverished childhood with the self-confident, businessman, who is well on his way to achieving his goal of a R1 Billion turnover by 2025. After exiting from an award-winning role in a global marketing company, Mthobisi used his BCom degree knowledge and corporate experience to start his first distribution business. He soon realised that manufacturing was where the opportunity was and wound down his business to set up Pavati Plastics, a women owned manufacturing business, with his wife, Nhle.

It took a further two long years of determined, tough negotiations to establish a more viable business model that could attract the kind of funding needed to scale. Mthobisi’s describes the sacrifices, down scaling, black listing and tough

Finally, after much personal hardship and struggle, Mthobisi and Nhle, accomplished a viable, commercial agreement with Bidvest Afcom and their funders, Absa Bank. Today he is even more driven to fulfil his mission, while living his same modest lifestyle, despite significant business success and escalating growth. He is the epitome of #DoMoreTalkLess Mthobisi is aware of the environmental concerns of plastic and while Pavati Plastics Group started as a plastics manufacturing (i.e pallet wrap, shrink wrap, bags) using cast and blown technology, the company has grown from these humble beginnings as a plastics-related product distributor, to recycling and circular economy ambassadors. There is an in-house recycling centre, focusing efforts on educating customers as recycling is a key employment generator, simultaneously driving job creation and sustainability.

Today Pavati Plastics Group manufactures, packages, warehouses and distributes products, while working towards their goal of distribution across the Southern African Development Community (SADC) region.

Their secret? “Stay consistent with your vision and ensure that the business you create is a legacy one.” Bruce Mthobisi

Mthobisi Bruce Nhleko Pavati Plastics

Nhle Nhleko Pavati Plastics

MAMMA’S FLOWERS

THE PANDEMIC PROVIDED THE V&A WATERFRONT WITH THE OPPORTUNITY TO EMPOWER SMALL BUSINESSES Cape Town is synonymous with many unique cultural traditions, one of which are the city’s evergreen flower sellers.

Flower sellers are to be found all over the city centre, including the iconic V&A Waterfront. This is where Ashra Adams (56) has been operating for almost 30 years. A generational family business, Ashra runs Mama’s Flowers at the Victoria Wharf, selling flowers to a loyal customer base.

registering with SARS and obtaining tax clearances and being able to register workers for UIF.

The strict national lockdown to counter the spread of COVID-19 was life changing for many. Only essential businesses could operate. Most SMMEs, including Mama’s Flowers, did not fall into this category. Ashra found herself, her staff of two, her children and family facing a deeply uncertain future.

“March 2020 is a date we will never forget” she says.

David Green, CEO of V&A Waterfront said: “We recognise the value in providing a nurturing environment for our SMMEs. The pandemic was a stress-test and we realised the need to support vulnerable small business traders in new and innovative ways.

The V&A is home to 800 tenants, including 450 small businesses. Around 24,000 people live and work daily at the Waterfront. Visitor numbers dropped from 60,000 to 80,000 a day (24 million per annum) to about 3,000 during the height of the pandemic.

This new business compliance enabled her to become a supplier to large retailers and Mama’s Flowers now retails to eight Spars across Cape Town and supplies the 3-Arts Village centre.

“Mama’s Flowers and businesses like hers are integral to the fabric of the V&A. We are delighted that we could be there to support, sustain and help grow Ashra and her business. It is a good example of working with our ecosystem to build back better and thrive together.”

The Waterfront took bold decisions to mitigate the effects of lockdown, giving R20m in rental relief to SMME tenants, providing information portals and support, and making working capital available in the form of non-interest bearing loans with a two-year payment holiday.

Thankfully, with the support of her community during these troubling weeks and months and a plan by V&A Management for rental relief and financial support, Ashra was able to continue her residency at the Waterfront once lockdown regulations were relaxed. The working capital loan enabled the purchase of a vehicle which resulted in a direct relationship with a new supplier.

Until this pivotal period and despite a 30-year history, Mama’s Flowers had operated on an informal basis. “When V&A Management said they would like to support us financially, that was a big wow for me, as it was an opportunity to move forward and support my workers,” Ashra says. “It also provided the opportunity to think differently about how to structure my business.”

With the support of an accounting practice at the Waterfront, Mama’s Flowers became fully business compliant, including

Ashra Adams Mamma’s Flowers

SMMEs are important for economic growth SMME success is key to South Africa’s growth. Here’s how to achieve it.

By Vusi Fele | Chief Procurement Officer, Absa Group Limited Small, medium and micro enterprises (SMMEs) make up 90 per cent of formally registered businesses in South Africa, employing about 60 per cent of the labour force. Despite this, SMMEs only contribute roughly 34 per cent of gross domestic product (GDP). This contrasts to more developed countries where small businesses represent approximately 70–90 per cent of the business landscape, employing up to 80 per cent of the total workforce and contributing about 60 per cent to the GDP.

Adapting procurement policies to fuel economic growth by actively supporting entrepreneurs to scale their businesses and support them will, in turn, contribute to increasing SMME success.

Having recognised the potential of this sector, government has – in the National Development Plan (NDP) – set a seemingly ambitious target that 90 per cent of new job opportunities created by 2030 should come from SMMEs .

To put that into perspective, the NDP calls for the economy to be close to full employment by 2030, through the creation of 11 million new jobs. Of these, 9.9 million jobs should come from SMMEs. Currently, it is estimated that formal SMMEs employ about three million full-time employees, with 39 per cent of the jobs being generated by medium-size businesses.

While SMMEs offer an important vehicle for sustainable economic and social inclusion as significant job creators, they face considerable challenges of which access to funding is a major hurdle.

Corporate South Africa needs to collaborate with government to ignite sustained SMME contribution to economic development. To address the multiple challenges of sluggish economic growth, widespread and high unemployment, and socioeconomic inclusion and sustainability, we need to start with our corporate procurement processes.

As one of the largest buyers of goods and services in the financial industry, we believe we have a moral responsibility to leverage our purchasing power to support the country’s supplier transformation agenda.

Adapting procurement policies to fuel economic growth by actively supporting entrepreneurs to scale their businesses and support them will, in turn, contribute to increasing SMME success.

black-owned and black-women-owned entities. In 2019, supplier development funding amounting to R253-million was provided to black-owned Qualified Small Enterprises (QSE) and Exempt Micro Enterprises (EME) to help them to grow their businesses, build capacity and infrastructure and integration into competitive markets. In 2019, Absa spent R8.1-billion with 51 per cent black-owned entities, and R5.7-billion with 30 per cent black-women-owned entities, R2.7-billion with SMMEs, and R162-million with youth-owned entities.

With an estimated 2.5 million SMMEs in South Africa as of the first quarter of 2019, corporate South Africa has a role to play to ensure that SMMEs not just survive, but also thrive. Supporting these fledgling businesses is key to accelerating and sustaining inclusive growth.

At Absa, in addition to the way we address procurement, we use our scale, reach, and significant balance sheet to maximum benefit to provide a multipronged way through which SMMEs can grow and achieve their possibilities.

We have developed strategic partnerships with local and international development finance institutions to help secure finance for SMMEs that do not qualify for credit through conventional banking, as well as partnering with other corporates to support the transformation of supplier and distribution value chains.

Through this approach, we have raised R2-billion in financing for SMMEs over the past two years and assisted about 100 000 SMMEs through training and mentoring.

A commitment to diversifying our supply chains to include suppliers from different backgrounds, gender, ethnic groups, regions, experience and expertise can make a positive impact with the ideal goal being a supply chain that reflects the diversity of a business’s customer base and the demographics of the regions wherein it operates.

At Absa, our supply chain promotes responsible and inclusive procurement practices, applying standards of integrity and good practice in managing related environmental, social and ethical impacts.

This considered approach has already yielded great results. We prioritise purchasing from small medium enterprises and Authorised Financial Services Provider Registered Credit Provider Reg No NCRCP7

Growing our impact through nurturing supplier development That’s Africanacity.

Authorised Financial Services Provider Registered Credit Provider Reg No NCRCP7