“Preferential procurement and investments in enterprise and supplier development provide important opportunities for promoting social and economic transformation in South Africa

Enterprise development and procurement

Preferential procurement and investments in enterprise and supplier development provide important opportunities for promoting social and economic transformation in South Africa. Their potential has been recognised in the recently revised Broad Based Codes, where they are allocated a substantial weighting of 40 out of 105 points. At Impala, our investment in supporting small businesses, and targeting our procurement expenditure, forms a critical part of our commitment to supporting socio-economic development in the communities in which we operate.

Investing to support small- and medium-sized businesses

Our enterprise and supplier development activities – which focus primarily on supporting local and black-owned businesses – are designed to ensure compliance with regulatory expectations, contribute to socio-economic development in neighbouring communities, and build a more robust and competitive supply chain for the Group. We work closely with the Royal Bafokeng Enterprise Development unit in Rustenburg, and the Marula Community structures in Burgersfort. All our initiatives are regularly evaluated to ensure that they meet defined expectations.

This year, we continued to provide support to various small to medium local black businesses through the following principal initiatives.

• Supplier development programme: Launched in 2013, this initiative seeks to enhance the competitiveness of 10 local small, medium and micro enterprises (SMMEs) and black-owned businesses that were already part of the Implats supply chain. This 24-month university-accredited training and mentoring programme includes business-specific training and bi-weekly on-site meetings with the owner/manager. All companies completed the programme during the strike period last year. Since its inception in January 2013, 70% of participating companies increased their turnover, with an average turnover growth rate of more than 400%. A total of 33 jobs was created equating to a 13% job creation rate.
• Business advisory and development service: This programme helps local black entrepreneurs to grow and sustain their businesses and become part of the Implats supply chain. The aim is to develop business skills that will lead to increased efficiencies, turnover and profit. Of the companies selected in January 2013, 50% are still on this programme and continue to be assisted by an external service provider. Two of the candidates will complete the programme by December 2015 and the others in 2016. Collectively up to the strike period, the original businesses experienced turnover growth of 20% and employment growth of 61%. Up to June 2015, the turnover of the remaining beneficiaries grew by 92% collectively while they created 49 jobs since they started on the programme.

Our enterprise development (ED) office within the supply chain department provides a business assistance programme that provides support to any local and black-owned businesses experiencing difficulties in meeting their contractual obligations. The department conducts a diagnostic analysis to determine intervention or development needs required. We then assist these companies to implement corrective action and provide mentoring as required. In addition, the ED office functions as a walk-in centre to give guidance to comply with regulatory and Impala's procurement requirements for start-up entrepreneurs.

A review of our compliance with the enterprise and supplier development requirements of the BBBEE Charter is provided here.