Transformation overview
As a committed corporate citizen and one of the largest employers in South Africa, Bidvest provides inclusive support to the empowerment of individuals, businesses and communities and is highly optimistic and encouraged by the opportunities brought about by B-BBEE. The ever closer alignment with the businesses and communities we serve is perhaps the biggest strategic opportunity facing our organisation today and into the future.
Our past successes and future endeavours continue to be a major driver for business growth and sustainability. Bidvest acknowledges that transformation is key to long-term growth and serves as a strategic platform to access new markets. While scorecards and good BEE ratings play a vital role in accessing opportunities it remains only a benchmark and measurement for transformation that happens beyond the tick-box framework.
The Revised Codes of Good Practice 2013 (revised codes) were fully introduced during the 2016 financial year. The more stringent requirements required a significant adjustment, particularly in relation to the administration of B-BBEE within our operations. With good planning and a robust gap analysis, our businesses were well positioned for the transition. There are aspects in relation to interpretation and application of the revised codes that remain ambiguous but we are hopeful that the Department of Trade and Industry (DTI) will clarify those aspects and communicate to the public with certainty on how to proceed. Despite these uncertainties and subsequent lack of clarity, our businesses continue to implement and optimise that which is within our control.
The Bidvest Group achieved a level 4 rating under the revised codes; an excellent achievement with which we are extremely pleased. We were also heartened by the recognition recently received as one of the top 10 most empowered companies listed on the JSE in 2016.
Bidvest, in accordance with its decentralised operating model, expects every subsidiary business to transform in its own right and to fully integrate B-BBEE as part of its operations. All businesses acquire their own B-BBEE ratings and report to the board of directors of the Bidvest Group as well as their respective stakeholders on how they are transforming as an employer, supplier, customer and corporate citizen. Other than those businesses governed by industry sector charters, the rest are in various stages of transition between the old codes of 2007 and the revised codes. Those that have completed the verification process have achieved very good to satisfactory B-BBEE ratings and the expectation is to perform even better in the coming year.
We cannot ignore the realities and impact of a no-growth economy and contentious political environment. The less favourable climate has had an effect on our ability to implement initiatives according to plan. Our businesses continue to perform a balancing act between complying with some of the heftier requirements of the scorecard while at the same time managing the downscaling of the business in response to a subdued economy, as well as significant down-trading in certain sectors. Despite these challenges, we remain committed and are on track to achieve our objectives in the coming year.
Bidvest black ownership and shareholding remains above 51% and as per the revised codes is recognised as a black-owned company. The black ownership in Bidvest incorporates direct B-BBEE ownership, the sale of asset transactions as well as the continuing consequences of previous broad-based deals.
The focus on diversity at top and senior management has escalated and is receiving the attention it deserves. Bidvest is evolving and with that comes the need to continually adapt our thinking and embrace new ways of doing business. We believe that diversity will foster innovation, creativity and competitiveness and stimulate a dynamic environment within which all employees can thrive.
Skills development remains a priority and our businesses are progressively increasing their investment in all areas of skills programmes, learnerships and internships. The increased weighting and investment requirements of the revised codes has meant that our businesses have had to adjust their plans accordingly. The bar has been raised significantly; however, we have stepped up to the challenge and have increased our investment in the training of black employees to R462 million in 2016. This makes up 82% of the total training spend (R557,1 million) in the Group.
Addressing the challenge of youth unemployment is high on our priority list and is demonstrated by the increase in the number of learnerships and apprenticeships for black employees and unemployed black people. In addition to improving the likelihood of employment through providing much needed skills, we are proud of the fact that we have enabled the absorption and employment of 40% of the unemployed learners in the Group. In line with increasing the number of learnerships and internships going forward, our aim is to substantially increase the absorption rate as we go along.
The introduction of enterprise and supplier development speaks volumes to government’s intention to stimulate and drive the process of SMME development. The amendments reflect a more streamlined approach to addressing the objectives of the national development plan and has provided a sound basis for our own plans and strategies going forward.
Enterprise and supplier development has taken more time than anticipated to plan and implement appropriately. Our businesses spent a significant amount of time laying the groundwork for identifying opportunities that are relevant, sustainable and commercially viable for both the business and beneficiary supplier. There are a number of projects that are in the early phases of being scoped and working in partnership with customers and existing suppliers are desirable.
Supplier development programmes vary across the Group due to the widespread nature of our businesses and varying demands from their respective supply chains and industries. We believe that this area has the greatest scope and opportunity for partnerships with government for tackling projects that have strategic significance in sectors earmarked for development. Bidvest have expressed our intent and desire to work more closely with government in this space.
Focus on the procurement and development of black SMMEs has resulted in heightened engagement with government, private sector and suppliers. Major customer groups acknowledge that we are on the same journey and that collaboration will go a long way to achieving mutually beneficial goals with a far greater impact. Our businesses continue to assess their supply chains to identify procurement opportunities for black owned and black women-owned SMMEs. The goal is to transform our own procurement practices and supplier beneficiary base by incrementally shifting the procurement of certain goods and services to black-owned SMMEs over a period of time.
For Bidvest, socio-economic development programmes have become far more strategic over the past years. We believe that there is no longer space for businesses to write cheques only to satisfy a tick-the-box requirement. Long-term, sustainable projects are the order of the day and our investment in such projects continue to increase. The key focus areas for Bidvest remain in education, health and community development. Our total investment in socio-economic development programmes for the period under review was R59 million.
The year ahead will see transformation being amplified to another level. Until now, government has given policy direction and introduced new scorecard measurements; however, our focus will fall on the effective implementation of said policy. Our goal is to continue to implement programmes and solutions that are suitable and commercially beneficial to all stakeholders and well situated for business growth.
We will continue to manage transformation beyond the framework of the scorecard and treat it as one of the biggest determinants for our growth, prosperity and continuity in South Africa.
Gillian McMahon
Executive director
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The full B-BBEE verification report can be found online at www.bidvest.com |