CLINCHING a contract to supply a major corporate can be a big coup for any business owner. But these days businesses who supply big companies have more to cheer about than just this.

Black-owned or empowered businesses can get business support, grants, as well as loans at a lower interest rate from big buyers. Corporates are keen to support these businesses as they stand to score Black Economic Empowerment (BEE) points for enterprise development.

Several big companies are still developing training programmes for their small suppliers. One of these is cellular network provider MTN. The company’s media liaison Rochelle van der Ross said 25% of MTN’s procurement spend went to BEE companies last year. She said the company pays its small suppliers within 10 to 15 days on receipt of invoice.

Steel giant ArcelorMittal is currently piloting a support programme for small suppliers. Thami Didiza, ArcelorMittal’s general manager for corporate affairs, said the intention was that certain products and services, such as mechanical spares, would be set aside for black-owned businesses. He said 10 businesses were already shortlisted to take part in the project.

ArcelorMittal has a targeted BEE expenditure of 30% of this year’s procurement spend. About 10% of that target is aimed at small and black owned suppliers. The steel giant does not have a policy of preferential payment terms for small suppliers.

Woolworths

In the last two years Woolworths has partnered with universities and research institutions such as the Council of Scientific and Industrial Research (CSIR) to assist their small suppliers to improve their business acumen. The company’s food technologists also work with suppliers.

Zinzi Mgolodela, head of transformation at food retailer Woolworths, said Woolworths recently gave a Beaufort West enterprise that supplies the retailer with basil, a loan at a reduced interest rate to buy a truck.

The retailer has also given them preferential payment terms. Mgolodela said Woolworths also gave a grant to a fish supplier to buy machinery.

She said assisting small black suppliers requires “creativity and open-mindedness” and that the biggest challenge was to constantly educate procurement staff on how to support smaller suppliers.

She said Woolworths was currently in talks with the Industrial Development Corporation to determine whether they could help finance black franchisees the retailer intends taking on board. 

Woolworths, however, did not want to disclose the percentage of procurement spend on BEE companies. The figure was also not listed in their 2007 annual report.

Shoprite

Sarita van Wyk, manager of corporate communications and customer relations at Shoprite Checkers, said the Shoprite Group has various mechanisms in place to assist small farmers.

She said the supermarket group’s fresh fruit and vegetable procurement arm, Freshmark, was steadily increasing the number of small black producers and offered farmers assistance in achieving the required quality standards.

Provincial and national government are supporting the group’s Project Nyama-Nyama, where Boerbok goats are marketed under the name Chevon. The project involves all kinds of meat – beef, lamb, pork, fowl and, in particular, chevon.

The group is aiming for black suppliers to supply 15% of its meat purchases within five years. Shoprite also has a dedicated office in its trade creditors department that offers small suppliers shorter payment periods
and a separate set of trading terms. Last year 30% of Shoprite’s suppliers were black-empowered while a further 30% qualified as exempted enterprises.

Metropilitan

Last year Metropolitan Holdings launched a portal in the Eastern Cape. This portal's purpose is to source local businesses to supply services such as security, catering and printing for the three annual events the company holds in the province.

Zelphinia Mvula, BEE specialist at Metropolitan, said the insurance company hoped to start a similar procurement portal in KwaZulu-Natal.


Free mentoring offered

SOLANI Lidzhane (pictured) was able to get free business mentoring assistance and subsidised business premises from her buyer, insurance company Metropolitan Holdings.