The firm com­mits to di­vert R3.9bn in BEE pro­cure­ment spend

Afro Voice (Northern Cape) - - INSIDE - BERNARD SATHEKGE bernards@the­

A GI­GAN­TIC move by Coca-Cola Bev­er­ages SA (CCBSA) to com­mit R4bn in pro­cure­ment spend to black en­trepreneurs will be seen by those call­ing for real black eco­nomic em­pow­er­ment (BEE) as a good prac­ti­cal ex­am­ple for large firms to open doors for black ci­ti­zens in the econ­omy.

Sketchy BEE deals and fronting by large com­pa­nies to se­cure lu­cra­tive gov­ern­ment con­tracts has been sin­gled out as the main stum­bling blocks for the up­lift­ment of black busi­ness.

Re­cently, Min­is­ter of Trade and In­dus­try Rob Davies called on big com­pa­nies to open doors for black op­er­a­tors in the sup­ply chain busi­ness in or­der for the coun­try to reach its goals of cre­at­ing many black in­dus­tri­al­ists as much as pos­si­ble.

CCBSA has now set the tone as it an­nounced a dra­matic shake-up of its pro­cure­ment pol­icy, com­mit­ting to di­vert R3.9bn in pro­cure­ment spend, or 30% of the to­tal, to black-owned and black women-owned or­gan­i­sa­tions over the next three years.

“Our new ap­proach breaks down the bar­ri­ers in the way of busi­ness growth and eco­nomic de­vel­op­ment.

“We’re lay­ing the ground­work for an en­vi­ron­ment in which op­por­tu­ni­ties are avail­able equally to all busi­nesses and where col­lab­o­ra­tion across busi­nesses builds a thriv­ing and vi­brant econ­omy that ben­e­fits us all,” Ve­laphi Rat­she­fola, man­ag­ing di­rec­tor of CCBSA, said.

Ad­dress­ing thou­sands of del­e­gates at the com­pany’s an­nual Sup­plier De­vel­op­ment Con­fer­ence in Midrand, in­clud­ing 220 small busi­ness ex­hibitors and 750 SMME at­ten­dees, Rat­she­fola said it was time to make BEE mean­ing­ful.

The con­fer­ence tar­geted spe­cific com­mod­ity cat­e­gories, in­clud­ing fleet main­te­nance, man­u­fac­tur­ing plant spares and ma­chin­ery, en­gi­neer­ing and lo­gis­tics and pack­ag­ing sup­pli­ers to max­imise op­por­tu­ni­ties to en­ter the sup­ply chains of par­tic­i­pat­ing cor­po­rates.

CCBSA has gone be­yond busi­ness as usual, to start a process that will catal­yse trans­for­ma­tion for its ex­ist­ing sup­pli­ers and open new op­por­tu­ni­ties for black-owned small and mid-sized busi­nesses.

Re­search in­di­cated that the ma­jor­ity of small busi­nesses launched in South Africa will fail, many of them within the first year of op­er­a­tion.

Among the rea­sons for these fail­ures are en­tre­pre­neur­ial ca­pa­bil­ity, un­scal­able busi­ness mod­els, ac­cess to mar­ket and ac­cess to cap­i­tal.

Ac­cord­ing to CCBSAs new sup­plier de­vel­op­ment ini­tia­tive, aims to take con­crete steps to ad­dress these un­der­ly­ing hur­dles in the way of small busi­ness growth in its sup­plier ecosys­tem.

Wal­ter Leon­hardt, CCBSA’s fi­nan­cial di­rec­tor, said the com­pany had recog­nised that large en­ter­prises like Coca-Cola were not al­ways geared to col­lab­o­rate with small and mid-sized sup­pli­ers and that it was time to turn around the sit­u­a­tion.

He said some of the global best prac­tice pro­cure­ment guide­lines that or­gan­i­sa­tions like CCBSA ad­here to, made it dif­fi­cult for small and mid­size busi­nesses to par­tic­i­pate in the sup­plier ecosys­tem.

“These am­bi­tious pro­grammes are de­signed to rad­i­cally change the way en­ter­prise and sup­plier de­vel­op­ment is done in SA and be­come the new best prac­tice bench­mark for the coun­try.”

The group did not give any de­tails when South Africans can ex­pect the first Coca­Cola al­co­holic drink, re­cently launched in Ja­pan.

But some an­a­lysts said the in­tro­duc­tion of the al­co­holic drink was a plot by the multi­na­tional com­pany to re­coup some of the losses that will re­sult from a sugar tax. They warned that more in­creases in their prod­uct prices were likely to pass on to con­sumers – to make sure prof­its are not im­pacted.


ALL WRAPPED UP: CCBSA is lay­ing the ground­work for a vi­brant econ­omy with its R4bn in­vest­ment.

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