Enterprise development programmes set global std for SAB group

“Enterprise development is an integral part of our business' long term sustainability, helping to create jobs and wealth in the communities where we operate,” says Janine van Stolk, SAB's Communications Manager. “Encouraging enterprise development in our value chain is a key sustainable development priority for SAB, and our activities in this area are numerous and well integrated into our day to day business.”

She explains that SAB's enterprise development initiatives have three main strands: Investing in the company's value chain to support local suppliers; encouraging broader entrepreneurship in local communities; and supporting smallholder farmers.

Supporting local suppliers

SAB has reported commercial equity spend of some R6.58-billion with over 5,000 suppliers in its 2008 financial year. Commercial equity now amounts to some 50.7% of total local procurement, up almost 20% from last year.

Van Stolk adds that SAB has a structured focus on identifying, mentoring and encouraging local suppliers. This would enjoy an even greater focus looking forward.

"We currently have on file in excess of 5,400 supplier scorecards, which cover 52% of our supplier database. This has been made possible by the appointment of a dedicated supplier assistance manager, whose task is to assist our suppliers to understand and interpret the BEE codes of good practice, and become BEE-rated."

SAB procures from 890 black-owned suppliers, 170 black women-owned suppliers, 3,168 micro enterprises and 415 qualifying small enterprises currently. The company reports that a particular challenge is finding more black women-owned suppliers, as they are not plentiful. SAB procures from 566 suppliers that it supports via enterprise development initiatives.

Encouraging entrepreneurship

“For us, business and economic transformation is not a new concept,” says van Stolk. “For example, we launched our owner-driver scheme, in terms of which we assist former employees to launch their own transport companies and deliver our products to the trade, in 1987; today, they deliver around 60% of SAB's beer.”

The Mahlasedi Taverner Training programme was piloted in 2003, and officially launched in 2005. Approximately R40-million has been spent already to train taverners. By the end of March 2008, a total of 15,571 taverners had successfully completed the Mahlasedi programme. Mentorship and training offered by SAB allows these small business owners to trade in a sustainable and responsible manner.

SAB's KickStart entrepreneurial development programme, launched in 1995, has trained well over 22,500 young entrepreneurs from previously disadvantaged backgrounds. Approximately a third of all grant winners are suppliers to SAB.

The KickStart programme has been adopted by SABMiller as a flagship model and is being rolled out with success in other subsidiary countries. SAB was the first company within the group to initiate an entrepreneurial development project of this nature.

SAB has budgeted over R9-million for Mahlasedi this year, R6-million has been allocated for KickStart, and R9-million for its owner-driver programme.

Supporting smallholder farmers

SAB's Taung Barley Farmers programme is another project that has been adopted by the SABMiller group, and has played a key role in developing the global brewer's development framework for smallholder farming projects across the world.

The Taung project was established in the early 1990's to encourage local barley production and to reduce SAB's reliance on imports. Today, the project spans 1,800 ha of land, and helps around 180 smallholder farmers generate an income from barley and maize in the Taung region.

Barley and maize, the main ingredients used in the brewing of beer, have provided the local Taung farmers with a nett income in excess of R16 million in the 2008 financial year. This is a significant increase on the value of the harvest in 1998, which was R2.4 million. In the process, SAB has established a sustainable local source of barley.

In line with its commitment to the region, SAB continues to focus on driving further improvement in the project model. Recognising the critical role of government as a partner, SAB works closely with the North West Department of Agriculture, Conservation and Environment to encourage infrastructure development. And, SAB has recently embarked on a new partnership with GrainSA, investing around R400,000 in a new tailor-made skills transfer programme for the Taung farmers community. The skills transfer programme will be rolled out in 2009.