Top retailers avoid BEE partners

Shoprite (South Africa)

Politically connected empowerment’s usual suspects are missing out on a combined market capitalisation of more than R160 billion as they are shunned by top JSE-listed retailers, which have chosen to rather give stakes to their staff and support struggling black entrepreneurs.

A snapshot Business Report survey shows that since the broad-based black economic empowerment (BEE) codes were passed into law eight years ago, at least seven major retailers, most of them among the top 40 largest JSE-listed blue chip companies, have not had empowerment partners.

Shareholder activist Theo Botha inspired the survey.

The companies with no black partners include furniture chains Lewis Group and JD Group, clothing retailers Foschini and Truworths, supermarket groups Pick n Pay and Shoprite and personal care chain Clicks.

This could be because the retailing chains do not feel obliged to chase targets set by the Broad-based BEE Act as they do not rely on state contracts for their survival.

The retail sector, unlike other industries, does not have a transformation charter that would have set targets to be achieved by a particular date.

Suzanne Ackerman Berman, Pick n Pay’s transformation director, said it had always been Pick n Pay’s philosophy that its employees should be owners in the business and, to this end, the company instituted an employee share ownership scheme soon after its inception in 1970.

At the end of February, the Pick n Pay employee share trust held 3.4 million shares in the company. The company recently set up a transformation committee and appointed a senior manager to oversee its broad-base BEE strategies.

The retailer focuses mainly on the preferential procurement and enterprise development elements set out in the Broad-based BEE Act of 2003.

“We believe that empowerment strategies focus on areas where we are able to effect the most change. More than 33 percent of our franchise stores are exclusively black-owned, creating new business entrepreneurs, transferring skills and creating jobs,” she said.

via Top retailers avoid BEE partners – Business News

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New fund to aid small business

Johannesburg – The National Empowerment Fund (NEF) launched an enterprise development fund in aid of small and medium companies on Wednesday.

The development would help speed up black economic empowerment in the private sector, NEF board of trustees chairperson Ronnie Ntuli.

NEF CEO Philisiwe Buthelezi said this entailed private sector businesses making contributions to the NEF’s enterprise development fund. The NEF would use this money to co-finance the NEF’s investments in enterprise development beneficiaries. It would help make these businesses sustainable and financially independent.

For a company to obtain the maximum of 15 points on enterprise development it should contribute 3% of its net profit after tax.

“The minimum contribution a measured entity may make into the NEF enterprise development fund is R5m.”

Looking exclusively at the 3% net profit after tax of the top 40 JSE-listed companies collectively, the potential resources available for enterprise development exceed R5.3bn.

Buthelezi said for every transaction that qualified for enterprise development funding, the NEF would co-invest on a 60:40 ratio, with the fund carrying up to a maximum of 40% of the risk.

The NEF said for five years from the time of contribution, the companies would enjoy their newly improved BEE scorecard ratings. The benefits would fall away on year six, after which the company had to contribute again to maintain the enterprise development points on the scorecard.

via New fund to aid small business: Fin24: Economy

BEE and job creation cannot coexist

I’ve just read a piece about the new EDF (Enterprise Development Fund) that will be rolled out under the NEF’s control.

The thing is, yet again, the BEE drum is the one that’s beating the loudest. Essentially, black-owned and managed businesses will be the only ones eligible for this funding.

The way I see it, you can have one or the other. Either you’re committed to job creation, OR you are committed to BEE.

In case you’re wondering why, let me explain.

If job creation is a priority, then any business with a viable plan, that has the potential to create jobs, for anyone in the country, should be a priority. It doesn’t matter, as far as I know, what race the person who is doing the hiring is – it’s the job, and the salary, that matters.

On the other hand, if it’s BEE that is a priority, then government is essentially saying that they don’t care if anyone else can create jobs, because it’s not the jobs themselves that are important, but getting the right colour bums in the managing seats.

Given our huge unemployment problem, it seems like folly to be restricting any enterprise, with the potential of creating jobs, from accessing the assistance they need to do so. I might be wrong, but if a white person can create 10 or 20 jobs, for example, with their business idea, are the jobs not more important than the colour of the entrepreneur?

Our government needs to give us all a straight answer on the BEE / job creation dilemma. Are they more interesting in maintaining the tenderpreneur mentality, or are they interested in real economic reform.

If it’s the former, then it’s business as usual I suppose. However, if it’s the latter, then the policies surrounding small business development definitely need an urgent rethink.

We are an emerging economy. We are a nation crippled by unemployment.

Maybe it’s time that those became the driving factors in policy with regards to business development, rather than the current one, which seems to be: if you’re not black, we don’t want your jobs.

via BEE & job creation cannot coexist: News24: MyNews24: Your Story

Anglo to create 25000 jobs

Anglo American (AGL), one of the world’s five largest resources groups, on Thursday said it was committed to creating and sustaining 25,000 jobs by 2015. This it would do through up to 1,500 new businesses.

Speaking at Anglo American’s local procurement and enterprise development trade fair, Chief Executive Cynthia Carroll said Anglo’s enterprise development arm, Zimele, has already invested some 467 million rand in 845 local businesses, which together employ about 16,000 people, and generate a turnover of more than 1.8 billion rand.

She also said Anglo’s commitment to developing new businesses supported the country’s vision of creating economic opportunities for black South Africans.

Anglo’s procurement spend with black empowered business in the past 10 years has increased from 911 million rand to 21 billion rand.

This makes up more than 40% of the group’s total available procurement spend to historically disadvantaged South Africans.

Department of Mineral Resources deputy minister Godfrey Oliphant said a recent study showed that South Africa’s youth would rather be entrepreneurs than be employed.

“It could be argued that lack of employment has encouraged the youth to look for alternative means to support themselves,” Oliphant said.

He said over 70% of the youth, particularly the black youth, consider running their own businesses, but they recognised that they needed experience.

He encouraged big business to get youth more involved in entrepreneurship. – I-Net Bridge

via Anglo to create 25,000 jobs – IOL.co.za

Small business owners – seize the opportunity to grow

Companies still get to pick the business owners they want to help. More black business owners must seize the opportunity to grow their business and move into the private sector if they are to become serious players in the economy.

More than anything, SA needs real entrepreneurs, not more BEE fat cats.

via BusinessDay – STEPHEN TIMM: Small business