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Tiger Brands Limited integrated annual report
2015 59
We remain committed to growing our black management
talent pool. We realise that employment equity is a
long-term challenge and we are investing in junior and
middle management levels to develop a pipeline of future
black leaders at senior and executive level.
Preferential procurement
Tiger Brands procured agricultural commodities, ingredients,
packaging, consumables and services totalling R16,5 billion
from B-BBEE suppliers in 2015 (2014: R15,6 billion). This
represents 57% of our discretionary procurement. Preferential
procurement is embedded in our sourcing process in South
Africa, and developing and supporting B-BBEE suppliers
remains a key element of our procurement strategy.
In addition to tracking progress on our suppliers’ B-BBEE
scorecards, we have improved our management information
system to allow for better transparency and quicker
decision-making at the point of purchase. Compliance under
the revised codes is expected to be a longer-term process
as suppliers come to terms with new targets and implement
the required steps to improve their scorecard levels.
We remain focused on supporting small and medium
black-owned businesses, especially in our core spend. As
detailed below, we regard this as a business imperative that
will contribute to a vibrant and competitive supply
landscape in South Africa in the longer term.
Enterprise development
Tiger Brands drives enterprise development projects across
its value chain, focusing on growing small businesses that
we can support over the longer term. While financial
support of R39,4 million (2014: R28,5 million) is a
cornerstone of our contribution, the sustainability of these
initiatives is driven by the specialist support of our staff to
mentor and develop skills in small businesses where
required.
Our annual investment in enterprise development equates
to 4% of FY15 net profit after tax, spread over most of our
businesses. Albany’s owner-driver scheme is the main
contributor (at R17,4 million). The balance comprises
donations and loans to organisations that presently supply
Tiger Brands.
As part of our strategy to comply with the revised B-BBEE
Codes, we are increasing our investment in enterprise
development to meet requirements within the next two years.
While the scope of our investment is broad, the first phases
will focus on emerging farmers to play a greater role in our
supply chains. To support this initiative, we recently signed
a memorandum of understanding with the Department of
Agriculture, Forestry and Fisheries and allocated R10 million
in the new budget year to fuel this initiative (see sidebar).
Developing small farmers
In August 2015, Tiger Brands entered its first private-
public partnership of this scale by committing to the
strategic development of projects in the agri-sector
through our enterprise and supplier development
initiatives, as part of the broader economic
transformation of the country. Our key undertaking
is to provide sustainable offtake agreements to small
producers of identified crops. We aim to partner with
rural communities to establish farming cooperatives
and will provide technical and financial support
where possible.
From a business perspective, the strength and growth
of the agricultural sector is vital to us. This agreement
will help us deliver on our supply chain strategy to
increase the local supply of raw material. It also gives
us the opportunity to build on our existing smallholder
development initiative (tomato farmers) and to expand
to other products. While we have a broad scope (that
includes a variety of crops) within the agreement, the
pilot project will focus on tomatoes, maize, sunflowers
and beans.
This leverages our position as a key player in food
security in South Africa, and reinforces our social
licence to operate.
This partnership demonstrates our support of
government’s aim to develop smallholder farmers as
part of accelerating the agro-processing sector. It also
has the potential to raise productivity, enhance food
security and promote rural development, while creating
jobs outside farming in the service and production
sectors.