Archive for July 26th, 2011

One of the aims of transformation is to grow black business. For true transformation we need more black owned businesses and to support black businesses.

I came across a very typical situation just today.  We analyzed procurement spend of a large company, part of a JSE listed business.

The company spends R592 million every year with local suppliers.

Of this, R23 million is spent with companies that are more than 50% black owned. This is 3.92% of their total procurement. Note that this could well imply that the companies are as little as 50.1% black owned and 49.9% white owned.

In addition they spent R2.6 million with companies that are more than 30% black female owned. This is 0.46% of their total spend. This could well imply that the company is 30% black female owned, and the remainder 70% white owned.

All other spend, 95.62% of their spend is spent with companies that are not majority black owned or 30%  owned by black females.

In terms of the B-BBEE procurement calculation, the company obtained 16.46 points out of 20, which is relatively good – compared to the many companies we have analyzed.