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SAA procurement plan is welcomed

19 May 2015

The Black Business Council has hailed the signing of a memorandum of understanding between the Department of Trade and Industry and South African Airways (SAA) to develop and support inclusive sourcing and procurement.

The council's secretary-general, Xolani Qubeka, said the signing of the agreement on 18 May was a bold and decisive move.

It was signed by Deputy Minister of Trade and Industry Mzwandile Masina and the chairperson of the SAA board, Dudu Myeni. The agreement was concerned with the procurement opportunities that would be made available to black industrialists at SAA.

"As the Black Business Council, we are very excited about the bold and decisive move that the [department] and SAA has made to open opportunities for black industrialists at SAA. This is in line with radical economic transformation. We are therefore looking forward to collaborating with SAA and the [department] to ensure that our members and all of the black business community can access these opportunities," said Qubeka.

SAA announced yesterday that black companies should be granted more than 50% of the R20-billion spent by the airline on procuring goods in the next three years. It said: "Successful implementation of the new three-year SAA Supplier Development Programme will see up to 50% of all consumable supplies sourced from empowered enterprises by end 2018."

This was "music to the ears of black businesspeople", Qubeka said.

Business ready

"The most important thing now is for our black companies to be ready and make sure that they are competent and are able to respond appropriately to these opportunities. It is also important that companies, particularly those that are in the manufacturing sector, need to fully understand the type of market that they will be accessing as a result of this agreement."

Speaking at the signing of the agreement, Masina described it as a historic milestone. It was part of the government's efforts towards radical economic transformation aimed at ensuring that blacks participated actively and meaningfully in the mainstream economy.

"This is not a patronage scheme for people who are not qualified to do things. We are speaking about millions of South Africans who are qualified and capable to provide many goods and services required by the SAA," he said.

"We are committing ourselves to working with the SAA and other stakeholders, including business, to make sure that of the R20-billion that SAA is spending on procuring goods and services, at least R10-billion should go to black business."

Industrialists programme

The Department of Trade and Industry would help to capacitate black entrepreneurs through its Black Industrialists Programme, Masina said, so that they could take full advantage of the opportunities at SAA.

SAA's board said it also resolved to accelerate its enterprise development programme and focus on inclusive opportunities for black-owned, women-owned, disabled- and youth-owned businesses. In partnership with the department, the airline would source potential suppliers and provide training and development assistance through regular seminars and engagement sessions around the country.

It was SAA's "intention to assume an active leadership role in enterprise development in South African aviation", said Myeni. "Transformation and inclusive participation in the economy does not begin and end with employment equity alone."

Masina called on other organisations to follow the example of SAA: "The government and all public institutions must creatively utilise their public procurement capabilities to leverage the emergence and support for this entrepreneurial class of black industrialists that must drive the broad transformation of our economy."

According to a 2013 study by Oxford Economics, the SAA Group contributes R9.2- billion to the South African gross domestic product (0.3%), of which R1.6-billion is contributed through spending by employees and the company's supply chain. In addition, 16 400 jobs are created directly through SAA's supply chain.

SAinfo reporter