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:: partnership :: growth :: prosperity |
| saibl bulletin |
April 2010 / Issue 2
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Dear Reader
Welcome to the second edition of the saibl bulletin, our new monthly e-newsletter! This month, the focus is on international trade. Read the first of a series of articles that will deal with issues regarding international trade, export marketing, trade finance, trade law and export logistics. Also see how saibl can support you with trade and export development.
::: EDITORIAL :::
Certified Bona Fide Black Suppliers to Become the Backbone of Sustainable Supplier Diversity
Are the Broad Based Black Economic Empowerment Codes of Good Practice bringing about sustainable transformation and integration of growing numbers of black suppliers into mainstream business?
Under the BEE Codes, white-owned companies gain points towards their BEE scorecard and ratings for transacting business with black enterprises and investing in their development. The higher the company's rating, the better its chances of winning government contracts. Likewise black empowered and black owned companies are required to produce rating certificates from an accredited rating agency, in order to improve their prospects of supplying to corporations. It is supposed to result in win-win business relationships and visible integration of black suppliers as evidenced by their presence and growth in the supply of goods and services within corporate supply chains.
Three years into the era of the BEE laws, many companies report impressive figures in terms of procurement from black suppliers, but few are able to provide a breakdown of procurement from bona fide black suppliers and what they have invested in developing their black suppliers. It is now widely accepted that the BEE Codes are not really changing the business-to-business landscape, and that many companies have learnt how to make the numbers look good without addressing the fundamental objectives of the Codes.
While we cannot deny that the BEE Codes have not yielded the results that its architects intended, it is still too early to pronounce them a failure. Rather we should all be looking at ways to make them work.
The South African Supplier Diversity Council (SASDC) is working towards setting up a database of certified bona fide black suppliers as the backbone of its supplier diversity programme. The first step was to review the definitions and certification processes used successfully by the National Minority Supplier Development Council in the US and by its affiliates in Canada and the UK. The SASDC has developed the following guidelines, which will frame the definition of a bona fide black supplier to be used in its certification process.
1. Ownership: Not less than 50.1% unfettered black shareholding (per Codes of Good Practice definition).
2. Control: The black owners must enjoy control of the business commensurate with their shareholding (per Companies Act and principles of non-dilution and undue limitation of the rights of majority owners).
3. Management: The black managers involved in the business must demonstrate control / authority commensurate with the area of functional responsibilities.
4. Establishment: The black owners must demonstrate that they have an established business capable of providing goods or services that member corporations would be willing to buy.
To ensure the integrity of the certification process, the verification of the above elements will be carried out internally by the staff of the SASDC. Furthermore, a black supplier will only become certified following a review of the certification reports by a Standing Committee of the Council and the issuing of a signed certificate by the Chairman of the Board of the Council. Only Member corporations of the Council will have access to the database of certified black suppliers.
It must be emphasised that member corporations will not give exclusive or privileged access to the certified suppliers. These suppliers will be expected to compete for business with other suppliers in accordance with corporations' own rules and practices. The SASDC will not support or promote practices that may be seen as anti-competitive. The purpose of certification is to provide member corporations with a source of genuine black suppliers. Member corporations will of course be encouraged to invest in the development of suppliers on the database and to invite them to compete for their business.
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::: Diversity Briefs :::
South African Supplier Diversity Council
On Thursday 25 March 2010, the second meeting of the SASDC Founding Steering Committee was held in Johannesburg. The most important outputs were the crafting of a vision statement for the SASDC and agreeing on the definition of a 'black supplier' for the purposes of certification.
The agreed upon vision statement is:
"To be the leading Corporate Council in South Africa dedicated to promoting supplier diversity value-add through sustainable targeted procurement and black supplier development."
A key part of the Council's future linkage process is to create and maintain a certification standard. This certification is set to become the 'Gold Standard' for certifying bona fide black-owned businesses. Council members, who ultimately sign off on certification requests, will then have access to a growing database of potential black suppliers that meet a minimum prescribed standard.
Membership Benefits
Leadership
- Leadership on an issue of national importance
- Responsible corporate citizenship
- Corporate image and brand
Leverage resources
- Economies of scale
- A growing database of bona fide black-owned suppliers
- Larger voice and impact
Knowledge sharing
- Shared experiences and knowledge
- Shared guidelines, methods and training
- Shared focus on supplier diversity and development
Interested in becoming a Corporate member? Read more on our website or speak to Gary Joseph or Paul Jackson at Tel: +27 11 544 6000.
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::: Trade Talk :::
Trade Finance 101
In this series, Tim Bergstrom, head of the saibl office at the CCA in Washington DC, introduces issues around trade finance. Future articles will go into more detail regarding the four methods of payment outlined here.
To succeed in today's global marketplace, exporters must offer their customers attractive sales terms supported by the appropriate payment method to win sales against competitors. As getting paid in full and on time is the primary goal for each export sale, an appropriate payment method must be chosen carefully to minimize the payment risk while also accommodating the needs of the buyer. As shown below, there are four primary methods of payment for international transactions. During or before contract negotiations, it is advisable to consider which method in the diagram below is mutually desirable for you and your customer.
View the Payment Risk Diagram >>>
Key Points
- International trade presents a spectrum of risk, causing uncertainty over the timing of payments between the exporter (seller) and importer (foreign buyer).
- To exporters, any sale is a gift until payment is received.
- Therefore, the exporter wants payment as soon as possible, preferably as soon as an order is placed or before the goods are sent to the importer.
- To importers, any payment is a donation until the goods are received.
- Therefore, the importer wants to receive the goods as soon as possible, but to delay payment as long as possible, preferably until after the goods are resold to generate enough income to make payment to the exporter.
Four Primary Methods of Payment for International Transactions >>>
Trade Tips: Entering New Frontiers -
The Key Steps
Cos Mamhunze, an International Trade Specialist at saibl's Johannesburg office, discusses Trade Tips in the first of a series of articles on international trade. Look out for future articles on issues such a international trade law, trade finance and payments, export marketing and logistics, cargo movement, as well as international financial management.
A successful international export agenda should revolve around a "good, needs-satisfying, appropriately priced, promoted and distributed" product. It should never be an unplanned plunge. Proper steps have to be followed, to avoid assumptions which are dangerous. Treading the export path carefully can save you from embarrassment and unnecessary expenses. This article looks at the critical steps that you, as an SME, should take before embarking on the export journey:
- Self-examination
- Researching export market opportunities
- Selecting export target markets
- Determining an appropriate entry strategy
- Developing an appropriate marketing mix
Five Steps Before Embarking on the Export Journey >>>
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In this issue:
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::: Trade Events :::
For more information about these events, contact the saibl trade team at tel: +27 11 602 1273 or email: info@saibl.co.za
::: Namibia :::
2-5 Jun: Namibia Tourism Expo, Windhoek Show Grounds (travel and tourism)
::: Tanzania :::
18-20 Jun: Tanzania MedExpo, Diamond Jubilee Hall, Dar es Salaam (medical and health)
28 Jun - 8 Jul: Dar es Salaam International Trade Fair, Saba Saba Grounds, Dar es Salaam (general exhibition)
::: Uganda :::
10 Jun: International Trade Facilitation Day, Lugogo Show Grounds, Kampala (trade facilitators and exporters)
::: Zambia :::
30 Jun - 6 Jul: Zambia International Trade Fair, Ndola (general exhibition)
::: USA :::
26-28 Jun: World Medical Tourism Fair, New York City (medical / health tourism)
27-29 Jun: Summer Fancy Food Show, Jacob K Javits Convention Centre, New York City (specialty foods)
29 Jun - 1 Jul: Americas Incentive Business Travel and Meetings Exhibition, Baltimore Convention Centre (MICE)
14-21 Jul: Atlanta International Gift and Home Furnishings Market, Atlanta (giftware, art and craft, decor)
16-19 Jul: California Gift Show, Los Angeles Convention Centre (giftware)
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::: Southern Africa Specialty Foods Forum :::
Thursday, 20 May 2010
Wesgro, Cape Town
The event is being hosted by saibl and the Southern Africa Trade Hub as well as by Wesgro, the dti's Western Cape promotional agency. The South African Fine Food Association has been invited to set up a booth to immediately recruit, register, and answer questions about the newly formed association.
This one-day training forum is designed for companies to get together to manage exporting expectations and define industry roles as well as address organic certification and labeling standards. We will also have pre-matched meetings between companies and industry stakeholders from the United States. The forum will address the powerful factors making growth in this industry a long-term trend.
Visit the saibl Website for More Information and Registration Details >>>
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::: saibl@work :::
Trade and Export Development
saibl provides support to black enterprises wanting to export their products or services to the Southern African Development Community (SADC), the US markets and to other African markets.
The saibl methodology for preparing clients wishing to export and for providing support in matchmaking and aftercare has been very successful and has received acclaim from the dti's trade representatives in New York, Chicago, and Washington. saibl is collaborating with the dti's Export Marketing and Investment Assistance Scheme in supporting export-ready companies and works towards developing joint work plans in supporting trade development events.
As a saibl partner, the Corporate Council on Africa (CCA) is responsible for developing market channels for South African black suppliers into the United States, and for the development and implementation of the activities in terms of the African Growth and Opportunity Act (AGOA). In addition, the Washington-based team organizes and implements inward and outward bound saibl trade missions, international study tours, and site visits to and from the United States.
Trade support services
::.. Information on export business opportunities
::.. Information on importers and buyers
::.. Information on exhibitions and export events
::.. Training and advice on exporting and INCOTERMS
::.. Company diagnostics and assessments on export readiness
::.. Product and packaging improvements to meet export market needs
::.. Arranging matchmaking and networking meetings with importers
::.. Travel and lodging assistance
::.. Advice on AGOA
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saibl is supported by the United States Agency for International Development (USAID). The programme is implemented by the Corporate Council on Africa, ECIAfrica and the National Business Initiative under a strategic partnership agreement with the Department of Trade and Industry.
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 ::: Subscription Options :::
Have you seen the saibl specialty food and wine e-newsletter with news headlines relating to the specialty food and wine market? The e-newsletter is mainly aimed at the US-market, but subscriptions are open to anyone, free of charge.
You can also receive regular saibl news and event announcements by email via RSS.
Click to Subscribe >>>
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::: Service Providers :::
Focus on BrandSmart
Since its inception in 2002, BrandSmart has quickly established a strong reputation as a sought-after specialist consultation company in corporate branding and marketing. The company is registered with saibl as a specialist service provider in Marketing strategies and Plans, Sales Improvements, Strategy and Business Management planning. The company attended Foundation Training with saibl in 2008.
The managing director Dudu Thabede is a Brand Strategist and Marketing and Advertising Consultant with many years experience in the corporate world. For the last eight years Dudu has been running her own successful marketing and communications company servicing a number of government and blue-chip companies. Offering a personalized and original service to her clients, Dudu is in a position to leverage her knowledge of developing and developed markets to build brands across various sectors from launching to repositioning of ailing brands, developing strategies to access new markets as well as developing advertising and promotional campaigns. Dudu is also an entrepreneur with various business interests; she is a speaker / presenter on personal branding and marketing and the branding of corporates and services. She sits on the Boards of Fluor SA and Khula Finance Limited as an independent director.
The company, which is based in Rivonia, Gauteng, has varied and extensive experience in sectors such as FMCG, financial services, employee benefits, publishing, mobile / cell phone market, petroleum products, as well as the public service. BrandSmart's services include Research (feasibility studies, focus groups, in-depth interviews), Branding (name development, corporate identity development, logo design and application), Organisational Integration (developing brand ambassadors, service delivery training, CRM), Smart Branding (copywriting, graphic design, promotions, advertising [print, radio, TV, digital], product launches, event coordination, exhibitions) and Project Management.
Previous and current clients include SASRIA, Negotiated Benefits Consultants (NBC), Sony Ericsson, SABS, The DTI, Mafube Publishing, CookSafe, Sizwe Medical Fund, FNB, First Link Insurance, Absa Mobile Banking, Regiments Capita (PTY) Ltd., Go Publishing, CEO Magazine, Brandhouse, Christian Lacroix.
In 2010, BrandSmart was appointed as the marketing and advertising agency for the Rwanda Development Board and has subsequently opened an office in Kigali.
www.brandsmart.co.za
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::: Enterprise Support :::
Zenzeleni Experiences Remarkable Growth
Zenzeleni Clothing (est. 1989), a Durban-based company owned by the South African Clothing and Textile Workers' Union (SACTWU), has experienced remarkable growth under the stewardship of astute management such as Lenny Naidoo. Zenzeleni has cemented strategic alliances with saibl over the past eight years. This has assisted in re-organising the company's operational processes and business organization.
During the early 1990s Zenzeleni operated as a cooperative, formed with the objective of providing employment to retrenched textile workers, mainly those retrenched by large textile organizations such as Frame Textiles. Whilst operating as a co-operative, Zenzeleni focused on producing T-shirts for other trade unions. Unfortunately unions did not always pay and the cooperative was entangled in cash flow problems. This cascaded down to the production of poor quality products and as a consequence in 1992, the cooperative was forced to reduce employees from 300 to 150.
Transformation at Zenzeleni occurred during the mid 1990s to the early 2000s when the company was presented with an opportunity by Bobby Godsell, the then Chief Executive Officer of Anglo Gold Ashanti, to manufacture mining clothing as part of the mine's black empowerment initiatives. Zenzeleni had to change from being a cooperative to a limited corporation and had to meet stringent quality requirements. Zenzeleni also had to comply with the legislative requirements on wages, a factor that reduced its price competitiveness. In response, management led by Lenny Naidoo revamped business processes at Zenzeleni and made operations more efficient. It was at this juncture that Zenzeleni approached saibl to assist in re-organizing the business.
Through its technical assistance fund, saibl helped Zenzeleni with improvements in IT for business solutions, market strategies and plans, as well as sales improvement plans. Zenzeleni was also assisted with quality assurance management and certification. The assistance provided by saibl augmented the efforts of Zenzeleni's dynamic management who realised the need to constantly upgrade operational processes and to gear up for global competition through the implementation of world-class manufacturing standards. Zenzeleni also diversified its clientele from focusing on the mining sector to include the public sector, including the manufacturing of clothing for Transnet, South African Police Services and the SA Army. Annual revenue at the company grew from initial levels of around R 5 million to the current levels of over R 45 million.
Ultimately, Zenzeleni (a Zulu word that translates to "we do it for ourselves") has managed to meet its primary objective of employing retrenched workers and to date employs up to 150 people. The challenge now for Zenzeleni is dealing with the influx of cheap imports mainly from the Asian market. Management agrees that saibl assistance is still very much needed, ranging from business advice to technical assistance to help minimize the impact of global competition.
www.zenzeleni.com
From Durban to Miami - Phoenix Power Cables Becomes a Global Company
(Picture from left to right: Roy Ramkisson, Yashoda Ramkisson, Mathias F Sandoval [PDIC President, General Cable Corporation Executive Vice President], Latha Ramkisson, Luis A Corte [Managing Director], Anni Ramkisson)
Phoenix Power Cables (PPC) started operating in April 2007 as a manufacturer of quality cables supplying house wire cables mainly for the household market. When PPC joined saibl in July 2008, a Company Diagnostic assessment confirmed that the company was in a growth phase, wanting to venture into the manufacturing of low and medium voltage cables. It also confirmed that the company was sound and had linkage potential with the Ethekwini Municipality.
In June 2009, saibl assisted PPC with the implementation of SANS 1507-3 and SANS 1339, SABS marks for the manufacturing and supply of low and medium voltage cables. The SABS marks are compulsory with the aim of ensuring the basic safety of electrical installations, to ensure the protection of people, animals and property and the proper functioning of an installation.
PPC has been growing in leaps and bounds with a more than 150% growth in turnover from R16 million (2008) to R41 million (2009). Because of the company's success and capability, on 19 January 2010 General Cable Corporation (NYSE:BGC), a Fortune 500 company, acquired a substantial portion of the wire and
cable assets of PPC. The entity that was born is called General Cable Phoenix South Africa (GCPSA). The former owners, the Ramkisson family, hold a 10% interest in the business. The four original directors Anni Ramkisson, Roy Ramkisson, Yashoda Ramkisson and Latha Ramkisson hold executive directorship in GCPSA andt heir incumbents Yashica, Roneil and Ashish also hold key positions in the company.
General Cable Corporation is currently engaged in developing, designing, manufacturing, marketing, distributing and installing copper, aluminium and fibre optic wire and cable products at GCPSA. Recently, saibl visited the company premises where a lot of activity is taking place, including an increase in new staff, expansion of the factory and factory machinery, as well as training of staff. The Ramkisson family is happy with progress and the direction the company is taking. They do not regret letting go in order to advance the business to the next level.
PPC remains in existence with Anni Ramkisson retaining a 100% shareholding. PPC remains a value chain participant in the cables manufacturing sector manufacturing house wire and maintains the SABS Mark: SANS 1507-2.
The success of PPC is one that saibl celebrates with them. PPC has proven that, when sound companies are assisted with the appropriate technical assistance, small business can become big business.
www.phoenixcables.co.za
African Allsorts Beads Its Way Into Global Market
(Picture: To celebrate the 2010 FIFA World Cup in South Africa, African Allsorts has launched a range of soccer artwork in the form of hand-made bead and wire art collectibles)
Started from humble beginnings in 2004, a predominantly woman black-owned bead and wire art business is fast becoming a job-creation and social upliftment centre in Cape Town. The support of saibl has seen African Allsorts (AA) making giant strides as an exporter to the USA, thus securing employment for many family breadwinners.
The strategic intervention by saibl came at an opportune time when AA was endeavouring to take its business to the next level and realise its vision of becoming a proudly South African worldwide art representative. "Our international doors opened when saibl assisted us in attending the California Gift Show in 2007 where African Allsorts' name was propelled into the global arena. We are very thankful for saibl's assistance without which it would have been very difficult to enter this new market", said Leila Rajah, AA owner and manager.
To enable AA's success at these shows, saibl had to assist by ensuring that their work was of export quality and ready to compete with international handcrafted art forms. With the support of saibl, the company has so far attended three international gift shows, with the Atlanta Gift Fair being the latest. "We increased sales dramatically and have opened new accounts as a result of these shows. We have also gained invaluable information about what is required in order to succeed as an exporter", said Rajah.
AA has expanded beyond Africa and its hand-made, finely sculpted bead and wire art collectibles are exported to the USA and other countries around the world.
In South Africa, it supplies up-market game lodges, boutique stores, hotels and gift shops, whilst its international client-base includes prestigious museums, renowned art galleries and luxury retailers. Due to a steady increase in orders, the company has set up a studio which includes a show room. Future plans include collaborating with different independent small designers and expanding the studio to a bigger production facility, thereby helping to achieve its primary goal of job creation.
www.africanallsorts.com
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::: Talk Back ::: 
" We were invited through saibl to attend as exhibitors, the New York Gift show... We were able (again with saibl assistance) to extend the period of our stay going to Virginia where were learnt new dyeing techniques to augment our own ... Lastly and not least we developed a working relationship with saibl especially Wilhela Gie whom we had known for years, Bongekile Mbili who mothered us through all the paperwork - and the frightful complications of obtaining US visas, and with Kennia Sommerville ... Momento's of Africa is a company that has truly put South African transformation into practice, not merely dressed the company up. It makes a world class product, using otherwise unemployed people, and trains them to be useful members of society."
- Roger Smith, Marketing Manager, Momentos of Africa
Port Elizabeth, Eastern Cape
"I would like to inform you that I am very pleased with the progress that we are making with regard to our initiative to develop MBSA suppliers. One of the really positive experiences was the diagnostic assessment that I participated in because I could see that it was really beneficial to the supplier ..."
- Owen Smith,
Manager Purchasing, Procurement: Mercedes-Benz Cars and Vans
East London, Eastern Cape
"Congratulations on saibl's first e-bulletin. It is very informative and keeps us in-touch."
- Krish Maharaj, Director, Growth Path International
Durban, KwaZulu/Natal
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South African International Business Linkages
145 Western Sevice Road
Maple Place South
Woodmead Business Park
Woodmead
2148 |
Tel: +27 11 602 1205
Fax: +27 86 524 2189
Email: info@saibl.co.za
Website: www.saibl.co.za |
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©2010 saibl. All rights reserved. |
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