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:: partnership :: growth :: prosperity |
| saibl bulletin |
June 2010 / Issue 3
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::: Editorial :::
Countdown to the Establishment of the South African Supplier Diversity Council
 The formation of the South African Supplier Diversity Council (SASDC), a corporate-led initiative to promote sustainable supplier diversity based on opening up more and more procurement opportunities for South African black suppliers, is now well under way following the announcement of the Council's formation at an event in Sandton on 26 May.
The event was attended by the US Ambassador to South Africa, Donald Gips, USAID Southern Africa's Mission Director, Jeff Borns, NBI Chief Executive Officer André Fourie, saibl Chief of Party John James, as well as members of the SASDC Founding Steering Committee that includes individuals from ABSA, Barloworld, Sasol ChemCity, Cummins, De Beers, Ford, Foskor, Mondi, Rand Water, Sappi, Unilever and the University of KwaZulu-Natal.
This month is a tight month for the SASDC Founding Steering Committee. After a few months of regular meetings, the corporate representatives will now be requesting their attorneys to review the SASDC company registration documents. Following this legal review, each of the corporations represented on the Steering Committee will need to indicate their intention of becoming founding members. A minimum of seven founding members is required, and a minimum of five Director nominations is expected.
Representatives of the founding members, most likely the Steering Committee members, will then sign CM4B and CM44C forms to enable the attorneys to successefully lodge the SASDC company registration documents with CIPRO by Friday 25 June.
If all goes to plan, the SASDC incoming Board will be able to meet for the first time in July 2010!
 ::: News Flash :::
Launch of the saibl business forum
saibl has launched an online business forum at http://blog.saibl.co.za. Each week industry experts analyze and discuss issues relevant to South African enterprises.
The forum will frequently invite guest experts, such as those featured at the recent Southern Africa Specialty Foods Forum in Cape Town, to lend their expertise and experience on how to set South African products apart in a crowded international marketplace.
In addition to specialty food, the forum will address a variety of sectors including business process outsourcing, wine and manufacturing, as well as other topics of general interest such as the World Cup, brand South Africa, industry best practices and supplier diversity. To solicit viewer feedback and make the forum more interactive we will post e-opinion polls, questions of the week, and a discussion forum designed to facilitate cooperation and group problem solving.
We hope the saibl business forum will invigorate South African businesses and their potential partners by allowing stakeholders to coalesce around a set of best practices and mutually beneficial opportunities. saibl hopes that participants in the forum will learn from these experts, and ask them questions about topics that matter most to them and their businesses.
We eagerly anticipate your participation!
Visit the saibl business forum >>>
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::: Diversity Briefs :::
Supplier Diversity Is Not Rocket Science
 Do you ever get that nagging feeling that your BEE efforts are more of a cost than a benefit? You wonder what sort of impact that portfolio of special projects is really making, and whether the costs attached to the human resources and reporting requirements are truly justified. You periodically hear reports of BEE suppliers that have come to pose risks to production and how the dearth of qualified black suppliers means you aren’t going to meet your preferential procurement targets.
So why is it that you find yourself in this predicament? Somewhere along the way business principles got confused with social objectives, and well-meaning managers started introducing needless operational complexities.
Let’s refresh our memory on the concept of supplier diversity. Supplier diversity can describe both a state and a process. It refers to deliberate business processes that stimulate the use of under-represented suppliers. The outcome is a supplier and transaction profile that better reflects the demographic profile of the country in which a corporation operates. So what? Here is a common sense answer to this question:
Citizens, and the businesses they operate, are a national asset. By tapping into the widest possible pool of businesses, corporations ensure that they get the best the country has to offer. Some of that business talent might be latent or, if you’re lucky, fully developed.
Stimulating supply chain competition through creating the space for new entrants is healthy. Suppliers who have previously been overlooked or excluded are more likely to strive harder than incumbents, and this in turn stimulates price competition, innovation and better service levels.
Suppliers, and the people who make up those businesses, can also become loyal customers.
An economically active nation is a stable nation.
But you already know this. You’ve bought into these concepts and can see the strategic relevance to your corporation. So why is your corporation struggling to translate this into an operational reality?
Here is one way of turning a seemingly complex issue into a simpler one. Read the following four points, and then re-read them with potential or existing suppliers in mind:
Looking for qualified staff? You need an effective outreach process, followed by a rigorous screening and testing regime.
Spot under-experienced individuals that exhibit high potential? Put them on a special exposure and learning programme.
Struggling with under-performing employees? Make sure a performance contract is in place, and manage performance against key performance indicators. Trim non-performers.
Looking to increase the responsibilities of a good performer? Negotiate, plan for and support a successful increase in responsibility.
By applying standard human resource management principles and processes to sourcing and managing suppliers, the task appears somewhat simpler. Of course, that isn’t enough, but that’s where the technical elements of conventional supply chain management step in. If you overlay the principle of supplier diversity to these standard business management techniques, you have a process that makes business sense and is aligned to your main driver - to excel in business and stay in business.
The soon to be established South African Supplier Diversity Council (SASDC) looks to support its members’ efforts to derive the value-add that supplier diversity promises. Taking a common sense approach, the members will be focusing on black-owned suppliers as an under-represented group in the South African business landscape.
If you would like to find out more about the SASDC and how your corporation can become a member, contact Gary Joseph on Tel: +27 11 544 6000 or email: joseph.gary@nbi.org.za
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::: Trade Talk :::
Trade Finance Part 2: Cash-in-Advance
 In the second article in this series on trade finance, Tim Bergstrom, head of the saibl office at the CCA in Washington DC, discussed cash-in-advance as one of four methods of payment.
With the cash-in-advance payment method, the exporter can avoid credit risk or the risk of non-payment, since payment is received prior to the transfer of ownership of the goods. Wire transfers and credit cards are the most commonly used cash-in-advance options available to exporters. However, requiring payment in advance is the least attractive option for the buyer, as this method tends to create cash flow problems, and unless the seller sees no other option or the buyer has other vendors to choose from, it often is not a competitive option.
Cash-in-advance payment methods >>>
Trade Tips Part 2: Entering New Frontiers -
The Entry Strategies
 Cos Mamhunze, an International Trade Specialist at saibl's Johannesburg office, continues his discussion on Trade Tips in the second part of this series of articles on international trade.
In my first article on “Trade Tips - Entering New Frontiers”, I discussed the key steps you have to follow before entering the export market. One of the steps involves selecting an export market entry strategy. In one way or another, you will have to select an entry strategy. In this article, I will briefly discuss the four main export market entry strategies. These entry strategies have differing levels of risk, legal obligation, advantages and disadvantages.
Key export market entry strategies >>>
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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
 ::: Botswana :::
Sep: Botswana International Trade Fair / saibl Trade Mission to Botswana
 ::: Ghana :::
26-30 Jul: saibl Trade Mission to Ghana
 ::: South Africa :::
25-27 Jul: Africa's Big Seven International Trade Fairs / Southern African International Trade Exhibition (SAITEX), Gallagher Estate, Midrand
 ::: Tanzania :::
28 Jun - 8 Jul: Dar es Salaam International Trade Fair, Saba Saba Grounds, Dar es Salaam (general exhibition)
 ::: Uganda :::
Nov: Visiting Trade Mission from Uganda
 ::: Zambia :::
30 Jun - 6 Jul: Zambia International Trade Fair, Ndola (general exhibition)
Sep: saibl Trade Mission to Zambia (Lusaka and the Copperbelt)
 ::: Zimbabwe :::
21-23 Jul: Mine-Entra, Bulawayo (mining, engineering, transport)
19-28 Aug:
Harare Agricultural Show, Harare
 ::: USA :::
26-28 Jun: World Medical Tourism Fair, New York City
27-29 Jun: Summer Fancy Food Show, New York City
29 Jun - 1 Jul: Americas Incentive Business Travel and Meetings Exhibition, Baltimore
14-21 Jul: Atlanta International Gift and Home Furnishings Market, Atlanta
16-19 Jul: California Gift Show, Los Angeles
21-24 Aug: Seatle Giftware Show, Seattle
26-27 Oct: Americas Food and Beverage Show, Miami
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::: saibl@work :::
Picking Sound Companies
saibl introduces a new tool to assess suppliers for certification and assistance.
The aim of the Supplier Competitiveness Component in saibl is to build a growing pool of competitive black suppliers, capable of winning more business-to-business contracts locally and internationally, and of becoming part of the mainstream value chain in corporations. saibl has learnt through the years that facilitating sustained linkages with large corporations depends directly on the quality and capability of black suppliers. Large business usually award contracts based on reliability, capacity, quality, price, and value-add to their business. For large corporations, the larger, reliable and more established the suppliers, the better.
To mitigate the risk of admitting unsound companies requiring more than four areas of assistance in their business before they are linked in sustainable relationships with large corporations, saibl has introduced a new tool, Picking Sound Companies. The tool is designed to effectively identify businesses that are most likely, given the right assistance, to succeed.
"It is critical that saibl continues to lift the standards for assessing suppliers and the quality of its interventions. This is the only way that we will improve the quality of suppliers that we support and introduce to the South African Supplier Diversity Council's corporate members", said John James, saibl's Chief of Party.
The tool provides a relatively intensive, quick and effective way to select sound companies. The tool assesses a supplier in the following aspects:
::.. The eligibility of the company based on the bona fides of the black shareholders
::.. Whether the company is established
::.. The financial condition of the company
::.. The suitability of the company as a prospective business-to-business supplier, based on the capabilities of the owners/managers and the company operations
saibl has partnered with Business Service Providers in Gauteng, West Cape and KwaZulu/Natal who will be using the web-based version of the tool, not only to assess black suppliers aspiring to be admitted to the saibl programme, but also their clients.
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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 :::
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::: Service Providers :::
Successful Partnership with Business Service Providers to Reach Clients
 During the first quarter of 2010, saibl's Cape Town office adopted a new strategy for reaching out to its clients.
"We partnered with our established and well-networked business service providers (BSPs). The purpose was simple - reach the right audience in the most effective and efficient manner", said Bertram Richards of the saibl Cape Town office. This was achieved by:
- Providing the correct promotion support material in the form of brochures and an up to date website and ensuring that the correct support is provided by the administrative team to any enquiries
- Conducting effective training with the BSPs on all aspects of the programme, including the Company Diagnostics and Picking Sound Companies tools and the South African Supplier Diversity Council
- Testing this training through participation with clients
- Acknowledgement of the BSPs' successes and their respective brands in communication with clients
- Keeping BSPs motivated, but also emphasizing that the programme only works if everyone plays their part
Two BSPs, Solly Fazel and Jayant Gajjar, took on the challenge at the beginning of the quarter with a passion. They focused on their existing networks and partnerships with the Western Cape Tooling Initiative and Swiss Contact and actively promoted the saibl programme. The result was the effective listing of seven qualifying clients with saibl from an initial list of eleven. These clients are now going through the Picking Sound Companies (PSC) assessment and listing process. From this point on, all of the opportunities and benefits of being with saibl are available to these clients.
The same approach has been taken with all the BSPs based in Cape Town with very positive outcomes resulting in 26 referrals, seven registrations, and 11 potential clients currently being assessed through the PSC process.
saibl realises that it can only effectively reach its clients through partnering with dedicated and active service providers. saibl is now replicating this process in Gauteng and KwaZulu/Natal where seven and four BSPs have been identified respectively. These BSPs will be utilised in the identification of suppliers and will also be interacting with various institutional channels of recruitment, such as the post-investment programmes of funding institutions such as the Public Investment Corporation and the National Empowerment Fund.
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::: Enterprise Support :::
Momentous Growth for Momento’s of Africa
 Momento’s of Africa was founded in 1994 by three women and an original capital of R4000 (less than US $500). It started selling (and in part making) mohair tapestries at Port Elizabeth airport and soon developed into a successful African curio shop with a rather unique name - an amalgamation of African Moments, and Mementoes. The initial “bit of weaving” at the back of a shop has since been translated into a thriving business with three factories and five shops. The company grew by ploughing profits back into the business and growing where opportunities arose. In 2008/9 it had a turnover of R5.5 million and is on target to increase that to R7.5 million in the current year.
The company currently has shops in the four major South African airports and is planning to open two new shops in Johannesburg and another in Cape Town on the prestigious Waterfront. Despite this ongoing growth in retailing, Momento's real success has been in the development of its mohair production business, where despite its small size it has been an influential player in the industry (as confirmed by Mohair SA). 70% of production is exported to designer houses and boutiques. the US is the largest single market but products are sold around the world (with the exception of Asia). Momento's manufactures products from kid mohair under the brand of BabyMo and have a décor range of throws and blankets that is regarded as amongst the best in the world, and a range of accessories such as scarves and capes.
As the company has grown so has ownership with 69% of the company being black owned. The company has an ISO 9001 rating, and a BBBEE Class 1 status (the highest).
With the support of saibl, Momento's attended the New York Gift show in 2009 as an exhibitor.
In addition to the obvious benefits of exhibiting at such a prestigious event, attendance of the gift show resulted in surprisingly useful spin-offs, such as being approached by a major importer of similar products in the UK and the featuring of their products on the Martha Stewart TV show in the US.
With saibl's assistance the company was able to extend its visit to the US to go to Virginia for the purpose of learning new dyeing techniques to augment its own. Momento's has since developed techniques and some of the equipment (they have their own workshops) and are now in a position to enter this new business in their own right. A visit to their distributors in Boston (BabyMo USA) turned into a full week of hard work that resulted in some changes in US marketing patterns, development of sales and sample materials and a range of product planning – including determining 2011 trade colours a full four months before being released by the design / fashion industry.
"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 [saibl Washington office]. It was with these three that we discussed future targets in the USA. We were anxious to explore Denver for example, but were persuaded that there were better options and one brought to our attention was Seattle, which not only has a useful show, but also attracts Canadian cross-border visitors and the cruise ships which ply the Alaska route. These seem to be ideal targets," said Marketing Manager Roger Smith.
With saibl's continued assistance the company successfully attended the
Accessories Show in New York in May 2010 and is planning to attend the Seattle Gift Show in August 2010.
www.momentos.co.za
Recent Collaboration Initiatives
 Enterprise Development Programme with MBSA: saibl was invited by the National Association of Automobile Manufacturers of South Africa (NAAMSA) to introduce itself to the CEOs of the Original Equipment Manufacturers (OEMs). The CEOs endorsed the objectives of saibl and encouraged their purchasing divisions to work with saibl. The Board of MBSA also signed a co-operation agreement with saibl. As part of the development plan, MBSA identified and introduced saibl to 15 component suppliers who could possibly qualify for saibl assistance. This exercise formed the basis of the MBSA Enterprise Development initiative. From the batch of 15 suppliers, three enterprises were registered as saibl clients and company diagnostics evaluations (CDs) were conducted on two enterprises to determine areas for possible saibl assistance.
Two senior staff members from MBSAs purchasing division participated in the CDs as observers and both were very impressed with the systematic approach used during the diagnostic process and the resultant benefits to the participating companies. A further 15 companies will be identified by MBSA in Phase Two of the ED initiative.
 Fruit Producers in Limpopo to Become More Competitive: Three fruit producing companies were registered with saibl with a view to assisting them to become more competitive. Picking Sound Companies evaluations that were conducted on the three companies revealed certain technical and business challenges. It is prudent to address financial conditions of the companies and to streamline the day to day management of their farming operations to increase their competitiveness.
Tshivhase Agridam has a black majority ownership of 75% and is currently selling bananas and subsidiary fruit cultivars locally. They wish to access the USA market and have requested saibl assistance in meeting HACCP and Globalgap standards to increase their competitiveness. Ditubatse Business Enterprises, a 100% black women owned producer of mangoes, avocados and guava is expanding the enterprise to take advantage of the increased economies of scale, especially in the fruit processing market. They have approached saibl for assistance in setting up export capabilities, especially gearing towards the USA market. Moradu Farming Enterprises is 100% black owned and produces citrus varieties that are exported to Europe and the Middle East. They would like to access the USA market and saibl is providing assistance in setting up financial systems, as well as with overseas exposure and matchmaking.
 Beefing Up Cattle Farmers in the Eastern Cape: A saibl initiative has resulted in the identification of 12 small rural beef farmers (100% black owned) for participation in the saibl enterprise competitiveness programme. saibl has embarked on awareness creation where these farmers are trained to identify the best legal entity that suits their farming operation. This training was facilitated with the help of SEDA Eastern Cape and provides for a mentorship programme where farmers will learn about and become competent with sound business practices and the technical issues of farming (specifically in breeding and nutrition for maximum herd efficiency). Six farmers in the Pedi and Seymore regions have progressed to the second phase of training where mentors have been identified to provide guidance and assistance. Training and mentorship of the first group will take place over a four month period, starting in June.
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::: Talk Back ::: 
"I would like to take this opportunity to thank saibl for such a wonderful presentation of opportunities in our neighbouring African countries. We as Lekoa Mining and Industrial take this seriously as it forms part of our plan in penetrating SADC countries. ...saibl’s involvement in such facilitation for countries ... that we are targeting for investment will help us to get potential partners that we need."
- Teboho Pitso, Executive Director, Sales and Marketing, Lekoa Mining and Industrial
Johannesburg, Gauteng
"The company diagnostics that I attended at the two suppliers in East London was very informative. The tool used to do the company diagnostics is a good one. I have read the reports on both suppliers and I am happy with the output."
- Jameela Gregory, Purchasing Specialist, Mercedes-Benz South Africa Procurement
East London, Eastern Cape
"Thank you for this informative, relevant and exciting newsletter! Well done! I just can't wait to read it AGAIN!"
- Vusi Montsho, CEO, Bantsho Management and Marketing Strategies
Johannesburg, Gauteng
"I wanted to thank you and your team for taking time from your busy schedule to accompany me on the site visits [in Cape Town]. The meetings with the various people were extremely informative and gave me a much better idea of what saibl is doing, including the challenges and opportunities. It also showed the diverse nature of the businesses being assisted. Thanks again."
- Jeff Borns, Mission Director, USAID/Southern Africa
Pretoria, Gauteng
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South African International Business Linkages
145 Western Sevice Road
Maple Place South
Woodmead Business Park
Woodmead
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Tel: +27 11 602 1205
Fax: +27 86 524 2189
Email: info@saibl.co.za
Website: www.saibl.co.za |
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