08 July 2009 | Paul Snell
The South African arm of steel manufacturer ArcelorMittal (AMSA) has announced plans to procure R30 million (£2.3 million) of goods and services from black-owned suppliers over the next three years.
The firm has chosen to buy engineering and manufacturing services from three minority suppliers, Commit Engineering, Tunnel Engineering and Hencill Engineering.
It is the first time AMSA has chosen vendors for preferential procurement. The company said it wants to increase the number of black-owned suppliers it deals with and improve their competitiveness. It will also provide the vendors with skills training.
Nonkululeko Nyembezi-Heita, CEO of AMSA, said: "Procurement from black-owned suppliers is an integral part of our empowerment strategy, but at the same time we want to support enterprises in communities in which we operate. By supporting these three companies we want to ensure that they develop business skills and expertise and overcome the challenges of doing business with large organisations."
AMSA said contracting with minority suppliers was a key to help the company win work from the South African government. All South African companies are given a black economic empowerment (BEE) rating and are more likely to win business with a higher score.
The company has initiated the project at its Vanderbijlpark Works and will later expand the scheme to cover plants in Newcastle, Saldanha and Vereeniging in South Africa.