Black is good to win business

5 July 2009

06 July 2009 | Jake Kanter

Contracting with black-owned and managed suppliers is important to winning new business in South Africa, according to research.

The survey of more than 400 South African companies by accountancy firm Grant Thornton last month found 63 per cent used purchasing policies to encourage black economic empowerment (BEE) and boost sales figures. This was an increase of 4 per cent on 2008.

All South African companies are given a BEE rating and are more likely to win business with a higher score, the study said.

Procurement remains one of the main strategies used to improve BEE ratings, and 61 per cent of the respondents increased the number of black-owned and managed vendors in their supply chain last year.

Other strategies include developing black members of staff and BEE-focused recruitment.

Firms in the construction sector were most engaged in the issue, with 71 per cent adopting BEE procurement policies. Tony Balshaw, managing partner of Grant Thornton Eastern Cape, said the public sector's failure to give black owned businesses preferential treatment in procurement procedures meant private companies were leading on the agenda.

In March, mining firm Anglo American South Africa revealed it increased spending with black-owned and managed suppliers by 42 per cent last year (News, 5 March 2009).

SMjul2009

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