1. Supplier Development (SD) Initiatives-
Heading heading heading
Date
Supplier Development (SD) Initiatives-
Port of Richards Bay th April 2016

2. WHAT IS SUPPLIER DEVELOPMENT?
Background
The Supplier Development (SD) Programme is an initiative of the Department of Public Enterprise as underpinned by the National Growth Path (NGP) objectives of the government. This initiative is supported by Transnet as a State Owned Corporation (SOC)
SD aims to:
Overarching SD Levers
SD mechanisms
Address an un-transformed manufacturing/services supplier base
Mitigate the decline in manufacturing capabilities and capacity
Address the monopoly structures within the local economy
Ensure Transformation and meaningful participation of the mainstream economy
Increase Capability – develop suppliers to have the know how/ability
Increase Capacity – develop suppliers to be able to deliver on requirements
Increase Competitiveness – develop suppliers to be able to compete in the South African supply base
Programmatic: Assist Government in achieving its industrialisation objectives through the development of a local and transformed supplier base
Strategic: Influence multinational organisations toward initiatives that lead to the development of local down stream suppliers through large-scale SOC procurement
Small enterprise development: Assist local suppliers to improve their skills, in line with the B-BBEE strategy
Job creation/preservation: Refers to an increase or preserve in the number of jobs due to the award of business from Transnet
Small business promotion: Encourage the growth and expansion of BO EMEs, BO QSEs and BO start ups
Rural Integration:Refers to suppliers functioning within rural community and regional areas in which the goods will be required.
Industrialisation: Development of industries through machinery, equipment & buildings spend resulting in globally leading capabilities
Focused: Assist local suppliers to improve their performance, enhance their existing production and skills capabilities by placing increased emphasis on benefiting previously disadvantaged individuals 2

3. SUPPLIER DEVELOPMENT CATEGORIES
Category
Description
Industrialisation
Development of industries through machinery, equipment & buildings spend resulting in globally leading capabilities
Refers to skills transfer with an emphasis on the accumulation of knowledge and experience
Generally targeted toward sector specific skills development with a focus on artisan and technical skills
Skills Development
Job Creation/ Preservation
Refers to an increase or preservation in the number of jobs due to
the award of business from Transnet
Favouring more labour intensive methods for job creation
Jobs include both skilled, semi skilled and unskilled
The predominant emphasis for each category will differ according to the opportunities identified through detailed market analysis
Small Business Promotion
Encourage the growth and expansion of BO EMEs, BO QSEs and
start ups through procurement and support mechanisms
Technology transfer/
Sustainability
Refers to process, know-how and IP associated with developing a competitive local supplier post the current transaction
Rural Development and Regional integration/LED
Refers to suppliers functioning within rural community and
regional areas (i.e. LED) in which the goods will be required 3

4. TRANSNET HAS INVESTED IN AND SUPPORTED NUMEROUS ED INITIATIVES (1/3)
Description
Project cost Rm
Duration
yrs
Create an enabling environment for SMEs to access economic development interventions;
Create a culture of entrepreneurship;
Transform Transnet’s supplier base ensuring active economic participation of SMEs;
Develop and support new entrepreneurs through structured training programmes.
Transnet ED Hub 3
GODISA Fund
Collaboration between Transnet, Anglo American and Small Enterprise Finance Agency
Provide financial and non-financial Support to Transnet Black Owned Supplier. 10
Itireleng Fund (in partnership with GEP)
A strategic partnership with Transnet and Gauteng Enterprise Propeller
Aimed at providing financial and non-financial assistance to ensure SMMEs benefit. 2
Transnet- Shanduka Black Umbrellas Business Incubation
Two Incubation Centres are currently running in KwaZulu-Natal, Richards Bay and Eastern Cape (Coega) areas;
A non-financial support service aimed at incubating 100% black-owned SMMEs, which meet Transnet’s supply chain needs. 2 4
Source: Transnet ED initiatives; Team analysis

5. TRANSNET HAS INVESTED IN AND SUPPORTED NUMEROUS ED INITIATIVES (2/3)
Description
Project cost Rm
Duration
yrs
Transnet-Seda Supplier Development Programme
The fund is aimed at strengthening the performance of supplier firms and enabling them to be globally competitive 3
Enhance the productive capacity and support Transnet black owned manufacturing suppliers within it’s supply chain in the next 5 years.
Productivity SA 3
Partnership between Transnet , SABS, JASA and Wits Transnet Centre for Systems Engineering;
Provide facilities and resources to SMMEs to research and develop innovative ideas which have commercially viability;
Focused on social, technological and business innovation.
Transnet Innovation and Research Centre (TIRC) 5
150
GIBS Academy
Aims to empower new and existing growth-oriented entrepreneurs with a business education, mentorship and other support services in order for them to build or grow their enterprises 2
An initiative with AIDC;
Employs a simple process of running a 4-day workshop where attendees will be taught the implementation of the problem solving methodology and continuous improvement.
Rapid Improvement Process 1 5
Source: Transnet ED initiatives; Team analysis

6. TRANSNET HAS INVESTED IN AND SUPPORTED NUMEROUS ED INITIATIVES (3/3)
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TRANSNET HAS INVESTED IN AND SUPPORTED NUMEROUS ED INITIATIVES (3/3)
ED initiative
Description
Duration
yrs
Project cost Rm
Bakery Project
A partnership between Transnet and Umnyakazo to empower 100% rural black women-owned co-operatives to run and operate container bakeries in their communities (EC, KZN and NW) 3
Through a partnership between Transnet and Furntech, this is a Centre of Excellence for the furniture industry , to offer business incubation and / or skills development in furniture manufacturing. This is focused specifically on Black People living with Disabilities
Furniture Manufacturing Incubation 1
Nawe Zifunze Disable Driving School & Computer Academy
Transnet has partnered with Vuka Academy and Road Accident Fund to establish a driving school academy and computer academy for disabled people in Richards Bay 1
Transnet SMME Business Toolkits
“Transnet has partnered with SAGE Pastel, who will develop SMME Business Toolkits, which covers all key areas of business management to our SMMEs.” 1 6
Source: PLP Programme: Achievements of Transnet’s CSDP Programme

7. THE TRANSNET ED HUBS PROMOTE SMME PARTICIPATION
Transnet ED Hub inputs
Outcomes
Create an enabling environment for SMMEs
Encourage and nurture a culture of entrepreneurship in South Africa
Transform Transnet’s supply chain, ensuring active economic participation of SMMEs
Develop and support new entrepreneurs through structured training programmes
Strategic partners including DTI, SEDA, NYDA, GEP and SARS
Relationships between Transnet, Provincial and National Economic Development Institutions
Financial and Non-Financial Support to SMME’s
Transnet provides infrastructure and manages the ED Hub
Strategic partners provide human capital resources and other resources/ services
Transnet ED Hubs 7
Source: PLP Programme: Achievements of Transnet’s CSDP Programme

8. SD PROJECTS- PORT OF RCB8

9. PROJECTS: CONSTRUCTION OF ROADS, PORT ENTRANCES & TIDAL BRIDGES
LOCALISATION (as per SOCs definition)
Target: 100%
Target met? Yes
TOTAL EMPLOYMENT
Aggregated Black people employed: 372
Aggregated Youth employed: 372
Aggregated Black youth employed: 372
Aggregated females employed: 54
Aggregated Black females employed: 54
Aggregated South Africans employed: 372
South Africans employed who are local community members: 372 9

10. PROJECTS: CONSTRUCTION OF ROADS, PORT ENTRANCES & TIDAL BRIDGES
SUPPLIERS CONTRACTED (DIRECT)
Aggregate amount of suppliers contracted: 7=subcontractors (including suppliers
total 84)
Large enterprises contracted: 4= subcontractors
Medium enterprises contracted: 3=subcontractors
Suppliers contracted who are South Africans: 7
Suppliers contracted who are local community members: 7
Suppliers contracted are black people: 5
Proportion of equipment the suppliers contracted purchased in South Africa: 100%
SUPPLIER/ENTERPRISE DEVELOPMENT
How many of the suppliers developed have been able to sustain their businesses after the completion of the SOCs project: 7
How many are black owned/people: 5
SKILLS DEVELOPMENT & TRAINING
Female employees trained: 62
Black female employees trained: 62
Youth Employees trained: 218
Total employees trained: 218
Black employees trained: 218 10

11. PROJECT 4: CONSTRUCTION OF TRUCK-STAGING AREA
LOCALISATION (as per SOCs definition)
Project’s localisation target: 55.75% 
How much of the localisation target was met?: %
TOTAL EMPLOYMENT
Aggregated Black people employed: 173
Aggregated Youth employed: 109
Aggregated Black youth employed: 109
Aggregated females employed: 18
Aggregated Black females employed: 18
Aggregated South Africans employed: 173
South Africans employed who are local community members: 173
SUPPLIERS CONTRACTED (DIRECT)
Aggregate amount of suppliers contracted: 79
How many Large enterprises contracted: 63
EME’s Contracted: 7
QSE’s Contracted: 9 11

12. PROJECT 4: CONSTRUCTION OF TRUCK-STAGING AREA…
SUPPLIERS CONTRACTED (DIRECT) Cont.…
Suppliers contracted who are South Africans 79 (All)
Suppliers contracted who are local community members 25
Suppliers contracted who are black people: 11
Suppliers contracted who are females: 2
Suppliers contracted are black females: 2
SUPPLIER/ENTERPRISE DEVELOPMENT
Suppliers developed that have been able to sustain their businesses after the completion of this project: All 79
New employees recruited by the suppliers as a result of this project: 26
SKILLS DEVELOPMENT & TRAINING  
Total employees trained: 104
Youth employees trained: 3
Black employees trained: 101
Female employees trained: 3 
Trained artisans who are local community members: 3 Youth
Trained engineers who are local community members: 1 Female
Note: Operation of Canteen at Truck Staging contracted to a Black Woman Owned Business - Umqhele
Bed & Breakfast 12

13. SMALL BUSINESS PROMOTION13

14. BROAD-BASED BLACK ECONOMIC EMPOWERMENT
B-BBEE OVERVIEW
BEE performance slide to go in here
BBBEE Performance
KPI FY FY FY
BROAD-BASED BLACK ECONOMIC EMPOWERMENT
TOTAL PROCUREMENT SPEND (Rm)
198,763,367.19
206,033,316.01
403,365,819.16
ACTUAL BBBEE SPEND (Rm)
181,623,275.15
179,473,045.89
389,248,015.33
TOTAL BBBEE SPEND AS % OF TOTAL PROC SPEND
91%
87%
96.5%
BBBEE TARGET %
70%
90%
QSE BBBEE SPEND (Rm)
53,735,208.65
25,776,714.52
38,723,117.66
QSE AS % OF TOTAL PROC SPEND
27%
12%
9.6%
QSE TARGET % 5%
13%
EME SPEND (Rm)
34,396,346.64
34,075,203.66
39,126,484.44
EME AS % OF TOTAL PROC SPEND
17%
9.7%
EME TARGET % 7%
BL WOMAN OWNED (30% SHAREHOLDING) (Rm)
74,881,032.76
3,417,915.52
44,370,240.09
BL WOMAN OWNED AS % OF TOTAL PROC
38% 1%
11%
BL WOMAN OWNED TARGET % 6% 8%
BLACK OWNED (50% BLACK SHAREHOLDERS)(Rm)
130,970,760.03
51,751,740.92
91,564,040.91
BLACK OWNED AS % OF TOTAL PROC
66%
25%
22.7%
BLACK OWNED TARGET % 9%
20% 14

15. EARLY PAYMENT FACILITY
TNPA grants shorter payment terms (i.e. 7 days / 15 days upon presentation of invoice) to qualifying small businesses.
Current status : 30 suppliers on early payment facility.
REQUIREMENTS TO QUALIFY:
Annual Turnover of less than R10 mil per annum
Suppliers must provide valid documentation (i.e. Valid Tax Clearance Certificate & BBBEE Certificate). 15

16. FY2016/17 SUPPLIER DEVELOPMENT PLANS

17. 17