1. WHERE LIES THE WEALTH FOR SUPPLIERS - SMMEs Presented by Carol Nkambule 03 February 2011 1 st Limpopo Provincial Supply Chain Management Summit

2. Outline Services offered SMMEs Business linkages / tenders LIBSA facilitated Budget 2009-11 Budget for year 2010/11 Infrastructure Budget Government spending per Dept 2009/10 Government spending – empowerment 2009/10 Government Spending Inputs required Basic infrastructure inputs Basic goods and services inputs Where is the wealth? Challenges Proposed solutions

3. Services offered SMMEs Business profiles – databases and tenders Business plans Tender advice / business linkages – leads Anglo Platinum Training Incubation Access to finance – Bridging finance LimDev

4. 2007/082008/092009/10 DistrictNoAmountNoAmountNoAmount Capricorn38R31 952 36919R7 326 29524R1 619 189 Mopani7R165 8823R2 610 61033R7 241 197 Sekhukhune205R23 441 927119R49 768 134328R58 908 228 Vhembe9R579 31858R5 431 219199R4 073 051 Waterberg122R12 186 99369R2 057 57742R472 661 500 Total381R68 326 489268R67 193 835626R544 503 165 BUSINESS LINKAGES / TENDERS LIBSA FACILITATED

5. Budget 2009-11

6. Budget for year 2010/11

7. Infrastructure Budget

10. Government Spending Infrastructure – Roads, Schools, Hospitals, Govt offices, houses, water reticulation infrastructure Goods – Stationery, Furniture, protective clothing, linen, Services - Catering, accommodation cleaning security,

11. Inputs required Infrastructure – Bricks, cement, sand, crushed stone, doors and window frames, pipes, roofing, plumbing material, electrification material, Goods – Food, stationery (books, files, pens, calendars, diaries, etc), wood for furniture making

12. BASIC INFRASTRUCTURE INPUTS Sand Crushed Stone Tools Hire Bricks / Paving CementPipesRoofing Windows / Doors Frames Window Glasses Paint Electricit y plugs, lights SchoolsXXXXXXXXXXX HousesXXXXXXXXXXX HospitalsXXXXXXXXXXX ClinicsXXXXXXXXXXX LibrariesXXXXXXXXXXX RoadsXXXX Water Infrastructure xX

13. BASIC GOODS AND SERVICES INPUTS Food Protective Clothing Gas Stoves Cleaning Material Cutlery / Crockery Stationery manufacturing / plastics WoodTools CateringXXXXXX AccommodationX X XXXX Cleaning X XX Security X X StationeryX FurnitureXXX

14. Where is the wealth? Infrastructure inputs Goods and services inputs New manufacturing enterprises for the inputs New wholesalers, fresh produce market for local small scale farmers

15. CHALLENGES Current legislation provides for awarding contracts or orders to the first tier suppliers Tenders issued for one big project with no requirements for the supplier to buy locally and from SMMEs and PDIs Current empowerment point system looks at the main suppliers disregarding the manufacturers, distributors Manufacturing capacity not yet fully developed for some products Some inputs are monopolized Suppliers are tied to distributors/wholesalers with easy access to credit even though it is at higher prices

16. PROPOSED SOLUTIONS Impose BEE requirements to the suppliers of suppliers or manufacturers of inputs Support new manufacturers for specific products to be linked to bigger infrastructure projects – buy directly from manufacturers Develop incentives for suppliers buying locally from PDIs Government proactive and deliberate ring-fencing of specific products so manufacturers can be developed for established markets.

17. Thank you