TRANSFORMING OUR SUPPLIER BASE

Our economic transformation strategy – as illustrated below by our transformation runway – was developed and adopted in FY2019/20. The overarching strategy highlights key initiatives in our seven sector strategies.

Preferential procurement

Even though we faced similar challenges to our suppliers in the year under review, we needed to gain an understanding of their unique challenges to support them. Consequently, we identified our top 100 suppliers and engaged them to understand these challenges.

We also conducted a risk analysis of our top 20 suppliers and concluded that they may be at risk of losing their current B-BBEE status to a lower level owing to the impact of COVID-19. As a result, we engaged them as part of the supplier performance monitoring process and ensured they submit BEE improvement plans to maintain or improve their status for the remainder of their contracts.

In the year under review, we developed a barometer dashboard to monitor progress against our targeted procurement spend. Our revised flagship projects in construction, IT and commercial remain a priority to ensure preferential procurement targets within these sectors are met regardless of the extent of our procurement spend.

Construction

Our overall performance in the construction sector exceeded the targets with 95% (R648.0 million) of procurement spend going to 51% black-owned suppliers, against a target of 35%; and 84% (R576.3 million) of procurement spend going to 51% black women-owned suppliers, against a target of 30%.

Furthermore, R237 million of the total spend supported EME/QSE suppliers, accounting for 35% of total spend. The five flagship projects are progressing well.

IT

Significant progress was made in the IT sector with 93.94% (FY2019/20: 62%) of the total IT procurement going to black-owned companies, of which 43.7% were black women-owned, and 2.94% youth-owned.

Property

Our economic transformation strategic objectives were realised through the construction of our new head office on a site adjacent to O.R. Tambo International Airport which is one of our flagship 10-year transformation projects. The project was completed and comprises three buildings that will house Airports Company South Africa and other prospective tenants. We continued to engage with advocacy organisations such as the South African Property Owners Association, the South African Institute of Black Property Practitioners and Women in Property Network. We also consulted our industry partners on an ongoing basis to enhance their understanding of how our transformation journey can contribute to our business.

Commercial

Our three flagship commercial sector projects were on hold for a large part of the year as a consequence of lockdown restrictions. These resumed as the airports’ commercial space increased operations.

An internal 10-year analysis of the top 20 commercial concessionaires concluded to determine whether there has been significant improvements or changes in B-BBEE ownership credentials for these group of concessionaires.

The black business revenue for the year accounted for 42% in core commercial revenue. The set target of 55% was missed as a consequence of the declining revenue from the retail businesses.

Enterprise and supplier development

Our enterprise supplier development initiatives provide financial and non-financial support to SMMEs, leading to increased economic participation and stimulating job creation. Including SMMEs in our supplier base supports their growth while advancing our transformational imperative. With our support, SMMEs can grow to scalable businesses with the potential to become part of our supplier development programme and, ultimately, to become preferred procurement partners.

Key enterprise and supplier development projects

In FY2020/21, several key enterprise and supplier development projects were affected by COVID-19.

Corporate Canteen – Café Zing

We continued to contribute as an enterprise development beneficiary through the waiver of rental and utility fees. Although the enterprise development contract is valid until February 2021, the canteen was closed for the majority of the year and resumed operation only in January 2021.

King Shaka International Airport – Ilembe Business Chamber collaboration

The partnership with ILembe Business Chamber continued in FY2020/21, supporting enterprise development initiatives. 20 SMME’s benefited from the programme in its 10th celebratory year. The Chamber partnered with Gordon Institute of Business Sciences (GIBS) Entrepreneurship Development Academy who delivered a four-part masterclass to the participants. Finalists received exposure in a form of an exhibition. The winners received funding to boost their respective business plans, mentorship support as well as membership to the chamber.

IT Enterprise Development Initiative

Capacity building of SMMEs is one of the four strategic pillars of Airports Company South Africa’s economic transformation strategy. Three of our IT suppliers were given the opportunity to register on Oracle Cloud Computing and were allocated 20 subscriptions each through Oracle University South Africa as enterprise development beneficiaries. The online training programme allows beneficiaries to study and complete at their own pace. Each learner has 12 months to complete the Oracle Cloud certification.