Social Responsibility

Enterprise development

Philosophy and why it is important

The goal of Enterprise Development (ED) at Hulamin is to facilitate the development of sustainable black-owned businesses as preferred suppliers. Hulamin is committed to this process by providing business opportunities to new enterprises and support for small, medium and micro enterprises (SMMEs) through the provision of professional, financial and logistical support as well as various start-up support services.

Successful implementation of ED ensures participation of SMMEs in Hulamin's supply, which results in positive cost benefits to the business while facilitating skills development and job creation.

Responsibilities

The Black Economic Empowerment (BEE) Review Committee coordinates activities of enterprise development, as well as procurement activities, and reports to the Transformation Committee, which is a sub-committee of the board. An independent accredited verification agency verifies records of enterprise development activities.

Approach

Enterprise development strategies and activities are mandated by the BEE Review Committee at quarterly reviews, where feedback is provided on ED performance against targets, resources are allocated and fresh mandates are provided. Hulamin has also developed a partnership with the Pietermaritzburg-based Business Support Centre (BSC), a non-governmental organisation which is well equipped to facilitate ED, providing a far broader impact than Hulamin can achieve on its own. Hulamin supported the BSC to the extent of R300 000 in 2010 alone, and a cumulative total of almost R900 000 since 2006.

Targets and performance

Targets for 2010:

• Establish five black business enterprises to provide Hulamin with goods and services; and
• Provide business support to existing Hulamin contractors to maintain or increase business with Hulamin.
• Four enterprises were established during 2010, being:
• Hulacore - engineering;
• Progress Engineering - engineering;
• Mapholoba Metal Works - industrial ducting services; and
• Winter Knight - forklifts.

Successful enterprise development projects facilitated by Hulamin in 2010

• Hulamin facilitated the establishment of a new business entity called Hulacore that cuts Hulamin's aluminium and steel cores. Hulacore cuts all cores previously performed internally, which results in turnover in the region of R0,3 million per year. Two entrepreneurs are running this specialised business. This operation will result in an additional three to four permanent jobs. Due to the critical nature of the service that Hulacore is providing, their premises are in close proximity to Hulamin.
• Progress Engineering participates in a business opportunity to repair and refurbish Hulamin's damaged scrap bins, used to store and transport aluminium scrap. This work was previously carried out by larger established businesses. Progress Engineering's involvement in this business resulted in a turnover in excess of R0,5 million and the creation of an additional three to four jobs.
• Hulamin Containers enlisted Mapholoba Metal Works to provide various engineering services, specifically ducting services. Mapholoba Metal Works has since employed three additional staff members and has a turnover of more than R0,2 million a year. Mapholoba Metal Works received operational support and ongoing mentorship from the BSC.
• Winter Knight is a family business providing, amongst others, forklift services to Hulamin. Hulamin afforded Winter Knight an opportunity to supply the services of one forklift - with the potential to grow as opportunities arise.

Hulamin continued to mentor 22 SMMEs, who were its suppliers in 2010. Turnover of these SMMEs rose collectively to R30 million compared to R28 million in 2009, and together they employ over 300 permanent employees.

Enterprise Development expenditure for 2010 was R505 000LA, equating to 1% of profit after tax.

Business Support Centre's 2010 achievements

Hulamin has contracted with the BSC to embark on providing skills to develop aluminium fabricators. This is a specialty training programme targeting aspirant entrepreneurs who wish to acquire skills that will enable them to set up their own businesses of installing aluminium doors, windows, balustrades, and shop fronts. These entrepreneurs are already working with aluminium material but have no recognised accreditations or qualification. They are assisted with a prior learning programme which requires a trade test upon completion. Fifteen candidates started the programme in September 2010 and will complete the course in June 2011. The programme is conducted by Training Force, based in Pietermaritzburg.

Hulamin has played a key role in the establishment of the BSC which has contributed enormously to the development of entrepreneurs as well as job creation in the region. Since its inception in 1997, the BSC has provided training to more than 11 400 entrepreneurs in various business skills. Currently the BSC registers approximately 200 new businesses per annum, as well as establishing and mentoring these new enterprises to ensure long-term sustainability. In 2010, the BSC coordinated in excess of 30 BBBEE Verification Certificates for SMMEs.

Since 2005 the BSC has been instrumental in creating more than 1 890 jobs. The total spend on enterprise development for the year under review amounted to R1 million.