Reliance and impact on key capitals > Social, relationship and intellectual capital

SOCIAL, RELATIONSHIP AND INTELLECTUAL CAPITAL

Social, relationship and intellectual capital encompasses our relationships with communities, groups of stakeholders and other networks and promotion of innovative thinking. It incorporates shared values and behaviours and provides us with our social licence to operate. Interaction with key stakeholders, consideration of their concerns and earning their trust are central to maintaining and developing this capital.

 

2014 areas of focus 

How we fared 

Extension of our long-term slab supply  Refer to our Isizinda Aluminium story 
Improve on our preferential procurement, enterprise development and skills development  Overall increase in our preferential procurement spend Continued support of SMMEs and enterprise development 
Unlock the opportunities in the recycling of aluminium  Refer to the Manufactured capital section 
Improve our health and safety record  Record safety performance Commitment to the improved health of our employees and communities Refer to the Human capital section
Reduction of our carbon footprint and support environmental initiatives  Challenges have been met in reducing our carbon footprint Refer to the Natural capital section

 

2015 and beyond focus areas 

Improve on our preferential procurement, enterprise development and skills development 
Extend our commitment to B-BBEE and the beneficiation of enterprise development of the community, supplies and customers 
Continue to improve the health and safety of our employees and the communities we work with 
Reduce our carbon footprint in line with global standards and seek alternative sustainable supplies 
Improve the quality of product provided to our customers together with innovating key product streams 
Strengthen relationships with all our key stakeholders 

 

Aluminium Beneficiation Initiative

In 2014, Hulamin and BHP Billiton collaborated to form the Aluminium Beneficiation Initiative (ABI), an economic development initiative focused on developing and supporting high-level entrepreneurs in aluminium fabrication or beneficiation. The initiative plans to identify, support, and train 100 to 150 entrepreneurs and guide them into sustainable businesses within three years.

A key objective of the ABI is to grow local market usage of aluminium. This will have a positive impact on the local economy by promoting job creation and providing an opportunity for skills transfer.

The value-add downstream aluminium projects envisaged will ideally result in products that are currently being imported, being locally produced. The project will commence in 2015. A foundational element of ensuring the success of the participating entrepreneurs, and ultimately the success of this project, include putting into place mentors and coaches who will guide, advise and provide general direction to the selected candidates. This will be required particularly in so far as manufacturing, fabrication and technical/technology aspects of the businesses.

The aluminium industry in South Africa depicts an industry that exports large volumes of unbeneficiated material while at the same time imports finished products. Through ABI, Hulamin and BHP Billiton want to promote a business model for the industry that will encourage local sales through significant beneficiation or value add.

Small Enterprise Financial Agency (SEFA) have partnered with the ABI in creating an Aluminium Fund that will be utilised for this intitiative.

 

Key Stakeholder Relationships, RELIANCE AND IMPACT

Hulamin recognises that in order to create sustainable value for all, it needs to be responsive to all stakeholder expectations. To meet these expectations it is crucial to build trust and respect with our stakeholders since this will impact positively on our reputation allowing us to engage proactively on issues of mutual interest.

 

Stakeholders 

Stakeholder importance to Hulamin 

Expectations and concerns 

Government  Local, provincial and national government, including regulatory authorities. They license us to operate and provide a supportive regulatory environment through:

tariffs and duties to level the uneven regimes between South Africa and our trading partners; and
benefits associated to the aluminium value chain for local development in terms of beneficiary electricity. 
Continual and responsible contribution to regional development:
  • Facilitate downstream development
  • Job retention and creation
  • Transformation and empowerment
  • Safer workplaces
  • Healthy competition among businesses
  • Energy consumption reduction 
Providers of capital  Shareholders, investment community, creditors and lenders who provide us with the financial capital required to sustain our growth. This is covered in detail under the Financial capital section Sustainable growth and returns on investment:
  • Sustainable returns
  • Supportive regulatory and business environment
  • Future growth for the business 
Customers  We are reliant on customers and potential customers to sustain revenue generation and growth. The majority of our sales are to export customers. We are focused on growing the local and regional markets This is covered in detail in various sections of this report, shown here Reliable service, good quality products and competitive prices:
  • Long-term security of supply
  • Consistent supply of products
  • Improved manufacturing capability and product range 
Suppliers  Suppliers of metal and other products and service providers are important as we are reliant on them to provide safe, good quality and good value products and reliable services that support growth.  Continued growth and relationships:
  • Long-term supply contracts
  • Efficient payment cycles 
Employees  Employees are the key underpin to achieve operational performance and objectives. This is covered in detail under the Human capital section.  Provision of gainful and safe employment:
  • Employment security
  • Safe working environment
  • Competitive remuneration and benefits packages
  • Workforce transformation
  • Information and communication
  • Participation and empowerment 
Communities  We build and nurture existing relationships, and create a conduit to better understand community needs and interests. This allows for us to contribute to transformation, enterprise development and various corporate social investment initiatives.  Responsive contribution to community interests and needs:
  • Support for key community developments and activities
  • Sponsorships and donations
  • Employment opportunities
  • Support for environmental initiatives 

 

 

Commitment to our communities

Recently Hulamin realigned our Corporate Social Investment policy to invest in fewer but more substantial projects with particular focus on historically disadvantaged communities as it is imperative to make a difference by adding value to the development of these communities. Our Corporate Social Investment programme focuses primarily on education, health, development of community skills, welfare, environment and crime prevention with a secondary focus on sport.

 

Programme 

Length of our association 

Thandanani Children’s Foundation
Founded in 1989, is a non-profit organisation based in Pietermaritzburg that facilitates community-based care and support for orphans and other vulnerable children. 
More than
5 years 
Pietermaritzburg and District Community Chest
Assists selected organisations within the greater Pietermaritzburg community, thus making a significant impact on the lives of many underprivileged, disadvantaged people, including many of the aged within these communities. 
More than
10 years 
Protec Pietermaritzburg
An organisation which provides quality mathematics and physical science enrichment education to grades 9 to 12 students from disadvantaged communities in the greater Pietermaritzburg and KZN midlands region. 
More than
5 years 
Maritzburg United Football Club (MUFC)
Hulamin is a major sponsor of the reserve team. Hulamin committed to supporting MUFC’s U19 team for the 2014/5 season. Hulamin believes this move will fast-track the development of talent and help facilitate players’ progression into the professional ranks. 
2014/5
football season 
CANSA
A non-profit organisation that aims to lead the fight against cancer in South Africa. It provides support to all people affected by cancer, enables research into the disease, and educates the public. 
More than
2 years 

 

Developing future business, unlocking economic growth

Hulamin’s Enterprise Development objective is to facilitate the development of sustainable businesses that will create jobs and add stimulus to the economy. 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. An important element is the emphasis on the value chain, where Hulamin has influence to create opportunities for new businesses as customers or suppliers.

The Department of Trade and Industries has set out a target of at least 3% of the net profit after tax to be spent on economic development. We have continued to meet and exceed this target.

 

Hulamin’s Enterprise Development Initiatives

Hulamin has been strategically involved in providing development support to many SMMEs and initiatives, such as:

  • Business Support Centre
  • Sasami (Pty) Ltd
  • Wenza-Okuhle (Pty) Ltd
  • Omalume Manufacturing and Services CC
  • Zee Industrial Corporation (Pty) Ltd
  • Shesha Mfana
  • Aluminium Beneficiation Initiative

Future leaders innovating today

Today, innovation performance is a crucial determinant of competitiveness and national progress. Moreover, innovation is important to help address global challenges, such as climate change and sustainable development. At Hulamin, we strive for innovation in order to provide the best quality product for our customers, promote economic development and develop future innovators and leaders.


Hulamin as a leader of technology and engineering

UKZN’s Hulamin-sponsored solar car was revealed to South Africa by a team of 11 engineering students at Howard College campus. It competed against 14 other solar cars from overseas and from all over South Africa in the 2014 Sasol Solar Challenge, coming in as the first South African team and third overall. The competition ran from 27 September to 4 October 2014.

The 4,5 metre-long space-age car has six square metres of solar panels covering its top surface. The car has been named iKlwa, which translates from isiZulu to “a short and agile spear”, and describes how the students expect this car to cut through the air.

“We are extremely grateful to Hulamin for their support,” said UKZN team leader, Kirsty Veale. “They have not only helped us with funds, but also with their technical expertise in the use of aluminium, and they have supplied us with as much aluminium as we need.”

The project also drew on students from the Durban University of Technology and included electronic and computer engineering students, as well as computer science students.

The Hulamin iKlwa is scheduled to race again in the World Solar competition to be held in Australia later in 2015.

 

Preferential procurement

Business relationships with companies who actively pursue sound employment equity and black economic empowerment programmes are encouraged in support of the economic empowerment of black South Africans.

The future of the country and Hulamin are dependent on growing the economic involvement in mainstream business, on a sustainable basis, of all previously disadvantaged groups. Business will only be sustainable with the empowerment of black South Africans going forward. Our intervention programme of preferential procurement is meant to achieve these objectives.

Over the last 12 months Hulamin spent R6,2 billion in total with B-BBEE enterprises. Of this total, R206 million was spent with Qualifying Small Enterprises (QSEs) and Emerging Micro enterprises (EMEs), R232 million on black enterprises (greater than 50% black-owned), and R47 million with black woman-owned businesses (greater than 30% black woman-owned). B-BBEE expenditure now represents 93,39% of total expenditure for the period after exclusions such as imported goods and services and VAT. Hulamin met and exceeded our targeted spend of R60 million with wholly African-owned entities for 2014 with a final spend of R70,7 million.

 

 

Developing local football

Hulamin announced a one-year sponsorship of Maritzburg United Football Club (MUFC) U19 team for the 2014/5 season for the sum of R750 000.

The sponsorship will help expose the local young players to a range of development opportunities in football and in the broadcasting field helping to produce better-rounded and better equipped players on and off the field. It will fast-track talent development for transition into first teams, locally and offshore, as well as facilitate progression to the professional ranks.

Hulamin considers itself as an integral part of the Msunduzi community in which it operates and is committed to helping improve the lives of those living and working within the region with particular focus on previously disadvantaged communities. It is important for Hulamin to use opportunities such as supporting MUFC to add value to the development of the local communities.