STIMULATING ECONOMIC TRANSFORMATION

By growing and developing local suppliers

Enterprise and Supplier Development

What exactly is Enterprise and Supplier Development? In the context of South Africa, ESD refers to a set of affirmative action and local content development measures aimed at promoting economic transformation. Under the revised B-BBEE Codes, ESD refers to the combination of Preferential Procurement, Supplier Diversity, Supplier Development and Enterprise Development programs:


Preferential Procurement (25 +2 points) is a national policy aimed at public and sector procurement to buy goods and services from previously disadvantaged individuals or businesses.

Supplier Development (10 points) is the process of working with certain suppliers on a one-to-one basis to improve their performance for the benefit of the buying organisation, leading to improvements in the total added value from the supplier in question in terms of B-BBEE rating, product or service offering, business processes and performance, and improvements in lead times and delivery.

Enterprise Development (5 points) is an economic development strategy that is underpinned by building SMMEs, and integrating them into competitive markets that are stronger and more inclusive. Enterprise development is achieved by monetary and non-monetary, recoverable and non-recoverable contributions actually initiated in favour of a beneficiary entity by a measured entity with the specific objective of assisting or accelerating the development, sustainability and ultimate financial independence of the beneficiary.

Women in working gear looking through outside bins

Through its vision of powering better lives in Africa and beyond, Exxaro aspires to implement leading practices in ESD across the core functional areas. We have an objective to become a level 3 B-BBEE contributor by 2019. This initiative intends to promote economic transformation through developing entrepreneurs and suppliers and creating competitive markets for them to generate more jobs and establishing sustainable communities.

Exxaro is committed to creating opportunities for black-owned suppliers and black entrepreneurs to encourage economic growth in the country through our operations and other ventures.  We will leverage our purchasing power, internal and external capabilities to deliver sustained stakeholder value, which entails:

  • Protecting and growing shareholder value by securing our licence to operate while being financially self- sustaining. This is achieved by bringing to market commercially viable enterprise support solutions as well as taking financial interests in high growth enterprises with capabilities needed to realise our business growth aspirations.
  • Meeting and exceeding minimum standards placed by local, provincial and national government. This is achieved by aligning our program objectives and deliverables to meet as a minimum the regulatory and statutory requirements of the territories we operate in.
  • Reducing enterprise wide supply chain risk by lowering internal user transaction cost and supply side risk associated with security of supply and delivery lead times. This we achieve by actively investing in diversifying the quantum and quality of vendors located close to our business operations. Supporting economic transformation by growing the number and size of black owned business. We achieve this by directly and indirectly providing market access opportunities for black owned business and by investing in non- financial and financial business support programs.