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. 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.

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Case study: Enterprise and supplier development

Stenda Trading Proprietary Limited is a 100% black, women and youth owned business established by Matshidiso Dlungwane in 2016. She hails from Mamelodi township in Pretoria, and worked in the mining sector as a metallurgical engineer before starting her own business.

The company provides multidisciplinary services and addresses the shortage of women run and owned enterprises providing technical services in the mining sector.

Stenda Trading is currently contracted to several mining companies, providing a range of services:

  • Underground ventilation, roof support and road maintenance
  • Building refuge bays and gunniting
  • Conveyor belt supply, installation and maintenance
  • Civil and concrete work
  • Scaffolding, water treatment and reticulation

At Exxaro, Stenda Trading provides underground civil and underground cleaning services at Matla Mine. Civil work includes building containment and explosion-proof walls, installing black brattices, reinforced brattices and air crossings. It builds refuge bays, undertakes concrete work and installs and reclaims specialised doors. Underground cleaning services include installing and maintaining life-lines and cleaning refuge bays and wash bays.

After it was awarded these contracts in 2018, Stenda Trading approached the Exxaro enterprise and supplier development (ESD) unit for financial support. The company was awarded an interest-free loan of R9.2 million to procure equipment, vehicles to transport material and employees to site as well as a mobile office.


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Dyna for transporting workers underground

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Stenda Trading employees at Matla coal mine with safety representatives in red overalls

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Dyna for transporting workers underground