Procurement and Enterprise Development

We make it our mission to procure goods and services from black-owned enterprises – primarily those that are women-owned – while working with the owners to develop these enterprises.

Sanlam’s performance for Procurement and Enterprise Development against the FSC

		Actuals
Component	FSC target	2007	2006
Procurement and enterprise development points scored against the Charter allocation	15	15	11
Procurement and enterprise development	50%	50%	40%

An empowering environment for broad-based BEE

The intention underlying the transformation of the Sanlam supply base is to increase the number of broad-based black economic empowerment (BBBEE) suppliers we use and the amount of money spent with these suppliers. We do this by identifying and removing barriers to entry and creating a culture that supports procurement from BBBEE suppliers.

Our focus on procurement is aimed at ensuring an optimal value proposition for our shareholders and internal service users. We consider dimensions such as service, quality, and environmental and BEE profile to ensure fair and equitable dispensation for the interaction between us and our supply base. While Sanlam is guided by the FSC and DTI CoGP, we also take an independent, long-term view of our business environment and we’ve set our procurement practices accordingly.

We know that targeted procurement provides employment and business opportunities for marginalised and/or disadvantaged individuals and communities. And that the development and promotion of small-scale enterprises contributes to job creation and poverty alleviation. Targeted procurement can provide market access for small businesses and as such create business opportunities in that sector.

Sanlam's procurement policy covers issues around transparency, effectively governed processes, employee conflict of interest, quality workmanship and service as well as timely delivery. Underlining this, the policy enhances long-term economic sustainability of all stakeholders and contributes to the South African economy by developing black entrepreneurial potential, thus advancing BEE.

We believe it’s imperative that companies procure services not just from large suppliers, but from small, broad-based, black economic empowered businesses. By uplifting and training black entrepreneurs who have the potential and skills to become self-sufficient and competitive, these businesses can successfully take part in the formal economy and become self-sustaining, ensuring a sustained supplier base in the future.

All Sanlam subsidiaries have for some time now been implementing targeted procurement and enterprise development programmes, to contribute towards the growth and development of emerging businesses.

Summarising the 2007 financial year, Sanlam subsidiaries, excluding Santam, purchased in excess of R640 million (of R1.6 billion) from BEE companies. When our enterprise development activity is included, this amount equates to approximately 50% of our overall procurement spend.