National carrier South African Airways (SAA) unveiled a three-year supplier development programme on Monday through which it aimed to ensure that half of all its consumable supplies were procured from black-owned companies by end 2018 – the airline currently procured R20-billion-worth of good as services yearly.

The R10-billion target was announced at a signing of a memorandum of understanding (MoU) between SAA and the Department of Trade and Industry (DTI), which committed the airline to develop and support inclusive supplier sourcing and procurement.

Trade and Industry Deputy Minister Mzwandile Masina said the initial focus would be on “low-hanging fruit” such as the supply of cleaning services, jet fuel, uniforms, as well as movies and music produced by black filmmakers and artists.

However over the medium term, the intention was to also integrate black-owned companies into the supply of technical parts and engineering services, with government assessing the creation of a supplier park for black industrial enterprises seeking to supply into the aviation sector.

Masina said that, while SAA already procured R10-billion yearly from black economic–empowerment companies, expenditure levels were actually more modest with black-owned and managed companies – firms where the shareholding was higher than 51%.

In fact, it was estimated that black-owned and managed companies were currently supplying only R1-billion-a-year in goods and services to the airline.

SAA chairperson Duduzile Myeni said the intention was not only to provide market access to black-owned suppliers, but to actively source, train and assist in the development of such suppliers, with the assistance of the DTI.

She promised regular seminars and engagement sessions around the country, with an inaugural seminar planned for June 12. Tender documents would also be reviewed in an effort to ensure that they were not structured in a way that created false barriers to entry.

Myeni insisted that, while every effort would be made to level the playing field for entrepreneurs from disadvantaged backgrounds, all procurement would continue to be pursued through transparent and competitive processes. The airline would also insist on cost competitiveness and quality.

Masina said that the DTI would pursue similar procurement agreements with other State-owned companies such as Eskom and Transnet, and that the department stood ready to incentivise the creation of black-owned industrial enterprises.

The Black Industrialist Development Programme, backed by a R1-billion specialised incentive, was being established, while the Industrial Development Corporation was planning to disburse R23-billion of a larger R100-billion in development finance to black industrialists by 2020.