Ecsponent Development Fund improving BEE procurement in the Mining Sector

21st June 2017

     

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JSE-listed African financial services company, Ecsponent Limited, says that its unique Ecsponent Development Fund (EDF) provides large corporate business with an effective way of managing preferential procurement and improving reliable delivery whilst ensuring true social upliftment and skills transfer for local enterprises.

This is according to Ecsponent CEO, Terence Gregory, who notes that South Africa’s highly regulated B-BBEE environment has created challenges in the supply chain. “The truth is that there hasn’t been a broad-based sharing of wealth through the commercialisation of business in communities.

“Instead, B-BBEE legislation has been built around a scorecard. This has led to organisations being concerned with achieving timely supplies that meet specifications, while also meeting regulatory thresholds. The upliftment and growth of their communities becomes a secondary outcome. The recent changes to regulations have added further disruption to the industry with many organisations facing substantial downgrades in their BEE ratings,” he adds.

Gregory explains that the EDF’s offering has been refined over years of providing funding and procurement support to the market-specific needs of its clients. The company now offers a comprehensive solution to assist businesses in achieving and maintaining B-BBEE compliance standards. In addition to ensuring more reliable delivery and driving socio-economic development it also provides local enterprises with the skills transfer and skills development they need to fulfil their duties and deliverables as preferred vendors.

Louis Coetzee, General Manager of Ecsponent Development Fund, says EDF’s supply chain solution is particularly beneficial to the mining industry, which is under increasing pressure to achieve the supplier and enterprise development targets as set out in the Mining Charter.

“According to the Charter, about 30% of capital goods and consumables need to be procured from small and emerging suppliers. With Ecsponent’s extensive experience in mining and engineering supply chain combined with its history of financing developing enterprises, EDF can potentially prove to be invaluable to the mining houses that are developing these small and emerging suppliers to fully-fledged suppliers,” Coetzee comments.

Gregory says, “Currently, there are financing operations in the market that provide financial assistance to vendors. There are also numerous operations that assist with tender applications, procurement negotiation and supply assurance. Ecsponent has combined all these elements. By taking a holistic approach in working with large corporate businesses and their preferred vendors, we have managed to achieve success in both controlling and uplifting. This allows corporate organisations to focus on their core business with complete peace of mind that Ecsponent ensures the delivery.”

In terms of the process, Gregory shares that the company provides a complete solution facilitating all aspects from initial quotation stage, through the procurement cycle and ultimately managing the payment function.

“Ecsponent manages the risks associated with the supply chain process while upskilling the vendor in every aspect of the process as well as the vendor’s own business. The corporate is provided with a monthly scorecard of its vendors’ progress, with the objective of graduating the vendor into the corporate’s normal supplier base in time,” he explains.

Ultimately, Gregory says, this solution is about linking large corporate businesses and their vendors with an efficient funding and supply chain facility.

“The Ecsponent Development Fund removes traditional preferential procurement concerns with a practical solution that aims to empower South African enterprises,” Gregory says.

“The negative perceptions relating to B-BBEE procurement in the market largely based on poor performance, governance at vendor level, and the ever-present problem of fraud and corruption,” Gregory adds, “has resulted in a level of mistrust in the market.”

“The structure of the Ecsponent Development Fund creates a synergy across the supply-chain, fostering a more trusting environment of mutual benefit with goods delivered, compliance standards taken care of, and vendors being upskilled and empowered,” he concludes.

-Ends-

About Ecsponent Limited
Ecsponent Limited (JSE:ECS), listed on the JSE’s main board under the Financial Services – 
Speciality Finance sector, predominantly creates wealth by investing in companies that offer a range of niche financial services in South Africa, Botswana, Namibia, Swaziland and Zambia.

These services vary in different jurisdictions of operation and include capital raising from retail and institutional investors. Additionally, the group’s services include secured business-to-business finance to a select group of clients. In an effort to advance the country’s B-BBEE transformation, Ecsponent also assists large corporate businesses to optimise their preferred procurement spending by uplifting, training and funding their suppliers. This support is helping upcoming, previously disadvantaged businesses to develop the skills needed to participate in the economy competitively, while the large businesses have peace of mind that their enterprise and supplier development efforts reach the people they are intending to reach.

While Ecsponent focuses primarily on the financial services industry, it diversifies its investments across multiple industries and geographies by identifying private equity, and mergers and acquisition opportunities with potential for high returns. Currently, the group’s private equity investments are diversified across industries like biotechnology, media intelligence, and mining and engineering supplies.

Edited by Creamer Media Reporter

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