Through ESD, Exxaro seeks to lead economic transformation by supporting black-owned, black women owned and black youth-owned small businesses that will create jobs in host communities, transform its supply chain and support the organisation’s growth aspiration.
The Exxaro ESD approach, while ensuring Compliance with relevant legislation, has four Strategic objectives:
- Innovation – invest in high-growth businesses that operate beyond the mining value chain, aligned to Exxaro’s Business of Tomorrow strategy.
- Social Impact – implement transformation initiatives focusing on social cohesion and sustainable community development.
- Supplier Diversity – drive the achievement of preferential procurement objectives, and de-risk supply concentration and an uncompetitive supplier base.
- Sustainability – ensure the financial continuity of the programme through the optimal use of financing models.
Exxaro began implementing a revised approach to enterprise and supplier development in 2017, focusing on establishing and supporting entrepreneurs who will be able to create employment and business opportunities in their communities.
The company has built the appropriate forums, processes and systems to enable socioeconomic progress through enterprise and supplier development. The business hubs provide incubation and related support like mentorship and advice to business units.
Going forward, these incubators will also collaborate with other SMME development partners to provide a broader range of support.
From a financial support provision standpoint, the organisation currently offers loans and grants to qualifying small enterprises (QSEs) and exempt micro enterprises (EMEs). In 2018, 24 enterprises and suppliers received funding totalling more than R180m. The funding was utilised to purchase new operating assets, or to refinance operating assets at a more favourable interest rate.
This not only frees up cash flow in supported enterprises but also ensures that they own assets that can be used beyond their contracts with Exxaro.
The ESD programme will continue to optimise its processes to ensure that it responds to small business needs in an agile manner. Part of this optimisation will be done through an online portal that will enable small businesses to access information, including business planning and modelling templates, diagnostic tools, access to funding, skills development and applying for Exxaro ESD support.
The revised approach to Enterprise and Supplier Development has enabled the organisation to achieve an Enterprise and Supplier Development score of 37.13 out of a possible 40 points for the 2018 financial year, and in the process contributed towards an improvement from a BBBEE Level 5 contributor to a Level 2 contributor within one year.
An equity funding structure will also be implemented, focusing on enterprises in the prioritised sectors of agriculture, water solutions and renewable energy.