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ArcelorMittal South Africa Launches Preferential Procurement Initiative

06/03/2009 - ArcelorMittal South Africa launches a three-year, R30 million preferential procurement initiative designed to support sustainable development in the communities in which it operates.

ArcelorMittal South Africa this week demonstrated its commitment to driving sustainable development in the communities in which it operates with the launch of a three-year, R30 million preferential procurement initiative.
 
Designed to help to ensure that the company’s operations and activities contribute toward the long-term development of the surrounding communities, the new initiative will distribute R30 million for the procurement of engineering and manufacturing goods and services from small-to-medium sized companies, with a particular focus on black-owned companies.
 
The company plans to launch the empowerment initiative initially at its Vanderbijlpark Works, later rolling it out to other business units in Saldanha, Vereeniging and Newcastle. Three preferred suppliers have been carefully selected for the first initiative, each representing a specific area of expertise and core competences. Two are based in the Sedibeng area near Vanderbijlpark Works and the other is based on the East Rand; one of the three is black women-owned.
 
Commit Engineering, the black women owned company, specializes in medium to heavy general engineering and fabrication, as well as the installation and maintenance of both air filtration systems and conveyors. Commit, which has been in existence since 1996, has workshops based in Sasolburg and Vanderbijlpark and boasts highly trained crews able to perform on-site fabrication and maintenance.
 
Tunnel Engineering, the second preferred supplier,specializes in general engineering with particular expertise in turning, milling, drilling, hydraulics and welding. With over fifty years combined expertise in the fields of turning, milling and related operations, Tunnel Engineering is 100% black owned and has supplied major organizations such as Eskom, Transnet Rail, MetroRail and Anglo Plats, among others.
 
The thirdpreferred supplier is Hencill Engineering, a five-year-old supplier of services and products related to steel fabrication, steel manufacturing and repairs. The company was founded with the vision of becoming the preferred medium to large sized supplier of steel engineering and related services to various industries, including mining, manufacturing, water supply and electricity supply. Hencill’s expertise lies particularly in the manufacture, repair and supply of valves to the mining industry on the East and West Rand.
 
While this pilot project will target engineering enterprises, ArcelorMittal South Africa is committed to broadening its procurement program to other sectors and geographic areas. As part of the expansion plan, the company will provide associated skills training and will implement other practical support measures.
 
One of the preferential procurement initiative’s three main objectives is to increase the number of BBBEE suppliers and promote their competitiveness relative to established suppliers. The program also targets the identification and removal of barriers to entry for these suppliers; and the creation of a culture that supports procurement from BBBEE suppliers. 
 
“Procurement from black-owned suppliers is an integral part of our empowerment strategy,’ explained CEO Nonkululeko Nyembezi-Heita, “but at the same time we want to support enterprises in communities in which we operate. This initiative meets both these criteria.
 
“By supporting these three companies we want to ensure that they develop business skills and expertise and overcome the challenges of doing business with large organizations,” added Nyembezi-Heita.