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WHERE LIES THE WEALTH FOR SUPPLIERS - SMMEs
Presented by Carol Nkambule
03 February 2011
1st Limpopo Provincial Supply Chain Management Summit
Outline • Services offered SMMEs
• Business linkages / tenders LIBSA facilitated
• Budget 2009-11
• Budget for year 2010/11
• Infrastructure Budget
• Government spending per Dept 2009/10
• Government spending – empowerment 2009/10
• Government Spending
• Inputs required
• Basic infrastructure inputs
• Basic goods and services inputs
• Where is the wealth?
• Challenges
• Proposed solutions
Services offered SMMEs
• Business profiles – databases and tenders• Business plans• Tender advice / business linkages – leads
Anglo Platinum • Training• Incubation• Access to finance – Bridging finance LimDev
2007/08 2008/09 2009/10
District No Amount No Amount No Amount
Capricorn 38 R31 952 369 19 R7 326 295 24 R1 619 189
Mopani 7 R165 882 3 R2 610 610 33 R7 241 197
Sekhukhune 205 R23 441 927 119 R49 768 134 328 R58 908 228
Vhembe 9 R579 318 58 R5 431 219 199 R4 073 051
Waterberg 122 R12 186 993 69 R2 057 577 42 R472 661 500
Total 381 R68 326 489 268 R67 193 835 626 R544 503 165
BUSINESS LINKAGES / TENDERS LIBSA FACILITATED
Government Spending
• Infrastructure – Roads, Schools, Hospitals, Govt offices, houses, water reticulation infrastructure
• Goods – Stationery, Furniture, protective clothing, linen,
• Services - Catering, accommodation cleaning security ,
Inputs required
• Infrastructure – Bricks, cement, sand, crushed stone, doors and window frames, pipes, roofing, plumbing material, electrification material,
• Goods – Food, stationery (books, files, pens, calendars, diaries, etc), wood for furniture making
BASIC INFRASTRUCTURE INPUTS
Sand Crushed Stone
Tools Hire Bricks / Paving
Cement Pipes Roofing Windows / Doors Frames
Window Glasses
Paint Electricity plugs, lights
Schools X X X X X X X X X X X
Houses X X X X X X X X X X X
Hospitals X X X X X X X X X X X
Clinics X X X X X X X X X X X
Libraries X X X X X X X X X X X
Roads X X X X
Water Infrastructure
x X
BASIC GOODS AND SERVICES INPUTS
Food Protective Clothing
Gas Stoves Cleaning Material
Cutlery / Crockery
Stationery manufacturing / plastics
Wood Tools
Catering X X X X X X
Accommodation X X X X X X
Cleaning X X X
Security X X
Stationery X
Furniture X X X
Where is the wealth?•Infrastructure inputs•Goods and services inputs•New manufacturing enterprises for the inputs•New wholesalers, fresh produce market for local small scale farmers
CHALLENGES•Current legislation provides for awarding contracts or orders to the first tier suppliers•Tenders issued for one big project with no requirements for the supplier to buy locally and from SMMEs and PDIs•Current empowerment point system looks at the main suppliers disregarding the manufacturers, distributors•Manufacturing capacity not yet fully developed for some products•Some inputs are monopolized•Suppliers are tied to distributors/wholesalers with easy access to credit even though it is at higher prices
PROPOSED SOLUTIONS
•Impose BEE requirements to the suppliers of suppliers or manufacturers of inputs•Support new manufacturers for specific products to be linked to bigger infrastructure projects – buy directly from manufacturers •Develop incentives for suppliers buying locally from PDIs•Government proactive and deliberate ring-fencing of specific products so manufacturers can be developed for established markets.