Original publish date – Wed, 08 Jul 2009 11:31:55 +0000, Cornilius
The B-BBEE codes have encouraged the growth of small businesses (those with annual turnover below R35 million) and Black owned businesses through the element of Preferential Procurement. Generic companies (companies with annual turnover of more than R35 million) earn 8 points for spending just 25% with suppliers with annual turnover below R35 million as well as Black owned and Black women owned businesses.
This certainly encourages large generic companies to buy from suppliers who need support to grow leading to more empowerment of the more deserving entities and individuals. The growth of any company heavily hinges on the number of customers that they have. Having customers in the form of large corporates is more desirable for any small business because they have more capacity to pay for orders.
In other words, there is a benefit to the generic companies in the form of getting more BEE points while helping the sustainability of the smaller businesses.