Seeds OF LEADERSHIP are SPROUTING

By Sasha Planting
Published: 3 April 2009

Taking the initiative and working on correcting some of the historical wrongs 

SA adolescents would rather have social pleasures and exchange “favours” for material gain than pursue educational opportunities, according to a recent University of Cape Town (UCT) study. The problem is worse in poorer communities where parents have little understanding of the school process. The report calls on skilled South Africans to share their knowledge about the education system and career opportunities to help counter the chronic underachievement the researchers encountered.

Agricultural and food processing companies tend to operate in and around some of SA’s most marginalised communities and many of them feel this responsibility acutely. “Transformation is about more than a scorecard. SA needs to pay serious attention to its agricultural sector,” says Tongaat CEO Peter Staude. “The slow pace of land reform and the failure of the transformation process to create a successful class of black commercial farmers must be addressed.”

This sector, like others in SA, deals with the shortage of black skills on a daily basis. “Our biggest challenge is filling our middle and senior management positions with black staff,” says Distell group manager for broad-based black economic empowerment (BBBEE) Kurt Moore.

Though they were slow on the uptake, many of SA’s leading food producers and processors surveyed by Empowerdex are investing significant resources into “growing one’s own timber”, as Tiger Brands puts it. For instance, last year Tiger funded 144 students who passed matric but could not afford tertiary education. The firm also invested about R16m on in-house learning programmes.

Distell has established a bursary scheme to help students from the Tulbagh, Wolseley and Gouda communities to further their studies in preparation for a career in wine. The liquor company also provides financial support to AgriTrain, a non-profit company which exposes youth to career opportunities within the agricultural sector.

Like its peers in Illovo and Tongaat, Crookes Brothers, which produces sugar cane as well as bananas, deciduous fruit, grain and crocodiles, has developed its own farm management training programme. “We have 30 learnerships, but hope to increase this to 60 next year,” says group MD Guy Clarke. Like others, this company faces an uphill battle sourcing middle and senior black managers. “Most of the talent is snapped up by bigger guys.”

Since the publication of the codes of good practice in February 2007, food producers have a better idea of what broad-based transformation is about and are more focused on achieving the stated objectives. ” When it comes to ownership and management, though, there is little change – with the exception of Tongaat and Oceana,” says Empowerdex project manager Kgaugelo Matjakana.

That is not to suggest there has been no activity. Rainbow Chicken announced a BEE transaction last year in which a broad-based consortium acquired 15% through a vendor financed structure. This year Tiger Brands plans to conclude the next phase of its ownership transaction, which will take “effective” ownership by black people to more than 20%. And even at Crookes Brothers, where the shares are tightly held by the founding family and RMB – and an equity deal is not easy to achieve, Clarke says: “Nonetheless, we are pursuing various BBBEE alternatives.”

It’s possible that this focus follows the launch last year – after years of wrangling – of the agricultural charter. “To get a charter in place is momentous,” said Empowerdex CEO Vuyo Jack at the time. “It’s been a difficult sector to transform.”

Though it would seem that sector-specific charters have fallen out of favour since government published its codes, this is one charter government says can be used to achieve a specific objective: to ensure that previously disadvantaged communities own at least 30% of the agricultural land in the country by the end of 2014. “Land is a critical issue in SA,” said Jack. “That is why you needed a specific charter to be able to deal with these issues.”

Of course, not all firms are dealing with land reform, but the likes of Tiger Brands, AVI and SAB are in a powerful position of influence. For instance, SAB spent R6,6bn with about 5 000 suppliers in the 2008 financial year. It has obtained scorecards from 5 400 suppliers, which is roughly 50% of its supplier database. “This was a huge undertaking,” says corporate affairs manager Janine van Stolk. Last year the company procured from 890 black-owned suppliers.

“The big firms are definitely putting pressure on their suppliers,” says EconoBEE’s Keith Levenstein. “It’s because they are feeling the pressure, which is political… and they have to set an example.”

The one area that agriprocessors and food producers seem to have invested significant energy in is their enterprise development initiatives.

Decades of subjugation of farm workers have left their mark. The Western Cape, for instance, has the world’s highest prevalence of foetal alcohol syndrome. Food producers and processors, working alone and as a community of firms, have the knowledge and the skill to right some of these wrongs

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