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

Budget 2009-11

Budget for year 2010/11

Infrastructure Budget

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.

Thank you