Sister companies AESSEAL and AESPUMP are to expand their apprenticeship programmes to ensure retention of Level Four BEE certification, recently re-assessed upwards from Level Five.
The two companies, which together employ a staff of some 110, have seven active apprentices undergoing alternate terms of theoretical training at Dinyane Education in Secunda, while on-the-job mentorship at the company’s Secunda workshops ensures a steady stream of qualified fitters and turners after completion of their two-year course.
An annual intake of between three and five apprentices each year ensures programme continuity, and AES group management believes that the programme is already delivering returns on the investment made in it.
Commenting on the progress of this programme, AES general manager and company secretary Craig Murray said that he believed the training of apprentices and their integration into the group workforce would prove to be the ultimate manner in which to grow South Africa’s skills base. At the same time, it would help companies to meet the government’s recently revised black economic empowerment targets in the medium term.
The amended regulations issued under the Preferential Procurement Policy Framework Act of 2000 have resulted in substantial reconfiguring of the BEE certification codes, shifting emphasis away from mere BEE compliance towards BEE strategy and true company empowerment.
The AES group’s own target compliance would also be helped by ongoing sponsorship of black undergraduates studying towards their bachelor’s degrees in commerce and finance, Murray said.
“Our highly rated apprenticeship programme has been at the heart of our recent upgrade to Level Four accreditation,” explained Murray, “but we want to expand it further because we believe that this emphasis on skills development will over time lead to a self-correction of the key pillar of black ownership.”
Murray said that the new codes, although hard work, are positive in that companies will have to make real changes in order to maintain or improve their BEE ratings.
Although the pillars of the new codes remain substantially the same (ownership; skills development; enterprise and supplier development incorporating preferential procurement) the targets have changed, and companies that fail to achieve the new targets will drop.
“The enterprise and supplier development criteria has changed dramatically, and will lead to every large enterprise applying individual and carefully considered strategies to each and every key supplier,” said Murray.
“This means that we will ourselves be under scrutiny by our own key customers, and it is therefore our intention to comply to our utmost ability. It is inevitable that the BEE portion of any tender will carry considerably more weight under the new codes.”
As an example of the changes, Murray explained that the new codes award only five points for spending as much as 80% of procurement spend with suppliers in possession of a BEE certificate, whereas the old codes awarded between twelve and fifteen points for a lower 70% procurement spend with BEE certificated suppliers.
“This is unless new suppliers are identified,” Murray continued, “because more points can be won by broadening the base and procuring a greater proportion of one’s spend from black owned qualifying small enterprises, or from exempt microenterprises.”
“So one cannot simply carry on with a business-as-usual approach. Among other initiatives, a revised procurement strategy will be needed if a company is to avoid dropping up to three levels on the scale by doing nothing,” said Murray.
Murray acknowledged that enterprise and supplier development will represent a challenge for AES, because the required ramping-up of local production capability will be difficult to achieve for any company that imports a finished, custom engineered product.
“But it’s not impossible. The apprenticeship programme will rectify the skills shortage over time, and we are already well in process with identifying components that lend themselves to local manufacture and assembly.
“Further, we will continue with our sponsorships and donations programme, which stretches from Hospice to a significant commitment to the Edward Daniels Charitable Trust, and includes the supply of mathematics textbooks into primary schools,” Murray added.
“The new codes demand a clear strategy if you are going to remain sufficiently competitive to remain a key supplier to customers who are themselves under pressure to maintain their own BEE ratings,” Murray concluded.