Steinhoff International has again scored a runaway victory as the manufacturing sector's top empowerment company. But it is a somewhat hollow victory for the global furniture manufacturer, which faced feeble competition. With only five companies ranked, it is as unrepresentative of the total sector as ever.
Steinhoff's total broad-based black economic empowerment (BEE) score calculated by Empowerdex came in at 28,27%. Though this placed it a distant 81st overall, it was a significantly better showing than its closest rival in the sector, clothing and textile manufacturer Seardel Investment Corp , which only mustered a total score of 10% to give it an overall position of 129th.
But even Seardel's score was comparatively high compared with third-in-line vehicle component manufacturer Wesco, with a total score of 2,31% and an overall 182nd position.
Steinhoff's victory in the manufacturing sector had little to do with black ownership of its equity. Steinhoff has not undertaken a BEE equity deal and on this important measure scored 2% out of a possible 20% weighting. No deal of this nature has been mooted, and in the absence of comment from Steinhoff's management (which the FM tried to obtain) the best indication is a statement in the 2005 annual report: "The group is open to new partnerships that will increase shareholder value."
However, this was merely a repeat of the comment in the 2004 annual report, as was a statement that the Steinhoff Africa division has appointed a transformation executive to assist with its efforts to achieve acceptable BEE status.
However, on the BEE shareholder front, Steinhoff's 60,4%-owned subsidiary in the transport sector, Unitrans, has made notable strides, having sold a 13% stake in the company to a consortium made up of Mvelaphanda Capital, Arch Equity and an employee trust for R291m in late 2004.
Steinhoff's involvement in skills development, which earned it a score of 9,9% out of a maximum weighting of 20%, is comprehensive and is already part of its succession planning. Among key initiatives to this end are university and technical bursary programmes, with a strong emphasis on wood science and financial courses.
The group also undertakes bridging skills courses and literacy programmes and encourages employees to study by providing home-based learning opportunities and workplace courses such as the management development programmes offered by the Steinhoff University.
Steinhoff's employment equity record is also admirable. Of a total of 24 500 employees in Southern Africa, 91% are black.
But it was Steinhoff's corporate social investment that won it the highest rating in any of the seven measurement categories: 8,7% out of a maximum weighting of 10%.
Among its initiatives are community projects motivated by staff and the adoption of Aids orphans in increasing numbers. The company has been awarded honorary membership of the Tikkun Foundation, an organisation focused on uplifting historically disadvantaged groups.
