Group Five, one of SA's top three construction and materials manufacturing companies, once again heads the basic industries sector in the Top Empowerment Companies survey.
This year, Group Five won with a total BEE score of 53,15%, edging out its closest rival, Aveng, by a margin of only 0,04%.
However, the group tumbled from ninth position to 28th in the overall empowerment ranking for companies in all sectors.
Group Five leapt into the sector's top spot last year on the back of a 2005 transaction that saw broad-based empowerment groups iLima and Mvelaphanda take a 21,6% stake in the group. A further 4,5% stake was set aside for current and future black management and broad-based employees, giving the group an effective BEE shareholding of more than 25%. Group Five embarked on the process of finding a black partner in May 2004 and initially invited presentations from more than 20 consortia. The group specifically wanted to find a partner with a core business that included construction and/or infrastructure development. It also wanted a partner that could help it fast-track transformation at all skills levels as well as support its enterprise development aims. The careful selection of a partner paid off. When the deal was announced, it attracted praise from deputy president Phumzile Mlambo-Ngcuka.
Group Five has achieved solid scores against most of the BEE criteria this year. The group's full marks for enterprise development reflects the success of its agreement with the construction arm of the iLima Group, iLima Projects. Under this agreement, Group Five is helping iLima Projects grow its business by providing it with financial assistance, management support, skills transfer and administrative systems. Group Five has given a medium-term loan to iLima Projects of R14,4m, provided financial guarantees and assisted it with plant and equipment. The eventual plan is to integrate iLima Projects into Group Five.
Group Five has also implemented a series of training and development programmes that stretch from student bursaries to executive programmes for middle and senior managers. A key initiative is a learnership programme for permanent employees and unemployed people that focuses on developing skills at NQF level 3 to NQF level 5. Group Five has set aside a budget of R3,1m for 100 learnerships. It spent a total of more than R10m on training during the 2006 financial year.
Group Five also stepped up its employment equity programme in 2006, with a particular focus on the advancement of women. During the financial year it appointed six women to senior posts (including group company secretary).
Corporate social investment (CSI) for the year amounted to R1,4m, or 0,14% of payroll. Group Five has committed to boosting its CSI spend to 0,25% of payroll to meet the goals set by the construction charter.
Group Five employs 11 000 people throughout SA, Africa, the Middle East and Europe, and reported turnover of R5,9bn and profit before tax of about R232m for the year ended June 30 2006.
Group Five's empowerment credentials will no doubt put it in a strong position to compete for infrastructure projects in the years ahead. Interim results for the six months ended December 31 2006 suggest that the group is already benefiting from increased government investment in infrastructure.
