Two construction companies lead the way in empowerment in the basic industries sector in the 2007 TEC survey. However, the sector as a whole lags the pace of transformation in mining, telecoms and financial services.
The two most empowered basic industries companies, Group Five and Aveng, were rated 28th and 29th respectively as the most empowered companies in the overall ranking for all sectors.
Aveng, the second-placed basic industries company, achieved a BEE score of 53,11%, with high marks for ownership and top marks for enterprise development and socio-economic development.
Aveng, a construction, steel and cement group, helped set the pace for BEE in the industry by announcing one of the sector's first big BEE transactions in 2004. It involved the sale of 25% of Aveng's SA operating subsidiaries, Grinaker-LTA and Trident Steel, to the Qakazana Investment Holdings consortium for R496m. The company is now focusing more closely on the other areas of empowerment, says Aveng CEO Carl Grim.
Skills development and employment equity are perhaps the most challenging areas for the group, because of a shortage of engineering skills at every level, from graduates upwards, says Grim.
Murray & Roberts (M&R), ranked sixth in the sector, achieved a BEE score of only 23,9%. The group achieved a robust score for ownership and full marks for socioeconomic development, but fared poorly in other categories.
The BEE scores achieved by some of the industry's giants in 2007 were disappointing, but important transactions in the sector last year and late in 2005 have brought most major players BEE shareholders and management representation. Finalisation of the industry's empowerment charter has given companies clear goals to work towards, while state spending on major infrastructure projects has given companies an incentive to improve their empowerment credentials.
In 2005, M&R announced the buyback of R500m worth of its own shares (10% of its issued share capital) in a bid to introduce broad-based direct black ownership. The group has committed to a BEE shareholding of at least 25% by 2010.
WBHO, 8th in the sector and 115th overall, finalised a BEE transaction in late 2006, which will see a broad-based BEE consortium, Akani Investment Holdings, hold a 15% share in WBHO.
Distribution & Warehousing Network (Dawn), a distributor of building fixtures and fittings, took third spot in the sector and came 50th overall with strong black representation at board and shareholder level. Broad-based BEE vehicle Ukhamba Holdings owns 33,47% of Dawn's shareholding through its subsidiary Dream World Investments.
Omnia, the diversified chemicals services group, was ranked fourth in the sector, and 58th overall, despite being named last year by labour minister Membathisi Mdladlana as a company with "unacceptable levels" of equity representation.
African Oxygen (Afrox), rounds out the top five with a BEE score of about 40%. Afrox's score was dragged down by its poor performance in the enterprise development category.
