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Top Empowerment Companies 2007

30 March 2007 Xerox. The OriginalXerox. The Original

SECTORS - TRANSPORT

Well ON TRACK to spread OWNERSHIP



By Themba Hlengani

The challenge is to extend empowerment to women and in subsectors such as freight

During the past year a number of sectors have taken a cautious approach to empowerment, largely because of uncertainty about the final version of the empowerment codes.

Most sectors first wanted to see what the codes would require before making a move, says one empowerment observer.

Because of the number of subsectors in the transport industry in particular, some companies thought it prudent to wait for the codes to be gazetted.

However, Putco - a commuter transport business - opted to be proactive and eventually concluded a deal towards the end of last year that brought in its workers and some familiar faces in the empowerment stakes.

Until the deal was signed late last year, Putco had been trying for some time to conclude an empowerment deal, but its attempts were frustrated by minorities reluctant to give up their interests.

After delisting in 2005, Putco concluded a deal that resulted in 42,6% of the company coming into the hands of "historically excluded" individuals.

This group includes 3 300 employees. The deal leads to staff holding 31,6% of the shareholding, while two women - Anna Mokgokong and Nomhle Canca - became beneficiaries of a 3% shareholding each.

A further 5% was acquired by people with disabilities, a black community group and a black youth group.

The Carleo family - which has owned the business since the late 1970s - retains the majority stake of 57,4%.

The transport sector has its own dynamics, with companies such as Putco that are able, but not necessarily willing, to conduct an empowerment transactions that could ensure their businesses grow.

Empowerment is a prerequisite to secure government tender routes, for example.

The transport sector principal charter says that a minimum of 25,1% of the sector should be in black hands in five years' time, and this might well be achieved in the commuter industry sector.

The taxi industry, which is the other road commuter system, is already black-dominated and would just have to jack up its female representation.

Other parts of the sector, such as freight and the logistics industry, which does not rely on government contracts but on goodwill, may not be anywhere close to the minimum targets.

Companies such as Grindrod and Cargo Carriers have made attempts to bring in empowerment at operating level rather than group level.

Though this gives empowerment companies an opportunity to participate in operations, it is often criticised as selective empowerment, since exposure might be limited to SA operations only (in the case of global operating companies such as Grindrod).

Another company in the sector to conclude a deal was Anchor Industries. Anchor supplies products and services to the marine and logistics industry.

It completed a broad-based black economic-empowerment deal benefiting its black workers. The deal was done in conjunction with Old Mutual Investment Group SA.

In terms of the deal, Anchor Industries staff would receive 25,1% of the company's equity in the form of a staff share trust.

Anchor management retains 50% of the company while Old Mutual takes the other 24,9%. Anchor, a family-owned business, was established in 1994, in Cape Town, with full operations in Durban and Johannesburg to satisfy demand for marine and offshore equipment around the Southern African coastline.

On the employment equity side, the sector is still challenged as perceptions persist that it is a "male sector". This is changing, though, with more women taking advantage of opportunities to stake their claim.

Besides concluding a BEE deal with Mokgokong and Canca last year, the company always had a partnership with a group of black women called Gauteng Women in Transport. This partnership ensures that the women lease buses and routes from the company.

The challenge now is to get other sectors of the industry - mostly freight, logistics and shipping - to bring in women operators.






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