The past year was once again a missed opportunity for listed manufacturing companies to show they take BEE seriously.
Other sectors, such as ICT and financial services, have either maintained or improved their empowerment standing but manufacturing went backwards. There were only five manufacturing companies listed in the top 200 listed companies in Top Empowerment Companies 2006, but this went down to three in the 2007 listing.
"It's disappointing, but I'm not surprised," says Empowerdex researcher Steven Hawes. Hawes says unlike other sectors that are dependent on some form of state business, manufacturing firms have been relatively immune to government pressure to transform themselves. "There is no stick to force these companies to comply."
But this is changing. Brian Molefe, CEO of the Public Investment Corporation - the state's pension fund - has made it clear that not even a large industrial company like Barloworld can be remiss when it comes to empowerment. He lambasted the group for its tardiness in not addressing transformation fast enough and has made it clear Barloworld is not the only company in his sights.
The reduction in the number of manufacturing companies making the 2007 listing might also have something to do with the progress companies in other sectors have made. A company like appliance maker Nu-World was at 194 in 2006, but at 204 this year it is just outside the latest listing.
The three companies that made it into the top 200 - furniture maker Steinhoff International Holdings, clothing & textile group Pal Holdings and Seardel Investment Corporation - have not done too badly in the overall empowerment rankings. Pals came in at 109, Steinhoff at 112 and Seardel squeaked on to the list at 190.
With these changes, 2006's leading manufacturing company, Steinhoff's total empowerment rating fell from 28,27% to 14,40% and it lo st its top ranking to the then third-ranked Pals Holdings. The higher weighting to employment equity is what pushed Pals Holdings into the top spot.
Hawes says "the thing that pushed Pals up above Steinhoff is basically the lack of skills development points for Steinhoff. If they had scored there, they would have taken it."
Steinhoff, under CEO Marcus Jooste, is not idle when it comes to skills development. Its annual report says it provid ed bursaries through the Steinhoff University programme.
