One thing is for sure, Tongaat Hulett is an old hand at broad-based black economic empowerment (BEE) - despite the fact that it has shot to the top of the FM's empowerment charts virtually overnight and toppled Oceana in the process.
Tongaat Hulett started selling its land to black farmers in the early 1990s - before land reform got under way in SA. And at about the same time the firm turned the factory shops in its David Whitehead textile division into a unit serving small black businesses. The project facilitated black empowerment at a grassroots level - rare in corporate SA a decade ago.
Since then Tongaat has transferred more than 50% of its landholdings, or 11 000 ha, to black farmers, creating 98 new farms. It has achieved 25% BEE equity participation and almost half of the permanent employees at management level are black, while 81,5% of skilled and supervisory positions are filled by black staff.
Tongaat came fourth on the FM's list of most empowered companies and was awarded a level three status by independent verification agency National Empowerment Rating Agency KZN. This entitles its customers to recognise 110% of procurement spend through purchases made from it.
It was the equity deal that cemented the rating. "That was the one area that we lagged in. We went from 0% to 25,1% in one big step," says CEO Peter Staude.
After a thorough process that included advertising for potential partners and sifting through 145 responses, Tongaat Hulett concluded a broad-based deal last year that benefits the communities surrounding Tongaat Hulett property developments and the small-scale cane grower communities surrounding its four SA sugar mills. The company's SA senior black management and employees, up to middle management, were also included. "We wanted to swing this deal so that the local communities would benefit without us creating trusts that they never see. We are proud of the shape we gave to the deal - it represented a big change for us in 2007," says Staude.
But he is adamant it is not about the scorecard. "You need to ask yourself what are the transformation challenges in a country like SA, and understand where your personal philosophies fit in. Are you part of the solution? Are you neutral or are you part of the problem?"
Much of the company's transformation philosophy was shaped in discussions with J B Magwaza, who has worked at Tongaat for decades and is arguably the father of BEE in SA. He is currently a nonexecutive director on the company's board.
"He was our BEE champion and adviser," says Staude. "He was involved in the discussions that helped formulate our thinking around what was right for the organisation."
The Tongaat-Hulett executive team was deeply aware of the need to not create racial pockets in the organisation during its transformation process. "That can be devastating and will ensure you never achieve any synergy from diversity. Instead it will polarise an organisation."
To guard against this the company works at it proactively, for instance by regularly monitoring attitudes within the organisation.
Staude has also become a qualified executive coach. "As a coach you ask different questions - the what and how of an issue - and the way you ask these questions can create the environment in which people grow and develop."
