The general industrials sector again showed insignificant progress in its transformation. The top empowered company in this sector, Sekunjalo, topped the list for the fifth year running. It is the only general industrial company with convincing levels of black ownership, procurement and executive management.
So what exactly is the problem? For a start, five companies - Control Instruments, Howden Africa Holdings, Kap International Holdings, Pasdec Resources SA and Hudaco Holdings - disappeared from the top 10 list of the sector in the 2008 TEC rankings. And regrettably newcomers to the rankings - Argent Industrial, Altron, Transpaco, ARB Holdings and Set Point Technology - do not bode well for the transformation of the sector either.
Well, how did they manage to make it into the top list? Trends indicate they score highly on the procurement and socioeconomic development levels - and ownership does look somewhat promising.
But there is still a lot of work to be done. Take the Argent Group, for example. This steel merchandiser has only one black director, who is a nonexecutive.
Supporting evidence of such insubstantial "empowerment" is easy to find in this sector. Technology group Altron's board of 14 directors has just one white female executive director (who is notably also its financial director) and two non-executive black directors, one of whom is Jacob Modise. He also surfaces on the board of ARB Holdings, which has no other black executive directors.
Packaging manufacturer and distributor Transpaco's board hardly warrants a mention. But its trump card was procurement and ownership.
Packaging company Nampak's high procurement score must have contributed to its inclusion this year. It was taken to task by the Public Investment Corporation and shareholder activist asset manager, Fraters, for the lack of transformation on its board. This issue made front page headlines earlier this year. Hopefully, that event will also be a signal to fellow companies in this sector that shareholders are becoming less tolerant of empowerment excuses.
Aside from problems with executive management in this sector, the lack of transformation in employment equity and enterprise development reveals gaping holes. Too many companies are either not cognisant of the points they could gain in those areas or they are not trying hard enough.
But at least Altron has professed its commitment to empowerment with its 2010 internal group charter and heavy hitting BEE partners Pamodzi, Izingwe and Kagiso. It also wants to improve its progress with broader BEE indicators. The company scores high in enterprise development. But it could do more in skills development, as it operates in the telecommunications, power, electronics and information technology sectors, which are highly desirable skills areas in SA. And the same could be said for Jasco, though it did score two points more than Altron on skills development with a six.
Jasco scores highly in the ownership stakes, trailing Sekunjalo by only two points. Jasco concluded a BEE deal with Community Investment Holdings in 2003, with CIH acquiring 30% of Jasco's ordinary share capital. ARB Holdings also has some black ownership through Batsomi Power, which owns 26% of ARB subsidiary Electrical Wholesalers. It scored some points on employment equity, with 75% black staff and vocational training. Its corporate social responsibility programme is also impressive.
