New entry to the empowerment scene Eqstra Holdings snapped the top spot in the 2008 Top Empowerment Companies (TEC) enterprise development rankings.
Eqstra, which was listed separately on the JSE last year after unbundling from transport and logistics giant Imperial, reflects the largest enterprise development spend as a percentage of its taxed profits. The target carried in the broad-based black economic empowerment (BEE) scorecard is just 3% of net profit after tax.
Enterprise development commands a weighting of 15% in the empowerment scorecard.
Financial services companies presented a strong showing with FirstRand, Cadiz and Absa all making the Top 10. FirstRand took the second spot and is followed by Cashbuild in the third place. Other contenders in the enterprise development rankings include Cargo Carriers, which took the fourth place, The Spar Group (5th), EnviroServ (6th), Cadiz, (7th), Absa (8th), Group Five (9th) and Blue Label Telecoms (10th).
The top performer, Eqstra, is an integrated capital equipment provider and leasing company. It also provides services in construction and mining, passenger and commercial vehicles as well as industrial equipment.
Its shareholders include Ukhamba, a company established in 1998 to benefit Imperial's black employees. It also participated in the group's BEE deal in 2003. Ukhamba and Eqstra jointly own Amasondo Fleet Services, a leasing companies servicing municipalities and companies. Eqstra owns the 820 vehicles used by black-owned Amasondo, giving enterprise development a key role in the growth of the company.
Eqstra Holdings executive director of strategy & business development Niall Lynch says the company's enterprise development strategy is to enter into joint ventures with empowerment companies, where it assists with skills and knowledge.
In second spot, FirstRand's approach is to develop financial and other products that are relevant to the small business market. With Khula Enterprise Finance, FirstRand facilitates access to funding for entrepreneurs who have viable business plans but with limited collateral or equity to obtain funding through normal channels. And with the Umsobomvu Youth Fund, it assists black youth and women buying into businesses, management buyouts and BEE ownership transactions. "We see enterprise development as an opportunity for the private sector to contribute to economic growth and poverty alleviation," says FirstRand head of enterprise development Heather Lowe.
The enterprise development category is often perceived to be inferior to the more popular scorecard elements, ownership and management. But more companies are realising the business imperative behind employment equity principles, and are increasing their contributions to the rest of the scorecard elements.
Says Lowe: "To support our commitment to enterprise development, we have enhanced our banking products and services to support and develop economic participants who are not yet at the stage where they can enter the traditional banking stream." FirstRand took the 10th spot in the overall scorecard.
