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South African Airways (SAA) announced today that the airline has signed a Memorandum of Understanding (MOU) with the Department of Trade and Industry (DTI) in a commitment to develop and support inclusive supplier sourcing and procurement. As national carrier SAA intends to lead transformation in South African aviation supplier development. The move also comes as the Board resolved to accelerate its enterprise development programme and focus on inclusive opportunities for black owned, women owned, disabled and youth owned businesses. Successful implementation of the new 3-year SAA Supplier Development Programme will see up to 50% of all consumable supplies sourced from empowered enterprises by end 2018.

In partnership with the DTI the airline will source potential suppliers and provide training and development assistance through regular seminars and engagement sessions around the country. “There is immense value in nurturing entrepreneurs,” says SAA Chairperson Ms. Duduzile Myeni, “while SAA will continue to derive value from competitive procurement. We are in the business of empowering entrepreneurs from disadvantaged backgrounds and levelling the playing field to deliver inclusive opportunity.”

Deputy Minister of Trade and Industry, Mr. Mzwandile Masina says that “this is a historic milestone. As the DTI we are excited to be engaged in this partnership with SAA. It proves that our efforts as drivers of industrial policy are systematically linking together the various divisions of the state towards a common objective and qualitative outcomes of economic transformation.”

“It is our intention to assume an active leadership role in enterprise development in South African aviation,” says Ms. Myeni. “Transformation and inclusive participation in the economy does not begin and end with employment equity alone. It is the responsibility of every South African company to provide opportunities, assist in developing and supporting emerging entrepreneurs. Small business drives our economy and represents the vast majority of the formal and informal sector; it employs the majority of South Africans.”

Adds Deputy Minister Masina: “The facilitation of black industrialists has to be deliberately undertaken in order to overcome the historically embedded barriers to entry that define the market mechanisms of our economy. The government and all public institutions must creatively utilise their public procurement capabilities to leverage the emergence and support for this entrepreneurial class of black industrialists that must drive the broad transformation of our economy.

“In undertaking this signing of the MoU, SAA correctly asserts its developmental mandate as a public entity. Our principles of consolidating a developmental state oblige us to establish a culture of socially responsive public institutions that act to promote the productivity of society. This combines the functions of institutions serving their direct mandates as well as helping various social groupings to benefit from the resources that public institutions have at their disposal”.

Ms. Myeni says that the up and downstream potential benefit will deliver to local, regional and the national economy. According to a 2013 study by Oxford Economics, the SAA Group contributes R 9.2 billion to the South African GDP (0.3%) of which R 1,6 billion is contributed through spending by employees and the company’s supply chain. The study also notes that 16 400 jobs are created directly through SAA’s supply chain. “Imagine when next a study reveals that SAA, or any company for that matter, has directly contributed to the development of new companies, new employment opportunities; this SAA initiative’s intent is to directly and positively impact this ideal.

“The public procurement arm of SAA has massive capacity to incubate an efficient and dynamic group of black industrialists. This will be a first step towards a broad procurement strategy by all State Owned Enterprises and government departments to incrementally set procurement targets that will boost the entrepreneurial efforts of these black industrialists,” says Deputy Minister Masina.

Issued by SAA