Pick n Pay

Sustainable Living Report 2013

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CASE STUDY Bana ba Kgwale Project The Bana ba Kgwale Project, made up of nine members and project mentor Jimmie Painter, is a farming co-operative that produces peppers, spinach, butternut and green beans in Jericho village, North West. The 110 ha under irrigation are tended by 160 full-time workers. To start up, the co-operative received a farm and water rights from the National Development Agency and the Department of Rural Development and Land Reform. They developed the 21.7 ha of land with equipment provided by the Department of Agriculture, Forestry and Fisheries. Pick n Pay facilitated access to a market. The second phase of the project involves capacity-building. To give these farmers a way into the retail market, a packhouse – donated by the Foundation – has been established to centralise and consolidate produce. The 3 000 m2 packhouse will also assist larger operations in the district wanting to increase their margins; it will become a self-sufficient business, running independently of the farm. Bana ba Kgwale has become one of the most successful social transformation projects in North West. It creates food and employment, and generates a yearly turnover of R200 000 – a figure set to increase in the future. PNP SUSTAINABLE LIVING REPORT 2013 From the ground up Support for small businesses includes specific and ongoing mentorship, Administered through the Small Business Incubator and the Foundation separately, Pick n Pay's small business support includes: mentorship by Pick n Pay buyers and the Fresh Produce Division on product and technical aspects training on business, marketing, IT and finances facilitated and funded by Pick n Pay workshops run by the Small Business Incubator monthly progress and challenge consultations with businesses in the Small Business Incubator technical assistance facilitated with government departments Small businesses are encouraged to adopt sustainable social and environmental practices. There is currently no formal audit to measure this. Mentoring small businesses and driving enterprise development Our small business mentorship and enterprise development initiatives support our procurement efforts and form part of our BBBEE certification. Our strategic approach is overseen by our Transformation Director and administered by our Transformation Office in hand with the Ackerman Pick n Pay Foundation. We support businesses that will become sustainable suppliers for the whole retail industry. Due to volume requirements, most of our goods are procured from larger suppliers. However, through the Small Business Incubator, and the Enterprise Development Fund administered through the Foundation, we are building, up-skilling and sourcing from an increasing number of small businesses, most of which supply fresh produce. Through these development programmes we have 72 suppliers (increased from 62 in 2012), and their turnover has grown on average by 48% in the past year, with many suppliers having doubled in size. Foundation farming projects in particular are growing at an annual rate of 50%. In total, 87% of the projects supported by the Foundation are managed by women, and 92.6% of the income-generation projects are led by women. We support businesses that will become sustainable suppliers As with our community development programmes, we use a partnership model to drive success. Government departments We work with the National Development Agency and the Departments of Trade and Industry; Agriculture, Forestry and Fisheries; and Rural Development and Land Reform. They identify potential projects, and contribute skills, training, equipment, infrastructure, funding and access to land. Companies that invest in the same community development initiatives as Pick n Pay Partnering with companies and banks allows us to optimise funding to avoid duplication of efforts, and to streamline funding and other forms of support for projects. Non-governmental organisations and service providers Organisations offering specialist services such as financial planning are engaged and funded to work with our beneficiaries. The process for identifying and working with small businesses FLOW CHART Small businesses are identified by the Foundation through reactive and proactive initiatives, and partnerships with relevant organisations such as the Department of Agriculture, Forestry and Fisheries. If businesses require financial assistance, the due diligence is done by the Foundation and then prepared for funding from the Enterprise Development Fund. If financial assistance is not required by the small businesses identified, it is directed to the Small Business Incubator for market access and mentorship. Following evaluation, the Foundation presents opportunities to the Enterprise Development Committee (comprising trustees and product category heads) for consideration every quarter. Businesses in the Small Business Incubator are given preferential terms on rebates and payments. They are also offered mentorship. Loans are given to businesses that merit it, provided they are at least 51% black-owned. These loans are repayable over a period negotiated with the supplier, and taking cash flow projections into account. We have developed a Small Suppliers label to let customers know when their purchase is directly supporting a BBBEEcertified SMME. Successful businesses become independent suppliers of Pick n Pay. If they fail to meet our demand and standards, they can be delisted. Two small suppliers were delisted in the past year. Once the loan has been repaid, and if the business still requires mentorship, it becomes the responsibility of the Small Business Incubator. We aim to help small businesses tackle their challenges, which include: scale; capital requirements; food audits; financial and business modelling; and distribution and competitive pressures. 06 20

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