Our preferential procurement policy prioritises awarding
contracts to suitably qualified B-BBEE suppliers in
alignment with the B-BBEE Act. We give preference to
suppliers that meet all selection criteria, while retaining
the right to limit dealings with those suspected of
B-BBEE fronting. To support compliant suppliers, we
offer assistance to help them strengthen their
credentials.
We encourage suppliers to improve their B-BBEE
standing and provide targeted support through our ESD
programme, particularly for those in the agri-development
sector. This helps selected B-BBEE suppliers access
capital, skills and markets. The ESD programme plays
a crucial role in enhancing the empowerment impact
of our procurement efforts. Our procurement and ESD
teams collaborate closely, particularly through the
agriculture aggregator programme, to improve B-BBEE
procurement performance (see here).
Our programmes focus on building local production
capacity for crops like groundnuts, small white beans,
tomatoes, sorghum, maize and wheat. We evaluate
potential suppliers based on price, business fit and
B-BBEE score, with a minimum 10% weighting for
B-BBEE compliance. This comprehensive approach
ensures that we achieve optimal value across price,
quality, service and delivery while upholding our
transformation commitments.
Transforming the supply chain for these crops presents
significant challenges. Small and under-resourced
enterprises require substantial capital, skills, inputs
and land to build secure, sustainable supply capabilities.
Additionally, the volumes we require, along with our
rigorous compliance standards, make it difficult for
individual smallholder farmers to compete.
Further, unreliable utilities, extreme weather, environmental
change and a challenging economic landscape affecting
small farmers have recently impacted our local and
developmental agricultural suppliers. Combined with global
disruptions in commodity supply, rising costs due to
climate change, geopolitical instability and logistical
issues, these factors have made securing reliable,
ethical and sustainable sources of key crops increasingly
difficult, posing significant hurdles to advancing our
preferential procurement and ethical sourcing principles
(see here).
Despite these challenges, we continue to pursue the
incorporation of more B-BBEE suppliers for these commodities,
supported by the Dipuno Fund and our ESD programme.
We remain actively engaged with key stakeholders across
agriculture and horticulture to identify new partners and
suppliers, expanding and strengthening the inclusivity of our
supplier base. Though progress has been slow, we recognise
our responsibility to support and develop emerging farmers in
South Africa.
Key local supply challenges in 2024
In the past season, the company faced significant supply
risks with small white beans and groundnuts. Adverse
weather conditions in February and March led to reduced
production of these key commodities in South Africa,
resulting in limited availability. Suppliers struggled to deliver
both quality products and sufficient volumes.
Additionally, shifts in demand for fruit, particularly for exports,
have disrupted supply dynamics. This has affected a range
of fruits, including citrus (oranges, lemons, limes and
mandarins), stone fruits (peaches and apricots), as well
as other key products such as apples and pears. While
the export market presents more favourable opportunities
for farmers, it has introduced added costs to maintain the
quality and pricing required for factory supply.
A particularly notable event occurred in Musina, where
an unexpected black frost, the first in nearly 20 years,
severely impacted tomato production. This unforeseen
climate event reduced deliveries from farmers, hampering
operational efficiency at our processing plant.
These challenges have led us to explore supply options
beyond South Africa's borders, intensifying the need for
alternative sourcing solutions within the SADC region.
This shift has complicated efforts to prioritise preferential
procurement while ensuring supply security.
Performance
In 2024, we achieved our highest preferential procurement
score, despite lower spend across key metrics, by focusing
on B-BBEE compliance, verifying certificates and maximising
allowable exclusions. In 2024, our total procurement spend
was R29 billion, with 86% spent on local suppliers. Of our
R24,9 billion local procurement spend, 57% was with
B-BBEE-verified suppliers and 18% was with black-owned
or black women-owned enterprises.
We procured 937 thousand tonnes of grains (excluding
rice), with 92% sourced locally. All our rice (245 million
tonnes) was imported, as it is not grown locally. We also
procured 81 429 tonnes of fruit and vegetables, of which
100% was sourced locally. Currently, 20% of the fruit and
vegetables we source locally come from verified B-BBEE
suppliers, while sourcing local grains remains a challenge,
with only 7% coming from B-BBEE suppliers.
Unfortunately, we identified an error in our 2023 figures
reported last year due to changes in our reporting system
and have restated them this year.
B-BBEE procurement spend
In 2024, we spent a total of R14,3 billion with B-BBEE-verified suppliers (2023: R15,7 billion), including:
R5,4 billion with black-owned suppliers (2023: R5,8 billion)
R4,7 billion with black women-owned suppliers (2023: R5,1 billion)
R431 million with small enterprises or exempt micro-enterprises (2023: R554 million)
Preferential procurement
Management
Our preferential procurement policy prioritises awarding contracts to suitably qualified B-BBEE suppliers in alignment with the B-BBEE Act. We give preference to suppliers that meet all selection criteria, while retaining the right to limit dealings with those suspected of B-BBEE fronting. To support compliant suppliers, we offer assistance to help them strengthen their credentials.
We encourage suppliers to improve their B-BBEE standing and provide targeted support through our ESD programme, particularly for those in the agri-development sector. This helps selected B-BBEE suppliers access capital, skills and markets. The ESD programme plays a crucial role in enhancing the empowerment impact of our procurement efforts. Our procurement and ESD teams collaborate closely, particularly through the agriculture aggregator programme, to improve B-BBEE procurement performance (see here).
Our programmes focus on building local production capacity for crops like groundnuts, small white beans, tomatoes, sorghum, maize and wheat. We evaluate potential suppliers based on price, business fit and B-BBEE score, with a minimum 10% weighting for B-BBEE compliance. This comprehensive approach ensures that we achieve optimal value across price, quality, service and delivery while upholding our transformation commitments.
Transforming the supply chain for these crops presents significant challenges. Small and under-resourced enterprises require substantial capital, skills, inputs and land to build secure, sustainable supply capabilities. Additionally, the volumes we require, along with our rigorous compliance standards, make it difficult for individual smallholder farmers to compete.
Further, unreliable utilities, extreme weather, environmental change and a challenging economic landscape affecting small farmers have recently impacted our local and developmental agricultural suppliers. Combined with global disruptions in commodity supply, rising costs due to climate change, geopolitical instability and logistical issues, these factors have made securing reliable, ethical and sustainable sources of key crops increasingly difficult, posing significant hurdles to advancing our preferential procurement and ethical sourcing principles (see here).
Despite these challenges, we continue to pursue the incorporation of more B-BBEE suppliers for these commodities, supported by the Dipuno Fund and our ESD programme. We remain actively engaged with key stakeholders across agriculture and horticulture to identify new partners and suppliers, expanding and strengthening the inclusivity of our supplier base. Though progress has been slow, we recognise our responsibility to support and develop emerging farmers in South Africa.
Key local supply challenges in 2024
In the past season, the company faced significant supply risks with small white beans and groundnuts. Adverse weather conditions in February and March led to reduced production of these key commodities in South Africa, resulting in limited availability. Suppliers struggled to deliver both quality products and sufficient volumes.
Additionally, shifts in demand for fruit, particularly for exports, have disrupted supply dynamics. This has affected a range of fruits, including citrus (oranges, lemons, limes and mandarins), stone fruits (peaches and apricots), as well as other key products such as apples and pears. While the export market presents more favourable opportunities for farmers, it has introduced added costs to maintain the quality and pricing required for factory supply.
A particularly notable event occurred in Musina, where an unexpected black frost, the first in nearly 20 years, severely impacted tomato production. This unforeseen climate event reduced deliveries from farmers, hampering operational efficiency at our processing plant.
These challenges have led us to explore supply options beyond South Africa's borders, intensifying the need for alternative sourcing solutions within the SADC region. This shift has complicated efforts to prioritise preferential procurement while ensuring supply security.
Performance
In 2024, we achieved our highest preferential procurement score, despite lower spend across key metrics, by focusing on B-BBEE compliance, verifying certificates and maximising allowable exclusions. In 2024, our total procurement spend was R29 billion, with 86% spent on local suppliers. Of our R24,9 billion local procurement spend, 57% was with B-BBEE-verified suppliers and 18% was with black-owned or black women-owned enterprises.
We procured 937 thousand tonnes of grains (excluding rice), with 92% sourced locally. All our rice (245 million tonnes) was imported, as it is not grown locally. We also procured 81 429 tonnes of fruit and vegetables, of which 100% was sourced locally. Currently, 20% of the fruit and vegetables we source locally come from verified B-BBEE suppliers, while sourcing local grains remains a challenge, with only 7% coming from B-BBEE suppliers.
Unfortunately, we identified an error in our 2023 figures reported last year due to changes in our reporting system and have restated them this year.
B-BBEE procurement spend
In 2024, we spent a total of R14,3 billion with B-BBEE-verified suppliers (2023: R15,7 billion), including: