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SKF South Africa’s transformation journey takes them to Level 4!

The management of SKF South Africa, specialist in bearings, engineering and rotating technology, proudly announces attainment of Level 4 recognition on the Broad-based Black Economic Empowerment (B-BBEE) Revised Codes of Good Practice.

This achievement comes on the back of the strong foundation that SKF has established by embracing the transformation legislation from the very beginning. SKF South Africa HR & B-BBEE Manager, Corlé Grobler, explains that as the elements of the B-BBEE scorecard are aligned with the SKF Care model which encompasses business, environment, employees and community, it has always been treated as part of SKF’s corporate strategy. “From day one we focused on socio-economic development, uplifting skills internally, implementing learnerships and driving preferential procurement, marking the start of our transformation journey.”

SKF continued to improve from its Level 8 status on the first B-BBEE scorecard to reach a Level 6 which was maintained for a period of time. “Level 6 accreditation gave our customers and authorised distributors 50% recognition on their procurement spend with us,” says Grobler. “But despite the B-BBEE successes, we never rested on our laurels, always setting our sights higher.”

SKF’s journey to reach Level 4 accreditation started in 2013 with the announcement of the Revised Codes of Good Practice. Prior to that, SKF South Africa, as a subsidiary of the multi-national SKF organisation, was attending to all elements of the B-BBEE scorecard with the exception of Ownership. When Ownership became a priority element, SKF’s efforts to address this element began in earnest.

“From the get-go we started addressing the Revised Codes of Good Practice targets to be ready when they became effective in 2015,” affirms Grobler. SKF South Africa invested heavily in capacity building within the company and allocated resources to manage B-BBEE itself.

When SKF South Africa acquired Lincoln Lubrication SA on 1 March 2015, it was decided that the companies would work jointly on B-BBEE. This culminated in a joint Level 6 B-BBEE certificate in February 2016. The success of these combined efforts is reflected in the significant improvement in points on the Management Control element (3.71 points increase) and the Skills Development element (6.83 points increase) on the new Level 4 scorecard.

To facilitate the fulfilment of Ownership requirements, SKF South Africa called on the support and assistance of expert consultants already in 2013. This resulted in the sale of 30% shareholding in SKF South Africa to Black Women Owned Golelo Trust in 2016. According to Grobler this transaction has significantly contributed to SKF’s Level 4 achievement.

Going a step further, SKF has implemented policies and processes to sustainably support the B-BBEE strategy; every business decision is measured against the potential impact on the company’s B-BBEE status – from recruitment to the selection of suppliers. SKF’s accomplishments in the B-BBEE arena prove that this approach has paid off.

The advantages of Level 4 reach beyond SKF and Grobler says that the B-BBEE recognition level of a supplier has a domino effect in the economy. “Companies want to buy from suppliers with a good B-BBEE recognition level due to the impact on their own scorecard, which impacts their ability to sell to their customers and so on.”

Authorised distributors and customers benefit not only from the recognition level of the new SKF scorecard but also from the Black Women Ownership of SKF South Africa (including Lincoln Lubrication SA). “Their spend with our two companies results in 100% recognition in the preferential procurement target to spend 12% of procurement spend with 30% Black Women Owned businesses. So basically customers score twice on the preferential procurement element when purchasing from us.”

By now meeting the minimum requirement of Level 4 set by state-owned enterprises, parastatals and suppliers to these entities as the minimum criteria for tenders gives SKF authorised distributors access to business from where they have previously been excluded.

SKF’s new Level 4 scorecard bears testimony to the many years of hard work, tenacity, perseverance and focus to achieve this degree of transformation. But there are constant changes and challenges along the transformation highway that need to be addressed. SKF management pledges ongoing commitment to drive B-BBEE with the same devotion, focus, dedication and hard work that is fundamental to enabling the company to play its part in the economic transformation of the country. SKF will continue to drive strategies and activities to address all elements on the scorecard with the priority elements (Ownership, skills development, enterprise and supplier development) remaining high on the agenda for 2017 and beyond. “Employment Equity is a major focus and we will continue to support our socio-economic development projects with which we celebrate ten years of support and partnership this year,” affirms Grobler.

The fact that many companies drop at least one or two levels on the first verification of the Revised Codes of Good Practice with its more onerous targets makes SKF’s Level 4 achievement particularly gratifying. But still more needs to be done and SKF is well prepared to continue on the transformation journey.

SKF is a leading global supplier of bearings, seals, mechatronics, lubrication systems, and services which include technical support, maintenance and reliability services, engineering consulting and training. SKF is represented in more than 130 countries and has around 17,000 distributor locations worldwide. Annual sales in 2015 were SEK 75 997 million and the number of employees was 46 635. www.skf.com

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