B-BBEE compliance leveraged as a sales tool

Johannesburg-based black economic empowerment (BEE) service company BBBee Wise is on the expansion trail, with branches opened in Cape Town and Durban last month, and plans to open offices in Port Elizabeth and East London soon. “The new Broadbased Black Economic Empowerment (B-BBEE) Act 2003 Codes – which came into effect on May 1 this year – brought major opportunities for expansion of our business,” said Kyle Mitchell, chief adviser for BBBee Wise. When the business opened, it started with three clients and had grown to well over 500 by the beginning of this year, Mitchell added. “Many freight and logistics businesses use their broadbased black economic empowerment (B-BBEE) status as a selling tool to gain the edge in an increasingly competitive environment, making it vital for them to understand exactly what their status is and how to optimise their rating,” said Mitchell. He told FTW there was still a lot of confusion around the new codes, commenting that BBBee Wise had been established because businesses needed to empower themselves to make more informed and strategic decisions. “In the past companies could be far more flexible around their BEE status and choose which of the BEE elements to implement. Now there is far less flexibility, especially around issues such as ownership, skills and supplier enterprise development,” said Mitchell. He noted that one of the biggest challenges around the codes, for logistics and freight businesses, was the element of ownership. “The codes call for all companies to have a 25% BEE ownership, which many find difficult to comply with as they are wary of losing control of their businesses,” Mitchell said. According to him, there are numerous ways of complying with the stringent BEE ownership requirements without losing management control of a business. “We have often found innovative ways, through various schemes, to help our clients retain that control and still meet all the BEE certificate requirements.” In addition to BEE certification, the company offers a range of advisory services which it has recently expanded to include training and skills development. “The training is provided by the directors of the company,” said Mitchell. INSERT & CAPTION There are numerous ways of complying with stringent BEE ownership requirements without losing management control of a business. – Kyle Mitchell