EXTERNAL STAKEHOLDERS

Our external stakeholders are a diverse group consisting of communities, non-governmental organisations, customers, investors, regulators, suppliers and contractors. In conducting our business, we also endeavour to find win-win solutions that deliver on our shareholders’ economic mandate without harming the environment and communities. In the following sections, we provide details of our approach, performance and future challenges as far as socio-economic involvement is concerned.

Five years ago Barloworld made a decision to sponsor a cycling team as part of its strategy to make Barloworld a global household name. Today, Team Barloworld is a highly successful and internationally respected team of professional cyclists.

To achieve our brand objective, we aimed for Team Barloworld to become the first South African-sponsored team to ride in the Tour de France within five years. This goal was met in 2007, when Team Barloworld not only competed in the Tour de France, but enjoyed a truly successful season with 21 wins and 26 second-place finishes overall.

The Tour de France is the third most watched sporting event in the world after the Soccer World Cup and the Olympics, with 4.5 billion viewers. Our team won two stages of the Tour through Robert Hunter and Maurico Soler as well as the second most coveted jersey in the Tour de France, the Maillot Pois Rouge (King of the Mountains jersey). Overall we were the third most successful team in the Tour de France. Team Barloworld achieved its objective of making Barloworld a global household name. In the month of July alone, global media impact measured R1 billion, a phenomenal return on investment.

Team Barloworld’s success is based on the values it shares with Barloworld – leadership, passion, honesty and integrity. We also share the same brand philosophy, winning through a combination of teamwork and individual excellence.

The team members are captain Robert Hunter, King of the Mountains Maurico Soler, Alex Efimkin, Fabrizio Guidi, Giosue Bonomi, Enrico Degano, Paolo Longo Borghini and Kanstantsin Siutsou, to name a few of the 17 riders.

The team is supported by internationally respected Italian team manager Claudio Corti and 13 employees.

Black economic empowerment (BEE) in South Africa

Barloworld’s BEE policy has been in place for four years. This policy is translated into shorter-term objectives aligned to Barloworld’s five-year strategic planning horizon.

Barloworld’s operations in South Africa comply with the letter and spirit of broad-based black economic empowerment through the implementation of its BEE policy.

Direct empowerment

Black employees and previously disadvantaged communities should have an equity stake in our South African business interests. Our target for historically disadvantaged South Africans (HDSAs) ownership is an effective 25.1% over the value of South African assets. We do, and will continue to participate in joint ventures and other commercial arrangements with black enterprises.

In South Africa Barloworld will:

finalise an appropriate BEE structure for the Barloworld group that recognises the leadership role that
Barloworld needs to assume, in terms of transformation of the South African economy, ensuring BEE delivers long-term shareholder benefits;
promote initiatives aimed at progressing broad-based black economic empowerment (BBBEE);
identify and pursue BEE opportunities at all levels to either unlock value for the business or preserve current value into the future;
choose BEE partners, where possible, who have both a broad-based ownership structure and can play an appropriate value-adding role in our businesses;
promote the productive and sustainable participation of black enterprises and black people in Barloworld; and
ensure that joint ventures or partnership arrangements are meaningfully structured with equitable division of the risks and rewards to each party.

Indirect empowerment

Through our South African operations’ procurement initiatives (Barloworld black economic empowerment through preferential procurement) Barloworld aims to:

set affirmative procurement targets;
increase its procurement from enterprises that have made significant progress in the area of BEE and are rated as good or satisfactory contributors to BEE, based on the South African Department of Trade and Industry (DTI) balanced scorecard;
reduce the cost of goods and services we purchase; and
monitor and report on our procurement performance.

In conjunction with company-wide procurement initiatives, each business is required to actively pursue BEE procurement initiatives. Barloworld uses DTI approved, independent rating agencies to rate Barloworld’s key suppliers’ empowerment status.

We focus on enterprise development as a means of increasing our HDSA supplier and customer base. As evidence of this commitment we launched Barloworld Siyakhula and other initiatives.

Strategic objective

It is our intention to ensure our South African business units achieve a Level 5 rating by end 2008 and Level 4 rating by end 2009 in terms of the BBBEE codes of best practice. BBBEE compliance is expressed in terms of eight recognition levels. These are:

Level 1 contributor (BEE recognition level: 135%)
Level 2 contributor (BEE recognition level: 125%)
Level 3 contributor (BEE recognition level: 110%)
Level 4 contributor (BEE recognition level: 100%)
Level 5 contributor (BEE recognition level: 80%)
Level 6 contributor (BEE recognition level: 60%)
Level 7 contributor (BEE recognition level: 50%)
Level 8 contributor (BEE recognition level: 10%)
N on-compliant contributor (BEE recognition level: 0%).

Level 4 is considered fully compliant with the codes on BBBEE.

Being at Level 4 allows companies that procure from you to claim 100% of the procurement spend, thus assisting them with the procurement elements of the scorecard.

This page was updated on 28 January, 2008

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