The Bidvest Group Limited Sustainability report 2006
This symbol indicates that further detailed information is available
Contents
We’re an international services, trading and distribution company, listed on the JSE, South Africa
and operating on four continents.
We employ 93 000 people worldwidebut our roots will always be South African.
In a big business environment we run our companywith the determination and commitment evident in a small business heart.
We believe in empowering people, building relationships and improving lives.Entrepreneurship, incentivisation and decentralised management are the keys.
We subscribe to a philosophy of transparency, accountability, integrity, excellence and innovation in all our business dealings.
And, we strive to deliver strong and consistent shareholder returns.
But most importantly, we understand that people create wealth, and that companies only report it.
We are proudly Bidvest – a company that creates valueand builds strength from diversity.
1 About this report2 Sustainability performance at a glance4 Our Group in brief – material issues8 Chairman’s message11 Chief executive’s message12 Sustainability at Bidvest20 Economic vitality21 Other financial information22 Black economic empowerment28 External opinions32 Divisional reviews 32 Corporate Services 38 Bidfreight 46 Bidserv 54 Bidvest Europe 62 Bidvest Australasia 66 Bidfood
74 Bid Industrial and Commercial Products 82 Bidpaper Plus
88 Bid Auto
94 Independent assurance96 Empowerment rating98 Sustainable development performance data102 GRI Index106 GlossaryIBC Administration
Bidvest publications:The Bidvest Group Limited Annual report 2006*
The Bidvest Group Limited Financial statements 2006
The Bidvest Group Limited Sustainability report 2006*
The Bidvest Group Limited Our business and products 2006*
The Bidvest Group Limited Report to our people 2006#
Corporate video: Young at heart
Multimedia: The Bidvest Group Limited 2006
Bidvoice (quarterly magazine)#
*Available on our website www.bidvest.com#Available on our intranet www.thevillage.bidvest.com
This document should be read in conjunction with the annual report.
The Bidvest Group Limited Sustainability report 2006 1
This is Bidvest’s third sustainability report that has been written for the Group’s global stakeholders.
Bidvest recognises its responsibility to report financial and non-financial information that is relevant and
material to its stakeholders. The scope, structure and content of this report, which covers the period
from July 1 2005 to June 30 2006, has been guided by the recently released G3 sustainability reporting
guidelines of the Global Reporting Initiative (GRI), as well as by stakeholder opinions reported last year.
This report includes all operations in which Bidvest has management control. Historic sustainability data
has been restated to provide for business divestments and restructuring.
The report structure is consistent with that used last year and provides a balanced and reasonable
representation of Bidvest’s multi-faceted and geographically diverse businesses. A general overview of
the Group as a whole is provided in the initial chapters. The subsequent detailed divisional reviews have
been included to provide in-depth information, perspective and for completeness. Within each division
the business units considered to be the most material are discussed. To improve comparability and
standardisation, a few data definitions have been changed – these are described in the performance data
section.
In the Group’s quest to deepen its understanding of the practical implications of “what sustainable
development means for Bidvest”, KPMG has undertaken a sustainability gap analysis. The feedback
received from KPMG is helping Bidvest shape its interpretation and expression of sustainable
development and will help guide the development of a more integrated strategy and approach for
Bidvest.
This report should be regarded as complementary to Bidvest’s annual report. “Sustainability” and
“sustainable development” have been used interchangeably in this report.
We recognise that black economic empowerment (BEE) is a South African issue and have assumed a level
of understanding from international readers and have not explained the terms as they are being used.
A glossary has been provided.
The report is printed on paper manufactured primarily from bagasse, a sugar cane by-product, and the
remaining pulp is obtained from certified sustainable afforestation. The paper bleaching process is free
of elemental chlorine. These processes reduce the impact on the environment and help conserve natural
resources.
The average exchange rates used for the conversion of foreign financial data were rand/sterling 11,44, rand/
Australian dollar 4,81 and rand/euro 7,82.
About this report
2
Sustainability performance at a glance
Highlights
4 Bidvest’s “A” empowerment rating has been reaffirmed with improvements noted all round
4 A number of business units have obtained improved and others first-time empowerment ratings
4 Increasing acceptance of Bidvest’s BEE credentials in the market
4 An electronic system is being launched to promote consistency in vetting supplier empowerment
credentials
4 Bidvest is one of only four South African companies listed in the Dow Jones Sustainability World Index
2007 and the JSE has reaffirmed Bidvest as a founding constituent of the JSE SRI Index
4 Total training spend R101,9 million (R83,0 million in South Africa)
4 Women employees – 42,4% (women employees in South Africa – 46,6%)
4 Corporate social investment spend increased to R28,7 million, equating to 0,8% of pre-taxation profit
(R25,7 million and 1,1% of profit before taxation in South Africa)
Disappointments
4 Twelve work-related fatalities, reported in the divisional reviews of this report
Challenges
4 Persistent crime problems result in high social and financial cost for South African businesses.
4 In South Africa, a lack of clarity in the definition of supplier empowerment status criteria is resulting in
inconsistent assessment criteria being used in the market place
4Developing a comprehensive sustainability strategy and management framework
4Establishing more effective programmes for managing HIV/Aids in the workplace
4Ensuring continued compliance with intensifying environmental regulations
4Attracting and retaining senior-level historically disadvantaged individuals (HDIs)
4Addressing general skills shortages
4Managing exposure of several business units to strike action
The Bidvest Group Limited Sustainability report 2006 3
Addressing material sustainability-related challengesThis table describes how the Group’s previously identified material sustainability-related challenges and risks are being
addressed. More detail is provided in the divisional reviews.
Key challenges Actions
Developing a comprehensive sustainability strategy and management framework, and setting uniform sustainability targets that suit Bidvest’s organisational structure and culture, without damaging its decentralised culture, independence and entrepreneurial flair.
This is work in progress. Recently drafted Group HIV/Aids and environmental policies and the KPMG sustainability “gap analysis” (discussed in “External opinions”), contributed positively.
Establishing more effective programmes for managing HIV/Aids in the workplace.
While HIV/Aids remains a challenge, many businesses are making steady progress in their efforts to manage the disease. Bidvest has drafted a Group HIV/Aids policy, has commissioned an HIV actuarial prevalence study and an assessment of HIV/Aids programmes in a bid to further improve the effectiveness of engagements. Bidvest has become a member of SABCOHA, the South African Business Coalition on HIV/Aids.
Developing an effective sustainability data collation system. Bidvest’s decentralised and multi-faceted structures make data collation a challenge.
Improvements have been made to the data definitions and the data collation process. Additional non-financial data is reported. Ongoing improvements are being made.
Continuing compliance with intensifying environmental regulations.
Businesses are responsible for identifying local regulations and national legislation relevant to their businesses and this forms part of their risk management process. The company secretary regularly advises South African businesses of new legislation. Where material, businesses have dedicated staff to manage compliance.
Attracting and retaining senior HDIs. The Bidvest Academy and divisional management and leadership programmes are used to develop senior HDIs. Improved recruitment and retention strategies are employed.
Skills shortages. Most businesses are affected by skills shortages and invest in employee training and learnerships.
A number of businesses are large employers of unskilled and semi-skilled staff and are exposed to the effects of strike action.
Businesses ensure good employee relationships and offer market-related remuneration packages.
See Our Group in brief and divisional reviews for further information on material issues .
Our Group in brief
Revenue Trading profi t Funds employed EmployeesEmployee benefi ts and
remuneration
Description of business Incorporating Material issues R’000Proportion
%Growth
% R’000Proportion
%Growth
% R’000Proportion
%Growth
% NumberProportion
%Growth
% R’000Proportion
%
Corporate Services The Group’s corporate offi ce, based in Melrose Arch, Johannesburg, provides strategic direction and services to the Group, houses investments, adding value through identifying opportunities and implementing Bidvest’s decentralised and entrepreneurial business model.
4Bid Corporate Services4Bidprop4Namsov Fishing Enterprise4Namibian Sea Products4Ontime Automotive
4 Namsov/Namsea: Management of HIV/Aids; high health-related absenteeism rates; dependence on natural fi sh resources; volatile African markets and exchange rate volatility
1 295 421 1,6 10,3 108 383 3,0 17,6 1 605 182 21,5 14,7 1 705 1,8 4,3 424 5,1
Bidfreight Bidfreight is Africa’s leading private sector freight management company with a presence in every major port in southern Africa. Port operations are reinforced by strong distribution and airfreight capabilities. Bidfreight focuses on terminal operations and logistics in southern Africa, international clearing and freight forwarding and marine services.
4 Bidfreight Terminals 4International Clearing and Forwarding 4Marine Services 4Manica Africa
4 Management of HIV/Aids4potentially hazardous working environment4signifi cant water, coal and fuel consumption
4 usage of cleaning agents4skills shortages
15 787 550 20,0 15,4 536 366 14,6 13,4 (170 361) (2,3) — 5 334 5,7 (1,7) 732 8,8
Bidserv Bidserv provides South Africa‘s most extensive range of corporate
outsourced services. Its brands operate across commerce and industry. Activities include cleaning and specialised industrial cleaning operations, hygiene, laundry and janitorial services, corporate travel and travel-related banking, aviation services and airport handling, offi ce automation, interior and exterior landscaping and electronic procurement.
4Cleaning Services 4Laundry Services 4Steiner Group 4Bidserv Industrial Products 4Green Services 4 Aviation Services 4Bidrisk Solutions 4International
Payment Systems4Business Solutions and Group Procurement 4Offi ce Automation4BidTravel
4Banking Services 4Foreign Exchange Services
4 Management of HIV/Aids4cleaning agents and horticultural and other chemicals4signifi cant water, coal and electricity consumption
4 exposure to strike action4Rennies Bank staff safety and safeguarding assets
4 587 817 5,8 6,4 554 709 15,2 21,2 846 414 11,4 (1,2) 54 646 58,6 1,0 2 051 24,7
Bidvest Europe Bidvest Europe is western Europe’s leading foodservice company. Its British businesses have good claim to be UK market leaders. As a broadline distributor, Bidvest Europe supplies ingredients, fi nished products and equipment to the catering and hospitality industries.
43663 First for Foodservice – United Kingdom 4Deli XL – Belgium 4Deli XL – Netherlands 4Horeca Trade – United Arab Emirates
4 Compliance with tightening health and safety and environmental legislation4provision of comprehensive range of health and safety training4minimising resource consumption and environmental impacts
22 132 036 28,1 49,2 651 223 17,8 22,2 950 817 12,8 122,2 8 458 9,1 54,9 2 316 27,9
Bidvest Australasia Bidvest Australasia operates as Bidvest First for Foodservice in Australia and as Crean First for Foodservice in New Zealand. It is the industry leader in these markets and the only foodservice company to provide a national service.
4 Bidvest First for Foodservice – Australia Crean First for Foodservice – New Zealand
4 Risk of skills shortage and pressure on labour rates4maintaininghighest levels of food safety4increasing fuel prices4water restrictions
6 505 802 8,2 14,3 219 403 6,0 33,9 581 362 7,8 — 2 278 2,4 10,8 595 7,2
Bidfood Bidfood serves the hospitality, leisure and catering markets with a comprehensive range of food products and consumables. The division also manufactures and distributes premixes, food ingredients, spices, seasonings and other products to the bakery, poultry, meat and food processing industries and is represented in all important urban areas and tourist centres across southern Africa.
4 Caterplus4Speciality 4Catering Equipment 4Paper Products 4Hospitality Accessories 4Bidbake4Crown Foods Group
4 Management of HIV/Aids4tightening food safety and product integrity standards4maintaining and improving BEE credentials and awareness levels4increasing fuel prices
3 666 437 4,7 12,7 299 813 8,2 (5,2) 562 880 7,5 18,1 4 060 4,3 5,0 369 4,4
Bid Industrial and Commercial Products
Bid Industrial and Commercial Products is South Africa’s leading supplier of electrical products and cable, furniture and stationery products, industrial sewing and embroidery machines and market leader in packaging closures, fastenings and tape conversion.
4Voltex Electrical Distribution 4Berzack Brothers4Eastman Staples4Stationery 4Offi ce Furniture 4Packaging Closures
4 Management of HIV/Aids4skills shortages4increasing fuel prices4competition from cheap Chinese imports
6 742 508 8,5 18,4 483 899 13,2 28,7 1 381 693 18,5 29,2 6 976 7,5 5,3 758 9,1
Bidpaper Plus Bidpaper Plus is the South African market leader in print production
and value-added fulfi lment services. Core competence in business forms manufacture, label production and personalisation and mail is complemented by strategic growth into digital and electronic solutions. The manufacture and distribution of high quality stationery augment an extensive range of services.Bidpaper Plus has a broad national footprint and exports its products and services to markets in Africa and beyond.
4Printing and Related 4Stationery Distribution 4Alternative Products
4Management of HIV/Aids4potentially hazardous working environment4exposure to potentially harmful chemicals4increasing fuel prices
2 011 776 2,6 4,7 181 940 5,0 13,9 372 128 5,0 (11,4) 4 073 4,4 2,6 348 4,2
Bid Auto Bid Auto is South Africa’s second largest motor retail organisation, with nationwide representation across more than 100 wholly owned dealerships. Its activities span vehicle import and distribution, new and used vehicle sales, parts and service, fi nancial services and fl eet support, vehicle auctioneering, on-line retailing and vehicle and truck rental. McCarthy represents most vehicle marques and is the importer and distributor of all Yamaha products in South Africa.
4 McCarthy Motor Holdings4McCarthy Financial Services4McCarthy Fleet Services
4Club McCarthy4McCarthy Call-a-Car 4Eliance4Burchmore’s Car Auctions4Budget Rent a Car4Budget Van Rental4Yamaha Distributors4McCarthy Vehicle Import and Distribution
4 Management of HIV/Aids4meeting OEM BEE equity ownership requirements4diffi culty in attracting and retaining senior-level HDIs
4 talent availability, attraction and retention4deteriorating road infrastructure4increasing fuel prices4stricter emission standards
16 197 055 20,5 18,8 621 264 17,0 30,9 1 325 675 17,8 72,5 5 795 6,2 9,6 718 8,6
The Bidvest Group Limited 4Developing a meaningful and comprehensive sustainability strategy4 management of HIV/Aids4skills shortages and attracting and retaining
senior HDIs4management of environmental issues
78 926 402 100,0 23,0 3 657 000 100,0 20,1 7 455 790 100,0 22,3 93 325 100,0 5,5 8 311 100,0
Southern Africa 49 127 806 62,3 17,9 2 783 416 76,1 16,3 5 592 873 75,0 30,0 81 569 87,4 2,2 5 077 61,1
United Kingdom and continental Europe
23 292 794 29,5 38,4 654 181 17,9 33,6 1 281 555 17,2 6,2 9 478 10,2 46,3 2 639 31,7
Australasia 6 505 802 8,2 14,3 219 403 6,0 33,9 581 362 7,8 — 2 278 2,4 10,8 595 7,2
4
Revenue Trading profit Funds employed EmployeesEmployee benefits and
remuneration
Description of business Incorporating Material issues R’000Proportion
%Growth
% R’000Proportion
%Growth
% R’000Proportion
%Growth
% NumberProportion
%Growth
% R’000Proportion
%
Corporate Services The Group’s corporate office, based in Melrose Arch, Johannesburg, provides strategic direction and services to the Group, houses investments, adding value through identifying opportunities and implementing Bidvest’s decentralised and entrepreneurial business model.
4Bid Corporate Services4Bidprop 4Namsov Fishing Enterprise4Namibian Sea Products4Ontime Automotive
4 Namsov/Namsea: Management of HIV/Aids; high health-related absenteeism rates; dependence on natural fish resources; volatile African markets and exchange rate volatility
1 295 421 1,6 10,3 108 383 3,0 17,6 1 605 182 21,5 14,7 1 705 1,8 4,3 424 5,1
Bidfreight Bidfreight is Africa’s leading private sector freight management company with a presence in every major port in southern Africa. Port operations are reinforced by strong distribution and airfreight capabilities. Bidfreight focuses on terminal operations and logistics in southern Africa, international clearing and freight forwarding and marine services.
4 Bidfreight Terminals 4International Clearing and Forwarding 4Marine Services 4Manica Africa
4 Management of HIV/Aids4potentially hazardous working environment4significant water, coal and fuel consumption
4 usage of cleaning agents4skills shortages
15 787 550 20,0 15,4 536 366 14,6 13,4 (170 361) (2,3) — 5 334 5,7 (1,7) 732 8,8
Bidserv Bidserv provides South Africa‘s most extensive range of corporate
outsourced services. Its brands operate across commerce and industry. Activities include cleaning and specialised industrial cleaning operations, hygiene, laundry and janitorial services, corporate travel and travel-related banking, aviation services and airport handling, office automation, interior and exterior landscaping and electronic procurement.
4Cleaning Services 4Laundry Services 4Steiner Group 4Bidserv Industrial Products 4Green Services 4 Aviation Services 4Bidrisk Solutions 4International
Payment Systems4Business Solutions and Group Procurement 4Office Automation4BidTravel
4Banking Services 4Foreign Exchange Services
4 Management of HIV/Aids4cleaning agents and horticultural and other chemicals4significant water, coal and electricity consumption
4 exposure to strike action4Rennies Bank staff safety and safeguarding assets
4 587 817 5,8 6,4 554 709 15,2 21,2 846 414 11,4 (1,2) 54 646 58,6 1,0 2 051 24,7
Bidvest Europe Bidvest Europe is western Europe’s leading foodservice company. Its British businesses have good claim to be UK market leaders. As a broadline distributor, Bidvest Europe supplies ingredients, finished products and equipment to the catering and hospitality industries.
43663 First for Foodservice – United Kingdom 4Deli XL – Belgium 4Deli XL – Netherlands 4Horeca Trade – United Arab Emirates
4 Compliance with tightening health and safety and environmental legislation4provision of comprehensive range of health and safety training4minimising resource consumption and environmental impacts
22 132 036 28,1 49,2 651 223 17,8 22,2 950 817 12,8 122,2 8 458 9,1 54,9 2 316 27,9
Bidvest Australasia Bidvest Australasia operates as Bidvest First for Foodservice in Australia and as Crean First for Foodservice in New Zealand. It is the industry leader in these markets and the only foodservice company to provide a national service.
4 Bidvest First for Foodservice – Australia Crean First for Foodservice – New Zealand
4 Risk of skills shortage and pressure on labour rates4maintaining highest levels of food safety4increasing fuel prices4water restrictions
6 505 802 8,2 14,3 219 403 6,0 33,9 581 362 7,8 — 2 278 2,4 10,8 595 7,2
Bidfood Bidfood serves the hospitality, leisure and catering markets with a comprehensive range of food products and consumables. The division also manufactures and distributes premixes, food ingredients, spices, seasonings and other products to the bakery, poultry, meat and food processing industries and is represented in all important urban areas and tourist centres across southern Africa.
4 Caterplus4Speciality 4Catering Equipment 4Paper Products 4Hospitality Accessories 4Bidbake4Crown Foods Group
4 Management of HIV/Aids4tightening food safety and product integrity standards4maintaining and improving BEE credentials and awareness levels4increasing fuel prices
3 666 437 4,7 12,7 299 813 8,2 (5,2) 562 880 7,5 18,1 4 060 4,3 5,0 369 4,4
�
������������������������������������
Bid Industrial and Commercial Products
Bid Industrial and Commercial Products is South Africa’s leading supplier of electrical products and cable, furniture and stationery products, industrial sewing and embroidery machines and market leader in packaging closures, fastenings and tape conversion.
4Voltex Electrical Distribution 4Berzack Brothers 4Eastman Staples4Stationery 4Office Furniture 4Packaging Closures
4 Management of HIV/Aids4skills shortages4increasing fuel prices4competition from cheap Chinese imports
6 742 508 8,5 18,4 483 899 13,2 28,7 1 381 693 18,5 29,2 6 976 7,5 5,3 758 9,1
Bidpaper Plus Bidpaper Plus is the South African market leader in print production
and value-added fulfilment services. Core competence in business forms manufacture, label production and personalisation and mail is complemented by strategic growth into digital and electronic solutions. The manufacture and distribution of high quality stationery augment an extensive range of services.Bidpaper Plus has a broad national footprint and exports its products and services to markets in Africa and beyond.
4Printing and Related 4Stationery Distribution 4Alternative Products
4Management of HIV/Aids4potentially hazardous working environment4exposure to potentially harmful chemicals4increasing fuel prices
2 011 776 2,6 4,7 181 940 5,0 13,9 372 128 5,0 (11,4) 4 073 4,4 2,6 348 4,2
Bid Auto Bid Auto is South Africa’s second largest motor retail organisation, with nationwide representation across more than 100 wholly owned dealerships. Its activities span vehicle import and distribution, new and used vehicle sales, parts and service, financial services and fleet support, vehicle auctioneering, on-line retailing and vehicle and truck rental. McCarthy represents most vehicle marques and is the importer and distributor of all Yamaha products in South Africa.
4 McCarthy Motor Holdings4McCarthy Financial Services4McCarthy Fleet Services
4Club McCarthy4McCarthy Call-a-Car 4Eliance 4Burchmore’s Car Auctions4Budget Rent a Car4Budget Van Rental4Yamaha Distributors4McCarthy Vehicle Import and Distribution
4 Management of HIV/Aids4meeting OEM BEE equity ownership requirements4difficulty in attracting and retaining senior-level HDIs
4 talent availability, attraction and retention4deteriorating road infrastructure4increasing fuel prices4stricter emission standards
16 197 055 20,5 18,8 621 264 17,0 30,9 1 325 675 17,8 72,5 5 795 6,2 9,6 718 8,6
The Bidvest Group Limited 4Developing a meaningful and comprehensive sustainability strategy4 management of HIV/Aids4skills shortages and attracting and retaining
senior HDIs4management of environmental issues
78 926 402 100,0 23,0 3 657 000 100,0 20,1 7 455 790 100,0 22,3 93 325 100,0 5,5 8 311 100,0
Southern Africa 49 127 806 62,3 17,9 2 783 416 76,1 16,3 5 592 873 75,0 30,0 81 569 87,4 2,2 5 077 61,1
United Kingdom and continental Europe
23 292 794 29,5 38,4 654 181 17,9 33,6 1 281 555 17,2 6,2 9 478 10,2 46,3 2 639 31,7
Australasia 6 505 802 8,2 14,3 219 403 6,0 33,9 581 362 7,8 — 2 278 2,4 10,8 595 7,2
5
The Bidvest Group Limited Sustainability report 2006 6
Revenue Trading profit Funds employed EmployeesEmployee benefits and
remuneration
Description of business Incorporating Material issues R’000Proportion
%Growth
% R’000Proportion
%Growth
% R’000Proportion
%Growth
% NumberProportion
%Growth
% R’000Proportion
%
Corporate Services The Group’s corporate office, based in Melrose Arch, Johannesburg, provides strategic direction and services to the Group, houses investments, adding value through identifying opportunities and implementing Bidvest’s decentralised and entrepreneurial business model.
4Bid Corporate Services4Bidprop 4Namsov Fishing Enterprise4Namibian Sea Products4Ontime Automotive
4 Namsov/Namsea: Management of HIV/Aids; high health-related absenteeism rates; dependence on natural fish resources; volatile African markets and exchange rate volatility
1 295 421 1,6 10,3 108 383 3,0 17,6 1 605 182 21,5 14,7 1 705 1,8 4,3 424 5,1
Bidfreight Bidfreight is Africa’s leading private sector freight management company with a presence in every major port in southern Africa. Port operations are reinforced by strong distribution and airfreight capabilities. Bidfreight focuses on terminal operations and logistics in southern Africa, international clearing and freight forwarding and marine services.
4 Bidfreight Terminals 4International Clearing and Forwarding 4Marine Services 4Manica Africa
4 Management of HIV/Aids4potentially hazardous working environment4significant water, coal and fuel consumption
4 usage of cleaning agents4skills shortages
15 787 550 20,0 15,4 536 366 14,6 13,4 (170 361) (2,3) — 5 334 5,7 (1,7) 732 8,8
Bidserv Bidserv provides South Africa‘s most extensive range of corporate
outsourced services. Its brands operate across commerce and industry. Activities include cleaning and specialised industrial cleaning operations, hygiene, laundry and janitorial services, corporate travel and travel-related banking, aviation services and airport handling, office automation, interior and exterior landscaping and electronic procurement.
4Cleaning Services 4Laundry Services 4Steiner Group 4Bidserv Industrial Products 4Green Services 4 Aviation Services 4Bidrisk Solutions 4International
Payment Systems4Business Solutions and Group Procurement 4Office Automation4BidTravel
4Banking Services 4Foreign Exchange Services
4 Management of HIV/Aids4cleaning agents and horticultural and other chemicals4significant water, coal and electricity consumption
4 exposure to strike action4Rennies Bank staff safety and safeguarding assets
4 587 817 5,8 6,4 554 709 15,2 21,2 846 414 11,4 (1,2) 54 646 58,6 1,0 2 051 24,7
Bidvest Europe Bidvest Europe is western Europe’s leading foodservice company. Its British businesses have good claim to be UK market leaders. As a broadline distributor, Bidvest Europe supplies ingredients, finished products and equipment to the catering and hospitality industries.
43663 First for Foodservice – United Kingdom 4Deli XL – Belgium 4Deli XL – Netherlands 4Horeca Trade – United Arab Emirates
4 Compliance with tightening health and safety and environmental legislation4provision of comprehensive range of health and safety training4minimising resource consumption and environmental impacts
22 132 036 28,1 49,2 651 223 17,8 22,2 950 817 12,8 122,2 8 458 9,1 54,9 2 316 27,9
Bidvest Australasia Bidvest Australasia operates as Bidvest First for Foodservice in Australia and as Crean First for Foodservice in New Zealand. It is the industry leader in these markets and the only foodservice company to provide a national service.
4 Bidvest First for Foodservice – Australia Crean First for Foodservice – New Zealand
4 Risk of skills shortage and pressure on labour rates4maintaining highest levels of food safety4increasing fuel prices4water restrictions
6 505 802 8,2 14,3 219 403 6,0 33,9 581 362 7,8 — 2 278 2,4 10,8 595 7,2
Bidfood Bidfood serves the hospitality, leisure and catering markets with a comprehensive range of food products and consumables. The division also manufactures and distributes premixes, food ingredients, spices, seasonings and other products to the bakery, poultry, meat and food processing industries and is represented in all important urban areas and tourist centres across southern Africa.
4 Caterplus4Speciality 4Catering Equipment 4Paper Products 4Hospitality Accessories 4Bidbake4Crown Foods Group
4 Management of HIV/Aids4tightening food safety and product integrity standards4maintaining and improving BEE credentials and awareness levels4increasing fuel prices
3 666 437 4,7 12,7 299 813 8,2 (5,2) 562 880 7,5 18,1 4 060 4,3 5,0 369 4,4
�
������������������������������������
Bid Industrial and Commercial Products
Bid Industrial and Commercial Products is South Africa’s leading supplier of electrical products and cable, furniture and stationery products, industrial sewing and embroidery machines and market leader in packaging closures, fastenings and tape conversion.
4Voltex Electrical Distribution 4Berzack Brothers 4Eastman Staples4Stationery 4Office Furniture 4Packaging Closures
4 Management of HIV/Aids4skills shortages4increasing fuel prices4competition from cheap Chinese imports
6 742 508 8,5 18,4 483 899 13,2 28,7 1 381 693 18,5 29,2 6 976 7,5 5,3 758 9,1
Bidpaper Plus Bidpaper Plus is the South African market leader in print production
and value-added fulfilment services. Core competence in business forms manufacture, label production and personalisation and mail is complemented by strategic growth into digital and electronic solutions. The manufacture and distribution of high quality stationery augment an extensive range of services.Bidpaper Plus has a broad national footprint and exports its products and services to markets in Africa and beyond.
4Printing and Related 4Stationery Distribution 4Alternative Products
4Management of HIV/Aids4potentially hazardous working environment4exposure to potentially harmful chemicals4increasing fuel prices
2 011 776 2,6 4,7 181 940 5,0 13,9 372 128 5,0 (11,4) 4 073 4,4 2,6 348 4,2
Bid Auto Bid Auto is South Africa’s second largest motor retail organisation, with nationwide representation across more than 100 wholly owned dealerships. Its activities span vehicle import and distribution, new and used vehicle sales, parts and service, financial services and fleet support, vehicle auctioneering, on-line retailing and vehicle and truck rental. McCarthy represents most vehicle marques and is the importer and distributor of all Yamaha products in South Africa.
4 McCarthy Motor Holdings4McCarthy Financial Services4McCarthy Fleet Services
4Club McCarthy4McCarthy Call-a-Car 4Eliance 4Burchmore’s Car Auctions4Budget Rent a Car4Budget Van Rental4Yamaha Distributors4McCarthy Vehicle Import and Distribution
4 Management of HIV/Aids4meeting OEM BEE equity ownership requirements4difficulty in attracting and retaining senior-level HDIs
4 talent availability, attraction and retention4deteriorating road infrastructure4increasing fuel prices4stricter emission standards
16 197 055 20,5 18,8 621 264 17,0 30,9 1 325 675 17,8 72,5 5 795 6,2 9,6 718 8,6
The Bidvest Group Limited 4Developing a meaningful and comprehensive sustainability strategy4 management of HIV/Aids4skills shortages and attracting and retaining
senior HDIs4management of environmental issues
78 926 402 100,0 23,0 3 657 000 100,0 20,1 7 455 790 100,0 22,3 93 325 100,0 5,5 8 311 100,0
Southern Africa 49 127 806 62,3 17,9 2 783 416 76,1 16,3 5 592 873 75,0 30,0 81 569 87,4 2,2 5 077 61,1
United Kingdom and continental Europe
23 292 794 29,5 38,4 654 181 17,9 33,6 1 281 555 17,2 6,2 9 478 10,2 46,3 2 639 31,7
Australasia 6 505 802 8,2 14,3 219 403 6,0 33,9 581 362 7,8 — 2 278 2,4 10,8 595 7,2
7
Our Group in brief
Revenue R’bn Trading profit R’m Trading margin %
06
05
06
05
06
05
06
05
06
05
06
05
06
05
06
05
06
05
06
05
06
05
06
05
06
05
06
05
0 100 200 300 400 500 600 700
06
05
0 5 10 15 20 25 0 2 4 6 8 10 12
06
05
06
05
06
05
0 5 10 15 20 25 0 100 200 300 400 500 600 700 0 2 4 6 8 10 12
06
05
06
05
0 5 10 15 20 25
06
05
0 100 200 300 400 500 600 700 0 2 4 6 8 10 12
06
05
06
05
06
05
0 100 200 300 400 500 600 7000 5 10 15 20 25 0 2 4 6 8 10 12
06
05
06
05
06
05
0 100 200 300 400 500 600 7000 5 10 15 20 25 0 2 4 6 8 10 12
8
Life on earth, in its astonishing abundance and diversity, has
taken billions of years to evolve. While corporations make a
significant contribution to economic and social development,
there are growing concerns about some of their social and
environmental impacts and increasing expectations for
them to make more positive contributions. The purpose of
sustainable development is to allow life to continue to flourish,
requiring us to reduce our negative impact on life-supporting
ecosystems. Responsible corporate citizens proactively
develop business practices that minimise these impacts.
Bidvest, over the last 18 years, has evolved into a successful,
diversified, multinational business. We provide a livelihood
to more than 93 000 valued employees. We are well into an
extensive transformation process. We are making progress
in our fight against HIV/Aids. We have put in place a
Group-wide environmental policy. We are involved in a
multitude of worthy corporate social investment projects.
While we do not yet have an overarching sustainability
strategy and management framework, we are establishing a
solid basis from which to expand our sustainability activities.
For Bidvest and all businesses, contributing to the
sustainability of life is not only a growing obligation and
challenge, but also what being a good corporate citizen is
all about. Business is expected to work towards developing
processes, products and services with zero negative impacts.
Yet destructive, wasteful practices persist and low-level
recycling and efficiency programmes only scratch the surface.
What is required is a fundamental redesign of products and
production, distribution and disposal processes. To make this
happen, massive investments are required.
This is where corporate leaders find themselves constrained.
The incentive for corporations to invest deeply in projects
that improve sustainability is limited, as least-cost production
is one of the tenets of business continuity in a competitive
world. Companies that over-invest in sustainability projects in
an unregulated market risk uncompetitiveness, a conundrum
that business and government need to tackle collaboratively.
Mitigating social and environmental impacts and costs,
known as externalities, and creating a regulatory environment
conducive to good sustainability practices on a level playing
Chairman’s message
The Bidvest Group Limited Sustainability report 2006 9
Cyril Ramaphosa
Non-executive chairman
field is primarily the responsibility of the government. While
shareholders demand single-minded attention to profit and
shareholder value maximisation, we at Bidvest are balancing
this business principle by collaboration with regulatory
authorities on sustainability issues.
Destructive business practices have to be penalised
and life-enhancing practices rewarded. Financial and
tax incentives can be used where “doing good” makes
businesses uncompetitive. Such carrot-and-stick mechanisms
will reward businesses investing in sustainable development
and make it synonymous with maximising shareholder value.
All nations face this issue and those that create mechanisms
that foster business and societal sustainability, will be nations
that build competitive advantage. South Africa cannot delay.
International and local customer, activist, regulatory, and
corporate pressures are escalating rapidly, significantly driven
from within the European Union. The contribution of business
to sustainability is becoming the new driver and yardstick for
success.
Developing nations like South Africa have the added
responsibility of social transformation, which needs to be
properly aligned with growing environmental expectations.
Our collaborative experience in developing successful
transformation frameworks may prove a valuable asset in
developing similar structures in the broader environmental
and social context.
Bidvest’s multi-faceted businesses will continue in their
quest to satisfy customer needs, care for their employees,
be environmentally responsible and develop life-supporting
business practices, while maximising shareholder value.
10
Over its 18-year lifespan Bidvest has grown into a well-respected
multinational. While the business has grown substantially in size
and diversity, we remain entrepreneurial and decentralised. This
empowers business managers to use their flair and operational
freedom to develop and grow their businesses within a
framework of common values and codes of conduct and ethics.
Society’s changing expectations regarding the role of
business in society – reflected in corporate citizenship,
transformation, sustainable development and regulatory
imperatives – add to the complexity and cost of running a
business. The result for Bidvest is a pressure to centralise and
standardise governance structures. Such policies, processes
and reporting mechanisms can be stifling and do not sit well
with our decentralised, entrepreneurial culture.
We recognise, however, that sustainable development is
becoming a new imperative for business and nations and
that their success will depend on how effectively they address
persistent environmental and social issues, such as poverty,
transformation, resource depletion and climate change.
On a continuum, going from non-compliance to leadership,
there are, broadly-speaking, two strategic approaches
to sustainability. The one is compliance-driven, where
corporations “follow” what is mandated and regulated, making
minimal investments to operate within legal regulations and
conform to society’s minimum expectations. The other is a
pro-active approach, where corporations take “the lead” and
go beyond basic regulatory requirements to creatively search
for new solutions to sustainability problems. These can be used
as a source of competitive advantage.
The ethos of sustainable development and good corporate
citizenship is about going beyond minimum expectations
and using the corporate sphere of influence as a creative
driver for positive change. This requires a significant shift in
mindset and culture for most corporations, including Bidvest.
A pro-active stance can become a source of inspiration and
innovation for the corporation, leading to improvements in
workforce motivation, customer loyalty, new business, brand
value and operational efficiencies. Momentum from this is likely
to promote prolonged competitive advantage and growing
shareholder value. Benefits, however, are constrained by the lack
of meaningful incentives offered by the current economic and
political systems and a pro-active stance may take corporations
beyond the currently possible business case for sustainability.
Chief executive’s message
The Bidvest Group Limited Sustainability report 2006 11
Brian Joffe
Chief executive
In South Africa and other developing nations we are faced
with the dual challenge of transforming society as well as
dealing with a broader set of social and environmental
issues. An enormous challenge is crime and its social and
financial costs to business and society. In terms of both
national renewal and businesses growth, there can be no
sustainability without the resolution of our crime problems.
For the majority of South Africans environmental issues,
arguably, are distant priorities to shelter, food, a steady job
and personal security.
Some of Bidvest’s businesses are pro-active and world-class
in the field of sustainable development, while others
have tended to adopt a compliance-driven approach.
Most fall between these two extremes. For the Group our
transformation process has been a resounding achievement.
A number of our South African businesses excel in the
management of HIV/Aids and corporate social investment
initiatives. The United Kingdom’s 3663 is one of our
businesses recognised as a leader in the UK foodservice
product distribution industry and has received a number of
environmental and social awards. We have show-cased them
as an example to our other businesses.
Discussions were held with divisional chief executives and
members of their management teams on what sustainable
development means to their businesses. This has furthered
the discussion and understanding of the topic within
divisions and will assist them with integrating sustainability
principles into their businesses.
To Bidvest, sustainable development is about finding
ongoing improvements in operational efficiencies, ensuring
long-term profitability and doing the “right thing” in its
ever broadening definition – and is an integral part of
business. We are continually refining our understanding of
what sustainable development means for the Group. We
will provide our businesses with a guiding sustainability
framework that complements our entrepreneurial culture and
adds value to what they are already doing. The framework
will include an overarching vision, implementation strategy,
and review and reporting processes.
12
Sustainability at Bidvest
Indicator 2004 2005 2006
Revenue (R’000) ✦ 62 811 776 77 276 491
South Africa ✦ 39 060 694 45 786 182
International ✦ 23 751 082 31 490 309
Trading income (R’000) ✦ 3 164 646 3 657 000
South Africa ✦ 2 426 552 2 625 461
International ✦ 738 094 1 031 539
Employees 81 010 88 441 93 325
South Africa 68 229 75 955 78 029
International 12 781 12 486 15 296
Total training spend (R’000) 72 865 85 658 101 943
South Africa 58 227 74 596 83 022
International 14 638 11 062 18 921
Training spend per employee (R) 894 876 1 092
South Africa 853 982 1 064
International 1 145 886 1 237
Injury rate ✦ ✦ 2,33
South Africa ✦ ✦ 1,62
International ✦ ✦ 6,65
Lost-day rate ✦ ✦ 55,9
South Africa ✦ ✦ 43,4
International ✦ ✦ 131,8
Work-related fatalities ✦ 11 12
South Africa ✦ 11 11
International ✦ 0 1
Black economic empowerment procurement
(R’000) 4 206 218 5 406 947 4 117 606
Black economic empowerment procurement
as % of discretionary spend 30,0 32,2 30,3
Corporate social investment (R’000) 11 691 17 390 28 650
South Africa 10 389 15 877 25 724
International 1 302 1 513 2 926
Corporate social investment as % of pre-taxation
profit 0,5 0,6 0,8Note:
– Indicator notes and definitions are provided in the sustainable development performance data .– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees. – Health and safety indicators have changed. – Empowerment data is for South Africa only.
✦ Information not available.
The Bidvest Group Limited Sustainability report 2006 13
MANAGING SUSTAINABLE DEVELOPMENT
Bidvest is a geographically diverse and multi-faceted
business that operates in many different countries and
industry sectors, providing employment to more than
93 000 people and economic benefit to an even larger
number of people. The success of Bidvest’s business model
is based on its decentralised, autonomous structure and
its entrepreneurial and dynamic culture. Divisions function
independently, yet derive the benefits of being part of a
larger group.
Bidvest business units take responsibility for their sustainable
development priorities and initiatives. Bidvest provides
guidelines for financial management, corporate governance
and transformation. The day-to-day aspects of sustainability
in its cross-cutting nature are dealt with by business
managers from different functional areas: economics is dealt
with by finance; social issues are the responsibility of human
resources; and environmental issues are the responsibility
of environmental managers or appointed operational staff.
At divisional and corporate level, sustainability is largely
managed as part of the risk management process, for which
management takes responsibility with support from the
corporate and divisional audit and risk committees.
Sustainability for Bidvest is about sound business practices,
risk management, good governance, taking account of
stakeholder opinions, stewardship of natural resources, black
economic empowerment (BEE) and developing employees.
Sustainability is the “right thing to do” and is an integral part
of doing business.
BEE as a tool for socio-economic transformation is a core
component of developing sustainable businesses and
communities in the South African context. BEE is a business
imperative and, through an equitable distribution of wealth,
a more stable and enduring economic environment will
develop.
Sustainable development is a process and every year there
is a deeper understanding and appreciation of this topic
among business units. Given the Group’s unique structure
and culture, Bidvest continues to evaluate what sustainable
development means for the Group and how to manage it.
CORPORATE GOVERNANCE
Corporate governance is a cornerstone of a sustainable
business and Bidvest is committed to an open governance
process based on the principles of transparency, accountability,
integrity and ethical behaviour that complements the
Company’s entrepreneurial flair. Bidvest’s commitment to
corporate governance is captured in its corporate governance
policy in the 2006 annual report and corporate governance
manual that includes the Group’s corporate values, corporate
code of conduct and code of ethics. The corporate governance
policy assumes an inclusive approach to good corporate
governance as advocated in the King II report.
The board of directors
The Bidvest board has been restructured and reduced. On
June 28 2006, the Group announced its revised directorate
incorporating the philosophy of maintaining the Bidvest
culture of decentralisation and participative management
styles, while ensuring succession planning and strengthening
the non-executive component along with the Dinatla BEE
representation. The Bidvest board comprises 24 directors,
consisting of seven (29,2%) non-executive independent, five
(20,8%) non-executive and 12 (50,0%) executive directors. The
board constitutes 29,2% black, 25,0% female and 91,7% local
directors.
Functions of the board
The board charter sets out the mission, roles, duties and
responsibilities of the directors to ensure that they fulfil
their duty with the necessary diligence. The nomination
committee annually appraises the performance of individual
directors, the board and the chief executive.
Board committees
The board has delegated certain responsibilities and powers
to committees. The committees, as of September 1 2006, are:
4 Group executive committee
4 South African executive committee
4 Audit committee
4 Risk committee
4 Remuneration committee
4 Acquisition committee
4 Nomination committee
4 Transformation committee
14
Sustainability at Bidvest
Managing risk
A stand-alone risk committee reporting directly to the
board has been established. The risk and audit committees
are responsible for managing risk and the process of
entrenching good corporate governance and appropriate
sustainability practices throughout the Group. Each division
has an audit committee, which collates the business units’
risks and reports these to the Group risk committee at least
four times per year. Group risk management is achieved
through the identification and control of the main business
and operational risks, which could adversely affect the
accomplishment of the Group’s business objectives.
Bidvest’s 24-hour fraudline serves a valuable function for the
Group and its employees in identifying areas of concern.
Investigations have led to a number of prosecutions and to
financial controls being improved.
Managing transformation
The transformation committee facilitates the Group’s
socio-economic transformation process. The transformation
committee has developed an enterprise-based charter, the
Bidvest charter, that guides the Bidvest BEE transformation
strategy.
MATERIAL ISSUES
The Group’s principal material issues and challenges are
discussed at the front of this report and in the divisional
reviews.
MANAGEMENT SYSTEMS AND GOVERNANCE
Businesses, where deemed to be of material benefit, have or
are working on implementing formal management systems. In
most cases these are generic management system standards
for quality (ISO 9000) and environmental (ISO 14000)
management, which are independent of product or industry.
Management systems, whether formal or informal, are usually
present in business units that deal with hazardous products,
have hazardous working environments or where quality is of
particular importance. However, both ISO 9000 and ISO 14000
are becoming increasingly important in business-to-business
dealings and provide an authoritative indication of how
quality, social and environmental activities are managed.
BLACK ECONOMIC EMPOWERMENT
Business units subscribe to the Bidvest charter and BEE
scorecard, which guide the Group’s transformation strategy,
as systems to measure and monitor BEE performance. In
South Africa, most divisions have appointed a commercial
director to champion transformation across business units.
The commercial directors assist businesses in meeting targets
and fostering business synergies within Bidvest and with
outside business partners, including Dinatla shareholders.
The Bidvest Group’s “A” empowerment rating was
reaffirmed, showing improvements all round. Progress in
most areas is in line with the transformation scorecard.
The principal challenge, in view of the national skills
shortage at top levels, is to improve representation at
senior and executive management level. There is a growing
commitment to BEE across the Group but there remains
a need to further embrace BEE as an opportunity and
strategic imperative. An increasing number of businesses
are in the process of obtaining empowerment ratings, or are
strengthening current empowerment credentials.
A separate socio-economic empowerment review is provided
in this report.
WORKFORCE
Bidvest employs 93 325 people. The majority (78 029) work
in South Africa, of which a major proportion is historically
disadvantaged individuals (HDIs). The Group thus makes a
material contribution to a considerable segment of South
Africa’s population. Notwithstanding growth in employee
numbers through acquisition, Bidvest has been a substantial
net employer over a sustained period of time.
Each intake of the Bidvest Academy, Bidvest’s leadership
development programme, conducts employee potential
utilisation surveys. To date 3 600 employees have been included.
Employee potential utilisation is a measure of the inherent
and potential ability of the employee to be motivated,
developed, innovative and productive. Globally, employee
potential utilisation is seen as a critical strategic imperative for
all organisations to establish a sustainable and competitive
advantage. The challenge for business leadership is to fully
The Bidvest Group Limited Sustainability report 2006 15
develop the potential of each individual, which is especially
important in South Africa, where, according to surveys
conducted by Quanta Consulting, most employees believe
they use only 30% or less of their potential at work.
The Academy assists Bidvest in raising the level of employee
potential utilisation across divisions. The challenge is seen
as a strategic issue for the Group and an opportunity for
the Academy to add value in contributing to Bidvest’s future
competitiveness and sustainability.
Businesses comply with the South African Labour Relations,
the Basic Conditions of Employment, the Skills Development,
the Employment Equity, the broad-based black economic
empowerment, Unemployment Insurance and the
Occupational Health and Safety Acts, or their equivalents in
other countries.
Businesses typically have codes, policies and procedures in
place that cover recruitment and selection, business conduct,
non-discrimination, industrial relations, employment equity,
grievance and dispute settlement, HIV/Aids and other
life-threatening diseases, employee conduct, freedom of
association, ethics and sexual harassment. Many of these
were negotiated and agreed with trade unions. Companies
tend to have formal grievance procedures in place, which in
South Africa are in accordance with Schedule 8 of the Labour
Relations Act.
Many businesses have structured employee development
programmes and related performance appraisal systems in
place and a growing number of businesses conduct formal
employee satisfaction surveys.
Communication
Bidvest communicates with its employees across all divisions:
4 The circulation of Bidvoice has grown to 40 000, reaching
out to Bidvest employees on four continents. The quarterly
staff magazine keeps Bidvest people informed about
what is happening at Group and business unit level. The
magazine includes information on the Group’s corporate
social responsibility activities, readers’ views, top achievers,
long-standing service, Group and company awards, as well
as reporting on health, safety and the environment.
4 Many divisions and business units have an intranet and
publish newsletters in print or online for employees.
4 The Village, Bidvest’s community portal, serves to enhance
internal communications, grow the Bidvest community and
to develop business synergies. Interactive communities
offer up-to-date information and discussion forums
that allow and encourage the exchange of ideas and
suggestions. The Village is expanding its functionality to
include the growing information-gathering requirements,
with tools for the BEE scorecard, Group BEE procurement
and monthly flash results being rolled out. The goal is to
touch every Bidvest employee and ongoing initiatives aim
to increase usage of the Village.
Health and safety
The Group values employees and their health and safety.
The Group is dedicated to meeting relevant occupational
health and safety standards, as well as sound global best
practices. South African companies ensure compliance with
the Occupational Health and Safety (OHS) Act. Businesses,
where health and safety issues are material, tend to be
National Occupational Safety Association (NOSA), or
equivalent, certified. Ongoing training and awareness play
an important part in creating a safer and healthier working
environment.
It is with regret that Bidvest reports the death of
12 employees while on duty. Full investigations are
conducted of fatal incidents and adaptations to the
health and safety processes are made where necessary.
The fatalities are discussed in the divisional sections
for Bidfreight, Bidserv, Bidfood and Bid Industrial and
Commercial Products.
This report includes health and safety data as recommended
by the GRI.
The injury rate for Bidvest was 2,33 and the lost-day rate was
55,9. Definitions relating to occupational health and safety
have been brought in line with the GRI’s G3 guidelines and
its technical protocols and are stated in number of cases
per 200 000 hours. Comparison with prior years is thus not
possible. Fatalities were not reported separately prior to 2005.
16
Sustainability at Bidvest
HIV/Aids
The HIV/Aids epidemic is a significant challenge affecting
most Bidvest companies in southern Africa. A Group
HIV/Aids policy, which serves to guide businesses in
developing appropriate programmes, has been finalised
and is awaiting formal adoption. A copy of the policy is
included in this section and is available on the Bidvest
website. Bidvest companies are pro-actively tackling the
epidemic, often in co-operation with unions. While a
number of businesses are making progress and several have
outstanding HIV/Aids programmes, many businesses must
improve their response strategies. HIV/Aids is a complex
issue and requires persistent work and creative initiatives to
break down taboos and prejudices.
An HIV actuarial prevalence study and an assessment of the
HIV/Aids programmes are being conducted by an outside
specialist as an initial step towards quantifying the impact
of HIV/Aids on the Group. Employee data for 62 000 South
African employees will be used to provide a statistically
derived indication of HIV infection, Aids sickness and yearly
Aids-related death and disability rates. These initiatives will
allow Bidvest to enhance existing programmes and assist in
the development of a co-ordinated HIV/Aids strategy for the
Group. While the studies are not yet complete, preliminary
findings indicate that the HIV prevalence rate is around
17,3%, which is an average and, given Bidvest’s diversity,
cannot be applied to any one business unit in isolation.
Bidvest has become a member of SABCOHA, the
South African Business Coalition on HIV/Aids, which
gives the Group access to a best practice knowledge
base and will assist the Group to more effectively address
HIV/Aids.
Training
Employee development is a vital aspect of maintaining a
motivated, competent workforce, especially given South
Africa’s shortage of skilled labour. Training programmes are
structured according to business and employee needs. In
2006, R1 092 was spent on training per employee, up from
R876 in 2005. Numerous companies offer staff education
bursaries, adult basic education and training (ABET)
programmes and other educational benefits.
COMMUNITY
Customers
Bidvest interacts with a broad range of corporate and
private customers. While a number of businesses conduct
formal customer satisfaction surveys, most interact with their
predominantly corporate clients on a regular basis and feedback
is used to enhance service delivery. A number of businesses
formally log customer feedback and subsequent actions, often
as part of a quality management system such as ISO 9000.
Bidvest Academy delegates have conducted customer
loyalty surveys. These surveys measure the extent to which
a customer will return for repeat business and the extent to
which he or she will willingly advocate the business to his or
her friends and colleagues – a loyal customer. A dissatisfied
customer in contrast may the next time choose a different
supplier. Customer loyalty is particularly important for mature
businesses and the challenge is to convert disloyal and
dissatisfied customers to loyal customers.
Based on Academy research, customer loyalty across the
Group is approximately 83%. This is a good score, but with
a lower employee potential score, there is a degree of
vulnerability in the system. The goal within the Academy
is to assist the Group in raising employee potential, in
turn customer loyalty and, in so doing, further strengthen
business competitiveness and ability to grow.
Community activities
Responsibility for corporate social investment (CSI) activities
resides with Bidvest divisions and their business units, most of
which support a variety of initiatives. There is a trend towards
CSI projects being co-ordinated at divisional level, the objective
being to provide more substantial support to a limited number
of philanthropic projects of relevance to the division and
Bidvest. Bidvest CSI covers: education and training, health and
HIV/Aids, community development, sports, arts and culture,
environmental initiatives, economic empowerment and job
creation, safety and security and welfare.
Group CSI spend increased to R28,7 million (2005: R17,4 million),
which equates to 0,8% of pre-taxation profit. The South African
operations spent R25,7 million, which equates to 1,1% of profit
before taxation.
The Bidvest Group Limited Sustainability report 2006 17
ENVIRONMENTAL
Bidvest consists of services, trading and distribution
businesses, which have a variety of environmental impacts.
The JSE SRI Index has classified Bidvest as a business with a
“medium” environmental impact. As a minimum, businesses
ensure compliance with applicable environmental legislation
and, in many cases, through the use of newest technologies
and best practices, go beyond compliance.
A Group environmental policy, which encourages businesses
to take a more pro-active stance towards the environment
as a sustainability issue, has been finalised and is awaiting
formal adoption, page 3.
United Kingdom-based 3663 stands out as a leader in the
Group, with its pro-active stance towards the environment
and its innovative environmental projects. A detailed case
study describing 3663’s environmental journey serves as an
example to other Bidvest companies and is included in the
Bidvest Europe divisional review.
The standardisation of data and the data collation process
have improved. Yet, in a group as diverse and decentralised
as Bidvest, ongoing work is required to streamline the
collation, management and usability of sustainability data
and to ensure management takes ownership of information,
to guide appropriate actions.
EXTERNAL APPRAISAL
Empowerment rating
Bidvest, a level four contributor and a good broad-based BEE
contributor, with unrestricted operational capacity, has an
“A” empowerment rating from Empowerdex.
Fitch Ratings
Fitch Ratings affirmed Bidvest’s credit rating as an AA- (zaf).
AA- (zaf) ratings denote a very strong credit risk relative to other
issuers in the same country.
Revenue ranking
Bidvest was ranked eighth of JSE-listed companies and fourth of
JSE-listed South African companies, by revenue.
Dow Jones Sustainability World Index
Bidvest is one of only four South African companies listed in the
Dow Jones Sustainability World Index 2007, a grouping of global
organisations that meets stringent criteria for strategic strength,
innovation, financial performance and stakeholder relations.
JSE Social Responsibility Investment Index
Based on an assessment of the Group’s policies, performance and
reporting on economic, social and environmental sustainability,
the JSE has reaffirmed Bidvest as a founding constituent of the
SRI Index.
Forbes Global 2000 – the world’s leading companies
Forbes Global 2000 is a comprehensive list of the world’s largest
and most influential companies, as measured in US dollars by
a composite ranking for sales, profits, assets and market value.
Bidvest is ranked 1 114th (2005: 1 162nd).
FTSE/JSE Africa Index Series ranking
In the June 2006 FTSE/JSE Africa Index Series quarterly review,
Bidvest was ranked 24th in both the FTSE/JSE All Share Index
and Top 40, 7th in the FTSE/JSE Industrial 25, with a market
capitalisation of R32,1 billion, a 100% free float and the JSE’s
highest liquidity rating.
Morgan Stanley International Emerging Market Index
Bidvest is considered to have a 100% free float for the MSIEM
Index in which it is included.
Bidvest as an employer of choice
Bidvest has been nominated by a panel of experts as one of
the top 10 companies to work for in South Africa in research
undertaken by the Corporate Research Foundation.
Company confidence predictor
In the June 2006 Campbell Belman company confidence
predictor, the influential twice-yearly survey of investment
analysts, Bidvest was rated highest among industrial companies
for its “company basics” and was particularly strong in “makes
effective use of capital”, “shows good judgement in acquisitions
or joint ventures” and “maintains a reassuring balance
between risk and return”. In “future potential” Bidvest was the
18
Sustainability at Bidvest
leading company for being “alert to new ideas to improve its
profitability”, in “people” as having “an effective chief executive”
and in “communications” for “chief executive is a straight talker”.
In “ethics” Bidvest shared the lead in “lives up to promises
– company results match expectations” and “believes in full
disclosure – is transparent” and was rated second in being
“reputable, honest and trustworthy”. Overall Bidvest was rated
third on the “total” industrials across all 28 characteristics used
in the evaluation. Of note was that for its “company basics”
Bidvest was also rated highest among the top companies, from
all sectors, in market capitalisation.
Investment communication award
Bidvest is not only recognised as an achiever in creating value
for investors, but also for general reporting and investment
communication. In June 2006, Bidvest received an award, for
the second year in a row, from the Investment Analysts’ Society
for the best reporting and communication in the JSE industrial
services sector.
Most admired company
In Finweek/Afrika‘s most admired company and CEO peer
review survey, Bidvest was ranked fourth and Brian Joffe second,
respectively.
HIV/AIDS POLICY – awaiting board approval
Bidvest recognises the human tragedy caused by the
HIV/Aids epidemic, particularly in southern Africa. We
are concerned about the gravity and implications of the
epidemic for our Group operating companies, Bidvest as a
whole, employees and their families and the communities
within which we serve. Our aim is to reduce the fear
of HIV/Aids and to minimise the social, economic and
developmental consequences of this epidemic on our
company and its people.
Bidvest believes in responding as far as is reasonably
possible to the human needs of the epidemic in a
supportive, positive and non-discriminatory manner, so that
people living with HIV/Aids are able to be open about their
HIV status without fear of stigma or rejection.
Bidvest believes that non-discrimination, as well as
consultation, inclusivity, and encouraging full participation of
all stakeholders, are key principles underpinning its
HIV/Aids responses.
ENVIRONMENTAL POLICY – awaiting board approval
The adoption of responsible environmental business
principles and a pro-active approach to environmental
management are part of sustainable business practices. All
corporations, irrespective of their sector, have an impact on
the environment and thus need to play a pro-active role in
using their spheres of influence to develop economically,
environmentally and socially sustainable operations. Bidvest
recognises its responsibilities in this regard.
Bidvest commits to:
4 Adhere to or exceed environmental regulations relevant to
its operations internationally.
4 Identify, mitigate and manage the environmental impacts
and risks of its products and services.
The Bidvest Group Limited Sustainability report 2006 19
Bidvest recognises that HIV/Aids carries a social stigma, and
accordingly recognises that those of its employees infected
or affected by the disease are entitled to be treated with the
utmost confidentiality.
Bidvest is committed to the principle of fair employment
practices, and recognises that employees afflicted with life-
threatening diseases or HIV/Aids may continue working in a
normal manner, unless such employee’s condition begins to
impact adversely on their work output, as defined by their
job description, in which case Bidvest will follow accepted
guidelines regarding incapacity.
Bidvest’s HIV/Aids approach comprises the following key
responses to the epidemic:
4 Education and training about HIV/Aids at all levels within
the Group.
4 Prevention of new infections through appropriate
programmes.
4 Elimination of stigma and discrimination.
4 Sensitive care and support of those infected or affected
by HIV.
4 Ensuring fair employment practices.
4 Measurement and analysis of the impact of HIV/Aids
programmes.
It is recognised that these responses should be framed within
an overall principle of sustainability of action and outcomes
in order to ensure that this policy is given substance and
attracts commitment from all stakeholders.
Businesses are encouraged to address the health challenges
posed by HIV/Aids in a co-ordinated way that shares knowledge
and experience. This approach will ensure a maximum effect in
dealing with the epidemic.
Group companies are committed to upholding these
principles and key responses to ensure that our people and
our customers are assured of a responsible and sustainable
employer and business partner operating to internationally
acceptable standards.
4 Optimising consumption of raw materials and energy,
and minimising waste through applying a “reduce, re-use,
recycle” philosophy.
4 Working in partnership with its suppliers, customers
and other relevant business partners, within its sphere
of influence, to redesign and reduce the environmental
impact of products, services and other business activities.
4 Unlocking the creative potential for sustainable solutions
by working with employees to embed an environmental
consciousness throughout the organisation.
4 Including environmental considerations in its business
decisions.
4 Working with its appropriate government departments, civil
society groups and other stakeholders to identify and resolve
environmental issues relevant to the Bidvest businesses.
4 Encouraging Bidvest divisions to set measurable targets
and timelines relevant to their sectors.
Divisions are responsible for staying abreast of environmental
best practices relating to their industry sectors and
developing innovative solutions to environmental issues.
The management of environmental issues is the direct
responsibility of management, supported by their audit and risk
committees. These committees oversee the establishment and
maintenance of relevant management structures and processes
to achieve the objectives of this environmental policy. The
policy objectives are reviewed periodically and, if necessary,
updated. The committees review performance against
objectives, which is reported annually.
Revenue: R’bn80
70
60
50
40
30
20
10
0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
Trading profi t: R’m4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
092 93 94 95 96 97 98 99 00 01 02 03 04 05 06
Total assets: R’m302826252420181614121086420
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
Cash generated by operations: R’m
4 500
4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
4 Annual compound growth rate in headline earnings per share in excess of 30% over the past 18 years
4 Market capitalisation as at June 30 2006 was R32,1 billion
4 R1 000 invested at the start of Bidvest, capital and dividend distributions re-invested, would have been worth an
estimated R314 000 in June 2006
4 New investments total R715,5 million in new or upgraded capacity
4 18 years of sustained growth in shareholder value
6,0
15,2
14,6
13,2
17,88,2
3,0
17,0
Divisional contribution to Group trading profit2006 (%)
Corporate Services
Bidfreight
Bidserv
Bidvest Europe
Bidvest Australasia
Bidfood
Bid Industrial and
Commercial Products
Bidpaper Plus
Bid Auto
59,7
23,3
6,6
Wealth distribution2006 (%)
Benefi ts and
remuneration
Taxation
Providers of capital
Retained for growth
10,4
20
5,0
Adding value
Bidvest is one of South Africa’s largest and most diverse industrial groups and employs more than 93 000 people from
communities in the many locations in which the Group businesses operate. Bidvest has produced consistent returns for
shareholders for the last 18 years. Results refl ect the success of operational units in seizing the opportunities presented by
largely favourable economic conditions. All divisions reported sales growth and strong cash generation.
Bidvest achieved revenues of R77,3 billion (2005: R62,8 billion), trading profi t of R3,7 billion (2005: R3,0 billion) and headline
earnings reached R2,4 billion (2005: R2,0 billion). R13,9 billion of wealth was created and R8,3 billion (59,7%) distributed to
employees and R915,5 million (6,6%) to the government. Total exchanges with government including amounts collected on their
behalf amounted to R14,7 billion. Foreign operations contributed 40,8% to Group revenue and 28,2% to trading profi t.
The Group’s fi nancial statements are fully reported in The Bidvest Group Limited Annual report 2006 and are the Group’s fi rst
consolidated fi nancial statements prepared in accordance with IFRS.
6,66,6
13,213,2 Bid Industrial andBid Industrial and
Commercial ProductsCommercial Products
Bidpaper PlusBidpaper Plus
Bid AutoBid Auto6,06,0
13,213,2
17,817,88,28,2
Economic vitality
The Bidvest Group Limited Sustainability report 2006 21
Other financial information
Value added statement
“Value added” is the value which the Group has added to purchased materials and goods by the process of manufacture and
conversion and the sale of its products and services. This statement shows how the value so added has been distributed.
South African
R’000
Foreign
R’000
2006
Group
R’000
Revenue 45 786 182 31 490 309 77 276 491
Net cost of raw materials, goods and services (37 100 739) (26 380 625) (63 481 364)
Wealth created by trading operations 8 685 443 5 109 684 13 795 127
Finance income 70 905 45 560 116 465
Total wealth created 8 756 348 5 155 244 13 911 592
Distributed as follows
Employees
Benefits and remuneration 4 887 310 3 424 010 8 311 320
Government
Current taxation 658 359 257 179 915 538
Providers of capital 1 295 830 152 368 1 448 198
Finance charges 310 755 121 851 432 606
Distributions to shareholders 985 075 30 517 1 015 592
Retained for growth 1 914 849 1 321 687 3 236 536
Depreciation 496 011 351 808 847 819
Retained income 1 418 838 969 879 2 388 717
8 756 348 5 155 244 13 911 592
Summarised financial information
Trading profit 2 625 461 1 031 539 3 657 000
Profit before taxation 2 457 239 940 722 3 397 961
Operating assets 12 624 633 8 539 011 21 163 644
Operating liabilities 7 297 164 6 410 690 13 707 854
Exchanges with government
including amounts collected on their behalf
2006
R’000
Employee taxes 722 350 842 728 1 565 078
Company taxes 658 359 257 179 915 538
Value added tax and sales tax 3 696 489 288 633 3 985 122
Customs and excise duty 7 639 345 273 818 7 913 163
Other 223 952 87 776 311 728
12 940 495 1 750 134 14 690 629
Payable to
South African authorities 12 902 867
Other 1 787 762
14 690 629
22
Black economic empowerment
Highlights
• “A” empowerment rating reaffirmed, showing improvements all round
• BEE procurement R4 billion (30,2% of discretionary South African spend)
• Total training spend R101,9 million (R83,0 million in South Africa)
• Black employees as a percentage of employees trained in South Africa – 81,2%
• Corporate social investment spend R28,7 million (R25,7 million in South Africa)
• Women employees – 42,4% (women employees in South Africa – 46,6%)
• A number of business units have obtained improved and first-time empowerment ratings
• Increasing acceptance of Bidvest’s BEE credentials in the market
• An electronic database is being developed for supplier empowerment credentials
• Bidvest ranked 13th in the Financial Mail Top 200 Empowerment Companies 2006 survey
Challenges
• In South Africa, the lack of standardised criteria to assess empowerment status results in problematic inconsistencies
• Improving employment equity at senior levels
• Attracting and retaining senior level HDIs
• Skills shortages
• Embracing BEE throughout the South African operations
Performance indicator overviewIndicator 2004 2005 2006
Empowerment rating A A A
Executive management (% blacks on the board) 23,3 22,6 29,2
Employment equity (% of blacks as per skills levels 1,2,3
of EEA report)#24,6 24,7 30,9
Women employees (%) – Group 44,2 41,9 42,4
Women employees (%) – SA 44,2 44,9 46,6
Preferential procurement (R billion)*# 4,2 5,4 4,1
Preferential procurement (% of discretionary spend) 30,0 32,2 30,2
Total training spend (R million) – Group 72,9 85,7 101,9
Total training spend (R million) – SA 58,2 74,6 83,0
Training investment per employee (R) – Group 894 876 1 092
Training investment per employee (R) – SA 853 982 1 064
Black employees as a % of those trained in South Africa 86,7 83,0 81,2
CSI spend (R million) – Group 11,7 17,3 28,7
CSI spend (R million) – SA 10,4 15,9 25,7
* Preferential procurement continues to increase. The decrease in rand value for 2006 is a result of a change in definition between 2005 and 2006.
#KPMG produced an assurance statement on BEE procurement by rand value and employment equity by race, page 94 .
The Bidvest Group Limited Sustainability report 2006 23
COMMITTED TO SOCIO-ECONOMIC TRANSFORMATION
Bidvest maintains an ambitious and aggressive approach to
promoting BEE and driving socio-economic transformation
throughout the South African businesses. This process has
steadily gained momentum. This achievement is reflected in
Bidvest’s “A” empowerment rating which was reaffirmed, with
improvements noted all round. The changes in the BEE codes of
good practice have resulted in what appears to be lower scores
in some instances, but real progress has been made. The role of
the Group’s empowerment partners in the Dinatla consortium in
helping improve Bidvest’s performance is readily acknowledged
and it is anticipated that Dinatla will continue to assist the Group
as it strives for “AAA” empowerment credentials.
Forging opportunities
Bidvest is an international company firmly rooted in South
Africa. The organisation is one of the largest employers
in the country, where 78 029 of its total 93 325 workforce
live and work. Socio-economic transformation and BEE
are an integral part of creating sustainable businesses
and communities. The Group, by virtue of its size and
diversification across numerous industries, is making a
far-reaching contribution.
The Group has pursued a structured approach to improving
its socio-economic performance. Bidvest has a significant
empowerment shareholding and a transformation strategy
aimed at addressing both the economic and social elements
of empowerment as it relates to sustainability. Focus areas
are: progressing skills development and employment equity
at all levels, facilitating increasing levels of procurement
of goods and services from HDIs and promoting the
development of small, micro- and medium-sized, black-
owned enterprises. The strategy is guided by the Bidvest
Charter and BEE scorecard, which all business units subscribe
to, as systems to measure and monitor BEE performance.
The Bidvest Charter was published in the 2004 sustainability
report which can be downloaded from the Bidvest
website www.bidvest.co.za.
This ongoing drive has been a process of “learning by
doing”. Advancing broad-based BEE developments has
enabled the business units to retain business and gain
new contracts, thereby adding value to shareholders, while
creating opportunities for other key stakeholder groups,
especially employees, suppliers and emerging business
enterprises. The organisation is emerging as a leading
catalyst for positive change across many industries.
EFFECTIVE EMPOWERMENT HOLDINGS
Economic BEE ownership calculated in terms of the BEE
codes of good practice is 41,4%, with a 29,2% effective BEE
control. The Dinatla BEE consortium effectively owns 15,0%,
The Public Investment Corporation 13,4%, and a further
16,6% is controlled by BEE asset managers.
The Dinatla transaction was at the holding company level,
including both the local and offshore operations of Bidvest.
If the Dinatla BEE consortium had bought into the South
African operations only, at the same transaction value, the
total percentage BEE direct and indirect ownership, at the
time of the transaction, would have been in excess of 50%.
KPMG report in the 2005 sustainability report .
Bidvest believes that taking into consideration the scale
of the Group’s operations and the number of sectors in
which it has an impact, both locally and internationally, the
effective 15,0% equity ownership, both in terms of value and
influence, has significantly more reach than would be the
case in many smaller BEE transactions, where percentage
equity ownership may be greater.
In partnership with Dinatla
The Dinatla consortium of BEE partners enables a broad-
based and representative empowerment grouping
to share and influence the future of Bidvest, in South
Africa and abroad. The core shareholders of Dinatla are
WDB Investment Holdings, Bassap Investments and the
Shanduka Group. The consortium comprises entrepreneurs
and black business professionals who collectively represent
a national footprint and maintain networks across diverse
sections of the economy. The partnership increases the
Group’s potential to secure business opportunities and
generate a pool of capital creators with production capacity
who will in turn contribute to the growth of the economy.
The partnership with Dinatla consortium continued to add
value to Bidvest at a strategic level and is mutually beneficial
24
Black economic empowerment
across all of our business units. The partnership is now at
the second phase of the agreement and the refinancing
of the partnership, within the envisaged timeframe, has
been announced. The Group is eager to reinforce this
successful relationship and is focusing on identifying
more opportunities for collaborative efforts on enterprise
development and procurement initiatives that will offer
tangible benefits to Dinatla partners.
STRUCTURES GOVERNING TRANSFORMATION
Bidvest has a transformation committee responsible
for driving socio-economic transformation within the
Group. The committee, which comprises executive and
non-executive board members, provides input on strategic
aspects of the business which positively influence the pace
of transformation. Its members are: MBN Dube (chairman),
the South African divisional chief executives, MJ Finger,
LI Jacobs, B Joffe, SG Mahlalela, TL Slabbert and FDP Tlakula.
The commercial directors’ forum, formally known as the
working committee, meets regularly to review progress and
provides strategic input to the transformation committee.
The forum comprises Bidvest’s commercial directors who
are responsible for driving transformation and business
development across their respective divisions. The
commercial directors excel in their roles, providing strategic
guidance to divisional chief executives.
There is a greater appreciation at executive level that BEE
presents a business opportunity. Promoting diversity is an
opportunity to bring new skills and energy into the Company
that will add value commercially and strengthen the Group’s
position. BEE imperatives are increasingly linked to broader
strategic imperatives, but there remains a need to embrace
BEE more widely across the Group. A principal challenge and
focus area is to engage management at business unit level to
drive this process so that BEE becomes integrated as part of
the culture throughout the organisation.
BEE implementation, monitoring and evaluation
The enterprise-based Bidvest Charter and scorecard
were drafted in consultation with Dinatla and the South
African government in 2003. The scorecard provides a
guide for monitoring the progress of internal business
activities, empowering business units to engage with the
BEE challenges they face. Principal challenges include
direct empowerment (equity ownership and executive
management), human resource development (employment
equity and skills development), indirect empowerment
(preferential procurement and enterprise development) and
CSI. Specific indicators are identified, targets and timeframes
set, and appropriate weightings allocated.
A common format is used by line managers for reporting
on BEE progress. Reports are submitted quarterly for
divisional consolidation and review and further review by the
transformation committee and the board. The raw data is
confirmed annually by third-party assurance providers and
the scores are determined and verified by an independent
empowerment rating agency.
The scorecard system has been fundamental in encouraging
and enabling individual business units to measure and
monitor their socio-economic performance. An increasing
number of businesses are in the process of obtaining an
independent empowerment rating, or have obtained a rating
and are striving to strengthen credentials.
The level of scorecard reporting has improved considerably and
there is a high level of commitment. Bidvest is developing an
electronic reporting tool which will greatly enhance the process
of collating scorecard data and ensure the highest standards.
The Bidvest intranet provides an effective resource for
improving levels of BEE awareness, understanding and
knowledge among employees. Every employee has access
to the site which provides information on BEE news, acts
and regulations, information on BEE developments and case
studies across the Group, and links to BEE related websites.
EMPLOYMENT EQUITY AND SKILLS DEVELOPMENT
The principal business risk at Bidvest relates to employees
and their skills. In order to sustain growth, the recruitment
and development of individuals who add significant value,
are essential. This issue is addressed by investing in skills
development and by building innovative, exciting businesses
that enthusiastic, entrepreneurial people want to join.
The Bidvest Group Limited Sustainability report 2006 25
A high value is placed on leadership development and
on increasing the representation of blacks and females
across management, technical and professional categories,
recognising this as critical for meeting long-term objectives.
Training requirements are managed on a decentralised basis.
Considerable effort is invested in identifying, attracting
and recruiting talent externally and promoting internal
programmes to develop skills. Divisions budget a minimum
of 1% gross total payroll for skills development programmes.
Training spend in South Africa has increased to R83,0 million
(2005: R74,6 million).
Integrated employment equity and skills development
programmes with targets for black representation at all
levels are rolled out across the divisions and at each business
unit. Succession planning strategies are implemented to
ensure the movement of black candidates into management
positions and retention strategies and mentorship
programmes for black employees are in place.
A new generation of Bidvest managers is emerging as the
majority of businesses make steady progress in meeting
employment equity and skills development targets.
A reliance predominantly on promotions within the business
has enabled some divisions to advance further than others in
increasing affirmative action at junior, middle management
and directorship levels. In spite of efforts to retain talented
staff who benefit from development opportunities,
competition in the market for skills results in loss of staff
which is a setback to achieving targets.
There has been marginal progress with senior and executive
management representation. The board was streamlined
and well-respected non-executives appointed. A number
of divisions appointed HDIs to senior levels, but retention
remains an ongoing challenge in view of the industry-wide
skills shortages.
There is a need for a more structured and focused approach
to developing core skills in order to enhance current efforts
to develop and advance entrepreneurial individuals to
senior levels. In some businesses, skills development is
not sufficiently front-of-mind; in others it could be more
relevant. There needs to be a greater alignment between
skills development, training, mentoring and succession
planning, with equity target objectives and requirements and
overarching sustainability objectives.
INDIRECT EMPOWERMENT
Procurement and regulatory certainty
Business units are committed to pursuing policies that
promote the use of black-owned and empowered enterprises.
Where there is a synergy between supply and demand
for services, the Group channels BEE procurement spend
through the Dinatla consortium and its constituency base.
Bidvest spent 30,2% of total procurement, excluding
monopolistic suppliers and foreign spend, on external BEE
suppliers of goods and services (40,7% including inter-group
purchases). The reported BEE procurement is lower than last
year due to a change in the definition.
26
Black economic empowerment
A prominent challenge for Bidvest and industry-wide in
South Africa, is a lack of clarity in the definition of BEE. There
is consequently variation in the assessment criteria used by
business units and suppliers to determine empowerment
status, resulting in different interpretations. Assessments may
be based on ownership, or on a broader set of indicators.
This inconsistency is problematic and is reflected in the
practices of empowerment rating agencies which use
different scoring methods. Inconsistency in the evaluation
of empowerment status has implications for the scorecard
data.
The draft codes of good practice on broad-based black
economic empowerment (BBBEE) released by the South
African government in 2004 are expected to be finalised
before the end of 2006. The enabling legislation will clarify
the objectives that companies should work towards and
how their progress will be measured, encouraging greater
BEE activity throughout corporate South Africa. In the new
regulatory environment, BEE performance will be assessed
on a broader basis, looking beyond equity ownership at a
number of areas of performance, providing a level playing
field for businesses.
The Group’s transformation strategy will be diligently aligned
with the new regulatory requirements. Discrepancies will be
addressed and the process will enable the Group to develop
a more coherent implementation plan.
Divisions are increasingly implementing initiatives to develop
levels of BEE understanding among suppliers and encourage
suppliers to obtain and strengthen empowerment ratings.
Bidvest is developing an electronic supplier database which
will serve as a consistent point of reference for supplier
empowerment credentials. Business units will use the tool to
South African procurement spend
Suppliers 2003Value of
purchases(R billion)
2003% of
discretionary procurement
2004Value of
purchases(R billion)
2004% of
discretionary procurement
2005Value of
purchases (R billion)
2005% of
discretionary procurement
2006Value of
purchases(R billion)
2006% of
discretionary procurement
BEE suppliers 1,4 16,7 4,2 33,8 5,4 36,6 4,0 29,6
Black woman suppliers
0,0* – 0,0* – 0,0* 0,0* 0,1* 0,7
Non-BEE suppliers 7,0 83,3 8,2 66,2 9,4 63,4 9,5 69,7
Discretionary procurement
8,4 100,0 12,4 100,0 14,8 100,0 13,6 100,0
Inter-group suppliers 1,5 1,6 2,0 2,4
Discretionary and inter-group procurement
9,9 14,0 16,8 16,0
Monopolistic suppliers
11,1 13,1 19,3 22,8
Non-discretionary foreign spend
1,3 4,1 3,8 2,7
Total procurement 22,3 31,2 39,9 41,5
* R96,2 million (2005: R4,0 million; 2004: R4,7 million; 2003: R4,8 million) .
Sales and not revenue are used to determine the total procurement figures.
The Bidvest Group Limited Sustainability report 2006 27
register suppliers’ details, including BEE status and products,
on the company intranet. It is anticipated that the tool will
considerably enhance opportunities for business units and
suppliers.
Enterprise development and corporate social investment
There has been good progress in identifying, initiating and
co-ordinating enterprise development and CSI opportunities
on a division-wide basis. The commercial directors are
responsible for spearheading this initiative which will have
more impact than the current fragmented approach pursued
by business units. Prominent examples are highlighted in the
divisional performance reviews.
Bidvest’s commitment to promoting enterprise development
involves engaging with financial institutions to negotiate
favourable financing terms for small BEE suppliers, providing
BEE suppliers with favourable credit and payment terms,
and offering mentorship and advice to small BEE suppliers
to ensure effective skills transfer and sustainability. The
advanced Bidvest BEE supplier database will assist suppliers
with marketing their goods and services.
CSI spend in South Africa increased significantly to
R25,7 million (2005: R15,9 million).
28
External opinions
INTRODUCTION
It is essential to obtain objective feedback from external parties on Bidvest’s sustainable development performance, to allow
the Group to deepen its understanding of the topic and improve its management of sustainability. Feedback relating to last
year’s stakeholder opinions and the results of a gap analysis conducted by KPMG are provided.
ADDRESSING STAKEHOLDER FEEDBACK
Last year a range of external Bidvest stakeholders were interviewed to obtain their opinions on the Group’s sustainability
performance and to guide Bidvest’s sustainability report content and actions. Feedback is provided:
Strategic sustainability issues
Issues raised Feedback
Bidvest is predominantly recognised for its leadership in economic performance, ethical standards and BEE achievements. Some respondents felt Bidvest is not recognised as a leader in the broader social and environmental arena and related communication.
Bidvest has begun raising the public profile of the Group and its constituent businesses and recently started communicating its social and environmental performance.
The Group and its businesses continue to receive public recognition – the Group as a member of Dow Jones and the JSE sustainability indexes, an employer-of-choice and for supporting the “Hear For Life Trust”, McCarthy for the “Rally to READ” and 3663 for its environmental work and as an employer-of-choice. Bidvest continues to work on improving its overall financial and non-financial performance and communication.
Bidvest should formalise a sustainability strategy, management framework and corresponding sustainability targets.
The chairman’s and chief executive’s reports state our position. Recently drafted Group HIV/Aids and environmental policies and the KPMG sustainability gap analysis have contributed positively.
Clarity was requested on plans for Brian Joffe’s succession. Succession plans are in place at all levels within the Group to cover both long-term natural succession and short-term forced succession which may arise as a result of unexpected occurrences. A restructured and rejuvenated board, newly appointed divisional chief executives and a new generation of managers are an expression of these succession plans.
Bidvest should ensure that BEE progress is effectively communicated.
Bidvest communicated its Charter two years ago. BEE progress is now being reported in greater detail at divisional level, which includes reporting on empowerment ratings achieved by individual businesses.
Individual businesses regularly communicate their empowerment performance to new and existing clients in a bid to secure new contracts.
The Bidvest Group Limited Sustainability report 2006 29
Strategic sustainability issues (continued)
Issues raised Feedback
HIV/Aids is a significant issue for a large employer like Bidvest. Bidvest should communicate the effectiveness of its HIV/Aids programmes and its HIV/Aids investment.
In 2005 Bidvest reported on the HIV/Aids programmes of divisions and businesses. Bidvest has drafted a Group HIV/Aids policy, has commissioned a Group-wide HIV/Aids actuarial prevalence study and an audit of HIV/Aids programmes in a bid to guide a strategy and improve the effectiveness of its engagements. The Group aims to report quantitative data to reflect progress in managing HIV/Aids.
Bidvest’s sustainability reports
Issues raised Feedback
Reports should portray sustainability performance against prior commitments. Where possible, performance should be quantified.
Bidvest continues to improve its data collation and reporting. Once a sustainability strategy and a management framework are in place, Bidvest will be in a better position to make more specific commitments.
Issues important to stakeholders should be discussed. Stakeholder engagements will continue to elicit issues important to a broader set of stakeholders.
A discussion on material issues and how they are being addressed should be included.
Material issues are discussed in divisional reviews.
More sustainability information about Bidvest’s international operations should be provided.
International operations have been included since 2005.
Transformation progress at divisional level and the contribution commercial directors are making to the transformation process should be described.
Transformation progress has been described in more detail at divisional level.
Information on Bidvest’s long-term strategic plans and how the Group intends addressing business challenges should be provided.
This is reported in a variety of manners and forums. Aspects are reported in the annual and sustainability reports. Strategic issues and challenges are reported on in the annual and sustainability reports and are also discussed at regular feedback meetings with shareholders, analysts and interested parties.
Stakeholder engagements
Issues raised Feedback
A broader set of stakeholders, specifically employees, communities, government, socially responsible investors, bankers, suppliers and grassroots shareholders within Dinatla should be engaged.
Bidvest will address these issues in future stakeholder engagements. This year Bidvest commissioned KPMG to undertake a sustainability gap analysis. The analysis will further the debate on what sustainability means for Bidvest.
International stakeholders should be included.
Given the scope and diversity of Bidvest’s multi-faceted operations and international scope, Bidvest should focus its engagement process on stakeholders who are directly associated with the Group’s most material issues.
30
External opinions
FINDINGS FROM KPMG GAP ANALYSIS
While no formal stakeholder engagement was conducted this
year, KPMG was asked in addition to their assurance report
to conduct a high-level sustainability gap analysis against
best practices as represented by the GRI’s sustainability
reporting guidelines. Interviews were conducted with Bidvest
executives, independent non-executive board members and
business managers.
The objective of the gap analysis was to analyse the Group
in a cross-sectional manner and identify specific sustainability
improvement opportunities. This process will contribute
towards the development of a strategic sustainability
framework that is compatible with Bidvest’s structure and
decentralised culture.
Key strengths identified:
4 A corporate governance manual which includes a code of
ethics, the Bidvest Charter and a risk management policy
are in place.
4 Emphasis is placed on legislative compliance.
4 Bidvest’s tangible culture is underpinned by philosophies
of excellence, entrepreneurship, decentralisation, financial
success, pride and doing business “the right way”.
4 The Group demonstrates excellent financial performance
and pockets of other sustainability excellence in areas
ranging from HIV/Aids programmes to CSI projects.
4 Exciting alliances with external stakeholders are evolving
and progressing to address joint sustainability or corporate
social responsibility issues – for instance, Voltex is working
with Eskom on its demand-side energy efficiency project.
4 Business sustainability issues are reviewed as part of the
Group-wide risk management process.
Improvement opportunities identified:
4 A dissemination programme emphasising the value
of Bidvest’s corporate governance manual, code of
ethics and the Bidvest Charter should be arranged to
ensure they are better disseminated and understood
and given prominence throughout all levels of the
Group. This is of particular importance given Bidvest’s
decentralised, entrepreneurial culture and expansion into
overseas markets with divergent ethical and behavioural
expectations.
4 The core relevance of sustainable development to
business success should be better understood, be
they opportunities or risks. Specifically, socio-economic
opportunities in Africa, if recognised through a formalised
sustainability strategy, could enable greater buy-in to the
importance of sustainability at operational level. Bidvest
is a large employer and plays a vital role in the lives of
many people. Bidvest is also a significant provider of
logistics and business services in southern Africa. A better
appreciation of Bidvest’s vital function in the socio-
economic well-being of southern Africa would serve to
improve internal support for sustainability.
4 Knowledge-sharing opportunities would allow best
practice and innovations to be exchanged and alliances to
be formed among Group companies.
4 Formal internal and external stakeholder engagements
and a clearer understanding of sustainability risks are
required to allow businesses to become more pro-active
and better incorporate sustainability issues into the risk
management process.
4 Criteria for evaluating potential acquisitions and current
investments should be widened to include a broader
range of non-financial assessments and be aligned with
Group sustainability objectives.
4 While improvements have been made to the sustainability
data management system, more consistent data definitions
and boundaries need to be agreed and implemented.
Bidvest maintains a commitment to instilling a sustainability
ethos throughout the Group. The KPMG findings are
being debated to agree how best to address the identified
sustainability gaps.
The Bidvest Group Limited Sustainability report 2006 31
“Business sustainability is about finding ongoing improvements in operational efficiencies, ensuring long-term profitability and doing the ‘right thing’.” Brian Joffe, chief executive
32
Corporate Services Products and services
Bid Corporate Services
Provides strategic direction, financial management, marketing, investor relations, corporate communications, corporate finance, investment, property management services and executive training to the Group. The corporate centre adds value by identifying opportunities and implementing Bidvest’s decentralised, entrepreneurial business model.
Bid Property Holdings(Bidprop)
Manages the Group’s property portfolio, provides property management and property development services and gives specialist assistance in areas such as lease scrutiny, lease negotiation and feasibility studies.
Namsov Fishing Enterprise (Namsov)
The premier horse mackerel concessionaire in the Namibian fishing industry, providing a low-cost, high-protein frozen product.
Namibian Sea Products (Namsea)
Has concessions to catch pelagic fish, owning and operating a fleet of pelagic fishing vessels and a fish-processing factory. Products manufactured include canned fish, fishmeal and fish oil.
Ontime Automotive Based in the United Kingdom, provides European-wide logistics solutions for the world’s motor manufacturers. Ontime’s automotive services include parking solutions, breakdown assistance, technical services (new and used car preparation), enclosed transportation, world-wide containerised distribution and open transporter distribution.
Divisional reviews
Corporate Services
Brian JoffeChief executive
Sustainable development at corporate officeSustainable development is about improving operational efficiencies, ensuring long-term profitability and doing the “right thing” in its ever broadening definition. Corporate office guides the overall sustainability process at Bidvest, adding value to the sustainability capabilities at divisional level.
The Group’s corporate office, based in Melrose Arch, Johannesburg, provides strategic direction and services to the Group, houses investments, adding value through identifying opportunities and implementing Bidvest’s decentralised and entrepreneurial business model.
The Bidvest Group Limited Sustainability report 2006 33
Material sustainable development issues
Business units Material issues Mitigating action
Namsov and Namsea Dependence on natural fish resources, which can be affected by natural disasters and poor resource management.
Quota allocations are used by Namibian authorities to manage fish resources. Recent biomass reductions and adverse size distributions may lead to a reduction in quotas. Fishing in other geographical areas and business diversification are being explored.
Namsov HIV/Aids in the workplace and high health-related absenteeism rates.
Comprehensive HIV/Aids programmes are in place. Absenteeism rates are declining.
Namsov Bulk of fish is sold to volatile African markets. Market diversification is being sought by developing new African markets.
Namsov Exchange rate volatility. All products are sold in US dollars.
Forex contracts are used to reduce exposure.
Sustainable development indicator overview
Indicator 2004 2005 2006
Revenue (R’000) ✦ 1 174 266 1 295 421
Trading profit (R’000) ✦ 92 124 108 698
Employees 1 369 1 635 1 705
Total training spend (R’000) 15 202 16 780 20 580
Training spend per employee (R) 11 104 10 263 12 070
Injury rate ✦ ✦ 0,64
Lost day rate ✦ ✦ 0
Work-related fatalities ✦ 0 0
BEE procurement (R’000) 484 143 884 620 620 242
BEE procurement as % of discretionary spend 86,8 87,1 86,7
CSI spend (R’000) 5 642 8 086 12 611
Note: – Indicator notes and definitions are provided in the performance data table.– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Training spend is skewed as it includes Bidvest Academy spend.– Health and safety indicators have changed.– Empowerment data is for South Africa only. ✦ Information not available.
34
Divisional reviews
Corporate Services
ECONOMICS
Corporate Services revenue increased by 10,3% to R1,3 billion
(2005: R1,2 billion). Trading profit increased by 18,0% to
R108,7 million (2005: R92,1 million).
Bidprop: The property portfolio demonstrated solid growth
and Bidprop achieved a competitive return. A severe scarcity
of industrial sites in the main centres is a growing issue for the
property industry. As a result of increasing power shortages in
South Africa, generators are being installed at many “mission
critical” Bidvest buildings at considerable cost to businesses.
Namsov: Aided by prior capital investments, Namsov
recorded highly creditable results, despite pressure on
operating costs attributable to spiralling fuel prices.
Namsea: Shrinking pelagic fish resources was the principal
reason for financial under-performance. Expansion into other
geographical areas and business diversification are being
explored.
Ontime Automotive: Growth was achieved despite a
challenging trading environment and long-term financial
prospects were enhanced following the closure of the French
car transport subsidiary.
MANAGEMENT SYSTEMS AND GOVERNANCE
4 Namsov and Namsea: Comply with International Maritime
Organisation (IMO) standards and procedures and the
IMO’s recently launched Safety Management System,
which covers safety and environmental issues. Fishing
licences are subject to full compliance with IMO standards
and Namibian government requirements. Hazard analysis
critical control point (HACCP) compliance is ensured
through regular inspections.
4 Ontime Automotive: ISO 9001 accredited at all sites and
ISO 14001 accredited at two sites. Other sites are being
ISO 14001 accredited. Environmental, quality, health and
safety and human resources policies and procedures are
being standardised across all businesses and this process is
near completion.
BLACK ECONOMIC EMPOWERMENT
Transformation in the South African businesses is driven
from corporate office, working with divisional executives and
commercial directors to develop appropriate transformation
tools and structures.
Bidvest’s intranet includes a BEE forum which provides useful
BEE-related information to staff. A system is being piloted to
use the intranet to capture and report transformation data.
Namsov is considered to be a transformation leader in the
Namibian fishing industry with a Namibian shareholding of
55,5% and a 34,1% HDI shareholding. Namsov and Namsea
make significant investments in training and developing HDIs
and are meeting the government-set Namibianisation targets
for the fishing industry.
WORKFORCE
Corporate office employs 54 people, most of whom work in
Gauteng, and Bidprop four. Namsov employs 561 staff and
Namsea employs 145 staff in Namibia. Ontime Automotive
employs 941 staff in the United Kingdom.
Namsov has improved its previously high health-related
absenteeism rates (an industry problem) by working with
employees to manage their health.
Ontime Automotive: New employee welfare policies and
procedures have led to improved driver-union relationships
and motivation levels.
Health and safety
4 Bid Corporate Services and Bidprop: Staff work in low-risk
office environments.
4 Bidprop: External consultants conduct regular building site
inspections to ensure compliance with the new Building
Act to ensure developers protect the health and safety of
construction workers.
4 Namsov and Namsea: Comply with all Namibian health
and safety and environmental regulations and are regularly
audited. Ships comply with the IMO’s regulations, relevant
The Bidvest Group Limited Sustainability report 2006 35
leadership (including re-engineering leadership DNA to
generate higher levels of energy and performance), business
strategy, service (customer service, customer orientation and
marketing) and finance.
Two new academies are planned. The top performers
from previous academies are expected to be given the
opportunity to participate in an “advanced” academy and
a sales academy is being developed to help talented young
sales managers enhance their general and industry-specific
sales skills.
The leadership programme is built around a model which
identifies leadership energy as the driver of all system
performance. Leadership energy drives employee energy
which in turn generates customer satisfaction and profitability.
The Bidvest Academy
Continuing to change people’s lives
The Bidvest Academy, now in its fourth year, provides a
platform for developing young executive talent within
the Group. Since March 2003, 368 young managers have
participated in the Academy’s six-month programme, which
provides exposure to Bidvest’s executive management,
Group operating methodologies and divisional business
strategies. The course objective is to not only equip
participants with practical business, team and leadership
skills, but to also enhance employee motivation by
developing inspired leaders. The programme focuses on
leadership behaviour and actions that prompt positive
change in organisational “DNA”. The programme covers
4 Namsov: An HIV/Aids policy and programme are in place.
Crew and land-based staff receive repeated HIV/Aids-
related education and VCT is encouraged. In-house
counselling and company-funded anti-retroviral treatment
(ART) are provided. HIV/Aids remains an ongoing
challenge for Namsov and the industry.
4 Namsea: Awareness training and programmes are in place
and sick employees are provided high-energy foods and
assisted in accessing government VCT and treatment.
ship registries and government regulations. Crew members
receive regular safety and emergency training and regular
health checkups are conducted.
4 Ontime Automotive: Comprehensive health and safety
procedures and structures are in place. Health and safety
training and auditing are outsourced.
HIV/Aids
4 Bid Corporate Services and Bidprop: Staff have received
general HIV/Aids awareness and prevention training.
36
Divisional reviews
Corporate Services
Training
4 Bid Corporate Services and Bidprop: A training committee
reviews and agrees training and education needs in
conjunction with individual staff members.
4 Namsov: Targets have been set to employ a greater
number of Namibians in navigation, engineering and
factory supervisory positions. Namsov is working with
a number of maritime organisations to develop skill-
development programmes and successful mentorship
programmes are in place.
4 Namsea: Sea-going staff receive training as part of a clearly
defined development path. Regular land-based training is
conducted according to individual and company training
needs.
4 Ontime Automotive: Individual training needs are
structured for the benefit of employees and specific
customer requirements. Training programmes support
both personal and professional development along clearly
defined career paths. Performance appraisals are integral
to agreeing training needs.
COMMUNITY
Customers
Namsov and Namsea: Dedicated staff, quality control
mechanisms and independent audits are used to ensure
Namsov and Namsea maintain their reputations for high quality
standards.
Namsov and Namsea are recognised as preferred suppliers
in their markets and customers have open lines to all levels of
Namsov management. Customer relationships are carefully
managed and complaints are dealt with on a case-by-case
basis. Namsov ensures consistent product quality through a
third-party quality assurance process.
Ontime Automotive: Customer complaints are logged and
addressed and surveys conducted in accordance with ISO 9001
requirements.
Community activities
Corporate Services supports a wide range of worthy
causes through the Bidvest Chairman’s Trust Fund and the
Bidvest Dinatla Trust. The Chairman’s Trust Fund disperses
approximately R5,5 million per year to worthy causes, including
support for the aged, orphanages, Soweto street children, the
handicapped, animal welfare, the homeless, various hospitals
and sports development and is one of the principal funders of
the Hear For Life Trust.
The Bidvest Dinatla Trust is in its second year of disbursing
approximately R3 million over three years to provide school
education bursaries for children and dependants of Bidvest
staff earning less than R5 000 a month. Since 2004, 191 students
have been awarded bursaries and a further R10 million has
been allocated to this initiative.
Bidvest contributes R2 million annually to the Business Trust.
Namsov CSI projects are sponsored through dividends
received by The Namsov Community Trust, which is a 10%
shareholder in the company. Since its inception in 1994, the
trust has contributed in excess of N$17 million to a variety of
upliftment and empowerment projects, focusing on education
and community development, in all regions of Namibia.
Ontime Automotive supports a number of local school and
sport initiatives.
ENVIRONMENTAL
4 Bidprop: New buildings are fitted with low-energy light
fittings and bulbs. Existing buildings are retrofitted with
low-energy lights where economically viable. Preference is
given to using local sanitary ware and building materials.
4 Namsov and Namsea: Comply fully with the fishing and
environmental regulations of the Namibian Ministry of
Fisheries and the IMO’s pollution prevention standards.
Vessels carry independent fisheries’ observers who ensure
compliance with fishing and pollution regulations.
The Bidvest Group Limited Sustainability report 2006 37
Ensuring sustainable fish resources
Fish resources are vital to Namibia’s fishing industry and
Namsov and Namsea support the government’s policy of
responsible fishing. In 1993, following independence, the
Namibian Ministry of Fisheries collaborated with industry
to develop and launch a fish resource management
system which has been acclaimed internationally. Regular
scientific surveys are conducted to assess the health of
fish stocks and make recommendations to the ministry on
the use of resources. Total allowable catch quantities and
individual quotas are adjusted and set in consultation with
the industry, which is represented by the Marine Advisory
Council. While this has at times been tough on industry,
the system has proved effective and is supported by the
key players. It is believed that recent shortages of pelagic
fish and variations in fish size are due to environmental
changes, not overfishing.
4 Ontime Automotive: Principal impacts are vehicle-related
noise, exhausts, wastes and spillages. Risks are managed as
part of ISO 14001. An environmental policy is underpinned
by comprehensive management and emergency
procedures ensuring acceptable standards in the areas
of emissions to air, releases to water, waste management,
contamination of land, use of materials and resources
and local environment and community issues. Ongoing
measurements and assessments are used to reprioritise
mitigation activities. Communities are engaged to address
specific concerns.
38
Bidfreight Products and services
BIDFREIGHT TERMINALSBulk ConnectionsIsland View StorageBidfreight Port OperationsRennies Distribution ServicesSACD Freight South African Bulk TerminalsNaval
Operates a wide range of specialist materials handling operations from strategically located facilities in and around the port peripheries, supported by various inland locations throughout southern Africa.
INTERNATIONAL CLEARING AND FORWARDINGSafcor Panalpina Offers specialist international freight management services. The relationship with
Panalpina allows the offering of 400 offices in 74 countries.
MARINE SERVICESRennies Ships AgencyMarine InsuranceFreightbulk
Provides a complete range of commercial, port agency and surveying services at all South African ports to container carriers, non-liner ship owners, charterers and cargo owners.
MANICA AFRICAOffers a full range of freight and marine-related services in southern Africa, having the network and facilities to meet all the logistics requirements of regional agricultural and mineral cargo flows.
Divisional reviews
Bidfreight
Anthony Dawe Chief executive
Sustainable development at BidfreightWhile continued economic growth for shareholders is a key driver, Bidfreight continues to drive transformation across business units to reflect the country’s demographics and to ensure employees are motivated and their skills developed. Attention will focus on improving safety standards to world-class levels, developing skills, ongoing environmental improvements and meaningful CSI projects.
Bidfreight is Africa’s leading private sector freight management company with a presence in every major port in southern Africa. Port operations are reinforced by strong distribution and airfreight capabilities. Bidfreight focuses on terminal operations and logistics in southern Africa, international clearing and freight forwarding and marine services.
The Bidvest Group Limited Sustainability report 2006 39
Material sustainable development issues
Business units Material issues Mitigating action
Southern African Bidfreight business units
Increasing impact of HIV/Aids among the workforce.
Businesses provide HIV/Aids education, awareness training, VCT and treatment or support in accessing treatment.
South African Bidfreight business units
Skills shortages. Staff training, internal promotions and learnerships are used as mitigation strategies.
Most Terminal business units and Manica
Potentially hazardous working environments due to heavy machinery, lifting equipment, overhead cargo and handling of hazardous chemicals and minerals.
Extensive health and safety systems and training programmes, reviewed and audited regularly, are used to minimise risk.
Various Bidfreight business units
Significant water, cleaning agents, coal and fuel consumption.
Ongoing infrastructure upgrades are expected to reduce consumptions per volume of goods traded.
Sustainable development indicator overview
Indicator 2004 2005 2006
Revenue (R’000) ✦ 13 268 320 15 601 922
Trading profit (R’000) ✦ 455 860 536 917
Employees 4 313 5 427 5 334
Total training spend (R’000) 10 065 10 232 12 129
Training spend per employee (R) 2 334 1 885 2 274
% of employees attending HIV/Aids training ✦ ✦ 17
Injury rate ✦ ✦ 2,58
Lost-day rate ✦ ✦ 23,5
Work-related fatalities ✦ 3 5
BEE procurement (R’000) 279 254 346 252 467 184
BEE procurement as % of discretionary spend 14,2 13,0 16,8
CSI spend (R’000) 668 2 134 1 777
Note: – Indicator notes and definitions are provided in the performance data table.
– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed.– Empowerment data is for South Africa only. ✦ Information not available.
40
CHIEF EXECUTIVE’S COMMENT
There has been a focus on investing in health, safety and
environment-enhancing infrastructural improvements, greater
interaction with the community and a drive for improved
customer satisfaction.
Good corporate governance is an ongoing priority. Business
risk committees, as part of the Group’s risk management
process, continue to be set up and all Bidfreight businesses are
expected to have a risk committee by early 2007.
South Africa’s growth is unlikely to slow down before 2010.
Consequently, resources within Bidfreight are being strained.
A challenge is to ensure the availability of skills to meet increased
sales volumes. There is ongoing investment in improving
Bidfreight’s environmental and health and safety performance.
Highlights include:
4 Safcor Panalpina and Rennies Ships Agency achieved an
“AA” empowerment rating and South African Bulk Terminals
an “A” rating.
4 Rennies Ships Agency appointed Bidfreight’s first black
managing director.
4 Bulk Connections and Island View Storage have fast-tracked
environmental improvement projects.
4 All Bidfreight business units have increased staff training and
efforts to fight HIV/Aids.
It is with deep regret that we report five employee fatalities.
These are unrelated and occurred in different businesses to last
year’s fatalities. Full investigations and improvements to health
and safety systems have been or are being undertaken.
Sustainable development is an ongoing journey of learning and
improvement. Bidfreight is focusing on improving safety standards
to world-class, developing skills, identifying environmental
improvements and supporting meaningful CSI projects.
ECONOMICS
Revenue showed satisfactory growth of 17,6% to R15,6 billion
(2005: R13,3 billion) while trading profit increased 17,8% to
R536,9 million (2005: R455,9 million). These figures are in line
with challenging targets and reflect robust efforts to optimise
the opportunity presented by continued growth in global trade
and a largely buoyant national economy.
MANAGEMENT SYSTEMS AND GOVERNANCE
4 Bulk Connections: A quality- and environmental-manager has
been recruited to implement and manage the attainment of
ISO 9001 and ISO 14001 certification.
4 Island View Storage: Sites are ISO 9001 and, other than
Durban, ISO 14001 certified. Durban, following extensive
facility upgrades, will be ISO 14001 certified in 2007. Sites are
OHS Act compliant and certified by independent verification
parties. Durban and Cape Town are NOSA rated and
Richard’s Bay has received its 9th consecutive Noscar rating.
IVS is a signatory to Responsible Care, the global chemical
industry’s voluntary initiative for continuous improvement in
health, safety and environmental performance. An externally
audited register of all applicable legislation is maintained.
Suppliers are audited for compliance with health and safety,
environmental and quality standards.
4 Bidfreight Port Operations: Five out of ten sites are ISO 9001
certified. The majority of sites are NOSA certified. The
Saldanha site is obtaining ISO 14001 certification.
4 Rennies Distribution Services: Several sites are NOSA rated.
The transportation business is SQAS (Safety and Quality
Audit Systems) certified. RDS is a Responsible Care signatory
and is ISO 9001 certified. Regular third-party audits are
undertaken.
4 SACD Freight: Health and safety systems are in place. Some
operations are NOSA rated. Inspections and independent
safety audits are conducted.
Divisional reviews
Bidfreight
The Bidvest Group Limited Sustainability report 2006 41
BLACK ECONOMIC EMPOWERMENT
Excellent transformation progress was achieved, reflected
in the improved empowerment ratings of several Bidfreight
business units. The business managing directors, supported by
key staff members, are responsible for ensuring performance
in line with the Group’s transformation goals and strategies,
and submit quarterly progress reports. Regretfully, Bidfreight’s
commercial director responsible for business development
and transformation employed at the end of 2003, elected to
leave to pursue other business opportunities – an indication of
the difficulty in retaining senior level HDIs. A new commercial
director is being recruited.
Empowerment ratings
Company Rating (2005) Rating (2006)
Bulk Connections BB AA
Island View Storage BB Being re-rated
Bidfreight Port Operations BBB Being re-rated
Rennies Distribution
Services B Being re-rated
SACD Freight BBB Being re-rated
South African Bulk
Terminals B A
Safcor Panalpina BBB AA
Rennies Ships Agency C AA
Marine Insurance ✦ Being rated
Freightbulk ✦ AA
WORKFORCE
Bidfreight’s staff complement shrunk marginally to
5 334 employees, of which 4 230 are employed in South Africa.
Most of the South African employees are based in Durban,
Johannesburg, Cape Town and Richards Bay.
Some businesses conduct employee satisfaction surveys
and some have feedback mechanisms in place for gathering
employee suggestions and opinions.
4 South African Bulk Terminals: Health and safety standards
consistent with the NOSA programme are in place. SHE
managers report to a newly appointed SHEQ manager.
A recently launched communications programme helps to
increase levels of health, safety, environmental and quality
awareness.
4 Naval: Health, safety and environment programmes, which
are audited regularly, have been implemented to meet
customer requirements.
4 Safcor Panalpina: ISO 9001 accredited. A national
occupational health and safety standard, which will include
both internal and third-party audits, has been implemented.
4 Marine Services: ISO 9001 certification is in place for the
Richard’s Bay, Saldanha and Durban sites.
4 Manica Africa: South African sites and the Botswana business
are NOSA rated. In Malawi, HACCP is in place and is
externally audited.
Bidfreight appoints its first black managing director
James Reddy was appointed
managing director – Rennies
Ships Agency with effect
from April 2006. James, who
was the director of the Liner
division for the preceding
three years, has been with
the freight business for 36
years and has worked in
a broad cross-section of
functions.
Six black financial directors appointed – an update
The six black financial directors appointed across
different businesses in 2005 have settled into their roles
and are progressing well. Four of the six have been
appointed to the Bidfreight board.
42
Divisional reviews
Bidfreight
Health and safety
Health and safety issues are dealt with at business unit or
company level and working environments vary. Business units
ensure compliance with the OHS Act. Companies, where health
and safety issues are material due to the nature of the work or
the number of people employed, are highlighted.
4 Bulk Connections: Employees work in a generally hazardous
environment, due to heavy machinery, lifting equipment
and potentially harmful cargo. Employees receive induction
and refresher health and safety training. Two safety
representatives are present on each shift. Daily safety
meetings are held.
4 Island View Storage: Many staff members work with
hazardous materials and employees and contract staff are
equipped with relevant safety, health and environmental
skills. A compliance department ensures necessary standards
are maintained. Richards Bay, employing 61 people, recently
achieved an impressive one million disabling injury-free
hours. Employee health is monitored regularly and a wellness
programme is under review.
4 Bidfreight Port Operations: Employees work in a
hazardous environment. Staff receive general safety, health
and environmental training from accredited external
organisations as well as internal job-specific training.
Each site has a SHE co-ordinator and certified SHE
representatives. Despite these health and safety systems,
three unrelated fatalities took place. One fatality was a
consequence of a third-party’s faulty equipment; legal
action has been taken on behalf of the deceased. The
other two fatalities were as a result of hazards which had
not been highlighted in prior risk assessments. Equipment
and procedures have been modified and risk assessments
updated. An external safety management firm was
contracted to conduct a comprehensive safety management
evaluation, with emphasis on behaviour- and attitude-related
issues.
4 Rennies Distribution Services: Safety, health, environment,
risk and quality are managed as part of an enterprise-wide
risk portfolio. One fatality took place when a driver assisted
in the loading operations at a client’s premises and an
unlicensed forklift operator knocked a cupboard onto the
deceased. A full investigation was conducted and all drivers
have again been instructed not to involve themselves in
client operations.
4 South African Container Depots: Safety officers are
appointed at each branch, monthly safety meetings are held
and safety staff receive ongoing training in accordance with
the OHS Act. Employees exposed to hazardous materials are
medically examined. Operating equipment is load-tested
regularly.
4 South African Bulk Terminals: Both terminals have full-time
safety managers and all NOSA-related safety procedures,
including health and safety training, are followed. Specific
dust explosion precautions are in place. Employee health is
monitored regularly.
4 Naval: Health, safety and environmental policies and
procedures are in place to comply with customer
requirements and minimise unsafe practices.
4 Marine Services: Compliance with the port authorities’ health
and safety requirements is ensured.
4 Manica Africa: Operates in six southern African countries,
where health and safety laws differ considerably. Where
Getting serious about HIV/Aids
Following the approval of IVS’s HIV/Aids policy last year, a
comprehensive support programme has been launched at
the Durban site. This includes awareness and educational
initiatives, such as pamphlets, notices, newsletters,
distribution of condoms, training, and HIV/Aids awareness
communication via line management, peer-education and
nursing staff. Anonymous VCT and treatment are provided
via the company’s on-site clinic, which is staffed by a full-time
nurse and a stand-by doctor. The nurse conducts regular
site visits to help generate awareness and provide general
wellness training. To date four staff members have come
forward for VCT and one staff member is already receiving
ART. The programme will be rolled out to other IVS sites and
will form part of the formal wellness programme.
The Bidvest Group Limited Sustainability report 2006 43
distributed to employees at Bidfreight business units. Despite
good progress, HIV/Aids remains a challenge and requires
ongoing business commitment.
Training
Seven young executives from Bidfreight, identified as potential
future leaders, attended the Bidvest Academy.
4 Bulk Connections: Multi-skilling is encouraged in the
operational division as this increases staff utilisation, job
satisfaction and salaries. Driving and freight-handling and
logistics learnerships are currently being run for 17 learners.
4 Island View Storage: A dedicated training department provides
job-specific training, which includes instruction on working with
hazardous materials. A skills development plan is in place and
training needs are reassessed on an ongoing basis. Financial
assistance is provided for job-related external education.
4 Bidfreight Port Operations: Staff receive regular job-specific
training and additional training is provided based on
six-monthly assessments. A freight-handling learnership
programme is offered to unemployed people. An annual
training-needs analysis forms the basis for a workplace
skills development plan, which is monitored by the industry
training authority, TETA.
4 Rennies Distribution Services: Conducts annual
training-needs assessments for employees. Employees
attend appropriately identified training modules.
Twelve-month learnership programmes for unemployed
people and ABET programmes for staff, are offered. A
training academy has been established.
4 SACD Freight: Departments provide in-house safety and
technical training, which includes refresher training and
certification where necessary. Regular customer awareness
and customer service training is provided. Each financial
year about 30 “Young Turks” participate in a leadership
course for promising management candidates. A
training-needs analysis is conducted regularly.
4 South African Bulk Terminals: Training modules, which are
provided by external training organisations, are adapted
to suit changing training requirements and are based
on an annual training-needs assessment. Six-monthly
performance appraisals are conducted across the board.
possible, Manica applies South African OHS Act norms,
which are of the highest standard. Premises employ
dedicated safety officers to ensure compliance. A motorbike
delivery driver was fatally injured in a road accident. The
accident is being investigated.
HIV/Aids
Progress has been made in the management of HIV/Aids in
the workplace, yet HIV/Aids continues to contribute to staff
absenteeism, productivity and turnover problems. Educational
awareness and, where available, treatment programmes have
been improved and expanded in all Bidfreight businesses. The
programmes, which are typically agreed with shop stewards
and/or unions, include educational activities, awareness
campaigns, peer-group education and counselling, condom
distribution and voluntary counselling and testing (VCT). In
a number of business units anti-retroviral treatment (ART) is
provided through in-house clinics or support is provided in
accessing government-funded treatment. HIV/Aids programmes
increasingly form part of comprehensive basic healthcare
and wellness programmes. More than 68 000 condoms were
Getting serious about HIV/Aids
Following the approval of IVS’s HIV/Aids policy last year, a
comprehensive support programme has been launched at
the Durban site. This includes awareness and educational
initiatives, such as pamphlets, notices, newsletters,
distribution of condoms, training, and HIV/Aids awareness
communication via line management, peer-education and
nursing staff. Anonymous VCT and treatment are provided
via the company’s on-site clinic, which is staffed by a full-time
nurse and a stand-by doctor. The nurse conducts regular
site visits to help generate awareness and provide general
wellness training. To date four staff members have come
forward for VCT and one staff member is already receiving
ART. The programme will be rolled out to other IVS sites and
will form part of the formal wellness programme.
44
Divisional reviews
Bidfreight
4 Naval: Training programmes are identified to suit skills
development needs. The performance appraisal system is
being reviewed.
4 Safcor Panalpina: An individual development programme,
based on a continual learning philosophy, allows employees
to participate in structuring their own training needs.
4 Marine Services: A number of structured training
programmes are in place. Annual performance appraisals
are conducted.
4 Manica Africa: Staff training is conducted on an
as-needs basis. Larger Manica business units use structured
performance appraisal systems for permanent staff.
COMMUNITY
Customers
Most Bidfreight business units have a small number of customers
and generally do not conduct formal customer satisfaction
surveys, but are kept up-to-date on satisfaction levels through
ongoing contact with customers and initiate corrective action as
required. In many cases, managing directors, through personal
interaction, obtain direct customer feedback.
4 Island View Storage: Customer issues are logged in a
ISO 9001-compliant non-conformance system which
identifies root cause, corrective and preventative actions.
4 SACD Freight: Issues and complaints are gathered by
customer-servicing staff and via the company website
forum, which are then investigated and action taken. Branch
marketing departments meet annually with customers to
obtain feedback. Reports and action plans are provided to
management.
4 Safcor Panalpina: External (and internal) questionnaire-based
customer satisfaction surveys are conducted six-monthly.
Results are used to improve service delivery.
4 Marine Services: Port Operations uses customer
questionnaires to enhance service levels.
Community activities
Bidfreight business units provide financial support to numerous
worthy projects within their communities of operation.
There is limited direct involvement from employees in these
projects. While there is no overarching CSI strategy in place
for Bidfreight, CSI projects tend to be health, education or
infrastructure focused. Investments are usually made through
existing projects to ensure funds are used effectively.
4 Bulk Connections: Funds are provided to orphans at Mayville
Secondary School to assist with their feeding, educational,
clothing, medical and administrative needs.
4 Island View Storage: Supports the Community Chest and
CROW, a wildlife rehabilitation project.
4 Bidvest Port Operations: Bursaries are offered to children
of disadvantaged employees. Employees participated in a
Habitat for Humanity house-building project.
4 Rennies Distribution Services: Provides bursaries for children
of HDI employees. Wheelchairs for the underprivileged in
the Western Cape are sponsored.
4 SACD Freight: Supports the repair and maintenance of a
cottage at William Clark’s children’s home. Containers are
sporadically donated to needy communities as infrastructure.
Ad hoc donations are made to needy schools. Tertiary
education grants are given to children of HDI employees.
4 South African Bulk Terminals: Projects include supporting
homes for abused children and Aids orphans, sponsoring
sports teams and distributing blankets.
4 Naval: Bursaries are offered to children of employees.
4 Safcor Panalpina: Provides financial assistance to under-
privileged schools for scholarships and infrastructural needs.
4 Marine Services: Provides financial assistance to Tisand
Technical (Maritime) School. Old computers are given to
needy schools in disadvantaged areas.
4 Manica Africa: Contributions to charitable activities are made
in Malawi and Zimbabwe.
ENVIRONMENTAL
Ongoing infrastructural investment, specifically at Bulk
Connections and Island View Storage, is reducing the
environmental impacts of these business units.
4 Bulk Connections: Customised handling procedures are
developed with expert consultants for environmentally
sensitive products, such as manganese ore and cement clinker.
The Bidvest Group Limited Sustainability report 2006 45
4 Naval: Compliance with Maputo Port Development
Company’s standards is ensured.
4 Safcor Panalpina and Marine Services: Low-impact, office-
based businesses.
4 Manica Africa: Stores and handles minerals and agricultural
products, including cobalt and copper concentrates.
Appropriate handling guidelines are in place. Occasional
third-party environmental audits are conducted.
Bulk Connection – managing runoff and dust
Significant capital investment has been made to modernise
the facilities and address contaminated water runoff and
dust problems. More than 30 000 square metres of quayside
have been paved. This allows dust-laden runoff to be
channelled into settling ponds where the contaminant is
extracted and returned to stockpiles. The recycled water is
used in upgraded dust-suppressing systems to wet roads
and stockpiles. Water requirements for spraying have
consequently decreased significantly. Further improvements,
subject to lease negotiations with the ports authorities, will
include additional quayside paving, spraying systems and
covered storage facilities.
4 Island View Storage: IVS stores a variety of materials,
including hazardous chemicals. IVS ensures compliance
with all appropriate regulatory environmental, quality and
customer codes, and is regularly audited by government
departments, rating agencies, major customers and insurance
underwriters. Ground water and air quality are monitored
regularly and results are shared with local authorities and
work groups. IVS is continually investigating new technologies
to reduce emissions. IVS interacts directly with community
members and organisations that have concerns about
emissions. IVS participated in setting up and funding an
ongoing air quality testing system. IVS is on track with its
ten-year infrastructure improvement plan, which was initiated
in 2000. Waste reduction efforts are in place and about 50% of
waste generated is reclaimed. The remainder is disposed of
in compliance with the Environment Conservation Act.
4 Bidfreight Port Operations: Limited amounts of waste timber,
paper, steel and oil are generated, which are mostly recycled.
Disposal certification is obtained where appropriate. In
Saldanha, where lead and copper concentrates are handled,
contamination prevention systems, such as special offloading
procedures, wash bays, sump filters and industrial vacuum
cleaning, are in place. Captured concentrate is returned to
the mines. A recent externally conducted environmental
assessment identified only minor areas for improvement.
4 Rennies Distribution Services: All substances, hazardous
or not, are handled and stored in keeping with legislative,
NOSA, SQAS and Responsible Care requirements.
Environmental impact assessments are carried out by
authorised inspection authorities.
4 SACD Freight: Receipt of hazardous substances is conducted
under strict supervision of qualified staff or contractors.
Hazardous waste is disposed of by recognised third parties;
disposal certificates are received. Regular site and water
audits are conducted by municipalities to ensure compliance.
The use of biodegradable substances is pursued.
4 South African Bulk Terminals: Products handled are
biodegradable, yet dust can be a problem. Dust suppression
systems are in place and a third-party monitors dust emission
levels. Appropriate runoff and containment precautions are
taken.
46
Bidserv Products and services
CLEANING SERVICESPrestige Group, TMS Group Outsourced contract cleaning and other property-related services to various industries.
LAUNDRY SERVICESBoston Launderers, First Garment Rental, Montana Laundries
Takes care of all laundry needs of corporate clients, from uniforms to bedroom and table linen.
STEINER GROUPSteiner Hygiene, Puréau Fresh Water Company, Execuflora, Rochester Midlands Industries, Steiner Environmental Solutions
Everything hygiene-related away from home. Washroom dispensers and consumables, deep cleaning and pest control, chemical manufacture, indoor plants and purified drinking water.
BIDSERV INDUSTRIAL PRODUCTSG. Fox & Company, Commercial Sundries, Clockwork Clothing, Giant Clothing
Manufacturers and distributors of a complete range of industrial supplies including workwear, safety equipment, wiping cloths, cleaning chemicals and paper products.
GREEN SERVICESTop Turf Group The provision of contracting, maintenance and irrigation landscaping services to the
commercial, resort, industrial, sports turf and golf course markets.
AVIATION SERVICESBidair Services, Airport Handling Services, Express Air Services, Aviation Security International
Provides the support services required by commercial aviation, including aircraft cabin cleaning, fixed base operator services, aviation security and cargo management.
BIDRISK SOLUTIONSMagnum Shield, Vericon Outsourcing, ProRisk Solutions
Uses analytical methodologies to offer risk identification and management solutions to businesses.
Divisional reviews
Bidserv
Lindsay Ralphs Chief executive
Sustainable development at BidservBidserv businesses tend to operate in competitive service sectors, characterised by low profit margins and low barriers to entry. Employees stand at the centre of this sustainability challenge. Well-trained, healthy, motivated employees allow businesses to maintain competitiveness by offering high levels of service quality, thus ensuring customer satisfaction and retention. Developing and nurturing employees is paramount for Bidserv businesses.
Bidserv provides South Africa‘s most extensive range of corporate outsourced services. Its brands operate across commerce and industry. Activities include cleaning and specialised industrial cleaning operations, hygiene, laundry and janitorial services, corporate travel and travel-related banking, aviation services and airport handling, office automation, interior and exterior landscaping and electronic procurement.
The Bidvest Group Limited Sustainability report 2006 47
Bidserv Products and services
INTERNATIONAL PAYMENT SYSTEMS
Offers sophisticated and reliable payment services to organisations with high levels of financial transactions.
BUSINESS SOLUTIONS AND GROUP PROCUREMENTmymarket.com Deploys world-leading technologies to offer business-to-business online and
conventional procurement solutions.
OFFICE AUTOMATIONMinolta South Africa, Océ Importers and distributors of printers, fax machines and multi-functional office devices.
BIDTRAVEL SERVICESCarlson Wagonlit Travel, Connex Travel, Ebony Travel, Harvey World Travel (SA), Incentag New Directions, Premier Club Airport Lounges, Prestige Travel, Rennies Travel, Rennies Travel Namibia, Rennies Travel and Foreign Exchange Malawi, Rennies Travel Zimbabwe, Travel Connections, Travelwise Botswana, World Travel
Provides travel management services to corporate and leisure clients through its extensive local, regional and international networks.
BANKING SERVICESRennies Bank Rennies Bank offers a broad range of banking-related services to corporate clients.
These services include trade and other related foreign exchange transactions.
FOREIGN EXCHANGE SERVICESMaster Currency, Bureau de Change
Rennies Foreign Exchange, a division of Rennies Bank, is recognised as southern Africa’s foremost provider of specialised foreign exchange services, operating through 68 strategically located Bureaux de Change throughout the sub-continent.
Material sustainable development issues
Business units Material issues Mitigating action
Most business units Management of HIV/Aids in the workplace. Most Bidserv companies have awareness programmes in place and are expanding these.
Most business units Many businesses are large employers of unskilled and semi-skilled staff and are exposed to the effects of strike action.
Businesses ensure good employee relationships and offer market-related remuneration packages and, in some cases, assist the Department of Labour to enforce minimum wage standards elsewhere in the industry.
Cleaning Services, Laundry Services, Steiner Group, Bidserv Industrial Products, Green Services, Aviation Services
Safe-use and storage of potentially hazardous cleaning and horticultural chemicals.
Chemicals are obtained from reputable, certified suppliers and, where applicable, products are purchased according to industry-specific guidelines and requirements. Staff working with chemicals receive relevant product, health and safety training.
Laundries, TMS Group Significant water, coal and electricity consumption.
Ongoing capital investments ensure modern equipment and procedures minimise consumption.
Aviation Services Aviation Services’ licence to operate is subject to meeting Airports Company South Africa (ACSA) and airline service expectations.
Aviation Services ensures good airline and ACSA relationships by providing high levels of service quality.
Banking Services and Foreign Exchange Services
Safety of Bureau de change staff and safeguarding Rennies Bank assets.
Secure facilities, security staff and state-of-the-art security measures are used to protect staff and assets.
48
CHIEF EXECUTIVE’S COMMENT
With 54 646 employees, Bidserv is the largest Bidvest
employer. The majority of employees are unskilled and semi-
skilled. A number of businesses have been relocated to the
Bidserv division, thereby expanding the portfolio of services
offered to corporate clients.
The security industry strikes had a negative effect on
Magnum Shield and its employees, many of whom suffered
intimidation, injury and property devastation. To support
employees who lost property, the company initiated a
collection drive to provide basic essentials such as blankets,
clothing and food. Tragically four security guards lost their
lives while travelling to work as a result of strike-related
intimidation. These guards had provident funds which
ensured death benefits for their next-of-kin. The strike
resulted in the loss of a number of business contracts, which
necessitated about 200 retrenchments.
Regretfully, the Prestige Group is now being affected by
wage-related cleaning industry strikes which started on
August 1 2006. About 20% of employees, who are members
of the 16 participating unions, are participating in the strikes.
A recent court interdict was obtained to help control violence
and intimidation.
It is a considerable disappointment and regret that three
fatalities occurred at work. A Magnum Shield security guard
was shot during an armed robbery and, in a surprising incident,
an Express Air Services manager was shot by an employee who
then committed suicide immediately following a disciplinary
hearing. Full investigations have or are being undertaken.
Businesses provide training, provide trauma councelling and
install appropriate equipment to minimise the risk of injury and
fatalities.
The most significant challenge going forward is the
implementation of comprehensive and effective HIV/Aids
programmes across all businesses. Several businesses are
reporting increases in what are thought to be Aids-related
deaths and absenteeism.
An ongoing challenge remains the development of HDIs to
middle-management level.
Divisional reviews
Bidserv
Sustainable development indicator overview
Indicator 2004 2005 2006
Revenue (R’000) ✦ 4 172 336 4 587 817Trading profit (R’000) ✦ 466 865 554 709Employees 45 439 54 113 54 646Total training spend (R’000) 16 048 30 311 26 346Training spend per employee (R) 353 560 482% of employees attending HIV/Aids training ✦ ✦ 11Injury rate ✦ ✦ 1,64Lost-day rate ✦ ✦ 59,5Work-related fatalities ✦ 3 3BEE procurement (R’000)* 2 269 571 2 265 931 366 275BEE procurement as % of discretionary spend 50,2 48,7 19,4CSI spend (R’000) 1 010 1 709 5 529
Note: – Indicator notes and definitions are provided in the performance data table.– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed.– Empowerment data is for South Africa only. ✦ Information not available. * Preferential procurement continues to increase. The decrease in rand value for 2006 is a result in change in definition between 2005 and 2006.
The Bidvest Group Limited Sustainability report 2006 49
For the upcoming year the emphasis will continue on
HIV/Aids, training and skills development and upgrading
technology and equipment used in service delivery.
A number of businesses have, or are developing,
environmental policies.
ECONOMICS
Bidserv’s structure has been widened to include office
automation, procurement services and the banking operations
and travel brands of what was previously Rennies Financial
Services. No other provider of outsourced business-to-business
services offers as extensive a range. Revenue increased by
10,0% to R4,6 billion (2005: R4,2 billion) while trading profit rose
18,8% to R554,7 million (2005: R466,9 million). These results
were largely driven by organic growth.
MANAGEMENT SYSTEMS AND GOVERNANCE
4 Prestige Group: ISO 9001 accredited. Chemicals are
only purchased from South African Bureau of Standards
and Chemical Allied and Industries Association (CAIA)
registered suppliers and must be accompanied by a
Material Safety Data Sheet providing product handling
and safety information.
4 TMS Group: ISO 9000 and NOSA accredited.
4 Laundry Services: Working towards compliance with
SABS 0146 quality, processing and safety guidelines for the
laundry industry.
4 Steiner Group: Steiner Hygiene is ISO 9001 accredited.
4 Green Services: A sustainability policy, covering economic,
social and environmental issues has been developed.
4 Aviation Services: Complies with ACSA’s Airside Quality
Management System, which specifies operational, health,
safety and security standards.
4 Magnum Shield: ISO 9001 accredited and complies
with the Security Industry Regulatory Authority (SIRA)
guidelines, which regulate and inspect operational
environment, wages, staff registration, work hours and
training.
4 BidTravel Services: Member of the Association of Southern
African Travel Agents and is bound by its code of conduct.
4 Banking Services and Foreign Exchange Services: Rennies
Bank adheres to the Banks-Act and reports regularly to the
South African Reserve Bank’s Bank Supervision Department.
BLACK ECONOMIC EMPOWERMENT
Bidserv businesses have shown significant progress across
most transformation indicators. Improved performance is
reflected in the upgrading of a number of empowerment
ratings. The commercial director, Lionel Jacobs, will focus on
assisting a number of businesses that have not performed
so well, specifically in the areas of executive management
representation and skills development.
Most business units continue to establish black-owned
enterprises and TMS, for example, is assisting employees to
set up businesses to manage the company’s stock systems
and quality management system. Minolta South Africa has
helped establish four BEE dealers and continues to nurture
these businesses.
BidTravel Services is a signatory to the tourism industry charter,
Banking Services and Foreign Exchange Services to the
financial services charter. Aviation Services will be a signatory
to the aviation industry charter on completion.
TMS Group develops skills to build own trucks
Following a feasibility study, a decision was made against
importing vacuum trucks and to rather invest in the skills
and facilities needed to self-build vacuum trucks. In 2005,
the first truck was completed successfully, with another
20 trucks to be completed within two years. The project is
to be expanded to include gully sucker trucks, which are
used for high pressure cleaning of sewer and drainage
systems. A team of specialists is responsible for researching
and developing equipment innovations. TMS has also
established a know-how exchange partnership with a
leading industrial cleaning company in the Netherlands.
50
A number of Bidserv business units have received
empowerment ratings. Others continue the process of
obtaining ratings.
Empowerment ratings
Company Rating (2005) Rating (2006)
Prestige Group A A
TMS Group A A
Steiner (including
Puréau)
BBB A
Top Turf ✦ A
Magnum Shield
(including Vericon)
A A
Minolta SA BBB AA
Connex Travel A A
Concorde Travel BBB BBB
Ebony ✦ BBB
Master Currency BBB AA
Prestige Travel ✦ BBB
Rennies Travel A A
Travel Connections BB BB
Uniworld Travel B B
World Travel BB BB
WORKFORCE
Bidserv’s staff complement grew to 54 646 as a result of
organic growth, acquisitions and the integration of the
office automation, travel, banking and foreign exchange
businesses. The largest employers are the Prestige Group,
Magnum Shield and the TMS Group. Staff management
issues remain challenging due to the highly dispersed nature
of most business operations.
The Prestige Group, Magnum Shield and a number of other
Bidserv businesses are labour-intensive operations and are
employers of significant numbers of unskilled and semi-
skilled employees.
Most business units conduct performance appraisals
from supervisory staff level upwards, while some conduct
appraisals across all levels. Appraisals often form an
integral part of skills development and needs analysis
programmes. A number of business units are in the process
of implementing standardised appraisal processes. Many
use yearly awards and other incentives to reward the most
dedicated employees.
Some businesses conduct employee satisfaction surveys and
some have feedback mechanisms for gathering employee
suggestions and opinions. The Prestige Group completed
a successful pilot project measuring employee satisfaction
levels, which will be rolled out to other Prestige businesses.
Health and safety
Health and safety issues are dealt with at business unit level,
that have varying working environments. Business units
ensure compliance with the OHS Act. Companies where
health and safety issues are material, due to the nature of the
work or the number of people employed, are highlighted.
Low-risk, office-based businesses are not discussed.
4 Prestige Group: Cleaning staff receive NOSA-approved
safety awareness training. Rope-access staff receive Rope
Access and Fall Arrest Association (RAPAA) approved and
certified training. A full-time safety co-ordinator ensures
that risk assessments and incident investigations are
conducted and that appropriate safety plans are in place.
4 TMS Group: Some cleaning activities are conducted in
hazardous industrial environments, such as petro-chemical
plants, and employees work with dangerous equipment
and materials, such as ultra-high-pressure water cleaners
and toxic cleaning agents. TMS has a dedicated safety
division, which ensures that staff receive safety training
and that specialised equipment is used in accordance
with NOSA and industrial cleaning safety procedures. At
least one safety representative is present at each TMS
site. Senior safety staff are NOSA SAMTRAC (safety
management training course) accredited.
4 Laundry Services: Regular health and safety audits are
undertaken.
4 Steiner Group: Health and safety training is provided
and regular building and equipment inspections are
conducted. All employees handling dangerous goods
will be enrolled in a newly restructured “Handling of
Dangerous Goods” training course which is accredited by
the Transport Education Training Authority (TETA).
4 Bidserv Industrial Products: A dedicated chemist is
responsible for the safe management of chemicals
and employees working with chemicals receive special
equipment and training.
Divisional reviews
Bidserv
The Bidvest Group Limited Sustainability report 2006 51
4 Green Services: Health and safety training is integrated
into basic work-related training. Employees working with
pesticides and herbicides are pest control officer certified.
4 Aviation Services: Comply with OHS Act and staff are
trained to meet ACSA’s safety and security requirements.
4 Magnum Shield: Staff receive extensive security and
health and safety-related training, which is SIRA approved.
Refresher training is conducted annually. Contract staff
will, where applicable, receive additional client- and site-
specific health and safety training.
4 Rennies Bank and Foreign Exchange Services: Bureaux de
Change staff, who are at risk of armed robberies, receive
specialised training on appropriate conduct during a
potential robbery and are protected through state-of-the-
art security facilities and measures. Trauma counselling is
available for staff who have experienced an armed robbery.
HIV/Aids
A number of Bidserv business units have an HIV/Aids policy
or are developing one. Most provide basic HIV/Aids-related
education and awareness training. A few business units
have developed comprehensive programmes, often as part
of broader wellness or disease management programmes,
which include voluntary awareness and education activities,
distribution of free condoms, VCT and treatment support.
The cost to business of HIV/Aids is increasingly being felt.
A number of Bidserv businesses have reported suspected
HIV/Aids-related deaths and small increases in sick leave
and absenteeism rates, which are believed to be HIV/Aids-
related. At one Prestige Group site, surveys indicate a 30%
HIV-positive rate.
The Prestige Group, the largest Bidserv employer with
30 202 staff, offers yearly HIV/Aids awareness training in
conjunction with GlaxoSmithKline and has launched a
condom distribution and awareness programme. Assistance
with accessing external counselling and public treatment is
provided.
Magnum Shield, Bidserv’s second largest employer with
10 988 staff, provides HIV/Aids awareness training as part
of its induction training. A more comprehensive, dedicated
awareness and prevention training scheme is being
developed.
Training
Bidserv is a people-intensive service business. Well-trained,
motivated employees are the mainstay of the business,
providing excellent customer service.
4 Prestige Group: Staff receive at least 16 hours of
operational and health and safety training per year.
Prestige participates in the services SETA committee.
Prestige has over the last five years exceeded the skills
development plan targets. An NQF level 3 learnership
for 100 supervisory staff has been launched. Employees
conducting high-rise window and rope-access cleaning,
receive specialised, certified training.
4 TMS Group: Industrial cleaning staff receive equipment
operating and safety training as well as client-specific
safety training. Contract staff receive training by TMS
Group as well as clients.
4 Laundry Services: Staff receive on-the-job equipment-
specific training, which includes health and safety
Project Promote – preventing HIV/Aids Prestige Cleaning, together with the Department of Health
and Gen-Lem Projects, has launched a condom distribution
initiative, called Project Promote. During the first month
100 000 condoms were distributed through Prestige-
managed restrooms at airports and universities. This will
be expanded to other restrooms, such as at shopping
malls and participating companies and it is expected that
two million condoms will be distributed in the first year.
Cleaning staff are encouraged to distribute condoms
in their communities. About 100 employees, who are
responsible for distributing condoms, have been trained
as peer HIV/Aids counsellors. SABCOHA will evaluate this
project after 18 months.
52
components. Boiler operators are externally trained and
certificated. Staff members handling cleaning chemicals
receive “correct usage” training from suppliers.
4 Steiner Group: A training department has been
established and training programmes, skills needs
assessments and development plans are being
standardised across the Steiner Group. A leadership
development programme and an employee educational
assistance programme are offered.
4 Bidserv Industrial Products: A skills committee has been
established to re-evaluate training needs and standardise
training programmes for the different businesses.
4 Green Services: Labourers receive theoretical and on-
the-job training. Landscaping staff receive South African
Qualifications’ Authority (SAQA) certified landscaping training.
A new employee development system is being implemented.
4 Aviation Services: Staff receive job-specific training as well as
repeated ACSA-approved safety and security-related training.
4 Magnum Shield: Security staff receive SIRA-approved training.
Managers receive suitable in-house and external training.
4 Bidtravel Services: Training is provided based on
development needs determined in conjunction with
employees as part of their regular performance
assessments. Training is focused on customer service skills
and team development.
4 Banking Services and Foreign Exchange Services: The
businesses work with employees to develop career paths.
Performance management systems assist in determining
learning and development needs.
COMMUNITY
Customers
Most Bidserv business units do not conduct formal customer
satisfaction surveys, but tend to obtain feedback during
regular interactions with customers. In several businesses,
including Magnum Shield and TMS Group, client managers
routinely record and act on client complaints. Some
companies, such as the Steiner Group, are implementing
structured customer feedback mechanisms. At the Prestige
Group, dedicated client relations staff log complaints as part
of its ISO 9001 system and ensure complaints are addressed.
Prestige Cleaning, in conjunction with the National Contract
Cleaning Association (NCCA), is working on improving the
image of the cleaning industry by initiating a classification
system where NCCA-registered cleaning companies are
classified according to their quality-of-service levels. Levels
are assessed according to four service aspects, namely client
satisfaction, employee satisfaction and motivation, supplier
quality standards and quality of internal management
systems. This initiative has been successfully piloted and is
envisaged to be implemented across the industry. The NCCA
is responsible for setting cleaning industry standards relating
to safety, labour standards and use of chemicals.
Community activities
Involvement in community projects varies between business
units, with some being peripherally and others significantly
involved in community projects. Some of the more
comprehensive initiatives are listed.
4 Prestige Group: Supports a variety of projects, including the
CANSA Shavathon and the Thembisa Hospital Aids clinic.4 Bidserv Industrial Products: Supports a number of charities
through financial and in-kind donations.
4 Green Services: Supports the Sun City soccer league,
donates materials and time to local charities and
constructs landscapes, such as playgrounds, in
disadvantaged communities.
4 Aviation Services: Supports the Kids Haven for abused
children in Benoni.
4 Magnum Shield: Donates used uniforms to the Salvation
Army.
4 Banking Services and Foreign Exchange Services: Support
the World Wildlife Fund, the Endangered Wildlife Trust
and the SA Police Service Hillbrow station and victims unit.
HyGienie’s educational reach
Steiner’s HyGienie educational road show has this year
reached about 500 000 children teaching them about
personal hygiene.
The HyGienie road show is being extended to include
a new campaign called “Pride of my School”. This
complementary initiative aims to educate scholars,
parent-teacher associations and school authorities in
disadvantaged areas about the importance of maintaining
bathroom hygiene at their schools. The project has been
piloted at an initial four schools and is now being rolled
out to about 100 schools across South Africa.
Divisional reviews
Bidserv
The Bidvest Group Limited Sustainability report 2006 53
ENVIRONMENTAL
A number of Bidserv business units have environmental
policies in place, typically those that work with cleaning
agents and chemicals. Higher-impact businesses are
discussed.
4 Prestige Group: Complies with NCCA industry guidelines
meeting international standards on the use of SABS-
approved cleaning chemicals.
4 TMS Group: An environmental policy is in place. The
company works with and transports hazardous chemicals,
the use of which is strictly controlled. Hazardous
compounds are disposed of at approved dumping sites.
Old oil is sent for recycling.
4 Laundry Services: Laundry companies, which are large
consumers of water, power and chemicals, are working
towards compliance with SABS 0146 laundry industry
guidelines. The laundries measure water, electricity, coal
and cleaning-agent consumption. Boston Launderers
continues to invest significant capital in advanced
continuous batch washers, which require about 67% less
water per weight of washing than conventional washer
extractors. There are also significant detergent and
electricity savings.
4 Steiner Group: An environmental management
programme has been developed for Steiner businesses
which involves the review and enhancement of
environmental management processes.4 Bidserv Industrial Products: A dedicated chemist ensures
quality control and the safe storage, handling and
processing of chemicals. Where necessary, SABS standards
and certification are in place.
4 Green Services: Various agricultural chemicals are used.
These are sourced from registered suppliers and conform
to SABS standards. Grey-water irrigation systems are used
where possible. The company recently won the Landscape
Irrigation Association (LIA) Environmental Management
Trophy for an innovative water-conserving astroturf hockey
field irrigation system. 4 Aviation Services: Cleaning chemicals must meet ACSA,
airline, airline manufacturer and NCCA requirements.
Biodegradable cleaning chemicals are used at all airports.
Suppliers are assessed for environmental compliance.
4 Office Automation: Products comply with United States
and European Union environmental and energy standards.
Most product components are ozone friendly and recycled.
54
Divisional reviews
Bidvest Europe
Bidvest Europe Products and services
3663 FIRST FOR FOODSERVICE – UNITED KINGDOM
A leading United Kingdom foodservice product distributor which is made up of two divisions:4 Trading (Multi-Temperature and Frozen)4 Logistics (Central Distribution and Ministry of Defence)
DELI XL – BELGIUM Supplies a wide range of fresh and frozen food items to institutions such as hospitals and company canteens, as well as to contract caterers and restaurants.
DELI XL – NETHERLANDS Supplies a wide range of fresh and frozen food items to institutions such as hospitals and company canteens, as well as to contract caterers and restaurants.
HORECA TRADE – UNITED ARAB EMIRATES
Pioneered the one-stop-shop approach in the United Arab Emirates by offering a product range of more than 3 500 items, including exclusive big-name brands.
Material sustainable development issues
Material issues Mitigating action
Managing and minimising environmental impacts, including resource consumption, water and noise pollution.
3663 uses its environmental policy and EMS to guide a process of continual improvement. Deli XL Belgium and Netherlands ensure compliance with all regulations.
Compliance with tightening environmental legislation, regulations and risk management.
Sites are regularly informed of changes in legislation and regulation. Risk management processes are in place.
Compliance with health and safety legislation, regulations and associated requirements.
Sites are regularly informed of changes in health and safety legislation and regulation and are audited. Regular meetings are held with authorities responsible for health and safety to ensure compliance.
Provision of a comprehensive range of health and safety training programmes.
Health and safety training programmes are continually updated and improved. Evidence of pro-activity in health and safety in the UK is demonstrated by 3663’s Lead Authority Partnership with a local authority. These partnerships aid government bodies in ensuring a consistent approach to health and safety management.
Fred Barnes Chief executive
Sustainable development at Bidvest EuropeTo Bidvest Europe, sustainability means continually evolving business practices based on Bidvest Europe’s people, products and environmental management vision and meeting or exceeding broader stakeholder needs.
Bidvest Europe is western Europe’s leading foodservice company. Its British businesses have good claim to be UK market leaders. As a broadline distributor, Bidvest Europe supplies ingredients, finished products and equipment to the catering and hospitality industries.
Bidvest Europe
The Bidvest Group Limited Sustainability report 2006 55
Sustainable development indicator overview
Indicator 2004 2005 2006
Revenue (R’000) ✦ 14 836 523 22 132 036
Trading profit (R’000) ✦ 532 753 651 223
Employees 5 647 5 459 8 458
Total training spend (R’000) ✦ 7 184 12 738
Training spend per employee (R) ✦ 1 316 1 506
Injury rate ✦ ✦ 11,57
Lost-day rate ✦ ✦ 186,1
Work-related fatalities ✦ 0 0
CSI spend (R’000) ✦ 530 1 714
Electricity – fossil fuel (kWh) ✦ ✦ 45 914 714
Electricity – nuclear (kWh) ✦ ✦ 5 700 118
Electricity – solar (kWh) ✦ ✦ 366 063
Electricity – wind (kWh) ✦ ✦ 313 768
Water recycled (m3) ✦ ✦ 71 630
Note: – Indicator notes and definitions are provided in the performance data table.
– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed. ✦ Information not available.
CHIEF EXECUTIVE’S COMMENT3663 has invested considerable resources in social and
environmental aspects of its businesses which has resulted
in 3663 becoming a friendlier, greener and more caring
business. 3663 is recognised as a sustainability leader in
the UK foodservices industry and has received a number
of awards, the most recent being this year’s Caterer and
Hotelkeeper’s supply category “Best places to work in
hospitality” award.
Three businesses have been acquired: Deli XL Belgium,
Deli XL Netherlands and Horeca Trade United Arab Emirates.
Businesses are managed independently and benefit from
learning about each other’s social and environmental best
practices. Deli XL Belgium and Deli XL Netherlands have high
social and environmental standards. Horeca UAE is a small
start-up business with 40 employees undergoing significant
change and will be discussed in future reports.
In response to growing market pressures to conform to
social and environmental expectations, 3663 has established
a sustainability board committee. The board’s objective is
to ensure that 3663’s Environment – People – Product vision
is operationalised and that all businesses continue to take a
proactive approach to sustainability issues. Similar
committees will be set up for the newly acquired businesses
and they will progressively adopt a similar sustainability
vision to that adopted by 3663.
Two specific challenges have to be addressed. There is
pressure to meet and where possible exceed tightening
sustainability expectations and regulations; and 3663 has
to ensure a cross-pollination of sustainability-related best
practices among Bidvest Europe businesses.
The focus is for 3663 to comply with the UK’s “Food Industry
Sustainability Strategy” (FISS) recommendations, recently
56
Divisional reviews
Bidvest Europe
published by the UK government’s Department of the
Environment Food and Rural Affairs. The FISS document
outlines the food industry’s role in creating sustainable
strategies that deal with the issues of energy, carbon
emissions, water, waste, transportation, corporate social
responsibility, ethical trading, workforce and communities. In
the government sector, sustainable procurement practices
are also an increasing priority. 3663 is well-positioned to meet
these growing expectations.
ECONOMICSBidvest Europe achieved pleasing growth in its mature
markets, driven largely by the full-year effect of earlier
new business gains and success in retaining large
national accounts. Revenue rose 50,3% to £1,9 billion
(2005: £1,3 billion) while trading profit (up by 23,2%) was
£56,9 million (2005: £46,2 million).
MANAGEMENT SYSTEMS AND GOVERNANCEBidvest Europe businesses operate in an intensely regulated
environment, with local and national social, quality and
environmental standards supplemented by an additional
tier of European regulations. Compliance with legislation is
monitored through internal audit processes.
3663’s EMS was certified in 2003 to the environmental
management standard ISO 14001, in the Food Products,
3663’s local sourcing initiative provides economic, social
and environmental benefits
3663 launched an initiative two years ago to purchase
products locally. The aim was to realise social, economic and
environmental benefits through supporting and stimulating
local business and employment, and to reduce food miles
by reducing the logistics and energy required to store and
supply food products. A growing proportion of locally
sourced products is being included in 3663’s product range,
and as a result over 100 small producers have been able to
access new local markets. While establishing the mechanisms
to make this possible has been a technical and logistical
challenge, this initiative now includes over 500 products and
covers about half of the UK. The remainder of the UK will be
included by December 2007.
Beverages and Tobacco sector. The corporate certificate
for all sites represents a first for a UK company in the food
distribution industry. An independent monitoring company
carries out EMS audits, conducting surveillance visits to
approximately one-third of the locations each year to ensure
compliance with standards and continual improvement.
A health and safety-related risk assessment pack and an
operations standards diary are issued to all sites on an
annual basis to ensure compliance with health and safety,
and food safety standards.
3663 requests all own-brand suppliers to confirm that they
comply with the general labour practice principles specified
by the Ethical Trading Initiative (ETI). 3663 is certified at a
“high level” to the UK Accreditation Service’s food safety,
wholesale storage and distribution standard.
Deli XL Belgium and Deli XL Netherlands are HACCP
certified and comply with strict national and EU health and
safety and environmental regulations. Deli XL Belgium has
begun preparing for ISO 22000 certification, the recently
launched food safety management system for the food chain.
Certification is expected to be achieved in about 18 months.
To enhance product and service quality, Deli XL Netherlands
is adopting 3663’s advanced total quality management
processes.
The Bidvest Group Limited Sustainability report 2006 57
delivery vehicles) are maintained in a safe condition. The
commitment to safety is underpinned by a comprehensive
range of training programmes including manual handling,
display-screen equipment assessment, racking repair and
inspection and general health and safety practice.
3663’s accident reporting process has been enhanced, relying
on a more robust and streamlined system and there has been
a steady drop in the number of reported accidents over the
last three years.
Deli XL Belgium and Deli XL Netherlands employ dedicated
staff members trained to ensure compliance with all relevant
health and safety requirements.
Training3663, Deli XL Belgium and Deli XL Netherlands maintain a
high level of training investment. Company training needs are
matched to business development plans. 3663 and Deli XL
Netherlands have structured performance appraisal systems
in place for all employees. Deli XL Belgium is putting such
systems in place. Training programmes include mentoring
programmes, secondments, coaching and involvement in
improvement groups.
In some areas, labour shortages create recruitment
challenges. This is addressed through training, offering
competitive salaries and maintaining or achieving employer-
of-choice status.
COMMUNITYCustomersHigh levels of customer retention are a function of
consistently high service quality and form part of 3663’s “First
for Service” vision. 3663 employees are among the best
trained and motivated in the industry and give the business
a competitive advantage. The 3663 service commitment
was highlighted by awards in several quality programmes.
3663 was recognised by Yum! as best European supplier.
Customer complaints are logged and used to improve service
delivery. Complaints have declined in the UK due to a more
rigorous application of operational standards, which led to
product quality improvements. 3663 and Deli XL Netherlands
conduct regular customer satisfaction surveys while Deli XL
Belgium will soon start conducting regular customer
satisfaction surveys.
WORKFORCEBidvest Europe employs 8 458 people: 6 306 in the UK,
1 750 in the Netherlands, 362 in Belgium and 40 in the UAE.
3663 has developed a comprehensive people strategy, “First
for People”, through which the company is establishing itself
as an employer of choice. This strategy and similar practices
are already in place or are progressively being adopted by
the three new businesses.
In addition to training and development opportunities,
the businesses offer good salaries and comprehensive
benefits packages. New procedures and practices relating
to maternity, adoption, paternity and flexible working have
been introduced. Non-discrimination policies and grievance
procedures are in place.
At 3663 and Deli XL Netherlands, the development of all
employees is managed by means of personal development
plans, which are generated to suit individual and business
needs and form part of a standardised performance appraisal
process. Deli XL Belgium is implementing such processes.
Workplace satisfaction at 3663 is measured in an annual
“People Survey” that measures employee perceptions on how
the business is managed and how they are treated, managed,
developed and involved in the business. Results are analysed
by geographical area, division and job function and are also
benchmarked externally. Improvement plans are implemented
and reported. Employee satisfaction has improved steadily
since 2001 and is currently at 74,4%, with a 92% response rate.
Deli XL Belgium and Deli XL Netherlands periodically
conduct satisfaction surveys.
The location of the Deli XL Belgium depot in the Charleroi
region was chosen to help address high levels of endemic
unemployment.
Health and safetyEffective health and safety management programmes are in
place with comprehensive policies and procedures covering
business risks. Health and safety information is issued to all
members of staff to ensure that everyone is aware of health
and safety considerations and practices within their workplace.
Maintenance, service and inspection processes ensure that
plant and equipment (including racking, fork lift trucks and
58
Divisional reviews
Bidvest Europe
Customer health and safety are paramount to Bidvest Europe
businesses and dedicated quality assurance and HACCP-trained
employees rigorously ensure food quality and safety standards
are met. Key customers conduct periodic food quality audits.
3663 has launched a healthier foods initiative called Positive
Steps. This promotes healthier eating habits among
customers, including schools, by supplying foods with
reduced sugar, fat and salt content.
The European businesses comply with European ingredient
labelling legislation and ongoing progress is made relating to
food traceability. Deli XL Netherlands participates in a national
foods database, GPI Databank, which allows customers to
access all product information relating to ingredients, allergens,
nutritional information and packaging details.
Community activitiesBidvest Europe supports a multitude of worthy causes:
4 3663 is a leading contributor to Hospitality Action, the
benevolent organisation offering support to those who
work or have worked in the hospitality industry in the UK
and are now facing hardship. Depots are actively involved
in a variety of additional volunteer initiatives that benefit
local communities.
4 Deli XL Belgium supports the Alimentary Bank, which
distributes food to the needy, by supplying about 20 tons
of food annually. Financial support is provided to Doctors
Without Borders in Goma, DRC.
4 Deli XL Netherlands supports Classy Cooking, a cooking
and educational programme teaching school children in
deprived areas of Amsterdam about healthier diets and
exercise. A number of smaller initiatives are also
supported.
ENVIRONMENTAL3663 has a 10-year history of minimising its environmental
impacts and embedding a culture of environmental
consideration and responsibility across all areas of the
business. A dedicated central support department sets and
monitors company-wide standards. A network of volunteer
environmental co-ordinators promotes awareness and
initiatives across sites. Environmental improvement targets
and programmes are set at both corporate and local levels.
A voluntary environmental performance improvement
scheme was launched for own-brand suppliers in the UK. The
scheme encourages suppliers to improve their environmental
performance and comply with 3663’s environmental standards.
The level of environmental performance amongst own-brand
suppliers is assessed using an annual questionnaire. The most
recent questionnaire was completed by 67% of own-brand
suppliers. Five suppliers have to date committed to a process
of ongoing environmental improvement, involving support from
3663 and an annual audit.
An objective is for all 3663 sites to set environmental targets
covering resource usage, recycling and waste minimisation.
Measurement and reporting systems are being developed.
Deli XL Belgium and Deli XL Netherlands meet and exceed
all legal environmental regulations.
Deli XL Belgium has implemented a dedicated environmental
protection plan in partnership with local authorities. More
than 90% of waste generated at the depot is recycled, sold
or appropriately incinerated. The company, as a member of
FOST Plus, contributes financially to the Belgian “Green Dot”
recycling initiative. A feasibility study is being conducted to
set up a wind turbine to generate electricity.
Deli XL Netherlands is optimising its inbound transport
logistics, which is likely to reduce transport costs and fuel
consumption per product volume. The company recently
restructured its warehouse to comply with new chemical
storage and handling procedure regulations.
Recent 3663 environmental awards:4 Harlow and District Business Awards 2004 and 2005 – this
award recognised the environmental commitment and
employee activity at the local site
4 Keep Edinburgh Clean – Gold Award 2005 for excellence
as an environmentally clean site.
The Bidvest Group Limited Sustainability report 2006 59
participation had to be encouraged. A network of
environmental co-ordinators, all volunteers who expressed
a genuine interest in this function, was established to
champion the initiative at each site.
There are now some 60 co-ordinators, at least one at each
of the 50 sites, who have taken on this task in addition to
their other duties. They fulfil a vital communications function
and support site managers in identifying and implementing
environmental improvement projects. Their tasks also
include environmental auditing, record keeping, reporting
and assisting with training.
A DECADE OF ENVIRONMENTAL PROGRESS
A case study of 3663’s journey beyond environmental complianceJust over a decade ago, 3663 set out to proactively tackle
environmental issues. This has led to many environmental
improvements, inspired employees and helped create a
more competitive business.
The business case
In 1995, as a response to growing environmental, employee
and stakeholder pressures, 3663 decided to improve its
environmental performance. Not only has the company
satisfied these stakeholder needs, but this initiative has
turned out to be an astute business decision that has
enhanced business performance. 3663 is the environmental
leader in this industry and continues to work at exceeding
environmental legislative requirements and customer
expectations. The programme has resulted in numerous
benefits, which include cost savings and improvements in
brand awareness, reputation, employee motivation, customer
retention, community relationships, operational efficiencies
and overall business competitiveness.
Getting started
The environmental programme became the responsibility
of the environmental services controller, who is also tasked
with health and safety management. A cross-functional
environmental steering group was established to assist
in guiding the process, developing policies and raising
awareness. An Environmental Mission Statement and
Environmental Policy were drawn up to communicate
the environmental vision, objectives and guidelines to
employees and other stakeholders. Fred Barnes, the then
operations director, was a strong supporter of the initiative
and ensured board support.
Empowering employees
To inspire everyone to create a culture of environmental
commitment and continual improvement, better employee
60
Divisional reviews
Bidvest Europe
Campaigns build commitment
Campaigns play an essential part in developing awareness,
understanding and commitment. For example, an
environmental awareness day was used to educate
employees about environmental issues, environmental
objectives and to collect suggestions for improvements. The
best suggestions received prizes and were implemented with
the help of employees. A longer-term campaign focused on
waste minimisation using the Reduce, Re-use and Recover
philosophy. Campaigns are supported by posters, dedicated
environmental notice boards, discussions at staff meetings
and newsletters.
Low-hanging fruit
Initial projects focused on areas where easy gains could
be made. One project focused on saving electricity, by
placing “switch off” stickers on light switches to encourage
employees to only use lighting when required. Other projects
focused on recycling of paper, cardboard, metal and glass.
These initial projects, which aimed to involve as many
employees as possible, helped create awareness and in
many cases resulted in cost savings. Projects would often be
piloted at one or two sites, before being rolled-out to others.
With time, more comprehensive projects were tackled, many
of which have resulted in cost savings.
Annual environmental conference
A forum was required to bring together the company’s many
environmental co-ordinators. To this effect, a yearly two-day
environmental conference is held where participants can
network, learn and plan upcoming projects. The conference
is set to coincide with a 3663 board meeting. This allows
co-ordinators to ensure new environmental projects are
supported by executives and it allows executives to stay
abreast of environmental progress.
Involving the community
As 3663’s level of environmental commitment grew, sites
were encouraged to share their newly-gained knowledge and
enthusiasm by working with communities on environmental
initiatives. Sites have initiated a broad range of projects,
which include educational projects for scholars, such as
the development of school gardens, poster competitions
and river clean-up initiatives. Sites also collaborate with
communities to resolve mutual issues such as noise pollution
and water run-off problems.
Environmental management system
In 2001 a decision was made to formalise environmental
practices by investing in a certifiable environmental
management system, ISO 14001. Since much of the
groundwork of fostering commitment and putting basic
systems in place had been done, the certification for all
locations was achieved in a record two years.
Managing the supply chain
Recently, an environmental supply chain manager was
hired to work with own-brand suppliers to improve their
environmental standards. While this scheme is voluntary, it
is likely to become mandatory for all own-brand suppliers
and already suppliers that commit to ongoing improvements
are audited and given ratings, which in future is likely to
contribute to a preferred-supplier status.
Measuring performance
All sites are being tasked with setting environmental targets
and measuring performance against these indicators. This will
make 3663’s environmental policy objectives more concrete,
ensure deeper commitment and allow 3663 to set targets
and report against these at company level. These indicators,
amongst others, include waste to landfill and recycling volumes
and resource consumption of water, electricity and fuel. Site
environmental performance, based on compliance with
legislation, company standards and ISO 14001 requirements,
are monitored.
The future
As legislative requirements and stakeholder expectations
grow, 3663 continues to be well-positioned to use its
environmental excellence to further improve business
The Bidvest Group Limited Sustainability report 2006 61
4 Installation of warehouse lighting systems, utilising low-
energy bulbs and reflectors, has resulted in savings of
£53 825 and 750 000 kWh in electricity usage over the last
two years.
4 An ongoing vehicle-routing optimisation initiative has
resulted in reduced vehicle mileage and fuel usage, which
has resulted in savings of at least £50 000 in the last year.
3663’s elegantly succinct environmental policy
3663 is committed to continually improving its environmental
performance and products through a process of pollution
prevention and compliance with appropriate environmental
legislation.
Specifically, 3663 aims to:
4 Identify and manage the environmental impacts of products,
packaging and services and, where possible, work with
suppliers to improve overall environmental performance in
these areas.
4 Manage all wastes appropriately and reduce the burden
on landfill by implementing the principles of the waste
hierarchy, namely Reduce, Re-use and Recover.
4 Reduce consumption of energy and resources and where
appropriate implement a green purchasing policy.
Continual environmental improvements to business operations
will be achieved by setting environmental objectives and
targets which will be monitored and reviewed through the
implementation of an externally recognised environmental
management system. This will be achieved by raising
awareness and providing education to all staff and where
necessary suppliers and customers regarding the company’s
position on the environment, its environmental management
system and their responsibilities.
competitiveness. Recently, a sustainability board committee
was established to take responsibility for social and
environmental issues.
Key environmental achievements
4 Over the last two years a cost saving of £400 000 has been
realised through a variety of resource conservation initiatives,
focused on water, electricity, fuel and recycling savings.
4 A corporate recycling strategy has resulted in 12 depots
becoming recycling hubs, where cardboard and plastic
pallet wrap from other depots are baled in preparation for
recycling, diverting some 1 300 tons from landfills and yearly
generating savings in excess of £31 000.
4 Five own-brand suppliers committed to ongoing
environmental improvements as part of 3663’s supply chain
environmental mentoring programme.
4 Innovative rainwater-harvesting systems are included in
new depots and so far two are in use, with a third coming
on-stream. The water is used for washing vehicles. Prior to
this, recycled water systems were installed in new depots.
Together with a programme of installing low-flush toilets,
these initiatives have over the last two years saved £40 000
and 25 000 cubic metres of water.
4 3663’s fleet of 1 000, 18-ton trucks are fitted with Scania’s
new Euro 3 engine which reduces particulate matter and
nitrogen-oxide emissions.
4 Approximately 80% of own-brand outer packaging and
approximately 40% of own-brand primary packaging
now bear eco-labelling symbols. These symbols provide
consumers with recycling and other relevant information.
4 3663’s local sourcing initiative, which now covers half of the
UK, helps reduce food miles, by reducing the logistics and
thus energy required to store and transport food products.
4 Vehicle parts are salvaged from discarded fleet vehicles. This
initiative was introduced a decade ago and has resulted in
savings to date in excess of £2 million.
4 Ammonia – Glycol refrigerant systems, which help reduce
electricity consumption, are now used in the new larger
depots. Over the last two years these initiatives have resulted
in savings of £67 500 and 1,3 million kWh of electricity.
62
Bidvest Australasia Products and services
BIDVEST FIRST FOR FOODSERVICE
The leading multi-temperature foodservice products distributor in Australia, offering a broad range of products throughout the continent.
CREAN FIRST FOR FOODSERVICE
The leading national foodservice products distributor in New Zealand, offering over 10 000 products through 18 strategically positioned branches.
Material sustainable development issues
Material issues Mitigating action
A potential shortage of skills in view of minimal unemployment and consequent pressure on labour rates.
Concerted efforts to ensure an attractive environment to work in, including extensive training programmes, safe and congenial working conditions, and the opportunity for career development.
Maintaining the highest standards of food safety. Accredited systems in place to ensure strict standards of food safety and product integrity.
Dependence on imported fuel and commodity exports. Higher fuel prices are affecting operational costs and consumer spending patterns.
Maximising operational efficiencies.
Water restrictions (Australia). Revised water reticulation and recycling capability for washing fleets.
Divisional reviews
Bidvest Australasia
Bernard Berson Chief executive
Sustainable development at Bidvest AustralasiaBidvest Australasia is committed to conducting business in a manner that is conducive to long-term sustainability and not solely focused on short-term achievements. Sustainability is about ensuring continued growth in profitability and shareholder returns in a fashion that is relevant to the societies and environments in which the business operates. Bidvest Australasia invests in developing its staff, its most important asset. Environmental responsibility is a priority and efforts focus on controlling the efficient use of scarce natural resources, often in conjunction with customers and suppliers.
Bidvest Australasia operates as Bidvest First for Foodservice in Australia and as Crean First for Foodservice in New Zealand. It is the industry leader in these markets and the only foodservice company to provide a national service.
The Bidvest Group Limited Sustainability report 2006 63
CHIEF EXECUTIVE’S COMMENTThe business continues to benefit from an expanded national footprint in both Australia and New Zealand, the successful integration of new business units and a constant focus on operational efficiencies.
Rigorous expense management will be necessary to maintain further growth in both sales and trading income in view of challenging macro-economic conditions in both countries. The principal industry challenges relate to rising inflation and higher fuel prices and their effect on operational costs and consumer spending patterns.
Low rates of unemployment are reflected in skills shortages, which is an ongoing challenge. The business invests in quality people and seeks to attract and retain talent with premium pay rates, extensive training programmes, safe and congenial working conditions and the opportunity for career development.
Environmental issues are controlled by state and federal legislation and the business rigorously observes all relevant statutes. A number of initiatives have been introduced to improve environmental practices and further opportunities are sought.
ECONOMICSBidvest Australasia entrenched its position as industry leader and achieved encouraging growth and profitability. Organic growth, continual improvements in existing working practices and operational efficiencies drove the business forward.
Revenue increased 11,0% to A$1,4 billion (2005: A$1,3 billion) and trading profit increased 30,0% to A$45,6 million (2005: A$35,1 million).
MANAGEMENT SYSTEMS AND GOVERNANCE4 Bidvest First for Foodservice has a quality management
system accredited to ISO 9002 standards, which incorporates occupational health and safety practices that comply with each state’s legal requirements.
4 Brisbane, Cairns and Darwin are Australian Quarantine and Inspection Service (AQIS) approved sites for exports.
4 Crean is fully HACCP accredited at all branches.
WORKFORCEBidvest Australasia continues to grow its business but this has not required additional staff to be recruited. The businesses are established employers-of-choice in the industry.
Sustainable development indicator overview
Indicator 2004 2005 2006
Revenue (R’000) ✦ 5 691 085 6 505 802
Trading profit (R’000) ✦ 163 844 219 403
Employees 1 904 2 056 2 278
Total training spend (R’000) ✦ 1 295 1 394
Training spend per employee (R) ✦ 630 612
Injury rate ✦ ✦ 6,27
Lost-day rate ✦ ✦ 195,57
Work-related fatalities ✦ – –
CSI spend (R’000) ✦ 620 672
Note: – Indicator notes and definitions are provided in the performance data table.
– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed. ✦ Information not available.
64
A combined total of 2 278 staff members remains relatively stable, with low levels of staff turnover. Given the low levels of unemployment and consequent skills shortages, pay scales tend to be higher than those offered by small business; premium pay rates are often necessary to attract and retain certain grades of staff.
Bidvest First for Foodservice subscribes to the principle of equal opportunity for women in the workplace and reports on progress to the government each year. The organisation is compliant with the Equal Opportunity for Women in the Workplace Act (EOWA) 1999. All branches are encouraged to employ mentally challenged individuals, where possible.
Health and safetyOccupational safety standards are maintained throughout the business. All branches adhere to the appropriate regulations in each jurisdiction and have a health and safety committee and programme to highlight and respond to health and safety risks. Standards are rigorously audited at Bidvest First for Foodservice. Crean will be audited by the government Accident Compensation Corporation (ACC), in a bid to qualify for a discount from the exclusive provider of work injury cover in New Zealand.
In Australia, a high level of social welfare support is built into the payroll scheme. In New Zealand, where there is no such scheme, Crean offers a retirement scheme for staff which includes health insurance and income protection insurance.
A limited number of minor accidents occurred during the year, consistent with levels recorded in recent years. There were no serious injuries.
TrainingInvestment in training is ongoing and reached A$0,3 million. Approximately 1 200 employees have signed up over the past four years to receive nationally recognised training throughout the branch network. Courses cover warehousing, distribution, administration and selling skills. In Australia there is a standardised training recognition, called AQF (Australian Qualification Framework). Training is recognised from level 1 to level 4, as well as diploma level and advanced diploma level. The training Bidvest provides is recognised by AQF to certificate level 3.
Together with competitive pay scales, the provision of training enables the company to develop a qualitative edge in service standards.
Crean continues to expand rapidly, increasing its capacity to offer career opportunities. The company is differentiated by the high calibre of its focused and motivated staff. While there is no standardised training and career development programme in place, training needs are identified and addressed at branch level.
COMMUNITYCustomersThe businesses are recognised market leaders in innovation and have sophisticated technology in place to ensure a distinct competitive advantage. Both the Australian and New Zealand operations have a sophisticated single network and
Divisional reviews
Bidvest Australasia
Quality management system recertified
Bidvest First for Foodservice’s QMS has been in place
since 1994 and is audited every three years to ensure
that the highest standards are maintained. The system
was recently audited and recertified, passing with flying
colours. The fully integrated programme incorporates
best practice concepts, quality assurance (ISO 9002),
food safety (HACCP), occupational health and safety,
environmental protection, corporate governance and
employment practices. The policy statements, procedures
and work instructions provide guidelines and parameters
to enable business units to operate in an efficient
and effective manner, ensuring that the interests of
stakeholders are protected, maintained and enhanced.
The Bidvest Group Limited Sustainability report 2006 65
IT system with a central mainframe servicing all business units around the country. This adds greater value for customers and suppliers by generating meaningful and specific reports that can be drilled down to give the required amount of detail. Bidvest First for Foodservice has a 24/7 online ordering system FindFoodFast to assist customers. More than 30% of sales transactions are handled electronically and the Online Product Reference Information (OPRI) system details a full catalogue of over 50 000 products on the internet.
The companies enforce stringent food safety standards, working with suppliers and customers to retain product integrity and to develop innovative product packaging, so that products are easier for customers to handle and present less of a risk in the kitchen.
Bidvest First for Foodservice suppliers have to be HACCP compliant and Crean suppliers require accreditation from AgriQual, an independent company that audits and verifies supplier performance standards.
Community activitiesCSI activities are aimed at addressing needs identified in the local communities in which the business units operate. Providing for community upliftment is generally considered to be predominantly a government responsibility and there is no significant pressure from stakeholders for the business to engage in a formal CSI programme. Bidvest Australasia recognises a degree of responsibility and accordingly engages in charitable efforts.
ENVIRONMENTALAll operations are fully compliant with strict standards of environmental practice enforced by the state and federal legislation in Australia and New Zealand. There is a strong environmental consciousness throughout the continent and although the operations generally have a low environmental impact, there is growing pressure from stakeholders for incremental progress in environmental performance.
Vehicle fleets are responsible for the most significant environmental impact. The majority of the trucks in operation have been replaced with energy-efficient, ozone-friendly models. The recycling of the fleet also enables the companies to take advantage of government tax incentives aimed at discouraging vehicles that are older than ten years. In Australia, where there are water restrictions, operations have revised their water reticulation and recycling capability to ensure that water is not wasted when washing fleets.
The refrigeration equipment installed is ozone-friendly and energy-efficient. Other environmentally friendly developments include the replacement of cans with flexible bladders, the discontinuation of metal drums and the introduction of flat-board packaging. There is a well-developed recycling mindset. The separation of office waste is a standard practice and the business is progressively moving towards biodegradable products.
Well-oiled recycling mindset
A practice well-established in all branches across Bidvest
Australasia is the separation of general rubbish, cardboard
and plastic – generally pallet wrap. The cardboard and
plastic are removed for recycling and the general rubbish is
disposed of through accredited providers into landfill. This
has not only reduced waste disposal costs but also enables
about 50% of waste generated to be recycled. Photocopier
and printer cartridges are also recycled, as is truck engine
oil in those branches that have in-house mechanics. The
businesses use many cardboard cartons for repacking
small orders; second hand and recycled cartons are used
instead of new cartons, resulting in an estimated saving of
approximately A$100 000 per annum.
66
Divisional reviews
Bidfood
Bidfood Products and services
CATERPLUSCatersales, CCW Catering Supplies, Chipkins Catering Supplies, D & R Lowe Catering Supplies,First Food Distributors, Lou’s Wholesalers,M&M Quality Choice, RFS Catering Supplies,Caterplus Botswana, Blue Marine, East Cape Foods, Sea World, 3663 First for Foodservice
A leading supplier of groceries, seafood, vegetables, poultry, red meat, dairy products, equipment, utensils and allied products to the catering, hospitality and foodservice industry.
SPECIALITYPatleys Local and imported premium quality food products are marketed under
Goldcrest and other major South African and international brand names.
CATERING EQUIPMENTVulcan-Catering Equipment South Africa’s leading manufacturer and distributor of locally produced and
imported kitchen and catering equipment.
PAPER PRODUCTSLufil Packaging Lufil Packaging is one of South Africa’s leading paper converters, producing a
wide range of paper products primarily for the fast food and retail industries.
HOSPITALITY ACCESSORIESHotel Amenities Suppliers, Promo Sachets, Steri Pic Hotel Amenities Suppliers is the leading supplier of guest amenities and
accessories to the South African hospitality industry.
BIDBAKENCP Yeast, Chipkins Bakery Supplies, IBI Group Manufactures and sells a wide range of baking ingredients, premixes and yeast
under the Chipkins, NCP Yeast and IBI brands.
CROWN FOODS GROUPCrown National, Modpak, Continental Spice Works Supplying the South African meat, poultry and food processing industries with
superior quality spices, herbs, seasonings, food ingredients, meat-processing equipment, sausage casings and food packaging.
Colin Kretzmann Chief executive
Sustainable development at BidfoodBidfood is committed to providing safe, affordable and nutritious food products and functional food ingredients to the foodservice community. Priorities include maintaining the highest standards of food quality and safety, providing a safe working environment and offering training and development opportunities for staff. There is an ongoing drive to reduce Bidfood’s environmental impact by reducing energy usage.
Bidfood serves the hospitality, leisure and catering markets with a comprehensive range of food products and consumables. The division also manufactures and distributes pre-mixes, food ingredients, spices, seasonings and other products to the bakery, poultry, meat and food-processing industries and is represented in all important urban areas and tourist centres across southern Africa.
The Bidvest Group Limited Sustainability report 2006 67
Material sustainable development issues
Material issues Mitigating action
Adhering to increasingly rigorous standards of food safety and product integrity in South Africa.
Quality control standards are maintained through food safety systems. Suppliers are selected on the basis of strong quality credentials. Bidfood strives to meet the requirements of HACCP and ISO.
Continuing to improve BEE credentials and awareness. Operational units within Bidfood are in the process of obtaining individual empowerment ratings.
Management of HIV/Aids in the workplace. HIV/Aids awareness and prevention programmes are managed at branch level and need to be more conscientiously promoted to ensure effective management of the disease.
Significant increase in fuel prices. Optimising efficiencies in the distribution system with a focus on effective regulation of fuel consumption and sale of a wider range of products to each customer.
Effective IT system as a management tool to maximise business effectiveness.
Process under way to improve IT system across the division.
Sustainable development indicator overview
Indicator 2004 2005 2006
Revenue (R’000) ✦ 3 254 592 3 666 437
Trading profit (R’000) ✦ 316 227 299 813
Employees 3 172 3 865 4 060
Total training spend (R’000) 4 078 2 934 4 755
Training spend per employee (R) 1 286 759 1 171
Injury rate ✦ ✦ 3,08
Lost-day rate ✦ ✦ 4,5
Work-related fatalities 0 0 3
BEE procurement (R’000) 352 522 445 527 500 736
BEE procurement as % of discretionary spend 17,9 20,6 21,3
CSI spend (R’000) 33 292 514
Note: – Indicator notes and definitions are provided in the performance data table.
– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed.– Empowerment data is for South Africa only. ✦ Information not available.
68
Divisional reviews
Bidfood
CHIEF EXECUTIVE’S COMMENT
Caterplus and Combined Foods were consolidated as
a single reporting unit, Bidfood. Catering Supplies and
Frozen Foods have been merged into a focused foodservice
business, Caterplus, under a single management team. This
will bring benefits to regional management and encourage
business growth, while at the same time streamlining the
activities of national accounts and national procurement.
Despite a challenging trading environment, no jobs were
shed and modest job growth was achieved. A number of
sectors performed particularly well during the year: the frozen
food businesses increased their combined market share in
the independent sector of the market; growth in the fast
foods sector has spurred growth for Lufil Packaging; growth
in the home entertainment sector has brought significant
benefits to Patleys; and Hotel Amenities Supplies has secured
a contract to supply a major hotel group.
All Bidfood businesses are in the process of obtaining an
empowerment rating.
It is with deep regret that we report three employee fatalities.
These resulted from separate motor vehicle accidents during
deliveries. Full investigations were undertaken.
A principal challenge is to improve the division’s IT system
as a management tool to maximise the effectiveness of
operations. Other key challenges include high levels of
illiteracy in the workforce and the need to improve efforts to
manage HIV/Aids in the workplace.
At the Durban NCP yeast factory, local authorities raised
concerns about the higher-than-standard levels of toxicity
in the effluent and high sulphite levels, which can cause
corrosion to the pipe work at the municipality’s waste-water
works and could harm marine life. An effluent permit has
nonetheless been issued by the municipality for 2006/2007,
without these issues being raised. Steps taken to dilute the
effluent disposal have been well received by local authorities
and the risks have been significantly reduced.
In response to public concerns raised around butchery
hygiene and official investigations into the cleanliness
of some butchery equipment, Bidfood is developing an
equipment cleaning solution targeted specifically at relevant
equipment.
A focus on increasing efficiencies in the distribution system
includes effective regulation of fuel consumption by
providing a broader basket of products to existing customers.
ECONOMICS
Bidfood achieved encouraging growth, particularly in
the convenience foods sector and made significant
inroads into the independent catering market. Revenue
increased by 12,7% to R3,7 billion (2005: R3,3 billion).
Trading profit, however, declined 5,2% to R299,8 million
(2005: R316,2 million) due to margin pressures and capacity
and overhead cost increases, mainly in distribution.
MANAGEMENT SYSTEMS AND GOVERNANCE
There is an emphasis on food safety systems across the
division, to ensure the highest quality control testing of both
raw materials and finished products. Specific management
systems and standards in place in certain business units are
outlined:
4 Bidbake: Implementation of the food safety systems
HACCP and ISO 22000 is in progress at new premises at
The Bidvest Group Limited Sustainability report 2006 69
products on the inventory are tested through Société
Générale de Surveillance (SGS) and/or SABS, to ensure
compliance with food safety standards.
4 Vulcan: The company is working towards ISO 9001
accreditation. Syspro, a fully integrated distribution
manufacturing and accounting package, has been
expanded to improve procurement, production and sales
efficiency. Independent occupational health and safety
specialists conduct a monthly quality and safety check
across the business.
BLACK ECONOMIC EMPOWERMENT
Bidfood has made good progress in terms of BEE and
transformation. There remains a need to further embrace BEE
as a strategic imperative to better position the business to
take advantage of market opportunities and compete more
effectively.
All Bidfood companies are in the process of obtaining an
empowerment rating.
There has been encouraging progress in improving the racial
profile of the boards of directors of Bidfood businesses, but
meeting equity targets at top and senior management levels
remains a significant challenge.
On average, over 50% of investment in training has benefited
black employees. However, few learnerships were undertaken
this year.
Procurement and sales personnel in all business units are
encouraged to seek information and guidance on BEE
issues from Bidfood’s commercial director. Procurement
spend on BEE-compliant companies was in line with targets.
Mechanisms to verify the status of suppliers continue to be
Longmeadow. A policy is in place requiring all suppliers to
maintain the strictest standards of food safety through the
implementation of quality programmes. Supplier standards
are maintained through a supplier approval system.
4 Caterplus: An operating manual covering all health
and safety requirements and related risk areas is being
developed and will be disseminated at each of the
branches to ensure that full compliance with the OHS Act
is achieved. Close liaison with suppliers and contingency
plans are in place in the event of any health-risk outbreak
that may undermine food safety. Roll-out of a standardised
IT system across Caterplus is in progress.
4 Crown Foods Group: The production facility in Cape Town is a
best practice manufacturing environment and is fully HACCP
accredited. National and international suppliers are regularly
monitored to ensure compliance with pre-set standards based
on international and industry food safety standards. Specific
emphasis is placed on instituting new technologies to assist in
reducing food safety risks and ensuring product quality.
4 Everyday Foods: The factory, within the Trimark Group, is
HACCP accredited.
4 Hotel Amenities: Manufacturers are required to provide
quality assurance in terms of Cosmetics and Toiletries
Federation of South Africa (CTFA) certification.
4 Lufil: All materials are Food and Drug Administration (FDA)
compliant and monitored through procedures prescribed
in the Lufil Quality Programme. This includes a dedicated
module relating to environmental practices. Two external
consultants have been appointed on a permanent basis
to drive quality issues with the aim of achieving HACCP
accreditation and to manage health and safety. Impact
Management Services monitor the enforcement of the Lufil
Quality Programme. Some products are SABS certified.
4 Patleys: Macrosafe has been contracted to assist the
company in meeting all OHS Act requirements. All
70
Divisional reviews
Bidfood
developed and there is improved awareness of the strategic
importance of supporting BEE suppliers.
The accuracy of information collated for the BEE scorecard
has improved significantly and the scorecard is proving to be
an effective management tool for monitoring progress.
Eleven bursaries were distributed across the division by the
Bidvest-Dinatla Bursary Trust, investing in the education
of employees’ children. Over 30 applications from various
branches of the division have been submitted for evaluation.
WORKFORCE
Bidfood employs a total of 4 060 staff. There are high
concentrations in Johannesburg, Cape Town and Durban,
and representation in all the regional centres including
Bloemfontein, East London, Empangeni, George,
Pietermaritzburg, Polokwane, Port Elizabeth and Nelspruit.
There is also a branch of Caterplus in Botswana and in Namibia.
Bidfood operates in a deregulated industry with no
centralised bargaining forums. Levels of pay are above
the minimum rates set out in legislation and pride is taken
in developing employees. Recognition and accolades for
exceptional achievement in the workplace includes the real
achievers together society (RATS) functions and divisional
awards held annually around the country.
Employee satisfaction is measured through climate surveys
as part of the division’s in-house First for Service quality
management process. Some companies have additional
systems in place to monitor employee satisfaction.
Performance appraisal systems are generally undertaken
on an informal basis and this is an area identified for
development. Employee benefits are managed on a
decentralised basis and in accordance with the Employment
Equity Act.
Health and safety
The principal health and safety risks associated with Bidfood
activities relate to the production, handling, warehousing and
distribution of foods and use of mechanical equipment to move
products. Only minor injuries were sustained in the workplace.
Health and safety issues are addressed at branch level and
ongoing training is undertaken in terms of the OHS Act,
including first aid training. Some branches within Caterplus
conducted occupational health and safety audits in order to
ensure that all health and safety requirements are met.
HIV/Aids
Several companies are experiencing an increasing impact
of HIV/Aids in the workforce, in the form of higher levels of
absenteeism and loss of staff. This has resulted in an increase
in the employment of temporary staff to compensate for
absent staff.
There is no standardised approach to HIV/Aids prevention
and support, with individual branches instituting programmes
to varying degrees. Most operations have awareness
campaigns. Some provide training for the workforce on
HIV/Aids and have voluntary peer educators or an outside
trainer to give greater impetus to the programme.
Employees who acknowledge their HIV positive status are
supported at branch level and victimisation is not tolerated.
The prevalence and incidence of HIV/Aids is not measured
and assistance with ART treatment is not provided.
The Bidvest Group Limited Sustainability report 2006 71
on HDIs. Bidfood sent 10 aspiring managers to the Bidvest
Academy.
4 Caterplus: Some operations conduct skills gap analyses
and implement appropriate training interventions aimed at
developing and promoting specific individuals, especially
HDIs. KPIs were identified at all levels; this has been a
learning curve and is starting to deliver benefits.
4 Lufil Packaging: Training is provided in accordance with
the Lufil Quality Programme. An internal mentorship
programme is provided for machine operators, as well
as formal training and refresher retraining for moveable
machine operators, including forklifts.
4 Crown Foods Group: Modern training facilities are
provided at the Cape Town factory. In conjunction with a
work skills plan, the following programmes are in place:
numeracy and literacy programme (ABET); subsequent
management training provided through First for Service,
quality assurance methodology, machine handling and
operations, in-house senior and middle management
training.
4 Vulcan: Initiated ABET training in 2004. Forty-one
employees are currently enrolled in the scheme to improve
their education to the equivalent of Standard 7.
COMMUNITY
Customers
Bidfood companies manage customer relations at branch
level and high levels of customer satisfaction are maintained.
An increasing number of major accounts insist on HACCP
standards. Stringent food safety and quality policies are
observed, and quality service provided, to meet customer
expectations. Many companies conduct customer satisfaction
Leadership through creative education
Crown National supports an adult education programme
called Leadership Through Creative Education which
provides its members of staff with the opportunity to
obtain a quality education denied to them as children. The
programme has an annual enrolment of 30 learners and
co-ordinates the services of seven highly qualified
educators. Tuition takes place daily on a one-to-one
basis starting with the National Qualifications Framework
level 1-4 literacy levels. This includes computer skills and
English literacy through to secondary school certificate
level. Students who complete this phase can proceed
to bridging courses to assist them in obtaining a BCom
degree. Examinations are undertaken through the IEB and
Unisa. Crown National fully subsidises the programme
and provides each learner with the opportunity to identify
a career path, allowing learners to study in line with their
potential and prospects for growth in the company.
Training
Investment in skills development increased. Every member
of staff has the opportunity to attend the in-house First
for Service quality management training programme,
implemented in 2001 to drive staff development. Over
1 200 employees from factory level through to managing
director level attended courses, each lasting a few days.
Refresher courses are offered and there are training
facilitators at each branch.
Skills development plans are identified at branch level and
training requirements are outsourced. Annual performance
is reported to the relevant SETA. Full advantage is taken of
management development opportunities, with a strong focus
72
Divisional reviews
Bidfood
potential environmental risks, which are duly reported to the
Bidfood board. An ongoing focus is to increase efficiencies in
the distribution system, including effective regulation of fuel
consumption.
4 Bidbake: Levels of toxicity in the effluent produced
at Durban NCP Yeast and Longmeadow factories
are monitored by local authorities and compliance is
maintained. There is no hazardous waste. Effluent at
Longmeadow is taken off-site to be treated prior to
dumping.
4 Crown: A dust extraction system has been installed at the
food ingredients production facility in Cape Town which will
marginally reduce the negative impact on the environment
and assist in safeguarding the health of staff.
surveys and have formal reporting structures for logging
customer complaints. Certain companies organise client
open days or roadshows for their customers.
Community activities
As part of its implementation of the Bidvest Charter on
transformation and empowerment, Bidfood has established
a CSI programme with three key focus areas: investing in
the training of talented HDIs to become chefs; supporting
disabled homes through the sub-contracting of packaging;
and working with suppliers to support targeted regional
community projects.
ENVIRONMENTAL
The risk committee in each sub-division oversees
environmental performance, including the identification of
Hotel Amenities’ exemplary enterprise
development initiative
The decision to outsource Hotel Amenities’ manufacturing,
warehousing and distribution, developed into a tremendous
opportunity for the business to make a significant and
ongoing contribution to social upliftment. As much of the
work required by the contract packers does not require
skilled labour, the prospect arose of offering the work to
physically and mentally disabled people from previously
disadvantaged backgrounds. Hotel Amenities is proud to
be associated with three projects which share the common
purpose of providing sustainable employment opportunities
for people with disabilities: The St Raphael Protective
Workshop in Eldorado Park, Johannesburg; The Midrand
Association for the Physically Disabled, in Rabie Ridge; and
The Transvaal Indian Blind Association (TIBA).
The Bidvest Group Limited Sustainability report 2006 73
4 Everyday Foods: Soak pits have been built and waste
management facilities are audited by external auditors.
Tanks have been built to resolve sewage water leaks
which contaminated other waste water and this is under
supervision and control.
Master chefs in the making
Bidfood is a proud sponsor of a bursary programme
aimed at talented students from historically disadvantaged
backgrounds who wish to train as chefs. Elias Kafi, a young
man from Khayelitsha, was talent-spotted by master chefs
Garth Stroebel and Paul Hartmann of the South African
Chefs’ Academy. His initiative and enthusiasm for food
preparation earned him a recommendation by Goldcrest’s
management and soon afterwards Bidfood agreed to
sponsor Elias through a two-year chef’s diploma. Currently
in his first year, Elias is a chef’s apprentice and is being
mentored in all kitchen disciplines while gaining working
knowledge of recipes and cooking methods. He will be
given theoretical training on all aspects of the culinary
profession. Bidfood will continue to identify and invest in
emerging chefs like Elias, recognising the contribution of
the programme towards the long-term sustainability of the
food industry.
74
Divisional reviews
Bid Industrial and Commercial Products
Bid Industrial and Commercial Products Products and services
VOLTEX ELECTRICAL DISTRIBUTIONWholesaleElectric Centre, Electrostar, Crew Electrical, Globe Electrical, H&T Electrical, Keens Electrical, Litecor, Sanlic International, Voltex, Voltex Coland, Voltex Retail Suppliers, Voltex Electrical
Offers a comprehensive range of well-known local and international electrical brands through 80 outlets throughout southern Africa.
SpecialistAtlas Cable Supplies, Association Cables, Waco Industries, Cabstrut, Sanlic, Voltex Lighting, Voltex Transmission & Distribution, Electrification and Distribution Technologies, Versalec Cables
BERZACK BROTHERSBerzack Brothers, Bloch & Levitan Eastman Staples
Based in South Africa and the United Kingdom, Berzack distributes industrial machinery and accessories to the clothing, luggage, upholstery and embroidery industries, as well as domestic appliances to leading chain stores.
STATIONERYWaltons Stationery Company Hortors, Waltons Import Division, SA Diaries, Waltons Promotional Gifts, Kolok, Contract Office Products
Wholesalers and distributors of a wide range of stationery products and computer consumables.
Myron Berzack Chief executive
Sustainable development at Bid Industrial and Commercial ProductsBid Industrial and Commercial Products strives to identify and manage the risks and opportunities associated with ensuring long-term business success. Focus areas include staff training and development, managing HIV/Aids in the workplace, product innovation and expansion and development in the market. The business is a proud facilitator of national energy-saving initiatives.
Bid Industrial and Commercial Products is South Africa’s leading supplier of electrical products and cable, furniture and stationery products, industrial sewing and embroidery machines and market leader in packaging closures, fastenings and tape conversion.
�
������������������������������������
The Bidvest Group Limited Sustainability report 2006 75
Bid Industrial and Commercial Products Products and services
OFFICE FURNITURECN Business Furniture CN Manufacturing, Budget Desks and Chairs, Office Furniture Clearance HouseDauphin Office SeatingSeating, Pago
Manufacturers and distributors of a wide range of office furniture and associated products for the corporate and commercial markets.
PACKAGING CLOSURESAfcom-GE HudsonBuffalo Executape
Leading distributors and manufacturers of packaging closures, strapping, tape, nailing, stapling and stretch film.
Material sustainable development issues
Business units Material issues Mitigating actions
Afcom and Seating Competition from cheap Chinese imports. Focus on balancing reliance on imports with support to local manufacture.
Voltex Electricity shortage in South Africa. Promoting energy-efficient products, specifically in the lighting sphere.
All Skills shortages. Providing adequate and appropriate training to generate a pool of skills for the future.
Various Increasing fuel prices. Improving operational efficiencies in the distribution line.
All Managing the impact of HIV/Aids in the workplace.
Promoting HIV/Aids awareness and prevention programmes and access to assistance.
Sustainable development indicator overview
Indicator 2004 2005 2006
Revenue (R’000) ✦ 5 643 160 6 722 172
Trading profit (R’000) ✦ 383 284 483 320
Employees 6 348 6 628 6 976
Total training spend (R’000) ✦ 5 085 11 846
Training spend per employee (R) ✦ 767 1 698
% of employees attending HIV/Aids training ✦ ✦ 15,4
Injury rate ✦ ✦ 1,27
Lost-day rate ✦ ✦ 2,1
Work-related fatalities ✦ 0 1
BEE procurement (R’000) ✦ 1 159 402 1 807 164
BEE procurement as % of discretionary spend ✦ 30,6 48,7
CSI spend (R’000) ✦ 2 341 3 048
Note: – Indicator notes and definitions are provided in the performance data table.
– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed.– Empowerment data is for South Africa only.✦ Information not available.
76
CHIEF EXECUTIVE’S COMMENT
Most business units have obtained an “A” empowerment
rating and all units strive to improve ratings. BEE
performance has improved against most scorecard
indicators. Equity imbalances at junior and middle
management levels have improved, but remain a challenge
at senior management levels.
Voltex has patented an energy-efficient mining light which is
attracting increasing demand from major mining companies.
Voltex works in association with Eskom to facilitate national
energy-saving initiatives, as demand for electricity in South
Africa threatens to outstrip supply.
The national skills shortage presents an enduring
challenge, exacerbated by technical increases in the
products and solutions offered by business units. Diverse
skills development programmes are implemented and a
management cadet programme aims to develop HDIs as
future leaders. Training spend increased significantly, notably
at Waltons which spent an additional R1,7 million.
Management of HIV/Aids in the workplace is another
principal challenge and area of focus.
Regrettably there was one fatality. An employee of Voltex
was hijacked and killed on his way to a company conference.
ECONOMICS
Industrial products, packaging closures, adhesive tapes and
commercial supplies were consolidated as a single division.
Revenue increased 19,1% to R6,7 billion (2005: R5,6 billion)
while trading profit rose by 26,1% to R483,3 million
(2005: R383,3 million). There was significant growth in
electrical distribution and the incorporated commercial
business units. Import pressures kept margins under pressure
in several areas, especially at manufacturing operations.
MANAGEMENT SYSTEMS AND GOVERNANCE
4 Dauphin: Complies strictly with the ISO 9001 system.
4 Seating: ISO 9001 accredited; the quality system is audited
every six months by external auditors.
4 Cecil Nurse: Performance agreements are used to
formalise supplier service and quality standards.
4 Voltex: Ensures that only SABS approved product is
distributed.
4 Kolok: Purchases from recognised world brands that produce
according to ISO 9001 and ISO 14002 or equivalent.
4 Packaging Closures: There are no accredited management
systems in place, but most principals are ISO 9000 and
ISO 14000 accredited. This is relevant to many customers,
specifically those that use Afcom or Buffalo products in
their exported goods.
BLACK ECONOMIC EMPOWERMENT
Many business units have acquired an empowerment rating,
in most cases an “A” rating. The broad-based approach to
empowerment is better understood but needs to be further
embraced. In some sectors of the economy, in particular
among the municipalities, business units need to be more
persuasive in communicating BEE credentials.
Bid Industrial and Commercial Products organises “supplier
days” as occasions to communicate with suppliers about the
benefits of an improved BEE profile.
Business units have a five-year rolling employment equity
plan which is reviewed annually. There is steady progress
towards achieving transformation targets. Renewed efforts
are under way to address continuing imbalances at senior
management level.
Waltons achieved a bridgehead into the public and
parastatal sector, confirming growing acceptance of Bidvest’s
BEE credentials. Waltons has established a buying forum
Divisional reviews
Bid Industrial and Commercial Products
The Bidvest Group Limited Sustainability report 2006 77
comprising buying personnel from all of the Waltons regions
as well as personnel from the retail and commercial divisions.
The forum aims to increase value within the supply chain,
notably in the performance of suppliers, based on quality,
price, service and BEE compliance.
Voltex was awarded an “A” BEE rating from Empowerdex,
Transnet and the South African Mining Preferential
Procurement Forum (SAMPPF).
Voltex and Kolok, as part of enterprise development
activities, provide extended credit terms to some black-
owned customers who do not have sufficient collateral to
obtain cash flow funding from financial institutions.
Empowerment ratings
Company Rating (2005) Rating (2006)
Voltex ✦ A
CN Business Furniture
A A
Contract Office Products
BBB Being re-rated
Kolok BBB A
Waltons Stationery BBB Being re-rated
Seating C Being re-rated
Dauphin ✦ B
Afcom & Buffalo ✦ Being rated
Berzack Brothers ✦ A
Bellco ✦ A
WORKFORCE
Bid Industrial and Commercial Products employs
6 976 people, of which Voltex and Waltons each employ over
2 000 employees.
Permanent employees qualify for standard company benefits
including a pension or provident fund, medical aid cover
and leave, as legislated. Some companies offer staff bursary
schemes for children and assistance with study loans.
Business units do not have formal systems to measure
employee satisfaction levels. Some companies conduct
employee evaluation interviews where management
encourages staff to raise concerns and make suggestions for
improvements in the workplace.
Health and safety
Bid Industrial and Commercial Products comprises
predominantly trading companies which have limited health
and safety risks in the workplace. Employees of selected
business units work in a light-manufacturing environment. All
business units have a health and safety committee to monitor
and manage health and safety systems and standards in the
workplace. There were no fatalities or reportable incidents
this year.
Voltex has an OHS Act manual which provides guidance
to branches on establishing and maintaining systems.
Management courses are held to ensure requirements are
understood and an internal audit department conducts random
visits to premises to review procedures and paperwork. Health
and safety is a focus area for training.
Creating energy-saving work for black-owned contractors
Voltex Lighting is an Energy Service Company (ESCO)
accredited by Eskom’s Demand Side Management (DSM)
division. The aim is to identify significant energy-saving
opportunities within industry and government. Voltex
Lighting conducts energy audits to identify opportunities.
The business supplies the energy-saving luminaires and is
responsible for their installation. Voltex Lighting subcontracts
the installation to black-owned electrical
contractors whose fees represent a
significant portion of the total project fee.
Project fees are typically from R150 000 to
just over R1 million.
78
Health and safety procedures at Packaging Closures’ six
factories are guided by Voltex and monitored by an external
company.
Contract Office has banned smoking on the premises following
discussions and an audit by the Department of Health.
HIV/Aids
The impact of HIV/Aids in the workplace is a significant concern.
The disease is believed to be responsible for increasing levels
of staff absenteeism. Concerted efforts are necessary to ensure
that HIV/Aids is effectively managed.
HIV/Aids awareness and education programmes are
undertaken at regular intervals. Training is provided internally
and externally. Most companies distribute condoms and
provide direct or indirect assistance with counselling,
confidential voluntary testing and access to treatment services.
The decentralised branch network of business units makes it
challenging to determine the extent of the impact of HIV/Aids
in the workplace. Some companies conduct research to
determine levels of prevalence: CN Business Furniture
established that approximately 12% of its employees are
HIV positive. At Kolok, 121 members of staff were tested of
which 15% were positive.
Waltons contributes annually to the HIV/Aids Business
Bannerthon and was awarded a gold medal for the company’s
commitment and contribution to HIV/Aids programmes.
Following an HIV/Aids knowledge, attitude and practice
(KAP) survey conducted by the Voltex training and
development department, in which over 500 employees
participated, HIV/Aids training programmes and internal
systems have been enhanced to address weaknesses
identified. Revised policies ensure absolute confidentiality
in the workplace with regard to HIV/Aids issues. Voltex
has promoted greater commitment from management to
support employees and interventions.
Seating has established an HIV/Aids clinic in Queenstown.
In conjunction with the organisation Right to Care,
Seating encouraged VCT uptake among its employees.
Approximately half participated in the prevalence testing.
Employees have access to ongoing counselling services
at the clinic and Seating is seeking approval from the
Department of Health to distribute ART.
Training
Bid Industrial and Commercial Products pursues an
aggressive skills development strategy to meet the enduring
challenge of skills shortages. This process and diversity
management programmes throughout the business units to
manage skills retention, assist in achieving equity objectives.
Certain technical fields are becoming progressively more
complex and business units are increasingly becoming a
consultant and partner to customers, offering optimum
products and solutions. In this environment, the quality of
employees is a source of competitive advantage, demanding
appropriate investment in training and the development of
specialist staff.
The Voltex training and development department is
provisionally accredited with the Wholesale and Retail
SETA and piloted specific skills development modules
are in the process of being accredited. The department
conducts an analysis at each of the 18 businesses that make
up Bid Industrial and Commercial Products, to establish
training requirements in relation to business needs. These
recommendations are discussed with managers and training
interventions are implemented accordingly. Systems are in
place to evaluate return-on-training investment and identify
areas for improvement.
Divisional reviews
Bid Industrial and Commercial Products
The Bidvest Group Limited Sustainability report 2006 79
Voltex has a management cadet programme which aims to
nurture identified future leaders within Bid Industrial and
Commercial Products.
4 Waltons: Accredited as a training provider with the
Wholesale and Retail SETA. Waltons launched a sales
academy which aims to generate a pool of skilled sales
staff and offers HDIs who wish to pursue a career in sales
the opportunity to attend a skills-bridging development
programme. A management development programme,
based on best practice assessment strategies, aims to
identify and develop candidates with talent and distinct
potential.
4 CN Business Furniture: Training needs are structured
around five job families: sales and design, IT and
administration, receiving and warehousing, picking and
dispatch, and installation. One-year learnerships are
offered to technical staff and an in-house management
development mentorship programme is in place.
4 Dauphin: Provides ongoing job-specific training and offers
ABET training to interested employees. Twenty employees
are presently participating in the programme.
4 Kolok: Focuses on sales and customer-related training.
Product-specific training is generally provided by suppliers.
Tertiary education support is provided for staff members.
4 Seating: To address low levels of literacy among the
workforce, there is an emphasis on ABET specific skills
development programmes related to job requirements.
Other training programmes include MBA, accounting,
production management and quality management.
COMMUNITY
Customers
The expanded division has extended its services as a
supplier to offer specialised consulting services to customers.
Business units interact with customers on a regular basis
with the aim of ensuring high levels of customer satisfaction.
Complaints are generally handled at branch level by the
relevant manager. Some companies obtain informal customer
feedback while others conduct random telephonic surveys or
send out questionnaires.
CN Business Furniture has customer relationship
management software to enhance customer relationships.
The business strives to educate customers on the benefits
of improved ergonomics and to improve customer service
levels. Symbiotic service agreements are formalised with
major suppliers, focusing on quality, delivery, exclusivity and
the development of long-term relationships. Customers are
telephoned before and after the delivery and installation
process to determine customer satisfaction and remedy any
concerns.
Community activities
CSI initiatives are managed at branch level and support
local communities in the regions of operation. This typically
involves donations or sponsorships with a focus on education
programmes. A more formal approach is being adopted
towards CSI activity with the aim of identifying and driving
initiatives that are centrally co-ordinated and managed
across the division. Many companies offer tertiary education
support for staff members.
4 Kolok: Supports the Avril Elizabeth Home for mentally
handicapped people with donations and assistance with
fundraising activities.
4 Dauphin: Supports education and mentoring programmes
for children of members of staff and in the broader
community.
4 Seating: Assisted a local community to establish a soccer
field and playing ground. The business supplies schools
with furniture, supports community-based garden projects
and makes donations to Heart of Healing.
4 Waltons: Supports SMME organisations and projects
through sponsorships, infrastructure development and
skills transfer. Projects include support for: the Middelburg
80
Care Village for 120 HIV positive orphaned babies; the
Silversea School in Tzaneen – a three-room school catering
for the needs of farm children; and the training of teachers
who assist disadvantaged children. Waltons donates
computers and printers to needy causes and supports
nature conservation initiatives.
ENVIRONMENTAL
Bid Industrial and Commercial Products comprises traders,
assemblers and light manufacturers. Business units respect
environmental legislation and are committed to operating in
a sustainable, socially responsible fashion without wasteful
use of resources.
4 Voltex: An active participant in Eskom’s energy-saving
initiatives and committed to promoting energy-efficient
products, specifically in the lighting sphere, for which there
is increasing demand.
4 Waltons: An environmental policy and sound
environmental practices are communicated to customers.
Waste is responsibly removed. Suppliers are required
to maintain sound environmental practices. Company
vehicles generally use lead-free petrol.
4 Seating: Developed a range of eco-friendly chairs using
moulded foam seats and backs as opposed to traditional
plywood. The used oil from trucks is collected and
removed.
4 CN Business Furniture: Created realistic laminate wood
finishes to minimise the use of veneers. A flat-pack design
to reduce the size of packaged products results in lower
transport costs. Warehouse lighting in Johannesburg was
converted to energy-saving lights. An electrical analysis was
conducted to balance the three-phase loads in order to
reduce electricity consumption in most of the operations.
4 Kolok: Recycles packaging at its distribution centres,
achieving cost-savings estimated at R150 000 per annum.
4 Contract Office Products: Maintains a practice of
shredding documents for collection by waste companies
and recycles products where possible.
4 Afcom: South African waste import regulation precludes
the importing of recycled raw material which is 40%
cheaper than virgin material. Competitors, however, are
able to import finished goods made of such recycled
material at significantly lower prices.
Divisional reviews
Bid Industrial and Commercial Products
Empowerment through entrepreneurship
Waltons KwaZulu-Natal provides ongoing support to the
Khanya Sewing Skills Centre for the development of rural
women. Operated by the Institute for Black Research, the
empowerment through entrepreneurship initiative provides
120 rural women each year with the opportunity to gain
literacy, numeracy and sewing skills over a six-month period.
Waltons has supported the project for five years through the
payment of trainer salaries, provision of learning materials
and funding of awards/graduation days held at Khanya.
Sales director Dan Chiorboli with the 2005 graduates from the Khanya Sewing Skills Centre. The graduation gowns, mortar boards and sashes were sewn by the students.
The Bidvest Group Limited Sustainability report 2006 81
Voltex innovation lights up the way
Voltex identified an opportunity to promote energy
efficiency in the mining sector. The business designed
and patented a robust and energy-efficient mining
light which is adapted to fit into existing underground
cabling. Compliant with safety standards and local and
international quality standards, there is great demand for
this advanced system from major mining companies.
VML MINELIGHT VOLTEX LIGHTING
FEATURES AND BENEFITS
We reserve the right to change any Technical Data, Descriptions and Drawings without prior noticeVoltex Lighting P.O. Box 4403, Johannesburg 2000, Tel: (27 11) 622 4910 Fax.: (27 11) 616 9149 www.voltexlighting.co.za
IP54/65
To specify state:
LUMINAIRE - BRAND VOLTEXVML - ES - 113W ELB-110V orVML - NI - 113W ELB-110V VML - ES - 113W ELB-230V orVML - NI - 113W ELB-230V
CONNECTOR BOXVML – HAULAGE CONNECTOR BOX - BRAND VOLTEX
LAMP13 WATT COMPACT FLUORESCENT LAMP - BRAND OSRAMOSRAM DULUX D/E 13E/840 – 4 PIN
DESIGNED FOR UNDERGROUND CONDITIONS. The VML operates with separate electronic ballast and 4 pin 13 watt energy saving compact fluorescent lamp. VML – ES is adapted to fit into existing underground cabling and the VML – NI was designed in conjunction with the new haulage connector box for ease of installation.
• Unit is compact and lightweight• Ease of installation• Installed and removed with special key• Meets safety standards• Meets performance standards• High tolerance to voltage fluctuations • Compliant according to both local and
international standards• Available in 110 volt and 230 volt versions• IP 54/65
MATERIALS/FINISHBody: Polycarbonate-non toxic : flame retardant : houses electronic ballast
Enclosure : Polycarbonate : impact resistant with internal longitudinal prism surface structure
INSTALLATION/MOUNTINGVML/ES is inserted into and existing “EMES” electrical box in the same manner as a conventional GLS lamp. The luminaire has been designed to make installing and removal via the insertion of a special tool.
VML/NI base is equipped with two clips to secure in new connector box. Electrical connection is made to the connector box by means of two spring connectors pins sealed with an O-Ring.
HAULAGE CONNECTOR BOXThe connector box is wired into a conventional multi-lamp lighting circuit, supplied by either single or three phase and neutral cable.
The connector box is supplied with earth wire connected to armoured cable, pierced wire connection and clamp block. The connector box shall be supplied with two protective plugs to protect the pins from any form of corrosion.
SPECIFICATIONS
VML - ESVML - NI
VML - ESVML - NI
82
Divisional reviews
Bidpaper Plus
Bidpaper Plus Products and services
PRINTING AND RELATED
Personalisation and MailLithotech Afric Mail CapeLithotech Afric Mail JohannesburgLithotech Afric Mail Durban
Provides a full print to post solution incorporating laser imaging and inserting.
LabelsLithotech LabelsLithotech Manufacturing SpartanOzalid
Produces a full range of self adhesive labels and label papers.
Printing and ConversionLithotech Manufacturing CapeLithotech Manufacturing PinetownLithotech Listings and LogisticsPhakama PrintGlobe Stationery ManufacturersSilveray ManufacturingKolok Africa
Manufactures a wide range of forms, cheques, tickets and commercial print. Also a major producer of envelopes and a broad range of paper stationery products.
Sales and DistributionLithotech CorporateLithotech SalesLithotech Exports
National warehousing and distribution of all above products.
Neil Birch Chief executive
Sustainable development at Bidpaper PlusThe business strives to balance continued growth in earnings with the market’s ability to fuel that growth, while ensuring that natural and human resources are respected and nurtured. In the interests of both the market and the natural environment, the business aims to rely increasingly on the use of electronic communication instead of paper.
Bidpaper Plus is the South African market leader in print production and value-added fulfi lment services. Core competence in business forms manufacture, label production and personalisation and mail is complemented by strategic growth into digital and electronic solutions. The manufacture and distribution of high-quality stationery augment an extensive range of services. Bidpaper Plus has a broad national footprint and exports its products and services to markets in Africa and beyond.
The Bidvest Group Limited Sustainability report 2006 83
Bidpaper Plus Products and services
STATIONERY DISTRIBUTION
Wholesale Stationery DistributionSilveray Statmark Company Distributes an extensive range of business and scholastic stationery to the trade
and retailers.
ALTERNATIVE PRODUCTS
Electronic TransactionsEmail Connection High-volume electronic bill presentment and provider of electronic communication
solutions.
Consulting Services and IT solutionsLithotech Solutions
Material sustainable development issues
Business units Material issues Mitigating action
All Skills shortages. Staff training, internal promotions and learnerships are pursued, to develop and retain required skills.
Manufacturing Risk of injury when working with equipment.
Extensive precautions taken to reduce risk of injury, in strict compliance with the OHS Act.
Printing plants Exposure to hazardous chemicals. Regular medical checks conducted to ensure that levels of toxicity absorbed are not harmful.
Distribution Increasing fuel prices. Major drive to optimise efficiencies in the distribution chain.
Sustainable development indicator overview
Indicator 2004 2005 2006
Revenue (R’000) ✦ 1 333 805 1 747 690
Trading profit (R’000) ✦ 176 928 201 980
Employees 3 885 3 969 4 073
Total training spend (R’000) 637 1 064 1 671
Training spend per employee (R) 164 268 410
% of employees attending HIV/Aids training ✦ ✦ 44,2
Injury rate ✦ ✦ 1,23
Lost-day rate ✦ ✦ 54,3
Work-related fatalities ✦ 0 0
BEE procurement (R’000) 67 318 124 043 186 415
BEE procurement as % of discretionary spend 5,9 9,9 23,2
CSI spend (R’000) 83 114 240
Note: – Indicator notes and definitions are provided in the performance data table.
– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed.– Empowerment data is for South Africa only.✦ Information not available.
84
Divisional reviews
Bidpaper Plus
CHIEF EXECUTIVE’S COMMENT
The consolidation of the Group’s print capabilities in one
division enhances production of the entire paper-based
product range. The respective distribution responsibilities
of Lithotech and Silveray Statmark remain focused on their
existing markets. Looking ahead, the ongoing migration
to non-paper-based electronic alternatives will continue to
justify the “plus” aspect of the division.
This year was characterised by a number of medium-term
contract awards and renewals and the clear adoption of
e-mail as an acceptable medium for business communication.
Modest job growth was achieved within the mailing operations.
A principal challenge is the shortage of skills in the industry.
Bidpaper Plus is developing a more formal approach to skills
development, with increased training spend.
Measures to improve environmental performance are
continually pursued. However, it is often difficult to motivate
developments that are costly and have not been adopted by
competitors or industry regulators.
A principal focus in terms of sustainability is to address
concerns about the impact of HIV/Aids on the workforce. To
gain a better understanding of the situation, efforts need to
be managed more specifically, within a project framework.
ECONOMICS
There has been a focus on optimising production and new
investment to expand the product range and reinvigorate
segments of the brand portfolio. In a challenging and
competitive trading environment, a measure of growth was
achieved in trading income and revenue. Revenue grew
by 31% to R1,7 billion (2005: R1,3 billion) and trading profit
increased by 14,2% to R202,0 million (2005: R176,9 million).
MANAGEMENT SYSTEMS AND GOVERNANCE
Lithotech Corporate is ISO 9001 accredited. Internally
developed quality, health and safety systems are in place
to ensure quality standards that dovetail with the levels
expected by ISO. Internal measures to monitor performance
standards include a quality logging system.
Lithotech Afric Mail conducts most of its business under
service level agreements which govern contract quality
standards. Where required by major customers, procedures
are developed to suit requirements, which may include safety
and security criteria. These procedures may be subject to
audits by external parties. Suppliers are required to provide
certificates on receipt of goods and products are inspected
for quality standards.
Companies comply with SABS standards where applicable.
BLACK ECONOMIC EMPOWERMENT
Lithotech, which embodies a large portion of the division,
has improved its independent empowerment rating from
“BBB” to “A”. Momentum will be used to drive a more
formal process towards acquiring an empowerment rating
for Silveray Statmark, where there is a greater need for
transformation.
Production units have the most discretion in terms of
procurement spend. Forms manufacturing is the biggest
external buyer and currently purchases approximately 50%
of its products from BEE companies. On a monthly basis,
factories submit their procurement figures and targets are set
on a branch or production unit basis. Supplier BEE levels are
continually reviewed and suppliers are encouraged to obtain
an empowerment rating.
There has been encouraging progress in improving the
equity profile of the workforce below management level
and there has been greater participation from HDIs at senior
management level.
A principal focus is the development and promotion of HDIs.
Attracting and retaining experienced black professionals
is an ongoing challenge. A legacy of suppression of skills
development has resulted in there being a small pool of HDIs
with specialised skills in the industry.
The Bidvest Group Limited Sustainability report 2006 85
involves standardised procedures and regular meetings
which are fully documented and are subject to internal and
sometimes external auditing.
Members of staff work in a light-manufacturing environment
which involves regular work with high-speed machinery, knives,
guillotines, forklifts, heavy boxes and heavy paper rolls. There is
some exposure to potentially harmful chemicals and solvents.
Extensive precautions are taken to reduce the risk of injury.
Depending on the size of the manufacturing site, assistance
from an occupational practitioner is available on-site, or as a
contract facility.
External suppliers undertake regular air emission tests and
water contamination tests to ensure that these remain within
regulated levels. The occupational practitioner regularly carries
out medical examinations of employees to ensure that any
levels of toxicity absorbed in the body are not threatening.
HIV/Aids
Business units have an HIV/Aids awareness programme
which is communicated to members of staff. The availability
and extent of additional educational and support initiatives
varies. Concerns about the increasing impact of the disease
in KwaZulu-Natal, in particular, have prompted a drive to
establish the extent to which the disease is prevalent in
the workplace. Although voluntary testing is offered and
encouraged, it is proving difficult to persuade members of
staff to make use of the facility.
Training
Sustained investment in skills development is essential. It
is an ongoing challenge to attract and retain experienced
professionals in a highly competitive market for a limited pool
of skills.
Following the mergers and acquisitions over the last two
years, Bidpaper Plus has stabilised and is establishing a
more formal approach to skills development. A skills audit
was conducted in order to identify skills requirements and
Employee-owned Phakama Print
Phakama Print is an empowerment initiative of Lithotech,
established in 2003. The sheet-fed printing business is 40%
owned by Lithotech and the remaining 60% shareholding
is distributed among Lithotech employees, making the
business effectively more than 50% black-owned. Phakama
Print was rationalised. The Cape Town operation was
closed and some of its components were moved to
Gauteng to form one consolidated plant. The business
employs 80 staff and has revenues of approximately
R50 million. Phakama also prints Bidvoice, Bidvest’s internal
communication publication.
WORKFORCE
Bidpaper Plus employs 4 073 staff members, of which
approximately 3 800 work for Lithotech companies, 200 for
Silveray Statmark and 50 for Kolok Africa.
Standard policies relating to the workplace are published in
electronic format on the Lithotech website and are available
to employees through departmental secretaries. A range
of standardised employee benefits is offered to permanent
employees and a process is under way to introduce benefits
for temporary staff. There are no formal performance
appraisal systems, though most companies conduct informal
performance reviews at least annually.
The label companies have worker and management forums
which meet monthly to address employee grievances.
There has been an encouraging reduction in the number of
complaints and grievances.
Lithotech Afric Mail has introduced a savings plan and risk
benefits for staff members who have not had a pension.
Lithotech Afric Mail in Cape Town employs 50 long-term
contractors with disabilities, all of whom are enrolled in
services SETA learnerships.
Health and safety
Strict compliance with the OHS Act is ensured in all
production environments and warehousing facilities. This
86
Divisional reviews
Bidpaper Plus
opportunities for development. Members of staff showing
distinct potential are identified, developed and promoted, as
a standard approach.
In addition to the 1% skills levy, the division invests 1% of payroll
on training. The majority of training is conducted in-house with
an emphasis on supervisory training. Over 70 employees were
nominated for training at various levels of competency.
All supervisors and managers of operations receive
training in sound labour relations practices to enhance staff
management capabilities.
Most technical staff training is structured as part of the
media advertising, publishing, printing and packaging SETA.
These industry-specific training courses offer trainees both
on-the-job as well as classroom training. Approximately
50 apprenticeship learnerships are in progress.
A two-day sales conference is held annually, focusing
on product introduction and sales training. Senior level
managers travel overseas to attend trade shows and visit
suppliers, in order to remain informed of best practice trends
and developments.
Employees are offered opportunities for tertiary level
education and approximately 20 members of staff are being
assisted in working towards acquiring a diploma or degree in
a subject which is generally job-related.
Members of staff with disabilities have the opportunity to enrol
for learnership programmes in terms of the services SETA.
COMMUNITY
Customers
All major customers are subject to service-level agreements
and large contract businesses are regularly reviewed by
management. Label companies’ management visits all major
clients on a weekly basis to assess practices and ensure
satisfaction. Lithotech Afric Mail senior personnel have
annual review meetings with customers to measure customer
satisfaction and discuss new business offerings and trends.
The manufacturing companies have a formal system of
logging and measuring customer complaints. These are
reviewed weekly and action is taken to reduce levels of
complaints. Sales and distribution log customer complaints
on quality issues on a national electronic control system
which automatically routes the complaints to the relevant
management personnel for action and resolution.
Community activities
The principal focus areas of community investment are an
HIV/Aids awareness, education and outreach programme;
Lithotech supports South African creative talent
Lithotech is proud to play its part in recognising, rewarding
and fostering creative excellence in South Africa, as a
sponsor of the Pendoring Awards and the Loeries Awards.
Lithotech’s direct mail business receives the support of
many advertising agencies and organisations involved
in direct marketing in the country. As a sponsor of these
prestigious national advertising organisations, Lithotech
appreciates the opportunity to give its support to creative
talent in the South African advertising community, both
English and Afrikaans. The efforts of the industry as a whole
have contributed significantly to Lithotech’s success as the
major producer of mailed communications in the country.
The regional autumn Pendoring Afrikaans Advertising Awards, sponsored by Lithotech, were recently held at the Castle in Cape Town, showcasing South Africa’s most talented individuals from the competitive world of Afrikaans advertising.
The Bidvest Group Limited Sustainability report 2006 87
The safe handling and responsible disposal of chemicals is
undertaken in accordance with legislative requirements and
best practice. Levels of emissions are monitored and, where
necessary, corrective action is taken. Uncoated paper waste
is removed by a recycling company. Coated paper such
as silicone-treated material is removed and disposed of in
official land-fill dumps. Steel from equipment including dies,
print rollers, plates and shafts that cannot be refurbished,
is sold to metal merchants for recycling. Waste is recycled
where possible. Nonetheless, the production processes
predominantly require virgin materials.
The factories have a large electricity requirement. Electricity-
consuming equipment is switched off after hours. Chemicals,
inks and adhesive waste is stored in underground tanks
and removed by specialist waste removal contractors, who
provide disposal certificates. The availability of more benign
chemicals and inks (such as soya-based or bio-degradable
inks) is explored on an ongoing basis.
Lithotech Afric Mail activities rely extensively on the use
of paper. Paper is obtained from reputable mills with
responsible environmental management and monitoring
policies. To minimise paper usage, clients are encouraged
to use electronic communication. Paper and corrugated
packaging board are recycled.
There is a major drive to optimise efficiencies in the
distribution line.
a secondary education bursary scheme for children of
employees; and a co-operative educational programme.
Support is given to charitable organisations that provide
opportunities for disabled and handicapped individuals.
Managing directors of business units are tasked with
identifying community projects to support in the regions in
which they operate. Where possible, members of staff are
encouraged to become involved.
The Lithotech website has a section dedicated to CSI which
provides a summary of current projects supported by various
business units.
ENVIRONMENTAL
Production units have the most extensive impact on the
environment. Several printing and paper conversion
companies work with a variety of hazardous printing-related
chemicals. Chemicals, inks and adhesives are supplied with
relevant certificates. The use of hazardous substances in
production is avoided wherever possible.
Nkosi Johnson Haven
Bidpaper Plus will be driving a project to refurbish facilities
in need of repair at the Nkosi Johnson Haven near Berea, a
home for HIV/Aids orphans and children living with HIV/Aids.
A long-term relationship will be developed with the centre,
whereby members of the Haven will be contracted to provide
HIV/Aids awareness training at Bidpaper Plus companies.
88
Divisional reviews
Bid Auto
Bid Auto Products and services
McCARTHY MOTORS HOLDINGS
Vehicle franchises include: Alfa Romeo, Audi, BMW, Mini, Seat, Land Rover, Volvo, Nissan, Fiat, Peugeot, Jeep, Chrysler, Chevrolet, Mercedes Benz, GAZ, Smart, Mitsubishi, Opel, Isuzu, Renault, Toyota, Lexus and Volkswagen. Truck franchises include: Mercedes Benz, Nissan Diesel, Hino, Renault and Iveco.
Over 100 dealerships in major urban areas selling upwards of 85 000 new and used vehicles and offering comprehensive after-sales parts and service back up
McCarthy Pre-owned Offers a wide range of quality used vehicles, all with comprehensive warranties and other peace-of-mind benefits.
McCARTHY FINANCIAL SERVICES
McCarthy FinanceMcCarthy Insurance Services
A one-stop service that provides customers with tailor-made finance allowance packages, short-term insurance products and client protection policies.
McCARTHY FLEET SERVICES A specialist division catering for the specialised purchasing and finance needs of corporate fleet owners.
CLUB MCCARTHY Club McCarthy is a loyalty programme that offers members a broad range of special benefits.
McCARTHY CALL-A-CAR South Africa’s leading online motor retailer.
ELIANCE A business communications agency at the forefront of IT and marketing. Offers cutting-edge CRM, website, multimedia, strategy, design and advertising solutions.
BURCHMORE’S AUCTIONS A national vehicle auctioneer, regarded as South Africa’s leading authority on vehicle auctions due to the high volumes of vehicles it auctions per year and the experience of its staff.
BUDGET RENT A CAR A fast-growing car rental company with over 60 car rental locations in South Africa, Namibia and Botswana, supported by sub-licensee franchises in Lesotho and Mozambique.
Brand Pretorius Chief executive
Sustainable development at McCarthyMcCarthy is continually challenged to meet and exceed OEM’s (original equipment manufacturer) rising performance expectations, which include social, BEE, service quality and environmental aspects. This places a high demand on the quality of labour skills. McCarthy, in the face of chronic country-wide skills shortages, invests heavily in developing human capital in the work place and in the community as part of its CSI
initiatives.
Bid Auto
Bid Auto is South Africa’s second largest motor retail organisation, with nationwide representation across more than 100 wholly owned dealerships. Its activities span vehicle import and distribution, new and used vehicle sales, parts and service, financial services and fleet support, vehicle auctioneering, online retailing and vehicle and truck rental. McCarthy represents most vehicle marques and is the importer and distributor of all Yamaha products in South Africa.
The Bidvest Group Limited Sustainability report 2006 89
Bid Auto Products and services
BUDGET VAN RENTAL Offers a wide selection of vehicles for short-term rental through its branches in the major cities across South Africa.
YAMAHA DISTRIBUTORS The sole importer and distributor of the full range of Yamaha products and parts in South Africa.
MCCARTHY VEHICLE IMPORT AND DISTRIBUTION
GAZ Southern AfricaAutoChina SA
The sole importer and distributor of the Russian GAZ range of commercial vehicles in southern Africa and, as from March 2007, a full range of Chinese vehicles through its AutoChina division.
Material sustainable development issues
Material issues Actions
Management of HIV/Aids in the workplace. A comprehensive wellness programme incorporates HIV/Aids awareness activities and support in accessing counselling and treatment.
Bidvest’s minority ownership policy conflicts with the goals of some OEMs – specifically in the area of BEE ownership at dealership level – which has resulted in margin sacrifices and restrictions on additional dealerships.
On an exception basis, where incremental growth opportunities exist, McCarthy has introduced BEE ownership at dealership level.
Difficulty in attracting and retaining HDIs at senior level. This is mitigated through a management development programme, improved recruitment activities and succession planning.
Talent availability, attraction and retention. McCarthy is the leading developer of talent in the motor retail industry and continually monitors employee satisfaction levels and remuneration structures.
Lack of new roads and deteriorating road infrastructure may impact on vehicle sales.
This issue is raised publicly through McCarthy’s public relations activities.
Increasing fuel prices, stricter emission standards and climate change-related mitigation regulations are likely to depress sales of certain vehicle categories.
It is expected that McCarthy’s broad vehicle-product mix will minimise this medium-term impact.
Sustainable development indicator overview
Indicator 2004 2005 2006
Revenue (R’000) ✦ 13 628 958 16 197 055
Trading profit (R’000) ✦ 474 672 621 264
Employees 4 906 5 289 5 795
Total training spend (R’000) 5 925 10 774 10 483
Training spend per employee (R) 1 208 2 037 1 809
% of employees attending HIV/Aids training ✦ ✦ 41,7
Injury rate ✦ ✦ 0
Lost-day rate ✦ ✦ 0
Work-related fatalities ✦ 0 0
BEE procurement (R’000) 52 971 181 172 169 589
BEE procurement as % of discretionary spend 9,2 14,6 12,7
CSI spend (R’000) 1 463 1 564 2 544
Note: – Indicator notes and definitions are provided in the performance data table.
– Where divisional structures changed, figures were restated to allow comparison and have been adjusted to exclude disposed/closed businesses.– 2004 financial figures have not been provided due to restructuring and IFRS.– Employee-related data includes non-permanent employees.– Health and safety indicators have changed.– Empowerment data is for South Africa only.✦ Information not available.
90
Divisional reviews
Bid Auto
CHIEF EXECUTIVE’S COMMENT
As South Africa’s second largest motor vehicle retailer,
McCarthy plays a significant role in supplying and maintaining
the country’s new and used vehicles. Annually, McCarthy
sells 85 000 new and used vehicles and services in excess of
700 000 motor vehicles.
To meet rising OEM standards and to expand and upgrade
McCarthy’s dealership infrastructure, landlords invested
R98 million in six new and refurbished facilities. For the
coming year, R280 million has been earmarked for 15 new
and refurbished facilities.
McCarthy’s principal challenge is identifying and recruiting
appropriately skilled employees. Economic growth is
outstripping the country’s supply of labour. Government
and the private sector need to work together to pro-actively
tackle this issue. McCarthy continues to invest heavily in
developing its human capital and is the leader in the motor
retail sector. A record number of 12 423 training days was
achieved. The number of McCarthy and external technical
trainees currently trained has risen to 1 100 which is about a
third of all such trainees in the automotive industry.
A continuing frustration is that developers of human capital,
including McCarthy, are being talent-raided and especially
highly skilled black employees are being lost. McCarthy
monitors employee satisfaction levels and remuneration
structures, to minimise loss of personnel. The careers at
McCarthy e-recruitment initiative will strengthen McCarthy’s
ability to recruit new talent. A corresponding internal initiative
will improve to process of identifying and advancing internal
talent.
McCarthy’s Rally to READ CSI programme continues to excel
and received the prestigious Mail & Guardian 2005 Investing
in the Future award.
ECONOMICS
Due to favourable macro-economic conditions and enhanced
vehicle affordability, the new vehicle market performed very
well. McCarthy optimised favourable trading conditions and
recorded its best ever year. Total vehicle sales approached
85 000 units, an increase of nearly 13 000 year-on-year.
Revenue reached R16,2 billion (2005: R13,6 billion), a
rise of 18,8%, while trading profit increased by 30,9% to
R621,3 million (2005: R474,7 million).
MANAGEMENT SYSTEMS AND GOVERNANCE
McCarthy dealerships have systems in place that meet the
stringent environmental, quality, customer service, and
health and safety standards set by OEMs. These systems are
regularly audited for compliance by McCarthy’s internal risk
control department, as well as by OEMs. Non-compliance
with OEM standards can result in profit margin penalisation
and even loss of dealerships. An independent, specialist
organisation is contracted to conduct six-monthly health
and safety audits, which include quality and environmental
aspects.
Forsdicks BMW Tygervalley was the first dealership in the
country to implement BMW’s rigorous Quality Management
Accreditation, covering environmental, social, health and
safety, and customer management issues.
A comprehensive risk management solution, called
BarnOwl, has been used since 2001 to enhance business risk
management.
BLACK ECONOMIC EMPOWERMENT
McCarthy’s empowerment rating remains “BBB”.
McCarthy has appointed its first black executive director,
Lazola Madikizela. In his role as commercial director,
The Bidvest Group Limited Sustainability report 2006 91
alignment of employee codes and policies with McCarthy’s
core values and employee behaviour. Consultative
committees are tasked to follow up in areas of identified
need. There has been a consistent upward trend in
satisfaction levels over the last eight years.
Permanent employees qualify for retirement, health-related
insurance, disability and maternity benefits.
Health and safety
Vehicle service staff, about 31% of employees, are exposed
to the risks associated with motor vehicle workshops.
McCarthy complies with the OHS Act and strict OEM safety
requirements, ensuring compliance through quarterly
meetings of its health and safety committee, monthly
inspections, appropriate employee training and independent
audits. There were no significant on-duty accidents or injuries.
Minor health and safety incidents were investigated through
to completion of appropriate corrective actions.
HIV/Aids
Actuarial research indicates that about 7% of staff is HIV positive
and just under 1% Aids positive. The company has an HIV/Aids
policy and a well-established wellness programme. Activities
have included: monthly information leaflets attached to payslips,
posters displayed in the workplace, a national
HIV/Aids quiz, an annual Wellness Week, in-dealership reference
material, a condom distribution programme and a wellness
co-ordinator in each business unit to provide guidance.
About half of McCarthy staff participated in the 2005
HIV/Aids staff quiz, which revealed that about 60% of those
who participated know their HIV/Aids status. This quiz will be
repeated shortly.
Training
McCarthy is the leader in the motor retail industry for
innovative and comprehensive training programmes and
Lazola fulfils various commercial functions as well as guides
Bid Auto’s BEE initiatives.
McCarthy continues to be the industry leader with its training
and education programmes, which largely benefit HDIs.
Attracting and retaining suitable HDIs at senior management
level remains an ongoing challenge despite significant efforts.
The McCarthy procurement office has grown its discretionary
expenditure with BEE suppliers from R20 million in 2001
to R170 million in 2006, in excess of 12,7% of the division’s
discretionary spend.
Enterprise development – from concept to success
The Busa Toyota Hillcrest dealership in KwaZulu-Natal
was established as a greenfield BEE joint venture in 1998.
Following a six-year development and growth period, the
BEE owner elected to become independent in 2004. Busa
Toyota Hillcrest, which still makes use of McCarthy’s state-
of-the-art management information systems, continues to
operate with great success.
McCarthy has since 2004 been mentoring a black-owned
SME, Afrisigns, which employs five people and provides
vehicle registration and number-plating services in
KwaZulu-Natal.
WORKFORCE
McCarthy employs 5 795 staff across its business units in
the major urban centres in South Africa. Despite its highly
dispersed workforce, McCarthy has been successful in
establishing staff management, training and communication
systems that effectively reach all employees. The company
has an intranet to enhance communication with its workforce.
Employee satisfaction levels and performance against key
values are measured annually using a standard 14-point
questionnaire, in which upwards of 80% of employees
participate. The employee satisfaction survey assesses
92
Divisional reviews
Bid Auto
has achieved a number of firsts in this area. A wide range
of technical, non-technical and managerial programmes
is offered spanning NQF levels 1 to 5. Training is mainly
provided at Bid Auto’s three regional training centres, located
in Midrand, Durban and Cape Town. A total of 12 100 training
days were logged.
The business spent R10 million on skills development and
training this year, approximately R2 000 per employee.
Principal programmes include an Emerging Business Leader
Programme with 85% black participation, sales cadet
learnerships with 70% black and/or female participation
and technical learnerships, which are also offered to non-
McCarthy businesses. A mentorship programme is offered to
high-potential staff, most of whom are black, and 15 high-
potential McCarthy staff participated in the Bidvest Academy.
COMMUNITY
Customers
Comprehensive customer feedback systems are available
at dealership, franchise and corporate level and are used to
obtain individual and aggregated feedback. OEMs obtain
independent customer feedback following the purchase
of a new vehicle and subsequent warranty-based services.
Such feedback systems form part of distribution agreements
with OEMs and profit margins are often linked to customer
satisfaction ratings. Individual complaints are dealt with
by nominated staff members. Customer satisfaction levels
across all 20 marques represented by McCarthy are routinely
measured. The results are used to identify and address specific
problem areas and are to be linked to management bonuses.
McCarthy conducts satisfaction surveys among all its used
vehicle customers, which is unusual in the industry. Customer
ratings of used vehicle service have shown steady quarterly
increases following implementation of a revised rating system
a year ago.
Community activities
The primary objective of McCarthy’s CSI projects is to
enhance the quality of school education by improving the
capacity of educators and the resources available to them.
McCarthy’s main social investment initiatives encompass:
4 Rally to Read programme reaching 35 000 learners. During
2006 the programme benefited 133 disadvantaged rural
primary schools and more than 35 000 learners.
4 McCarthy co-ordinated School Computer Centres project,
which has to date established 25 computer learning centres
at primary schools in the Durban region. The programme’s
The Bidvest Group Limited Sustainability report 2006 93
in new and refurbished dealerships to separate oil from water.
An independent specialist organisation audits the adequacy
of oil waste disposal.
There is a growing trend towards recycling and refurbishing
brake and clutch linings and recycling aluminium and other
metal wastes.
Most European vehicle marques sold by McCarthy comply
with the Euro 4 and 5 standards, which restrict emissions from
engines and exhausts.
effectiveness is monitored by the project co-ordinating
committee, which includes the key sponsors.
4 In-kind donations to a variety of worthy causes and the
participation of a number of dealerships in individual
projects.
ENVIRONMENTAL
Dealerships have a variety of policies and procedures in
place which conform with OEM environmental requirements.
These policies and procedures govern recycling and the
appropriate handling and disposal of used motor car oil,
effluent and other disposables. Oil traps are being installed
The award-winning Rally to Read
The Rally to Read is a reading development programme
organised nationally by McCarthy with advertising and
educator skills support from the Financial Mail and the
Read Educational Trust respectively. The programme is now
in its ninth year and, due to the dedicated involvement of
McCarthy staff, was nominated the national winner in the
“Best Corporate Employee Investment Programme” category
of the Mail & Guardian 2005 “Investing in the Future” award.
The Rally involved 1 311 sponsor representatives utilising
438 vehicles in nine separate rallies countrywide. Just over
R4 million in cash was raised to support literacy programmes
that have reached 34 500 scholars in 133 rural schools.
Two-thirds of the funds were used to purchase reading books
catering to all levels of literacy development. The remaining
funds are being used to fund teacher training programmes
for 1 079 teachers. Additional donations of R1,8 million were
secured to cover other educational materials and services.
These included management training for principals, training
for district officials and principals on implementing a literacy
development programme in schools, science training courses
for teachers, science kits and stationery. Financial and non-
financial donations were received from 96 corporate and
individual sponsors.
Evaluations of Read-conducted literacy development
programmes have demonstrated that, after a two-year
intervention, the improvement in learner reading and
writing skills is four years and two years, respectively, ahead
of schools which are not involved in the programme. An
independent programme assessment is under way in the
rural schools which partner the Rally programme and will be
finalised following the 2007 Rally.
To date R21 million has been raised as part of this
programme and 408 rural schools have been supported by
the Rally for three years.
94
Independent assurance
Independent assurance report to the directors of Bidvest on the 2006 sustainability report
INTRODUCTIONWe were engaged by The Bidvest Group Limited (Bidvest) to provide assurance on the 2006 Sustainability Report (the report) with respect to:4 Aggregated Group data on Black Economic Empowerment
(BEE) procurement by rand value on page 12 and employment equity by race on page 98 (collectively referred to as the selected BEE data); and
4 Management assertions on page 30 in relation to the findings from the KPMG gap analysis over Bidvest’s sustainability management processes.
This report is made solely to Bidvest in accordance with the terms of our engagement. Our work has been undertaken so that we might state to Bidvest those matters we have been engaged to state in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Bidvest, for our work, for this report, or for the conclusions we have reached.
RESPONSIBILITIES OF DIRECTORSThe directors of Bidvest are responsible for the preparation and presentation of the report and the information and assessments contained within it, including the management assertions on the findings from the KPMG gap analysis; for determining the Group’s objectives in respect of sustainability performance and for designing, implementing and maintaining appropriate performance management and internal control systems to record, monitor and improve the accuracy, completeness and reliability of sustainability data from which the reported information is derived.
RESPONSIBILITY OF THE ASSURANCE PROVIDEROur responsibility is to express our conclusions to Bidvest, based on our independent assurance engagement, performed in accordance with International Standard on Assurance Engagements (ISAE 3000): Assurance engagements other than audits or reviews of historical financial information. This standard requires us to comply with ethical requirements and to plan and perform our assurance engagement to obtain limited assurance, expressed below, regarding the subject matter of the engagement.
BASIS OF WORK, CRITERIA AND LIMITATIONSThe procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the subject matter and the purpose of our engagement. In making these assessments we have considered internal controls relevant to the company’s preparation and presentation of the selected BEE data in
the report, in order to design procedures appropriate for gathering sufficient evidence to determine that the selected 2006 BEE data is fairly stated and not misled. Our assessment of relevant internal controls was not, however, for the purpose of expressing a conclusion on the effectiveness of the company’s internal controls.
Bidvest applies the Bidvest Charter and BEE scorecard, which are based on the Broad-Based Black Economic Empowerment Act of 2003, as the criteria for determining the recognition and measurement of the selected BEE data. The reliability of BEE data is subject to inherent limitations given their nature and the evolving method for determining, calculating or estimating such data. This is demonstrated by the note on page 26 outlining the variation within the Group over the criteria for recognition of BEE suppliers. It is important to understand the selected BEE data and related statements in the report in the context of these limitations.
The Global Reporting Initiative’s sustainability reporting guidelines 2002 were used as the basis for assessing the management assertions on page 30 in relation to the findings from the KPMG gap analysis over Bidvest’s sustainability management processes.
We planned and performed our work to obtain all the information and explanations that we considered necessary to provide sufficient appropriate evidence to provide a basis for our limited assurance conclusion expressed below. The evidence-gathering procedures we carried out were more limited than for a reasonable assurance engagement, and, therefore, less assurance is obtained than in a reasonable assurance engagement. No assurance is expressed in relation to other information or assertions included in the report, not covered by our work performed.
We believe that our work performed as set out below provides an appropriate basis for our conclusions.
WORK PERFORMEDOur work on the selected BEE data consisted of:4 Obtaining an understanding of the systems used to
generate, aggregate and report the selected BEE data at the corporate office and divisional levels and five business units to assess the reliability of associated Group data;
4 Performing an analytical review of the selected 2005 BEE data aggregated at corporate office level and obtaining explanations for unusual trends;
The Bidvest Group Limited Sustainability report 2006 95
4 Testing the accuracy of the aggregation process for the consolidated selected BEE data at corporate offi ce level; and
4 Reviewing the consistency between the selected BEE data and related statements in the report, in light of our fi ndings.
Our work on the management assertions in relation to the fi ndings from the KPMG gap analysis on page 30 consisted of:4 Conducting interviews with certain board members and
senior management at the Group and divisional levels to understand the relevance of sustainability to the businesses and the processes in place to manage and report on sustainability issues;
4 Obtaining an understanding of the “Bidvest culture”, reporting lines and core business functions including corporate governance and risk management, the operation of acquisitions and investment appraisal criteria, stakeholder engagement, human resources, training and incentivisation schemes.
4 Reviewing documents supporting management assertions over: the existence of health, safety, environment and community policies and programmes; and the extent to which sustainability issues are considered and managed as part of core business functions.
4 Reviewing the management assertions on page 30 to assess whether they are supported by our fi ndings and whether other related information in the report is consistent with those assertions.
CONCLUSIONBased on the work described above, in our opinion:4 we have no reason to believe that the selected BEE data
set out above for the year ended June 30 2006 is not fairly stated, in all material respects, on the basis of the Bidvest Charter and BEE scorecard.
4 we have no reason to believe that the management assertions on page 30 in relation to the fi ndings from the KPMG gap analysis over Bidvest’s sustainability management processes are not fairly stated on the basis of the Global Reporting Initiative’s sustainability reporting guidelines.
KPMG Services (Pty) Limited
Per PD NaidooDirectorJohannesburgOctober 2006
Independent review on the black economic empowerment shareholding in BidvestKPMG Services (Pty) Limited reviewed the BEE shareholding in Bidvest as at June 30 2006 and confi rmed the fi ndings of Empowerdex. A copy of their report can be
obtained from our website, www.bidvest.com
Pro-forma interest of Dinatla in the South African operations of BidvestKPMG has previously confi rmed the calculations in respect of the 23,33% pro forma interest of Dinatla in Bidvest, had Dinatla invested in the South African operations of Bidvest only, rather than making their investment at holding company level which includes the offshore operations. This is an historic calculation and does not change from year-to-year. The Bidvest Group Limited sustainability report 2006 can be obtained from our registered offi ce or
from our website, www.bidvest.com
96
Empowerment rating
Empowerdex rating definitions
General
BEE Black Economic Empowerment.
Black people A generic term which means African, Coloured and Indian South African citizens.
Status (Indirect empowerment)
Good broad-based contributors
The entity has shown exceptional contribution in some areas of BEE, and average contribution in other areas.
Fair broad-based contributors
The entity has shown an average overall contribution towards BEE.
Unsatisfactory broad-based contributors
The entity has shown below average overall contribution towards BEE.
Status (Operational capacity)
Unconstrained operational capacity
The entity has full capacity to conduct its entire operations and has insignificant operational reliance on any third-party entities.
Constrained operational capacity
The entity relies on a related or third-party entity to conduct its administrative, procurement, logistics, financing or other non-core operations. The reliance does not significantly impact on the entity’s capacity to perform its core operations.
Limited operational capacity
The entity relies extensively on related or independent third-party entities to conduct its core operation. The entity does not have sufficient capacity to deliver its services without external support.
The Bidvest Group Limited Sustainability report 2006 97
4. Skills development C
4.1 Skills development spend R83 021 5284.2 Skills development plan Yes4.3 Skills spend as a percentage of payroll 1,7%4.4 Total number of delegates trained 38 4674.5 Delegates trained as a percentage of workforce 53,9%4.6 Number of black delegates trained 31 2514.7 Black delegates as a percentage of total
number of delegates trained 81,2%4.8 Learnerships as a percentage of total employees 1,0%4.9 Specific obstacles or restrictions None
5. Affirmative procurement C
5.1 Affirmative procurement plan Yes5.2 Affirmative procurement target Yes5.3 Total procurement R41 453 327 1755.4 Affirmative procurement R4 117 606 1805.5 Affirmative procurement spend as a
percentage of total procurement 9,9%5.6 Application of an independent,
robust verfication mechanism None5.7 Specific obstacles or restrictions None
6. Enterprise development A
6.1 Enterprise development initiatives Yes6.2 Total enterprise development spend R637 439 337
7. Social development D
7.1 Social development initiatives Yes7.2 Total social development spend R25 724 4707.3 Specific obstacles or restrictions None
8. Operational capacity A
8.1 The operational activities of the entity include: investment holding8.2 Bidvest does not rely on the support of
related/third-party entities8.3 Bidvest does not outsource any of its key operations8.4 The entity is in possession of annual financial
statements8.5 The entity is in possession of a valid tax
clearance certificate8.6 The risk of economic benefits flowing out of the
Company as a result of the lack of operational capacity is: Very low
8.7 Specific obstacle or restrictions: None
Factor Component Empowerdex
BEE factors status status rating
BEE ownership A
Level 4
contributor* A
BEE management C
Employment equity B
Skills development C
Affirmative procurement C
Enterprise development A
Social development D
Operational capacity A Unconstrained* As per the Department of Trade and Industry’s Draft Codes and Good Practice (released June 2005).
1. BEE ownership A
1.1 BEE voting rights 41,4%1.2 BEE women voting rights 21,8%1.3 BEE entitlement to economic interest 41,4%1.4 BEE women entitlement to economic interest 21,8%1.5 BEE designated groups entitlement to economic interest 14,3% 1.6 Ownership fulfilment No1.7 Net economic interest 7,6%1.8 Total ownership points earned 19,00
2. BEE management C
2.1 BEE board participation through voting rights 29,2%2.2 BEE board participation through representation 16,7%2.3 BEE women board participation through representation 8,3%2.4 BEE senior executive management representation 33,3%2.5 BEE women senior executive management representation 33,3%2.6 BEE other executive management representation 11,1%2.7 BEE women other executive management representation 0,00%2.8 Total management points earned 5,7
3. Employment equity B
3.1 Total workforce analysed 71 3833.2 Black representation 83,7%3.3 Black female representation 36,9%3.4 Employment equity plan Yes3.5 Employment equity committee Yes3.6 Affirmative action plan Yes3.7 Specific obstacles or restrictions None
98
Sustainable development performance data
Data has been collated for Bidvest’s South African and international operations, for the period July 1 2005 to June 30 2006, which coincides with Bidvest’s financial reporting. Where divisional structures changed, figures were restated to allow comparison with 2005.
Every effort has been made to ensure data accuracy and completeness. There is, however, the possibility of small inconsistencies due to human error in recording and collating, and differences in interpretation of definitions.
Where the analysis refers to racial categories, only South African data is presented. “Black” in that context includes black, Indian and coloured. Employee-related data includes non-permanent, contract employees.
The collation of sustainability information at Group level commenced in 2003 and focused on South African operations only. Gradually the exercise has been widened to include offshore operations and a broader selection of indicators. This year selected additional social and environmental data is published at divisional level. Data is only reported where it is considered to be of reasonable accuracy and is reported according to the 2002 GRI guidelines. Ongoing efforts are being made to improve the data quality and to broaden the range of indicators.
Where information is not available this has been marked with a “✦”.
Health and safety indicators 4 Definitions relating to occupational health and safety have been brought in line with the GRI’s G3 guidelines. This data is now reported as
“injury rate”, “lost-day rate” and “work-related fatalities”. Comparison with prior years is not possible. Fatalities were not reported separately prior to 2005.
4 An “injury” is defined as a fatal or non-fatal injury arising out of or in the course of work and is reported if an employee is not able to return to their normal duties the day following the day on which the injury occurred, irrespective of it being a work day or not. The “injury rate” expresses the frequency of injuries relative to the total time worked by the total workforce for the reporting period and is stated as the rate per 200 000 employee hours.
4 “Lost days” are defined as days which could not be worked as a result of occupational accidents or diseases. A return to limited duty or alternative work for the same organisation is not considered to be lost days. The “lost-day rate” provides an indication of the impact of occupational accidents and diseases and is stated as the rate per 200 000 employee hours.
2002 2003 2004 2005 2006
Employees and their compositionNumber of employees 66 599 69 752 81 010 88 441 93 325
South Africa 53 396 56 742 68 229 75 955 78 029
International 13 203 13 010 12 781 12 486 15 296
Employment by gender profile – (%)Group ✦ ✦ ✦ 100,0 100,0
Male ✦ ✦ ✦ 58,1 57,6
Female ✦ ✦ ✦ 41,9 42,4
South Africa 100,0 100,0 100,0 100,0 100,0
Male 53,7 55,0 55,8 55,1 53,4
Female 46,3 45,0 44,2 44,9 46,6
International ✦ ✦ ✦ 100,0 100,0
Male ✦ ✦ ✦ 75,4 79,3
Female ✦ ✦ ✦ 24,6 20,7
The Bidvest Group Limited Sustainability report 2006 99
2002 2003 2004 2005 2006
Employment by gender profile – (%) continued
Female employment (Group)
Directors 9,1 8,1 15,2 13,1 11,7
Management 25,3 25,3 27,6 25,9 23,8
Other employees 46,7 45,5 44,7 42,3 42,8
Employment equity profile by race – (%) 100,0 100,0 100,0 100,0 100,00
Black 62,7 64,9 69,0 71,7 71,2
White 20,3 19,2 16,4 14,2 15,0
Indian 6,7 6,3 5,0 5,1 4,8
Coloured 10,3 9,6 9,6 8,9 9,0
Employment equity by race and gender – (%) 100,0 100,0 100,0 100,0 100,0
Black male 43,4 45,1 47,3 47,9 45,8
White male 10,4 9,9 8,5 7,2 7,6
Black female 36,3 35,7 36,3 37,8 39,3
White female 9,9 9,3 7,9 7,1 7,3
Management representation – (%)
Bidvest Group board representation 100,0 100,0 100,0 100,0 100,0
Black male 7,1 13,8 13,3 12,9 16,7
White male 85,8 75,9 73,4 70,9 62,5
Black female 0,0 3,4 10,0 9,7 12,5
White female 7,1 6,9 3,3 6,5 8,3
Bidvest divisional board representation 100,0 99,9 100,0 100,0 100,0
Black male 1,5 2,0 6,3 6,6 14,3
White male 89,5 89,4 78,4 83,6 72,8
Black female 3,0 1,3 5,1 4,1 9,3
White female 6,1 7,3 10,2 5,7 3,6
Top management 100,0 100,0 100,0 100,0 100,0
Black male 10,5 13,3 15,5 12,3 13,5
White male 75,7 70,7 65,8 69,8 68,6
Black female 2,1 3,1 2,7 4,3 4,1
White female 11,7 12,9 16,0 13,6 13,8
100
Sustainable development performance data
2002 2003 2004 2005 2006
Management representations – (%) continued
Senior management 100,0 100,0 100,0 100,0 100,0
Black male 13,6 14,6 20,3 19,9 20,8
White male 53,4 55,9 47,2 49,8 50,6
Black female 5,6 5,6 5,2 4,4 6,2
White female 27,4 23,9 27,3 25,9 22,4
Number of disabled employees ✦ ✦ ✦ 212 171
South Africa 75 87 107 200 156
International ✦ ✦ ✦ 12 15
Trade unionisation – (%) ✦ ✦ ✦ 26,6 28,3
South Africa 17,4 26,0 23,5 28,7 30,1
International ✦ ✦ ✦ 15,0 19,8
Training
Training spend (R’000) ✦ ✦ 72 865 85 658 101 943
South Africa 38 991 36 201 58 227 74 596 83 022
International ✦ ✦ 14 638 11 062 18 921
Training spend per employee (R) ✦ ✦ 894 876 1 092
South Africa 730 638 853 982 1 064
International ✦ ✦ 1 145 886 1 237
Training hours ✦ ✦ ✦ 538 057 596 009
South Africa ✦ ✦ ✦ 474 734 490 854
International ✦ ✦ ✦ 63 323 105 155
Training hours per employee ✦ ✦ ✦ 6 6
South Africa ✦ ✦ ✦ 6 6
International ✦ ✦ ✦ 5 7
The Bidvest Group Limited Sustainability report 2006 101
2002 2003 2004 2005 2006
Health and safety
Injury rate ✦ ✦ ✦ ✦ 2,33
South Africa ✦ ✦ ✦ ✦ 1,62
International ✦ ✦ ✦ ✦ 6,65
Lost-day rate ✦ ✦ ✦ ✦ 55,9
South Africa ✦ ✦ ✦ ✦ 43,4
International ✦ ✦ ✦ ✦ 131,8
Work-related fatalities ✦ ✦ ✦ ✦ 12
South Africa ✦ ✦ ✦ ✦ 11
International ✦ ✦ ✦ ✦ 1
HIV/Aids
Employee % that participated in HIV/Aids-related training and awareness programmes
✦ ✦ ✦ ✦ 13,4
Number of condoms distributed ✦ ✦ ✦ ✦ 145 600
BEE procurement
BEE procurement (R’000) ✦ ✦ 4 206 218 5 406 947 4 117 606
BEE procurement (% of discretionary spend) ✦ ✦ 30,0 32,2 30,3
Corporate social investment
CSI (R’000) ✦ ✦ 11 691 17 390 28 650
South Africa 8 761 11 197 10 389 15 877 25 724
International ✦ ✦ 1 302 1 513 2 926
CSI as % of pre-taxation profit ✦ ✦ 0,5 0,6 0,8
South Africa 0,7 0,7 0,6 0,7 1,1
International ✦ ✦ 0,2 0,2 0,3
102
GRI Index
Bidvest followed the GRI’s G3 sustainability reporting guidelines. This table provides cross-references to where GRI performance indicators are discussed.
Where Bidvest did not report on a GRI indicator this does not necessarily mean that the issue is not addressed by Bidvest business units. Non-reporting could be due to the difficulty of gathering this level of detailed information given the Group’s decentralised and multi-faceted nature. Bidvest has a significant number of business units operating in a broad range of industries and geographies, dealing with a highly diverse range of products, services, suppliers and customers. Ongoing efforts are being made to improve indicator coverage and data collation.
Status indicators:
ü fully reported
~ partially reported
û not reported
n/a not applicableDisclosure items and performance indicators Status Reference
1. Strategy and analysis1.1 Statement from the CEO and chair ü Chairman’s message and chief executive’s statement
1.2 Description of key risks and opportunities ~ Sustainability performance at a glance; sustainability at Bidvest. Annual report
2. Organisational profile
2.1 Name of the reporting organisation ü Contact details
2.2 Major brands, products and services ü Divisional reviews. Annual report: review of operations. Our businesses and products 2006
2.3 Operational structure ü Divisional reviews. Annual report: review of operations
2.4 Countries of operations ü Geographic footprint
2.5 Nature of ownership and legal form ü Annual report: directors’ report; interest in subsidiaries, joint ventures and associates
2.6 Markets served ü Divisional reviews. Annual report: review of operations
2.7 Scale of the reporting organisation ü Group in brief; sustainability at Bidvest. Annual report: financial statements
2.8 Major decisions ü Divisional reviews. Annual report: chief executive’s report; review of operations
3. Report parameters3.1 Contact point for questions ü Contact details
3.2 Reporting period ü About this report
3.3 Date of most recent previous report ü About this report
3.4 Changes in measurement of indicators ü About this report; sustainable development performance data
3.5 Plans for future reporting ü About this report
3.6 Application of GRI-reporting framework ü About this report; sustainable development performance data
3.7 Report content and stakeholders ~ Introduction; external opinions
3.8 Specific limitations on the scope of the report ü About this report; external opinions
3.9 Data measurement techniques ~ Sustainable development performance data
3.10 Approaches to stakeholder engagement ~ Sustainability report 2005: stakeholder opinions
3.11 Information from stakeholder engagement ü External opinions
3.12 Boundary of the report ü About this report
3.13 Significant changes since previous report ü About this report; divisional reviews. Annual report: chief executive’s report; review of operations
The Bidvest Group Limited Sustainability report 2006 103
Disclosure items and performance indicators Status Reference
3.14 Joint ventures, subsidiaries, leased facilities ~ About this report. Annual report: interest in subsidiaries; joint ventures and associates
3.15 Re-statements of information ü About this report; sustainable development performance data
3.16 GRI content index ü GRI index
3.17 Independent assurance for the report ü Independent assurance
4. Governance, commitments and engagement4.1 Governance structure ü Sustainability at Bidvest. Annual report: corporate
governance
4.2 Indicate if chair of the highest governance body is also an executive officer
ü Annual report: corporate governance
4.3 Independent members of the highest governance body
ü Sustainability at Bidvest. Annual report: corporate governance
4.4 Recommendations to highest governance body û
4.5 Linkage between compensation and the organisation’s performance
ü Annual report: directors’ report; corporate governance
4.6 Qualifications of highest governance body ü Annual report: corporate governance
4.7 Avoidance of conflicts of interest ü Annual report: corporate governance
4.8 Internal values, codes of conduct and principles ü Sustainability at Bidvest. Annual report: corporate governance
4.9 Management of economic, environmental and social performance
ü Chief executive’s statement; sustainability at Bidvest Annual report: corporate governance
4.10 Evaluation of the highest governance body ü Annual report: corporate governance
4.11 Precautionary approach ~ Sustainability at Bidvest. Annual report: corporate governance
4.12 Voluntary initiatives ü Divisional reviews
4.13 Memberships ü Divisional reviews
4.14 Stakeholder groups ~ External opinions
4.15 Selection of stakeholders ~ External opinions. Sustainability report 2005: stakeholder opinions
4.16 Stakeholder engagement ~ External opinions. Sustainability report 2005: stakeholder opinions
4.17 Key issues of stakeholder engagement ü External opinions
Economic Performance IndicatorsDisclosure of management approach ~ Sustainability performance at a glance; group in brief;
sustainability at Bidvest; economic vitality
EC1 Economic value generated and distributed ü Economic vitality
EC2 Financial implications of climate change û
EC3 Benefit pension plan obligations û
EC4 Financial assistance from government û
EC5 Entry wage compared to local minimum wage û
EC6 Spending on locally based suppliers ü Black economic empowerment
EC7 Local hiring in senior management ~ Black economic empowerment
EC8 Infrastructure investments for public benefit û
EC9 Indirect economic impacts (Add) ~ Divisional reviews
Environmental Performance Indicators
Disclosure of management approach ~ Sustainability at Bidvest
EN1 Weight of materials used û
104
GRI Index
Disclosure items and performance indicators Status Reference
EN2 Recycled material û
EN3 Direct energy consumption ~ Divisional reviews: Bidvest Europe
EN4 Indirect energy consumption û
EN5 Renewable resources (Add) ~ Divisional reviews: Bidvest Europe
EN6 Conservation and efficiency improvements (Add) û
EN7 Energy-efficient products and services (Add) ~ Divisional reviews: Bidvest Europe; Bid Industrial and Commercial Products
EN8 Initiatives to reduce indirect energy consumption (Add)
û
EN9 Total water withdrawal by source (Add) û
EN10 Water sources and habitats affected by water withdrawal (Add)
û Predominantly not applicable to Bidvest businesses
EN11 Percentage and volume of water recycled (Add) ~ Divisional reviews: Bidvest Europe
EN12 Protected areas û Predominantly not applicable to Bidvest businesses
EN13 Impacts of activities on protected areas û Predominantly not applicable to Bidvest businesses
EN14 Habitats protected or restored (Add) û Predominantly not applicable to Bidvest businesses
EN15 Biodiversity impacts (Add) û Predominantly not applicable to Bidvest businesses
EN16 IUCN Red List species (Add) û Predominantly not applicable to Bidvest businesses
EN17 Greenhouse gas emissions û
EN18 Emissions of ozone-depleting substances û
EN19 NOx, SOx and other air emissions by weight û
EN20 Waste by type and definition û
EN21 Total water discharge and quality û
EN22 Total number and volume of significant spills û
EN23 Other relevant greenhouse gas emissions û
EN24 Hazardous waste (Add) û
EN25 Water sources and habitats affected by water discharges (Add)
û
EN26 Environmental impacts of products/services ~ Divisional reviews
EN27 Recycled products û
EN28 Non-compliance with environmental regulations û
EN29 Environmental impacts of transportation (Add) û
EN30 Environmental protection expenditures (Add) û
Social Performance Indicators – labour practices and decent workDislosure on management approach ü Sustainability at Bidvest; divisional reviews
LA1 Workforce by employment type/region ü Black economic empowerment; divisional reviews; sustainable development performance data
LA2 Employee turnover by age group and gender û
LA3 Minimum benefits (Add) ~ Sustainability at Bidvest
LA4 Employees represented by trade unions ü Sustainable development performance data
LA5 Notice period, consultation and negotiation on operational changes
û
LA6 Joint health and safety committees û
LA7 Injury, occupational diseases, lost days, etc ü Sustainability at Bidvest; divisional reviews; sustainable development performance data
LA8 Training on HIV/Aids etc ü Sustainability at Bidvest; divisional reviews
LA9 Occupational health and safety management (Add)
ü Sustainability at Bidvest; divisional reviews
The Bidvest Group Limited Sustainability report 2006 105
Disclosure items and performance indicators Status ReferenceLA10 Health and safety agreements with trade unions
(Add)û
LA11 Training per year per employee ü Sustainability at Bidvest; divisional reviews; sustainable development performance data
LA12 Lifelong learning (Add) û
LA13 Performance and career development review (Add)
~ Sustainability at Bidvest; divisional reviews
LA14 Diversity ~ Black economic empowerment; sustainable development performance data
LA15 Male/female remuneration (Add) û
Social Performance Indicators – human rightsDisclosure on management approach ~ Sustainability at Bidvest; black economic
empowerment. Annual report: corporate governance
HR1 Investment agreements û
HR2 Suppliers and contractors û
HR3 Employee training on human rights (Add) û
HR4 Discrimination û
HR5 Freedom of association, collective bargaining û
HR6 Child labour û
HR7 Forced labour û
HR8 Procedures for complaints and grievances concerning human rights (Add)
~ Sustainability at Bidvest
HR9 Security personnel trained on human rights (Add) û
HR10 Incidents involving rights of indigenous people (Add)
û
Social Performance Indicators – societyDisclosure on management approach ~ Sustainability at Bidvest. Annual report: corporate
governance
SO1 Impact assessment of operations on communities û
SO2 Prevention of corruption ~ Sustainability at Bidvest
SO3 Actions in response to instances of corruption ~ Sustainability at Bidvest
SO4 Public policy development and lobbying û
SO5 Contributions to political parties (Add) û
SO6 Anti-competitive behaviour (Add) û
Social Performance Indicators – product responsibilityDisclosure on management approach ~ Divisional reviews (for example, Bidvest Europe, Bidfood)
PR1 Health and safety of products ~ Divisional reviews
PR2 Non-compliance with health and safety regulations (Add)
û
PR3 Labelling of products and services û
PR4 Non-compliance with product and service labelling regulations (Add)
û
PR5 Customer satisfaction (Add) ~ Sustainability at Bidvest; divisional reviews
PR6 Marketing communications û
PR7 Non-compliance with marketing communications regulations (Add)
û
PR8 Data protection û
PR9 Complaints regarding breaches of customer privacy
û
106
This symbol indicates that further detailed information is available
ABET adult basic education and training
ART HIV/Aids-related anti-retroviral treatment
BEE black economic empowerment
BBBEE broad-based black economic empowerment
CAIA Chemical and allied industries’ association
CSI corporate social investment
EMS environmental management system
HACCP hazard critical control point
HDI historically disadvantaged individual (South African blacks, coloureds and Indians)
IFRS International Financial Reporting Standards
ISO (9000 and 14000) International Organisation for Standardisation quality management and quality assurance series of standards (9000) and environmental management series of standards (14001)
JSE JSE Limited, South Africa
KZN KwaZulu-Natal
NOSA National Occupational Safety Association
NPI National Productivity Institute
NQF National Qualifications’ Framework
OEM original equipment manufacturer
OHS Act Occupational Health and Safety Act (No. 85 of 1993), South Africa
SABCOHA South African Business Coalition on HIV/Aids
SETA sectoral education and training authorities
SHE safety, health and environment
The Codes codes of good practice for broad-based black economic empowerment as published by the Department of Trade and Industry, South Africa.
VCT HIV/Aids-related voluntary counselling and testing
Glossary