BBBEE

2010 BBBEE Certificate - ()

 

BROAD-BASED BLACK ECONOMIC EMPOWERMENT

Our transformation goals aim to reflect the demographic profile of South Africa, in line with the economically active population at all levels. These goals are set to address areas of underrepresentation in terms of diversity by race and gender at all levels. To realise our growth strategy, we focus on the attraction, development and retention of skills within the Group and in the broader South African context.

Omnia regards BBBEE as a business fundamental that is crucial to the future of South Africa and its economy. It is an essential process required to bring about increasing black participation in the South African economy and reducing the existing disparity between income inequalities.

Our BBBEE imperatives are based on the principles that:

• Poverty can only be effectively dealt with in a high-growth environment.
• Wealth must be generated and opportunities created to ensure a more equitable society.
• It is a moral necessity, required to address the legacy of a past in which the majority of South Africa’s citizens were excluded, on the basis of their race, from enjoying the benefits to be derived from being participants in the mainstream economy.

A Level 5 status affords a BBBEE procurement recognition of 80% for customers of the Omnia Group. A copy of the new certificate and report is available on the Omnia website at www.omnia.co.za.

Omnia performs well in terms of skills development, enterprise development and socio-economic development, having exceeded some of the targets set by the Codes in these categories. This is a reflection of the Group’s focus on developing employees and communities, and addressing the skills challenge faced by the Group. Omnia is within six points (a score equal to or greater than 65) of achieving a Level 4 status with a 100% BEE recognition level, which is in line with our target for 2010.

Omnia participated in the Financial Mail/Empowerdex survey for 2010, and based on recent information, although not tested to the degree performed during a formal verification, achieved a score of 63,74, and is ranked 59th overall in the Top 100 Empowerment Companies index in South Africa, published by the Financial Mail in April 2010. We have once again performed better than some of our competitors.

Omnia established the Sakhile equity scheme for employees, which places 10% of the company in the hands of our South African employees, in 2007. At the time of the launch, eligible employees were awarded 1 000 shares each. The Sakhile initiative ensures that the Group’s broader employee base benefits directly from its growth over the longer term, thus aligning their interests with those of shareholders. A separate legal entity, Sakhile, is now overseen by a board of directors who are nominated to their positions by members.

The Omnia Board has long recognised the need for significant management ownership participation within the Group and believes that the Group’s success is related to the excellence and long-term dedication of its key management personnel. The Board also believes that an effective partnership arrangement between the shareholders of Omnia and management enhances the wealth of the group.

According to these objectives, a second phase of the employee share scheme, Sakhile 2, was launched during 2010. Aimed at black members of Omnia’s management team, a portion of the shares allocated to the scheme are to be used to attract skilled individuals to the Group and to retain talented black board members, executives and employees.

At Omnia we believe that a diverse workforce contributes to cross-cultural understanding, broadens perspectives and helps to enhance our competitive edge. We are therefore committed to transforming Omnia’s workplace by systematically implementing an employment equity plan, which, based on a robust set of principles, guides the actions and initiatives we take to build a truly representative workforce. These principles include:

• Offering equal opportunities to all employees, irrespective of race or gender.
• Providing an enabling environment which allows people to develop to the full extent of their capabilities.
• The payment of remuneration packages that take account of individual performance and union agreements.
• The provision of a consultative environment for workforce representatives.
• Fostering a sense of ownership.
• Fostering an internal focus of control.

Part of Omnia’s process of developing the employment equity plan was establishing employment equity committees at plant-level across all divisions. These ground-based committees report to the divisional committees, who then report to the central Group employment equity committee.

* RSA employees only.

Plant and divisional-level committees debate strategies and monitor legislative compliance, while the central committee evaluates progress against set objectives and targets in each business on a quarterly basis. All committees have received training as to their roles, and produce annual reports on their progress.

The introduction of plant-level committees has proven highly effective. Beyond setting and driving compliance with targets, the committees have empowered employees at plant-level to take ownership of the employment equity process, and serve as a platform for employees to voice a broad range of concerns which are then escalated within the division and Group.

Procurement

Where possible, the Group seeks opportunities to increase its procurement of products and services from accredited BBBEE suppliers. In 2009, 49,2% of total procurement spend was with such suppliers, an increase of 14% over the previous year. At the same time, spend with enterprises that have a 50% black ownership increased from less than 1% to 8,95% in the course of the 2010 financial year.

We believe entrepreneurs form the backbone of a vibrant economy. To this end, Protea Chemicals has developed strong business relationships with several black-owned businesses, providing assistance in the form of shared infrastructure, extended payment terms and by imparting business knowledge and expertise.

Omnia’s Agriculture division contributes to the vitally important agricultural sector of the economy with practical assistance on agricultural best practices in a wide range of agronomic applications. Government is planning to redistribute 20 million hectares to emerging farmers by 2014. If this land were to be divided into plots averaging 200 hectares in size, 100 000 new farms would be created. Agronomic assistance is a critical success factor in the economic viability and sustainability of these new farmers, and Omnia is committed to helping emerging farmers establish their own farming businesses.

Moreover, with agriculture as one of Omnia’s primary areas of focus, we have long been aware of the disparity that exists within the South African agricultural economy, which is characterised by a well-developed commercial sector and poorer, subsistence farming operations.

To address this disparity, Omnia actively provides development and emerging farmers with assistance and advice by making available the expertise of our trained agronomists. We offer assistance and support to new entrepreneurs to set up their own businesses wherever possible, contributing to the sustainability of enterprise development in the sector by offering input and practical assistance through agricultural best practices, not only in plant nutrition but also in other agronomic practices, for example soil cultivation, tillage systems and environmental programmes. Reduced tillage systems not only increase farmers’ profitability and reduce their production risk, but are also more environmentally friendly. Through the use of Omnia’s in-house developed technology, including OmniSap®, OmniBio™ and OmniPrecise™, our agriculturalists are able to further increase farmers’ margins and reduce their financial risk.

A dedicated agricultural unit, established specifically to assist emerging farmers, spent R9,9 million during the 2010 financial year helping farmers establish their enterprises. Selection is made on the basis of farmer ability and agronomic due diligence – the potential of the farmer and the farm to be economically viable and sustainable in the long term.