DTI sweetens procurement transformation pill - Davies

Cape Town - A new cost sharing grant relating to procurement and supply was announced by Minister of Trade and Industry (DTI) Rob Davies on Tuesday.

The aim would be to enhance manufacturing supply capacity.

In his keynote address at the Smart Procurement conference in Cape Town Davies said the DTI wants to "sweeten the pill" of procurement transformation by "rejigging" one of its existing incentives.

The DTI will now broaden its current incubation support programme. Davies regards incubators as very important tools for formal training and mentorship, enabling businesses to become more sustainable.

Davies called the broadened programme a strategic partnership to empower companies to become effective in enterprise development and supply development.

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"There is a high level of concentration in the South African economy, including as far as suppliers are concerned. Black industrialists say they start out and the DTI supports them, but then they cannot get procurement," said Davies.

"So, we will start to expect this transformation to happen. Government will now expect procurement to be indicated on the score card regarding supply - unless you are an SME. This is seen as a major tool to help with transformation."

He said, therefore, if a large company is seeking to earn points in terms of the BEE code, government expects them to go out and find quality suppliers and work with them to produce good supplies.

At the same time Davies cautioned that the cost sharing grant will be capped at R15m over a period of three years - subject to the availability of funds.

The DTI intends to launch an awareness campaign about this new grant.

"Procurement in the private sector is as key as procurement in the public sector," Davies said.