A Shatterprufe supplier transforms workers’ lives
A bold BEE deal gives 51% ownership to employees and becomes a successful model for the transforming automotive industry
The National Association of Automotive Component and Allied Manufacturers (NAACAM) and its member organisations are strong proponents of localisation, transformation and supplier development within the South African automotive industry. For this reason, NAACAM member Shatterprufe initiated a conversation with its crate supplier TC Woodworks about raising the latter’s B-BBEE rating by relooking its ownership structure. The outcome of these discussions is unlocking opportunities for the company and significantly benefiting its employees – while providing an example for other local automotive industry suppliers to follow.
TC Woodworks, Shatterprufe’s largest supplier of crates for exporting auto glass and pallets, took the bold decision to award 51% ownership to its staff. By doing so, the Port Elizabeth company has raised its B-BBEE status to Level two.
TC Woodworks co-owners Andre van Heerden and Colin Salter explain the organisation’s transformation process, and why they rejected the “quick change” and increased overheads of bringing in a black partner. “Instead of handing over shares to some person who didn’t know the first thing about woodwork, we decided to give them to our workers,” Salter says.
As part of its employee empowerment strategy, TC Woodworks transitioned from a CC to Pty Ltd, and both an investment company and workers’ trust were formed. The investment company is headed by coloured female and black male directors, while the trust consists of 31 employees, all with a minimum of five years at the company. Profit is split between the two bodies in the form of dividends, with dividends increasing incrementally for every five years an employee has spent at the company.
This has had special significance for Jeremy Smith, a TC Woodworks employee for 20 years. The change in ownership structure has unlocked the opportunity of sending his children to university.
Greater job security for workers has resulted in a leap in employee morale, and Salter is confident the ownership of the shares will result in improved competitive advantage and profits in the long-term. To date, there has been a 10% increase in profitability since the suppliers became black-owned.
TC Woodworks customers have commended the company on its efforts. Wynand Smith, Corporate Logistics Operations Manager at Shatterprufe, commented, “TC Woodworks is a valuable supplier to Shatterprufe, and investing back into its people, as well as promoting building back into the community can definitely be seen as a feather in TC Woodworks’ cap. They’re leading the way for change.”
Interviewed for comment, NAACAM executive director Renai Moothilal commended both TC Woodworks and Shatterprufe on the outcome. “This is a good example of value chain business relationships that are leveraged to ensure transformation in the autos sector happens. That, at the end of the day, is what will ensure long-term growth and sustainability in our industry.”
Moothilal adds, “What we see is a beneficial outcome stemming from a combination of advocacy, policy development, implementation and proactive management, which NAACAM is working to promote. We expect to hear of more success stories like TC Woodworks’ in future as more companies get to grips with how to use transformative outcomes to support business growth.”