top of page
Import.png

BEECHAMBER

IMPORT SUBSTITUTION PLAN

Introducing our unique method of Import Substitution, designed to boost local content while helping your business meet B-BBEE verification requirements.

Our specialized team at the BEE Chamber can assist your business in creating an effective Import Substitution Strategy. This strategy not only fulfills the requirements of the Codes of Good Practice but also promotes local manufacturing through supplier development, offering the distinct advantages of import substitution. Our team is proficient in verifying Total Measured Procurement Spend (TMPS) exclusions, making the BEE Chamber the ideal partner in navigating this intricate process.

62cee017caee4217a8b49595_GettyImages-1351437852.webp
Asset 8_edited.png

Import Substitution Plan

​

Is Importing and a favourable B-BBEE score critical to your business? If so, you have landed on the right page.

Localisation contributes to an inclusive economy that generates job creation and shareholding opportunities. However, there are several reasons why organisations choose the route of importing items. One reason might be the lack of availability. Another could be that the production costs of locally producing such imported items are high, thus making it cheaper to import them. Essentially, South African law supports free trade and importing goods, as long as organisations record each transaction and pay any necessary tariffs or taxes to the Government.

​

However, enter the Generic Codes of Good Practice (Codes), which support localisation. The result is that imports impact Preferential Procurement targets, making the B-BBEE verification process more complex.

​

What do the Codes say?

​

The 2013 Codes, subsequently updated in 2019, permit automatic exclusion of certain imports from an organization's Total Measured Procurement Spend (TMP5). Paragraph 6.5 provides for the exclusion of imported capital goods or components for Value-Added Production in South Africa, providing that:

​

6.5.1.1  there is no existing local production of such capital goods or components; and

6.5.1.2  importing those capital goods or components promotes further Value-Added Production within South Africa;

6.5.2    imported goods and services other than those listed in paragraph
6.5.1 if there is no local production of those goods or services including, but not limited to, imported goods or services that

6.5.2.1 carry a brand different to the locally produced goods or services; or

6.5.2.2 have different technical specifications to the locally produced goods or services.

6.5.3    The exclusion of imports listed under 6.5.2 are subject to them having developed and implemented an Enterprise.

 

Development and Supplier Development plan for imported goods and services. This plan should include:

​

6.5.3.1 Clear obiectives

6.5.3.2 Priority interventions

6.5.3.3 Key performance indicators; and

6.5.3.4 A concise implementation plan with clear articulated milestones

6.5.4 The Department of Trade and Industry will from time to time consult with the industry and issue practice

notes with regard to the provisions on import exclusion.

​

How can we help You?

​

The BEE Chamber's Technical Compliance Services guide organizations to strategize imports according to the Codes, which entails the development of an advantageous Import Substitution Strategy. This strategy includes all prerequisites, such as an Import Substitution Plan (ISP) and the requisite evidence.

​

  • Identifying Beneficiaries An ISP aims to facilitate local manufacturing through Supplier Development. By applying the Flow-Through Principle to determine Ownership, a supplier must be an EME or QSE with at least 51% 'Black' Ownership. In determining the ownership percentage of such a supplier, an organisation should consider a 'Black' Shareholder's Economic Interest and Voting Rights. Importantly, such an EME or QSE must achieve total points for Net Value.

  • Identifying Opportunities Upon identifying items for import under paragraph 6.5, a feasibility study and needs analysis will determine whether there is a gap in the market for you to produce locally. An ISP must outline how Beneficiaries locally producing such goods and services will grow them to become financially independent and sustainable.

  • Developing Beneficiaries | The information must outline how you will develop a supplier to become sustainable, as well as ultimately financially and operationally independent from the host organisation.

  • Identify priority interventions

  • Reviewing import data to identify products that have the potential for localisation.

  • Investigating potential products.

  • Prioritising opportunities against feasibility studies.

  • Identifying strategic partners like the Government, competitors or other businesses that would like to acquire the same goods or services.
    Plotting the implementation of the project.

  • Reporting progress on the project.

  • Identifying Key Performance Indicators for the programme for those responsible for implementing the ISP.

  • Identifying milestones and clearly articulating what each of them is.

  • Detailing and tracking the implementation against each milestone.

​

In line with B-BBEE verification requirements, Technical Compliance Services will aid you in substantiating TMPS exclusions, as well as implementing and tracking the evidence necessary. The intervention includes, but is not limited to:

​

  • A list of foreign suppliers excluded from an organisation's TMP5, aligning with the ISP.

  • Proof of expenditure. An organisation must provide evidence that capital goods or components, as well as other goods or services, were procured from a foreign country by providing:

  • Creditors Ledger;

  • An invoice, which will show a supplier with a foreign address, which could be in a foreign currency; shipping documents;

  • Proof of payment;

  • Customs clearance documents pertaining to the relevant invoice; and

  • Foreign exchange reconciliation.

  • Evidence of having registered as an importer is a SARS import certificate.

  • Justification of the type of import as per paragraph 6.5 of Code 400:

  • Confirmation from management that there is no local production in South Africa;

  • Evidence that goods imported are raw materials or components for further value-added processing, or

  • Confirmation that imports differ in terms of brand or technical specifications

​

Why Choose Us?

​

Choose the BEE Chamber's Technical Compliance Services to navigate the complex landscape of import substitution in South Africa. Our Import Substitution Plan (ISP) identifies opportunities and strategic partners, and outlines clear objectives, KPIs, and implementation milestones. We help you develop and track suppliers, substantiate TMPS exclusions, and provide evidence of compliance for B-BBEE verification.

​

Contact Us?

​

Select the BEE Chamber's Technical Compliance Services to adeptly navigate the complex yet beneficial terrain of import substitution in South Africa, thereby enhancing local content. Our Import Substitution Plan (ISP) identifies opportunities and strategic partners, and outlines clear objectives, KPIs, and implementation milestones. We help you develop and track suppliers, substantiate TMPS exclusions, and provide evidence of compliance for B-BBEE verification.

bottom of page