How working with a B-BBEE Level 1 TMC can help grow your business
IOL / 12 SEPTEMBER 2018 - 17:35 / IOL SUPPLIED
Flight Centre Business Travel, part of the Flight Centre Travel Group Corporate (Pty) Ltd has made significant progress in its transformation journey, achieving an jump from Level 4 B-BBEE to Level 1 status in just under one year.
“We are immensely proud of this achievement and what it means. Our rating also has a direct impact on the competitiveness of our clients. A Level 1 score offers benefits to everyone in our supply chain, both financially and concerning increasing their own BEE scores,” says Ryan Potgieter, General Manager Flight Centre Business Travel.
To achieve transformation, FCTG Corporate (Pty) Ltd created a broad-based black economic empowerment plan and set up an AICC female trust
Companies that procure only from Level 1 suppliers spend less but can claim more. When a potential customer is in the process of choosing a supplier, their own BEE level is affected by the supplier’s level. And the higher the supplier’s level, the more the customer can claim towards their procurement spend.
“It is simple maths: if clients choose a BEE level 6 company, only 60 cents out of every rand they spend will count towards their own BEE scorecard. However, as a Level 1 company, for every R1.00 our customers spend with us they can claim R1.35 against their own preferential procurement scoring,” says Potgieter.
This means that if a company procures mostly from BEE compliant entities with a high score, it results in their procurement score being high without changing anything pertaining to the ownership, management or financial structuring of the company.
A BBBEE certificate does not only offer economic benefits. It also shows clients and business partners that the company is committed to transformation, says Potgieter.
“As a Travel Management Company (TMC), we specialise in transforming the business of our clients, helping them streamline their corporate travel needs and improving their travel spend. But this is not the only transformation we focus on. Our Level 1 B-BBEE status is a clear demonstration that we are also serious about the transformation of South Africa, the development of our country and the growth of the country’s businesses.”
To achieve transformation, FCTG Corporate (Pty) Ltd created a broad-based black economic empowerment plan and set up an AICC female trust. The trust affords female staff from AICC backgrounds who have worked for FCTG Corporate (Pty) Ltd for a minimum of 12 months the opportunity to earn annual dividends on the trust's shares.
“After a solid year for the Corporate Brands, we have paid R645,000 in dividends to the 215 eligible female employees. This aligns with our overall company philosophy of ‘our people’ and also our strategy to broadly impact our people's prosperity,” concludes Potgieter.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER