Black economic-empowerment (BEE) transformation in South Africa is not as successful as it could be, as BEE engagement is challenged by previously advantaged individuals not understanding the benefits of growth-driven transformation, including the transfer of skills to the previously disadvantaged, says compressor specialist Part Solutions Interactive (PSI) Group.

PSI Group MD Hennie Labuschagne notes that this resistance is linked to mistrust, selfishness and the fear of losing control, as well as fear of the new and transferred businesses thriving.

PSI Group GM Waldo Van Zyl comments that, to bridge the skills gap and contribute to BEE transformation, the company has restructured its ownership model and continues to drive this process to maintain sustainable relevance in and among others in the mining industry.

He highlights that the company has – as initial test cases – successfully developed two subsidiary black-owned businesses, compressor specialist Ntshu Air Ekurhuleni, with a current 26% and soon to be 51% black shareholding, and Ntshu Air Middelburg, with a 26% black shareholding.

These companies are equipped to provide practical and theoretical training and continue the manufacture, distribution and service of compressors, Van Zyl says, noting that growth is inevitable.

“These enterprises include multitiered, broad-based transformation elements, such as ownership by employees and innovative broad-based black economic-empowerment (BBBEE) enterprise development mechanisms at branch level, which include a strong technical-expertise component and the empowerment of all ethnic groups in the company,” he asserts.

PSI’s restructuring, which started in 2010, includes substantial black ownership at holdings, subsidiary and associate levels, as well as a transformation business plan, in which skills transfer has played a prominent role to ensure future growth while unlocking value for stakeholders.

Labuschagne comments that the main objective was to not only develop businesses but also bridge the skills gap in South Africa by developing a concept where the previously disadvantaged, as well as the advantaged, work together to facilitate skills transfer.

The company’s BBBEE plan aims to bridge the skills gap, thereby creating an opportunity to establish and align itself to the broader goals of the national transformation strategy.

“ . . . a South African black middle class will broaden the overall tax base and, thus, contribute to the economic and political security of South Africa through ownership, skills development, job creation, supplier development, enterprise development and contributions to all the societies we trade in,” Labuschagne explains.

Business Plan
Labuschagne points out that one of the features of the company’s BBBEE engagement and skills transfer business plan is that it plays a leading role in the mining industry in terms of the broader strategic economic security of the company’s relevant stakeholders, including current and new staff, its new business owners, current and new clients, and suppliers.

He comments that, with real skills transfer, the critical and core skills deficit in the mining industry is addressed, adding that the prevention of skills migration allows for stability through empowerment.

Another feature is the development of internationally accepted trade specialists through which the subsidiaries and the main company become internationally competitive.

“Through the introduction of internationally accredited business processes and product standards, we ensure that we position our group as a regional, continental and internationally competitive group of companies, with the ability to deliver and compete worldwide,” Labuschagne emphasises.

He notes that other features of the business plan include creating black-owned businesses that are reliable, sustainable and skilled service providers in the mining sector, further providing not only cost-effective pricing but value-adding strategic partners for the industry.

International partnerships, assure that the black-owned companies developed by PSI can compete with the large players in the mining industry at the same, or often better, service levels, while offering the same, or better, quality products at a more attractive price.

“The success of our model has unlocked exponential growth for the group. In most cases, up to 88% compound organic growth [has been achieved] over a three-year period, something prospective investors might find very attractive,” Labuschagne notes.

Skills Transfer Vital
Van Zyl says training plays a major role in determining whether uplifting previously disadvantaged communities and new business owners will be successful, adding that equipping the newly established businesses with the necessary skills is vital.

“The transfer of skills from one individual to another is important, but so is ensuring that skills are sustained and updated through training centres.”

He points out that, for example, there is a lack of skills in the compressor industry because universities and colleges are not providing in-depth training on compressors. PSI, with its BBBEE business plan, aims to establish training centres in an attempt to provide training on compressor manufacturing, installation and maintenance through theory and practical modules.

“Any new concept is not easy to sell; however, the most important idea is to exchange and update skills to end the increasing skills gap. “Many people have a fear of the unknown, but it is important to take calculated risks and create opportunities for ourselves and others. In doing so, we can secure a growing industry and greater equality when we approach business development,” concludes Van Zyl.