E&SD remains a key focus for the group, and we continue to identify and invest in local procurement opportunities. The group further creates and maintains an efficient and equitable supply chain aligned to our strategic objectives through a robust governance process.
|Our focus for 2018||What we achieved||Self-assessment|
|Consolidating E&SD activities into a structured and consistent offering, ensuring we leverage opportunities to introduce additional efficiencies.||
Enhanced internal processes, resulting in improved reporting efficiencies. Introduced an E&SD programme group-wide with a formal BDS successfully rolled out at one unit. The BDS will be rolled out to other units in 2019.
|Supporting and enhancing the Sun International brand within our communities.||Introduced a tender bulletin board to proactively engage with suppliers in surrounding communities to expose them to our supply chain processes.||In progress|
|Positioning the E&SD function group-wide and entrenching the 2020 strategy.||Ongoing.||In progress|
|Finalising and implementing the fronting policy.||
Defined a fronting process within the draft compliance management standard operating procedure, that will be implemented in early 2019. Created a task team to review existing and new fronting incidents.
|Focusing on effective reporting of E&SD funding.||Achieved greater use of IFS projects to record and monitor E&SD loan funding, resulting in greater visibility in the loan recovery process.||Achieved|
|Meeting our B-BBEE target for E&SD suppliers.||Significant spend redistribution at group level, benefited and enabled existing, new and SMME businesses. Focus on achieving B-BBEE targets at unit level.||Achieved|
|Preferential procurement||3 306||4 010.8||100||24.90 (99%)|
|Supplier development||46||34.5||100||11.00 (100%)|
|Enterprise development||10.2||9.0||100||6.00 (100%)|
|Total points out of a possible 44.00 (40 + 4 bonus points)||40||n/a||100||41.91 (100%)|
The group remains committed to creating opportunities for all suppliers, especially B-BBEE compliant SMMEs. Ethical conduct throughout our supply chain is imperative, and we require our suppliers to commit to the highest standards of ethical conduct. Sun International’s supplier code of conduct (is based on recognised international standards, principles and best practices. All suppliers are required to adhere to this code, which also complies with the group’s code of ethics. Suppliers are encouraged to follow specific requirements in respect of labour conditions, human rights and occupational health and safety, and demonstrate consideration in mitigating harmful environmental impacts.
Sun International’s total measured procurement spend for the financial year exceeded R3.3 billion (2017: R4.0 billion), of which R3.04 billion was procured from over 3 000 verified B-BBEE-compliant suppliers. This 92% valid spend compliance was below the group target of 95% for 2018. Our 2020 goal is to reach and maintain 95%.
The group prefers to engage suppliers that support our objectives and meet our optimum B-BBEE standard: black-owned with a level 3 rating or better. 41% of group spend met this optimum requirement, exceeding our 40% target for 2018. Our 2020 goal is to reach and maintain 50%.
Black-owned SMME spend of 35% (2017: 14%) was achieved, exceeding our 20% target. We intend to increase our annual target to 30% by 2020.
Stringent B-BBEE compliance controls are implemented throughout the year, including suspending a significant number of non-compliant suppliers. These controls positively impacted the transformation of our supply chain when measured against internal indicators (defined below), and were introduced as part of our preferential procurement strategy towards achieving optimal compliance by 2020.
|Black female spend||30%||19%||13%|
|Level 1 to 3||80%||63%||64%|
|Valid B-BBEE spend||95%||92%||88%|
|2||Actual contributions invested, not the recognised values as per the B-BBEE Codes.|
Although sourcing suppliers is commercially driven, we remain committed to economic transformation in South Africa by adopting the B-BBEE framework that encourages black SMME participation. We give preference to commercially competitive suppliers who meet our optimum B-BBEE compliance standard. All potential suppliers are required to register on the Sun International supplier database for inclusion in any sourcing opportunity. Sourcing opportunities are also advertised on our corporate website.
The graphic below depicts Sun International’s onboarding process.
Sun International’s E&SD strategy remains a group priority, emphasising responsible corporate citizenship and a commitment to the environment, community, and economy. These objectives drive our supplier sourcing and create opportunities for small businesses to enter our supply chain.
The group’s E&SD programme identifies and assists businesses at our various properties through capital funding or other business development services, with the goal of:
Through process efficiencies and our commitment to E&SD the group invested R46 million (2017: R34.5 million) in supplier development, including early settlements substantially above the claimable value. An additional R10.2 million (2017: R9 million) was invested in enterprise development, supporting a pipeline of new business into the supply chain. This investment represents 18.75% (2017: 11%) of net profit after tax, against the Tourism Code’s requirement of 3.5% for the tourism sector.
Sun International believes that the endorsement of a small business by a corporate organisation goes a long way in supporting access to markets, creating job opportunities and uplifting local and regional communities. The group is proud to endorse our E&SD suppliers on our corporate website: corporate.suninternational.com
For more detail on the various E&SD initiatives refer to: