Sun International - Annual Integrated Report 2019 | Supplier-and-enterprise-development

Improve our existing operations and guest experience

Protect and leverage our asset portfolio

Grow our business into new areas and products

Our people

Governance and sustainability

Enterprise and supplier development

Our supply chain helps create value across the group’s broad supplier base and supports the group’s vision of creating genuine value for the communities in which we exist, by investing in local procurement opportunities. The group further maintains an efficient and equitable supply chain aligned to ethical standards and practices through a robust governance process.

IMPACTS

R44.4 million invested in supplier development and distributed to 77 business beneficiaries from within our local communities

R12.3 million committed in enterprise development to 37 business beneficiaries from within our local communities

Supported 15 beneficiaries through formal business development support (BDS) in line with the requirements of our E&SD programme

Introduced an online tender bulletin board to advertise formal sourcing activities and to facilitate direct online quoting opportunities

FOCUS AREAS IN 2019

Self-assessment:

ALL

ACHIEVED/ GOOD PROGRESS

IN PROGRESS

LIMITED PROGRESS

Formalising the group’s E&SD committee

WHAT WE ACHIEVED

Established the E&SD committee in 2019, which meets quarterly

Introducing an automated e-sourcing portal

WHAT WE ACHIEVED

Tender process concluded and fi nalised a business case proposal to be presented to exco for consideration

Conducting compliance management on Sun International’s active supplier database and responding accordingly

WHAT WE ACHIEVED

Implemented stringent controls to mitigate risk of procurement from non-compliant suppliers

Continuing to entrench BDS across all units, including the conclusion of a formal BDS provider sourcing process

WHAT WE ACHIEVED

While the group has appointed two preferred service providers in this regard, the progress towards entrenching BDS as a fundamental requirement remains a strategic focus

Formalising the compliance management standard operating procedure

WHAT WE ACHIEVED

This was achieved and communicated to the group

Enhancing the business intelligence capabilities

WHAT WE ACHIEVED

Investigations into alternative business intelligence platforms remains ongoing

KEY PERFORMANCE INDICATORS

	PREFERENTIAL PROCUREMENT		SUPPLIER DEVELOPMENT		ENTERPRISE DEVELOPMENT		TOTAL POINTS OUT OF A POSSIBLE 40.00

	2019	2018	2019	2018	2019	2018	2019	2018
Spend (R million)	3 223	3 306	44.4	46	12.3	10.2	40	40
B-BBEE score achieved Points/(%)	100%	100	100%	100	100%	100	100%	100

PERFORMANCE OVERVIEW

The group remains committed to creating opportunities for all suppliers, especially B-BBEE compliant SMMEs. We maintained our B-BBEE levels across all pillars in support of economic upliftment through our supply chain nationally. Our focus remains on improving spend allocation across a broader base within our supply chain. We continue to address this through our ongoing procurement controls.

Sun International introduced an online tender bulletin board to advertise formal sourcing activities in an open and transparent platform. This platform now also allows prospective suppliers to submit online quotes for direct inclusion in ad-hoc sourcing opportunities and can be accessed on our corporate website: https://corporate.suninternational.com/ procurement/tenders/

Local geographic E&SD spend (R million)

Preferential procurement

Sun International’s total measured procurement spend for the financial year exceeded R3.2 billion (2018: R3.3 billion), of which R2.99 billion was procured from over 2 900 verified B-BBEE-compliant suppliers. This 93% valid spend compliance was below the group target of 95% for 2019. Our 2020 goal is to reach and maintain 95%.

The group continues to engage suppliers that support our objectives and meet our optimum B-BBEE standard: black-owned with a level 3 rating or better. 51% of group spend met this optimum requirement, exceeding our 45% target for 2019. Our revised 2020 goal is to reach and maintain 60%.

Black-owned SMME spend of 26% (2018: 35%) was achieved, exceeding our 25% target. We intend to increase our annual target to 35% by 2020.

Stringent B-BBEE compliance controls are implemented throughout the year, including suspending a significant number of noncompliant suppliers. These controls positively impacted the transformation of our supply chain when measured against internal indicators and were introduced as part of our preferential procurement strategy towards achieving optimal compliance by 2020.

Indicator categories	Revised Target by 2020 (%)	Achieved in 2019 (%)	Achieved in 2018 (%)
Black-owned spend	65	52	45
Black women spend	30	21	19
Level 1 to 3	80	73	63
Optimum spend¹	60	51	41
SMMEs	60	36	35
Valid B-BBEE spend	95	93	92

1	Actual contribution invested, not the recognised values as per the B-BBEE Codes..

Sourcing and supplier onboarding process within Sun International

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 must register on the Sun International supplier database for inclusion in any sourcing opportunity. Sourcing opportunities are also advertised on our corporate website.

ONBOARDING PROCESS

PRODUCT

PRICE

SERVICE

B-BBEE

BEST FIT SUPPLIER

Preference will be given to commercially competitive suppliers who demonstrate optimum Sun International B-BBEE compliance.

Empowering supplier

Black ownership ≥ 51%

Level 1-3

Enterprise and supplier development

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:

fostering sustainable business growth, creating jobs, and adding economic value
supporting the development of black-owned SMMEs
offering consistent and structured application of E&SD projects
focusing on the sustainability of our beneficiary organisations
supporting South Africa’s National Development Plan 2030
supporting strategic category management plans
achieving meaningful value through effective use of funding.

The group committed R44.4million (2018: R46 million) in supplier development, including early settlements substantially above the claimable value. An additional R12.3 million (2018: R10.2 million) was committed in enterprise development, supporting a pipeline of new business into the supply chain. This investment represents 8% (2018: 18.75%) of net profit after tax, against the Tourism Code’s requirement of 3.5% for the tourism sector.

Sun International’s E&SD beneficiaries per category

Sun International believes that the endorsement of a small business goes a long way in supporting market access, 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

114

E&SD BENEFICIARIES

(2018:70)

Casino and gaming

Fixtures, fitting and equipment

Food and beverage

Human resources

IT supplies and services

Maintenance services

Marketing services

Operating equipment and supplies

Professional services

Travel service

Retail services

LOOKING AHEAD

Entrenching the principles of formal BDS into all existing and new projects by enhancing adoption of the group’s E&SD programme
Reporting on the economic and social impact of our interventions within our local communities
Continuing to develop opportunities for including local supplier into sourcing activities and the group’s supply chain
Improving management and recovery of E&SD loans, ensuring ongoing capacity to support new beneficiaries within our E&SD programme
Addressing spend imbalances within the business unit supply chains to ensure optimal preferential procurement outcomes

E&SD INITIATIVES

For more detail on the various E&SD initiatives refer to:

https://www.suninternational.com/stories/people/

STRATEGIC OBJECTIVES

Enterprise and supplier development

IMPACTS

FOCUS AREAS IN 2019

WHAT WE ACHIEVED

WHAT WE ACHIEVED

WHAT WE ACHIEVED

WHAT WE ACHIEVED

WHAT WE ACHIEVED

WHAT WE ACHIEVED

KEY PERFORMANCE INDICATORS

PERFORMANCE OVERVIEW

Local geographic E&SD spend (R million)

Sourcing and supplier onboarding process within Sun International

Sun International’s E&SD beneficiaries per category

LOOKING AHEAD