Procurement Practices: 204-1

  • Management Approach

    Indicators addressed under Indirect economic impacts are covered by our sustainable development framework and our commitment to being a responsible corporate, and the Financial, Social, Intellectual, and Human capitals.

    Barloworld’s Worldwide Code of Conduct (Code of Conduct) sets out the group’s five core values of integrity, excellence, teamwork, commitment, and sustainability. It determines how our aspirations and values are translated into actions and behaviours.

    Teamwork, one of our core values includes ‘We build outstanding long-term relationships with our principals, suppliers and customers…we look for principals and suppliers who demonstrate strong values and commit to ethical principles outlined in the Barloworld Code of Conduct’.

    Our Code of Conduct reminds us of the standards to which employees and the group are accountable, and consequently it informs the group of what is to be regarded as material within the organisation.

    By operating in communities in which it operates, Barloworld creates significant value for local suppliers including Original Equipment Manufacturers (OEMs) and sub-contractors. This is reduced where plant and equipment can only be sourced from offshore principals, in which event the commitment is to spend the balance locally.

    In South Africa, Equipment division’s products are sourced from overseas principals resulting in some 73% local spend, while Automotive division sources vehicles through local OEMs resulting in 97% (including salaries and wages) of its spend being locally based. Sourcing varies by regions of activity and division. In Russia, given the nature of the Equipment business and sourcing Caterpillar product, some 17% of total spend is on local suppliers.

    Logistics business sub-contracts a large portion of its business to local contractors resulting in some 97% of its spend being locally based. The significant contractors in the logistics business are audited around Safety, Health, Environment and Quality aspects which accounts for some 40% of the procurement spend in this business. At an aggregated group level, local procurement spend was in excess of 75% for the reporting period.

    Direct value for communities includes the group’s support for enterprise and supplier development initiatives under Barloworld Siyakhula and other community investment activities.

    These principally benefit communities in South Africa, in excess of some R335 million in accumulated funds invested for enterprise and supplier development initiatives since inception (since 2007).

    Indirect economic impacts include: employee spending, the provision of products and services, community development , and job creation, reducing demand on the fiscus and enabling resources to be redirected to other areas of the economy.

    In South Africa, an effective way of bringing previously disadvantaged groups into the economy is through procurement. Preferential procurement practices vary by business unit and are influenced by the source and nature of their requirements, as well as the Broad-Based Black Economic Empowerment (B-BBEE) status of represented OEMs/suppliers.

  • 204-1 - Proportion of spending on local suppliers

    The reporting organization shall report the following information:

    1. Percentage of the procurement budget used for significant locations of operation that is spent on suppliers local to that operation (such as percentage of products and services purchased locally).
    2. The organization's geographical definition of 'local'.
    3. The definition used for 'significant locations of operation'.
    Integrated Report:
    Our operating context - SOCIAL AND ENVIRONMENTAL CHALLENGESDifferentiated relationships - Stakeholder engagementDifferentiated relationships - Stakeholder engagement - Communities

    Barloworld is committed to stakeholder value creation and supporting local communities as far as possible. A significant aspect of this spend is remuneration for locally resident employees. The number of employees by region who benefit from employment is reflected below.

    Employee breakdown by region   2020  2019  2018 
    South Africa   9 543  12 352  13 150 
    Rest of Africa   1 665  1 908  2 053 
    Europe and Russia   1 697  1 068  1 044 
    Middle East   0  68  90 
    Total   12 905  15 396  16 337 

    By operating in communities, Barloworld creates significant value for local suppliers including Original Equipment Manufacturers (OEMs) and sub-contractors. This is reduced where plant and equipment can only be sourced from offshore principals, in which event the commitment is to spend the balance locally.

    In Equipment southern Africa,’ products are sourced from overseas principals resulting in some 73% local spend, while Automotive division sources vehicles through local OEMs resulting in some 97% (including salaries and wages) of its spend being locally based. Sourcing varies by regions of activity and division. In Russia, given the nature of the Equipment business and sourcing Caterpillar product, some 17% of total spend is on local suppliers.

    Logistics business sub-contracts a large portion of its business to local contractors resulting in some 97% of its spend being locally based. At an aggregated group level, local procurement spend was in excess of 75% for the reporting period.

    Direct value for communities includes the group’s support for enterprise and supplier development initiatives under Barloworld Siyakhula and other community investment activities.

    These principally benefit communities in South Africa, in excess of some R335million in accumulated funds invested for enterprise and supplier development initiatives since inception.

    Indirect economic impacts include: employee spending, the provision of products and services, community development , and job creation, reducing demand on the fiscus and enabling resources to be redirected to other areas of the economy. In South Africa, an effective way of bringing previously disadvantaged groups into the economy is through procurement. Preferential procurement practices vary by business unit and are influenced by the source and nature of their requirements, as well as the Broad-Based Black Economic Empowerment (B-BBEE) status of represented OEMs/suppliers.