CBM TEC, Kitwe

ZAM WORKSHOP: LOCAL CONTENT IN ZAMBIA MINING SECTOR

Overiew

1. Private Enterprise Programme Zambia

2. PEPZ Business Linkages Programme

a. Identification and recruitment of potential suppliers

b. Business Diagnostic Exercises

c. Areas of the organization assessed

d. Summary of assessment results for local suppliers to the mines

e. Types of support

f. B2B online Platform

Private Enterprise Programme Zambia

• GBP 14.5 million 5 year SME development programme which aims to support the emergence of transformative SMEs that can create jobs and help diversification of the Zambian economy;

• Funded by UKAID and implemented by DFID;

• Launched in December 2014;

Background to the programme

Goal of PEP-Z:

• A Zambian private sector capable of delivering inclusive growth through increased private investment and employment creation in the economy

Objectives of PEPZ

OUTCOME INDICATORS • Policy influence - Models of engagement with

private sector demonstrated by PEPZ and taken up by government and development partners

• Investment - Additional investment by MSMEs • Value addition - Increased value addition by

MSMEs supported by PEPZ • Jobs - Additional FT jobs created by MSMEs

directly or indirectly. GENDER: 40% jobs created for women!

• Awareness - Increased percentage of Zambian adult population with positive views twds entrepreneurship

Objectives of PEPZ

• Business Plan Competition (BPC): support new start-ups and help innovative businesses grow, generating wealth and creating jobs. And raise the profile of entrepreneurship in Zambia;

• Business Development Services (BDS): improve access to markets, governance, management and business planning services for transformative MSMEs to access loan finance and grow;

• Business Linkages Programme (BLP): facilitate linkages between large businesses and MSMEs and help the latter supply the large businesses competitively so they can grow and create jobs;

• Impact Investment: provide patient capital, TA and mentoring support to investment-ready MSMEs capable of transformative growth to increase competitiveness and create jobs;

The four components

Four related components

PEPZ Business Linkages Programme

Partner with anchor companies, BMOs such as ZAM & BMO

Sign MoUs on collaboration in creating local supply base;

MoUs so far signed with Chibuluma Mine, KML, KCM and already working with MCM

1. Matching Anchor Companies to Local Suppliers

Business diagnostic to assess needs

Management Improvement Plan & BLP support package - Addressing supplier capacity gaps through training, mentoring & coaching, grants - certifications & standards and management information systems

Sign Performance agreement with SME

2 Address Information Failures

Establish Business to Business online platform that gives partner anchor companies direct access to supported SMEs and vice versa

ZAM Annual Local contact show case, seminar & awards

3 Crowding in Financial Institutions

MoUs with GroFIn, ZANACO, DBZ, Stanbic & Kukula

MoUs with providers of Credit Enhancement Instruments e.g. African Trade Insurance Agency

Steering Committee membership

Three pronged strategy for supporting local suppliers

PEPZ Business Linkages Programme

The supplier matching process

Identification and recruitment of potential suppliers

• Over 50 SMEs so far have been identified, associated with the following Anchor companies:

• Shoprite • Mopani • Chibuluma • Kalumbila • Sun International

• Minimum requirements for SMEs included in application;

• Should have a PACRA number • Comfort later from a bank • Owners/managers demonstrate innovativeness and ability to grow

business • VALUE ADDED GOOD/SERVICE

Business Diagnostic Exercises

• What is a Business Diagnostic? • Approach to appraising the capabilities of SMEs to fulfil the anchor firms

purchasing requirements. • Due diligence exercise looks at issues such as regulatory compliance, law suits

et

• Two experts carry out business diagnostic interview - one focused technical issues and the other management issues; – A score out of 100 is assigned to management/leadership, marketing

& sales, HR, Marketing, Finance, production, QM, Health & safety & risk management to which a predetermined weight is applied to arrive at an overall summary score;

• Product/service viability – assess the feasibility & development impact of the local sourcing opportunities from anchor companies; – Results of a business diagnostic are combined with viability

assessment;

Business assessments are precursor to PEPZ support

Areas of the organization assessed Performance benchmarks Description

Management & leadership Clear goals exist with management having the capability as well as systems to not only execute but also course correct where required

Marketing & sales Clear knowledge of target customer(s) & product/service positioning as well as marketing plan with adequate staffing to execute

Human Resources Existence of staff establishment with job description, contracts, suitable incentive structure, recruitment and succession planning, gender, statutory compliance as well as staff development

Finance How well is management able to monitor financial performance and is there a written accounting policy as well adequate internal control

Products/Services and Operations Value adding products and services, capacity utilization, use of up to date technology, utilization of resources including shifts, ability to satisfy orders on time and maintenance of equipment

Quality Management Quality control systems and is quality management certification in place

Environmental & Health and Safety Good house keeping, health and safety management systems, use of PPE and ladders etc

Management of Risk (business) Business risk identification and mitigation

Management of Risk (Technical) Technical risk identification and mitigation

0%

10%

20%

30%

40%

50%

60%

70%

80%

ASSESSMENT CATEGORY AVERAGE SCORE

ASSESSMENT CATEGORY AVERAGE SCORE

Summary of assessment results for local suppliers to the mines

Types of local suppliers to the mines assessed

Rubber lining services

10%

Pole & Timber Processing

10%

Grinding media 10%

Heavy duty engine rebuilding

10% Welding, metal fabrication &

civil works 30%

Air systems 10%

Clay brick manufacturing

10%

Foundry, machining &

metal fabrication

10%

SME Categories

Suppliers to the mines belonging to varying categories have so far been assessed

PEPZ Business Linkages Types of Support

Training – technical/management

Coaching/mentoring Grants for quality &

information management systems

Credit enhancement to facilitate A2F

Searchable profile on www.zamb2b.com

One or a combination of the types of support below are available to local suppliers

WWW

B2B Online Platform – www.zamb2b.com

B2B online platform

• www.zamb2b.com

– Is an online searchable database which will serve two purposes: • Allow large corporate businesses (anchor firms) to find SME suppliers

manufacturing/producing local inputs that they can buy;

• Profile, vetted and supported local SMEs that produce local inputs for large corporate businesses (anchor firm);

– Site tested and software acceptance issued to developer in March 2015

– Population of the site pending inclusion of terms of use • Draft terms of use in the process of being finalized after which an internet savvy lawyer

will review;

– Plan to officially launch site with in October during manufacturing week; • PR campaign being planned between now and launch date

– DEMONSTRATION OF THE WEBSITE

B2B Website is up and running

Home page with info on what can be done on the site & FAQs

You can register through the site as an anchor firm

You can register through the site as a supplier

The home page once logged in

What the supplier profile will look like

Anchor firms such as mining companies will also be able to post tenders

Thank you.

Q&A