Q: What is the Supplier Development Fund (SDF)?
A: Massmart Holdings Limited (“Massmart”) has established a R200 million Supplier Development Fund (“SDF”), to assist South African small, micro and medium -sized business (“SMMEs”), who are either existing or potential suppliers to Massmart. The SDF is implemented over 5-years (2012 to 2017). The SDF targets all established local manufacturers, producers and significant assemblers of products that can be resold in the Massmart retail divisions. Preference but not exclusivity is given to black-owned and women-owned businesses. The purpose of the SDF is to assist suppliers to enhance the quality of their products or improve their production capacity.
Q: What investment areas is the SDF focused on?
A: The SDF is focused on farming, manufacturing and providing services to suppliers. A strategy is in place to ensure that the SDF achieves significant impact across specific product categories that grow and enhance Massmart’s local procurement from SMMEs.
Q: What is the direct farm procurement programme presently focused on?
A: The Ezemvelo Direct Farm Programme is presently focused on vegetable procurement with plans to launch a red meat procurement pilot project in 2014. The programme is currently active in five (5) provinces namely Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga and the Eastern Cape. The programme will be gradually rolled out in line with Massmart’s fresh produce business footprint growth and its retail store presence.
Q: What is the manufacturing procurement programme presently focused on?
A: The manufacturing procurement programme is focused on clay bricks, milling, processed food, building materials, clothing and textiles “(prioritised clusters”).
Q: Does the SDF support suppliers outside of its prioritised clusters?
A: On a case-by-case basis the SDF will review what it classifies as “ready-link” opportunities to support SMMEs outside of its prioritised clusters. Ready-link opportunities are not normally related to a prioritised cluster investment. Provided these ready-link opportunities align with the SDF’s overall objectives and with Massmart’s supply chain, such opportunities are supported by the SDF. These investments tend to be smaller in size given that the SDF is largely committed to focus on the prioritised clusters.
Q: How does the SDF engage with service providers?
A: The SDF engages service providers on behalf of its beneficiaries, and on behalf of the SDF administration.
Q: How does the SDF invest?
A: The SDF invests in three ways, namely 1) non-recoverable grants including for working capital and limited infrastructure and equipment requirements, 2) recoverable commercial loan guarantees and 3) non-recoverable technical assistance support to suppliers.
Q: How do I apply?
A: You can contact the SDF via the Massmart website, internal or external referral or direct telephone inquiry. Once you have made contact we will provide you with a contact sheet to complete and return to us. The SDF will thereafter assess your contact sheet to determine whether it’s in line with the SDF’s objectives and strategy.
Q: What is the timeline/application window?
A: The SDF application window is open from January until end of August each year
Q: Can I drop off samples/products at the Head Office?
A: No. Upon submission of the application via the abovementioned process, we will make direct contact with the applicant should product samples be required.
Q: Who makes a decision on whether a beneficiary receives funding or not?
A: The SDF Fund Committee which is comprised of senior leaders and merchants within Massmart makes a decision by means of a voting process on which projects are funded and in line with the SDF’s overall strategy and objectives. The SDF Fund Committee consults with an Advisory Board on its decisions.
Q: How does the SDF measure its progress and impact?
A: The SDF will monitor all its approved projects to assess outputs and outcomes in line with the SDF’s strategy and objectives. Key measures to be reported on for example will include: the number of existing suppliers supported; the number of new suppliers supported; the number of suppliers supported within a specific prioritised cluster; the value of procurement from suppliers within a specific prioritised cluster; the value of purchase order commitments from suppliers within a specific prioritised cluster; the number of black-owned suppliers; and the number of women-owned suppliers.