Altron issues a BBBEE pledge: How does it measure up?

Allied Electronics Corporation (Altron), the JSE listed electrical and electronics technology company controlled by the Bill Venter family, makes a noteworthy pledge to broad base black economic empowerment (BBBEE) in its latest financial report.

Seen against observations that the technology sector and mainly ICT is yet to make a convincing transformation movement, the Altron pledge will be closely scrutinised and perhaps spark a bigger debate.

If the sector is struggling to make grade under the current light regime of BBBEE codes, how will it look when the new tougher codes are unleashed. However Altron is making a strong case for itself.

Altron looms large over South Africa’s ICT sector with operations covering infrastructure development down to corporate and consumer services. The group boasts annual revenue of about R25bn.

Inside Altron rests giants like Allied Technologies (Altech) and Bytes Technology Group. In a recently concluded reshuffling of Altron’s structure the latter two have been bundled together under a structure called Altron TMT (Telecommunications, Multi-media and Information Technology). Altron also houses Powertech, a firm that specialises in servicing infrastructure development for the power sector.

The firm has huge exposure to the public sector market which should be more sensitive to BBBEE credentials. This exposure is best reflected in the positioning of Altech to the planned migration of South Africa’s television broadcasting to a digital platform. Having serviced pay television player MultiChoice with set top boxes, Altech is eyeing the massive opportunity to supply set top boxes to the country’s digital migration process. It has built a R200m factory in KwaZulu-Natal with the capacity to serve this market. Competition is tight in this process and BBBEE credentials may just be the tilting factor.

In its financial report for the six months ended August, Altron noted that it has maintained a level 3 BBBEE rating. This means it commands a total BBBEE score of between 75% and 85%. Contributing to this is a fair representation of black people at board level. This representations was boosted this week when the group announced the appointment of Ronnie Ntuli and Sindi Mabaso-Koyana to its board. They joined other black nonexecutive directors Jacob Modise, Penuell Maduna, Dawn Mokhobo.

Altron noted that its subsidiary Powertech has dropped to a level 4 contribution from level 3. It added that other subsidiaries Bytes and Altech have been rated under the ICT Charter and have both achieved level 2 ratings.

Altron said it continues to focus on transformation as a competitive advantage and as a social responsibility imperative. “In this regard, economic benefit accrues to the black and/or female shareholders at the Powertech group, Bytes group, Altech Netstar, Altech Multimedia and Altech Radio Holdings”.

“With regards to business development, several small to medium sized sustainable enterprises have been developed at Aberdare Cables, the Powertech Batteries group and Powertech Transformers,” said the group.

It added that “Over the last 48 months in excess of R30 million has been invested in health infrastructure development and education through the various social empowerment programs…”

The group said it has continued with the implementation of its group-wide Human Capital and Transformation Strategy BEYOND 2012 adopted in July 2012. “The internal metrics versus each divisional goal and industry show a positive trend. The challenge remains attraction and retention of black professionals at the managerial and executive levels”.

Following the buyout of Altech minorities and delisting of the company from the JSE, the former Altech Academy will be converted to an Altron corporate university.

On a theme termed ‘Sustainability’ Altron said  the recent acquisition of the Altech minorities’ shares in Altech and the establishment of the AltronTMT division is evidence of the group’s commitment to improve profitable revenue growth, invest in its people, lead through innovation and build and maintain strategic alliances.

Altron highlighted that it has disclosed its first comparable data for electricity use and waste disposal in its 2013 Integrated Annual Report. “Water data had to be restated due to system improvements which resulted in more accurate data being available”.

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