The next empowerment deal that South Africa’s largest food group, Tiger Brands, does will be broad-based and the empowerment parties involved will have to add value, with a possible grouping being communities near the group’s operations, Tiger Brands chief executive Nick Dennis said on Thursday.
However, Dennis made it clear that the mention of communities in any possible empowerment deal is “not a commitment”.
For instance, near Musina, Tiger Brands operates a tomato-processing plant, where the group provides seed to farmers to grow tomatoes, and communities in this instance could be involved in a future empowerment transaction.
Earlier on Thursday, Tiger Brands announced that it has sold off 4% of the group’s equity to three employee trusts for R729-million.
Chris Nissen is head of Tiger Brands’ transformation committee and Bheki Sibiya, head of Business Unity South Africa, is a Tiger Brands non-executive.
Nissen said any empowerment deal shouldn’t be too broad-based, as then the benefits flowing to the beneficiaries of any empowerment deal would be too watered down.
Any future empowerment parties would need to be active in Tiger Brands’ business and couldn’t be passive empowerment participants, Nissen added.
The empowerment deal cost Tiger Brands’ shareholders R191-million or 1,1% of its issued shares, Dennis said. On Thursday, Tiger Brands’ share finished at a closing high of R116,95, up 4,4% or R4,95 from its previous close.
A black managers’ trust will take a 2,7% stake in Tiger Brands for a payment of R496-million, a general staff trust will take a 0,3% stake in the group for R61-million and the Thusani trust will take a 1% stake in Tiger Brands for R172-million.
About 80% of Tiger Brands’ black staff will be involved in the general staff trust, Dennis said.
The group’s empowerment programmes include black senior management, changing the group’s demographic profile, embarking on skills development, procurement policies, enterprise development and social development, Dennis said.
By 2010, Tiger Brands is looking to have 25% black ownership, with 10% direct black ownership.
The move by the group to do empowerment programmes follows the release of the Department of Trade and Industry’s code of best empowerment practice, as well as the development of the AgriBEE document, the development of the health-sector charter and the empowerment charter for the fishing industry.
In South Africa, Tiger Brands has interests in food, pharmaceuticals and fishing.
The deal will see Tiger Brands lock in just fewer than 400 black managers at its operations in South Africa for 10 years. — I-Net Bridge