Petra’s supply chain department is responsible for managing the Group’s inbound supply chain. It performs an important role in terms of delivering on our production and expansion plans by ensuring that the right goods and services are delivered to the right location at the right time. The team is also accountable for ensuring that our supply chain operates safely, efficiently and according to the high level of ethical conduct that we expect of our business.
We proactively manage and develop a capable and commercially secure supply base, with the aim of delivering sustainable value to our Company and to our suppliers through leveraging long-term relationships and effective contract management. Our approach in this regard is guided by our procurement policy, which was revised during FY 2018 to incorporate the Preferential Procurement Policy.
In order to significantly simplify and streamline our supply chain, Petra implemented a supply chain management platform in FY 2018, enabling suppliers to register to do business with the Company via our online eProcure Portal. This ensures that the suppliers are made aware of new opportunities as they arise and also allows us to expand our list of contractors and make our procurement system more transparent and effective. The platform also encourages potential suppliers to comply with various forms of legislature and registrations that is measured by a Business Maturity Index (BMI) visible to every registered supplier on the platform. Petra aspires to improve the average BMI of suppliers contracted going forward.
We expect all suppliers and contractors to act with integrity and respect for human rights and therefore compliance with our Code of Ethical Conduct is explicitly required as part of the general terms and conditions of contract with the Petra Group. We have vetting processes in place to ensure that we deal with reputable businesses, but we will continue to strengthen these processes as part of the ongoing formalisation of our supply chain practices.
Petra sources 100% of the goods and services for its South African, Tanzanian and Botswana operations from the countries in which they are located, as even those goods supplied by international companies are purchased through their operating branches in-country. However, we view targeted local procurement as a powerful lever for local economic development and community empowerment and preference is therefore always given to suppliers in close proximity to our mines when possible.
Despite significant progress made, challenges remain relating to the availability of BEE suppliers in South Africa and the fact that suppliers of high value capital goods are very seldom situated in the host communities of our mines. Petra therefore has a strategy in place to help develop local suppliers to be able to enter our supply chain.
The migration of our supply chain to the Petra eProcure platform in FY 2018 is assisting us in widening the base of local SMMEs with whom we do business.