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 2017.
In order to significantly simplify and streamline our supply chain, we have commenced a process to implement a supply chain management platform known as the Petra eProcure Portal throughout FY 2018. Whereas previously we operated a closed tender system, the new platform will allow all suppliers wishing to do business with Petra to be able to register their details and then be made aware of new supplier opportunities as they arise.
This will also allow us to expand our list of contractors and make our procurement system more transparent and effective.
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.
There were no significant changes to our supply chain in FY 2017; however, we do foresee a substantial drop in expenditure in FY 2018, further to the advanced nature of our expansion programmes and the fact that our capital profile is now on a declining trend.
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 expected to assist in widening the base of local SMMEs with whom we do business.