Group Logistics Strategy Briefing Session. Briefing session 14 August 2013
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1 Group Logistics Strategy 2013 Briefing Session Briefing session 14 August
2 Agenda Time Topic Objective Speaker 10:00 10:30 Welcome & Introduction Group Logistics Strategy Purpose of the briefing session 10:30 10:45 Vendor Application & SHERQ Management Systems Welcome and opening remarks How to become an accredited vendor in ArcelorMittal South Africa 10:45 11:00 Q&A All 11:00 11:15 Preferential Procurement Policy Explain the impact of the Preferential Procurement Policy Enterprise Development Interventions 11;15 11:30 Q&A All 11:30 12:30 Logistics Business Opportunities in ArcelorMittal South Africa AOL/SADC Raw Materials Domestic Steel Ports & Harbours Overview of logistics related business opportunities Cross border road transportation of steel to Sub-Saharan African customers Steel to the local market/customers 12:30 12:45 Q&A Discuss opportunities All 12:45 13:00 Evaluation Criteria Supplier Database Tender Transparent, Fair, Equitable Evaluation Criteria: Price, Capacity, BEE Level, SHERQ Leroy M Nsibande Ntokozo Khanyile Tometsi Mosai Hennie Odendaal Leroy M Nsibande 13:00 Closure Leroy M Nsibande 2
3 Operational Overview Flat Steel Products shipped* Vanderbijlpark Works 2 250kt (2 478) Saldanha Works 1 092kt (941) Long Steel Products shipped* Newcastle Works 1 305kt (947) Vereeniging Works 278kt (337) Iron ore procured* 3 444kt (4 584) from Sishen 1 234kt (1 409) from Thabazimbi 1 285kt (650) others Coke & Chemicals shipped* Coke 460kt (631) Tar 109kt (117) *12 months to December 2012 Steel plants Captive iron ore source Saldanha Works Sishen Cape Town Vanderbijlpark Works South Africa Newcastle Works Thabazimbi Johannesburg Vereeniging Works Durban
4 Group Logistics Structure Adjudication Committee Group Manager & Head of Logistics LM Nsibande Manager: Logistics Group Contracts H Odendaal Manager: Ports & Harbours T van Tonder Manager: Central Logistics Planning E Odendaal Manager: Logistics Operations C Loots Snr Specialist: Raw Material Livhu Mugwagwa Snr Specialist: Domestic Steel Ria Vermaak Snr Specialist: Ports & Harbours Naresh Singh Specialist: AOL Rudzani Tshifhumulo Group Logistics: Our Vision: To provide integrated logistics solutions to ArcelorMittal South Africa by strategically supporting our business objectives Our Mission: To be the benchmark in logistics within ACIS Our Principle: To Communicate, Coordinate & Collaborate (3Cs) GIT R. Palayi 4
5 Purpose of the briefing session. The purpose of this briefing session is to provide information on: Accessing transport and logistics business opportunities in ArcelorMittal South Africa The structure of Group Logistics as a dept. with Procurement & Logistics ArcelorMittal South Africa s tender process at a glance How to get hold of ArcelorMittal South Africa tender documents Applying to become a vendor in ArcelorMittal South Africa What information and documents to provide with a tender response 5
6 Logistics spend 2012 Logistics spend overview 2012 Sea Freight, R195,868, Port Costs, R297,378, Road TPT Raw Material, R281,598, Road TPT Steel, R899,828, Rail Transport, R3,305,000,000.00
7 What governs our procurement? ArcelorMittal South Africa will act in the following manner when procuring logistics services FAIR Everyone must be given the same opportunity to tender. No favouritism TRANSPARENT The process must be open, showing there is nothing exclusive or to hide COMPETITIVE Open and fair competition must be promoted EQUITABLE Decisions must promote equity in South Africa, with preference to the previously disadvantage or BEE companies COST EFFECTIVE The best value for money must be obtained 7
8 ArcelorMittal tender process at a glance Tender is advertised Newspaper Website Tender Notice Board Collect tender Document Fax Attend briefing session (where applicable) Complete tender form And assemble relevant documents, information and costing for your tender response Unsuccessful tenderers are informed that they were unsuccessful If successful, you are awarded the tender and you will be required to sign a contract Vendor application & ArcelorMittal SA performs vendor audit on SHERQ systems Submit your tender Before the closing date and time Render the contracted service Performance Evaluation Monthly 8
9 Vendor Application & SHERQ Management Systems Ntokozo Khanyile
10 Vendor registration requirements 10 The following documents are required before vendor registration Certified copies of the required documentation must accompany the fully completed ArcelorMittal vendor application form. Applications will be rejected should any of the required supporting documentation as listed below not be attached to the vendor application form: Registration certificate of: - Private or Public Company (CM1 or CM6 Certificate of incorporation) - Closed Corporation (CK1 or CK2 Founding Statement for Closed Corporation or amendment thereof) VAT Registration certificate TAX Clearance certificate Registration certificate at Compensation Commissioner (Letter of Good Standing) Cancelled cheque or letter from Financial Institution confirming bank details The Applicant must hold a valid BBBEE certificate of at least level 5, issued by an accredited verification agents ISO Quality accreditation or compliance certificate (If available) ISO Environmental accreditation or compliance certificate (If available) OSHAS Health and Safety accreditation or compliance certificate (If available)
11 SHERQ Requirements Arcelormittal and contractors are required by the OHS Act 85 of 1993 to provide a safe work environment and protect the safety and health of their work forces. Arcelormiital South Africa has contractors on site contractors including transport contractors. All potential transport contractors will be audited by Vendor management to confirm their legal and SHERQ compliance with ArcelorMittal requirements. The audit is base on ISO 14001, ISO 9001 and OHSAS The minimum score to achieve is 65% in all three standards, If a vendor does not achieve a score of 65% or more for the assessment, a second audit will be arranged. If the vendor fail the second audit, it will be permanently black listed and it will never be ably apply for the vendor code with Arcelormittal If the vendor pass the audit, a vendor code will be allocated, then it is expected that the vendor prepares a safety file before any work is performed. 11
12 Preferential Procurement Policy Tometsi Mosai
13 Preferential Procurement Policy Broad Based Black Economic Empowerment (BBBEE) is an integrated and coherent socio-economic process, located within the context of the country s national transformation programmes, ArcelorMittal South Africa Limited commits itself to actively support and contribute to the development and growth of BBBEE enterprises in the Republic of South Africa.
14 Policy Objectives Creating an enabling environment for BBBEE enterprises to access available procurement opportunities within ArcelorMittal South Africa. Increasing participation by small and medium enterprises (SMME s) that are black owned and black women owned. Contributing to the growth of the small and medium sized BBBEE enterprises by ensuring that a target percentage of expenditure on goods and services is procured from such enterprises. Contributing to the development of the small and medium sized BBBEE enterprises through initiatives that are aimed at improving their business sustainability.
15 Order of Preference 1. Black Women Owned (BWO) and managed entities with exempted micro-enterprise (EME). 2. Black Owned (BO) and managed entities with exempted micro-enterprise (EME) status. 3. Black Women Owned and managed entities (BWO) with qualifying small enterprise status (QSE). 4. Black Owned and managed entities (BO) with qualifying small enterprises status (QSE). 5. Black Women Owned and managed entities (BWO) with generic enterprise (GE) status. 6. Black Owned and managed entities (BO) with generic enterprise (GE) status. 7. Contribution level ranking where contribution level 1 is the most preferred and level 8 is the least preferred.
16 Preferential Procurement -Benefit
17 Supplier Development Interventions Partnership agreement with ABSA Invoice clearing facility. Vendor financing. Partnership agreement with B1SA Advisory services on BBBEE compliance. Targeted procurement Set a side procurement opportunities for exclusive participation by a designated group of companies.
18 Business Opportunity Hennie Odendaal
19 Road transport of steel- domestic and export Enquiries will be issued before the end of 2013 for the road transport of steel all tonnages reflects estimated annual tonnages: From Pretoria to domestic customers + 81,000 tons From Vanderbijlpark to Durban and Richards Bay and domestic customers approximately 69,000 tons. From Vereeniging to Durban and Richards Bay and domestic customers + approximately 70,000 tons Enquiries will also be issued for: The receiving, packing and handling of + 76,800 tons of tin products at ArcelorMittal Vanderbijlpark as well as the transport thereof to Durban for export and to domestic customers. The receiving, packing and handling of + 67,000 tons of DWI products at ArcelorMittal Vanderbijlpark as well as the transport thereof to domestic customers 19
20 Opportunities in SADC countries Available opportunities SADC region are: VANDERBIJLPAKR WORKS TO: NEWCASTLE WORKS TO: VEREENIGING WORKS TO: PRETORIA WORKS TO: Country Estimated tons/month Country Estimated tons/month Country Estimated tons/month Country Estimated tons/month Namibia 82 Malawi 59 Botswana 60 Botswana 56 Malawi 381 Swaziland 108 Zambia 90 Mozambique 150 Botswana Zimbabwe 395 Zambia 150 Zimbabwe Namibia 620 Zimbabwe 200 Zambia Botswana Mozambique Zambia Mozambique More details about volume per route per country will be available on the main tender Maximum of 3-year contracts commencing on 1 January
21 Import Coal Total coal imports 1.7 million ton per annum Predominantly rail Road needed when rail fails Destinations Richards Bay to Newcastle 20,000 per month Richards Bay to Vanderbijlpark 20,000 per month Additional information Side tippers only loads per day to each business unit Estimated payload 34 ton 21
22 Ports and Harbours contracts Service Contracts expiring within the next year Tally of export steel at Saldanha Steel 660 kt pa ESTIMATED Volumes Tally of export steel at Richards Bay Warehousing, consolidation & transportation of import consumables 41 kt pa 70 kt pa ~ containers pa Service Other contracts expiring in 2015 Stevedoring of iron ore pellets, coke and steel in Saldanha & Richards Bay Freight forwarding (Ocean and Air) and clearing of Import Consumables Combined conditioning, loading, stowing, securing and surveying of AMSA shipments in Durban & Richards Bay Surveying of steel in Richards Bay
23 Evaluation Criteria Leroy M Nsibande
24 Evaluation Criteria ArcelorMittal South Africa will evaluate tenders based on the criteria listed below: 1 Competitive Price Value for money Total Cost of Ownership, etc. 2 SHERQ Systems Based on our SHERQ system as per vendor application onto our database 3 BBBEE Level Preferably Level 1 5 As per ArcelorMittal Preferential Procurement Policy 4 Capacity Commercially - (Financial position of prospective supplier) Technically vehicles to execute contract (i.e. vehicle type, etc) Set-asides Capacity NB: Price Supplier Development SMME Development 24
25 Thank you! 25
26 Contact Details Hennie Odendaal(Manager) Rudzani Tshifhumulo(Specialist) Livhuwani Mugwagwa(Specialist) (016) (016) (016) Ria Vermaak(Specialist) (016) Naresh Singh(Specialist) (016) Refilwe Palayi(Specialist) (016) Tometsi Mosai (Preferential Procurement)
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