Empowerdex analysis shows South Africa’s deep-sea trawling industry is 62.36% black owned

Newsletter No.5 July 2016

More than 60% of South Africa’s most valuable commercial fishery, the deep-sea trawling industry, is black-owned. This is one of the key findings of a study that has just been completed by the independent economic empowerment verification and research agency, Empowerdex.

The finding is in sharp contrast with widely held opinion that the deep-sea trawling industry, which has annual sales in excess of R5 billion, is largely untransformed.

Empowerdex lead researcher, Lister Saungweme, says the study was conducted to understand and verify the extent to which the fishery has transformed in recent years.

“Our aim was not only to clarify the deep-sea trawling industry’s verified transformation status but to benchmark it against other industries. A significant finding is that the industry is 62.36 % black-owned and a level three contributor to broad-based black economic empowerment (BBBEE),” she said.

A level three contributor scores greater than 75 out of a possible 100 points when scored against a range of BBBEE criteria including, inter alia, ownership, management and control, employment equity, skills development, preferential procurement and enterprise development.

Rights-holders in the deep-sea trawling industry operate capital intensive businesses that require large vessels and extensive skill to harvest fish about 100 nautical miles from the coast, with nets cast up to 800 meters deep and vessels sometimes riding 6 m swells – fish is regarded as one of the last hunted sources of protein available commercially. The catch is delivered to fish & chip shops in every corner of South Africa and processed and packaged into fish fingers and other popular hake products for local supermarkets. There is also a demanding international market that is supplied with a range of value-added hake products. Collectively, the industry employs 7 050 people at sites in Saldanha Bay, Cape Town, Gansbaai, Mossel Bay and Port Elizabeth. Wages are negotiated at industry level and employees are offered a range of benefits including a variety of training opportunities and scope for career progression.

Empowerdex divisional manager, Nazeem Allie, says the transformation achieved by the deep-sea trawling industry should be acknowledged.

“At the beginning of the study we were aware of the widely held view that the industry has to be restructured, but our findings have shown that there has been a significant shift in the transformation credentials of the deep-sea trawling industry. It has a relatively high number of employees and requires very costly equipment and extensive skills to, firstly, go and hunt for the raw material and, secondly, extract maximum benefit through a series of complex processes from production to marketing and distribution,” he said.

Empowerdex noted that the industry’s transformation compares very favourably with other sectors of the economy. For example the deep-sea trawling industry placed fourth out of 10 when compared with other industries, scores for which were drawn from the top empowered listed companies in each sector. With a score of 79.17%, the deep-sea trawling industry came in after the construction and materials industry (83.12); the ICT industry (81.90%) and the forestry and paper industry (80.38%).

Tim Reddell, chairman of the SADSTIA, said:

“It would be correct to say that the deep-sea trawling industry is a transformed industry that has undergone a sea change over the past 25 years. Before 1990, there were a few rights-holders in the fishery – all of them large and predominantly white-owned. Today, there are 46 rights-holders and many of them are small to medium enterprises (SMEs) that have invested in vessels, factories and other capital equipment and are operating successfully alongside the large companies that remain in the fishery.”

He adds: “Change is happening and SADSTIA believes the Empowerdex report proves that the industry has transformed to a great extent, relative to other industries of similar size and complexity.”

The deep-sea trawl fishery is certified as sustainable and well managed by the Marine Stewardship Council (MSC), the world’s gold standard of sustainability ratings.

View the full Empowerdex report here

SADSTIA members play a vital role in developing South African youth

In recognition of Youth Month, the deep-sea trawling industry has produced a factsheet that documents the many initiatives it undertakes to train and develop South African youth. The factsheet shows that the industry provides close to 500 learnerships to unemployed youth per year; provides training for at least 130 interns and apprentices every year; and employs at least 20 graduate trainees in the fields of engineering, finance and marketing each year.

Read the Youth Development paper here.