Pepkor is considering co-investing in Namibian manufacturers that show potential to enter its supply chain as the retail group works towards placing N$40 million in procurement orders with local producers over the next three years.
Tyrone Vera, CEO of Pepkor’s Emerging Business Units Portfolio, said the group is looking beyond simply purchasing finished products and could work with local manufacturers to build the capacity needed to meet its volumes and standards.
The approach comes as Pepkor searches for Namibian manufacturers capable of supplying clothing, footwear and homeware to its operations, following conditions imposed on its acquisition of Retailability Namibia businesses.
The Namibian Competition Commission (NaCC) requires Pepkor to target N$40 million in purchases from Namibian manufacturers over three years following its acquisition of the Legit, Style and Swagga/Beaver Canoe businesses.
Vera said Pepkor was confident it could place the full procurement value by working with local businesses and, where appropriate, supporting their development and potentially co-investing in their operations.
The company has already identified potential suppliers through its manufacturing summit, although some businesses will require additional capacity before they can meet Pepkor’s procurement requirements.
Pepkor said knowledge and skills transfer could be used to help promising manufacturers improve their operations and position themselves for future orders.
Leather manufacturing has emerged as one of the areas where Pepkor sees potential for greater local sourcing, particularly for its furniture and footwear businesses.
“There’s some interesting leads in areas like schoolware manufacturing within the territory as well as some other products, and obviously Namibia is very strong on leather, so we’re looking at how that plays into potentially in our furniture business or also in our footwear business,” Vera said.
“So we have identified a few key partners, but we’re hoping that through the two days we’ll identify a lot more. The expressions of interest have been high and the attendance has been great.”
He said manufacturers that successfully enter Pepkor’s supply chain could initially gain access to the retailer’s approximately 360 stores across Namibia, with the possibility of supplying its operations in other countries if they develop sufficient production capacity.
“Some of the other vendors that have real potential to get onto our order books could supply our Namibian business, which now reaches some 360 stores across our various brands,” Vera said.
“They may also have the opportunity to enter the export market, which would ideally be the first prize, as the volumes would be significantly larger if they could export to some of our other territories. So, we are quite confident that we will place the full value.”
Vera said interest from local manufacturers had been strong, with organisers having to expand the venue to accommodate increased participation.
Pepkor is using the two-day engagement to identify additional manufacturers that could either immediately enter its supply chain or be developed into future suppliers as the retailer moves to expand its Namibian procurement base.
