Top NewsA bold BEE deal gives 51% ownership to employees

Crate supplier TC Woodworks, which supplies crates for exporting auto glass and pallets to Shatterprufe, handed over majority ownership to its 31 employees following conversations with Shatterprufe over raising its B-BBEE rating by relooking its ownership structure. The move – which has been hailed by the National Association of Automotive Component and Allied Manufacturers (NAACAM) – has seen profits increase, staff morale soar and prospects for its workers and their families improve. TC Woodworks is...
CueMay 20, 2019
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Crate supplier TC Woodworks, which supplies crates for exporting auto glass and pallets to Shatterprufe, handed over majority ownership to its 31 employees following conversations with Shatterprufe over raising its B-BBEE rating by relooking its ownership structure. The move – which has been hailed by the National Association of Automotive Component and Allied Manufacturers (NAACAM) – has seen profits increase, staff morale soar and prospects for its workers and their families improve.

TC Woodworks is now rated B-BBEE status Level two. Says NAACAM executive director Renai Moothilal: “This is a good example of value chain business relationships that are leveraged to ensure transformation in the autos sector happens. That, at the end of the day, is what will ensure long-term growth and sustainability in our industry.”

Moothilal adds, “What we see is a beneficial outcome stemming from a combination of advocacy, policy development, implementation and proactive management, which NAACAM is working to promote. We expect to hear of more success stories like TC Woodworks’ in future as more companies get to grips with how to use transformative outcomes to support business growth.”

TC Woodworks, Shatterprufe’s largest supplier of crates for exporting auto glass and pallets, took the decision to transfer 51% ownership to its staff after rejecting the “quick change” and increasing overheads of bringing in a black partner, says TC Woodworks co-owners Andre van Heerden and Colin Salter.

“Instead of handing over shares to some person who didn’t know the first thing about woodwork, we decided to give them to our workers,” Salter says.

As part of its employee empowerment strategy, TC Woodworks transitioned from a CC to Pty Ltd, and formed an investment company and workers’ trust. The investment company is headed by coloured female and black male directors, while the trust consists of 31 employees, all with a minimum of five years employment at the company. Profit is split between the two bodies in the form of dividends, with dividends increasing incrementally for every five years an employee has spent at the company.

This has had special significance for Jeremy Smith, a TC Woodworks employee for 20 years. The change in ownership structure has enabled him to send his children to university.

Greater job security for workers has resulted in a leap in employee morale, and Salter is confident the ownership of the shares will result in improved competitive advantage and profits in the long-term. To date, there has been a 10% increase in profitability since the suppliers became black-owned.

TC Woodworks customers have commended the company on its efforts.

Wynand Smith, Corporate Logistics Operations Manager at Shatterprufe, commented, “TC Woodworks is a valuable supplier to Shatterprufe, and investing back into its people, as well as promoting building back into the community can definitely be seen as a feather in TC Woodworks’ cap. They’re leading the way for change.”

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