CEO's Report

Every year I have the pleasure of reviewing our activities to compile this annual report, and once again I am delighted by the organisation’s growth in size, stature and relevance.

Our core purpose of saving money and streamlining procurement processes for the higher education sector has continued to enjoy solid growth. 

But what is even more rewarding is how we have become a trusted partner for far more than simply making purchases. We have established a role as a training organisation to enhance the professional skills in this sector, and we have broadened the type of contracts that we can negotiate by venturing into areas such as electronic security, emergency services and a variety of others. 

Now we are looking at even more value-added services that we can provide to our members, such as renting out our conference rooms so members and suppliers have a welcoming, economical and high-tech meeting space when they travel to Gauteng.

We are not losing our core focus on cost-saving procurement, but now that PURCO SA has gained the trust of our members and the professional skills to move into other areas, we are exploring numerous ways in which we can become a more valuable partner to you.

Trusting PURCO SA with your procurement is an easy decision since we have once again been re-certified as ISO 9001:2008 compliant. This ISO certification confirms that our processes remain efficient, transparent and impeccably documented.

Our financial results show that more than R1.36 billion was channeled through our tenders in the past year, up 33% from R1 billion in the previous year.

We also achieved a surplus of R12.6m, which we distributed back to our members. Interest on the money we keep for contingencies has also grown, putting us in a strong financial position and making us more sustainable.

That growth has been achieved because our members are entrusting us with more of their purchases and increasingly using the bulk-ordering tenders we negotiate on their behalf.

This bigger uptake is also fuelled by an increasing need for transparency and corporate governance, as the level of scrutiny in how higher education organisations manage their money increases. Those universities looking for proper governance and transparency are our greatest allies.

Our growth is also compounded by the financial challenges in an economic climate where many students are struggling to pay their fees. That puts pressure on cash flow and fuels the need for smarter, more economical purchasing. 

South Africa’s new University of Mpumalanga and Sol Plaatje University in Kimberley are now active members of PURCO SA and are channeling their tenders through our systems. Unfortunately there are delays with the Department of Higher Education finalising the status of Technical & Vocational Education & Training Colleges (TVETs). PURCO SA has requested direct engagement with the Auditor General to resolve this issue to allow them to become our members, because many of these colleges are in urgent need of help with their procurement policies to keep their spending under control. 

Meanwhile, we have made great progress in broadening the type of tenders we are able to negotiate, towards an overall goal of being able to handle tenders for whatever goods or services our members require. 

We continually survey the market to spot opportunities so we can vet and pre-approve trustworthy suppliers and negotiate better prices. Some of our newer areas include building leases, student verification services, photographic services for graduation days, banking, security surveillance and emergency services, such as having medical personnel on stand-by at events like marches, concerts and sporting events. 

We are also exploring the field of electronic books to add these to our procurement options.

Another area we are becoming more active in is upskilling our suppliers to help them grow their businesses. Broadening the variety of items we tender for has increased our base of vetted and approved suppliers. But some suppliers that have valuable technical skills like plumbing, electronics and maintenance services, for example, need help with issues like paperwork and cash flow management.

Since legislation now requires our members to invest in supplier development for their black economic empowerment scorecard, the two issues tie in nicely. PURCO SA has conducted a study to gather industry information on supplier development practices in the private, government and University sectors. This information will be used to pilot training courses for some of our suppliers in the regions next year. Members in those regions will be asked to nominate suppliers to attend a training course spanning financial management, compiling tender documents, marketing and computer skills training. 

Those pilots will help us to compile training courses that our members can replicate to up-skill their own suppliers. Alternatively, PURCO SA could run those courses across the country on behalf of our members, if the members are willing to fund it.

We are proud to be involved in such initiatives, because by developing our suppliers we are helping them to improve and expand their businesses and contribute to the country’s economic success.

We are also working to improve the skills within our member organisations. That began with a skills audit through which we identified key priority areas. Our first training courses in finance in procurement were attended by about 80 individuals from member organisations in the Eastern and Western Cape, Kwazulu-Natal and the Central region. Our regional committees funded these two-day courses and feedback from the attendees was enormously positive. We need to offer much more training, however, to raise the procurement skills of key employees within our member organisations.

Employees who attend these courses gain CPD points towards accreditation by the Chartered Institute of Procurement and Supply which sets the international benchmark for procurement professionals.

I hope members will recognise this need and contribute to such training, since better qualifications will give their staff enhanced career paths, more job satisfaction and see them introduce more efficient practices that benefit their organisations too. 

Finally it is my privilege to thank the staff, board and committees of PURCO SA for their dedicated work once again during the past year. I thank our members and suppliers for their increasingly enthusiastic support for our services. 

I look forward to another successful year of partnerships and if you have any thoughts on how we can venture into new fields that will better serve our members, we would very much like to hear from you.

Selvan Govender
Chief Executive Officer