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Social review

Highlights   Lowlights
     
     
• R17 million of a planned R60 million (over five years) spent on local economic development projects approved by the Department of Mineral Resources
• 65% of total procurement representing R2,3 billion spent with BBBEE suppliers
• Corporate social investment spending rises 30% year on year and formal initiatives extended to Botswana and Zimbabwe
• Over 4 000 improvement suggestions generated by our people; more than 70% used, contributing to direct savings of over R17 million
• PPC’s new vision successfully rolled out to employees
 
• Percentage of payroll spent on training and development dropped from 7,2% to 6,4% but focus on extracting maximum value from training spend paid off
• Slight decrease (1%) in employee perception of group reflects challenging environment of past two years, worldwide
 
During PPC's long history of success there has always been a hardworking, committed and dedicated team of employees. 2010 was no different as our people's determination continued to drive the company's progress in creating a better life for all.

A significant portion of this progress has been in meeting the government's requirements in the broad-based socio-economic charter for the mining industry (mining charter) and the Minerals and Petroleum Resources Development Act, 2002. The different elements of this charter are discussed in various sections of this report and progress is summarised in the mining charter scorecard.

The bulk of PPC's business is in manufacturing and the company therefore also measures its transformation progress against Department of Trade and Industry's codes of good practice for broad-based black economic empowerment (BBBEE). The group's rapid progress from an empowerment rating of level 4 to level 2 underscores our focus on transforming every level of our business. More detail on PPC's BBBEE contribution. 
 

Our people
The campaign supporting our new vision - to grow PPC into a leading emerging-market business - was successfully launched in February. In follow-up initiatives, each site used communication tools such as industrial theatre and journey maps to depict their understanding, commitment and contribution to the group's vision.

A key element in the campaign was to ensure all our people understood the importance of remaining the leading force in our current markets in South Africa, Botswana and Zimbabwe while working towards our longer-term goal. 
 

PPC’s Kambuku way of life
Our people are integral to maintaining the Kambuku philosophy. The word Kambuku is derived from Tsonga and means great tusker, referring to an elephant bull, whose characteristics of tenacity and loyalty sum up PPC's value-based management philosophy.

This PPC 'way of life' creates a healthy, rewarding and satisfying working environment - one in which everyone has the opportunity to contribute to our success and their own development, and to be recognised for excellence.

The Kambuku initiative with its focus on employee value creation was introduced 10 years ago. It has entrenched a high-performance culture across PPC based on employee engagement, growth and strong values, underpinning the way PPC does business. To maintain the passion and commitment of our people, it is important to continuously provide clear direction and realignment of our organisation's systems to current and future business challenges. 
 

Enrichment – cementing the way ahead
To ensure sustainable business performance in a challenging environment, the Kambuku value-creation model is continually reviewed and strengthened.

The Kambuku enrichment initiative aims to establish a strong foundation to continuously empower employees and facilitate their growth. It also provides opportunities to advance individual mentoring and coaching skills, foster a greater understanding of PPC's REAL (relevant, empowered, actualised and lasting) transformation philosophy, and enhance the ability of managers to inspire employees in a diverse environment.

Ultimately, this enrichment initiative aims to increase the ability and effectiveness of team members through broad-based skills that ensure continuous improvement. 
 

Creating lasting value for our people
For the past decade, Team PPC has embraced the processes and principles of Kambuku to develop a world-class operation, founded on passion, commitment, innovation and teamwork.

As part of this process, our organisational performance model sets the benchmark for internal standards, systems and processes that facilitate employee engagement and participation. The effectiveness of each element in the model is measured annually. 
 
 

Employee participation and engagement
A fundamental principle of the Kambuku process is that positive results are easily achieved when all employees are engaged, empowered and accountable. Active involvement and communication therefore occur frequently across PPC through established systems and processes, including: 
• Key leader summits: regular team meetings at plant or site level throughout the company involve all appointed, elected and informal leaders. The aim is to inform employees about plant or site performance, strategic initiatives, challenges and opportunities. Robust and constructive communication takes place in an environment of mutual trust and cooperation, and the outcomes of each summit are communicated clearly and promptly down to shop-floor level. Through this process, we maintain a clear purpose and common vision and direction throughout the company. 
• Invocoms: structured, team-based discussions take place daily for teams at shop-floor level, weekly at sectional supervisory level, and monthly at departmental level. There are some 370 active and effective Invocoms operating across all levels and all functions of PPC. Importantly, the group average for Invocom team forums has been maintained at a globally competitive 4,3 out of a standard of 5,0 and organisational benchmark standards at 3,3 out of 4,0. 
 
Through these discussions, we communicate elements of PPC's vision and objectives, evaluate team performance, analyse obstacles affecting performance and develop appropriate action plans, and ensure targets are achieved. Behavioural safety, educational topics and development are also discussed in Invocoms.

Plant- and site-level Invocoms are designed to spread communication both upwards and downwards through the company to: 
• Facilitate transparent problem resolution and employee participation 
• Regularly encourage teams to stretch outputs and targets by reviewing and assessing team performance 
• Capture innovations and suggestions to enhance cost savings, process improvement, efficiency and safety 
• Communicate positive recognition
• Capture best practices on a centralised database
• Manage the PPC climate through the adherence of team members to the company code of conduct. 
 

Saving costs through employee innovations and suggestions
During the period, over 4 000 value-adding suggestions were generated via Invocom structures, 25% higher than 2009. Of these, more than 70% were evaluated and implemented. This saved PPC an estimated R17,2 million in 2010, taking the three-year total to some R59 million in cost savings. 
 

Individual Perception Monitor – listening to our people
For the past 10 years, PPC's annual Individual Perception Monitor survey has given all our people the opportunity to express their views and rate the company on critical processes, including understanding its vision, employee benefits, leadership behaviour, remuneration, training, coaching and communication. Participation in the survey is both voluntary and confidential. Results are analysed by site and at group level to identify and address areas of concern and reinforce positive trends. While we believe the slight decrease in the index average (1%) for 2010 is more a reflection of the challenges of the economic climate, we are concentrating on addressing those areas of concern identified by our people. 
 

Succession planning
Our succession strategy aims to ensure that competent people are continuously available to assume key positions in the company. In line with this strategy, succession-planning discussions are held biannually at group and site levels, and development plans include mentorship and coaching. The strategy is closely aligned with PPC's economic empowerment targets and plans, and has specific emphasis on key technical skills - an ongoing industry-wide challenge. 
 

Balanced workforce
PPC's total workforce for 2010 is 3 263 compared to 3 234 in 2009. Annual turnover rate for 2010 is 12,4% in South Africa, 1,8% in Botswana and 2,2% in Zimbabwe. The average length of service in PPC in South Africa is around 12 years with a number of employees holding 25, 30 and even 40-year awards.

At the same time, we work hard at the balance between retaining this experience and developing the pipeline of future leaders.

Where appropriate, PPC strives to recruit black talent in line with the demographic requirements of its operating regions. In South Africa, demographically representative recruitment is at 76% (2009: 76%; 2008: 85%).

The demographic and age breakdown of our workforce (SA only) are shown below. 
 
1 White 24% 1 Under 30 years old 25%
2 African 53% 2 30 to 50 years old 54%
3 Coloured 20% 3 Over 50 years old 21%
4 Indian   3%      
 

Workforce analysis: South Africa*
  White African Coloured Indian SA nationals Foreign nationals  
  M F Total M F Total M F Total M F Total M F M F
Total
                                   
                                   
Executive 1 1 1
1
Senior management 11 11 2 1 3 1 1 2 2 4 16 3
19
Middle management 54 5 59 9 2 11 5 5 7 3 10 73 10 2
85
Professionally qualified, experienced specialist and lower management 92 31 123 32 26 58 29 8 37 18 10 28 167 74 4 1
246
Skilled (upper/supervisors/foreman) 63 14 77 21 5 26 16 4 20 2 1 3 100 24 2
126
Skilled technical 205 48 253 142 41 183 102 28 130 4 8 12 447 125 6
578
Semi-skilled 16 46 62 649 44 693 221 50 271 1 5 6 886 145 1
1 032
Unskilled 6 6 191 38 229 21 7 28 218 45
263
Apprentices 2 2 13 1 14 2 2 1 1 18 1
19
Total permanent
450
144
594
1 059
158
1 217
397
97
494
35
29
64
1 925
427
16
1
2 369
Temporary 23 8 31 103 24 127 29 29 2 2 155 34
189
Total
473
152
625
1 162
182
1 344
426
97
523
35
31
66
2 080
461
16
1
2 558
* September 2010
 

Workforce analysis: Botswana*
Foreign nationals BW nationals
M F M F M F
Total
               
               
Middle management 1 1
1
Professionally qualified, experienced specialist and lower management 10 1 1 9 1
11
Skilled (upper/supervisors/foreman) 7 7
7
Skilled technical 20 6 1 19 6
26
Semi-skilled 52 9 52 9
61
Unskilled 3   3
3
Total
93
16
3
  
90
16
109
* September 2010
 

Workforce analysis: Zimbabwe*
M F
Total
       
       
Senior management 2 0
2
Middle management 35 6
41
Skilled upper/technical 111 31
142
Semi-skilled 210 5
215
Apprentices/trainees 46 3
49
Labourers/unskilled 138 3
141
Total
542
48
590
* September 2010
 
The percentage of employees recognised as members of a trade union is 32% in South Africa, 61% in Botswana and 69% in Zimbabwe. PPC acknowledges that freedom of association and relevant agreements between the company and various unions exist. 
 

Learning and development
The principle of 'learning for growth' remains a key in PPC's success: our group needs the right people, with the right skills, doing the right things. That is why training is such an important building block of our strategy for growth. Accordingly, the learning and development function is primarily aimed at ensuring that PPC team members have the opportunity, the resources and the means to fulfil their career ambitions and their highest potential.

Our diverse training programmes have produced substantial benefits for both PPC and participants. PPC's commitment to the principle of learning for growth has been entrenched throughout the group, with the academies growing from strength to strength. 
 

Average hours of training per category
On average, a PPC employee spends around 78 hours or over nine days on training per annum. 
 
Employee levels   Average training hours
     
     
Executive   10,0
     
Senior management   6,6
     
Middle management   16,9
     
Professionally qualified specialists   53,6
     
Skilled (upper) supervisors   70,5
     
Skilled technical employees   70,0
     
Semi-skilled employees   62,7
     
Apprentices/trainees   486,4
     
Unskilled employees   97,5
     
Overall average   77,6
 

Cost of training (RSA only) (R000)
            African Indian Coloured White
Male Female Male Female Male Female Male Female
               
               
R11 483 R1 566 R3 930 R656 R263 R76 R3 198 R671
 

Percentage of payroll invested in skills development
During the review period, PPC spent 6,4% of its payroll (ie leviable amount) on skills development for employees; 80% of this was spent on previously disadvantaged employees at a total investment of R33,7 million, compared to R31,5 million in 2009. 
 

Leadership development
We believe developing leadership at PPC is a valuable investment in guiding the mindsets of our leaders and equipping them for their respective roles.

Leadership development initiatives during the year were diverse but focused on guiding and aligning leadership to the new vision and business strategy. This included a review of PPC leadership values and behaviours, mentoring and coaching initiatives and ongoing emotional intelligence profiling and coaching for new and current managers. All initiatives were targeted at executive and senior management levels.

By continuously reviewing and aligning all our leadership development initiatives, we ensure they remain relevant and appropriate for the intended business purpose. 
 

Academies
PPC is focused on building sustainable competence to remain globally competitive. Our academies were developed to support this need. Where appropriate, PPC aims to align its development initiatives to the National Qualifications Framework (NQF).

The PPC Academy consists of five legs: 
• Sales and marketing
• Operations
• Mining
• Leadership and management
• Technical skills.
 

PPC sales and marketing academy
In April 2010, the third intake of seven learners from PPC and 20 from Barloworld's Plascon began their course at PPC's sales and marketing academy. In November, the second group of learners graduated with a level 4 qualification in customer management accredited by the NQF and recognised by the European Marketing Federation.

In developing this academy, PPC and Plascon carefully identified their own needs and integrated these into a registered qualification hosted by the Services Seta. 
 

PPC operations academy
In November 2010, 27 learners of the original 40 graduated from the 2007 and 2008 intakes to the operations academy. Fifteen learners were enrolled in each of the 2009 and 2010 intakes.

All learners are working towards further education and training certificates in carbonate materials manufacturing process on NQF level 4. PPC is the only company offering this 18-month programme, which is accredited by the MQA and registered with SAQA. 
 

PPC mining academy
PPC adapted its rock-breaking: quarrying qualification to align with new explosives regulations in 2009 and retain its status as an industry leader among accredited training providers.

In total, 26 learners are at various stages of completing this NQF level 3, 18-month course. Practical training is clearly a critical component in developing rock-breaking skills and PPC is working closely with major suppliers such as Stefanutti Stocks civils division, Shawroc Trading and Videx to ensure learning takes place in situations that resemble the real-life experience as closely as possible. 
 

PPC leadership and management academy
Launched in May 2009, the aim of this academy is to develop the ideal balance of leadership and management skills, resulting in globally competitive leaders who are also high-performance managers addressing our business requirements. At present, there are 16 leader/managers participating in the senior management programme.

The PPC leadership and management academy is unique in that learning material is customised for PPC, and includes case studies from the group. Participants also benefit from the combination of PPC subject-matter experts and best-of-breed facilitators and lecturers, while group work enhances cross-functional learning across the value chain. In addition, applying new knowledge is customised for each participant and integrated with coaching, while on-the-job evaluations link to performance. Participants are carefully selected from high performers, succession candidates and newly appointed technical specialists. 
 

PPC technical skills academy
The technical skills academy (TSA) completed another successful year, operating above capacity for most of the time. During the period, TSA maintained its MQA accreditation, its ISO 9001:2008 certification, and received a clean audit report from the SABS. After a recent audit by Merseta, it was recommended that TSA receive full accreditation to provide training and conduct trade tests as a decentralised trade test centre for the next five years.

Facilities were upgraded during the year to accommodate up to 100 delegates at a time. By year end, 28 of the current learners had successfully completed their trade tests. 
 

Technician development programme
Ten candidates embarked on the pilot technician development programme launched in early 2009. This is aimed at attracting, retaining and developing technicians from within and outside PPC, with two routes towards technical development: the first offers external students at universities of technology the opportunity to complete their in-service training with PPC; the second route enables PPC employees - current technicians or those who want to develop in this area - to develop their existing competencies or follow the technician route by developing their knowledge, skills and experience. Both routes of development feed into technician succession pipelines.

Six trainees continued with their second-year training in the past year, specialising in specific PPC competencies. Some of these candidates have already been appointed to permanent positions in the company. The next intake of trainees is in January 2011. 
 

2010 development initiatives
African Indian Coloured White
Programme Comments M F M F M F M F
Total
                     
                     
Sales and marketing 2008 intake All graduated in November 2010 3 2 1 1 3
10
Sales and marketing 2010 intake Started in April 2010 5 1 1 1
8
Operations 2007 intake Graduated in November 2010 4 2 5 8
19
Operations 2008 intake Graduated in November 2010 7 7 6
20
Operations 2009 intake 8 3 4
15
Operations 2010 intake Started in June 2010 6 5 4
15
Mining 2008 intake 5 6 3
14
Mining 2009 intake 5 3 1 3
12
Management and leadership 2 2 2 1 8 1
16
Electrical learnership 14 4 4 3
25
Fitter and turner 18 4 9 2
33
Plater welder 18 4
22
Diesel mechanic 13 3
16
Bridging programme 32 1 43 1 18 4
99
Total
  
140
11
6
2
89
3
64
9
324
 

Case study - Trainee technician programme builds skills
In 2008, PPC approved a pilot programme to train electronic technicians for the group and to give candidates with S4 qualifications the work experience (or in-service training) they need to receive national diplomas. In addition to 12 months of work experience, we included a second year of training on PPC-specific competencies.

The first nine trainees were enrolled in January 2009, moving through a generic engineering skills programme to practical and theoretical courses at PPC's technical skills academy (TSA) and their respective sites.

An important part of the learning experience was the need for each candidate to complete a mini project on a plant simulator at TSA and present this, together with their total learning experience, to a panel of experts in November 2009. Following positive feedback from both the panel and candidates, the trainee technician programme is being integrated into the total learning experience offered by the academy. 
 

Graduate development programme
The PPC graduate development programme was initiated two years ago, in response to the need to establish a structured and focused learning programme that addresses the growing shortage of graduates with a strong technical foundation.

The programme is driven by the business needs for bench talent (multiskilled people who can fulfil several job specifications) in several critical disciplines such as engineering, production and process services, mining, quality and environment, and sustainability. It is reviewed annually. 

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