Local Entrepreneurs Development Program At Las Bambas

Written by Lenny Merino     January 20 2017 at 7:25 AM

Three years ago our Las Bambas operation in Peru established a Local Entrepreneurs Development Program (LEDP) that matches business opportunities at the mine to local companies which have the potential to grow commercially.

Given the size of the operation Las Bambas needs a wide range of goods and services for its daily activities including fresh food, transport, uniforms, signage,  and specialised welding services.

The goal of the LEPD is to help local companies improve their business management, productivity and profitability to a level where they can competitively supply Las Bambas with goods and services,  and eventually extend their services to other customers in Peru and internationally. The long-term aim is for participants to become financially viable and sustainable businesses that are not reliant on Las Bambas for business.

There are four categories of enterprise in the program: maintenance; logistics and transport; complementary services and rural enterprises. Today, 47 companies are part of the LEDP and purchases by Las Bambas from LEDP participants reached US$30.6 million in December 2016.

The first step in the Program involves matching internal demand for goods and services at Las Bambas with local businesses. Before being accepted into the Program applicants are evaluated on their entrepreneurship and growth potential via questionnaire, and Las Bambas undertakes due diligence.

For a company to be successful in the LEPD requires much time and effort. The selected participants are required to sign a contract acknowledging their commitment to the Program. Before starting in the LEPD they are given access to additional training to ensure everyone enters the Program at the same level.

The LEPD is a three-year staged program with each stage lasting one year:

  • In the first year participants define their business model and improve their business management skills
  • In the second year the focus is on implementing processes that will prequalify them as eligible to tender for contracts. All suppliers to Las Bambas have to meet MMG’s strict standards for safety, health, environment, community and business conduct. After meeting the requirements of this stage of the LEPD, participants can enter the mainstream tender process
  • The third stage involves the businesses working towards certification for ISO standards (Environmental Management Series and Safety Series) so they can compete nationally and internationally.

The Program has attracted external sources of funding. The first stage is funded via an agreement with the Canadian Government, while the second and third phases are currently part funded by the Peruvian Ministry of Production.

Outside the LEPD Las Bambas also helps participants connect with potential customers and provides mentoring so they can respond to external tenders.

The companies in the program contribute to local sustainable development in a region that just five years ago was reliant on subsistence agriculture. As local businesses grow they employ more local people and can pay better salaries, which means their employees can afford better housing, education and healthcare.

A company in the LEDP can typically begin to operate and supply Las Bambas within six months. The advantages to Las Bambas of using local companies include hiring local residents and reduced logistics costs.

Ines Martines Chauca is the Manager of General Contractors Varmar Sac, a personnel transport company with seven employees. Ines started working with the LEDP in 2015:

“My experience in the program was very rewarding as it helped me improve my management skills and I have learnt to see new business opportunities. My greatest achievements have been increased profits, purchasing new vehicles and increasing the business’s capital which will allow me to offer new and better services. Personally I now have the confidence to take on new challenges and offer more specialised services. My family has a better quality of life and I can provide my children with a better education. One of my goals is to support my younger brothers so they can succeed as I am.”

 

Pictured: Through the Local Entrepreneur Development Program, we seek to increase the competitiveness and productivity of companies from our area of influence.

 

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