IDC Funding for Industry Development, Upgrading, Expansion & - - PowerPoint PPT Presentation
IDC Funding for Industry Development, Upgrading, Expansion & Transformation South African Institute of Foundrymen, 15 August 2017 Ganief Bardien Senior Industry Development Manager Machinery and Equipment SBU CONFIDENTIAL AND PROPRIETARY
Senior Industry Development Manager Machinery and Equipment SBU
CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of the IDC is strictly prohibited
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Overview of the IDC Corporate Plan and Objectives Funding Schemes and Requirements Application Process
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Net approvals of 175 transactions
Jobs created or saved
Funding disbursed to industry
Approved for the manufacturing sector
Approved for BEE and Black Industrialist companies
Source: IDC Integrated Report 2017
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Source: IDC Corporate Plan 2017/18
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Development Finance Project Development Research and Input into Policy Management of Ring-fenced Funds Business Support Services Capacity Building for Other DFIs Large OEMs Small to Medium Companies Other DFIs Concept and Scoping Pre-feasibility Studies Bankable- feasibility Studies Product Commercialis- ation Plant Commissioning Expansions Mining and Metals Beneficiation Agriculture and Agroprocessing Basic and Specialty Chemicals Machinery and Equipment Automotive and Transport Clothing and Textiles Tourism ICT Media and Motion Pictures Renewable Energy New Industries Debt Equity Quasi-equity Export-Import Finance Short-term Trade Finance Bridging Finance Guarentees Wholesale Funding through Intermediaries Rest of Africa Export Focus of SA Manufactured Capital Equipment
Source: IDC Corporate Plan 2017/18
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Overview of the IDC Corporate Plan and Objectives Funding Schemes and Requirements Application Process
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Media and Motion Pictures Basic Metals and Mining, Machinery & Equipment, Automotive Basic and Specialty Chemicals, Chemical Products, Pharmaceuticals Industrial Infrastructure Agriculture and Agro-processing Clothing and Textiles High Impact Industries New Industries
‒ Start Ups ‒ Expansions ‒ Localisation ‒ Regional Integration
‒ New Jobs ‒ Saved Jobs
‒ Black Industrialists ‒ Women ‒ Youth
‒ Balance Sheet Strength ‒ Profitability ‒ Reduced Impairments
Source: IDC Corporate Plan 2017/18
8 Segment SIC Division Description Key Activities Upstream 351 Basic iron and steel Operation of steel blast furnaces, rolling and finishing mills, and the manufacture of primary iron and steel
bars and rods; angles, shapes, sections and wire; tubes, pipes and hollow profiles of iron or steel, seamless, including cast, tubes, pipes and hollow profiles open seam or welded, riveted or similarly closed; railway and tramway track construction material, e.g. unassembled rails; and other finished iron or steel products. 352 Basic non-ferrous metals Production of non-ferrous base metals from ore or scrap. This includes the manufacture of powder, flakes, foil, plates, sheets, strip, bars, rods, profiles, wires, tubes, pipes, pipe fittings Downstream (Metal Products)
353 Casting of metals Castings of ferrous and non-ferrous metals, structural metal products and fabricated metal products
354 Manufacture of structural metal products, tanks, reservoirs and steam generators Includes fabrication of bridges and bridge parts, towers, masts, columns, girders, trusses, arches, rafters, pithead frames, telescopic props, sluice gates, piers, jetties. This group includes manufacture of containers of metal for compressed or liquefied gas. Manufacture of central heating boilers and radiators. Manufacture of reservoirs, tanks, and similar containers of types normally installed as fixtures for storage whether or not fitted with tops, closures, or lined with materials other than iron, steel or aluminium. The manufacture of steam or other vapour generating boilers other than central heating hot water boilers even, if also capable of producing low pressure steam. The manufacture of auxiliary plant for use with boilers, such as economisers, super-heaters, steam collectors and accumulators. Soot removers, gas recoverers and sludge scrapers are included. Also includes nuclear plant. 355 Manufacture of other fabricated metal products Forging, pressing, stamping and roll-forming of metal; powder metallurgy Treatment and coating of metals; general mechanical engineering on a fee or contract basis. Manufacture of cutlery, hand tools and general hardware. Manufacture of other fabricated metal products n.e.c. including metal fastners, metal cable, wire and fencing, drums, springs, kitchen appliances, metal sanitary ware and other metal products
Source: Standard Industrial Classification 1993
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century mining model
downstream industry development
equipment
distribution
assembly
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local value add
new chemicals
into specialty chemicals
industry
imaging
diseases
products
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inputs into processing value chain
advantage
competitiveness in areas of South Africa’s competitive disadvantage
chain
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Gas beneficiation Renewable energy Additive manufacturing (3D printing) Energy storage Fuel cells Medical devices Electricity generation Water Logistics Telecommunication infrastructure Natural fibres such as wool, mohair, bamboo, hemp Poly-viscose and cotton spinning Cotton spinning Footwear Industry sustainability IDC clients Industry competitiveness Export promotion and import replacement Funding for micro, low, and medium budget films Animation films and hub Broadcasting Supporting film infrastructure
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Overview of the IDC Corporate Plan and Objectives Funding Schemes and Requirements Application Process
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Size R5Bn R600k per job Pricing between 8.4% and 10.94% Limit R50m per applicant To contribute towards sustainable job creation and retention by supporting job creating transactions while providing concessionary funding
To assist manufacturing companies with working capital Size R1Bn Pricing 4% R50m per applicant To assist struggling metals and engineering sector with an interest rate subsidy to normal IDC risk pricing Size R1.5Bn Pricing subsidy 1.5% - 2% Maximum investment R75m To provide finance to renewable energy and energy efficiency projects of smaller scale and manufacturing of Green products in South Africa Size R1Bn Pricing prime + 2.8% Limit of R250m per project
To provide finance to SME’s for the commercialisation phase of their locally developed innovative projects with the aim of increasing South Africa’s global competitiveness. Size R145m RATIRR of 3% R1 to R5m
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contract cost
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‒ Greenfield projects ~ 40% to 50% ‒ Existing going-concern entities ~ 35%
‒ Preference secured senior debt ‒ However other forms of debt, quasi-equity and/or equity ‒ Equity high impact expected turnover > R200m
‒ Interest rated for debt is prime-linked and risk-based payable monthly after first draw ‒ Repayment period of between 3 and 10 years ‒ Capital moratorium of one year applies although interest is generally ‒ BEE criteria of 4 or a viable transformation plan ‒ Minimum funding amount R5 million if below refer to SEFA
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Overview of the IDC Corporate Plan and Objectives Funding Schemes and Requirements Application Process
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The Industrial Development Corporation 19 Fredman Drive, Sandown PO Box 784055, Sandton, 2146 South Africa Telephone (011) 269 3000 Facsimile (011) 269 2116 E-mail callcentre@idc.co.za