Transcript www.idc.co.za

Industrial Development Corporation
30 June 2011
Financial Results
Abridged Statements of Comprehensive Income
R’m
Mini-group
2010
Actual
Mini-group
2011
Actual
Revenue
Cost of sales
Financing costs
3 785
476
3 900
12
314
Gross profit
3 309
3 574
Other income
Foskor
2011
Actual
Other
subsidiaries
and
associates
2011
Actual
4 611
492
3 078
354
28
54
1 505
84
Other
2011
Actual
Group
2011
Actual
(38)
(50)
8 965
3 444
346
12
5 175
90
42
-
131
Operating expenses
2 299
2 155
1 058
235
(391)
3 057
Net income before capital gains
Net capital gains
1 010
573
1 419
354
537
(5)
(109)
-
402
(313)
2 249
36
Net operating income
Share of profit/(loss) of equityaccounted investments
Profit before tax
1 583
1 773
532
(109)
89
2 285
80
(17)
3
647
-
633
1 663
1 756
535
538
89
2 918
Taxation
Profit for the year
Other comprehensive income
(303)
1 966
10 769
85
1 671
10 558
158
377
(37)
575
89
206
2 712
88
(559)
799
10 886
Total comprehensive income
12 735
12 229
465
16
888
13 598
3
Abridged Group Statements of Comprehensive Income
for the Year Ended 31 March
R’m
Group
2011
Actual
Group
2010
Actual
% Change
Revenue
8 965
7 785
15
Cost of sales
3 444
2 565
34
346
528
(34)
5 175
4 692
10
131
159
(18)
Operating expenses
3 057
3 416
(11)
Net income before capital gains
2 249
1 435
57
36
573
(94)
2 285
2 008
14
633
40
1 483
2 918
2 048
42
206
(181)
NMF
2 712
2 229
22
Other comprehensive income
10 886
12 406
(12)
Total comprehensive income
13 598
14 635
(7)
Financing costs
Gross profit
Other income
Net capital gains
Net operating income after capital gains
Share of profit/(loss) of equity-accounted investments
Profit before tax
Taxation
Profit for the year
4
Sources of Income
Sources of Income
8 000
7 000
454
323
6 000
835
R million
5 000
Other
481
4 000
3 164
3 000
2 000
1 000
119
533
980
902
432
121
698
1 114
703
775
790
Dividends - unlisted
414
1 307
2 183
2 150
1 461
998
-
-668
-1 000
-2 000
2007
2008
2009
2010
5
Preference shares
income
Interest
2011
Dividends - listed
Operating Expenses
R’m
2011
Actual
Operating expenses
2010
Actual
% Change
2 155
2 299
(6)
968
915
6
14
182
(92)
- Impairments and write offs
1 173
1 202
(2)
(a) General Book
1 024
1 157
(12)
149
45
231
- Administration expenses
- Project costs
(b) Projects
6
Impairments as a % of Total Financing at Cost
Impairments as a % of Total Financing at Cost
2011
17.3%
2010
16.3%
2009
15.1%
2008
12.0%
2007
10.7%
0%
2%
4%
6%
8%
10%
7
12%
14%
16%
18%
20%
Impairments as a % of Total Financing at Market Value
Impairments as a % of Total Financing at Market Value
2011
5.2%
2010
4.9%
2009
4.8%
2008
4.0%
2007
3.4%
0%
1%
2%
3%
8
4%
5%
6%
Abridged Statements of Financial Position
as at 31 March 2011
R’m
Mini-group Mini-group
2010
Actual
Assets
Cash and cash equivalents
Loans and advances
Investments
PEE and inventories
Other assets
Total assets
Equity
Share capital
Reserves
Total equity attributable to holders of parent
Minority shareholders’ interest
Liabilities
Loans
Deferred taxation liability
Creditors and provisions
Total liabilities
Total equity and liabilities
9
2011
Actual
2 293
9 769
74 356
179
597
87 194
5 329
11 613
85 893
161
535
103 531
1 393
1 393
74 502
75 895
87 187
88 580
4 236
7 349
6 388
675
11 299
87 194
6 234
1 368
14 951
103 531
Foskor
Other
Group
2011
Actual
2011
Actual
2011
Actual
404
95
440
(4 263)
1 263
(38)
(2 503)
5 828
12 053
81 971
5 838
1 116
106 806
141
3 806
3 947
(141)
340
199
342
1 393
91 333
92 726
342
129
601
1 101
1 831
5 778
(801)
(1 824)
(419)
(3 044)
(2 503)
6 677
5 011
2 050
13 738
106 806
341
4 414
619
5 778
Abridged Statements of Financial Position
as at 31 March 2011
R’m
Assets
Cash and cash equivalents
Loans and advances
Investments
PEE and inventories
Other assets
Total assets
Equity
Share capital
Reserves
Total equity attributable to holders of parent
Non-controlling interest
Liabilities
Loans
Deferred taxation liability
Creditors and provisions
Total liabilities
Total equity and liabilities
Group
2011
Actual
Group
2010
Actual
% Change
5 828
12 053
81 971
5 838
1 116
106 806
2 866
10 374
68 891
5 012
1 488
88 631
103
16
19
16
(25)
21
1 393
91 333
92 726
342
1 393
77 796
79 189
366
17
17
(7)
6 677
5 011
2 050
13 738
106 806
3 527
3 795
1 754
9 076
88 631
89
32
17
51
21
10
Balance Sheet Items for the Last 5 years
Balance Sheet Items for the Last 5 years
120
100
Revaluation of
investments
R billion
80
71.8
60
Investments at cost
61.4
40
51.6
39.0
20
0
Loans and
advances
40.3
12.7
13.0
14.1
10.8
11.2
5.1
6.1
8.8
9.8
11.6
2007
2008
2009
2010
2011
11
Borrowings
Borrowings
8 000
7 000
1 978
6 000
R million
1 617
1 595
5 000
1 463
Rand based
4 000
527
3 000
5 371
4 736
2 000
4 659
4 430
3 709
1 000
0
2007
2008
2009
2010
12
2011
Foreign currency
based
Listed Investments Trend Analysis
Listed Investments Trend Analysis
70 000
60 000
5 498
7 722
3 173
R million
50 000
7 716
40 000
30 000
8 080
4 401
4 621
20 000
4 488
3 263
12 844
3 824
2 863
6 344
5 492
20 698
12 893
8 519
19 836
2008
14 645
14 648
16 125
2009
2010
13
Kumba Iron Ore
Sasol
20 853
0
2007
Arcelor Mittal
BHP Billiton
6 802
6 183
10 000
9 127
Other
2011
IDC Group – Strengthened Financial Base
100
133%
140%
130%
123%
90
120%
109%
80
70
R billion
60
50
40
86%
71%
67%
54%
70%
48%
39%
27%
10.4
10
10.5
31%
13.4
12.8
2002
37%
28%
9.2
11.3
12.8
21%
13.2
0
2001
48.2
2003
2004
15.4
16%
14.3
29.2
23.6
35%
36%
14%
15.4
31%
25%
22.9
11%
2005
2006
Fair value revaluation
Debt/Equity ratio
Debt/Equity ratio (incl. commitments)
2007
80%
45.6
59%
63%
57.0
80%
77%
30
20
100%
89%
33.1
76%
69%
60%
42%
29%
31.6
29%
29%
16%
33.6
10%
35.7
5%
7%
2010
2011
27.6
8%
8%
2008
2009
40%
20%
19%
0%
Excl. fair value revaluation
Debt/Equity ratio (excl. reval.)
Debt/Equity ratio (incl. commitments, excl. reval.)
14
Highlights
– An additional 8 100 jobs expected to be created through direct linkages to
activities in the informal economy.
• Alignment of operations with New Growth Path (NGP) and establishment
of a Green-Industries business unit;
– 97% of new investment approvals in the priority sectors as identified in the
NGP.
Value of Funding Approvals
14
Value of Funding Approvals (R'bn)
• Net funding approvals for South African based development of R8.4 billion
at the highest levels ever;
• Impact on South African job creation improved with approvals during the
year expected to create 19 650 full time jobs and save an additional 11 650
with a combined impact on employment of 31 300
Outside South Africa
10
8
6
4
2
0
06/07
• Success with sourcing of alternative funding:
• Successful interventions in manufacturing to sustain and increase job
creation:
– R646 million approved for businesses in the clothing and textiles industry to
curb job losses and increase competitiveness with an additional R648 million
approved for schemes managed on behalf of the dti targeting the industry.
– R1.7 billion approved for investments in the motor vehicle industry covering
both assembly as well as component manufacturers, some of which were in
distress.
15
07/08
08/09
09/10
10/11
Impact on South African Employment
45
40
Number of Jobs ('000)
– R1.5 billion approved to companies through the UIF bond, creating and
saving more than 17 000 jobs;
– Low cost funding secured from an international lender for the promotion of
energy efficiency initiatives.
South Africa
12
35
Direct impact on 2nd economy jobs
Saved
Expected to be created
30
25
20
15
10
5
0
06/07
07/08
08/09
09/10
10/11
Supporting Industrial Capacity Development
• The manufacturing industry received the largest portion of
funding.
– R1.7 billion approved for motor vehicles and components
industry
– R646 million was approved in the clothing and textiles industry
to support distressed companies and assist with
competitiveness improvements;
• Infrastructure investments related mostly to funding for the
construction industry and telecommunications infrastructure,
with hospital infrastructure also receiving a significant
portion of funding;
• Funding in the mining value chain was considerably lower
than in previous years. Funding approved focussed on coal
mining;
• Although funding the green economy is still a new area for
IDC, several transactions were funded, including the roll-out
of solar water heaters and a co-generation project.
Distribution of Value of New Funding Approvals
(2010/11)
Infrastructure(16%)
Agricultural Value Chain(7%)
Mining Value Chain(16%)
Manufacturing(27%)
Green Economy(13%)
Tourism & High Level Services(3%)
Knowledge Economy(4%)
African Development(10%)
Not Aligned to NGP (3%)
Excluding cancellations
16
Regional Distribution of Funding
• 49% of approvals during the year destined for
developments in provinces other than Gauteng, the
Western Cape and KwaZulu-Natal compared to the
36% that these provinces contribute to the SA
economy.
Examples of industries supported by province:
Limpopo
Eastern Cape
• Motor vehicle production and
components
• Assembly of televisions
• Hospital
•Agro-industries
Free State
North West
• Chicken abattoir
Gauteng
• Motor vehicle production and
components
• Pharmaceuticals
KwaZulu Natal
• Electricity co-generation
• Motor vehicle components
• Jewellery
Mpumalanga
•Mining services
•Electricity pylons
Distribution of Value of New Funding Approvals
(2010/11)
Western Cape
12%
Northern
Cape
2%
Eastern Cape
28%
North West
3%
Mpumalanga
7%
Free State
4%
Limpopo
5%
KwaZulu
Natal
12%
•Motor vehicle components
Northern Cape
Gauteng
27%
• Malt production
Western Cape
• Film studios
• Clothing
• Agro-industries
17
17
Sector Focus
IDC Focus Area: Green Industries
The establishment of a unit focusing on green industries allows IDC to cover a range of sectors related
to environmental products and services
Heat, Electricity
& building
efficiency
Local manufacturing
related to renewable
energy & energy
efficiency
Cleaner production
/ Industrial
Efficiency
Services related to
renewable energy &
energy efficiency
Transport
Efficiency
Bio Diesel
Wind Power
Generation
Concentrated
Solar Power
Co-generation
Waste to
Energy
Bio Ethanol
Solar Photo
Voltaic Power
Water & treatment
Air pollution control
Clean stoves
Waste Management/
Recycling
19
19
Green Industries
• Solar Academy of Sub-Saharan Africa
– The IDC approved funding for the roll-out of 200 000 solar water
heaters to the South African market. The company has a diversified
portfolio of projects including the mass roll out of the low pressure
SWH, high pressure SWH and investigating opportunities within the
renewable energy space.
– The low pressure SWH project is the first programmatic CDM SWH
Carbon Project globally to be registered at the UNFCCC.
– The project has rolled out 60,000 LPSWH units to the impoverished
RDP Communities, uplifting their standards of living by providing
them with hot water on tap, benefiting at least 240,000 individuals.
– The project supports localisation and in doing so is currently
establishing a local manufacturing plant. The manufacturing facility
would allow the local content of the product offering and service,
creating 535 local job opportunities. The second phase of training
will see 10% of all installers being trained to become qualified
plumbers.
Sustaining and creating jobs

Building a new industry

Green industry

Gauteng
North West
Free State
KwaZulu-Natal
Western Cape
20
Eastern Cape
Green Industries
• SA Calcium Carbide
– SA Calcium Carbide is the only producer of calcium carbide in
Africa, through the beneficiation of local limestone and coal mineral
resources.
– The company uses a large portion of the electricity supplied to the
town of Newcastle.
– Apart from the strain put on the electricity supply, recent tariff hikes
will result in significantly higher production costs.
– IDC will provide funding to assist with the installation of a cogeneration facility, utilising furnace off-gas currently being flared, to
reduce the company’s reliance on the national grid for electricity.
– Co-generation promotes energy efficiency and reduces the use of
coal in power stations and hence qualifies for carbon emissions
reductions.
Green industry

21
KwaZulu-Natal
IDC Focus Area: Agro-Industries
By focussing its efforts on agro-industries IDC will increase demand for labour intensive primary
agricultural products and add value to currently produced products
International
demand
Value addition
Other (niche and
new products)
Primary
agriculture
Import
replacement
Improved
competitiveness
Creating backward
linkages to drive job
creation and rural
development
Legend
IDC focus areas
Linkages to other
industries
22
22
Agro-Industries
• Peppadew™ International
– Peppadew International (Pty) Ltd manufactures products based on
the unique “Sweet Piquanté Peppers” and markets them locally and
internationally under the Peppadew™ brand.
– The company started in the late 1990s and has a processing facility
in Nkowankowa, Limpopo, sourcing produce for processing through
contracts with farmers in the surrounding region and its operations
in Peru.
– The economic crisis negatively affected the company in 2009 and
projected sales growth failed to materialise. As a result, Peppadew
received a working capital facility from the IDC to meet working
capital requirements for the 2011 production season.
– The IDC funding will save 1 700 jobs in the factories and farms
contracted to supply the peppers.
– The funding offers additional potential for the IDC to partner with
Peppadew to fund further land reform projects and establish a
wholesale facility to fund emerging black farmers
– The funding will also contribute
Sustaining jobs
towards the preservation of a
Rural development
uniquely South African international
Supporting exports of South
brand.
African products
23
Limpopo



Agro-Industries
• The Noodle Factory
– This start-up in the Western Cape, will manufacture instant noodles,
which would previously have been imported from Asia..
– The IDC approved a loan for the Noodle Factory for the
establishment of a greenfields noodle production factory. The funds
will be used for the construction and completion of the factory, for
working capital and to acquire equipment.
– This project will beneficiate low value commodities (wheat flour and
vegetable oil) into higher value products.
– This operation will create 21 direct jobs in Philippi and it has the
potential to create more jobs once it expands.
Sustaining and creating jobs

Expansionary BEE

Import replacement

Adding value to raw materials

Developing a new industry

24
Western Cape
Agro-Industries
• Green Farms Nut Company (GNFC)
– Part of the biggest nut processing operations in South Africa with
processing factories in Mpumalanga, KZN and Limpopo.
– Established in 1991 to process macadamia nuts in the Levubu area
in Limpopo.
– IDC approved a loan facility to Green Farms Nut to upgrade its
existing factory and provide a more competitive service to both its
growers and customers.
– The upgrade will result in a doubling of capacity over the next five
years.
– GNFC, together with the European Union, supported the Vhembe
Co-Operative, owned by ±350 Black Farmers for the establishment
of macadamia production in the area.
– The company is currently in talks with the local Ravele community
to establish a joint venture to dehusk and dry nuts for the benefit of
small scale emerging farmers.
Sustaining and creating jobs

Labour intensive industry

25
Limpopo
Agro-Industries
• Grainfield Chickens
– GFC will be a new sizable chicken (broiler) abattoir in the Free
State;
– With a first phase capacity of slaughtering 160 000 chickens per
day, it will be the fifth largest in the country;
– At the end of the first phase of the project, it will be employing 780
people directly;
– Suppliers to the project will be setting up their own chicken houses,
adding to the employment impact of the project;
– Through the project, c.a. 80 000 tons of maize will be beneficiated
annually and imports of frozen chickens will be replaced.
Free State
Sustaining and creating jobs

Broad based black ownership for
workers

Replacing imports

Introducing competition in the
domestic industry

26
Agro-Industries
• Dynamic Commodities
– Established in 1996 and relocated to Coega IDZ in 2006 with
assistance from IDC;
– Manufactures sorbet and other frozen fruit based products for the
export market;
– IDC provided various loans over the years and has recently
approved another application for expansionary funding
– Currently employs 860 people (annualised figure) with another 92
jobs (annualised) to be created.
Establishing a new industry

Assisting exporters

Assisting small enterprises to
expand

Eastern Cape
27
IDC Focus Area: Automotive
Sector, Fabricated Metals and Capital Equipment
IDC’s efforts in this industry revolve around increasing local content
Component
manufacturers
Capital
equipment
Automotive
assembly
SOE Capex
programmes creates
demand for locally
produced goods
Fabricated
metals
Legend
IDC focus areas
Linkages to other
industries
28
28
Automotive Sector, Fabricated Metals and Capital
Equipment
• The Motor Vehicle Industry
– IDC approved R1.7 billion in 16 transactions to companies in the
motor vehicle assembly and components industries;
– Funding approved to Ford Motor Company of SA to revamp its
Silverton plant and upgrade its engine plant in Port Elizabeth;
– Components and other equipment supported include:
• Aluminium heat exchange
and radiator tubes
• Tooling and presses for the
automotive industry
• Exterior mirrors
• Automotive plastics
• Cross car beam assemblies
• Assemblies for catalytic converters
• Exhausts and mufflers
• Interior carpets
• Door insulators
• Loadbin liners
Sustaining and creating jobs
• Truck trailers
• Chassis frame assemblies
Replacing imports
• Forged wheel hubs
Increased localisation
• Automotive control cables
29
Gauteng
North West

KwaZulu-Natal


Western Cape
Eastern Cape
Automotive Sector, Fabricated Metals and Capital
Equipment
• Africa Cellular Towers
– The company was established in 1999 to fabricate, supply and erect
lattice towers for the telecoms industry;
– In 2007 the company took a decision to diversify by expanding into
the electrical transmission and distribution industry;
– The company was awarded tenders by Eskom to install power lines
and approached IDC to assist with the funding required to deliver on
these contracts;
– IDC approved funding to cover the purchase of equipment, working
capital requirements as well as a guarantee facility;
– The funding provided by IDC will assist the company to retain its
existing labour force and create another 220 full-time equivalent
jobs during the implementation of the contracts.
Sustaining and creating jobs

Black empowered business

Localising SOE capital expenditure

30
Limpopo
North West
Mpumalanga
Automotive Sector, Fabricated Metals and Capital
Equipment
• Electro Inductive Industries
– The company was established in 1999 with IDC’s support as a
small fledgling service and distribution centre for electrical
transformers;
– Have been able to grow to a fully fledged original equipment
manufacturer with the third highest market share in the domestic
market;
– During the year, IDC provided funding to the company to sustain its
operations through renewal of revolving credit facilities and
guarantees as well as conversion of portions of its revolving credit
facility to loans;
– The transaction saved 220 jobs.
Sustaining and creating jobs

Assisting SMEs to expand

Expansionary BEE

Production of capital equipment

Western Cape
31
IDC Focus Area: Other Manufacturing Industries
Clothing, textiles,
footwear, leather
Pharmaceuticals
Plastics and
chemicals
Non-metallic
minerals
Advanced
manufacturing
Etc.
32
Other Manufacturing Industries
• Econo-Heat™ Energy Efficient Appliances
– The company was formed in 1990 to manufacture innovative and
safe wall mounted heaters that are more energy efficient compared
to competitor products;
– It has a strong presence in the local market and exports to 38
countries across the globe;
– They employ 109 workers in their Wetton, Cape Town factory;
– The company, which has been expanding over the past few years,
has been funded for working capital requirements to deliver on
local and export orders.
– The funding will allow the company to sustain current operations
and fulfil potentially growing orders.
Creating and sustaining jobs

Supporting exports of South
African products

Western Cape
33
Other Manufacturing Industries
• Ellen Arthur
– Ellen Arthur was originally founded in 1959 as a cut, make and trim
manufacturer of blouses for a major South African retailer.
– It has since expanded to design and manufacture a range of ladies
clothing;
– The company saw margins reducing and ultimately losing orders to
domestic and international competitors as retailers put pressure on
manufacturers to cut prices in an effort to maintain their margins;
– IDC provided a guarantee to allow the company to retain its
overdraft facilities at a commercial bank that is vital for the
company’s working capital requirements;
– IDC’s facility will assist the company to reconfigure their business to
cater for a wider range of clients and diversify its client base;
– 460 jobs have been saved as a result of the transaction.
Sustaining jobs

Labour intensive industry

Black-empowered business

Western Cape
34
Other Manufacturing Industries
• Chic Shoe Manufacturers
– Chic Shoes was established in 2004 following the closure of a shoe
factory in Cape Town. This was done partly through funding raised
from IDC;
– The company has grown from strength to strength and is ready to
expand following an opportunity to supply several footwear ranges
to a major South African retailer;
– With most of the funding IDC provided in the past paid up, the
company approached IDC for new funding and a guarantee facility
to assist the company with working capital requirements for the
expanded capacity was approved;
– 64 new jobs will be created in addition to the 120 currently
employed.
Creating new jobs

Labour intensive industry

Expansionary BEE

Assisting SMEs to expand

Western Cape
35
Other Manufacturing Industries
• Synthecon Surgical Sutures
– Synthecon is a local sterile surgical sutures manufacturer and
distributor based in Isando. The company manufactures about 400
different sutures based on needle type and size, which are used to
close the edges of wounds or incisions and to repair damaged
tissue.
– Synthecon has achieved a number of milestones since inception,
including SABS certification for its products.
– The company has successfully penetrated the export market,
providing sales in Malawi, Mozambique, Swaziland, Uganda,
Rwanda and Mauritius.
– The initial funding created 45 jobs, mainly for women, with an
additional 13 jobs created through the latest funding package.
Sustaining and creating jobs

SME development

Supporting exports of SA products

Localisation

36
Gauteng
Other Manufacturing Industries
• WG Wearne
– WG Wearne was incorporated in 1910 by the Wearne family and is
a significant player in the ready mix concrete, aggregate and
building materials market. The company has successfully grown
since inception and has been profitable until 2008.
– Wearne’s operates across the country and employs people at its
quarries, as well as through its distribution system.
– The economic crisis and the downturn in the construction industry
resulted in declining demand for the company’s products.
– During the year IDC approved funding to assist the company with its
turnaround strategy and in the process save 700 jobs.
Gauteng
Limpopo
North West
Free State
Saving jobs

Broad-based ownership

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KwaZulu-Natal
Other Manufacturing Industries
• Vektronix
– Vektronix was established in 1974 as SATV and was one of the first
television manufacturing plants in the country;
– The company has since expanded to other products and is today a
cost-effective electronics contract manufacturer;
– The company had been assembling CRT televisions for a major
South Korean manufacturer for 6 years and in 2009, the company
was awarded a contract to assemble flat panel (plasma, LCD)
televisions for the same manufacturer;
– Initially the company applied for a guarantee facility from IDC to
enable it to meet the requirements of its international supplier.
– This was subsequently increased to meet additional demand in the
previous financial year based on the company’s good performance.
Sustaining and creating jobs

Labour intensive industry

Domestic value addition

Black-empowered company

Eastern Cape
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Other Manufacturing Industries
• Pharma-Q
– Pharma-Q contract manufactures and packages pharmaceuticals
from its facility in Industria, Gauteng;
– The company services more than 30 leading global companies for a
diverse range of products including ampoules, dental cartridges,
eye drops, oral syrups, sprays, topical ointments, tablets and
capsules;
– As a result of changed regulations by the Medicines Controls
Council, the company had to upgrade its facilities and at the same
time modernise its plant and introduce new equipment;
– IDC approved funding to enable the company to upgrade and
modernise , this should enable it to more aggressively enter the
export market.
Improving competitiveness

Supporting exports of value added
products

Improving efficiencies

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Gauteng
IDC Focus Area: The Mining Value Chain
IDC is involved in funding extractive mining activities and encourages local downstream beneficiation
Stage 1 beneficiation
(e.g. smelted or refined
products)
Extraction
Stage 2 beneficiation
(e.g. alloys)
Stage 3 beneficiation
(e.g. semimanufactured articles)
Stage 4 beneficiation
(e.g. fabricated
articles)
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The Mining Value Chain
• Opencast Mining Services
– Diesel Power Opencast Mining is an opencast contract mining and
earthmoving contractor. Diesel Power was established in the mid
1980’s and is now one of the largest opencast contract mining and
earthmoving contractors in SA;
– The slowdown in the world economy resulted in a surplus of
second-hand fleet, which significantly reduced used fleet prices.
– This, together with the tougher credit climate, resulted in Diesel
Power not being able to replace its fleet timeously resulting in
downtime which negatively impacted the performance of the
business since March 2009.
– The IDC facility will enable Diesel Power to replace a portion of its
fleet thereby reducing maintenance costs and downtime and
restoring the business to profitability, saving 1 357 permanent jobs.
Sustaining jobs

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Mpumalanga
The Mining Value Chain
• Creative Design Manufacturers
– Creative Design Manufacturers was established in 1995 with the
aim of providing quality gold jewellery chains to the local and export
markets;
– During its previous expansions, the company received funding from
IDC which has been fully repaid.
– The company currently manufactures yellow gold chains, bangles
and earrings and it needed working capital to expand its product
range to include white gold jewellery;
– The working capital facility approved in 2010/11 will assist the
company to expand its operations and create 4 new jobs in the
process.
Creating jobs

Downstream minerals beneficiation

Assisting SMEs to expand

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KwaZulu-Natal
IDC Focus Area: Tourism, creative industries
and high-level services
Film
Tourism
ICT
Healthcare
services
Etc.
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High-Level Services, the Knowledge Economy,
Tourism and Film
• Cape Town Film Studios
– Cape Town Film Studios was built in response to a call by the
Western Cape Provincial Government, the City of Cape Town
and Wesgro for proposals to invest in and build a film studio in
Cape Town;
– The construction of the 4 sound stages and 2 workshops have
been completed and these are the only studios in Africa suitable
for the production of big budget movies;
– Shooting of the first film to use the studio, the big budget new
Judge Dredd production completed earlier in the year and at the
height of the production saw 400 South Africans and 50 top
internationals working at the studios;
– The SA Film value chain will benefit from attracting more and
bigger films into SA for production.
– IDC’s investment in the studio will provide local movie makers
with world class facilities.
Creating jobs

Improving competitiveness

Western Cape
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High-Level Services, the Knowledge Economy,
Tourism and Film
• Cross-Med Health Centre – Mthatha Private Hospital
– Cross-Med Health Centre, trading as Mthatha Private
Hospital will construct a new 52 bed hospital in Mthatha;
– The hospital will provide ambulatory surgical services,
inpatient surgical, medical and maternity services including
primary healthcare and diagnostic services;
– IDC’s funding, which includes an equity portion will result in
the creation of 205 permanent jobs as well as 224 jobs
during the construction phase.
Creating jobs

Development of a poor area

Eastern Cape
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Prospects
IDC Sectoral Focus Areas
R102 billion funding available in the next five years.
R11.1 billion
Industrial
infrastructure
Logistics
Green and
energy saving
industries
Bio fuels
R22.4 billion
Craft and film
Business process
services
R7.7 billion
Agroprocessing
Forestry, paper &
pulp, furniture
Mining related
technologies
Biotechnology
Tourism
Healthcare
ICT
R14.8 billion
Automotives,
components, medium
and heavy commercial
vehicles
Metals fabrication,
capital and
transport
equipment
Clothing, textiles,
footwear, leather
Advanced
manufacturing
Pharmaceuticals
Mining
Plastics and
chemicals
Downstream mineral
beneficiation
R22.1 billion
Oil and gas
Grreen industry
components
Other funding areas :
Venture Capital: R500 million
Funding to distressed companies: R2.5 billion
R20.8 billion
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Prospects – Some Projects in the Pipeline
• Titanium and Zirconium Beneficiation
– South Africa is the world’s second largest producer of titanium minerals after Australia;
– These ores are exported in basic beneficiated form of titanium slag and zirconium sand without beneficiated highvalue add;
– To beneficiate these mineral ores into high-value added products, very specialised and complex technologies are
needed;
– Two years ago, the IDC collaborated with the National Empowerment Fund, Magnesium & Metals Ltd of Russia
and Rare Metals Industries of SA by jointly investing R40 million in a pre-feasibility study to develop the project to
beneficiate the ores;
– This mineral beneficiation project employing the proven Russian technology aims to construct and operate an
unprecedented and world-first pure metals refinery complex producing titanium , zirconium and silicon with their
derivative alloys and products;
– It is expected that the complex will create at least 2 800 permanent jobs when fully operational and in excess of 5
000 jobs during the construction phase;
– Pure titanium and zirconium metals and their derivatives creates the potential for downstream local industries such
as the production of micro-chips for computers and mobile phones, lightweight alloys for the aerospace, semiconductors, photo-voltaic panels to harvest solar power and various industrial products for the medical, leisure and
power generation industries;
– It is envisaged that the decision whether to proceed to a bankable feasibility study will be made later in the year.
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Prospects – Some Projects in the Pipeline
• Bus and Green Transport Programme
– A collaboration by IDC and the dti to promote local jobs in the medium and heavy commercial vehicle
manufacturing industry and to promote greener public transport;
– Internally generated by the IDC team, in response to the industry dynamics in the sector and in pursuit of the
objectives of the NGP and IPAP2;
– The local production leg focuses on restoring and building new manufacturing capacity in the sector in light of
significant capacity decline over the past few decades;
– The objective of the program is to capitalise on increased domestic demand resulting from the expected
recapitalisation of bus fleets nationally;
– IDC funding will be made available for plant establishment and expansion and a funding scheme for qualifying
buses is being designed;
– Similar arrangements are being put in place for trucks, taxis and yellow goods;
– Mini- and midibus taxis are likely to see the largest investments in this sector, and the IDC are currently
negotiations with several applicants, about their bids for setting up taxi manufacturing/ assembly plants in SA on a
phase-in basis;
– Co-funding agreements with the large commercial banks are being negotiated, thereby crowding in private sector
funding in support of local jobs;
– The green transport leg capitalises off the green economy focus of the NGP;
– IDC is promoting the generation and utilization of biogas from landfill sites, sewage sludge, food wastes,
agricultural wastes, and non-food portions of energy crops;
– Off-takes for the gas from municipalities and other levels of government, for application in their own transport fleets
is being envisaged.
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Prospects – Some Projects in the Pipeline
• Malting House
– The project envisages the design, construction and commissioning of a barley malting plant in the Northern Cape
province;
– A significant amount of malted barley is imported;
– The project will supply local as well as regional brewers.
• Gypsum Rapidwall Project
– The project proposes the development of a plant to manufacture readymade building panels from waste material
generated by Foskor;
– The Environmental Impact Assessment has been approved to erect the Rapidwall factory at a site in Alton,
Richards Bay;
– National Nuclear Regulator approval is being sought for the use of gypsum in the Rapidwall panels;
– Work is progressing on agreements for the supply of gypsum, the off-take of panels and technology licensing to
enable the commencement of construction.
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Achievement of IDC’s goals is
dependant on partners:
• Business;
• Co-funders;
• Labour;
• Government; and
• Civil society
Prospects
Thank you
Industrial Development Corporation
19 Fredman Drive, Sandown
PO Box 784055, Sandton, 2146
South Africa
Telephone 011 269 3000
Facsimile 011 269 2116
E-mail [email protected]
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