The IDC Loyiso Jiya Chief Economist Industrial Development Corporation of South Africa Ltd 7 May 2002

IDC - Corporate Profile ... Self-financing state-owned development finance institution Provides financing to entrepreneurs engaged in competitive industries Follows normal company policy and procedures in its operations Pays income tax at corporate rates and dividends to its shareholder Independent Board of Directors Reports on a fully consolidated basis, with its Annual Report freely available to the public IDC Head Office Sandton

Self-financing state-owned development finance institution

Provides financing to entrepreneurs engaged in competitive industries

Follows normal company policy and procedures in its operations

Pays income tax at corporate rates and dividends to its shareholder

Independent Board of Directors

Reports on a fully consolidated basis, with its Annual Report freely available to the public

Vision ... “ To be the primary driving force of commercially sustainable industrial development and innovation to the benefit of South and southern Africa”

Contribute to the generation of balanced, sustainable economic growth in southern Africa Economically empower the southern African population Promote entrepreneurship through the building of competitive industries and enterprises based on sound business principles Mission ...

Contribute to the generation of balanced, sustainable economic growth in southern Africa

Economically empower the southern African population

Promote entrepreneurship through the building of competitive industries and enterprises based on sound business principles

Core Strategies ... Providing risk capital to widest range of industrial projects Maintaining its financial independence internal profitability divestments from mature assets borrowings Identifying and supporting opportunities not yet addressed by the market Establishing local and global involvement & partnerships in projects that are rooted in or benefit SA and SADC Building upon and investing in human capital in ways that systematically and increasingly reflect the diversity of SA’s society 4

Maintaining its financial independence

internal profitability

divestments from mature assets

borrowings

IDC’s Financial Results ... Ranked 29th in South Africa’s “Giants League” i.t.o. assets Ranked 4th largest SA public corporation i.t.o. assets and 5th largest i.t.o net income Financial year 2000/2001 Financially strong Assets = R30 billion Net income after tax and capital profits = - R 258 million

Ranked 29th in South Africa’s “Giants League” i.t.o. assets

Ranked 4th largest SA public corporation i.t.o. assets and 5th largest i.t.o net income

Financial year 2000/2001

Financially strong

Assets = R30 billion

Net income after tax and capital profits = - R 258 million

IDC’s Development Impact ... Assisted 2 109 industrialists Generated over US$3.2 bn in additional annual export earnings Empowered the historically disadvantaged (31% of number of approvals in 2001) Facilitated development in rural areas (agro-industries, SDI’s) Created 89 000 additional jobs Contributed 10% to manufacturing investment in productive capacity Investments facilitated over the past 6 years:

Assisted 2 109 industrialists

Generated over US$3.2 bn in additional annual export earnings

Empowered the historically disadvantaged (31% of number of approvals in 2001)

Facilitated development in rural areas (agro-industries, SDI’s)

Created 89 000 additional jobs

Contributed 10% to manufacturing investment in productive capacity

IDC’s Operational Structure ... 14 strategic business units (SBUs), each focussed on specific economic sectors CEO / President Khaya Ngqula HR and Corporate Support Services Lesé Matlhape 21 departments are tasked with providing the necessary operational services to the SBUs Marketing & Corporate Affairs Neo Sowazi Projects Jaco Kriek Sectors Andile Reve Professional Services Geoffrey Qhena Finance and Funding Gert Gouws Sectors Raisibe Morathi

Role of the Sectors Division ... Sectoral focus and specialisation Facilitate in sectoral development on a broad front ... through the use of IDC’s basket of financial instruments through the participation in development initiatives within sectors Financial and Funding Service sectors Raisibe Morathi Professional Professional Services Services Geoffrey Qhena Financial and Funding Gert Gouws HR, IT, Admin Lesé Matlhape CEO / President Khaya Ngqula Sectors Andile Reve Projects Jaco Kriek

Sectoral focus and specialisation

Facilitate in sectoral development on a broad front ...

through the use of IDC’s basket of financial instruments

through the participation in development initiatives within sectors

Sectoral Business Units… Metal- Based Products Jan Weys Chemicals William Smith Wood Paper, Other Dean Webster Textiles Willie Fourie Agro-Processing Shakeel Meer Tourism Ben Nkosi Empowerment Sonja Loggenburg Entrepreneurial Mining & Beneficiation Muvhango Netshitangani Techno-industries Gerrit van Wyk Wholesale, Guarantees, Gov. Tenders Trevor Mashabane Executive- Sectors Andile Reve Executive- Service Sectors Raisibe Morathi

IDC’s Focus Areas Empowering of emerging entrepreneurs Support manufacturing , tourism development, agro-industries and small-scale mining Regional ( SADC and Africa ) development New initiatives: telecommunications and IT retail and service sectors government tenders venture capital Continue with the establishment of internationally competitive, large, resource-based beneficiation projects and downstream value-added industries

Empowering of emerging entrepreneurs

Support manufacturing , tourism development, agro-industries and small-scale mining

Regional ( SADC and Africa ) development

New initiatives:

telecommunications and IT

retail and service sectors

government tenders

venture capital

Continue with the establishment of internationally competitive, large, resource-based beneficiation projects and downstream value-added industries

Financial Products ... Equity Quasi-equity Commercial loans Wholesale finance Share warehousing Guarantees

Equity

Quasi-equity

Commercial loans

Wholesale finance

Share warehousing

Guarantees

Greenfield projects, expansions & rehabilitations Relatively sizeable projects Economic merit (profitability & sustainability) Developmental impact (jobs, value addition, exports) Fixed assets and the fixed portion of growth in working capital requirements Reasonable financial contribution from owners Security Environmental requirements Financing Criteria ...

Greenfield projects, expansions & rehabilitations

Relatively sizeable projects

Economic merit (profitability & sustainability)

Developmental impact (jobs, value addition, exports)

Fixed assets and the fixed portion of growth in working capital requirements

Reasonable financial contribution from owners

Security

Environmental requirements

IDC Financing by Sector Business Unit Approvals: July 1997 to June 2001 Sectoral Exposure ... 0 5 10 15 20 25 30 35 40 Agri-projects Wholesale & Bridging Finance Techno-industries Entrepreneurial Mining & Beneficiation Mining, Mineral & Energy Projects Textiles, Clothing & Leather Metal Based Products Tourism Chemicals, Rubber & Plastics Agro-industries Wood, Paper & Other Empowerment International Finance Large Beneficiation Projects % of total number approved % of total value approved Source: IDC

Empowerment Financing ... Credit facilities for delivery on government contracts Wholesale financing Warehousing of shares Take-overs and acquisitions Loan finance

SME Financing ... SME financing’s value - from 11% of approvals in 1996 to 67.2% in 2001 Since 1996 the IDC has approved finance worth more than R7.6bn to 1 823 SME’s , creating more than 54 538 jobs and generating export earning in excess of R10.2 bn

SME financing’s value - from 11% of approvals in 1996 to 67.2% in 2001

Since 1996 the IDC has approved finance worth more than R7.6bn to 1 823 SME’s , creating more than 54 538 jobs and generating export earning in excess of R10.2 bn

CEO / President Khaya Ngqula HR and Corporate Support Services Lesé Matlhape Marketing & Corporate Affairs Neo Sowazi Projects Jaco Kriek Sectors Andile Reve Professional Services Geoffrey Qhena Finance and Funding Gert Gouws Sectors Raisibe Morathi Focus on larger projects Prefer infant developments with regard to products and/or technologies Projects that require more active involvement from IDC Involved in all the stages of project development Focus on maximum development impact Projects within the IDC ...

Focus on larger projects

Prefer infant developments with regard to products and/or technologies

Projects that require more active involvement from IDC

Involved in all the stages of project development

Focus on maximum development impact

Units within Projects ... Projects Jaco Kriek Large Beneficiation Carlos Galego Minerals, Mining & Energy Sipho Mkhize Agri-Projects Guy Clarke Public Private Partnership Monwabisi Manjezi

IDC’s Role in Projects ... Identify project opportunities Co-sponsor feasibility studies Source financial and operating partners Provide and arrange funding (e.g. export finance) Provide equity stake Assist with implementation via steering committee Serve on board of directors

Identify project opportunities

Co-sponsor feasibility studies

Source financial and operating partners

Provide and arrange funding (e.g. export finance)

Provide equity stake

Assist with implementation via steering committee

Serve on board of directors

IDC’s involvement in the rest of Africa ... Promoting Investment in Africa ... By providing consultancy services By supporting development initiatives such as SDIs By assisting in the financing of imports of South African capital goods & services By identifying sound investment opportunities By acting as a catalyst for investments in productive capacity

IDC’s involvement in the rest of Africa ... Hydro power Manufacturing Mining Phamaceuticals Prawns Hotels Mining Shoping Mall Tea Aluminium Brewery Cashews Cotton Heavy Minerals Prawns Sesame seeds Sugar Timber Tourism Sugar Tourism Mining Distillery Tanning Telcoms Horticulture Manufacturing Parkade Mining Grape fruit Manufacturing Mining & Mineral beneficiation Shopping Mall Hotels Port Expansion Horti and Floriculture Mining Tourism Current & potential Africa (excl. SA) projects ...

International Finance ... Export Finance: Loans to foreign borrowers to facilitate purchase of SA capital goods & services Import Finance: Utilising lines of credit to finance the importation of capital goods & services into SA Project Finance: Sourcing and arranging funding from diverse international lenders for major projects Risk Mitigation: Risk mitigation products to hedge & structure political & commercial exposure in SADC Trade Finance: Pre & post shipment working capital finance to exporters

Export Finance: Loans to foreign borrowers to facilitate purchase of SA capital goods & services

Import Finance: Utilising lines of credit to finance the importation of capital goods & services into SA

Project Finance: Sourcing and arranging funding from diverse international lenders for major projects

Risk Mitigation: Risk mitigation products to hedge & structure political & commercial exposure in SADC

Trade Finance: Pre & post shipment working capital finance to exporters

Concluding Remarks ... The IDC is at the front of industrial development in SADC We are moving into non-manufacturing activities that yield development and financial returns Highly profitable opportunities exist for investors in the South Africa Together we can turn big ideas into big business!

The IDC is at the front of industrial development in SADC

We are moving into non-manufacturing activities that yield development and financial returns

Highly profitable opportunities exist for investors in the South Africa

Together we can turn big ideas into big business!

www.idc.co.za Together we can turn big ideas into big business