1 Who Are WE ? The IDC was established in 1940, we are a national development finance institution set up to promote economic growth and industrial development. We are owned by the South African government under the supervision of the Economic Development department. Our mission The IDC's primary objectives are to contribute to the creation of balanced, sustainable economic growth in South Africa and on the rest of the continent. We promote entrepreneurship through the building of competitive industries and enterprises based on sound business principles. Our vision We aim to be the primary source of commercially sustainable industrial development and innovation to benefit both South Africa and the rest of Africa. Our values (Our Core Personality) Everything we do is directed by our values which are:
Our Objectives and Strategies Supporting industrial development capacity Objectives Promoting entrepreneurship Growing sectoral diversity Sustainable employment Growing SME sector Regional equity Broad-based black economic empowerment Industrialisation in the rest of Africa Outcomes New entrepreneurs Environmentally sustainable growth Our Core Strategies (How we get there)
We serve as a catalyst for balanced, sustainable development;
Identifying and supporting opportunities not addressed by the market; and
Providing risk capital in partnership with the private and public sector.
Latest audited financials, management accounts and financial projections for the target company.
A covering letter with details of the finance required from the IDC.
Expansions by existing businesses
Latest audited and actual financials (signed by the finance director, MD or CEO).
Your updated business plan focusing on the proposed project/expansion.
A detailed description of the nature of expansion, its related costs and revenues.
7 Business Sectors Supported by the IDC
green industries, which includes renewable energy, energy efficiency, pollution mitigation, waste management and recycling, and bio-fuels;
agricultural value chain, including agro-processing;
manufacturing, focusing on advanced manufacturing; automotive, components, medium and heavy commercial vehicles manufacturing; clothing textiles, footwear and leather; forestry, paper and pulp, and furniture; metals fabrication, capital and transport equipment; pharmaceuticals; plastics and chemicals;
mining value chain, including downstream mineral beneficiation, mining and mining technologies;
tourism and high-level services, which includes business process services and tourism ;
media and motion pictures, which has to do with media pictures production, the media value chain of broadcasting (radio and television), media expansion including new media, music value chain, and film production and animation; and
the knowledge economy, to do with health care, information and communications technology and biotechnology.
8 IDC Credit Application Appraisal Process (Non – Complex Transactions) Enquiry Stage (by you) – ca. 1 day Business Plan Preparation and Submission Stage (by Company Rep) – up to 30 days Basic Assessment Stage(by IDC Deal Maker) – ca. 15 days Due Diligence Stage (by IDC team at your site) – ca. 5 days Submission Report Preparation (by the IDC Team) – 5 days Legal Agreements and Payment Stage– minimum of 5 days FYI: We want to improve our TAT to 15 days after DD
9 Metals, Transport and Machinery Products SBU Our Metal, Transport and Machinery Products Strategic Business Unit offers funding and industry and project development support to ferrous and non-ferrous metal-based manufacturing businesses. Our operations are in line with the government's New Growth Path and Industrial Policy Action Plan. We focus on specific sub-sectors, namely: fabricated metal, capital and transport equipment, automotive assembly (including medium and heavy commercial vehicles, buses and taxis, and components, advanced manufacturing, and renewable and energy-saving industry components. While each proposal submitted to us for funding is considered on its particular merit, preference is given to:
Financing fixed assets and the fixed portion of growth in working capital requirements; and
New or existing projects or businesses that have a significant developmental impact, for example, rural development, empowerment, job creation, township development and value addition.
10 Of importance, is the IDC Development Funds The funds currently managed are:
EU, Risk Capital Facility Programme, only equity based;
Support Programme for Industrial Innovation, (SPII)
Transformation and Entrepreneurship Scheme, only equity based
Target beneficiaries herein are previously disadvantaged groups, including women, people with disabilities, low income worker groupings and marginalized communities. ( e.g for Community Trust and Foundations, Co-operatives, Workers Trust, Black and White Manco establishments) The objective here is to support projects that will eventually contribute to the development of the economy through:
Developing rural areas and underdeveloped provinces and regions; and
Boosting Broad-based Black Economic Empowerment and empowering people who were previously excluded from participating in the economy.
Many of selected projects under these funds are generally considered high risk and are therefore ring-fenced.
Overview of Key Development Funds 11
GRO – E SCHEME R10 billion, ring-fenced, on-balance sheet Available for 5 years or until scheme is exhausted Objective: to encourage employment creation, thereby expanding South African production capacity Qualifying Criteria: the business must have economic merit, i.e. it must have prospects of acceptable profitability to service its obligations for the duration of funding period cost per job created or saved must not exceed R500,000 relating to total funding required by the business. BBBEE certification is required from an accredited verification agency, where applicable only available to businesses operating in or expanding in South Africa.
GRO – E SCHEME cont … Funding provided: across all IDC mandated sectors for start-up businesses includes funding for buildings, machinery and working capital for existing businesses, funding for expansionary purposes minimum of R1 million with a maximum of R1 billion per project, excess can be accessed through IDC’s normal funding with IDC’s normal fees are applicable Own contribution will be determined by the financial capacity of the entrepreneur and the cash flow profile of the business First draw must occur within 1 year from approval of funding by the IDC or pricing reverts to normal IDC pricing Pricing - interest rate for loan products will be Prime less 3% for 5 years, thereafter normal IDC pricing will apply Rate of return for equities and sharing in the upside will depend on the development impact of the business
First drawdown by client within 7 months after approval
WE THANK YOU QUESTIONS AND CONCERNS IF ANY! NB: Business plans will always be welcome and must be forwarded to: Within any ferrous and non-ferrours Metals Sector: firstname.lastname@example.org or email@example.com 011 (269) 3000 for other business sectors, general IDC Contact Details are: Call Centre: 086 069 3888 Website: www.idc.co.za 15