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 Any use of this material without specific permission of the IDC is strictly prohibited
Contents � Overview of the IDC � Corporate Plan and Objectives � Funding Schemes and Requirements � Application Process 2
The IDC is SA’s largest DFI that providing funding for industry growth across key industrial sectors National footprint with offices in all regions Performance Impact 2016/17 R15.3Bn Net approvals of 175 transactions 20 881 Jobs created or saved R11Bn Funding disbursed to industry R7.7Bn Approved for the manufacturing sector R10.1Bn Approved for BEE and Black Industrialist companies 3 Source: IDC Integrated Report 2017
The IDC is structured to serve the country’s core primary and manufacturing sectors Metals Value High Impact Chemicals Value Agricultural Chain Chain Value Chain Sectors � Heavy � Basic Metals and � Basic and � Agro-processing Manufacturing Mining Specialty and Agriculture � Light � New Industries � Machinery and Chemicals Manufacturing � Industrial Equipment � Chemical � Tourism � Automotive and Products and Infrastructure � Media and Motion Transport Pharmaceuticals Pictures Equipment � Clothing and � Rest of Africa Textiles Value Chains are earmarked for special attention including proactive project development, whilst High Impact Sectors are exclusively reactive 4 Source: IDC Corporate Plan 2017/18
Funding activities are aimed at addressing market failures, catalytic development, supporting industrial capabilities and risk funding for entrepreneurs Project Sectoral Regional Funding Core Activities Key Customers Lifecycle Involvement Development Mechanisms � Debt � Rest of Africa � Mining and � Development � Large OEMs � Concept and � Equity � Export Focus of Metals Finance � Small to Medium Scoping � Quasi-equity SA Manufactured Beneficiation � Project Companies � Pre-feasibility � Agriculture and � Export-Import Capital Development � Other DFIs Studies Finance Equipment Agroprocessing � Research and � Bankable- � Short-term Trade � Basic and Input into Policy feasibility Studies Finance Specialty � Management of � Product � Bridging Finance Chemicals Ring-fenced Commercialis- � Machinery and � Guarentees Funds ation � Wholesale Equipment � Business Support � Plant Funding through � Automotive and Services Commissioning Intermediaries Transport � Capacity Building � Expansions � Clothing and for Other DFIs Textiles � Tourism � ICT � Media and Motion Pictures � Renewable Energy � New Industries 5 Source: IDC Corporate Plan 2017/18
Contents � Overview of the IDC � Corporate Plan and Objectives � Funding Schemes and Requirements � Application Process 6
Over the next 5 years the IDC aims to leverage balance sheet to inject over R100Bn into the economy The IDC’s key funding objectives are: High Impact � Industrial Capacity Development Industries ‒ Start Ups Media and Motion 11% ‒ Expansions Pictures Basic Metals and ‒ Localisation 1% Mining, Machinery New Industries ‒ Regional Integration 3% & Equipment, 32% Automotive Job Creation � ‒ New Jobs ‒ Saved Jobs Industrial 20% Infrastructure Economic Transformation � ‒ Black Industrialists ‒ Women ‒ Youth 3% � Economic Sustainability Clothing and Textiles ‒ Balance Sheet Strength 20% 10% ‒ Profitability Basic and Specialty Agriculture and ‒ Reduced Impairments Chemicals, Agro-processing Chemical Products, Pharmaceuticals 7 Source: IDC Corporate Plan 2017/18
Under the Standard Industrial Classification (SIC) scheme the casting of metals falls under division 353 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 products. Products of the rolling, finishing and tube mills are sheets, plates, strip coils; bars and rods; hollow drill 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 Production of non-ferrous base metals from ore or scrap. This includes the manufacture of powder, flakes, foil, metals plates, sheets, strip, bars, rods, profiles, wires, tubes, pipes, pipe fittings Downstream 353 Casting of metals Castings of ferrous and non-ferrous metals, structural metal products and fabricated metal products (Metal Products) 354 Manufacture of Includes fabrication of bridges and bridge parts, towers, masts, columns, girders, trusses, arches, rafters, structural metal pithead frames, telescopic props, sluice gates, piers, jetties. products, tanks, This group includes manufacture of containers of metal for compressed or liquefied gas. reservoirs and Manufacture of central heating boilers and radiators. steam generators 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 Forging, pressing, stamping and roll-forming of metal; powder metallurgy fabricated metal Treatment and coating of metals; general mechanical engineering on a fee or contract basis. products 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 8 Source: Standard Industrial Classification 1993
Contribute to a competitive mining and metals beneficiation industries including downstream manufacturing Focus Areas: Selected Key Projects: � Security of supply of energy minerals � Development of Waterberg Coalfields � Mining in transition – towards a 21 st � Introduction of steel mini-mills century mining model Basic Metals and � Scrap replacement for steel production � Inputs for downstream metals sectors Mining � Competitively priced basic metals for downstream industry development � Power generation, transmission and distribution � Gas cylinder manufacturing Machinery and equipment � Low to medium voltage cables � Mining, quarrying and construction � Instrumentation cables Equipment � Bulk materials handling and heavy lifting � Solar panel manufacturing � Oil & gas, water handling, storage and � Mine drilling equipment distribution � Coega IDZ BAIC project � Expand local vehicle manufacture and Automotive and � Multi-OEM automotive assembly assembly Transport � Complete knock-down bus assembly � Expand local rail and rolling stock industry � Automotive grade aluminium body sheets Equipment � Expand local and regional aviation industry � Forged train wheels � Expand ship and boat building industries 9
An integrated globally competitive chemical industry that enhances downstream productive capacity Focus Areas: Selected Key Projects: � Fertilisers import replacement and increased � Crude oil storage facility Basic and local value add � LPG gas terminal facility Specialty � Increased gas usage as an energy source � Phosphate rock beneficiation � Increased liquid fuels energy security Beneficiation of cobalt, nickel and lithium Chemicals � � Increase local production of green and other into specialty chemicals new chemicals � Local manufacture of consumer goods inputs � Local manufacture of consumer goods � Establish of urea manufacturing facility Chemical � Competitiveness improvements for the plastics � Contract manufacturing of personal care Products and industry products Pharmaceuticals � Production of radiopharmaceuticals for nuclear � Microalgae production plant imaging � Waste chemicals and plastics � New capacity for targeted products for priority � Vaccine production diseases � Radio isotopes for medical imaging 10
Jobs-rich and globally-competitive processed food, beverages, and other derived product industries Focus Areas: Selected Key Projects: � Investments in primary agriculture to support � Ester oil manufacturing inputs into processing value chain � Industrial hemp fibres � Defend positions of dominance � Almond industry development Agriculture and � Build positions of dominance � Development of pine-apple industry value � Develop sectors where there is competitive chain Agro-processing advantage Develop regional and continental � competitiveness in areas of South Africa’s competitive disadvantage � Support of government policy 11
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