58
IDC Annual Results For the year ended 31 March 2015 Presentation to the Portfolio Committee on Economic Development Cape Town | 10 November 2015 1
IDC Annual Results For the year ended 31 March 2015
Presentation to the Portfolio Committee on Economic Development
Cape Town | 10 November 2015
1
2
IDC’s Vision, Mission, Objective and Values
Val
ues
V
isio
n
To be the primary driving force of commercially sustainable industrial development and
innovation for the benefit of South Africa and the rest of the African continent.
Mis
sio
n The IDC is a self-financing national development finance institution whose primary
objectives are to contribute to the generation of balanced, sustainable economic
growth in Africa and to the economic empowerment of the South African population,
thereby promoting the economic prosperity of all citizens. The IDC achieves this by
promoting entrepreneurship through the building of competitive industries and
enterprises based on sound business principles.
Ob
ject
ive
Passion Professionalism Partnership
Ou
tco
mes
Lead industrial capacity development
Primary: Facilitate sustainable direct and indirect employment
Secondary:
• Improving regional equity, including the development of South African rural areas,
poorer provinces, township economies and industrialisation in the rest of Africa;
• Promoting entrepreneurial development and growing the SME sector
• Transformational impact on communities and growing black industrialists
• Environmentally sustainable growth
• Growing sectoral diversity and increased localisation of production
2
3
Summary of IDC’s Main Activities
Activities Customers Business
lifecycle
Sectoral
involvement
Funding
products
Regional
involvement
Provision of
development
finance
Project
development
Research and
policy inputs
Fund
management
Non-financial
forms of
business
support
Capacity
building
Business
Government
Other DFIs
Conceptual
Pre-feasibility
Feasibility
Product
commercialisatio
n
Establishment
Expansion
Mature
Manufacturing
Agricultural
value-add
Mining and
mineral
beneficiation
Green industries
Industrial
infrastructure
Clothing &
textiles
Tourism, ICT,
cultural
industries and
other productive
services
General debt
Quasi-equity
Equity
Export/import
finance
Short-term trade
finance
Bridging finance
Guarantees
Venture capital
Wholesale
funding through
intermediaries
South Africa
Rest of Africa
Global
imports of
South African
capital
equipment
• IDC’s main activity is the provision of industrial finance to businesses throughout the business lifecycle
in various sectors aligned with industrial policy priorities as well as developing projects in these
industries.
• In addition, it is involved in other activities such as research, policy inputs and fund management for
government departments; non-financial support for business; and capacity building for other DFIs.
3
Financial Results For the year ended 31 March 2015
4
5
Mini Group
IDC Ltd
Findevco (Pty) Ltd
Impofin (Pty) Ltd
Konoil (Pty) Ltd
100%
100%
100%
Other subsidiaries1
Scaw South Africa (Pty) Ltd
Associates2
Mozal SARL
Incwala Resources (Pty) Ltd
Hulett Aluminium (Pty) Ltd
Savannah Platinum SPV (Pty) Ltd
Other subsidiaries
Other associates
74%
24%
24%
30%
29%
various
various
1 – Companies in which IDC holds more than 50% equity
2 – Companies in which IDC holds between 20% and 50% equity
3 – Legally, the IDC own 59% but for accounting purposes, in terms of IFRS 85% of
Foskor is consolidated into the IDC
sefa 100%
Foskor (Pty) Ltd 59%3
Entities acquired as part of the Scaw SA transaction
100% Haggie Reid (Pty) Ltd (Australia)
100% African Wire Ropes (Pty )Ltd (Namibia)
100% Scaw Metals (Pty) Ltd, formerly PWB Anchor
100% Afrope Zambia Ltd (Zambia)
100% Haggie North America Inc (Canada)
50.01% Consolidated Wire Industries (Pty) Ltd
Palabora Copper (Pty) Ltd 20%
IDC Group Structure
5
6
Mini Group Foskor Scaw sefa Other
subsidiaries
Other Group
2014 2015 2015 2015 2015 2015 2015 2015
Actual Actual Actual Actual Actual Actual Actual Actual
Revenue 6,814 6,736 5,331 6,269 157 2,056 (950) 19,599
Cost of sales - - (4,669) (6,227) - (1,643) (2) (12,541)
Financing costs (837) (1,170) (215) (466) - (46) 495 (1,402)
Gross profit after financing costs 5,977 5,566 447 (424) 157 367 (457) 5,656
Net capital gains 1 427 217 - - - (4) 640
Other income 231 284 62 - 10 176 131 663
Operating expenses (3,248) (3,425) (1,323) (500) (496) (811) 606 (5,948)
Operating profit 2,961 2,852 (597) (924) (329) (267) 276 1,011
Profits from equity accounted investments 2 3 (1) - 31 - 623 656
Profit before taxation 2,963 2,855 (598) (924) (298) (267) 899 1,667
Taxation (551) (55) 188 (161) (1) 14 1 (14)
Profit/(loss) for the year
2,412 2,800 (410) (1,085) (299) (253) 900 1,653
Movement in Reserves due to net unrealised
change in equity values and other
7,606 (16,626) (121) 574 - (11) (2,560) (18,744)
Total comprehensive (loss)/income
inclusive of movement in equity values
10,018 (13,826) (531) (511) (299) (264) (1,660) (17,091)
Group Statement of Comprehensive Income R’m
6
7
Group Group
2015 2014 %
Actual Actual change
Revenue 19,599 20,021 (2)
Cost of sales (12,541) (11,432) 10
Financing costs (1,402) (1,026) 37
Gross profit after financing costs 5,656 7,563 (25)
Net capital gains 640 1 nmf
Other income 663 635 4
Operating expenses (5,948) (5,686) 5
Operating profit 1,011 2,513 (60)
Profits/(losses) from equity accounted investments 656 (310) nmf
Profit before taxation 1,667 2,203 (24)
Taxation (14) (560) nmf
Profit for the year
1,653
1,643
1
Movement in Reserves due to net unrealised change in equity values and other (18,744) 8,332 nmf
Total comprehensive (loss)/income inclusive of movement in equity values (17,091) 9,975 nmf
Group Statement of Comprehensive Income R’m
7
8
2 183
2 858 3 110 3 246
2 744
790
781
1 041 670
758
(668) (284)
65
(147) (119)
1 154
1 294
1 492 2 071
2 157
147
207
540
587 692
230
286
390
367 417
118
142
197
251 371
(1,000)
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2011 2012 2013 2014 2015
Mozal metal income
Money market income
Fee and other income
Interest earned on loans to clients
Preference share income
Dividends - unlisted
Dividends - listed
Sources of Income - Mini Group R’m
8
9
31 364 37 460 47 269 54 199 61 278
71 627
70 762
69 904
75 731
55 637
17,3% 18,2% 18,2% 18,2%
16,7%
5,2% 6,3%
7,4% 7,6% 8,8%
-
20 000
40 000
60 000
80 000
100 000
120 000
140 000
2011 2012 2013 2014 2015
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Cost Fair value adjustment
Impairments as a % of Total Financing at cost Impairments as a % of Total Financing at market value
Impairments as a % of Total Financing - Mini Group R’m
9
1
0
2015 2014
Mining and Mineral Beneficiation 330 361
Construction 310 (8)
Metals, Transportation and Machinery Products 277 227
Textiles 214 248
Green Industries 177 18
Agro industries 120 70
Chemicals and Allied Industries 107 70
Venture capital 84 122
Tourism 59 (26)
Healthcare 39 139
Information Communication Technology 39 131
Media and Motion Pictures 22 51
Strategic High Impact Projects 21 31
Franchising 11 (18)
Transportation and Financial Services - 1
Forestry and Wood Products (58) 262
Other 75 109
1,827 1,788
Net increase in impairments and write-offs per sector
– Mini Group - R’m
10
1
1
Group Group
2015 2014 %
Actual Actual change
Cash and cash equivalents 8,257 7,877 5
Loans and advances 22,412 20,818 8
Investments 73,114 92,337 (21)
Other Assets 18,506 17,561 5
Total assets 122,289 138,593 (12)
Equity
Share Capital 1,393 1,393 -
Reserves 88,404 105,376 (16)
Total equity 89,797 106,769 (16)
Non-controlling interest 125 215 (42)
Liabilities
Loans 24,006 21,350 12
Deferred taxation liability 3,369 5,480 (39)
Creditors and provisions 4,992 4,779 4
Total liabilities 32,367 31,609 2
Total equity and liabilities 122,289 138,593 (12)
Abridged Statement of Financial Position R’m
11
1
2
12 108 16 875 19 507 22 585 25 972
13 877 13 776
19 149 21 770
25 058
71 627 70 762
69 904
75 731 55 637
-
20 000
40 000
60 000
80 000
100 000
120 000
140 000
2011 2012 2013 2014 2015
Loans and advances Investments at cost Revaluation of investments
Loans, Advances and Investments - Mini Group R’m
12
1
3
20 621
34 268
30 027 28 996 27 442
6 279 8 385
16 023
11 171 10 901
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
31.03.11 31.03.12 31.03.13 31.03.14 31.03.15
Commitments - undrawn facilities Advances
Commitments and Advances – Mini Group R’m
13
1
4
20 853 19 735 21 698
31 405
21 955
19 836 21 830 20 146
15 686
6 474
9 127 7 894 9 217
10 996
8 986
1 301 1 801 1 801
2 005
2 202
3 173 1 973 1 003
1 181
666
4 197 2 690 3 012
4 037
4 686
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
Mar-11 Mar-12 Mar-13 Mar-14 Mar-15
Sasol Kumba Iron Ore BHP Billiton Life Healthcare Arcelor Mittal Other
58,487 55,923 56,877 65,310 44,969
Listed Investments - Mini Group R’m
14
1
5
35 724 37 453 41 260 42 563 44 886
57 002 54 409 55 507 64 206
44 911
7%
11%
20% 20%
27%
0%
5%
10%
15%
20%
25%
30%
0
20 000
40 000
60 000
80 000
100 000
120 000
2011 2012 2013 2014 2015
Equity excluding fair value revaluation Fair value revaluation Debt/Equity ratio
IDC Group – Strong Financial Base R’m
15
Performance Results For the year ended 31 March 2015
16
1
7
IDC’s Impact in 2014/15
1
7
R11.5 BILLION overall funding approvals
R10.9 BILLION funds disbursed
R1.8 BILLION approved for investments in 10 other African countries
R2.0 BILLION approved for 111 SMEs
20 388 jobs created/saved
R5.9 BILLION approved for black empowered
and black owned companies
R14 BILLION in support of REIPPPP over the
last four years
655 MW of IDC supported REIPPPP invest-
ments connected in 2014/15
R5.2 BILLION approved for the manufacturing
sector
R756 MILLION approved for businesses with
women ownership of more than 25%
R943 MILLION additional funds disbursed by
sefa to 1 246 SMEs
R159 MILLION approved for businesses with
youth ownership of more than 25%
17
18
However, IDC has maintained its level of
activity and Increased funding into the
productive sectors of the economy
• Following a record year in 2013/14, this year’s
approvals of R11.5 billion was lower owing largely
to reduced approvals to REIPPPP projects.
• The change in finance focus to activities outside
REIPPPP, especially manufacturing, resulted in a
51% increase in approvals to these sectors of the
economy during this year when compared to
2013/14.
• The R10.9 billion disbursed during 2014/15, was
comparable to last year’s levels.
8.7 8.8
11
.0
7.1
10
.7
4.6
2.1
6.7
0.8
6.3
8.4
16
.0
11
.2
10
.9
0
2
4
6
8
10
12
14
16
18
R b
illio
n
REIPPPP approvals
Other approvals
Disbursements
Value of approvals and disbursements
18
19
IDC activity is supportive of growth
• IDC continued to support private sector
investment through equity and debt
funding for greenfield and brownfield
investments.
• 92% of funding approved has been
allocated to facilitating growth through
transactions for expansions (40%) and
transactions funding start-ups (52%).
• During the financial year, 67% of
approvals by number, representing 63%
of the total value of approvals went to
new clients of the IDC.
• IDC continues to sustain existing
production capacity by providing working
capital financing, among other forms of
support.
Start-up52%
Expansion40%
Feasibility/Project dev costs1%
Distressed business
1%
Expansionary ownership
change3%
Restructuring3%
Purpose of funding approved (2014/15)
19
20
2015 saw increased funding into the
manufacturing sector of the economy
• As the core sector to our mandate,
Manufacturing attracted the largest
portion (45%) of funding approvals for
the year 2014/15.
• Mining attracted 21% of approvals,
most of which was for early stage
mining industry projects.
• The infrastructure and services sectors
received 34% of funding approvals.
Funding approval share per broad
economic sector (2014/15)
20
2
1
Funding for the manufacturing sector of the economy
supported the development of key industries
• The bulk of funding approved for the Manufacturing sector went to the basic and downstream metal
industries spread over some 190 transactions with a wide array of developmental benefits.
• Highlights include R220 million approved for the manufacture of 240
locomotive bodies for Transnet in support of government’s infrastructure
programme.
• The jobs-intensive
textile, clothing and
footwear
sub-sector also
attracted
significant
amounts of
approvals
(R594 million)
where over
2 000 jobs are
expected to be
created and/or
saved and the
industry shows
signs of recovery.
Funding approvals within the manufacturing sector (2014/15)
21
22
Case study
DCD Group
• As part of Transnet’s rolling-stock
procurement programme, DCD was
awarded a sub-contract to fabricate and
supply the complete car-body structures for
240 locomotives in Vereeniging, Gauteng.
• IDC is providing a R200 million guarantee
and R20 million loan for the company that
will allow it to fulfil this contract.
• This transaction continues IDC’s partnership
with this black-empowered company – IDC
previously funded the establishment of a
wind tower manufacturing facility in
partnership with DCD.
• Close to 600 jobs are supported through this
contract and production for government
procurement programmes are localised.
Highlighting investment – Saving jobs,
localising production
22
23
Highlighting investment – Localisation
Case study
Busmark
• In 2011, the IDC funded a black investor to
acquire shares in Busmark, which was then
a small family owned bus manufacturing
company.
• Following the acquisition, the IDC has
extended additional working capital facility to
fund a contract awarded to the company to
manufacture 221 buses for the City of Cape
Town MyCiti bus rapid transport.
• The contract required Busmark to open a
new assembly plant in Cape Town which the
IDC has funded through a construction loan.
• More than 80% of bus bodies is local
content.
• The project is aligned with the SA
government’s broader automotive strategy
to develop a vibrant domestic bus
manufacturing industry that supports the
public transport programmes of
municipalities across the country.
• Busmark operates from facilities in
Randfontein, Gauteng and Cape Town,
Western Cape.
• IDC had approved R433 million for the
company since its first involvement, R113
million in the last financial year.
• The projects that IDC funded over the
years were expected to create 1 000 jobs
including construction jobs.
23
24
Highlighting investment - Job creation in
Manufacturing
Case study
Spring Romance Properties T/A
Impahla Clothing
• In 2011, IDC approved funding for a cutting
machine, the procurement and installation of
30kw solar photovoltaic panel system and
working capital funding to support business
growth.
• Based in Cape Town, Impahla was South
Africa’s first carbon neutral garment
manufacturer, with the solar panels
delivering c.a. 25% of the company’s annual
energy requirements.
• In early 2014 Asics, a Japanese based
sports brand, awarded Impahla a five year
contract to manufacture Springbok
supporter gear. This was part of the SARU
initiative to manufacture rugby gear locally.
• In support of this growth, IDC approved
further funding for assets and working
capital in 2014. Impahla also manufactures
rugby jerseys for local teams.
• The company employs about 470 people,
with 300 more having been employed since
IDC’s first involvement.
• IDC had approved R6 million to the
company since its first involvement, with R2
million approved in the latest transaction.
24
25
Highlighting investment - Agro-processing
Case study
Cavalier Abattoir And Cavalier Farms
• The Cavalier group is a vertically integrated
business in the red meat industry.
• IDC was approached by the companies to
fund the establishment of a beef abattoir
and meat packaging facility and to address
growth constraints.
• A total of 616 jobs are expected to be
created – 125 of these during the
construction phase.
• IDC approved R203 million for the project
that will be located in Cullinan, Gauteng.
25
26
Highlighting Investment - Black youth
technopreneur
Case study
Wagienience
• Wagienience was established in in 2007 by
a young black entrepreneur with assistance
from the Innovation Hub.
• The company was established to
commercialise a newly invented and
patented valve that reduces losses of water
in toilet cisterns due to leaks.
• IDC’s funding will be used for concept
optimisation, engineering, product
development and enhancement, tooling for
pre-production trials, and continued
business support.
• This transaction promotes black economic
empowerment and will assist a young black
entrepreneur to commercialise his invention.
• At this stage, 2 jobs are expected to be
created with the R1 million that IDC
approved.
• The business is located in Pretoria.
26
27
Our role in Mining sector is providing risk
capital for early stage projects
• During the reporting period, we approved R2.5 billion for Mining, mostly for early stage mining
industry projects.
• The largest portion (R1.9 billion) of this funding was additional funding
for a Manganese project in the Northern Cape, fulfilling the dual
purpose of providing risk
capital for early stage
projects, and funding
in priority provinces.
• Other funding
approved during the
past year included
R200 million to extend
the life of a copper mine
by a further 20 years and
black-owned coal mines,
as important future sources of
supply for South Africa’s energy mix.
Funding approvals within the mining sector (2014/15)
27
28
Highlighting investment – Mining and
beneficiation
Case study
Palabora Mining Company (PMC)
• PMC started as an open-pit operation in
1956 to a depth of ~800 meters. This was
later converted to an underground operation
in early 2000’s still tracing the mineralised
pipe towards a depth of 1 480 meters.
• The refinery produces rod for the domestic
market and cathodes for export.
• Located in Phalaborwa, Limpopo, PMC
produces three primary products: copper,
magnetite and vermiculite
• The PMC ore body is vertical, this structure
permits the extension of the current mining
operations by developing another block
cave operation, Lift II, about 500 meters
below the current operation.
• The Lift II project is expected to cost R9.3
billion and its scope comprises the
underground works which include the
development of a second mine and other
upgrades.
• IDC approved a facility to support PMC raise
project finance for the expansion with a
R200 million facility excluding an equity
stake valued at R1.1 billion.
• Lift II will benefit from the existing
infrastructure and extend the PMC life of
mine to 2033.
• The company currently employs 2 300 full
time employees and 2 100 contractors and
is 26% black owned
• The R200 million that IDC approved will
save the existing jobs and is expected to
create an additional 1 400 jobs.
28
29
Highlighting investment – Assisting black
empowerment in mining
Case study
Tshedza Mining Resources
• Tshedza has signed a 15-year coal supply
and off-take agreement (CSA) with Eskom
for its newly developed Manungu Colliery
(Manungu), also known as Eloff Colliery, in
Delmas, Mpumalanga.
• The Colliery is contracted to supply 100% of
its production to Eskom with an average of
1.62 million tonnes per annum (Mtpa) of
coal for the first three years to Kendal Power
Station, followed by an average of 3 Mtpa to
Kusile Power Station (scheduled completion
mid-2018) for the remaining 12 years of the
contract.
• Tshedza will be one of the top four suppliers
to Kusile Power Plant once it comes online,
supplying between 15% and 20% of the
total coal requirement.
Picture for illustrative purposes only
• IDC funding totalling R210 million will be
used for completion of the mine
development, weighbridge and other
infrastructure required to bring the mine to
production and for working capital, which will
help finance the mine’s operating costs for
the three months preceding first coal
production and sales.
• The company is expected to employ 219
people ramping up to 403 when in full
production in 2018
• Tshedza is 51% black owned and a Level 3
contributor to B-BBEE.
29
30
We continue to fund infrastructure projects
across a wide array of sectors of the economy
• We continue to support the REIPPPP having supported projects that will deliver 1 408
MW into the grid. Several of the projects, providing 655 MW,
have started delivering electricity to the grid, assisting with the
easing of current supply constraints.
• Other funded alternative
energy infrastructure
projects included Sunrise
Energy (R490 million), a
liquefied petroleum gas (LPG)
terminal and storage facility in
Saldanha and funding for
Egoli Gas, to extend its gas
pipeline.
• IDC is also funding projects
to accelerate access to ICT
infrastructure, including establishing
wireless and broadband infrastructure in Soweto.
• Further, we approved funding of R150 million for
companies in the media, motion pictures and
related industries, the highlight being additional funding
for expansions at Cape Town Film Studios.
Funding approvals within the
infrastructure and services sectors (2014/15)
30
31
Highlighting investment - Renewable energy
Case study
KaXu Solar One
• KaXu Solar One, located near Pofadder in
the Northern Cape Province, is the first solar
thermal electric plant to operate
commercially in South Africa, having started
operating early in 2015.
• KaXu Solar One has a total installed
capacity of 100 MW plus 2.5 hours of
storage in molten salts.
• KaXu Solar One produces enough clean
electricity to power 80 000 South African
households, while preventing the emission
of 300 000 tons of CO2 annually.
• Currently, the plant employs 80 people in
full-time positions.
• IDC provided R2 billion in finance, including
funding for the local community’s 20% share
in the project.
31
32
Highlighting investment - Alternative energy
Case study
CNG Holdings
• CNG Holdings promotes the use of natural
gas by setting up compressed natural gas
filling stations, operates a virtual gas
network, and supplies gas equipment.
• IDC provided funding for the company in
2012 to support the company’s first phase
roll-out plan.
• The company again approached IDC for
funding to assist with the conversion of
hospitals boilers from coal and diesel to
more cost effective gas.
• The investment is broadening the energy
mix and assisting this black industrialist
owned and managed company to expand
and will create 22 jobs.
• In total, IDC has approved R183 million for
the company, with R70 million approved in
the last year for the conversion of hospitals.
32
33
Highlighting investment – Infrastructure and
Renewables
Case study
Gledhow Sugar Company
• GSC is a sugar mill based in Stanger, KZN.
It is made up of a consortium of 4
shareholders. Previously, IDC had
approved funding for the sugar mill to on-
lend to commercial and emerging farmers.
• In 2014/15, IDC approved further funding of
R25 million to GSC, utilising funds secured
through its Green Energy Efficiency Fund,
for the upgrade of their existing boilers to
replace coal with bagasse (waste biomass
from sugar mill), creating 4 jobs.
• The project was successfully implemented
during its offcrop season, resulting in cost
savings for the client as well as reduction in
overall carbon footprint due to use or
renewable resources to produce energy.
• Improved the sustainability of company.
• Reduced carbon footprint due to lower
greenhouse gas emissions (28% reduction
in coal usage. 33
34
Highlighting investment – Recycling initiative
Case study
Nobomate
• Nobomate trading as New GX Enviro
(NewGX) is a black owned, controlled and
managed waste management company
providing services to the City of Tshwane
Metropolitan Municipality.
• NewGX provides household waste
collection and related services to the
townships of Atteridgeville, Lotus Gardens
and Olievenhoutbosch, through a
management contractor model whereby
NewGX incubates SMME’s from its service
area into independent waste management
entities by capacitating them through a free
transfer of waste trucks after 3 years.
• The level of service delivered through this
model has been extremely high and
Tshwane has received numerous accolades
in the press for the cleanliness of these
townships especially Atteridgeville.
• In Sep 2014, CTMM appointed NewGX to
develop a multipurpose recycling facility in
Atteridgeville which will create over 250 new
green jobs at full production. In Dec 2014,
IDC has approved NewGX R21 million in
funding for the first phase of the project.
• All 4 facilities will create approx. 1 000 jobs
at full production. NewGX will incubate
SMME’s at the CTMM's buy back centres in
Atteridgeville, Hammanskraal and
Stinkwater at no additional cost. The buy
back centres have created 20 new green
permanent jobs. 34
35
Highlighting investment – Infrastructure and
Beneficiation
Case study
Platinum Power at Chamber of Mines
of South Africa
• First commercial fuel cell installation at a
building in SA
• Fuel cell utilises a platinum catalyst to
generate green power (electricity) from
natural gas with water as the main
“emission”.
• South Africa has more than 80% of global
platinum resource and fuel cells are the next
major potential market for platinum.
• Project developed by Mitochondria Energy,
a Black Industrialist and partner of IDC’s,
that focusses on fuel cell projects.
• IDC is providing R3.2 million in long term
green loan funding.
• Gas supplied by Egoli Gas, a black
industrialist, and client of IDC.
• Showcases clean, efficient and silent fuel
cell power to other potential customers and
partners
• Demonstrates potential of the market to
large production companies, drives
beneficiation through platinum and
encourages the localisation of fuel cell
technology production in SA.
• This 100kW installation at Chamber of
Mines building in Johannesburg provides
baseload power to the entire building.
35
36
Highlighting investment –
Empowering Black Filmmakers
Case study
Emerging Black Filmmakers
Transformation Fund:
Finders Keepers Movie
• The IDC is providing R2.8 million to fund
Finders Keepers, a crime caper film about a
cleaner whose lucky find lands him in trouble
with some shady characters.
• This is the first film to be funded through the
Emerging Black Filmmakers Transformation
Fund (Transformation Fund).
• The Transformation Fund is a collaboration
between the IDC and the National Film and
Video Foundation (NFVF) and it was
launched in July 2014.
• The Transformation Fund aims to assist
emerging black filmmakers (producers and
directors) by providing concessionary
funding and other support (mentorship,
finance, legal, production and marketing) for
up to 18 films by 2018. 36
37
Jobs-rich industrialisation remains one of
IDC’s key outcomes
• 20 388 jobs are expected to be
created and saved as a result of our
2015 approvals.
• An expected 14 537, over 70% of the
jobs facilitated by IDC will be new
jobs, the balance (5 851) are jobs
that are expected to be saved as a
result of IDC financial support.
• It is expected that sefa’s overall
financial disbursements will facilitate
around 60 000 jobs.
Number of new and saved jobs
facilitated per year
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Highlighting investment – Job creation in
Manufacturing
Case study
Robertson & Caine
• A yacht manufacturer founded in 1991 by
John Robertson and Jerry Caine
• Has used IDC funding to expand and grow
their company since 2008. On the back of
this partnership with the IDC, the company
was able to drastically increase production.
• Currently, our funding support is aimed at
improving the company’s manufacturing
facility in the Western Cape, expanding its
manufacturing plant into a new factory to be
based in Montague Gardens.
• IDC funding is aligned with our strategic
intent to assist the ship and boat building
sector.
• The planned expansion will create an
estimated 222 new jobs.
• After expansion, Robertson & Caine
employs more than 1 100 staff and ensures
that local workers are trained into highly
skilled and semi skilled workers.
• The total value of facilities approved to the
company over the years is R99 million, with
R40 million approved in 2014/15.
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We continue to increase funding to Black
owned and empowered companies
• Over the last five years IDC has
approved R25 billion for black
empowered businesses (companies
with more than 25% black
ownership).
• Of the above, R11 billion was
allocated to black owned companies
(companies with more than 50%
black ownership)
• The funding approved for black
empowered and owned companies
in 2014/15 represents over half of
total approvals.
• R756 million of approvals funded
women empowered businesses; up
from R325 million in 2013/14.
Approvals to black empowered
companies
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Highlighting investment – BEE in green
industries
Case study
Egoli Gas
• Egoli Gas is a wholly owned subsidiary of
the Reatile Group, a 65% black-owned
company.
• It acquires gas from Sasol and distributes
this to homes and businesses across
Johannesburg.
• Recently, the company has embarked on
the process of extending its gas pipeline
network in the area between Robertville and
MTN’s head office in 14th Avenue, Northcliff,
Gauteng.
• MTN is using the gas to generate electricity.
• IDC’s R50 million funding allows for the
construction of this 8km pipeline allowing for
alternative energy sources to be utilised and
easing pressure on the electricity grid.
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Highlighting investment – Assisting woman
entrepreneurs
Case study
Koni Multinational Brands
• Koni is the brainchild of Ms Connie
Ferguson and Mr Groovin Nchabeleng, a
marketing expert.
• They have teamed up to establish a
cosmetics operation under the Connie
Ferguson brand and to grow and develop it
into a leading supplier of branded hand and
body lotions.
• Initially, Koni will use a contract
manufacturing model to establish a foothold
in the market. The intention is to do own
their own manufacturing capacity once the
brand has been established.
• The contract manufacturing will take place in
Pelindaba, North West, and in Durban,
KwaZulu-Natal.
• The IDC invested in the company with the
aim of supporting a black-owned cosmetics
company in an industry dominated by
foreign businesses with the intention of
developing locally owned brands.
• IDC approved R6.4 million that will create 8
new direct jobs and 29 indirect new jobs in
the contract manufacturers.
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Highlighting investment - Assisting women
entrepreneurs
Insert Illustrative Image here
Case study
Semona Eco
• Semona Eco was funded to establish
manufacturing facilities in Midrand vicinity to
manufacture compressed biomass logs
mainly for the braai and fireplace market.
The logs are branded as Eco Blaze and are
manufactured from recycled waste.
• The plant is designed to produce 5 000 tons
per annum.
• IDC’s R36 million funding supported the
establishment of the plant.
• The funding is assisting a black woman
industrialist to set up productive capacity.
• 45 jobs were facilitated through this
investment.
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4
3
• IDC investments are situated
across South Africa, providing
local jobs and supporting local
economies.
• Of the R9.7 billion funding
approvals within South Africa,
46% went to transactions in
targeted provinces.
• The funding allocated to these
provinces also accounted for 42%
of jobs IDC expects to
create/save.
• Of the priority provinces, the
Eastern Cape is the largest
beneficiary in terms of number of
projects, with 19 projects that are
worth R50 million and above,
across 9 sectors.
IDC promotes the development of less industrialised
provinces and rural areas in South Africa
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44
Highlighting investment – Renewable energy
in a priority province
Case study
Oakbay Wind Farm
• The Renewable Energy Independent Power
Producer Procurement Programme
(REIPPPP) has become an important driver
for investment in South Africa’s electricity
generation industry, and is a cornerstone for
the development of the Green Economy.
• IDC has played a significant part in funding
projects in Rounds 1 to 3 of the programme
with its role declining in the latest round.
• Despite this, it still supported projects in
round 4, one of which, Oyster Bay Wind
Farm to be located in the Eastern Cape, will
generate 140MW of electricity to the
national grid.
• The R162 million approved by IDC will
create 117 jobs during the construction and
operational phases.
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Highlighting investment – Manufacturing in a
priority province
Case study
Topline Plastics
• Topline Plastics was founded in 2003 and is
a manufacturer and distributor of flexible
plastic packaging material, such as carrier
bags , patch and loop bags, bread bags,
courier bags, flat bags and plastic sheets
from its premises in Bloemfontein, Free
State.
• Demand for the company’s products had
expanded to the level where it needed to
invest in additional manufacturing capacity.
• IDC approved R8.5 million in funding (R2.5
million of which from the Manufacturing
Enhancement Competitiveness Programme)
to purchase plant and equipment and fund
working capital.
• 25 jobs will be created in the expansion.
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Highlighting Investment – High value rural
industry
Case study
Tzaneen Blueberries
• IDC had been playing a large role in the
expansion of the high-value South African
berry industry over the past number of
years.
• Tzaneen Blueberries established 17,5ha of
blueberry plantations in Limpopo at own
cost.
• The company required additional funding for
the completion of the development, which
included the funding to bring the existing
plantings to bearing stage, building the
packhouse and farming equipment.
• IDC’s R13.5 million funding for the project
will create 62 jobs.
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Highlighting investment - Rural development
Case study
Telemedicine Africa
• Telemedicine Africa was established in 2008
to explore the provision of healthcare
services by utilising new technologies.
• IDC has been assisting the company to pilot
and roll out services in Limpopo and in
KwaZulu Natal
• The company successfully implemented its
first large scale telemedicine project in the
Limpopo province – this project included
training to doctors and nurses.
• The project is not only assisting a black
female entrepreneur, but is extending the
reach of healthcare services in rural areas.
• IDC approved R2.2 million in 2014/15 with
18 jobs expected to be created.
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Special rural and township development initiatives
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• Attempt to address economic growth
at a municipal level
• Unlocking investment potential by
leveraging unutilised local
municipality assets for development
• Exploits comparative advantages in
area
• Capacity building
•Municipal support for Local
Economic Development
• Programme being phased out
• Successor to Development Agencies
• Catalytic and facilitatory
• Based on forming strategic
partnerships between public, private
and community sectors;
• Unlocking investment potential by
leveraging unutilised assets and
opportunities for development;
• Exploiting comparative advantages
in area.
• Provide funding for suitably
qualifying social enterprises
• Support the strengthening of
mission-driven enterprises designed
primarily to achieve socio-economic
goals
• Facilitate the integration of these
enterprises into the main stream of
the society and the economy
• Provide a conducive climate for
these enterprises to be brought to
scale and to exploit, where possible
and appropriate, opportunities for
their replication
• Catalyse broad economic
participation through facilitation,
mobilisation and sharing of
information
• Foster innovation for collective and
sustainable socio-economic change;
and,
• Identify and promote opportunities
for cooperation and coordination in
the socio-economic sector.
Development Agencies Special/Spatial Interventions Social Enterprises
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Highlighting investment – Development
Agency
Case study
Mandela Bay Development Agency
• Location : Eastern Cape
• Stage : Operational Phase.
• Key Projects/Developments: • Urban renewal
• Mandate area (city centre, central and
beachfront)
• Uitenhage
• Motherwell
• Stadium
• Future Plans: To ensure the continued
growth and prosperity of its town and rural
hinterland.
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Highlighting investment – Development
Agency
Case study
Philippi Container Village
• A strategic partnership with The Business
Place Network, Investec, Bertha
Foundation, Jobs Fund and others
• The Business Place is a business support
and development service provider to
entrepreneurs
• A pilot project was run where start up
businesses were housed in 20 re-modelled
containers
• Following the initial success, IDC has
supported the expansion with 54 more
containers to provide accommodation for
businesses with R4.4m with an additional
R100m having been leveraged
• There is an over-subscription of 200% for
entrepreneurs eager to secure premises for
their businesses
• At least 54 successful businesses and 200
employment opportunities were created
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• The vision for the Philippi Village is to create
a township-based hive of business activity
where the business community can thrive
and where various support service are
available including : clinic , early childhood
development centre, student training,
networking and mentoring, business support
etc.
• Future plans are to serve as a blueprint for
expansion into other townships with
artisanal training, agriculture a hotel and a
hospital planned for future phases.
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Highlighting investment – Social Enterprise
Case study
Unconventional Media
(Abomakgereza)
• 100% youth business (R5 million)
• Provides waste-reclaimers (Abomakgereza)
with efficient, durable waste-carts
• Carts distributed free of charge
• 10% cash back to reclaimers from the profits
of the social enterprise
• A total of 600 indirect beneficiaries
• 6 direct jobs created
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https://www.youtube.com/watch?v=2gooaccauN0
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• IDC is committed to regional
integration to the benefit of all of
Africa’s people.
• Our footprint in the continent
covers 23 countries outside of
South Africa.
• R 1.8 billion (17%) was
approved for funding in the Rest
of Africa in 2014/15.
• Some of IDC’s largest
investments in Africa include
aluminium smelting,
telecommunication
infrastructure, agro-processing,
power generation, hotels and
cement production.
Truly African, not only South African
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Highlighting investment - Regional integration
and infrastructure development
Case study
Maamba Collieries
• Maamba Collieries consists of a coal mine
and a 330MW power project. The project
consists of the completion and revamping of
the coal fields, construction of a coal fired
power plant as well as related infrastructure
near Maamba in Zambia.
• The total project cost is USD 828 million
with IDC funding USD 50 million.
• IDC is participating in the funding for the
project that will have several benefits for the
region: • Addressing power shortages in Zambia and
the region;
• Assisting Zambia to be self-sufficient in
power and not have to import from South
Africa – freeing up South Africa’s
constrained capacity;
• The project is utilising products and services
from South Africa.
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Highlighting investment – Regional
Development
Case study
Cenpower Generation Company
• IDC funding of USD 44 million facilitated for
the construction of Cenpower a 340 MW
combined-cycle power generation plant
and161 kW substation in Ghana
• The new plant and sub-station located at
Kpone near Tema, a heavy industrial
coastal area near Accra in Ghana, will
operate liquid fuel and natural gas.
• The plant will house on-site fuel tanks and a
natural gas pipeline linked to the West
African Gas Pipeline.
• International, African and South African
financiers have invested approximately
USD900 million in the project.
• A South African construction and
engineering firm Group Five, has been
contracted to build the plant.
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Highlighting investment – Regional
Development
Case study
Cimentos da Beira
• Cimentos da Beira is a cement production
plant in the Mozambican port city of Beira.
• It consists of a cement clinker grinding and
packing plant, with a design capacity of
800 000 tons a year and will supply quality
cement at a reasonable price to the growing
local market and certain export markets in
landlocked Zimbabwe, Zambia, Malawi, as
well as the mineral-rich Katanga Province in
the DRC.
• IDC invested R151 million in the project. It
has also provided funding for cement plants
in Namibia and Ethiopia.
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Corporate Social Investment
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CSI expenditure by focus area Highlights
• IDC donated funds to construct the
Nkonkwana Junior Secondary School
outside Willowvale in the Eastern Cape.
• Improved infrastructure at schools including
10 upgraded science laboratories; 7 new
laboratories; 2 new ablution facilities;
renovation of 11 schools and access to
clean water supply to 4 schools; 26new
classrooms; and a feeding scheme kitchen.
• Capacity development workshops for 104
educators to improve the teaching of maths,
science and accounting subjects.
• Career information sessions for
3 219 learners in partnership with other
organisations.
• Distribution of sanitary towels to ensure that
poor girls do not miss school.
• Capacity to the Northern Cape TVET
College to deliver “green skills-related
training” preparing students for employment
within the green sector.
• Continued support for the Extended
Curriculum Programme at the University of
the Western Cape (UWC) which targets
students from poor families to help them
reach a standard that will allow them to
complete their degrees.
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In Conclusion
IDC will continue to play a countercyclical role in the economy, proactively
intervening to develop industrial capacity, especially in support of the development
of identified value chains.
IDC will continue to play a role of transformation in the economy, driving
localisation and supporting black industrialists enter the core of the economy.
The African continent is an important focus of IDC activity into the future and here
IDC investments will support regional integration built on mutual benefit.
IDC cannot do this alone; achieving these goals will require partnerships with our
clients, government and other stakeholders within the economy. Together we can
build a stronger economy. IDC is your partner in development finance.
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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]
