Industrial Development Corporation

Transcription

1 Industrial Development Corporation 30 June 2011 IDC EC Regional Office Kwakanya Mtintsilana

2 Background o Established: 1940 o Type of organisation: Development Finance Institution (DFI) o Ownership: State owned company, 100% owned by the SA government o Total assets: R139 billion (31 March group) o Total liabilities: R32 billion (31 March group) o Funding status: Self financing, pays dividends and income tax o Main business area: Provides funding for businesses and projects that are contributing to industrialisation and job creation o Geographic activities: South Africa and the rest of Africa o Products: Financial products to suit client/project needs including debt, equity, guarantees or a combination of these o Stage of investment: Project finance project development, feasibility, bankability Business finance - start-ups, expansion, commercialisation o Number of employees: 828 (31 March 2014) 2

3 Positioning IDC as DFI Places greater importance on social and developmental objectives Places greater importance on financial objectives Government / NGOs Non-commercial focus Fiscal transfers and grants Social development objectives Commercial and developmental focus Sharing risk DFIs Internally generated funds, government funds, loans Industrial Development Corporation DBSA SEFA National Empowerment Fund (NEF) Landbank FDC Commercial Financiers High commercial focus Private sector capital Financial objectives Known risks ABSA Standard Bank FNB Nedbank Capitec Business Partners IDC does not directly compete with any of these institutions, but encourages cooperation to achieve its goals 3

4 Operational model Sector specialization through Strategic Business Units (SBUs) flexible application of a large variety of financial products Agro-Industries Mining & Beneficiation Chemicals & Allied Industries Metals, Transport & Machinery Products Textiles & Clothing Forestry & Wood Tourism Media & Motion Pictures Healthcare Green Industries ICT (Information, Communication and Telecommunication) Strategic High Impact Projects Venture Capital utilising two business channels Industrial or Business Finance Project development finance Commercial debt Mezzanine debt/quasi equity Equity Guarantees Bridging finance Special funding schemes Business support products Project feasibility funding Venture Capital 4

5 General investment guidelines The project or expansion must facilitate the creation of jobs The funding request must be for at least R1-million Risk sharing (through equity participation) from private-sector investment operating partners is non-negotiable Finance limited to 60% of the total funding requirement for start-ups. This may be increased for viable BEE clients IDC can fund a full expansion if the debt at peak is <= 35% of total assets IDC will consider equity finance if IDC the project is viewed as strategic (only minority stake < 50%) 5

6 General investment guidelines - continued New projects, start-ups or expansions Economic merit (profitable within a reasonable time) Fixed assets and working capital Security (Collateral)/Surety Environmental & Legal compliance 6

7 Special funding schemes Gro-E Scheme (inclusive of Gro-E Youth Scheme <35) UIF Fund for job creation Transformation and Entrepreneurial Scheme (TES) o Women Entrepreneurial Fund o People with Disabilities Fund o Development Fund (Workers) o Community Fund o Equity Contribution Fund Risk Capital Facility (RCF) Energy Efficiency/Renewable Energy Fund (GEEF) Clothing and Textiles Competitiveness Programme (CTCP) Support Programme for Industrial Innovation (SPII) Agro-Processors Competitiveness Scheme (APCF) Agro-Processors Linkage Scheme (APLS) Clothing, Textiles, Footwear and Leather Competitiveness Scheme Cross sectoral schemes/funds Managed on behalf of the DTI Sector specific schemes/funds 7

8 Gro-E Youth Scheme (IDC, SEFA, & NYDA) Gro-E Youth Scheme Applicant must be less than 35 years at date of application >50% of business owned by youth Maximum cost per job = R Prime less 3% for 5 years, thereafter market rates Start-ups and expansions Minimum finance amount is R1 million Maximum finance amount is R50 million No minimum owners contribution, but will be determined by financial capacity of owner and cashflow profile of business Only businesses based in SA Must be within IDC s sector mandate, else referred to SEFA NYDA to assist with vouchers for compiling business plans 8

9 Regional presence IDC has offices in all provinces; Regional offices are operational offices that form part of the SBUs value chain; Satellite offices some with permanent staff and some not. Often co-located with other DFIs; Responsibilities include: Dealing with enquiries, applications and business support in the province; Improving IDC stakeholder relations and stakeholder perceptions; Extending IDC s reach and footprint; Proactive sourcing of deals/projects; Engaging with provincial and municipal government on regional development plans; 9

10 IDC Regional Exposure by Industrial Sector 10

11 Wholesale & retail trading activities (SEFA, FDC, NEF) Purchase of land (BANKS) Property development (BANKS, BUSINESS PARTNERS) Re-financing of existing facilities (BANKS) Overdraft facilities (BANKS) Public Private Partnerships (DBSA) Pure primary agriculture (Land Bank, Old Mutual - Masisizane Fund) Pure sale of shares for empowerment purposes (NEF unless > R75 million then IDC) Franchises (SEFA, FDC & NEF) Transportation (SEFA, FDC & NEF) Construction (SEFA, FDC & NEF) 11

12 East London Chesswood Office Park Winkley Street Berea, 5412 East London (043) THANK YOU