Mei 2014
36
Moreon the IDC’s focus
in theFreeState
T
he Industrial Development Corporation of South Africa Ltd
(IDC) is a state-owned, self-financing, development finance
institution (DFI).
It was established in 1940 to promote economic growth and in-
dustrial development in South Africa. The IDC operates in a broad
spectrum of industries and is able to offer appropriate financial
assistance to awide varietyof individuals and companies.
The IDC seeks to achieve the followingoutcomes:
Creating sustainable employment opportunities
Assisting small andmedium enterprises
Assistingnew entrepreneurs entering the economy
Ensuringbroad-basedblack economic empowerment
Promoting environmentally sustainablegrowth
The IDCoffers awide arrayof financial instruments, including:
Commercial debt (loans)
Equity (shareholding)
Quasi-equity
Bridging finance
Guarantees
Export/import finance
Venture capital
The IDC’smain financing criteria:
Financial assistance isprovided for thedevelopment of newpro-
jects, expansions or rehabilitationof existingprojects
Projectsmust exhibit economicmerit (beprofitable)
The IDC finances fixed assets andworking capital
Reasonable contribution expected frompromoter/s
R3millionminimum loan
Security is required
Every application is considered from a permanent job creating per-
spective, as this is themain focusof government and the IDC. To this
end the IDChascreated funds thatofferconcessionary financebased
on the number of jobs created. The IDC has also developed finance
schemes that encourage job creation such as a linkage scheme for
resource poor farmers, a rural/township hospital scheme offering
concessionary finance, andaspecial shortenedapproval process for
bridging finance in all sectors.
Each province decides on their own priorities and focus areas in or-
der to unlock the province’s competitive advantages and to achieve
the IDC’s expectedoutcomes. In all provinces, agriculture and agro-
processingplay amajor role.
The regional priorities for the IDC
Free State office
For the next three years the regional priorities of the IDC Free State
will be to support thegovernment’s Industrial PolicyActionPlanand
theGrowthPathbyworking closelywith theapplicable IDC strategic
business units and all relevant regional stakeholders.
These plans are focused on identifying potential projects in key
sectors such as agro-industries and the alternative energy sector
(biofuels, biogas and solar).
The IDC’s operations in the Free State
The IDC’s regional focus for 2014 in theFreeState ismainlyon agro-
industries andmoreon agro-processing, butwill also focusonener-
gy efficiency and renewable energy, aswell as selectmanufacturing
sectors (chemicals,metals) andniche tourism.
The IDC has investments totalling some R700 million in the
Free State. Of these some 65% are in agro-processing, 10% in the
chemicals sector, 10% in tourism and 10% inmining. The remaining
investments are in textiles, franchising and education (the latter two
arenowoutsidemandate).
Current agricultural and agro-processing
projects
The IDC focusesmainly on agro-processing, especiallymilling, and
other value-added subsectors suchasplant oils, biofuels andbiogas
in the FreeState. Primaryhorticulture is also targeted such as fruits,
cherries, nuts etc.
Due to livestock farming being prevalent, leather tanning and pro-
cessing holds promise. Alternative energy solutions (biofuels, bio-
gas, solar) are very high on the government’s priority list and will
alsobepursuedwherepractical.
The IDC has invested in an apple orchard, a cherry estate, a walnut
farm and groundnuts. In terms of primary agriculture, the IDC does
not compete with the Land Bank and focuses on horticulture (high
value crops such as fruits, berries, nuts) rather than cash crops. No-
tably livestock is alsonot funded.
Potential investment sectors in the
Free State
Notably, manufacturing in the central Free State is somewhat lim-
ited, yet some substantial operations exist here such as SA Truck
Bodies. Unfortunatelymost parts of the FreeState are far fromboth
its rawmaterial suppliers and major markets. In the textiles sector
somepromisingnicheoperations exist that couldbe expanded.
Manufacturing therefore holds promise if raw materials can be
sourced fromwithin the regionor if nichemarkets canbe identified.
Otherpotential areaswithin thissector are themanufacturingof jew-
ellery, plastic recyclingand themanufacturingof farmequipment as
well as tanning and leather goods.
Asmentionedearlier, agro-processingholds themost potential with
crops such as sunflower (for oil and oil cake), maize andwheat (for
milling) beinghighlyprevalent, and tosomeextent fruit, nut andveg-
etableproducts in theprovince (for juicingor packaging).
Contact information
The IDC’s Free State regional office will definitely want to become
your partner and you should therefore contact Stoffel Meyer at
Bloemfontein 051 4111450 for more information or on
Bloemfon-
.
STOFFELMEYER,
Industrial Development Corporation of SouthAfrica
FOCUS
Moneymatters and insurance
Special
Product information
