Download - The IDC
The IDCThe IDC
Loyiso Jiya
Chief EconomistIndustrial Development Corporation of South Africa Ltd
7 May 2002
IDC - Corporate Profile ...IDC - Corporate Profile ...
• Self-financing state-owned development finance institution
• Provides financing to entrepreneurs engaged in competitive industries
• Follows normal company policy and procedures in its operations
• Pays income tax at corporate rates and dividends to its shareholder
• Independent Board of Directors
• Reports on a fully consolidated basis, with its Annual Report freely available to the public
IDC Head OfficeSandton
Vision ...Vision ...
“To be the primary driving force of commercially sustainable industrial
development and innovation to the benefit of South and
southern Africa”
Contribute to the generation of balanced, sustainable economic growth in southern Africa
Economically empower the southern African population
Promote entrepreneurship through the building of competitive industries and enterprises based on sound business principles
Mission ...Mission ...
Core Strategies ...Core Strategies ...
Providing risk capital to widest range of industrial
projects
Maintaining its financial independence
internal profitability divestments from mature assets borrowings
Identifying and supporting opportunities not yet addressed by the
market
Establishing local and global involvement &
partnerships in projects that are rooted in or
benefit SA and SADC
Building upon and investing in human capital in ways that systematically and increasingly reflect the
diversity of SA’s society
4
IDC’s Financial Results ...IDC’s Financial Results ...
Ranked 29th in South Africa’s “Giants League” i.t.o. assets Ranked 29th in South Africa’s “Giants League” i.t.o. assets
Ranked 4th largest SA public corporation i.t.o. assets and 5th largest i.t.o net income
Ranked 4th largest SA public corporation i.t.o. assets and 5th largest i.t.o net income
Financial year 2000/2001
Financially strong Assets = R30 billion Net income after tax and
capital profits = - R 258 million
Capital and reserves
0
5000
10000
15000
20000
25000
1997 1998 1999 2000 2001
Financial year (1 jul to 30th June)
R m
illio
n
IDC’s Development Impact ...IDC’s Development Impact ...
• Assisted 2 109 industrialists
• Generated over US$3.2 bn in additional annual export earnings
• Empowered the historically disadvantaged (31% of number of approvals in 2001)
• Facilitated development in rural areas (agro-industries, SDI’s)
• Created 89 000 additional jobs
• Contributed 10% to manufacturing investment in productive capacity
Investments facilitated over the past 6 years:
14 strategic business units (SBUs), each focussed on specific
economic sectors
CEO / CEO / PresidentPresident
Khaya Ngqula
HR and HR and Corporate Corporate Support Support ServicesServices
Lesé Matlhape
21 departments are tasked with providing the necessary operational services to the SBUs
Marketing & Marketing & Corporate Corporate AffairsAffairs
Neo Sowazi
ProjectsProjects
Jaco Kriek
SectorsSectors
Andile Reve
ProfessionalProfessionalServicesServices
Geoffrey Qhena
Finance and Finance and FundingFunding
Gert Gouws
SectorsSectors
Raisibe Morathi
IDC’s Operational Structure ...IDC’s Operational Structure ...
Role of the Sectors Division ...Role of the Sectors Division ...
• Sectoral focus and specialisation
• Facilitate in sectoral development on a broad front ...
• through the use of IDC’s basket of financial instruments
• through the participation in development initiatives within sectors
ProfessionalProfessionalServicesServices
Geoffrey Qhena
Financial andFunding
Financial andFunding
Gert Gouws
HR, IT, Admin
Lesé Matlhape
CEO / PresidentKhaya Ngqula
Sectors
Andile Reve
Projects
Jaco Kriek
Service sectors
Raisibe Morathi
Metal- Based Metal- Based ProductsProducts
Jan Weys
ChemicalsChemicals
William Smith
Wood Paper, Wood Paper, OtherOther
Dean Webster
TextilesTextiles
Willie Fourie
Agro-Agro-ProcessingProcessing
Shakeel Meer
TourismTourism
Ben Nkosi
EmpowermentEmpowerment
Sonja Loggenburg
Entrepreneurial Entrepreneurial Mining & Mining &
BeneficiationBeneficiationMuvhango
Netshitangani
Techno-Techno-industriesindustries
Gerrit van Wyk
Wholesale, Wholesale, Guarantees, Gov. Guarantees, Gov.
TendersTendersTrevor Mashabane
Executive- SectorsExecutive- Sectors
Andile Reve
Executive- Service Executive- Service SectorsSectors
Raisibe Morathi
Sectoral Business Units…Sectoral Business Units…
IDC’s Focus AreasIDC’s Focus Areas
Empowering of emerging entrepreneurs
Support manufacturing, tourism development, agro-industries and small-scale mining
Regional (SADC and Africa) development
New initiatives:
telecommunications and IT
retail and service sectors
government tenders
venture capital
Continue with the establishment of internationally competitive, large, resource-based beneficiation projects and downstream value-added industries
Financial Products ...Financial Products ...
Equity
Quasi-equity
Commercial loans
Wholesale finance
Share warehousing
Guarantees
Equity
Quasi-equity
Commercial loans
Wholesale finance
Share warehousing
Guarantees
Greenfield projects, expansions & rehabilitations
Relatively sizeable projects
Economic merit (profitability & sustainability)
Developmental impact (jobs, value addition, exports)
Fixed assets and the fixed portion of growth in working capital requirements
Reasonable financial contribution from owners
Security
Environmental requirements
Financing Criteria ...Financing Criteria ...
IDC Financing by Sector Business UnitApprovals: July 1997 to June 2001
Sectoral Exposure ...Sectoral Exposure ...
0 5 10 15 20 25 30 35 40
Agri-projects
Wholesale & Bridging Finance
Techno-industries
Entrepreneurial Mining & Beneficiation
Mining, Mineral & Energy Projects
Textiles, Clothing & Leather
Metal Based Products
Tourism
Chemicals, Rubber & Plastics
Agro-industries
Wood, Paper & Other
Empowerment
International Finance
Large Beneficiation Projects
% of total number approved
% of total value approved
Source: IDC
Empowerment Financing ...Empowerment Financing ...
Credit facilities for delivery on government
contracts
Wholesale financing
Warehousing of shares
Take-overs and acquisitions
Loan finance
Approvals to Empowerment (% of total No)
9%
14%
19%
27%
31%
0%
5%
10%
15%
20%
25%
30%
35%
1997 1998 1999 2000 2001
Financial year (1 jul to 30th June)
SME Financing ...SME Financing ...
• SME financing’s value - from 11% of approvals in 1996 to 67.2% in 2001
• Since 1996 the IDC has approved finance worth more than R7.6bn to 1 823 SME’s, creating more than 54 538 jobs and generating export earning in excess of R10.2 bn
SMEs as % of total IDC approvals(value)
67.2
42.3
25.3
8.7
36.6
10.9
0
10
20
30
40
50
60
70
95/95 96/97 97/98 98/99 99/00 00/01
% SMEs
CEO / CEO / PresidentPresident
Khaya Ngqula
HR and HR and Corporate Corporate Support Support ServicesServices
Lesé Matlhape
Marketing & Marketing & Corporate Corporate AffairsAffairs
Neo Sowazi
ProjectsProjects
Jaco Kriek
SectorsSectors
Andile Reve
ProfessionalProfessionalServicesServices
Geoffrey Qhena
Finance and Finance and FundingFunding
Gert Gouws
SectorsSectors
Raisibe Morathi
• Focus on larger projects
• Prefer infant developments with regard to products and/or technologies
• Projects that require more active involvement from IDC
• Involved in all the stages of project development
• Focus on maximum development impact
Projects within the IDC ...Projects within the IDC ...
Units within Projects ...Units within Projects ...
ProjectsProjects
Jaco Kriek
Large Beneficiation
Carlos Galego
Minerals, Mining & Energy
Sipho Mkhize
Agri-Projects
Guy Clarke
Public Private Partnership
Monwabisi Manjezi
IDC’s Role in Projects ...IDC’s Role in Projects ...
Identify project opportunities
Co-sponsor feasibility studies
Source financial and operating partners
Provide and arrange funding (e.g. export finance)
Provide equity stake
Assist with implementation via steering committee
Serve on board of directors
IDC’s involvement in the rest of Africa ...IDC’s involvement in the rest of Africa ...
Promoting Investment in Africa ...
By providing consultancy services
By supporting development initiatives such as SDIs
By assisting in the financing of imports of South African capital goods & services
By identifying sound investment opportunities
By acting as a catalyst for investments in productive capacity
IDC’s involvement in the rest of Africa ...IDC’s involvement in the rest of Africa ...
Hydro power
Manufacturing
Mining
Phamaceuticals
Prawns
Hotels
Mining
Shoping Mall
Tea
Aluminium
Brewery
Cashews
Cotton
Heavy Minerals
Prawns
Sesame seeds
Sugar
Timber
Tourism
Sugar
TourismMiningDistillery
Tanning
Telcoms
Horticulture
Manufacturing
Parkade
Mining
Grape fruit
Manufacturing
Mining & Mineral beneficiation
Shopping Mall
Hotels
Port ExpansionHorti and Floriculture
Mining
Tourism
Current & potential Africa (excl. SA) projects ...
International Finance ...International Finance ...
• Export Finance: Loans to foreign borrowers to facilitate purchase of SA capital goods & services
• Import Finance: Utilising lines of credit to finance the importation of capital goods & services into SA
• Project Finance: Sourcing and arranging funding from diverse international lenders for major projects
• Risk Mitigation: Risk mitigation products to hedge & structure political & commercial exposure in SADC
• Trade Finance: Pre & post shipment working capital finance to exporters
Concluding Remarks ...Concluding Remarks ...
• The IDC is at the front of industrial development in SADC
• We are moving into non-manufacturing activities that yield development and financial returns
• Highly profitable opportunities exist for investors in the South Africa
• Together we can turn big ideas into big business!
www.idc.co.za
Together we can turn big ideas into big business