Owing to the success of the Black
Industrialists Scheme (BIS) which provided funding for a hundred black
industrialists, minister of trade and industry, Rob Davies says that a further 100
businesses will be assisted.
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Success of Ipap to spill over to other industries. Source: Freedonia Focus Reports
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Since the inception of the BIS in 2016 until the end of
March 2018, assistance was given to 102 black industrialists. The department of
trade and industry (the dti) has critics wrong, Davies shares.
Aside from the fact that the dti allowances of about R2-billion
helped to unlock investments of around R8-billion, an estimated 18 400 job
opportunities were created and retained. In addition, 48 companies were helped
to improve their market access.
According to the recently released industrial
policy action plan (Ipap 2018/19-2020/21), the dti allowances went to
businesses in various industries, such as plastic and pharmaceuticals (R567-million),
agroprocessing (R316-million) and the metal industry (R279-million).
What is a black industrialist?
A black industrialist, for the purposes of the BIS, is seen
as a business that is more than 50% black-owned, or somebody who controls the
business, takes personal risks with his participation and does business in the
manufacturing sector (specific Ipap focus areas).
Among the recipients is the multimillion-rand Microfinish Automotive in KwaZulu-Natal,
which last year received R13.5 million. The business manufactures and supplies
valve guides and valve seats to original vehicle manufacturers and after-market
service providers. According to the department, Microfinish has clients as far
as Europe and the Middle East.
Other success stories that are mentioned in the Ipap
document are:
- · Maneli Pets in the agroprocessing sector, which received R50 million;
- · United Industrial Cables received R46 million for the manufacturing of a variety of copper cables;
- · Mthembu Tissue, which received R13 million, and;
- · The commercialisation of the Thakadu nickel sulphate project in North West, by establishing a R250 million plant. The chemical products manufactured at the plant are used worldwide in lithium ion batteries, and delivery agreements are already in place.
In 2016, the BIS was launched with a budget of R3.6-billion,
but development financiers like the Industrial
Development Corporation (IDC) and commercial banks have also offered
assistance through the Black Industrialist Financing Forum.
According to the latest IDC annual report, the corporation
approved some 80 transactions totalling some R4.7 billion with black
industrialists. A total of R10.1-billion in funding was approved for black
economic empowerment companies (of which at least 25% of the shares are
black-owned).
Expanding the pool
According to Davies, it was clear from the initial phase of
the BIS that support to black industrialists had to be expanded to include
different categories. In this manner, industrialists who have received help in
the period up to March this year will receive support from a post-investment
office to help clear any remaining hurdles, such as regulatory compliance.
The office will also coordinate interaction between the
businesses and the government, so problems can be speedily resolved. Financial
support in the period 2018/19 until 2020/21 has to go to projects that have
expansion potential and new businesses with the ability to grow fast in a
relatively short time, the minister says.
The third category involves cooperation with the department of small business development to dovetail some of its programmes with black
industrialists whose businesses are still in their infancy. This support will be focused on small
companies in the manufacturing sector – especially in townships and urban areas
– to help them developed into black industrialists.
Cooperation with the departments of agriculture, mineral
resources, public works, telecommunications and postal services is foreseen. According
to Davies, better market access for pioneers is an important aspect of the BIS.
According to Davies, targets will be set for state-owned
companies to buy locally manufactured goods from black industrialists.
Source: Fin24
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