idc integrated results for the year ended 31 march 2017

IDC Integrated Results for the year ended 31 March 2017

31 July 2017

Advancing Transformative Industrialisation

Outline

1 Overview of the Year

3 Operational Performance


2 Financial Performance

4 Conclusion

2

About Advancing Transformative Industrialisation

Industrialisation

Transformative

Advancing

Transformation of the South African economy

has several facets:• More balanced racial and gender participation in

ownership of assets;

• Providing opportunities for Black Industrialists,

women and youth to encourage tomorrow’s

leaders of industry;

• Improving competitiveness of the economy;

• Expanding the role that productive sectors play

in the economy;

• Creating more employment opportunities to

increase income levels and reduce poverty;

• Nurturing new industries that will replace sunset

sectors in the future;

• Increasing local production of inputs for

infrastructure development and beneficiation.

3

Overview of the Year

The year under review was again a challenging one for the IDC

GLOBAL DOMESTIC

• The rate of increase in world output, at 3.1% in

2016, was the weakest since the global

financial crisis in 2009.

• Rather extraordinary geo-political

developments dominated international

headlines, thereby affecting investor and

business confidence.

• World trade remained under pressure,

impacting on performance of many export-

reliant economies.

• Although commodity prices started recovering

during the year, underlying market

fundamentals have not yet supported a

sustained recovery.

• As a key market for SA’s manufactured

exports, Sub-Saharan Africa’s subdued growth

has been of particular concern.

• South Africa’s economic growth has been

gradually declining for a number of years –

with GDP increasing by only 0.3% in 2016 –

the lowest rate of expansion since the 2009

recession.

• The economy entered a technical recession in

the 2nd half of the reporting period, whereas

concerns over the country’s sovereign credit

ratings continued to loom large.

• Fixed-investment spending by the private

sector declined by 5% in real terms.

5

Most South African sectors performed below expectations

Real GDP growth by main economic sector

-10 -8 -6 -4 -2 0 2 4 6

Agriculture (2.4%)

Mining (8.1%)

Manufacturing (13.7%)

Electricity (2.3%)

Construction (3.9%)

Trade (15.3%)

Transport (9.4%)

Finance (22.1%)

Government (17.0%)

Personal services (6.0%)

Total GDP

% Change 2015 2016

Figures in brackets refer to contribution to overall GDPSource: IDC, compiled from Stats SA data

• Overall economic growth continued to

slow

• The drought-affected agriculture sector

contracted by 7.8% and mining’s gains

of 2015 were rolled back

• Manufacturing grew by 0.7% with

performance of sub-sectors shown

below:

• Services industries maintained positive

albeit low levels of growth.

Manufacturing sub-sectorWeight in

manufactu-ring

Growth in output 2015 to

2016

Food & beverages 24.4% -0.6%

Textiles & clothing 3.2% -1.8%

Wood & paper 12.7% 3.4%

Chemicals 22.1% 3.8%

Non-metallic mineral products 3.9% -2.0%

Metals & machinery 19.6% -1.8%

Electrical machinery 1.7% -1.9%

Radio & TV 1.4% 7.9%

Transport equipment 7.4% -0.4%

Furniture & other industries 3.6% -3.3%

6

The IDC continued to balance its priorities

We achieved commendable results in a year characterised by high

levels of uncertainty and slow global economic growth

Financial Sustainability

Developmental Outcomes

IDC continued to achieve record-

levels of funding approvals with

an all time high of R15.3 billion

supporting transformative

industrialisation

IDC remained financially

sustainable through recording

a group profit of R2.2 billion

7

Performance Highlights for 2016/17

R15.3bn

175 TRANSACTIONS APPROVED

R11.0bn

TOTAL FUNDINGDISBURSED

20 881

JOBS EXPECTED TO BE CREATED OR SAVED

R7.7bn

APPROVED FOR THE MANUFACTURING

SECTOR (126 Deals)

R10.1bn

APPROVED FOR BLACK-EMPOWERED

COMPANIES (117 Deals)

R4.7bn

APPROVED FOR BLACK INDUSTRIALISTS

(83 Deals)

R3.2bn

APPROVED FOR BUSINESSES WITH

WOMEN OIWNERSHIP OF >25% (46 Deals)

R2.3bn

APPROVED FOR BUSINESSES WITH

YOUTH OWNERSHIP OF >25% (52 Deals)

(↑6%) (↓3%) (↑37%) (↓14%)

(↑104%) (↑178%)

R2.2bn

NET PROFIT AFTER TAX

R129.8bn

TOTAL ASSETS

(↑887%)

(↑63%) (↑142%)

We advanced transformative

industrialisation, whilst remaining

financially sustainable

(↑7%)

8

Financial Performance

Ensuring financial sustainability

IDC Group Structure

Mini Group

IDC Ltd

Findevco (Pty) Ltd

Impofin (Pty) Ltd

Konoil (Pty) Ltd

100%

100%

100%

Other subsidiaries

Scaw South Africa (Pty) Ltd

AssociatesMozal SARL

Incwala Resources (Pty) Ltd

Hulamin (Pty) Ltd

Ka Xu Solar One (Pty) Ltd

Other subsidiaries

Other associates

74%

24%

24%

30%

29%

various

various

sefa100%

Foskor (Pty) Ltd59%

Palabora Copper (Pty) Ltd20%

KHI Solar One (Pty) Ltd29%

10

Summary of IDC Group Financial Performance

IDC Mini-Group

IDC Group

REVENUE

R17.4bn

REVENUE

R7.5bn

From R6.3bn

NET PROFIT FOR THE YEAR

R2 200m

NET PROFIT FOR THE YEAR

R2.8bn

From R1.2bn

ASSETS BASE

R130bn

FAIR VALUE OF FINANCIAL ASSETS

R83bn

From R76bn

PROFIT FROM EQUITY ACCOUNTED

INVESTMENTS

R963m

IMPAIRMENT AS A % OF BOOK AT COST

16.7%

From 16.9%

11

IDC Group – Actual profit year-on-year

Group Income Statement (R‘ million)

Group

2016 2017 %

Actual Actual change

Revenue 19 408 17 372 (10)

Cost of sales (11 918) (9 010) (26)

Financing costs (1 317) (2 607) 98

Gross profit after financing costs and cost of sales 6 173 5 755 (2)

Net capital gains 453 1 688 273

Other income 581 329 (43)

Non-administrative expenses - (378)* nmf

Loss from discontinued operations - (362) nmf

Operating expenses (7 701) (6 416) (13)

Operating profit (494) 616 nmf

Income from associates and JVs 557 963 73

Profit before taxation 63 1 579 2 406

Taxation 160 621 nmf

Profit/(loss) for the year 223 2 200 887

Other comprehensive (loss)/income (5 612) 956 nmf

Total comprehensive (loss)/income (5 389) 3 156 nmf

12* Non-administrative expenses relate to a tax provision for an exit from an investment which qualifies for recognition in the financial year, however, tax triggers are not met to disclose the provision in the tax line

Mini Group Foskor Scaw sefa

Other

subsidia-

ries, JVs &

associates

Consolida-

tion

journals

Group

Figures in Rand million 2016 2017 2017 2017 2017 2017 2017 2016 2017

Actual Actual Actual Actual Actual Actual Actual Actual Actual

Revenue 6 330 7 482 5 637 3 041 170 2 403 (1 361) 19 408 17 372

Cost of sales - - (4 715) (2 631) - (1 666) 2 (11 918) (9 010)

Financing costs (1 300) (2 679) (123) (329) (32)(141)

697 (1 317) (2 607)

Gross profit after financing costs 5 030 4 803 799 81 138 596 (662) 6 173 5 755

Net capital gains 410 1 688 - - - - - 453 1 688

Other income 406 213 55 0 17 65 (21) 581 329

Non-administrative expenses -(378)

- - - - -- (378)

Loss from discontinued operations - - - (362) - - -- (362)

Operating expenses (4 709) (3 687) (2 179) (506) (417)(575)

948 (7 701) (6 416)

Operating profit 1 137 2 639 (1 325) (787) (262) 86 265 (494) 616

Income from associates and JVs - - (2) - 15 950 - 557 963

Profit before taxation 1 137 2 639 (1 327) (787) (247) 1 036 265 63 1 579

Taxation 25 195 425 - 24 31 (54) 160 621

Profit/(loss) for the year 1 162 2 834 (902) (787) (223) 1 067 211 223 2 200

Other comprehensive (loss)/income (6 023) 1 362 (2) 17 14 - (435) (5 612) 956

Total comprehensive (loss)/income (4 861) 4 196 (904) (770) (209) 1 067 (224) (5 389) 3 156

Statement of Comprehensive Income

3 110 3 246 2 744

1 438 1 403

1 041 670

758

1 105 1 057

65

(147) (119)

328

(145)

1 492 2 071

2 157 2 705 4 297

540

587

692 570

533

390

367 417

423

442

197

251 371 169

108

6 835 7 045 7 020

6 736

7 695

(1 000)

-

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

2013 2014 2015 2016 2017

R’m

Mozal metal income

Money market income

Fee and other income

Interest earned on loans to clients

Preference share income

Dividends - unlisted

Dividends - listed

14

Mini-Group – Sources of Income

47 269 54 199 61 278 69 564 73 646

69 904

75 731

55 637 47 224

53 344

18,2% 18,2%16,7% 16,9% 16,7%

7,4% 7,6%8,8%

10,1% 9,7%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

-

20 000

40 000

60 000

80 000

100 000

120 000

140 000

2013 2014 2015 2016 2017

R’m

Fair value adjustment Cost of investments

Impairments as a % of cost Impairments as a % of market value

Impairments Charge

(R‘ million)

2016 2017

Actual Actual

Impairments and write offs: 3 644 2 086

Impairments 1 626 772

Project impairments -27 -14

Write-offs 2 045 1 328

IDC Mini Group

Impairments by Sector

(R' million)2016 2017

Agro, Infrastructure & New

Industries 1 274 (137)

Mining & Metals 2 592 9

Chemicals & Textiles 113 1 863

High Impact (334) 351

Total 3 644 2 086

Mining & Metals:

• Recovery in commodity prices

• Increased export demand

Chemicals & Textiles

• Volatile commodity prices

• Unfavourable foreign currency movements

15

Impairments as a % of Total Financing

Figures in Rand million 2016 2017 % Change

Statement of financial position

Cash and cash equivalents 6 865 7 699 12%

Loans and advances 23 928 25 802 8%

Investments 71 586 78 266 9%

Property, plant and equipment 10 626 12 384 17%

Other assets 8 343 5 685 -32%

Total assets 121 348 129 836

Capital and reserves 84 717 88 097 4%

Non-controlling interest 102 193 89%

Other financial liabilities 27 984 30 367 9%

Other liabilities 8 545 11 179 31%

Total equity and liabilities 121 348 129 836

16

Statement of Financial Position

126 885

138 593

122 289 121 348

129 836

96 766

106 769

89 797 84 715

88 097

19,7% 20,1%

26,8%

33,0%34,5%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

2013 2014 2015 2016 2017

R’m

Total assets Capital and reserves Debt/equity

Total assets increased from R121 billion in 2016 to R130 billion during the review period mainly as a result of the increase in the fair value of

BHP Billiton and Kumba Iron Ore Limited (mainly due to higher iron ore prices). Our borrowings have grown in line with the growth in loans

and advances resulting in an increase in debt/equity ratio from 33% in 2016 to 34.5% in 2017.17

IDC Group – Financial Base

21 698

31 405

21 955 23 519 20 806

20 146

15 686

6 474 3 301 8 420

9 217

10 996

8 986

5 612

7 004

1 801

2 005

2 202

1 857

1 509

4 015

5 219

5 352

5 675

7 100

56 877

65 310

44 969

39 964

44 839

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

Mar 13 Mar 14 Mar 15 Mar 16 Mar 17

R’m

Sasol Kumba Iron Ore BHP Billiton Life Healthcare Other

18

The Listed Portfolio

30 02728 996

27 442

33 982

30 914

16 023

11 171 10 901 11 380 10 974

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

31.03.13 31.03.14 31.03.15 31.03.16 31.03.2017

R’m

Commitments - undrawn facilities Advances

Commitments by Value Chain R'million % Split

Industrial Infrastructure 9,388 30%

New Industries 245 1%

Agro-processing & Agriculture 907 3%

Chemicals and Textiles Industries 5,378 17%

High Impact and Regions 3,154 10%

Mining and Metals Industries 11,842 38%

Grand Total 30,914, 100%

19

Commitments and Advances

Operational Performance

Leading industrial capacity development

• The value of funding approvals increased to R15.3 billion, 5.7% higher than the previous year. An additional R922 million

(of which 91% is dti funds) was approved from funds managed on behalf of third parties.

• Levels of disbursements remained flat, with R11.0 billion disbursed in the period compared to R11.4 billion in 2016.

Implementation of REIPPP programme stalling:

• Funding for projects that have already been approved not being drawn as companies wait for Eskom to sign power purchase

agreements.

21

Our proactive approach increased approvals while disbursements remained flat

Value Chains New IndustriesSpecial High

Impact Sectors

High Impact

Sectors

Industrial

Infrastructure

• Metals, Metal

Products, Machinery

& Equipment,

Transport Equipment

and Mining

• Chemicals Products

& Pharmaceuticals

• Agro-Processing and

Agriculture

• Sectors which are

determined by

forward looking

trends and

innovation, and

could develop into

significant

opportunities for SA

• Motion pictures &

entertainment

• Clothing, textiles,

footwear and

leather products

• Sectors within IDC

mandate that offer

high volume of

opportunities,

contribute to IDC

development goals,

but where IDC

does not play a

proactive role.

These include

industries such as

tourism, ICT,

furniture and other

manufacturing

industries not

covered elsewhere.

• Infrastructure that

unlocks industrial

development:

electricity, water,

telecommunications

and logistics.

22

We have prioritised a number of sectors and value chains

Utilisation of funds approved (2017)

R8 498m Metals & mining

R55m Agro-processing & agriculture

R2 051m Chemicals & pharmaceuticals

R1 840m Industrial infrastructure

R434m Clothing, textiles, leather&

footwear

R161m Media & motion pictures

R222m New industries

R2 024m Other manufacturing, tourism &

services

Value approved by sectoral focus area (2017)

The metals and mining and chemicals and

pharmaceuticals value chains attracted the

largest portion of funding

Funding to the agro-processing and

agriculture value chain was disappointing

due to conditions in the sector and

cancellations of funding approved in

previous years (since all the reported

activities reflect net approvals).

Majority of funds were directed towards

projects and start-ups, followed by capacity

expansions.

29% Capacity expansions

46% Projects & new start-ups

10% Ownership changes

13% Distressed businesses

2% Expansionary ownership changes

23

Our proactive investment approach resulted in an increase in funding approvals

Basic Metals and Mining Value Chain

Other transport equipment

Motor vehicles and parts

Machinery and equipment

Fabricated metals

Basic metals

Mining

Development Outcomes

JOBS EXPECTED TO BE

CREATED AND SAVED

IN SOUTH AFRICA

JOBS CREATED AND

SAVED PER R’M APPROVED

IN SOUTH AFRICA

9 240 1.1

FUNDING TO BLACK-

EMPOWERED

COMPANIES

FUNDING TO BLACK

INDUSTRIALISTS

R5 178m R3 269m

FUNDING TO WOMEN

ENTREPRENEURS

FUNDING TO YOUTH

ENTREPRENEURS

R2 194m R286m

Remarks

• Funding approved increased by 41.7% to R8.5 billion, while

disbursements were lower by 28.5%,

• The highlight of our proactive activities was the partnership with

BAIC to establish a new car plant in Port Elizabeth.

• Other approvals include funding for a new aluminium beverage

can factory to be built in Germiston by a Black Industrialist.

24

The mine’s production of anthracite coal (low sulphur and phosphorous), enables it to operate

in a niche market, with a high-demand from the metallurgical industry. South Africa is

currently a net importer of anthracite, a situation which this transaction assisted to address.

South Africa’s consumption of anthracite is primarily driven by demand by ferrochrome

producers.

The availability of locally produced anthracite reduces the input costs to these industries and

improve their competitiveness.

Nkomati is a sizeable employer in the Mpumalanga region, which employed 233 people.

Funding from the IDC created an additional 100 new jobs through the expansion project.

Nkomati is owned by the Mpumalanga Economic Growth Agency (MEGA) and Benicon Coal

Limited (Benicon) in a 40:60 split respectively. Benicon is a wholly-owned subsidiary of the

JSE-listed Sentula Mining Limited.

Nkomati is an opencast and underground coal mine exploiting anthracite along the Kangwane Coalfield near Komatipoort in Mpumalanga Province.

Sought funding to establish its make-safe ramp-up plan. This operation included blasting to recover left behind coal on the mine’s roof and floor, cutting uneven sides of tunnels, pillar design, roof stability and installation of new conveyor and ventilation systems.

Direct Jobs:

100

IDC’s funding to

Nkomati Anthracite

supported the

development of

strategic minerals to

lower cost for

beneficiation

industries.

CASE STUDY

25

Development of strategic minerals to lower cost for beneficiation industries

Ronewa Analytical Laboratory was established in 2012 offering analytical services in the mineral

industry mainly the coal industry. Ronewa is a sought-after analytical services corporation that offers

excellent services in the field of chemistry. They are a proudly South African company empowered

by a woman and youth. The partnership with IDC is to fund the purchase of equipment and vehicles

required to set-up an independent coal analytical laboratory in Polokwane, Limpopo province.

Ronewa has secured a two year contract from a major coal producer mining over 2 million tonnes

p.a. Ronewa will carry out laboratory coal testing services at coal projects in Limpopo and

operations in Mpumalanga provinces. The samples will be analysed and results communicated to

the mining company within 2 working days. Ronewa is to deliver services following standards of

practice recognised by one or more first-class laboratories performing similar work under similar

circumstances. The mining company has taken Ronewa on board as part of the company’s

enterprise development initiative.

Ronewa AnalyticaLaboratory

Polokwane, Limpopo

Basic Metals & Mining

Women: 50%

Youth: 100%

IDC has committed R5 million to fund a youth driven start-up. The proposed funding will assist in establishing youth entrepreneurs and complies with IDC’s Gro-e Youth Scheme.

CASE STUDY

Direct Jobs:

1626

Ronewa Analytica is boosting black women ownership and youth ownership into the mining industry


JOBS EXPECTED TO BE

CREATED AND SAVED

IN SOUTH AFRICA

JOBS CREATED AND


IN SOUTH AFRICA

1 023 6.6

FUNDING TO BLACK-

EMPOWERED

COMPANIES

FUNDING TO BLACK

INDUSTRIALISTS

R77m R45m

FUNDING TO WOMEN

ENTREPRENEURS

FUNDING TO YOUTH

ENTREPRENEURS

R36m R79m

Remarks

Horticulture

Beverages

Food Processing

Agriculture, forestry and fishing

Gross

approvals

Net

approvals

Funds

disbursed

• R203.3 million from IDC’s funds and an additional R79.1 million

from the Agro-Processing Competitiveness Fund was approved

for projects in this value chain, a drop of 28% from the previous

period. Disbursements, however, increased by 5%

• Amongst the highlights is funding for a fresh water aquaculture

operation near Graaff-Reinet and funding for a black-owned

abattoir in Klerksdorp

27

Agro-processing and Agriculture Value Chain

Maneli Pets, Gauteng

Agro-processing

Black Industrialist: 78%

Women: 4%

Youth: 65%

Maneli Pets is a black youth-owned pet treat manufacturer, and the first South African pet treat company to secure access to the United States market.

Direct Jobs:

39In addition to the funding being supplied by the IDC, Maneli Pets also received

grant funding through the dti’s Black Industrialist Scheme.

Maneli Pets is a business

initiative of the Maneli

Group, a newly established

agro-processing holding

company, with initiatives

aimed at exploring other

business ventures.

The company is being

established to produce

ostrich- and venison-based

treats for dogs, branded

under the label Roam to be

sold in retail stores in the

United States. The treats

will be sold in over 100

regional pet speciality

chain stores in high-end

suburban areas across the

country.

CASE STUDY

The company will source its raw materials from the Karoo and Limpopo, thus assisting

in the development of rural areas, with its processing facility to be established in

Sebenza, Johannesburg.

28

Supporting youth empowerment, rural development and promoting SA exports


JOBS EXPECTED TO BE

CREATED AND SAVED

IN SOUTH AFRICA

JOBS CREATED AND


IN SOUTH AFRICA

1 169 0.7

FUNDING TO BLACK-

EMPOWERED

COMPANIES

FUNDING TO BLACK

INDUSTRIALISTS

R1 110m R384m

FUNDING TO WOMEN

ENTREPRENEURS

FUNDING TO YOUTH

ENTREPRENEURS

R219m R110m

Healthcare

Oil and gas transport and storage

Plastics and other products

Chemical products & pharmaceuticals

Fertilisers

Basic chemicals

• R2.9 billion in 2017 for the funding businesses in this value chain

compared with R4.8 billion in 2016, the change mostly due to

last year’s recapitalisation of Foskor;

• Two significant projects approved in this period include Sunrise

Energy, a liquefied petroleum gas import and storage terminal,

also funded by the IDC, establishment of a pipeline and

compression infrastructure to distribute natural gas from wells in

the Free State to industrial users.

Remarks

29

Chemicals and Pharmaceuticals Value Chain

Tetra4 beneficiates natural gas to offer Compressed Natural Gas (CNG) solutions for the transport, mining and industrial markets. CNG is a fossil fuel substitute for petrol, diesel and propane (LPG). It is considered to be a more cost-effective and environmentally friendly alternative to other liquid fuels, as it produces less pollutants.

IDC assisted Tetra4 with funding for the first phase of a project to construct a pipeline linking up 13 existing gas wells to the mother-station compressor and dispenser. Gas emanating from a specific well can only be used if that well is piped to an appropriate offtake point. With the project, Tetra 4 aims reticulate the existing 13 wells to a central processing facility or mother-station compressors and dispensers.

Tetra4, Free State

Chemicals Value Chain

Women: 10%

The IDC's support of Tetra 4, a natural gas producer that provides a sustainable, clean energy solution to large scale users in the Free State Goldfields region, is in line with our strategy to diversify energy resources.

Direct Jobs:

65

CASE STUDYTetra4 currently

has a total of 14

employees, with

an additional 15

new permanent

jobs to be created

through IDC’s

funding.

30

IDC remains committed to energy resource diversification

Industrial Infrastructure

Electricity generation and distribution

Transport and logistics

Other infrastructure


JOBS EXPECTED TO BE

CREATED AND SAVED

IN SOUTH AFRICA

JOBS CREATED AND


IN SOUTH AFRICA

2 864 1.4

FUNDING TO BLACK-

EMPOWERED

COMPANIES

FUNDING TO BLACK

INDUSTRIALISTS

R1 966m R9m

FUNDING TO WOMEN

ENTREPRENEURS

FUNDING TO YOUTH

ENTREPRENEURS

R297m R948m

Remarks

• Funding approved reached R2.1 billion in 2017, similar to the value

approved in 2016.

• Bulk of funding is for electricity generation, with financing approved

for two coal-fired independent power stations for SA;

• Furthermore, funding for a black-owned company to provide rail

maintenance services for Transnet, funding for a black woman-

owned company constructing an energy transmission line and a

100% black youth-owned company servicing the rollout of fibre to

homes.31

Delta Zero Corporation

Johannesburg, Gauteng

Delta Zero Corporation is a newly-formed company. IDC has a call option in Delta Zero Corporation and provided development funding towards completing units to be tested at Harmony Gold and another mine for six months respectively. The company aims to manufacture and rent the units commercially to the mining industry.

Direct Jobs:

5

CASE STUDYDelta Zero Corporation slurry pumps are an innovative way of pumping large volumes of slurry at high pressure that significantly reduce the load on the environment. Its pumping systems use less than 70% of the energy required by conventional systems and require no gland seal water. In addition, conventional system energy efficiency reduces rapidly as wear takes place on rotating impellers in direct contact with abrasive slurries. The rotating impellers in Delta Zero systems operate in non-abrasive clean water with minimal wear rates, thus maintaining high energy efficiencies over the life of the system.

Delta Zero’s patented technology is locally-developed and 80% of the components supporting it are locally produced, with the potential of being exported.

32

Our funding of Delta Zero Corporation prioritisesthe security of water supply as a scarce resource

The technology supports the mining

value chain by reducing the cost of

production through lower water and

energy consumption, of which slurry

pumping is a large component. The

funding has created five jobs, with three

additional jobs expected to be created

for every 10 pumps installed. In addition,

37 indirect jobs were created through the

associated supply companies, who manufacture the units.

Clothing, Textiles, Leather and Footwear

Leather and footwear

Clothing

Textiles


JOBS EXPECTED TO BE

CREATED AND SAVED

IN SOUTH AFRICA

JOBS CREATED AND


IN SOUTH AFRICA

852 1.9

FUNDING TO BLACK-

EMPOWERED

COMPANIES

FUNDING TO BLACK

INDUSTRIALISTS

R271m R120m

FUNDING TO WOMEN

ENTREPRENEURS

FUNDING TO YOUTH

ENTREPRENEURS

R26m R33m

Remarks

• Funding approved for businesses in the clothing, textiles, leather

and footwear industries declined by 22% to R433.5 million.

• Typically, funding in this sector is in the form of payment

guarantees.

• Most of the new funding approved was for existing clients, including

funding for a business operating from Zwelitsha, Eastern Cape, that

we helped to establish in the 1940s.

• 72% of the total funding approved was towards the Textile industry,

while 22% was allocated to the Clothing sector. 33

The business was acquired in 2015 by a Black Industrialist. Prior to that it had been in operation for 10 years.

Polyfabrics has been operating successfully due to its lean operations, allowing it to cater to clients’ needs with short lead times and competitive pricing. Due to its success, the company has been facing capacity constraints at its plant in KwaZulu-Natal.

In order to meet rising demand, the company has identified a need to move to a larger premises. During the move, the company will replace some of its ageing machines and some other additional equipment.

The company has also identified an opportunity to purchase a raw material manufacturing plant, which will allow it to backward integrate its operations, improve reliability of its raw material supply, and increase its competitiveness.

Polyfabrics Unlimited

KwaZulu-Natal

Youth: 100%

Trading as PolyfabricsUnlimited, a youth-owned enterprise, manufactures webbing from synthetic fibres such as polypropylene, nylon and polyester. This is predominantly used in packaging for the agricultural, chemical, mining and construction industries and logistics.

Direct Jobs:

47

CASE STUDYOur funding for these

business-

improvements will

help this young

entrepreneur create

47 new jobs.

34

The youth we are investing in are contributing to job creation

Media and Motion Pictures


JOBS EXPECTED TO BE

CREATED AND SAVED

IN SOUTH AFRICA

JOBS CREATED AND


IN SOUTH AFRICA

126 1.2

FUNDING TO BLACK-

EMPOWERED

COMPANIES

FUNDING TO BLACK

INDUSTRIALISTS

R80m R79m

FUNDING TO WOMEN

ENTREPRENEURS

FUNDING TO YOUTH

ENTREPRENEURS

R59m R62m

Remarks

Television and radio broadcasting

Film and video production

• Funding approved was R207.6 million in new funding for this year

down 22% from the last year, while R350.3 million was disbursed.

• The funds approved for film and video production are for the

production of a television series, a full length 3D animated film, and

three lower-budget films that will be licensed for broadcast by pay

television.

• We continued to support a black-owned broadcasting group that has

interests in a number of radio stations in Gauteng, Limpopo, the

Free State, and the Eastern Cape.

35

Over and above the film market, Octopus Vision have developed networks with local upcoming musicians, who want to break into the mass market and promote their material on video channels such as Channel 116, Vuzu.

IDC’s funding of Octopus Vision created 10 jobs and is in support of the aggressive drive by South Africa’s three broadcasters, SABC, M-Net and e.tv, to promote local content. Octopus Vision is targeting the entry-level film category, in which films are not sold, but exclusively licensed out for three years to broadcasters.

Breaking into the local film production sector remains a challenge for young film makers, especially since production companies typically require production equipment such as cameras, computers and editing suites and seed capital to fund start-up losses as broadcasters usually only make their buying decisions once they have seen the finished productions.

Octopus Vision aims to produce and license between four and five films per year. The two producers are skilled in movie and video production and have produced four movies and two music videos, which was well received in the market.

Octopus Vision

Sebokeng, Gauteng

Youth: 100%

Octopus Vision, 100% owned by two young aspiring black entrepreneurs, approached the IDC to fund the purchase of film equipment and working capital to produce content mainly for television and to provide production services for music artists. The company produces TV shows that are based on local stories and filmed in Sebokeng, Gauteng, using local actors.

Direct Jobs:

5

CASE STUDY Funding young

emerging black film-

makers to enter the

sector is one of our

key developmental

areas in establishing

and growing a

sustainable local

film industry.

36

Funding the youth to enter a niche market

New Industries

Other industries

ICT-related

Machinery

Electronics

Medical equipment


JOBS EXPECTED TO BE

CREATED AND SAVED

IN SOUTH AFRICA

JOBS CREATED AND


IN SOUTH AFRICA

478 2.2

FUNDING TO BLACK-

EMPOWERED

COMPANIES

FUNDING TO BLACK

INDUSTRIALISTS

R31m R79m

FUNDING TO WOMEN

ENTREPRENEURS

FUNDING TO YOUTH

ENTREPRENEURS

R3m R108m

Remarks

• Funding approved in the unit was R227.2 million, 52% higher than in

2016, while disbursements increased by 10% to R110.9 million.

• Significant transactions included funding for a company that

produces light-emitting electronic devices using standard silicon-

based manufacturing processes, the commercialisation of toilet

valves and funding a company that will produce metal-mould tooling

using additive manufacturing.

• Significant funding was allocated to support several of our existing

clients in the medical equipment industry. 37

Metal Heart is a start-up

company which was established

to provide a service using

additive manufacturing to

produce, inter alia, specialised

metal components to industry

which cannot be manufactured

through conventional methods.

The capability of the proposed 3D printing

equipment is not available in South Africa

at present. This investment will facilitate

localisation opportunities and import

replacement.

Metal Heart

Randburg, Gauteng

New Industries

Youth: 100%

IDC advanced R17 million for key technologies that are enabling the Fourth Industrial Revolution

CASE STUDY

Direct Jobs:

738

Metal Heart is at the heart of technological advancement with additive manufacturing

Metal Heart intends starting its venture into additive manufacturing by supplying

improved tooling to an established DIY fasteners and fixers company, for whom they

will manufacture metal mould inserts. The company has also received interest from

other companies manufacturing and retailing various specialist goods from cycling

components, automotive applications to air shafts.

Other Manufacturing Industries, Tourism and Other Services

39

ICT

Tourism

Construction

Recycling

Furniture & other manufacturing

Electronics

Non-metallic mineral products

Wood & paper products


JOBS EXPECTED TO BE

CREATED AND SAVED

IN SOUTH AFRICA

JOBS CREATED AND


IN SOUTH AFRICA

5 115 2.6

FUNDING TO BLACK-

EMPOWERED

COMPANIES

FUNDING TO BLACK

INDUSTRIALISTS

R1 364m R796m

FUNDING TO WOMEN

ENTREPRENEURS

FUNDING TO YOUTH

ENTREPRENEURS

R390m R717m

Remarks

• Funding approved increased by 69% to R2.2 billion, while

disbursements increased to R1.3 billion.

• Under Tourism, funding was approved for a new luxury hotel in

Umhlanga Village in KwaZulu-Natal and a mid-market hotel in

Mthatha in the Eastern Cape.

• In manufacturing, funding was approved for the expansion of a

porcelain tile manufacturer in Bronkhorstspruit, Gauteng, for an

establishment of a new tissue paper mill, and for modernisation of

production equipment at a leading paper sack manufacturer.

Fair Price Furnishers was started to manufacture goods for its affiliate company, FP Retail through its 90 stores. Fair Price Furnishers has grown quickly as a result of both the increasing range of goods it produces, as well as the growing number of stores it supplies through FP Retail.

Fair Price Furnishers’ products are aimed at the low- to mid-income market. The company needed to expand its manufacturing capacity to meet local consumer demand for quality products at reasonable prices. IDC’s funding capacitated the company to purchase plant and equipment and property in Brits, North West. In addition, the funding provided working capital.

Fair Price Furnishers Vereeniging, Gauteng

With its 100% black ownership, IDC supported the company to increase capacity in a struggling industry, whilst growing the number of Black Industrialists entering the manufacturing market.

Fair Price Furnishers manufactures a range of furniture products for low-to middle income groups. In addition to the factory in Brits, the company has three other factories, situated in Devland, Nancefield and Qwaqwa.

Direct Jobs:

183

CASE STUDY The South African furniture manufacturing industry has been

constrained by declining competitiveness, low economic

growth and the influx of cheap imports.

40

Growing Black Industrialists in a labour-intensiveindustry

MTC converts paper wadding into 1-ply and 2-ply toilet paper, serviettes, paper towels and wipes for its industrial and retail clients, as well as its own brand, Cloud Nine™. Its array of SABS-approved products appeals to both the high-end and low-end markets. The company employs 18 people in the KZN Province.

When Nampak exited its converting plant facility in 2005, it entered into an Enterprise Development Agreement with MTC and undertook to supply paper wadding to MTC as well as to purchase converted products on a take-or-pay basis. The contract was renewed after five years and the assets were transferred to MTC. Upon renewal, the conversion volumes were increased and the term was changed from fixed term to evergreen.

Twincare Group acquired Nampak Tissue in 2014 and the company signed an addendum taking over the agreement with MTC to continue converting TwinSaverproducts for its KZN market.

MTHEMBU TISSUE CONVERTING

Kwazulu-Natal

Mthembu Tissue Converting (MTC), an established manufacturer and seller of tissue products in KwaZulu-Natal.

The company was established in 2005 by a visionary Black Industrialist, who started his career at Nampak as a packer, only to become its converting plant manager and later owner of his own company, MTC.

Direct Jobs:

18

CASE STUDYThis 100% black-

owned company

has received

funding to

purchase energy-

efficient, modern

equipment to

expand its

production

capacity.

41

Empowering Black Industrialists whilst creating jobs through expansion

• We facilitated the creation of 18 206 new jobs (2016: 11 833 jobs); and saved 2 675 existing jobs

(2016: 3 439 jobs).

• In line with our strategy, majority of jobs created and saved were in the Manufacturing sector.

Number of jobs expected to be created and saved Number of jobs expected to be created and saved per sector

Agriculture, hunting, forestry

and fishing; 1 023

Mining and quarrying; 4 326

Manufacturing; 9 086

Electricity, gas and water

supply; 2 632

Construction; 1 914

Other; 1 900

42

The number of jobs expected to be created and saved represents a 37% increase on 2016

The OTMS project is a new entrant into the local crude oil storage industry. IDC provided a plant and equipment loan for the first construction phase, which includes building eight crude oil storage tanks with capacity of 1.1 million barrels each and the full infrastructure for Phase 2, which includes building an additional four storage tanks.

The storage tanks will be built from concrete and will be above ground and covered. A new pipeline will be constructed from the facility to a tie-in station, where it will connect to an existing pipeline from the Strategic Fuel Fund Association (SFF). The pipeline currently runs between the adjacent SFF strategic crude oil storage facility to the existing oil jetty in the Port of Saldanha.

Oiltanking MOGS Saldanha (OTMS)

Saldanha Bay, Western Cape

Chemicals Value Chain


IDC partnered with project oil company Oiltanking MOGS Saldanha (OTMS) to fund the construction of the first phase of an open access commercial crude oil blending and storage terminal adjacent to the Port of Saldanha in the Western Cape Province.

Direct Jobs:

720

The project will create

70 permanent jobs as

well and 650 annualised

construction jobs.

Additional benefits on a

national, regional and

local level include

procurement of cement

and steel and using

regional skilled labour

from a talent pool

created by previously

funded IDC projects.

CASE STUDY

43

Oiltanking MOGS Saldanha, is expected to contribute towards energy security and the creation of 720 jobs

Value of funding for black-empowered and black-owned

companies

The value of funding for black-empowered and black-owned companies increased by 103% to

R10.1 billion (2016:R4.9 billion).

We recorded a significant improvement in approvals for women-empowered businesses at R3.2 billion.

This amount is triple the R1.1 billion approved in 2016.

These results demonstrate our commitment towards economic transformation

44

We continued to increase funding for black-empowered and black-owned businesses whilst prioritising women-empowered businesses

The company received funding from the IDC to construct and install a section of the Ariadne Venus 400KV transmission line in Estcourt, KwaZulu-Natal. Transmission Worx was awarded a subcontract to erect and string electricity transmission lines, maintain electricity transmission live lines, install fibre optic cables and maintain the telecommunication optic fibre infrastructure. The contract was to construct 30km of the 123 km long transmission line.

Transmission lines and installation of optic fibre falls within the IDC’s Industrial Infrastructure mandate in support of the corporation’s aim to increase its impact in the transmission space, largely through support of specialist sub-contractors such as Transmission Worx. In developing local skills, companies like Transmission Worx plays a meaningful role in the National Development plan deliverables and facilitates the export of South African skills in delivering on transmission projects in the Rest of Africa.

TRANSMISSION WORX

Howick, Kwazulu-Natal

Industrial Infrastructure


Women: 51%

Youth: 26%

A majority black women-owned business within the power line and telecommunications infrastructure space.

Direct Jobs:

138

The IDC’s investment in

Transmission Worx

supports the value created

by Black Industrialists in

the energy sector, where

black-owned companies

have historically not

featured and continue to

face high barriers to entry

due to a lack of financial

resources.

CASE STUDY

45

Supporting Black Industrialists in our quest for infrastructure development

The funding approved for youth-empowered and youth-owned businesses increased to

R2.3 billion in 52 transactions (2016: R970 million, 19 transactions).

We also hosted our first National Youth Enterprise Conference in October 2016.

46

We remain committed to our target to support youth enterprises to the value of R4.5 billion from 2016 – 2020

2Ten Hotel CC is a youth-owned family business that started trading in 2008 as afour star hotel with 34 rooms, conference facilities for 750 guests, two restaurantsand other amenities. The hotel is ideally located in Sibasa Town, Thohoyandou inLimpopo province. It is positioned to attract Government, business and leisuretravellers as an ideal location for hosting events and conferences.

With the growth in businesses and services sectors in Thohoyandou, 2Ten hasbenefited from the limited supply of upscale hotel accommodation and is considereda flagship hotel among the locals in and around Thohoyandou.

2Ten Hotel CC, Limpopo Province

Light Manufacturing & Tourism


Youth: 49%

IDC’s funding of 2Ten Hotel CC included a senior loan facility to complete the structural work of a 61 key room hotel expansion with associated facilities, furniture, fittings, equipment and operating supply and equipment.

Direct Jobs:

76

CASE STUDYOne of the IDC’s key deliverables is to invest in tourism

businesses that increase accommodation in priority provinces,

such as 2Ten Hotel CC in Limpopo Province.

47

IDC supported a youth-owned business to play a meaningful role in the tourism sector

Approvals to Black Industrialists increased significantly

• Government policy related to black economic empowerment is focusing on the development of Black Industrialists. This aims to assist individuals enter the productive economy and to create wealth through the development of the productive sectors of the economy.

• IDC, prior to the introduction of the term “Black Industrialist”, focused on expansionary empowerment with an emphasis on industrial development thus placing the Corporation in an excellent position to assist with the implementation of this policy.

• To support this initiative, IDC has developed a comprehensive framework for the development of Black Industrialists which covers several areas including opportunity identification, identification of Black Industrialists, facilitating access to finance and increased business support.

Since inception in 2014/15, the IDC approved:

(net) 203 deals to Black Industrialists, with a value of

R11.4 bn, to 185 companies,

creating and saving 11 725 jobs.

48

Wagienience, based in Gauteng, developed a unique patented product, WHC Leak-less Valve™. WHC Leak-less Valve™ is a water-control mechanism that is placed in toilet cisterns to stop the influx of water at a pre-determined level, thereby reducing water loss due to outlet valve leaks.

The IDC supported Wagienience through its New Industries Strategic Business Unit (SBU) in providing funding that enabled the company to execute client orders, pilot projects with municipalities, Massmart and Public Private Partnership CSI Projects that target water savings. In addition to the funding, the IDC has played a pivotal role in formulating Wagienience’s strategy to commercialise and promote this locally designed, patented and manufactured product. The technology will be rolled out to public buildings.

WAGIENIENCE

Pretoria, Gauteng

New Industries

Youth: 100%

As part of its focus on promoting young entrepreneurs, the IDC funded Water, Hygiene and Convenience (WHC) trading as Wagienience, a 100% black youth-owned company founded by technopreneurPaseka Lesolang.

Direct Jobs:

462

The company has

significant job

creation and export

potential and the

business is

currently underway

to establish itself as

a manufacturing

entity for its own

products.

CASE STUDY

49

The Wagienience investment compliments our water conservation strategy whilst creating 462 jobs

Local production

Energy security IDC’s funding of AVK Holdings is in line with its objectives to replace imported machinery and equipment that can be manufactured locally in support of Government’s infrastructure programmes.

AVK Holding Southern Africa

Alrode, Gauteng

Mining & Metals Value Chain

AVK Holdings and PV combined will have a strong position in South Africa for both water and industrial segments based on present market position and localisation, which is expected to reduce competition from cheaper imports.

Direct Jobs:

49

CASE STUDY

• Government infrastructure

development programmes

are providing

opportunities for local

production of goods and

services.

• Most funds were allocated

towards coal for electricity

generation.

50

R4.9 billion was approved for localisation

Mpumalanga

GautengNorth West

Northern Cape

KwaZulu-Natal

Eastern Cape

Western Cape

Limpopo

Free State

Funding approved for the 5 years

from 2013 to 2017

Jobs expected to be created and

saved for the 5 years from

2013 to 2017

Total exposure

at cost:

R15.1 bn

5 890

R12.3 bn

Northern Cape

Total exposure

at cost:

R1.2 bn

9 664

R6.4 bn

North West

Total exposure

at cost:

R9.3 bn

15 790

R9.2 bn

Limpopo

Total exposure

at cost:

R3.2 bn

7 065

R3.2 bn

Mpumalanga

Total exposure

at cost:

R18.5 bn

25 605

R18.2 bn

Gauteng

Total exposure

at cost:

R5.7 bn

14 059

R3.7 bn

KwaZulu-Natal

Total exposure

at cost:

R0.6 bn

1 075

R0.6 bn

Free State

Total exposure

at cost:

R5.3 bn

8 050

R4.2 bn

Eastern Cape

Total exposure

at cost:

R6.7 bn

11 806

R4.6 bn

Western Cape

51

Our funding continues to promote regional growth

IDC subsidiaries continue to play a crucial role in the economy

Phosphoric Acid prices are forecast to remain depressed in the medium term, thus requiring a significant change in the way Foskor operates.

Initiatives include:

1. Operation Optimisation

2. Cost Reduction

3. Developing Premium Market and Strengthening Existing Market Base

4. Enhancing Performance Management

5. Diversification and Growth through New Projects

6. Cash Generation

Loss: (R902 mill.)

Scaw is not sustainable in itscurrent form due to the continuedweak financial performance. Inorder to turnaround the Company,the IDC is in the process ofintroducing Strategic EquityPartners (SEPs) who will bringfocused operational know-how andcapital injection into differentdivisions of Scaw.


1. Carving-out Grinding Media andCast Products division’s operationsfrom Scaw to operate asindependent entities and introduceSEPs with industry know-how tooperate the businesses.

2. Introduce an SEP in the remainingScaw divisions with industry know-how to introduce alternativemarkets and operationalefficiencies and consequentlyperformance of the remainingbusiness divisions.

Loss: (R787 mill.)

sefa continues to focus on strengthening its sustainability initiatives especially in light of the reduced government grant.


1. Increasing collections levels and reducing impairments especially in the Direct Lending businesses channel.

2. Further reduction of operating costs to achieve the cost to income ratio of 100% by 31 March 2018.

3. Optimal and effective management of the property portfolio.

4. Increasing interest and non-interest income

5. Strengthening new business and developmental returns through leveraging existing partnerships, and growing the private sector networks.

Loss before grant: (R223 mil.)

52

Approvals

Target: R885m

Achieved: R827m

93.5%

Disbursements

Target: R704m

Achieved: R1,075b

152.8%

Number SMME

Target: 47 055

Achieved: 43 211

91.9%

Jobs

Target: 73 862

Achieved: 55 997

76.7%

Youth

Target: R211m

Achieved: R222m

105.4%

Rural

Target: R313m

Achieved: R365m

116.8%

Women

Target: R317m

Achieved: R406m

128.3%

Black

Target: R493m

Achieved: R759m

154.1%

Productive sectors

(Approvals)

Target: R354m

Achieved: R359m

101.6%

Disabilities

Target: R14m

Achieved: R3m

21.7%

Cost-to-income

Target: 157%

Achieved: 161%

98%

Impairment

Target: 29%

Achieved: 47%

62%

Interest & fee

income growth

Target: 6%

Achieved: -10%

-166.7%

Turnaround time

(average)

Target: 32 days

Achieved: 31 days

103%

IDP implementation

Target: 80%

Achieved: 93%

116%

• Level of customer satisfaction

77% (vs target of 70%)

• Employee satisfaction index

achieved 77% (vs target of

70%).

Small (< R500k)

Target: R369m

Achieved: R451m

122.3%

53

sefa performance – As at 31st March 2017

Transforming

Communities

Social Enterprise Initiatives

R58 million

Education & Skills

Development

R24 million

Entrepreneurship and Job

Creation Initiatives

R3.5 million

2016: R15 million

2016: R27 million

2016: R2.5 million54

We remain committed to transform communities: CSI & Social Enterprises

Partnerships

Leadership and Change Management

Since its inception in 2012, the IDC has invested approximately R88 million in this school-based support project which aims to improve the functionality of schools.

This amount has been spent on:

• ICT programmes,

• basic infrastructure,

• learner and educator support, as well as

• management and governance of schools.

A total of 30 schools are now part of the programme (20 secondary and 10 primary schools) impacting on 41 429 learners and 552 educators and management.

Our CSI flagship project, is currently in its fourth year of implementation.

IDC has:

- Built 69 new

facilities

- Upgraded 79

existing facilities

• Nelson Mandela Foundation: implement a Numeracy and Literacy

Programme in all adopted Primary Schools

• Wipro Technologies: launched a Information and Communication

Technology (ICT) Programme within adopted schools

• In Phase 1, identified 6 schools (Mpumalanga, Eastern Cape, Northern

Cape) to navigate the process of changing to a digital classroom;

• Phase 2 will feature an additional 6 schools.

55

Whole School Development project (in partnership with Adopt-a-School Foundation)

Through its

Corporate Social

Investment (CSI)

initiatives, the

IDC is crafting a

brighter future for

unemployed

youth, by

supporting

the Technical

Vocational

Education

and Training

(TVET) Colleges

sector.

Ekurhuleni East College’s

Kwa-Thema Campus,

Gauteng

T Northern Cape

Urban College’s

(NCUC)

Galeshewe Campus

Waterberg

College’s

Lebowakgomo

engineering campus,

Limpopo

Port Elizabeth College’s

Ohayiya Campus,

Eastern

Cape

4

In 2017 the IDC set aside grant funding to

support projects at four TVET colleges

56

Support for TVET Colleges aims to upskill youth

SINAKHO

Langa, Western Cape

CSI

To establish a holistic, multi-purpose skills development centre, aimed at developing entrepreneurial skills, to train and equip unemployed persons and vulnerable youth and women in various hard and soft skills such as basic business skills, computer skills, food technology and confectionary - all through experiential learning.

• Tamara Nketle (54), a graduate from the 2015 programme, has started her

own business since obtaining her tool kit.

• In 2017 a total of 50 participants will be graduating. In partnership with

supporting stakeholders, Nedbank and the Cape Town Fashion Council, the

goal is to support Sinakho to open a mini-clothing and textiles factory.

In 2015 and 2016,

45 youth and women

completed a Level 3

certificate training in

all aspects of

garment-making,

delivered by

“I Love Sewing”, an

accredited industrial

training service

provider.

CASE STUDY

The organisation was established to improve the quality of leadership support, skills

development and entrepreneurial skills that are lacking in our historically disadvantaged

communities, in order to restore self-respect and dignity.

57

Sinakho Skills Development Centre and Entrepreneurship Training Academy

Buhle Farmers Academy

Delmas, Mpumalanga; Mkhondo, KwaZulu-Natal

Community Development Programme, CSI

• Training 200 students in 2017

• Offering courses in: vegetable, poultry, livestock production, and mixed farming.

• Students also prepare a viable business plan and market their produce, learning how to access markets and price the goods.

CASE STUDY

We support community entrepreneurial projects which are aligned to the IDC’s mandate, targeting women and youth.

After the training, the Farmer Support Programme supports approximately 100 graduates per annum with

technical advice and business set up, bridging the gap between the information and experience gained.

58

Buhle Farmers Academy (BFA) is a non-profit organisation that trains and mentors aspiring farmers

The initiative supports the protection of plant biodiversity in compliance with the Nagoya protocol and promotes the protection of threatened indigenous plant species through engagement of rural communities in cultivation and value addition rather than wild harvesting.

Partnerships are crucuial to Zuplex: 27 ha of land from the iNgonyama Trust via the Ntuli Traditional Authority has been signed with the Edakeni Muthi Futhi Trust (shareholder in Zuplex).

All surpluses will be reinvested into the Edakeni Muthi Futhi Trust for socio-economic development within the community.

18 permanent jobs and 26 temporary jobs have been created.

Zuplex (Muthi Futhi)

Eshowe, KwaZulu-Natal

Social Enterprise Initiative

IDC approved:

R 4 998 000,00

The main environmental objective of Zuplex is to create rural jobs through sustainable use of indigenous plant species, as an alternative to income generation through wild harvesting.

Direct Jobs:

18

CASE STUDY This initiative

manufactures

indigenous plant

extracts targeting

the international

market, whilst also

achieving tangible

social and

environmental

benefits.

59

We created rural jobs through sustainable use of indigenous plant species

Conclusion

In conclusion

The IDC journey ahead is still ambitious and bold; our goal is a substantially more proactive

IDC, focused on sectors that exhibit the highest potential for sustainable and jobs-rich

industrial development.

The IDC has achieved pleasing results amidst a challenging operating

environment.

Looking ahead, economic recovery may be delayed by recent developments,

including the downgrades of South Africa’s sovereign credit ratings, our high

unemployment rate and the fact that we have entered a technical recession.

• These factors have a potential adverse impact on the IDC’s:

- overall financial sustainability; and

- ability to raise low-cost funding and support its clients.

IDC’s counter-cyclical role will be more challenging yet even more important

during the upcoming period.

IDC will continue to advance transformative industrialisation whilst remaining

financially sustainable.

61

THANK YOU


idc integrated results for the year ended 31 march 2017

Documents