Page 35 - IDC

6 CITY PRESS, 12 FEBRUARY, 2017

business

Western Cape

A
PROJECT IN in numbers

PARTNERSHIP

WIITH THE
IDC 5.8m

THE NUMBER OF PEOPLE
WHO LIVE IN THE WESTERN
CAPE – AMOUNTING TO
11.3% OF SA’s POPULATION

13.6%

GOING BIG Lizo Ntloko is confident the Saldanha Bay industrial development zone will be one of the key economic drivers for the west coast THE WESTERN CAPE’s
Grow opportunity CONTRIBUTION TO THE

COUNTRY’s GDP

R6.3bn

to harvest success THE IDC’s APPROVALS OVER

THE PAST FIVE YEARS

The Western Cape is most famous for its wine and as a perfect place for a holiday. 12 785

DIRECT JOBS CREATED
However, there are plenty of business prospects in the province too. The Industrial IN THE PAST FIVE YEARS
Development Corporation’s Lizo Ntloko tells Gayle Edmunds where to find them
R1.4bn

ost people associate the Western Cape agriculture and agroprocessing value chain. Horticultural, field
with wine and tourism. Though, crop processing, livestock and meat processing, and
increasingly, the base of options for aquaculture value chains are areas of growth potential and TOTAL FUNDING
driving economic growth in the province interest to the IDC. As part of this value chain, there are also
is growing. What would you name as the other niche products in the Western Cape that are not yet fully APPROVALS IN THE
Mfive biggest opportunities entrepreneurs exploited, such as rooibos, buchu and hoodia, which can be 2015/16 FINANCIAL YEAR
should look for in the province over the next two years? used for medicinal and other non-food purposes, and they
Tourism remains an important sector in the province to have a huge potential to create large numbers of jobs,
support inclusive economic growth. It is very labour intensive, especially during harvesting time.
with rising productivity and its ability to create sustained jobs In the five years to September 2016, we had advanced more
for all skill levels in both urban and rural nodes. Our world- than R650 million to entrepreneurs to grow their businesses in 55
renowned wine industry in the Western Cape continues to this sector. The investments ranged from the growing and
make strides in global markets and the opportunity is there to processing of fruit, nuts, beverages and spice crops; growing
develop other niche products that will sustain our position as a and processing of rooibos tea; poultry and meat processing; NUMBER OF PROJECTS
global player. growing and processing of blueberries and persimmons; and FINANCED IN THE
Agriculture and agroprocessing are key sectors in the marine aquaculture and fish processing.
Western Cape, and continue to show a strong advantage WESTERN CAPE IN 2015/2016
compared with other provinces in terms of export potential. One of the IDC’s major concerns is ensuring that
Already, we have seen increased exports of agricultural communities benefit from the deals that are done, not
products to the rest of Africa. only in terms of job creation, but also regarding
In terms of the province’s economic game-changers, the oil community ownership. R83m
and gas sector is also identified as key. The development of the TEA TIME Rooibos, buchu and hoodia can be used for Broad-based economic empowerment is one of the main
Saldanha Bay industrial development zone and the proposed medicinal and other non-food purposes objectives for the IDC in projects that we finance – you are
Atlantis special economic zone present a lot of opportunities spot-on. We always strive, through our special funding FUNDING APPROVALS TO
for metal fabricators, rig and ship repair companies, and schemes, to facilitate equity participation by communities and
component manufacturers, especially in areas of renewable the workers. Trusts are normally the preferred vehicles YOUTH-EMPOWERED
energy, energy efficiency and other greener technologies. employed for the holding of shares on behalf of the BUSINESSES IN 2015/16
The plastics and chemical industries are also well established beneficiaries.
in the Western Cape, and we already have a plastic recycling
industry that feeds into another opportunity for converters of What is the Western Cape office doing to actively
recycled and blended products. Coupled with the already empower youth, women and black-owned businesses in R63m
entrenched recycling culture in the Western Cape, we do the province? Of the projects you’ve funded in the past
believe that there is still more to be exploited in areas of basic, five years, how many have been youth owned, how many
speciality chemicals, pharmaceuticals and other chemical owned by women, and does the province boast a number FUNDING APPROVALS TO
products. of black industrialists yet?
Lastly, the relatively undervalued rand provides some There are special funds set aside to support youth, women WOMEN-EMPOWERED
opportunities for increased film production. We have seen entrepreneurs and black industrialists within the IDC. Though BUSINESSES IN 2015/16
increased activity in this area and its multiplier effect for job our investments in black industrialists may seem modest in
creation in tourism accommodation and other service-related comparison with other natural resource-rich provinces, we
sectors, such as catering and retail. have disbursed more than R570 million to black-owned or
empowered companies in the past five years.
The whole country faces unemployment and stagnated While the office has funded several women- and youth- R89.7m
economic growth. What specific challenges do businesses FROM THE EARTH Agriculture is strongly represented owned businesses over the past year, we would want to see an
in the Western Cape have to overcome and how does the in terms of the IDC’s sectoral distribution increased uptake from these groups, and we have since FUNDING APPROVALS
Industrial Development Corporation (IDC) help them? realised that to increase uptake from these target markets,
While we are aware of the realities of the current economic especially where the youth is concerned, entrepreneurial TO BLACK INDUSTRIALISTS
climate, we remain optimistic about the potential some of development and technical support are key to business IN 2015/16
these businesses possess should they overcome obstacles. Some opportunities, particularly when it comes to industrial sectors.
companies find themselves in a distressed situation due to Being hands-on in the business and not just a passive
internal cash flow pressures, lower demand for their products investor is a requirement. Involvement at both an operational
and services, and probably an inability to source finance from and strategic level of the company is essential. This is often not
traditional sources. It is in times like these that the IDC plays an easy task for many due to a lack of the necessary business R700m
its countercyclical role in filling some of the gaps in the acumen and skills. That is where the IDC steps in to assist with
market, thereby ensuring that jobs and capacity in these its business support programme.
businesses are retained. In the 2015/16 financial year, the IDC in the Western Cape CURRENT EXPOSURE
We do this through our business support programme, which approved a total of R1.4 billion, and R83.4 million of this was to IN THE LEATHER,
is aimed at addressing some of these obstacles. Ordinarily, this youth-owned businesses; R63 million to women-empowered
may come in the form of pre- and post-investment support, businesses and R89.7 million to black industrialists. TEXTILE AND
which is also one of the unique non-financial support systems In addition, Economic Development Minister Ebrahim Patel CLOTHING SECTOR
that we offer to our clients in the 2015/2016 financial year to announced in May last year that to bring more black South
grow their businesses. Africans into the productive sectors of the economy,
particularly women and the youth, the IDC would set aside
The IDC has funded 55 projects in the 2015/2016 financial R9 billion – R4.5 billion for women and R4.5 billion for the R650m
year. Which of these did you find to be a surprising fit for CINEMA Cape Town Film Studios. The undervalued rand youth over the next five years. This is massive, and it is now a
a province defined by wine and holidays in the mind of provides opportunities for increased film production challenge to our youth and women-owned businesses to come
the public? forward with fundable transactions. CURRENT EXPOSURE IN
We have seen an increased investment in basic metals, metal
products and machinery; textile, clothing and leather goods; negotiable. How much money has the province put aside for projects AGRICULTURE, HUNTING,
motor vehicle components, parts and accessories; coke and Besides and as part of the application process, in-depth due in the next two years? FORESTRY AND FISHING
petrochemical products; electrical machinery and apparatus; diligence to identify and mitigate risks; structuring to suit the We do not have a specific allocation per se for the Western
the manufacture of transport equipment; and the manufacture uniqueness and merits of the transaction; pricing based on risk Cape, but what we can tell you is that R100 billion over five
of food and beverages. and developmental factors; as well as the consideration of years was set as a national IDC target and we anticipate the
Manufacturing; agriculture, hunting, forestry and fishing; and business support when needed are all taken into account when Western Cape contribution to remain significant, especially in
electricity, gas and water supply are strongly represented in assessing an application. terms of the number of business partners. R570m
terms of the IDC’s current sectoral distribution in the province,
and we could see this trend repeating itself in the funding of A constant in any discussion around the economy is What are your top tips for entrepreneurs in the province CURRENT EXPOSURE
the 55 projects. driving beneficiation in the agricultural field. Do you see who are about to walk into your office to ask you to fund
more openings for entrepreneurs to get into this business? their idea or help them upscale their business? IN BLACK-OWNED OR
What are the specific benefits the Western Cape offers What have been the most exciting beneficiation Besides the necessary passion, drive and commitment; a EMPOWERED COMPANIES
entrepreneurs who are looking for opportunities? programmes you’ve been involved in since the IDC opened good business plan, capacity, character, cohesion and
Customer service and streamlined turnaround times for offices in the province? continuity, and tolerance for risk are all key considerations.
decision making and approval of applications are non- There are specific subsectors that are driving growth in the . This project is reported by City Press and supported by the IDC