Page 1 - IDC

14 CITY PRESS, 18 OCTOBER, 2015

news

A PROJECT

IN PARTNERSHIP

WITH THE
IDC The IDC in numbers

BUSINESSES FUNDED

Last year:
210

Past five years:
1 158
Past 10 years:
2 161
BUILDING THE ECONOMY Geoffrey Qhena, the Industrial Development Corporation’s CEO, which has funded some of SA’s biggest success stories MAIN PHOTO: ELIZABETH SEJAKE Past 20 years: 5 513
From Ouma to

wind energy MONEY INVESTED

Last year:
R11.5 billion

Past five years:
The Industrial Development Corporation is not only investing in businesses that R60 billion

make money, but in those that create thousands of jobs and social change Past 10 years:
R98 billion

Past 20 years:
NICKI GÜLES projects to support embattled Eskom, and mining Although Qhena says he cannot choose a favourite Gauteng and some of them have been exported,” he
nicki.güles@citypress.co.za and beneficiation projects to convert raw materials among the companies the IDC has funded, he has a says. “There are lots of others, including one that R143 billion
into saleable products. Localisation is a top priority, soft spot for those using or producing locally looks at stitching wounds without using a needle.”
hat do Ouma rusks, the developing manufacturers who make everything developed technology. The IDC’s new-industries unit looks for new
Gautrain and overhead parking from spare parts, wheels and undercarriages for “We have a company called Lodox that produces a technologies to support, and works with universities,
bay LED lights at the airport Transnet locomotives to photovoltaic panels, and low-dosage X-ray machine, started by [diamond the Innovation Hub and the CSIR to identify them.
have in common? parts and towers for wind farms. miner] De Beers. Now it’s used in hospitals around “Also, the department of trade and industry has an
All of them were developed industrial-innovation programme called SPII. When
Wwith funding from the you’re in a rush at the airport and want to park,
Industrial Development Corporation (IDC). those devices with the green and red lights that tell
Since its formation 75 years ago, the IDC has you which bays are free – that’s an SPII project.”
injected capital into industries as diverse as those of Back in the game Ads and waste meet Another soft spot is the agriprocessing companies
oil giant Sasol, aluminium supplier Hulamin and that create thousands of jobs for poor rural people.
Mozambican aluminium smelter Mozal, as well as Qhena rattles off examples – Karsten Boerdery in
into smaller projects such as the hit film iNumber Upington grows table grapes and dates for local and
Number and an authentic Shweshwe fabric weaver Shweshwe Less trudge, export markets, and also dries them, producing JOBS CREATED
(see sidebar). raisins “on sale at Woolworths”.
Over the past 20 years, the IDC has funded local A dairy in Coega, Eastern Cape, has black farmers Last year:
and regional enterprises to the tune of R143 billion, success more trash as shareholders. “Now they are going a step further –
but its CEO, Geoffrey Qhena, would have liked that and when you go to Debonairs and have your pizza, 20 000
number to have been bigger. the cheese comes from that dairy.”
“Yes, it is a lot, but it’s not enough. The South BIÉNNE HUISMAN ZINHLE MAPUMULO Agriprocessing support will be stepped up to Past five years:
African economy needs more,” he says. “If, on bienne.huisman@citypress.co.za zinhle.mapumulo@citypress.co.za create more rural jobs. Another new direction is
average, we could approve about R20 billion every pursuing regional agricultural opportunities – cotton 138 000
year, that will be a number that will make an even flood of cheap Chinese fabric imports saw Da ifiso Ngobese is a young man who believes that grown in Mali can be spun in South Africa, and fruit
bigger impact than this.” AGama Textiles in the Eastern Cape hanging by a Schallenging the status quo should be part of grown in the Democratic Republic of Congo can be Past 10 years:
More important would be the jobs created with thread five years ago. everyone’s character. An economist by training, processed here. 282 000
such an investment: 450 000 over 20 years. But the company – makers of South Africa’s Ngobese left his daily comforts at an investment “That is why I keep coming to work: to make a
Qhena says that of greater importance than the original Three Cats shweshwe at a factory in bank in Johannesburg to pursue his dreams and difference; to ask, when we have approved a project, Past 20 years:
amount directly invested in the corporations they Zwelitsha – was saved thanks to cash injections goals as a social entrepreneur. if somebody who had no hope of getting a job will
fund is the amount that is leveraged. For every R1 of millions of rands since 2010 from the IDC In an effort to change lives, Ngobese came up get one. And as a result, his or her child will get an 450 000
the IDC invests in a project, R3 is leveraged from and the department of trade and industry’s with the idea of empowering opportunity to go to school and their lives will
other partners, including banks, development productivity incentives programme. South African informal waste change.”
partners and the entrepreneurs themselves. Da Gama bought sole rights to print the pickers with functional, safer One such project sticks out – a
“In 1950, Sasol was started with a R10 million branded Three Cats range on traditional and durable waste trolleys. business plan competition
investment from the IDC, and now it’s the copper rollers in 1992 when it employed The trolleys double up as between universities where the
greatest thing ever,” says Qhena of the company 12 000 people. But cheap imitations from outdoor adverting mobile winner, a brick-making project,
in which the IDC still has a 7.9% stake. China pushed the company to the brink of billboards, allowing companies bagged the funding.
The IDC’s first loan was made in 1941 to a collapse, forcing it to retrench thousands to advertise on them. “There was this labourer, a man
Mrs MJS Greyvensteyn to finance her Ouma of workers over the past 10 years. The innovative idea, known as in his fifties, who came and said: ‘If
rusks, which were made in a barn on a farm Ryan Brent, Da Gama’s financial Abomakgereza, township slang this business was not funded, I
converted into a bakery. The family, from the director, says: “The South African textile for informal recyclers, was wouldn’t have had a job.’ He had
Eastern Cape town of Molteno, went on to industry has faced many challenges funded by the IDC. Other dignity. We can talk about all these
launch Simba chips more than a decade later. over the past 10 to 15 years.” partners include Redisa (the billions, but this is what it comes down to.
“That was the first beneficiary and it’s still Staff described the “absolute recycling and economic development This is what should drive us.” SECTORS THAT BENEFITED
around,” says Qhena. desolation and sadness” of the factory initiative of SA), Joburg waste utility Pikitup, Arguably the biggest plan on the IDC’s horizon
Sasol followed in 1950 and, over the past filled with idle machines and no orders. Red Bull, Nedbank and Collect-A-Can. is a commitment to spend R23 billion over the next
20 years, the IDC has helped capitalise Now they employ 671 people, mostly It led to him being a finalist at the SAB five years to support black industrialists. In the past 20 years, the IDC has invested:
Hulamin – in which it has retained a 30% from Zwelitsha. Foundation Social Innovation Awards this week, held “We want black people to also be involved in the
stake – and Mozal in 1994, their first project Brent says each employee has to honour innovators who come up with products to core economy, to create new capacities and help R46 billion in metals and machinery
outside South Africa, and in which the IDC now between four and five dependants, which help their communities. He is in line for a R1.2 million expand capacities. We need to ensure this economy
has a 24% shareholding. amounts to about 3 000 lives sustained by the prize. grows,” says Qhena.
“In the past three years we have invested factory producing bright, traditional prints, Ngobese says that what was unique about Other plans include increasing investment in the
R14 billion into a number of renewable energy authenticated by a backstamp on the fabric. Abomakgereza was that their work was not just manufacturing sector and in localisation. R34 billion in mining
projects, including wind, solar energy and Their various patriotic shweshwe ranges include about outdoor advertising or working towards a “We support black entrepreneurs. Last year, of the
photovoltaic technology, as well as hydroelectric green and gold print to support the Springboks. greener environment, but it touched people’s lives. R11.5 billion we approved, R5.9 billion went to
power. That’s been the biggest investment for us in Shweshwe has become popular on catwalks, “Informal recyclers share in the advertising profits companies with at least 25% black ownership. Last R20 billion in chemicals and petroleum
this period,” he says. courtesy of trendsetting fashion designers such as to somewhat address their impoverishment,” he says. year, R756 million went to companies controlled by
Those projects now feed 600MW of electricity into Sun Goddess. Ngobese’s website details the plight of South women or with female ownership of more than 25%.
the national grid – just less than Medupi Power Brent says the funding helped them buy 27 new Africa’s estimated 43 000 “recycling hustlers” who It’s important that, while you create new capacities,
Station’s Unit 6. When they are all online, they will looms, allowing them to produce greige fabric – raw, walk many kilometres every day to find recyclables transformation happens within the economy as well.” R20 billion in other manufacturing
add 1 400MW to the grid and provide the IDC with undyed cloth – comparable in quality and cost to to sell. Of those, 8 000 live in Johannesburg’s . Are you the next big industrialist? If you want
new source of revenue. “And its clean, using what imported fabric. townships and informal settlements. to be the country’s next Patrice Motsepe or Herman
nature gave us,” says Qhena. They also bought new dye and bleaching machines “Abomakgereza is our flagship product offering, Mashaba, take your business plan to the IDC’s head
The IDC, government-owned and located within that will be used from the end of the year. allowing our corporate partners huge marketing office in Sandton or to any of its provincial and R16 billion in agriprocessing
the department of economic development, last Brent describes Da Gama’s products as “truly part opportunities and an inspired chance to make a satellite offices countrywide, and they’ll help with
received money from the state in the 1950s. of southern Africa’s heritage and the only shweshwe difference with us,” he says. the rest. Your business plan need not be perfect,
“We fund ourselves from investments, repaid loans that continues to keep up the original values and “Our trusted team of recycling hustlers take these but must include an indication of the market for R15 billion in other services
and dividends from our shareholdings. Or we borrow standards of touch, smell, feel and quality that is part trolleys around the busy streets of South Africa each your product, which IDC staff can help to enhance.
money – we go out into the market and issue bonds of the whole culture”. day, and keep all of the profits from the products The aspirant industrialist has to prove he or she
and obtain lines of credit from international It sells for R50 per metre at textile distributors they collect. either has, or has access to, technical know-how.
development finance institutions,” says Qhena. countrywide. “They also share in advertising profits received “It helps to have some money, but we won’t turn R11 billion in tourism
Although money doesn’t come from government, “The funding assists in making us more competitive from advertising on the trolleys. Our trolleys are you away if you don’t have capital. If it’s a great
direction does. “We look at government’s priorities and ensuring long-term sustainability through capital clean, fun and a great branding opportunity for South idea, we will fund that because we need great ideas
and support those.” reinvestment,” he says. Africa’s best companies.” that will change South Africa.”
So, big on the IDC’s agenda are renewable energy For more, go to idc.co.za Source: IDC Graphics24