Page 37 - IDC

6 The IDC financing process in 5 s teps
CITY PRESS, 27 AUGUST, 2017
business R1 million or more for entrepreneurs for new

businesses or expansions

The potential client drops off their business plan at the
1
IDC's P re-Investment Business Centre (PIBC) at 19
Friedman Ave, Sandown, or at one of the IDC's r egional
provincial offices
2 All business 3 If it falls within the
plans are mandate, the PIBC
Through its new Financing approved NEW ECONOMY Christo Fourie is set registered by allocates it to a
manager to begin
the records
for new industries
*
screening as part o f
departement
industries strategic *Net approvals on developing strategic new industries and screened the basic
PHOTO: DEON RAATH
andate
m
for a
assessment process
ICT-related Electronics
unit, the IDC is looking Machinery Medical equipment 4 Applications that pass the basic assessment process are forwarded for
review to one of the 13 strategic business units (SBU's)
Other
for businesses of the R MILLION
250
future that will drive R227.2m
Industrial
economic inclusion 200 Agroprocessing infrastructure Metals and Chemicals
and agriculture
mining
and job creation, 150 R150m
writes
100 Automotive a nd Textiles New Heavy Media
Riana de Lange equipment clothing industries manufacturing and motion
and
transport
pictures
50
ike much of the world, South Africa is
experiencing an influx of new technologies that
are threatening to disrupt the traditional order
of doing business. While few would dispute 0
that technology has transformed our lives for 2016 2017 Machinery Chemical Light The
Lthe better, the unintended consequence of the Source: IDC and capital products and manufacturing rest of
fourth industrial revolution is job losses. THEUNS KRUGER, Graphics24 equipment pharmaceuticals and tourism Africa
Herein lies the challenge. Should we embrace technologies 5 The SBU undertakes a d ue diligence
far behind. This economy has one of the best and most THE ECONOMICS process. If the plan meets all the
that are canibalising jobs by creating new competitive
advantages or shun adoption to preserve jobs? While the
requirements, the money is
latter is an easy option, the consequences could be dire.
transferred
“In terms of technology adoption, South Africa, isn’t too
sophisticated financial sectors – a factor that one can easily THEUNS KRUGER, Graphics24
OF TECHNOLOGY
attribute to the sector’s adoption of modern technologies,”
says Christo Fourie, the IDC’s head of New Industries,
adding that it’s the objective of the corporation to help
South Africa to establish and develop innovative industries OF TECHNOLOGY
that can spur economic growth.
The unit was established after a review process examining
how the IDC could best fulfil its role as a development
financer. To that end, the IDC approved R227.2 million in
financing for businesses in new industries during the
financial year up to the end of March.
Fourie said this represents a 52% increase compared to Prior to the establishment of this unit, its forerunner, the necessarily look like the energy giant Sasol. Although it can Value of approvals per sector (2017)
the previous financial year, and this figure is set to increase venture capital unit, invested in 39 start-up businesses over still be centered on a single, massive, technology-driven
exponentially over the next few years. a period of eight years. investment, an industry can also be hundreds or thousands R227m R55m
The target for the 2018 financial year is to allocate at least Thorough research was done in 20 categories to of smaller companies,” Fourie said. New industries Agroprocessing
R345 million to new industries, he said. determine the competitive advantage for success in South Fourie said the success of Sasol, which was established by R161m and agriculture
Established two years ago, this unit, among other Africa by, for example, looking at the available IDC investment, is also apparent in the string of supporting
objectives, focuses on the development of technologies that could give a country the edge, industries and services that would not exist without the Media
and films
industries that will help South Africa to build A natural resources that could be used to our energy giant. R2bn
a competitive economy. benefit, or a geographical advantage. “Another example, think of natural products and how Other
This broader focus incorporates 3-D PROJECT IN Fourie said the attractiveness of the South Africa’s unique flora can be used in cosmetics, R434m manufacturing
printing technology, nanotechnology, PARTNERSHIP potential industries was also judged by pharmaceutical products and food additives. How can we tourism and
robotics, artificial intelligence and measuring it against the IDC’s financial and capitalise on the uniqueness of our flora? Clothing, services
biotechnology, data analysis and WITH THE development goals. “Even though much has already been done in this sector, textiles, leather
IDC must be able to compete and be successful in with further processing of home-grown products.” shoes
autonomous vehicles. “The industries that the unit invests in we want to get more deeply involved in the value chain products and
THE SECTORS THAT THE BUSINESS the international market, as well as create job In relation to the fourth industrial revolution, South Africa R1.8bn Value
UNIT IS FOCUSING ON ARE: opportunities.” has a lot of capacity at its universities and institutions such Chain
. Gas beneficiation; Fourie said the timelines for developing new as the Council for Scientific and Industrial Research (CSIR) Industrial
. Energy storage; industries is in years and decades. The goal of the new to develop new technology. infrastructure
. Fuel cells; industries business unit is to create at least one or two new But we do not have to reinvent the wheel.
. Renewable energy; industries in the next five to 10 years. “We aren’t just going to wait for technology to be R8.5bn
. Medical equipment; The venture capital model is that investors typically invest developed – we want to follow the shortest route to the R2.1bn Metals
. Natural products; and in, for example, 10 businesses. One or two will probably be development of new industries and, if we initially have to Chemicals and and mining
. Technology or new business models tailored for the fourth successful, a few will just survive and others will fail. depend on imported licensing or if our technology has pharmacology
industrial revolution. “The same principle is applicable to the new industries to be bought and modified, we will follow that route,” said Source: IDC integrated report, 2017 COBUS PRINSLOO, Graphics24
that we chose. We also realise that a new industry does not Fourie.

SA steps into Energy storage will

the futuristic fuel future growth

The energy sector in South Africa offers the greatest
world of 3-D opportunities for economic growth – and it is a sector where
the Industrial Development Corporation (IDC) is focusing its
impact.
Christo Fourie, head of the IDC’s business unit for new
metal printing industries, said South Africa offered a lot of opportunities for
the manufacture of batteries.
Opportunities around gas beneficiation, energy storage and
fuel cells are a top priority for the corporation’s business unit
for new industries.
The IDC is involved in a joint project in cooperation with
RIANA DE LANGE
Bushveld Minerals for the co-development of vanadium redox
projects@citypress.co.za
flow batteries in the field of energy storage.
Thanks to two engineers’ search for the complicated Vanadium is seen as a cheaper alternative to lithium for
components needed to make an electrical bike run, and the energy storage purposes.
investment backing of the Industrial Development Entrepreneur Elon Musk, known for the development of the
Corporation (IDC), South Africa has just taken its first electric Tesla vehicles, is building one of the world’s largest
commercial steps in the world of 3-D metal printing. lithium battery factories to supply the expected demand for
The IDC’s R17 million investment in Gerrie Lombaard and electric vehicles.
Ken Gray’s start-up company, Metal Heart, marked its first “South Africa has most of the minerals used in those cells,
forays into 3-D printing as a manufacturing process. so, even though we have a backlog, we can catch up,” said
It took just one month from the date the business plan Fourie.
was presented to the day that Metal Heart switched on the
3-D metal printer, although the two friends began ULTRAMODERN Ken Gray and Gerrie Lombaard with their futuristic machine PHOTOS: ELIZABETH SEJAKE
researching their idea in this field way back in 2014. Start-ups will drive
The machine was imported from Germany and installed at 3-D metal printing process is, said Gray.
the company’s property in Johannesburg. Lombaard says the machine saves time because it can
Metal Heart’s first contract was to provide casting moulds carry on working indefinitely and without supervision. future job creation
for the manufacture of certain components that a well- Personnel can therefore get on with other work.
known provider of security products and do-it-yourself As a result of the accuracy, the final product is much
enthusiasts use in the opening mechanism of a door. closer to what is ultimately required, and very little
According to Lombaard, the so-called SLM machine that finishing work is needed when the casting mould comes out Some of the businesses the Industrial Development
Metal Heart imported is the first commercially available 3-D of the 3-D printer. This also saves working hours and Corporation’s (IDC’s) business unit for new industries
metal printer in the country. energy. approved financing for over the past financial year include:
After the agreement with the IDC was signed, the Gray says one of the greatest advantages is the range of . A company that manufactures electronic appliances that
company was so eager to begin that it already had a materials that can be used. beam out light by following a standard, silicon-based
technician from SLM waiting in the car to calibrate the The list is long and includes titanium, aluminium, tool manufacturing process;
machine – only to hear that it still had to obtain customs steel, cobalt-chrome and stainless steel. . The commercialisation of a valve that prevents leaking in
clearance for the printer, Lombaard explains. The metal powder used in the process is imported and toilet cisterns; and
The 3-D printer works by adding layers of metal dust to comprises just a small percentage of the costs, says Gray. . Support to existing clients that manufacture medical
an object form, which has been preprogrammed into a The biggest expense is the machine itself. equipment.
computer. Every layer is bonded to the previous layer using The different sorts of metals that can be used, the According to the IDC’s integrated report for this year,
a laser beam. complex elements that can be applied in the design and the BENEATH THE SURFACE Complex inner workings R31.4 million of the entity’s financing went to black
The machine does its own quality control test after every accuracy of the process means the machine can cater to industrialists, and R107.9 million went to businesses run by
layer is added. various fields. young entrepreneurs.
The accuracy of the machine, along with its complicated Just think of what it could mean for sectors such as can be achieved, because complexity is not a limiting factor. Much of the money goes to start-up businesses that focus
geometry and unique characteristics that can be applied in motorsport, tools, aviation, space travel, cycling equipment Eventually, the technology can even begin to influence the on the commercialisation of new technology – innovation –
the design process, has many advantages over conventional and lightweight but functional equipment for outdoor way that car bonnets or camera casings look, because these and have not yet entered a growth phase.
manufacturing techniques. enthusiasts. designs are still largely limited by what can be achieved by Job creation is still low at this early stage, with 478 new
The more complex the product, the more competitive the Gray says there are few limits on the types of designs that conventional manufacturing techniques. posts created in the financial year that ended in March.