Page 45 - IDC

6 CITY PRESS, 25 JUNE, 2017

business

The IDC financing process in 5 s teps
outh Africa has the lowest levels of youth
entrepreneurship in the southern African R1 million or more for entrepreneurs for new
region and on the rest of the continent,
despite the country’s massive youth businesses or expansions
unemployment problem. The potential client drops off their business plan at the
S The Industrial Development Corporation 1 IDC's P re-Investment B usiness Centre (PIBC) at 19
(IDC) is determined to change this. Its Development Fredman Drive, Sandton, or at one of the IDC's r egional
Impact Support Department (DIS) has embarked on a or satellite offices, or submit an online application
drive to encourage more young entrepreneurs,
especially those that are focused on manufacturing, to 2 All business 3 If the business plan falls
knock on its doors to get support for their start-ups or plans are within the mandate,
to expand their existing businesses. registered by the PIBC allocates
Stuart Bartlett, head of DIS, says the development the records it to a m anager to
finance institution set aside R4.5 billion to invest in department begin screening as
youth businesses over five years, the objective being to and screened part o f t he basic
create a new cohort of young people that can get into assessment process
industries that have the capacity to create employment
and unlock opportunities. 4 Applications that pass the assessment process are sent for review to
One of the major challenges the team has one of the 13 strategic business units (SBUs) and a d ue diligence is done
encountered so far has been finding enough young
people with experience and skills to enter the
manufacturing sector.
“Youth very often don’t have this type of experience
in manufacturing, the finance or the networks of the
old boys’ club. They haven’t been given the opportunity
to gain experience in the sector. They are moving more Agroprocessing Industrial Metals and Chemicals
into retail, services and similar industries and agriculture infrastructure mining
where competition is stiff.”
Bartlett says most youth
entrepreneurs tend to gravitate A
towards light manufacturing,
technology and tourism. PROJECT IN
“These are the new types
of industries that are kick- PARTNERSHIP Automotive a nd Textiles New Heavy Media
starting the fourth industrial transport and industries manufacturing and motion
revolution. The youth are WITH THE equipment clothing pictures
more tech savvy and
knowledgeable in these IDC
sectors, but we also want to
encourage and assist them to
venture into manufacturing.
“As the IDC, we are determined that
if we are going to start making an impact in Machinery Chemical Light The
industrialising the country, we need to deal with the and capital products and manufacturing rest of
issue of youth unemployment.” equipment pharmaceuticals and tourism Africa
To make the corporation more appealing to young
people, it launched the Gro-e-Youth Scheme. On approval by the IDC management, funding is
This scheme has designed products and terms that 5
are suited to budding young entrepreneurs. made available to the client subject to meeting set
Mzwabantu Ntlangeni, who is also a development conditions
specialist in the same department, says they have also
come up with additional support packages to assist Call the IDC on 0860 693 888 or send an email to callcentre@idc.co.za
youth-owned businesses that are investment ready.
The Youth Pipeline Development Programme is a HELPING HANDS Daniel van Vuuren, Stuart Bartlett and Mzwabantu Ntlangeni are the youth Clients can also apply o nline, or find more information about the regional
another business support package that helps young enterprise team at the Industrial Development Corporation PHOTO: ELIZABETH SEJAKE offices at www.idc.co.za
people become investment-ready by removing any
obstacles in their path.
“Say a business plan qualifies for funding, there HOW TO GROW YOUNG
could be a condition that requires them to spend
money first to become investment-ready.
“Let’s say in order to operate a factory they first
need to undertake an environmental impact assessment
(EIA). We know that this exercise is not cheap.
“This programme subsidises the young person at a
50% ratio to get this EIA done, and this money can be ENTREPRENEURS
repaid at the end of the loan term,” he says.
His colleague Daniel van Vuuren adds that the
objective was to create an environment that would not
intimidate young people, and this they did by putting
in place a process that would take them by the hand
and provide them with guidance from the moment they With R4.5bn set aside for young South Africans who have the potential to
walk through the door until those who are successful
receive funding and support.
To assist young entrepreneurs that are applying for create jobs, the IDC is open for business, writes Caiphus Kgosana
the first time, Bartlett’s team works closely with the
Pre-Investment Business Centre, which is where all new
applications for IDC funding are received and assessed. Then guiding them on what sectors the IDC is He said the developmental mandate of the IDC, especially for mid-level jobs,” he says.
“We have worked to change the perception that interested in funding and helping them structure their especially in such a difficult time when the country has Ntlangeni further pointed out that the National
young people may have had in the past that the IDC is business pitch to make it more attractive for funding. been hit with credit downgrades and is in the midst of Development Plan envisages an economy that should
a bridge too far for them. Through the Gro-e-Youth Scheme, youth-owned a technical recession, is to inject more capital into the create 11 million jobs by 2030.
“What we are now saying is that the IDC is open for enterprises (those with a 50%-plus youth ownership) economy and create jobs. For this to happen, he says, South Africa has to
business, including providing support to youth-owned and youth-empowered enterprises (those with between “We want to see youth enterprises creating jobs. create 50 000 small and medium enterprises between
businesses. 25% and 50% youth ownership) are offered financial Youth unemployment is almost 60%. We are now and then. This requires the economy to grow by a
“Young people need to experience that when they packages that are tailored at an interest rate of up to experiencing a youth bulge and most of these youths staggering 20% a year until 2030, something that is
walk through our doors,” Van Vuuren said. prime minus 3% on the capital amount. are unemployed … it’s dangerous. We want to see youth extremely difficult in the current economic climate.
This means helping them by understanding their What they offer to qualifying youth enterprises is not enterprises creating jobs at a cost of two jobs for every That is why the IDC, and its cooperating partners,
ideas, then taking into account their background and just a financial package, says van Vuuren, but post- R1 million that we invest. are expected to play a bigger part in helping the
skills, and helping them compile a basic business plan. funding business support as well. “It is not difficult to achieve in these industries, country to grow its economy.

The sky’s the limit for this trio of black industrialists

POLOKO TAU VISIONARY in size from a 240m² space to two studios, here will bring in their own staff.
projects@citypress.co.za TRIO The separated by an acoustic door divider, giving a “We normally see five to eight actors on
directors of combined space of 1 000m² when opened. television, but behind the scenes there are
The ice has melted at the once-famous Sky Rink Sky Rink The studios are surrounded by several control about 30 to 50 people making it all possible,”
in the iconic Carlton Centre building, situated in Studios, Miles and sound rooms. Mohapi explained.
Johannesburg’s central business district (CBD), but Britton- Each studio has been kitted out with LED “This is one great industry that can employ
expect no dampened floors there – the skating Masekela, lighting, high-definition facilities and three everyone from an accountant to a security
rink has been transformed into a multimillion- Frank Mohapi cameras. There is also space for fully equipped guard and cleaner.”
rand, world-class film and television production and Marvin production offices. Mohapi said the directors were also looking
facility that is almost ready to launch. Mathibe, A long corridor is lined with 10 post- at creating a platform to empower black people
Described as a “high-technology, one-stop celebrate the production suites. And completing these studios to become managers in the film and television
studio and production facility”, the refurbished near are, of course, make-up rooms as well as production industry.
structure is expected to make its mark as the completion of waiting rooms, both private and communal. “We have very experienced black people who
first and largest black-owned, one-stop film and their facility With all these structures conveniently located know the ins and outs of the industry and
TV production hub of its kind in the country. in the heart in one space, Mohapi said the establishment production, but no one in this country will
Inspired by the chronic shortage of studios of Joburg was well equipped to produce dramas, sitcoms, expose them to management positions.”
and production facilities in South Africa, three PHOTO: TEBOGO telenovelas, news features, talk shows, sports Mohapi and his partners may have succeeded
black industrialists came together about four LETSIE and advertising productions. in realising their dreams in just a few years by
years ago to embark on this joint venture. “We are a one-stop shop that will address working hard and overcoming challenges, but
Soon, they will open the doors of Sky Rink producers’ needs. We are able to live schedule, they are all too aware of other entrepreneurs in
Studios, where film and television production host channels and stream live right from here.” different disciplines who have failed because of
houses are expected to find everything under Mohapi added that the directors of Sky Rink the funding committee set-up.
one roof. This is where producers will walk in did not plan to go out fighting for business “You find a committee with accountants who
with storylines and walk out seeing them given against other production houses once the only think of the money and less of the
life in the form of quality TV dramas and talk establishment was operational. business. There should be entrepreneurs there
shows, sports and music shows. “We do not want to be referee and player, who think along the same lines [as the
It all started after Frank Mohapi tried to use but are offering a platform where production producers] when security is needed.”
his considerable public relations and Britton-Masekela, the trio wasted no time in up multiplying more than four times from the houses can do it all under one roof. Whatever Asked where he saw Sky Rink over the next
communications clout to help his producer working on business plans and proposals. original R50 million envisaged. we had in mind was for the production decade, Mohapi said there would be many other
friend, Marvin Mathibe, secure a studio for When they approached Transnet, the owners Transnet offered the trio the floor as well as houses,” he said. establishments like theirs, adding that while he
filming. of the Carlton Centre, Mohapi said they had increased support. Why locate the business in Joburg’s CBD? and his partners were setting a trend, they were
They tried everywhere, but all the good planned to house the facility in the 2 000- Today, after receiving R180 million from the Mohapi smiled at the question. “Apart from also addressing the desperate shortage of
studios in town were fully booked. seater ballroom, but were instead offered the Industrial Development Corporation and a bringing life back to the city centre, the CBD will facilities while staying on par with technology.
Naturally, they spotted a gap in the market. disused ice rink. further R40 million from the National allow easy access for extras (additional people “We are expecting to hit the ground running
“I decided then and there to build our own Thanks to those who told them to “go big or Empowerment Fund – along with other brought in on a temporary basis for crowd when we open our doors. Already, we are
studios,” Mohapi said. go home”, Mohapi is not shy to say today that tranches from other partners – the three scenes). There will be no need to bus in extras.” about to finalise contracts for long- and short-
“There was an opportunity in the market the three entrepreneurs were sent back to directors of Sky Rink will soon see their dream The directors also have job creation in mind. term productions. I believe we will be fully
waiting to be exploited.” polish their proposal and expand on a number house being launched. Sky Rink is expected to create about 150 direct booked in our first year of production and will
Together with IT and media enthusiast Miles of things – including their budget, which ended The 2 400m² facility offers six studios, ranging jobs, while production houses using facilities look into expanding soon,” he said.