14 CITY PRESS, 18 OCTOBER, 2015

news A PROJECT IN PARTNERSHIP WITH THE IDC The IDC in numbers

NUMBER OF FUNDING APPROVALS

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: From Ouma to 5 513

VALUE OF FUNDING APPROVED

Last year: wind energy R11.5 billion Past five years: The Industrial Development Corporation is not only investing in businesses that R60 billion Past 10 years: make money, but in those that create thousands of jobs and social change R98 billion

Past 20 years: NICKI GÜLES projects to support Eskom, and mining and Although Qhena says he cannot choose a favourite Gauteng and some of them have been exported,” he R143 billion nicki.gü[email protected] beneficiation projects to convert raw materials into among the companies the IDC has funded, he has a says. “There are lots of others, including one that 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 an x-ray machine from spare parts, wheels and undercarriages for “We have a company called Lodox that produces a technologies to support, and works with universities, at the Chris Hani Baragwanath Transnet locomotives to photovoltaic panels, and low-dosage X-ray machine, started by [diamond the Innovation Hub and the CSIR to identify them. Hospital 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 with funding from the you’re in a rush at the airport and want to park, WIndustrial 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 export markets, and also dries them, producing JOBS CREATED AND SAVED (see sidebar). Shweshwe Less trudge, 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, as shareholders. “Now they are going a step further – but its CEO, Geoffrey Qhena, would have liked that success more trash 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 [email protected] [email protected] create more rural jobs. Another new direction is average, we could approve about R20 billion every pursuing regional agricultural opportunities – 140 000 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 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 and thread five years ago. everyone’s character. An economist by training, processed here. 285 000 saved with such an investment: 450 000 over 20 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 years. 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: Qhena says that of greater importance than the Zwelitsha – was saved thanks to cash injections goals as a social entrepreneur. if somebody who had no hope of getting a job will amount directly invested in the corporations they 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 452 000 fund is the amount that is leveraged. For every R1 and the department of trade and industry’s with the idea of empowering opportunity to go to school and their lives will the IDC invests in a project, R2 is leveraged from productivity incentives programme. South African informal waste change.” other partners, including banks, development Da Gama bought sole rights to print the pickers with functional, safer One such project sticks out – a partners and the entrepreneurs themselves. branded Three Cats range on traditional and durable waste trolleys. business plan competition “In 1950, Sasol was started with a R10 million copper rollers in 1992 when it employed The trolleys double up as between universities where the investment from the IDC,” says Qhena of the 12 000 people. But cheap imitations from outdoor adverting mobile winner, a brick-making project, company 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 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 the Staff described the “absolute recycling and economic development This is what should drive us.” SECTORS THAT BENEFITED brand is still 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 R35 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. R26 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 R13 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.” R13 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 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 R11 billion in agroprocessing 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 ’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 R11 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 R7 billion in tourism and restaurants 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