BLACK INDUSTRIALIST REPORT the dtic Department: Trade, Industry and Competition REPUBLIC OF SOUTH AFRICA Minister’s Foreword 04 Part A: Introduction 06 Part B: Department of Trade, Industry and 12 Competition Part C: Industrial Development Corporation 18 Part D: National Empowerment Fund 24 Part E: Case Studies 30 Part F: Conclusion 100 ICONS SUPPORTED BLACK INDUSTRIALISTS JOBS TO BE SUPPORTED APPROVED FUNDING DISBURSEMENTS PROJECTED INVESTMENT JOBS TO BE RETAINED/SAVED YOUTH EMPOWERED WOMEN EMPOWERED GREEN ECONOMY ARTS AND CULTURE INFORMATION AND COMMUNICATIONS TECHNOLOGY AND SOFTWARE PRODUCTION AGRO-PROCESSING AND AGRICULTURE INDUSTRIAL INFRASTRUCTURE AUTOMOTIVE AND TRANSPORT EQUIPMENT MACHINERY AND EQUIPMENT CHEMICALS, MEDICAL AND INDUSTRIAL MINERAL MANUFACTURING CONSTRUCTION AND MATERIALS MEDIA AND AUDIO VISUAL CLOTHING, TEXTILE/LEATHER AND FOOTWEAR MINING AND METALS/MINERAL BENEFICIATION DISTRIBUTORS, DISPATCHERS AND PROCESSORS OIL AND GAS EDUCATION PROPERTY ENERGY/RENEWABLES/GREEN ECONOMY RETAIL ENGINEERING SERVICES FINANCIAL SERVICES STEEL AND METAL FABRICATION/WHOLESALE FOOD AND BEVERAGES TOURISM AND SERVICES HEALTH ECONOMY TRANSPORTATION HEAVY MANUFACTURING 02 BLACK INDUSTRIALIST REPORT 2021 ACRONYMS B-BBEE Broad-based black economic empowerment BIS Black Industrials Scheme GDP Gross Domestic Product ICT Information and communications technology IDC Industrial Development Corporation NEF National Empowerment Fund SEZ Special Economic Zones SME Small and medium enterprise the dtic Department of Trade, Industry and Competition BLACK INDUSTRIALIST REPORT 2021 03 MINISTER’S FOREWORD Ebrahim Patel Minister of Trade, Industry and Competition It is my pleasure to present the inaugural Black Industrialist Report, highlighting some of the work of the Department of Trade, Industry and Competition (the dtic), the Industrial Development Corporation (IDC) and the National Empowerment Fund (NEF) in developing and supporting a new class of South African industrialists. Over the last five years, some R32 billion has been To realise our economic potential, South Africa must invested through funding initiatives within the dtic in embark upon a focused and determined effort to nearly 800 black industrialist businesses. This funding transform our industries and make them more dynamic has supported the creation of new and dynamic and competitive. In doing so, we are developing our enterprises in a number of critical value chains across all industrialisation efforts around strategic localisation nine provinces, crowding in additional investment from by boosting domestic demand for South African the private sector as well as creating and saving nearly manufactured goods, and expanding our access to 120 000 jobs. export markets. Black industrialist funding, provided by the dtic and its We have obtained commitments from social partners entities, is creating platforms for a new entrepreneurial at the National Economic Development and Labour class to play its rightful role in boosting industrialisation Council (Nedlac), as part of the national priorities set and fully harnessing the resources of our country. out in the Economic Reconstruction and Recovery These platforms have been enhanced by the dtic even Plan, to reduce reliance on imported goods, and to further through reforms enabled in competition law, work with government in developing our productive efforts to improve the ease of doing business and the capacity. Over the next five years, we will seek to invest implementation of the national sector masterplans. in new industries which can reduce our reliance on 04 BLACK INDUSTRIALIST REPORT 2021 imports by 20% and boost our economic output. These the dtic, IDC and NEF over this period. The case studies commitments made by social partners will further cover a range of productive sectors: food production, create opportunities for South African manufacturers, clothing and textiles; mining metals machinery including small and medium businesses and industrial & equipment; transport logistics & infrastructure; firms owned and controlled by black South Africans, to chemical products and healthcare; plastic products; grow their businesses and create jobs. the green economy; the creative industry; property, construction & building materials; tourism and the The realisation of a single African market, through the fourth industrial revolution. implementation of the African Continental Free Trade Area (AfCFTA), will further expand opportunities for Through each of these efforts, we are opening up and South African industrialists, including black industrialists. changing our market structure, paving the way for new A number of black owned and operated businesses entrepreneurs and industrialists. To strengthen these are already taking advantage of existing opportunities efforts, from 1 April 2021 the dtic and the entities across the rest of the African continent. the dtic and its under its oversight will roll out a series of seven joint entities have witnessed how black industrialists have key performance indicators. used opportunities on the continent, particularly in the exporting of cooler boxes to Mozambique; hollow In this way, the combined efforts of all public entities core internal doors to Botswana; train brake shoes to will begin to be aligned to national priorities in a Zimbabwe; wine to Ghana; and machine cutting tools more explicit manner. The J-KPIs cover, among others, to Mauritania. Targeted policies can enhance the entry the work of sector masterplans, initiatives to boost of young entrepreneurs, women and black industrialists levels of investment and localisation in the economy, in these export markets. expanding trade within the continent, enabling better local economic development, supporting the growth We are developing industrial competitiveness plans, of new industries (in the green economy and through referred to as sector masterplans, for a number of beneficiation) and building a capable state. These local industries. These masterplans include substantial efforts will improve coordination between the dtic, commitments towards transformation, to complement IDC and NEF in identifying, supporting, and growing efforts to expand local production and improve black-owned and operated industrial enterprises in economic dynamism. In the automotive industry, South Africa. some R6.4 billion has been committed by automotive manufacturers towards the creation of an Automotive There have been many lessons learnt over the last five Industry Transformation Fund, which will provide funding years, which we will use to make the funding support and market access opportunities for black component of government more targeted and efficient. I would like manufacturers in the automotive value chain. In the to thank the staff of the dtic, IDC and NEF for their work agricultural sector, R1 billion has been committed to in carrying out their black industrialist support over improve opportunities for black sugar farmers, while the last five years, and challenge them to improve the in the poultry sector, the industry has committed R1.7 access and efficacy of this funding in the years to come. billion to expand opportunities for black farmers. Each of these commitments complements the funding which government has provided through the dtic and its entities. We expect further opportunities to be created through the development and implementation of masterplans in different industries, including steel, furniture, chemicals and plastics, as well as clothing, textile, footwear and leather. Ebrahim Patel The inaugural report provides details of approximately Minister of Trade, Industry and Competition 100 black industrialists who have been supported by 19 April 2021 BLACK INDUSTRIALIST REPORT 2021 05 A INTRODUCTION 06 BLACK INDUSTRIALIST REPORT 2021 The Department of Trade, Industry and Competition • Redress and deal with the historical exclusion of (the dtic) and its agencies, the Industrial Development black people from the mainstream economy and Corporation (IDC) and the National Empowerment the legacy of economic exclusion of black people; Fund (NEF), have a mandate to support economic • Lay the foundation for deeper growth through growth, job creation and transformation. The greater economic inclusion that widens the talent department uses industrial development, trade pool of enterprises drawn from black South Africans, policies and competitiveness measures to broaden including women and young people; and empowerment and economic inclusion. • Address the huge inequalities of South African society, a challenge that is unique to the country. This report addresses one aspect of the dtic’s broad transformation mandate, focusing mainly on the department’s support to black industrialists. In Evolution of empowerment policies addition, the NEF – showcases some of its funding activities, including projects such as property ventures. Over the years, the focus of empowerment has Detailed information on the impact and beneficiaries broadened to include support to: of wider empowerment initiatives and programmes • Individual share ownership, which typically is still being collated – this report focuses on current comprises a non-controlling share of an existing activities in support of black industrialists. Future business and which advances capital accumulation reports will include additional information on broader among black South Africans; empowerment initiatives and impact analysis. • Broad-based empowerment made up of communities, consortia of women or