20 ENTERPRISE
20 ENTERPRISE DEVELOPMENT Growing local business underpins corporate strategies. Supplier Development Programmes and Enterprise Development Programmes are major contributors to the promotion of local businesses all over South Africa. With the arrival of large corporates in the form of solar and wind farm investors, rural communities in the Northern Cape, SDP and EDP have become an important part of the transformation of region’s economic landscape. The Minerals Council South Africa (representing mine owners) is running the Northern Cape Mining Community (NCMC) project to provide insight into the contribution of mining to the Northern Cape. Specifically, the initiative aims to illustrate the economic, social and environmental contributions by and the impact of mining on the area and its people. According to the NCMC, more than R700-million was spent on development projects by mining companies in the province over a period of five years. Nineteen mines are listed in the province – with eight of those being in the John Taolo Gaetsewe District Municipality – and each of these operations has Social and Labour Plans (SLPs) in addition to SDPs and EDPs. In terms of these programmes, large companies are obliged to or choose to help build up and train business owners (ED) which might be part of their supply chain (SD). The programmes often overlap, as it makes business sense for a large mining operation to have a successful local bus company supply its transport needs. The same would apply to the cleaning of solar panels, illustrated in the top picture on this page at the Kathu Solar Park. Given a steady client and a reliable income, these local businesses are much more likely to succeed in the long term and to create employment as they grow. So widespread have ED and SD programmes become that national awards are now presented annually. The Business Day Supplier Awards has no fewer than 11 categories and an overall winner. That winner in 2021 was Tiger Brands, whose R100-million Dipuno Enterprise and Supplier Development Fund impressed the judges and which was cited as an illustration of the best kind of collaboration between the private sector, government, mining houses and their pipeline partners. This kind of cooperation creates jobs and can lead to expansion. Kumba Iron Ore, which mines the Sishen Mine near Kathu, spent R5.4-billion on local community suppliers in 2022. Across the province, that amount rose to R18-billion with BEE-business suppliers. Fully 81% of the company’s employees are local. The Sishen Iron Ore Company-Community Development Trust (SIOC- CDT) is the body that disburses funds to community projects. So far, it has invested more than R1-billion in socio-economic and community development projects. Support is given to local SMMEs through advice and support, over and above any purchasing agreements, and health and education are the major focus of the community trust. The other images on this page reflect work done by the SIOC-CDT.
NATIONAL INCENTIVE SCHEMES The national Development of Trade, Industry and Competition (the dtic), in collaboration with other public and private sector entities, has developed a number of incentives schemes to assist with the growth of certain sectors. These national incentives schemes are listed below. INNOVATION CLUSTER MANUFACTURING INVESTMENT CLUSTER PROGRAMME INCENTIVES PROGRAMME INCENTIVES • Technology and Human Resources for Industry Programme (THRIP) • Support Programme for Industrial Innovation (SPII) • A 50% to 90% cost-sharing grant to maximum R8-million per annum for three years for approved project engaged in applied research and development in science, engineering and technology. • Matching scheme that provides financial assistance in the form of a non-taxable grant for qualifying costs incurred in development activity associated with a specific project to a maximum of R5-million. • Black Industrialists Scheme (BIS) • Aquaculture Development and Enhancement Programme (ADEP) • Strategic Partnerships Programme (SPP) • A 30% to 50% cost-sharing grant of up to R50-million. Offers support on a cost-sharing basis towards capital investment costs, feasibility studies, post-investment support and business development services (to the maximum of R2-million). • Reimbursable cost-sharing grant of 30% to 50%, maximum of R20-million. • A maximum of R15-million per financial year on a 50:50 basis. • Global Business Services (GBS) Incentive • Film and TV Production • Export Marketing Investment Assistance (EMIA) • Sector Specific Assistance Scheme (SSAS) • Capital Projects Feasibility Programme (CPFP) SERVICES INVESTMENT CLUSTER EXPORT CLUSTER • Reimbursable cost-sharing grant of 30% to 50%, maximum of R20-million for qualifying costs. Score based on economic benefit criteria. • For productions with various QSAPE amounts, various percentage and calendar days requirements may be waived and such discretion will take into account the budgetary implications of the decision made. • Return airfares, subsistence allowances, the cost of sample transportation and various other costs may be covered in respect of costs related to marketing, missions and trade fairs. • Project Funding. A reimbursable 80:20 cost-sharing grant scheme. • Emerging Exporters. 100% of the cost to a maximum of R1.9-million per project. • Reimbursable contribution up to a maximum of R8-million. • Agro-Processing Support Scheme (APSS) • Automotive Investment Scheme (AIS) • Special Economic Zone Fund (SEZ) • Critical Infrastructure Programme (CIP) • Reimbursable cost-sharing grant of 20% to 30% to a maximum of R20-million. Non-taxable cash grant of • 20% of the value for light motor vehicle manufactures and • 25% of the value of qualifying investment in component manufactures and tooling companies. INFRASTRUCTURE INVESTMENT CLUSTER • Preferential taxes (including 12i Tax Allowance) • Bulk infrastructure (electrical sub-stations, water storage, sewerage treatment and pumping, etc) • Top structures • Business development (pre-feasibility studies and feasibility studies, technology testing and training, EIA and general research linked to planned investment and clusters) Registered private entities and local governments (municipalities, excluding metropolitan municipalities).Types of supported projects, capped at R50-million: • strategic infrastructure feasibility studies • generic investment • South African film and TV studios and cinemas • state-owned testing facilities • state-owned industrial parks • distressed municipalities or investors in such municipalities
