These funds will be distributed through the newly launched Manufacturing Competitiveness Enhancement Programme (MCEP) under the administration of the Department of Trade and Industry (DTI).
Speaking at the third annual AfriMold conference, Tshepiso Makgothi, Chief Director of the Competitiveness Cluster for the DTI said the incentive is aimed at promoting enterprise competitiveness and job retention within the manufacturing sector.
She added that the programme was established to curb job losses in the manufacturing industry as the economy had lost some 200 000 jobs during the 2008/2009 recession.
The fund will inject cash into waste management, cleaner production, information technology, logistics, agro-processing and renewable energies, with the exclusion of automotive manufacturers, clothing and textile industries, which currently have a separate incentive specifically aimed for those sectors.
The MCEP will be in the form of a grant that is based on a company’s Manufacturing Value Added (MVA).
“The grant is designed to promote enterprise competitiveness and job retention so going forward, smaller companies will get a bigger share of their MVA while big companies will get a smaller share,” she said.
A 100 percent black owned company with total assets of below R5 million would qualify for a 15 percent MVA, whereas one with total assets with a historic value of R200 million and above would only qualify for a 7 percent MVA.
Divided into a production incentive and loan facilities, the incentive is not meant for office equipment, land costs, vehicles or second-hand assets. “We will only reimburse businesses for manufacturing related products and goods utilised in the company, nothing else,” said Makgothi.
The National Tooling Initiative Programme (NTIP) CEO, Dirk van Dyk, said the programme is a strong inducement for enterprises to upgrade their production facilities, processes, products and up-skill their workers.
He urged all role players in the South African manufacturing industry to take advantage of this initiative. He further thanked the government for being a major role player in an effort to revitalise ailing South African TDM sector.
The closing date for the six-year programme will be the end of March 2018. Companies will be given the opportunity to apply for other incentives within the programme after two years of the initial application.
