Developing countries that have shown upward economic trends have relied on the manufacturing sector as their engine room for growth. The Manufacturing Competitiveness Enhancement Programme, is a support scheme that offers production incentives and financial loan facilities to the manufacturing industry in South Africa.
The Manufacturing Competitiveness Enhancement Programme grant provides a rebate for the purchase of machinery, tools, equipment, cleaner energy, new product marketing, production efficiency and most other projects related to increasing the competitiveness of manufacturing companies in South Africa across almost all sectors. This includes investment into software as well as processes and projects related to manufacturing. Companies that provide services to manufacturing companies may also apply. These include consultants, engineers and service providers that consult to the manufacturing industry.
Industrial Financing and Loan Facilities
The Industrial Financing and Loan facilities comprises two components i.e. Pre and post-dispatch Working Capital Facility and the Industrial Policy Niche Projects Fund.
- Pre/Post-dispatch Working Capital Facility offers a working capital facility up to a maximum of R30 million for a period of up to four years, at a preferential fixed interest rate of 6%.
- Industrial Policy Niche Projects Fund: projects identified by the dti sector desks and IDC’s Strategic Business Units that focus on new areas with the potential for job creation, diversification of manufacturing output and contribution to exports, that would otherwise not be candidates for commercial or IDC funding, may be eligible for an MCEP grant that may be structured as part of the borrower’s equity contribution
The MCEP can be used for:
- Capital Investment
Equipment upgrading and expansions, includes: new machinery and equipment, building improvements and extensions. For entities with total assets below R 5 million, the minimum investment in machinery and equipment is R 500 000. Where total assets exceed R 5 million, the minimum capital investment is R 1 million and where total assets exceed R 30 million, total capital investment required is R 2 million.
- Green Technology Upgrading Grant
To achieve cleaner production and improved energy efficiencies e.g. Recycling, solar panels, establishment of renewable energy infrastructure, water treatment.
- Enterprise Level Competitiveness Improvement Grant
To achieve accreditation of conformity and quality standards.
e.g. ISO, CE mark. Feasibility Studies Grant
The expected investment project to result from the feasibility study should have a minimum value of R 30m (maximum grant of R7.5 million).
e.g. design costs and EIA costs.
- Cluster Initiatives Grant
Project costs to support cluster initiatives to improve competitiveness, innovation and access
to new markets (at least 5 individual enterprises) e.g. market research, benchmarking, product development.
- Working Capital Facility (Pre / Post-Dispatch)
A working capital facility of up to R 50m at a fixed rate of 4% which is available for a term of up to 4 years.
- Industrial Policy Niche Projects Fund
Projects identified by the DTI / IDC that focus on new areas with potential for job creation, diversification of manufacturing output and contribution to exports, that would otherwise not be candidates for commercial or IDC funding, may be eligible for an MCEP grant that may be structured as part of the borrower’s