the dti's manufacturing competitiveness enhancement program
DESCRIPTION
Theo Meintjes' presentation on the DTI Production Incentives for manufacturing companies willing to improve their competitiveness at the Cap40.TRANSCRIPT
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Manufacturing competitiveness enhancement program
• Cash grants on investment cost
• Improve productivity & competitiveness
• Retain jobs.
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Main Qualifiers
• Applicant company’s activities must include
manufacturing or Engineering services or conformity
assessment agency.
• At least 1 financial year of trading history
• BEE Level 4 or provide 2 year plan
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How much?
A cash grant varying between 30% and 80% of
investment Cost.
Tax Exempt, but not really.
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Qualifying investment costs
1. Upgrading and expansion of equipment and
buildings
2. Converting to Green technology & Energy saving
3. Improving competitiveness (soft issues)
4. Feasibility studies
5. Cluster initiatives
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Also on offer
• Pre- and post production working capital loans @ 6% p.a. from IDC
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CLASSIFICATION
Size of applicant according to BALANCE SHEET + ACC. DEPR.
Grant % varies from component to component
R0 – R5 million Highest % grant
R5 – 30 million
R30 – R200 million
> R200 million Lowest % grant
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MVA Limitation
This is an overall limitation on the first 4 cost types
• MVA = Manufactured sales less cost of materials
used.
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Example: MVA calculation
IncomeStatement
MVA Calculation
Sales of manufactured goods 1 000 000 1 000 000
Sales of other goods and services 788 000 n/a
Total sales 1 788 000 1 000 000
Raw materials & Packaging 600 000 600 000
Operating cost 231 000 n/a
Administrative cost 97 000 n/a
MVA 400 000
Limit according to size of applicant, e.g. R30m> <R5m= 25% R100 000
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Size of applicant
Expand Green Soft Feas. study
Cluster MVA %
R % % % % % %
<5m 50 50 70 70 80 n/a
>5 <30m 40 40 60 70 80 25
>30m <200m 30 30 60 50 80 20
>200m 30 30 50 50 80 10
MVA limit? Yes Yes Yes Yes No
Summary of grant percentages
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CONCLUSION
• More generous than any program before.
• Fewer entry level requirements and performance
requirements than any program before.
• The only exclusions are, no subsidies on 2nd hand
assets, no vehicles and no leased buildings