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National Industrial Participation Programme
Performance Review 2009
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OF
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2009
Introduction 1A Brief History of the NIPP 2
How the NIPP Works 3
Determining the NIPP Obligation 4
Monitoring the NIPP Obligation 4
Measuring the Obligor Performance 5
Strategic Defence Programme (SDP) Obligations 5
Geographic Spread of NIPP Projects 6
Impact of the NIPP 11New and Strategic Sectors 11
Sectoral Impact 13
Direct and Indirect Impact 14
Case Studies: Measurable Impact 15Job Creation 15
Access to International Markets 16
Access to Finance 17
Enterprise Development 17
Critical Skills Development 18
Cross-Cutting Impact 18Successes of the NIPP 19Failures of the NIPP 20Lessons Learned 21Conclusion 22Appendix 1: Full Project Overviews 23
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2008/09
When the National Industrial Par ticipation Pro gramme (NIPP) was initially launched in 1997, it was met with considerable skepticism from some quarters, particularly after government had approved the Strategic Defence Packages (SDP) in 1999. Some argued that government was naïve to believe that the major corporations from whom expensive purchases were made would reinvest on the scale they had promised, and deliver jobs to the degree anticipated.
Objectives of the NIPP are:
Sustainable economic growth•
Establishment of new trading partners•
Fast track foreign direct investment into •South Africa
Exports of South African value added •goods and services
Job creation•
Human resource development•
Technology transfer•
Economic benefits to previously •disadvantaged communities
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economy. The NIPP Secretariat monitors and enforces this process, within the dti’s Industrial Development Division (IDD) (previously known as EIDD). In addition, the obligations are shaped by cross-cutting national priorities, such as promoting Black Economic Empowerment and Small Business Development.
The dti has been mandated with the management and monitoring of the NIPP. The objectives include increasing the levels of foreign direct investment, a ss i s t i ng w i th ga i n i ng ma r ke t acce ss fo r South African value-added goods and services, local job creation and ski l ls development. The mission of the Programme is to leverage economic benefits and support the development of South African industry by effectively utilizing the instrument of government procurement.
All obligations, both those originating from defence procurement and non-defence procurement, are monitored and managed. Each obligor has milestones to reach within their fulfilment period. Should they not meet these targets, a contractually prescribed breach procedure is followed, allowing the obligor time to correct the situation. At the end of this process, the milestone will be reassessed. Should the obligor still be lagging behind, a recommendation on how to proceed will be made to the Minister of Trade and Industry.
More than a decade after its inception, the jury on the NIPP is in. We can now properly assess the efficacy of the NIPP as major obligors2, closely monitored by the national Department of Trade and Industry (the dti), complete their side of the deal by fully discharging their obligations against pre-set criteria called “milestones”. The conclusion of this report is that the NIPP is working well.
This report gives a brief history of the NIPP, an overview of how the programme works, and high lights the successes and failures and the lessons learned going forward.
A Brief History of the NIPP
In South Africa the NIPP came into effect in 1996, in terms of Cabinet Memorandum 10/1996. In terms of this Cabinet Memorandum, any state purchase from companies selling foreign products to the Government of South Africa in excess of USD10 million is required to incur an NIPP obligation that is calculated at 30% of the imported content of the purchase contract. The set amounts, to be discharged within fixed timescales, are reinvested into the South African
2 Obligor: the company which has incurred the obligation in
terms of the NIPP.
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By July 2010 the NIPP had seen the implementation of 221 projects and credits in excess of USD19 billion had been awarded. This was primarily in the form of investments made, as well as exports generated, which have led to the creation and/or retention of approximately 26,000 jobs directly created and many more indirect jobs (see Table 4 on page 14).
The NIPP is working, and it is working by and large along the lines intended. There is little doubt that the NIPP has beneficially impacted on the growth and trajectory of the South African economy, and thus on the lives of our citizens.
How the NIPP Works
Industrial Participation Programmes are not unique to South Africa. They have been used by many countries, including Brazil, India, Greece and Portugal, amongst others, to offset major purchases by governments of large budget items from foreign suppliers. They seek to mitigate the impact of such purchases on the national fiscus and ensure (as far as possible) that knowledge, skills and new technologies are transferred to the country doing the purchasing, to break cycles of dependency and to stimulate local industrial and manufacturing development.
Offsets also provide governments with extra leverage for their own particular national economic strategies, for instance to develop underdeveloped regions, rural areas or marginalised and vulnerable communities (women, youth, etc.). The discharge of obligations helps local companies to add further value to local raw materials, and to expand export capacity and product ranges. Sometimes, obligors can help by providing access to finance for higher risk start ups or entirely new ventures, or even by investing in training colleges and SME start-ups.
The NIPP thus forms an integral part of the South African government’s economic development strategy. As such, it is aligned with industrial policy priorities as well as the key socio-economic imperatives of the government of the day.
Determining the NIPP Obligation
The obligations incurred must be at least 30% of the value of the imported content of the tender, and involve a signed contract with the obligor in question to commit to the agreement, with penalties for non-compliance.
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Obligors submit projects they wish to support as part of the discharge of their obligations to the National Industrial Participation (NIPP) secretariat, which assesses them against a variety of criteria for eligibility, framed by industrial development interests and priorities. Where necessary, the NIPP secretariat assists obligors to find suitable projects. If approved, the performance of approved projects is monitored until they are completed. In Appendix 1 of this report there are many detailed examples of such projects.
Each of the projects is classified initially by the dti for specific purposes between foreign direct investment (FDI) and export promotion (EP) related projects.
Monitoring the NIPP Obligation
Performance is measured by the NIPP Secretariat against the fulfillment of NIPP obligations as incurred by the obligors. The majority of NIPP obligations are tracked against investment and market access milestones, which in turn generate economic activity in terms of job creation, technology transfer and training. The NIPP also delivers high value added projects across industry sectors. Concerted efforts to include Black Economic Empowerment (BEE), Small, Medium and Micro Enterprises (SMME), promote women and youth-owned enterprises and work opportunities, and geographic spread are evident across the spectrum of implemented projects.
Measuring the Obligor Performance
Table 1 below sets out the updated progress, as for the dti’s annual report for the year ended 31 March 2010, on the achievement of the obligations due by the obligors, under the Strategic Defence Package (SDP).
Table 1: Progress in Obligor milestones to 31 March 2010
Obligor Value Obligation Over/Under Achieved
BAE SAAB $7,200,000,000 To be assessed in April 2011
GSC €2,852,460,454 Achieved
GFC $2,047,600,000 A shortfall of $205,413,468 *
Thales $652,408,990 Achieved
Agusta (LUH) $767,930,000 Achieved
Agusta Westland £108,644,495 To be assessed in September 2010
* The last claims are in the process of being processed
which should then satisfy this obligation in full. These claims
have taken longer than anticipated to finalise due to the lack
of administrative capacity within the obligor’s organisation.
[Source: National Industrial Participation Programme (NIPP)
(REPORT OF THE ACCOUNTING OFFICER for the year ended
31 March 2010) amended]
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In order to monitor the obligors’ progress, the dti has endeavoured over the past years to develop an industrial participation electronic database that would allow staff to electronically update information. A system has been procured from an external vendor and is currently in the process of being customized, tested and implemented.
Strategic Defence Programme (SDP) Obligations
The SDP still accounts for approximately 85% of the NIPP in value terms. Three of the six obligors under the SDP have completed their NIPP obligations to date, namely Thales under the Corvette Combat Suite Programme, Agusta Westland under the Light Utility Helicopter (LUH) Programme and the German Submarine Consortium (GSC) under the Submarine Programme. The German Frigate Consortium (GFC) is very close to completion, with only administrative matters left to complete.
On obligations not related to the defence procurements, significant progress has been made in getting the South African automotive sector to participate in the programme, with most Original Engine Manufacturers (OEMs) having signed agreements with the dti. Some South African based companies have been developed to be first tier suppliers to OEMs like Airbus. This has led to a number of localization programmes, as in the case of Volkswagen and Toyota SA. Various skills development programmes have been implemented.
The geographic spread of the NIPP (see pages 6 – 10) shows which projects have been or are being implemented. These projects are categorised according to provinces. Some of the provinces have benefited from fewer NIPP projects than other provinces. The reasons for this variance range from the choice of the obligors to viability of the economic sectors in the different provinces.
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* As at 30 June 2010
Geographic Spread of selected NIPP Projects*
ObligOr PArTNErS PrOjEcTSEASTErN cAPEAGUSTA Cape Mohair, Alpha Tops-PE Cape Mohair
Mario Levi Mario LeviFlexider S.r.l Flexider
AGUSTA WESTLAND Ashley Wendworth, Storm River catereres, HDI Shapoe Holding
Storms River Adventure
BAE/SAAB Mac Arthur Baths Package Tourism Investment to upgrade poolsBel-Essex Corporation Investment made by Bel-Mec to establish greenfield high pressure die
casting plantDAIMLER CHRYSLER Eberspaecher Manufacture of Catalytic ConvertersFERROSTAAL Magwa Tea Investment
Welfit Oddy Expansion of tank container fascilityFORD MCSA Faurecia SA
Gillet Exhaust TechnolgyGENERAL MOTORS Borbet Germany & GMSA Alloy Wheels - Hummer H3SOUTH AFRICA Goodyear SA & GMSA Tyres - Hummer H3
Borbet Germany & GMSA Alloy Wheels - Opel CorsaTHYSSEN Coega Wood PelletsVOLVO Faurecia Export of Catalytic Converters.Reduction by 40%
TSW Export of Aluminum Wheels from TSW
FrEE STATE BAE/SAAB Harmony Gold Investments in plant and machinery for gold beneficiation
SARM Investment for manufacture of gold chains by SA Royal manufacturers
gAUTENgAGUSTA Novamet, Katana Foods & Italian
Plastics InternationalItalian Plastics
SICAD SA & SICAD SicadPyromet &SMP Pyromet/Techint
AGUSTA WESTLAND AWL /Ngena Designs IRSCat-A-Trac & Ngena Cat-A-TracUnavolta/Novara Novara Flextech Flextech
NIPP REPORT 2009
EASTERN CAPE
NORTHERN CAPE
NORTH WESTMPUMALANGA
LIMPOPO
GAUTENG
FREE STATEKWA ZULU-NATAL
WESTERN CAPE
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AIRBUS Aerosud Manufacturing of set of VU for Airbus A320Barloworld Robot, Stemcor Export of robor tubesAfrican Non Destructive Testing Centre (ANDTC)
Training, examinations, aircraft inspections, industry inspections, R&D, NDT high tech equipment supply, NDT installation plant, consultation and validation
Eurolamine, Duferco Export of steel products by EurolamineEADSM Product life cycle management by AMS
ALCATEL Alcatel Altech Benoni Export of servicesExport of R&D Engineering to AlcatelLocal manufacture of DECT Components
ALSTOM Alstom South Africa Planning & design – railway signalling equipmentAlstom Electrical Machines F3 Motors Alstom Partslink, Rechanges & Renovation
Railway Rolling stock
Alstom SA – Alstom France HVITCALTECH ALCOM MATOMO
Motorola, Dalman, Duxbury Webb & Alcom
Exporting of two way radios
AREVA NECSA, AREVA Skills development in nuclear industryNECSA, Pronatura and Areva Investment in green coal Phase 1a
AVENTIS PASTEUR Aventis Clinical trials – TricliniumBAE/SAAB Electrolux SA Investment into Electrolux
ABB ABB Procurement Exports – ABB Switchgear
Interoc Atlas Copco Exports – Mining Equipment, Interoc Atlas Copco
Sopranu Investment into Supranu by SAAB ABB – soy protein manufacture
Industrial Business Park Construction and development of industrial business park for training and skills development programme
Y-Digital Works Establishment of a software development house focusing on export markets – outsourcing software development to Y-Digital
NEI Africa Export of switch-gears, transformers and power transformers
Kolbenco (Pty) Ltd Investment to fund the establishment of a die casting foundry and two machining lines to manufacture pistons for Ford
Swedish Match Acquisition of Leonard Dingler & Brasant for the manufacture and distribution of tobacco products
Aspen Investments into pharmaceutical manufacturing
General Electric Scaw Metals
Pyromet, IDC and BAE Ferrochrome beneficiation
Ethos IT Fund
Cavadi Tech Cavidi Tech viral diseases testing
TTS Electronics Investment for the development, manufacture and introduction of SA made electrical products for export
Grintek, Kunene, SAAB Investment by SAAB for shares in Grintek
Compass Group Strategic exports of value added goods and services by the Compass Group
Paper Base Manufacturing Investment to establish Espin factory for local sales of Pampers baby diapers
Gold Loan Scheme Creation of a 1000kg Gold Loan Scheme
Cybivad Ubbivatuibs, Cynovad France Investment by BAE into GEMCO for licensing to manufacture, sale and use of advance dental prosthesis
Treacle Fund II Investment opportunities in export-based businesses
SAAB – Denel Aerostructures Aerospace products
BOEING Denel WorkpackageAerosud AerosudSAT Bid WorkpackageLocal Office Setting up of a local officeCSIR Technology transfer
BOMBADIER Gauteng Gautrain rapid rail link, Swasap railway axles, UCWP railway vehiclesDCD Dorbyl Ring rollers expansionERB & RCS Railway signalling
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CISCO Torqe IT Entrepreneurial skills developmentManchu Consulting Skills development – network engineers Innovation Laboratory Research and development
DAIMLER CHRYSLER Auto Quip Manufacture and supply of transmission oil pipesKolbenco-Kolbenschmit Manufacturing and sales of automotive componentsNF Die Casting Manufacture of aluminium wheelsAutomotive Leather Company (ALC) Manufacture of leather seat covers
ERICSSON Ericsson South Africa Export of telecomm equipment to ROA, DECT and GSMEricsson SA, Futuristic Design, Foampak, Gauteng
Mini Links (manufacture of AMM for microwave equipment)
Metswedi Logistics Investment to establish Metswedi, BEE companyEUROCOPTER ARECSA Eurocopter contribution to ARECSA Human Capital
Training into nuclear industry using the ARECSA Human CapitalFERROSTAAL Ferroman Export of engineering services, to Ferrostaal markets worldwide
Salmac, Barlowworld Robor Extension of facility for manufacture of conveyingand ornamental pipes. Purchase of land.
Intertrading Fruit Corporation Export of grapefruit to GermanyFerisa, South to South and DEC Investment into FerromanMAN Turbo Investments into expansion of MAN SA operationLocal and Foreign Hosaf recyclingSAMES Loan to finance working capital and capex need to fulfill the contractTrimica Trimica Call Centre loan
GENERAL ELECTRIC CSIR – Pretoria CSIR R&D Thermal Spray Coatings – Phase oneSasol Sourcing of acetone through GLM – CU SI & Chemicals – SASOL 1Flame Flame Electrical – Investment
HONEYWELL Honeywell Automation College Midrand Training in engineering skillsLIEBHERR DEVELOPMENT
Liebherr & IFT Academy IFT Academy – Training and development
MALESELA M-Tech Local manufacture of optical fibre ground wireMARPLESS Cybex, SA Ace and BHT project Export of telephone booths and support and service – only local
content claimedUnisys & Marpless Export of telecomm servicesPlessey & Marpless Export of telecomm equip towers, generators, wire fencing
MDSI MDSI SA MDSI product based software developmentMOTOROLA Motorola SA Service centre for radio productsORACLE Mobile Obsession Software development
eSkills Academy Establishment of facility for skills development (IT related) PARTIA Patria/LMT LMT ProductsROLLS ROYCE Rolls Royce, Super Alloy Production of turbine blades and nozzle guide vanes
Rolls Royce, Turbomeca Africa Export of Tay Gearbox componentsSAFRAN CSIR Collaboration R&D (machine upgrading)
Wadeville JHB – Hall Longmore Export of Hall Longmore pipes to EuropeBell Equipment Export of articulated dump trucks – incremental salesOndeo Dregemont Export of water treatment plants
SIEMENS Siemens – Waltloo Software development in Telecomms (fixed and mobile networks) Siemens – Waltloo Local manufacture of MDF9120 connector strips SAJ Training of artisans
SUMITOMO Armoured Vehicle & Systems Export of armoured vehicles THALES Novamoda Novamoda
IDC/Societe Generale IDC credit facilityAllen Meshco Independent WireIDC/Calyon IDC credit facilityAEL AELPAM Fabricators & Thales Pre-Plan
THALES/DENEL Geratech Geratech(GBADS) Total Energy/Thales Greenhouse farming, Pre-stressed bars
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THALES/PRODIBA Grinman GrinmanTHYSSEN Krup Polysius Export of capital goods – investment
Dispack/DSU Investment into Dispack, incl. tech transfer, training and expansion of business
Sames Manufacture and marketing of a range of high performance mixed signal integrated circuits
Nampak Glass bottles for the wine, beer and spirits VAN OORD MARINE Purchasing of spare partsVOLVO NFD Export of alloy wheels
Johnsons Controls Export of leather seat covers for use by VolvoFleetguard After treatment systems for heavy diesel enginesJohnson Mathey After treatment systems for medium diesel engines
KwAZUlU NATAlAGUSTA Capstone, Quincy Group and Zanetti Capstone
Augustus/KES KgwanyapeAGUSTA WESTLAND Chep Chep
AWL St Lucia Saw MillsNatal Forest Products Natal Forest Products (formerly known as Dezzo, Romox)AWL/DST/Augustus Adept AirmotiveBiotech Fuels Biotech Fuels
BAE/SAAB Durban Shipyard – EB&H Investment- floating dock – ship repair and engineering workDiesel management systems Universal diesel saver, investment loan, exportsCarbotek Carbon Manufacture Manufacture of carbon from wood – investment, loan, exportsHivex Ltd Investment into Hivex for trials and then commercialisationGreenheat South Africa Investment for expansion for manufacture of heating gel from organic
products – investment, exports, local salesDunlop tyres Investment from BAE – loans to support expansion of tyre manufactureBiological Control Products Investment to fund expansion and commercialisation of the plant used
to manufacture biological agents for agricultural pestsTyre Safe Investment into blending plant for manufacture of tyre sealantSA Bioproducts Management buy-out by Zarara Energy and IDC, thus converting the
current production capacityDunlop Industrial Products & Hiflex Investments for the funding of the expansion of the JV
FERROSTAAL Dezzi Expansion of product range and facilitiesJAN DE NUL Ships maintenanceSUMITOMO Hulett Aluminium, Sumitomo Corp Export of aluminium productsTHALES Blackstone Tek Blackstone TekTHYSSEN All radiator, eNovative solutions, TK
Lodemann – ShareholdersInvestment into Alltube – construction loan, supplier loan and start up capital
Alltube Investment into AlltubeTOYOTA SA Cataler & Toyota SA Cataler SA, Roof panels, Parts localisation
limPOPOBOUYGUES TP Khulile Africa, DBSA, EU Hlanganani Tourism FERROSTAAL Limpopo Government To revitalize the tea estates in VendaSIEMENS Lephalale FET College Training of artisansTHALES Invensil , Pechiney Silicon smelter, Export of Silicon fume dioxide
mPUmAlANgABAE/SAAB Global Forest Products Transfer funds into GFP from GEF and BAEBOMBARDIER Columbus stainless steelHONEYWELL Honeywell Automation College Secuda Training in engineering skillsITCOHU Ilitha, Hernic JV for supply of chrome ore to Europe, Japan, China and USA
Ondeo-Degremont Water treatment MITSUI Highveld Steel & Vanadium Co.,
Nippon Denco LtdSAJV
THYSSEN IDC Greenfield production facility to manufacture Biomass pelletsUTC Investments in Aircon in a hospital in Witbank
VOLVO Columbus Steel -Middelburg Export of Steel for use in Volvo buses
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NOrTh wESTATC (PTY) LTD ATC – Brits Manufacture and export of copper and fibre optic cablesDAIMLER CHRYSLER Brits textiles, Berlyn, NCI Manufacture of sisal reinforced components THYSSEN SA Bafokeng, IDC, Bateman,
Outokumpo, TK MetInvestment into Ferrochrome project
wESTErN cAPEAGUSTA Filk and Oro Africa Filk Gold
Oro Filk & Cenere CenereRotorway/Augustus Rotorway
AGUSTA WESTLAND Sinter Metals Sinter MetalsAWL/Worldfish WorldFish UK
AIRBUS Dorbyl Marine Increase in exports of Dorbyl marine servicesAREVA FRAMATOME Lesedi Investment in Lesedi which provides maintenance services in the
nuclear fieldSygnum Investment in Sygnum which provides engineering services in the
nuclear fieldBAE/SAAB Silmar, SA Link, Impala Silplat-Platinum Jewellery
SAP Wines Branding of SA preminium wines for exports to the USAGlass and Aluminium Investments-Plant and equipment-manufacture value-added productsShurlock, Proton, MG Rover, Bentley Shurlock
BLUEWATER SA Five Construction and refurbishment of offshore oil and gas unitDAIMLER CHRYSLER Atlantis Foundries Atlantis Foundries – investment
Emission Control (EMCON) Manufacture of catalytic convertors (Nedcar)Atlantis Forge Manufacture of auto crankshafts
DAMEN SHIPYARDS Damen Shipyards & Far Ocean Damen shipyards South AfricaFar Ocean Construction and supply of one offshore patrol vessel for the
protection of fisheriesFERROSTAAL Atlantis Training Centre
Load Yacht Port Facility Establishment of a dedicated yacht load out facilityHasso Platter Venture CapitalVideo Vision Long Walk to Freedom (Movie)
GENERAL ELECTRIC Freeplay, Cape Town Baygen Power Freeplay 1 Investment 1Reid and Mitchell ExportsGlacier Bearings ExportsFederal Mogul Ex Glacier Bearings. Export of large bearings to Europe
Al Steel Sourcing of Electric Motor through Nouvo Pignone from GEC Alstom SA 1
Ampaglas, Modek, GE Plastics Investment Ampaglas for manufacture of polycarbonate roofsheeting, using GE lexan brand . Increased exports
Rotek Engineering Subcontracting by GE Power systems through TBL(UK) for service work to Eskom.
Walmart, Nu World GE branded appliances manufactured by SA Manufacturers sold to Walmart via GE agent Holmes GroupGE Seaco
SPESCOM Fabco, Vomag Industries Quante – manufacture of testing equipmentAMS, TELEDATA Outdoor enclosures – design, develop, manufacture Dada Voice IS project – development of speech processing technology
THALES Lavinir LarocheTenesa, Total Energy, Thomson Manufacture of solar energy panels
VOLVO Zeuna Starker Export of Catalytic ConvertersAcerinox Export of stainless steel to Scandinavia
OThEr PrOjEcTS*JAN DE NUL Sourcing of spare partsTHYSSEN Festo, Universities Mechatronics: Equipment and technology transfer for tertiary
education
* Not limited to one province
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Strategically, the NIPP investments are highly sig nifi cant for the South African economy in terms of breaking down international monopoly barriers. Many well-established industries that operate globally (e.g. energy, aviation) are dominated by a few big players, and the international supply chains that support these industries are extremely difficult for newcomers to break into, especially for relatively small newcomers. In terms of the NIPP,
THE NIPP
New and Strategic Sectors
The National Industrial Participation Programme (NIPP) was measured by a macro-economic impact assessment study in 2009.2
Table 2 shows the impact of the NIPP on the transfer of technology to South African industry, thus keeping the South African economy globally competitive. It is not just the transfer of new technology that is important, but also its integration into production, which the NIPP projects facilitate.
2 Conducted by Mosaka Economic Consultants. By using a
general equilibrium economic impact model, with the Social
Accounting Matrix (SAM) as basis, the direct and indirect
effects of the NIPP projects (managed by the dti) on the
South African economy were quantified in 2008 prices.
Table 2: Levels of Technology Transfer of the NIPP
Technological Transfer Classification
Number of projects
High 38
Medium 75
Low 42
None 55
Total* 210
* Measured by 2009 Macro-economic assessment study.
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It is also important to note the contribution the NIPP is able to make in sustaining or expanding significant areas of expertise that currently may be neglected, but in future are likely to pay dividends. One example is in the field of green technologies, from plastic recycling to biofuels. In this instance, with the IDC and a local Workers’ Trust, GFC-ThyssenKrupp has created a green industry export, with the production of wood fuel pellets in Sabie, Mpumalanga Province, including the necessary technology transfer. Exports of ZAR60 million a year are anticipated. A second example is the retention of nuclear expertise for peaceful purposes, which is important for the development of South Africa’s energy and medical sectors. Here AREVA is supporting the ARECSA nuclear technology training programme and Lesedi Services Signum, a local BEE company which provides nuclear maintenance and engineering services, such as mechanical, electrical, instrumentation and control, plant engineering and technical assistance.
obligors can create opportunities for South African manufacturers to become integrat ed into these supply chains. A particularly good example of this is Aerosud’s incorporation of South African suppliers of aircraft galleys, using local design and manufacturers to supply the giant Airbus A319, cementing Aerosud SA as a fully qualified and certified Airbus supplier. Similarly, MAN Turbo, a local Ferrostaal project, has consolidated a South African manufacturing system of turbine blades for export worldwide, by opening MAN’s global business network to MAN Turbo – with all the added credibility of Ferrostaal’s international credentials as a global player in its industry sector. Another example is the strategic joint venture between SAFRAN and Denel which resulted in the formation of local company Turbomeca to produce Teargay box and gearbox components for the UK and other European regions. The company has been integrated into the Rolls-Royce supply chain.
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Sectoral Impact
Table 3 below shows the aggregated impacts (for formation for both the operational and construction phase) in terms of the nine main sectors in the South African economy. It reveals the significant support the NIPP has given the manufacturing sector, which has a strong potential for job creation.
Table 3: Aggregated GDP in terms of the nine main sectors of the South African Economy [Rand millions; 2008 prices]
Direct impact Indirect impact Total impact Percentage (Total)
1. Agriculture 0 107 108 1%
2. Mining – 849 849 6%
3. Manufacturing 4 347 2 895 7 241 49%
4. Electricity & water 531 384 915 6%
5. Construction 83 109 192 1%
6. Trade 134 1 549 1 684 11%
7. Transport & communication 136 957 1 094 7%
8. Financial & business services 394 1 819 2 213 15%
9. Community services 177 345 522 4%
Total 5 803 9 014 14 817 100%
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Direct and Indirect Impact
Overall the NIPP has helped GDP, the balance of payments (BoP), employment and government revenue significantly.
Table 4: Macro-economic Impacts of NIPP [Constant 2008 prices]
Direct Impact Indirect Impact Total Impact
Impact on GDP [ZAR millions] 5 803 9 014 14 817
Impact on employment [Numbers] 26 442 58 620 85 062
Skilled employment 10 617 12 901 23 518
Semi-skilled employment 12 673 24 785 37 458
Unskilled employment 3 152 20 933 24 085
Fiscal Impact [ZAR millions] 7 333
Impact on BOP [ZAR millions] 11 329
In sum, the impact on GDP has been almost ZAR15 billion a year, some 85,000 jobs have been created or sustained, and there has been a ZAR11.3 billion reduction in our BOP.
The NIPP has a major impact on the South African economy via its contribution to economic growth and the alleviation of poverty. Both in terms of absolute GDP and employment creation the NIPP fares particularly well.
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A notable example is the BAE Systems project, Dunlop Industrial Products, which saved 800 jobs in KwaZulu Natal, producing rubber hosing for exports worth USD5.3 million a year, with an investment by the obligor of ZAR15 million. In isolated rural areas the impact on scarce job opportunities can be even more dramatic. The black-owned Magwa Tea Plantation in the former Transkei, with the support of Ferrostaal Southern Africa (Pty) Ltd and in partnership with the Eastern Cape Development Corporation (ECDC), created 1,050 permanent and up to 2,000 seasonal jobs (mostly for women) in return for an investment by Ferrostaal and some training and refurbishment. For more information about these and other examples, see Appendix 1.
MEASURABLE IMPACT
Job Creation
At the heart of the offset investments that make up the National Industrial Participation Programme (NIPP) is the creation of jobs. The blanket term “jobs”, however, does not do justice to the NIPP’s full contribution in this regard. It is not just a matter of jobs created and the social impact thereof. In a sample of projects from obligors reported upon here, incurred as a result of state purchases affecting a wide range of projects from the Gautrain and Eskom to military helicopters, it becomes clear that the Programme affects job creation from a variety of different angles. Sometimes it is also not just a matter of new jobs in new industrial sectors in new geographic locations, but also of jobs saved as a result of obligor investments, technology transfer and training.
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At the other end of the technological scale is the example of Ferrostaal’s joint venture to develop a maintenance and service yard for oil and gas platforms, especially given the proximity of West African and Angolan oil fields. This Cape Town-based project will create 1,000 jobs, is partly black-owned, develops local skills in a high potential and internationally competitive growth sector and shows the catalytic effect that NIPP investments can have.
Access to International Markets
Manufacturing has also benefited. BAES SAAB, through Denel SAAB Aerostructures, makes South Africa a supplier of aircraft components for the international market. SAAB Grintek develops and delivers software for the Eurofighter programme. Similarly, South African company Aerosud has become a first tier supplier of engine components to Airbus.
Indeed, expanding South Afr ica’s expor ts is encouraging the healthy diversif ication of South Afr ica’s economy, as wel l as the diversification of export markets, and also earns the country valuable foreign exchange that strengthens the national balance of payments, and thus lifts the ceiling on economic growth rates (with more exports, we can afford more imports, for example of factory equipment). Thus the transfer of skills from Agusta Westland, plus injections of capital and technology, led to the establishment of Rotorway and the first South African manufacture of helicopters of international quality, for export. And ThyssenKrupp Engineering SA helped to create and sustain 400 jobs in the engineering and export of plants for the cement and mining industries, generating ZAR500 million and using ThyssenKrupp technology. Naturally all of these enterprises pay tax, which swells government revenue.
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Access to Finance
Sometimes access to finance provided by or secured by the obligors is all that is required to help South African companies reach success. For instance, Hasso Plattner Ventures Africa, in partnership with Ferrostaal and as part of the NIPP obligations, established a venture capital fund to assist entrepreneurs in developing, commercialising and distributing innovative new technologies.
Enterprise Development
Small businesses have also received attention. Most projects have outsourcing initiatives for local small businesses. As already noted, some NIPP projects focus exclusively on finance for SMEs. Agusta Westland’s support for Storms River Adventures, a 65% black-owned tourism company, gave jobs to 10 local women in the high-unemployment Tsitsikamma area. Cisco Systems SA (Pty) Ltd, in return for their sales to Telkom, has established a CISCO Entrepreneur Institute to supply entrepreneurial education content to South African entrepreneurs across the board. It has also initiated a Global Talent Acceleration Programme using IT to exploit opportunities for entrepreneurs in new sectors with high growth potential internationally.
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Critical Skills Development
When it comes to the youth, the NIPP’s major contribution to skills development and training comes to the fore. Areva supports the ARECSA Human Capital project, training 342 people so far in the nuclear industry field. Project leaders for South Africa, another Areva project, has sent 20 black engineers to train in strategy and management competencies and project leadership at La Sorbonne University in France. Kgwanyape Energy Solutions, an Agusta Westland project, which develops low cost, low power systems, received an Africa Energy Award in 2010 for the best leadership in skills development. The Honeywell Automation Colleges in Midrand and Secunda train engineers in the very latest technology. Liebherr Training Academy funds skills training for artisans and apprentices. Siemens Ltd has recapitalised the Lephalale FET College in Limpopo Province to train engineering students, mostly recruited from the surrounding rural areas. EC Biomass, a green industry project in the Eastern Cape Province, partners with local universities in technical skills training.
All of these investments will bear fruit in the longer term, addressing critical skills shortages, creating jobs and enhancing economic growth. Without the NIPP they would not exist.
Cross-Cutting Impact
The NIPP thus forms an integral part of the South African government’s economic development strategy. As such, it is aligned with industrial policy priorities as well as the key socio-economic initiatives of the government of the day.
In addition, the NIPP supports government’s policy to spread investments across poorer regions, and impacts on marginalised groups such as rural women and the youth. Agusta-Westland’s Cat-a-Trac cataract detection device project provided financial support for the development of a low-cost cataract detection device especially for the rural poor. Ferrostaal’s investment in Limpopo Tea revived a dying industry creating up to 2,300 seasonal jobs for local women in the former Venda area.
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OF THE NIPP
1. The total value of the counter trade obligations by participants currently being monitored by the dti is approximately USD16.5 billion.
2. The average annual impact of the NIPP on the GDP of South Africa will amount to ZAR14.8 billion (based on 2008 prices). Thus, each year, ZAR14.8 billion of GDP is generated, consisting of remuneration of employees and returns on capital invested (profits among others) due to the construction and operation taking place with regards to NIPP projects.
3. Almost 44% of the jobs created or sustained by the NIPP are for semi-skilled workers. This shows the substantial contribution that the NIPP makes towards poverty alleviation and the eradication of unemployment among previously disadvantaged communities.
4. The total impact on household income amounts to ZAR15.9 billion of which 17% is earmarked for the lower-income households. Thus, of the total income generated directly and indirectly through the NIPP, a large percentage reaches the poor communities in South Africa. The impact on the low income households comes through the linkages that the Programme has with other sectors of the economy, i.e. agriculture, textiles and clothing etc., through the buying of materials and the payment of salaries in the system as a whole.
5. The annual fiscal impact amounts to approximately ZAR7.3 billion per annum through direct and indirect taxes due to the NIPP. All these additional taxes provide the government with revenues that can be used to improve the average quality of life of the average citizen in South Africa, especially with regard to education and health.
6. The impact on the Balance of Payments is a positive ZAR11.3 billion per annum over the lifespan of the NIPP projects.
7. Had it not been for these obligations under the NIPP, it is highly unlikely that South Africa would have attracted the same level of total foreign direct investment.
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In this 2009 NIPP Report the details of projects undertaken by the obligors under review are given without fear or favour. The fact is that not all projects succeed. It would be unrealistic to expect otherwise. What is important is to learn from the failures, so that the experience is not repeated. Sometimes, however, exogenous factors impinge on projects that are well beyond the control of either the companies or the governments involved (popularly called “Black Swan” events).
“Only those who dare to fail greatly can ever
achieve greatly”Robert F. Kennedy
The details are in this Report, but the main general reasons for project failure can be summarised as:
The global financial crisis, which dries up •sources of finance and affects demand in export markets.
Currency fluctuations, which reduce •South Africa’s competitiveness against low wage suppliers such as China.
Poor or inexperienced local management •and the normal risks of any new venture.
The sheer number of projects involved.•
Obligors are sometimes required by local •priorities to invest outside their own core areas of business and thus expertise – for instance in agro-processing or tourism.
OF THE NIPP
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LEARNED
1. Extra care is needed in the selection of projects outside the obligor’s area of core business.
2. Due diligence is required in the selection of partners.
3. As a relatively open economy, South Africa is vulnerable to external shocks beyond its control, such as oil price and currency fluctuations and the global financial markets, which may challenge initial costing and profitability projections.
4. Skills development is as critical as market access.
5. The NIPP provides an inside track to incor porat ing new technologies into production in South Africa.
6. Access to new thinking and cutting edge technology which is proprietary to major international corporations is a major benefit of the NIPP.
7. Local partners themselves need to be capacitated and carefully monitored.
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The NIPP has seen the implementation of over 220 projects, the awarding of over USD19 billion in credits for both investment and export generation, and the creation and retention of some 85,000 jobs.
In conclusion, based on the size of the absolute macro-economic impacts (in view of the initial investments) as well as the effectiveness criteria, the NIPP is a significant contributor to the alleviation of poverty and economic growth in South Africa. All this therefore points towards the success of the NIPP.
“… NIPP is a significant contributor to the alleviation of poverty and economic
growth in South Africa. ”
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Name of Project24 Adept Air Motive24 Aerosud Galley Design And Manufacturing24 Aerosud Vu Manufacturing25 Arecsa Human Capital25 Atlantis Foundry25 Bio Diesel Project25 Biotech Fuels (Pty) Ltd26 Biovac Institute27 Capstone27 Cat-A-Trac Cataract Detection Device27 Cisco Entrepreneurial Institute28 Cisco Global Talent Acceleration Programme28 Denel Saab Aerostructures28 Dunlop Industrial Products29 Dunlop Tyres29 EC Biomass29 Ferrochrome29 Ferrochrome Beneficiation30 Global Forest Products30 Hasso Plattner Ventures Africa30 Hlanganani Limpopo Tourism31 Honeywell Automation College31 Hosaf Recycling Plant31 IDC Sme Financing32 Italian Plastic Technologies (Pty) Ltd32 IST Dynamics32 Lephalale FET College32 Lesedi33 Liebherr Training Academy33 Limpopo Tea34 Magwa Tea Plantation35 MAN Turbo35 Novara Pet Pallets35 Oil & Gas Platform Service Yard36 Oil & Gas Saldanha36 Omnia36 Project Leaders For South Africa37 Rotorway37 Sabie Wood Pellets38 SAJ Technical College38 Storms River Adventures38 Tenesol
PROJECT OVERVIEWS
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Name of Project ADEPT AIR MOTIVEObligor AGUSTA WESTLAND
Project summary Provision of Finance and Technical assistance to develop first ever all-South African designed and produced modern aviation engine
Partners in the project Agusta Westland / ADEPT Air Motive
Geographic location Durban, Natal
Current status Active
Number of jobs created 7, with more to follow as the project grows
BEE outsourcing Target is 90%
Skills development Project support arranged by Agusta Westland to provide technical assistance and knowledge transfer to aid in certification of ADEPT product
Investment value of project GBP1,266,973
Exports generated To be determined
New business generated To be determined
Small business assisted Yes
Social impact Development of advanced technology
What was delivered Financial and technical assistance to enable design and certification activities
Challenges Unfortunately development has suffered a number of setbacks that were beyond the control of all parties. Therefore it is likely that, although the project will be successful, any generated sales are likely to fall outside the claimable period
Name of project AEROSUD GALLEY DESIGN AND MANUFACTURINGObligor AIRBUS SAS
Project summary Capacitate Aerosud for indigenous design and manufacturing of Airbus A320 family galley
Geographic location Gauteng
Number of jobs created 30 direct new jobs
Skills development Development of skills and employments in the aerostructure sector
Exports generated USD6 million IP Credits in 5 years
New business generated Yes
Social impact Support development of employees
Current status Ongoing and further developing
What was delivered Airbus qualification to produce locally designed and manufactured aircraft galley for Airbus customers
Successes Successful project. Aerosud now has the capacity to supply 5 customers and equip more than 200 aircraft. The customer base now needs to be further developed. Airbus qualification allows Aerosud to market its own product to all Airbus A320 customers
Name of project AEROSUD VU MANUFACTURINGObligor AIRBUS SAS
Project summary Manufacturing of two types of electrical racks for Airbus A320 family
Partners in the project Aerosud, Airbus, Labinal
Geographic location Gauteng
Number of jobs created 80 direct new jobs
Skills development Development of skills and employments in the aerostructure sector
Exports generated 14 million IP credits in 5 years
New business generated Yes
Social impact Support development of employees
Current status Ongoing and further developing
What was delivered Electrical racks from Airbus aircraft• Manufacturing of parts plus assembly work and configuration management•
Successes Successful project. Contribution and support given to Aerosud development put the company on the aerostructure supplier world map, allowing it to capture additional work packages
SELECTED PROJECTS*
* data supplied by obligors
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Name of project ARECSA HUMAN CAPITALObligor AREVA
Project summary Financing of the administrative costs of a joint venture between AREVA and NECSA to provide training in the field of energy and to the benefit of Eskom, NNR, PBMR and NECSA employees
Partners in the project NECSA, South African Institute of Welding, Itemba Labs, South African Universities
Geographic location Pelindaba
Skills development Since 2007, 342 trainees from NECSA, Eskom, NNR and PBMR have benefited from training in the nuclear field organised by ARECSA
Current status Approved and ongoing
Successes Successful project. Training capacity is in place. Third party companies are expressing an interest in ARECSA training
Name of project ATLANTIS FOUNDRYObligor AIRBUS SAS
Project summary: Re-investment and market development of engine blocs by Daimler Chrysler South Africa
Partners in the project: Atlantis Foundry
Geographic location: Western Cape
Number of jobs created: Purchase by Daimler Chrysler maintained and created jobs in the foundry
Exports generated: USD140 million
New business generated: Yes
Social impact Maintain and redevelop the foundry activity of the site
Current status: Still ongoing but IP contribution achieved USD140 million
What was delivered: Engine blocs
Name of project BIO DIESEL PROJECTObligor GFC – THYSSENKRUPP
Project summary Feasibility study for a Bio Diesel refinery agrarian programme to secure feedstock
Partners in the project Phyto Energy, ELIDZ, AsgiSA, AFGRI, SA, ECDC
Social impact To produce the feedstock (canola) for the plant will generate more than 2,000 jobs in rural areas
Special features Test cultivation of canola on more than 10,000 ha has proven to be a success
Current status Study finalised, negotiation on financing
What was delivered Comprehensive study to establish a Bio Diesel industry in South Africa, including feedstock security
Challenges The production of sufficient feedstock (canola) takes longer than expected
Successes Successful project, study proofed feasibility• Successful set up of Project Steering Committee with parties involved from private and public sectors•
Name of Project BIOTECH FUELS (PTY) LTDObligor AGUSTA WESTLAND
Project summary Provision of financial assistance for the establishment of a Bio pellet production facility
Partners in the project AW / JBIL/ GIL / Biotech Fuel
Geographic location Howick, Natal
Number of jobs created 37
BEE ownership 50% BEE equity
BEE outsourcing 100% local content
Skills development Development in knowledge of the production of energy pellets and operation of advanced pelleting facility
Beneficiationofrawmaterials Recycling of waste timber
Investment value of project GBP5,479,468
Exports generated To be determined
New business generated To be determined
Small business assisted Yes
Social impact Development in rural Howick, environmental project generating sustainable energy source, recycles waste
Special features Environmentally sustainable energy source
Current status Active
What was procured Facility
What was delivered Financial assistance
Successes Project was successful. Agusta Westland assistance has enabled a facility to be built that utilises local waste material to produce a desirable product on the world market
Challenges There has been a problem with wet weather in SA, causing the production process to take longer than expected, resulting in sales taking longer to materialise. Sales are currently being generated however verified amounts were not available at the time of this report
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Name of project BIOVAC INSTITUTEObligor SANOFI PASTEUR
Project summary Re-establishment of capacity at The Biovac Institute to provide a fully-integrated vaccine-manu facturing facility, capable of manufacturing vaccines and delivering them to the market in a sustainable and feasible manner and adding value to South Africa and developing African nations in general
Partners in the project Department of Health (DoH), The Biovac Consortium (Litha Healthcare Holdings (Pty) Ltd), Disability Employment Concerns Trust, Bionet (Thailand), Sanofi Pasteur
Geographic location Cape Town, Western Cape
Number of jobs created 68
BEE ownership 37.5% – The Litha Healthcare Investments (Pty) Ltd
BEE outsourcing Litha Logistics (Pty) Ltd for logistics and distribution
Skills development Integrated training and skills transfer capacity building programme:Training, learnerships, and mentorships with technology partners• Production, laboratory, quality control and quality assurance• Site cGMP product-specific analytical techniques• WHO cGMP standards, licensing procedures and general regulations•
Beneficiationofrawmaterials Local manufacture of vaccines will add value to local raw materials rather than importing finished products or bulk antigens
Investment value of project ZAR53.118 million
Exports generated ZAR16.5 million. Will grow substantially when the formulating and filling suite achieves WHO certification and the company’s own internally developed products are registered
Small business assisted The company supports a number of small business both in the development and implementation of the project, i.e. architects, quantity surveyors, etc. as well as in the operational aspects of the company, e.g. clinical research organisations, business development and financial advisors, regulatory affairs, and distribution
Assistance for women, disabled or youth
The Disability Employment Concerns Trust (DEC) is an equity partner in the company
Social impact Increasing access to immunisation for children and families • Immunisation carries economic benefits for families and communities• Routine immunisation coverage has increased to over 85%, from historic lows of as much as 60% in some districts•
Special features Re-establishment of feasible vaccine manufacturing capacity in South Africa resulting in:International vaccine manufacturing capacity• Far reaching impacts at local, regional and national levels, from industrial, macro-economic and • socio-political points of viewDevelopment of relevant vaccines such as for HIV, malaria and TB•
Current status Completed end of 2009
Successes Successful project:DoH supplied with a sustainable quantity of vaccines over the past 5 years• Donation of 2 million doses of polio vaccines to the Democratic Republic of Congo • First locally-filled vaccine to be introduced into the market•
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Name of Project CAPSTONEObligor AGUSTA WESTLAND
Project summary Production of special textile fibres for bedding and clothing
Partners in the project Agusta Westland, Capstone, Papini Company, Confezioni L’Uomo
Geographic location Kwa Zulu Natal
Number of jobs created 250
BEE ownership BEE ownership in CAPSTONE
BEE outsourcing 94% Local content
Investment value of project USD6,230,349
New business generated USD2,800,871
Current status Closed
What was delivered Transfer of machinery, technology and skills from Italy
Name of Project CAT-A-TRAC CATARACT DETECTION DEVICEObligor AGUSTA WESTLAND
Project summary Provision of financial support for the development of a low cost cataract detection device
Partners in the project Agusta Westland / Ngena
BEE outsourcing – details To be determined
Investment value of project GBP22,825
Exports generated To be determined
New business generated To be determined
Small business assisted Yes
Assistance for women, disabled or youth
Disabled
Social impact If successful the device could be able to assist in early cataract detection primarily in rural and poor locations to help prevent blindness
Special features Social project
Current status Active
What was procured Soft tools
What was delivered Financial assistance for required design work
Challenges Funding of project that could assist many disadvantaged individuals• Aim of the project is to produce low cost devices, therefore low price of product will result in low sales figures and • low NIP return
Successes Partial success. Full success is expected when low cost product is produced
Name of Project CISCO ENTREPRENEURIAL INSTITUTEObligor CISCO SYSTEMS
Project summary The Cisco Entrepreneur Institute (Institute) develops or licenses specific entrepreneurial education content from recognized leaders for entrepreneurs and SME business owners. Cisco teams up with organizations that have a specific mission to help small and medium business become successful. These may include chambers of commerce, government SME programmes, economic development agencies, angel funding organizations and university business education programmes
Partners in the project Cisco Systems, University of Johannesburg
Geographic location Countrywide
BEE outsourcing Training centres selected are BEE entities
Skills development Strategy, planning, organizational readiness, change management, governance, problem-solving, IT processes and strategies, IT enabled process improvements
Investment value of project ZAR19.23 million (over 5 years)
New business generated Recruited three Cisco Entrepreneur Institute Training Centres: Maharishi Institute, Market Matters, Bandwidth Barn
Small business assisted Donated the Cisco Content Delivery Network Bundle to one of the Training CentresConducted Entrepreneur Institute training for the Training Centres recruitedAssisted Training Centres to develop their implementation plans for providing training to entrepreneursUndertook regular review meetings with Training Centres via Webex and physical visits
Assistance for women, disabled or youth
61 participants received entrepreneurship training from two of the Institute’s training centres. One of the training centres, Mkhwanazi, focuses primarily on the youth
Social impact The training provided will equip potential entrepreneurs with business skills to enable them to start their own businesses and participate meaningfully in the economy, thereby alleviating unemployment and poverty
Special features The Cisco Entrepreneur Institute training was developed in collaboration with leading educational institutions and is updated on a regular basis to remain relevant and useful
Current status Ongoing
What was procured Cisco provides access to tools and content at no cost to Training Centres
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What was delivered Training of Institute Program Managers and Facilitators to enable them to run their own training centresAssistance with the development of Implementation plans for the Training CentresProviding access to Cisco Learning and Collaboration Tools – Moodle, Webex and Sales ForceProviding training content to the Training Centres
Successes Project is expected to be successful. The feedback from the Training Centres on the quality and relevance of the Cisco Entrepreneur Institute training content and tools has been overwhelmingly positive
Name of Project CISCO GLOBAL TALENT ACCELERATION PROGRAMMEObligor CISCO SYSTEMS
Project summary Cisco proposes to address the shortage of CCIE-level post sales ICT engineers in South Africa by operating the Cisco Global Talent Acceleration Programme (GTAP) in South Africa on a sustained basis at a new Service Provider Centre of Excellence (SP CoE). The intention is to produce approximately 24 skilled CCIE-level post sales engineers each year. This is an Education, General Training, and Technology Demonstration centre for partners, South Africa University students, and customers. By partnering with public education organizations and providing advanced networking training courses for students, Cisco will also enhance higher technical education alternatives across South Africa. Cisco will create new Advanced Training and Certification Facilities for CCIE, CCNA, CCNP Certifications conducted through our learning partners (“CCIE Lab”). This is essential to developing the ability to implement increasingly complex advanced network solutions. The Cisco GTAP and SP CoE is intended to become a skills development engine for creating SP skills for supporting the Next Generation of Networking in South Africa
Partners in the project Cisco Certified Training Partners, Channel Partners
Geographic location Gauteng
Jobs created 16 engineers have graduated from the programme
BEE ownership Establishing the programs locally to enable BEE company to compete on international level
BEE outsourcing Torque IT is BBBEE certified
Skills development Technology transfer; alignment with the country’s focus on entrepreneurship, innovation and education
Investment value of project ZAR17.52 million (over 5 years)
New business generated The increased skills level of engineers increases the capacity and potential for growth of organisations
Small business assisted Graduates all taken up by Cisco partners, thus increasing skills base and organisational capacity
Current status Ongoing project
What was delivered 16 PHD level engineers trained in 12 months (only 70 engineers at this level in SA). Equals a GDP contribution of ZAR37million per annum
Challenges The NIPP credit approval process and the amount of information required was arduous and consumed a large amount of executive time. It would be valuable if this process could be streamlined and simplified
Successes 16 PHD level engineers have graduated and are employed in the industry
Name of project DENEL SAAB AEROSTRUCTURESObligor BAES SAAB
Project summary Manufacture of aircraft components
Partners in the project BAES SAAB, Denel Aerostructures
Geographic location Gauteng
Number of jobs created Jobs saved
Exports generated USD368 million
New business generated USD368 million
Current status Active
What was procured Aircraft grade aluminium
What was delivered Aircraft components
Successes Access to SAAB expertise in the field contributed to success of project
Name of project DUNLOP INDUSTRIAL PRODUCTSObligor BAES SAAB
Project summary Manufacture rubber hoses for industrial and automotive use
Partners in the project Dunlop Industrial Products, Hiflex
Geographic location KwaZulu-Natal
Number of jobs created Jobs saved: 800+
Exports generated USD5.3 million
New business generated USD189.1 million
Current status Active
What was procured Rubber
What was delivered Rubber hosing
Challenges Initially providing the full funding, without aligning shareholders’ goals with the funder’s goals
Successes Successful project
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Name of project DUNLOP TYRESObligor BAES SAAB
Project summary Manufacture of automotive tyres
Partners in the project Dunlop Africa
Geographic location KwaZulu-Natal
Exports generated USD51.8 million
New business generated USD626.6 million
Current status Active
What was procured Rubber
What was delivered Automotive tyres
Successes Successful project
Name of project EC BIOMASSObligor GFC – THYSSENKRUPP
Project summary Production plant for Fuel Pellets
Partners in the project EC Biomass Fuel Pellets (Pty) Ltd , IDC
Geographic location Port Elizabeth, Eastern Cape
Number of jobs created 100
BEE ownership 40% of shares made available to BEE companies
BEE outsourcing Community programmes for forestry and collection of feedstock for the plant, transport subcontract to BEE company
Skills development In-house training and education programmes for technical skills in cooperation with University of Transkei
Investment value of project ZAR160 million
Exports generated ZAR80 million /year
New business generated Fuel pellets for export
Special features Technology transfer, forestry programme
Current status In operation
Challenges Problems at start up with infrastructure in IDZ, Coega Electricity and water supply not in place
Successes Successful project
Name of project FERROCHROMEObligor GFC – THYSSENKRUPP
Project name Ferrochrome
Project summary Erection of a new chrome ore melting plant
Partners in the project SA Chrome & Alloys, Royal Bafokeng
Geographic location Rustenburg, North West
Number of jobs created 350
BEE ownership Major shareholder Royal Bafokeng Nation, public offering of another portion of the shares to BEE
BEE outsourcing Transport and warehousing contracts offered to BEE companies
Skills development Internal training programme
Beneficiationofrawmaterials Melting and pelletizing of chrome ore
Investment value of projects ZAR700 million
Exports generated ZAR900 million/year
Current status Merger with Xstrata, consolidation of industry
What was delivered Ferro chrome pellets
Successes Successful project
Name of project FERROCHROME BENEFICIATIONObligor BAES SAAB
Project summary Export of beneficiated chrome.
Partners in the project International FerroMetals, Pyromet, IDC
Geographic location North West
Number of jobs created 2,000
BEE ownership 26%
Investment value of project ZAR2 billion
Exports generated USD321 million
New business generated USD328.3 million
Current status Active
What was delivered Ferrochrome
Successes Successful project, Successful feature: Providing seed capital prior to listing in exchange for a BEE stake in the company
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Name of project GLOBAL FOREST PRODUCTSObligor BAES SAAB
Project summary Manufacture of timber
Partners in the project Global Forest Products, Mondi
Geographic location Mpumalanga
Exports generated USD55.4 million
New business generated USD403.8 million
Current status Active
What was delivered Timber
Successes Successful project
Name of project HASSO PLATTNER VENTURES AFRICA
Obligor MAN FERROSTAAL SOUTHERN AFRICA (PTY) LTD
Project summary Prof Hasso Plattner and MAN Ferrostaal teamed up to implement a Venture Capital Fund supporting SA-based high tech start-up companies. Focus industries of the Fund will be telecoms and green-technologies. The Fund has been capitalised with a total of Euros 29 million
Partners in the project The Fund is managed by a South African management company which is operated and owned by South African nationals – Marc Balkin and Andrea Boehmert
Geographic location Stellenbosch, Western Cape• Johannesburg, Gauteng •
Skills development The primary aim of the Fund is to assist entrepreneurs in developing, commercialising and distributing new and innovative technologies
New business generated Awaiting approval of sales credits from the dti
Small business assisted Six investments to five small businesses have been approved
Special features This Fund fills a gap which has been vacant for some time – funding for early stage South African companies
Current status The business was launched in February 2008 and the Fund has approved five investments so far totalling ZAR81.5 million
Successes The project concept was successful and the project is now in its second year of operations
Name of project HLANGANANI LIMPOPO TOURISMObligor BOUYGUES TP
Project summary To develop a new tourism destination based on establishing a multi-faceted heritage, arts and culture centre in Limpopo: phase 1 is the upgrade of the Ben Lavin game reserve and accommodation
Partners in the project Khulile Africa, local communities, DBSA, LED
Geographic location Makhado Elim area Limpopo
BEE ownership 95%. Hlanganani community is organized in a trust and is the main beneficiary of the development. Funds are managed via the project management company, Khulile Africa
BEE outsourcing Project management is done by Khulile Africa, a Section 21 Company
Skills development Training provided during implementation phase in the fields of tourism, accommodation, game farming, restaurant, services to customers and also through all the workshops
Investment contribution Bouygues – ZAR11 million• DBSA – R850,000• European Union – R369,500•
Investment – value of project Phase 1: ZAR10 million• Phase 2: ZAR35-45 million•
New business generated Direct and indirect
Small business assisted Yes (construction, ICT, ecolife, interiors, etc)
Assistance for women, disabled or youth
All part of the development of the project
Social impact Significant community benefits in a rural area
Special features Land restitution• Community-orientated• High media visibility•
Current status Phase 1 is 70% completed. Partial opening of Phase 1 scheduled for December 2009
What was delivered New facility
Challenges Challenges in project management; had to recruit a professional one;• Sourcing funding outside of Bouygues TP•
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Name of project HONEYWELL AUTOMATION COLLEGEObligor HONEYWELL
Project summary Establishment of an Automation College at Midrand and Secunda to offer the following recurring structured programmes to upskill engineers for working in junior and senior engineering capacities. Courses offered: 1. Honeywell Technology Track 2. Process Track for Industry and candidates from tertiary institutions3. Honeywell Technology for university students
Partners in the project Honeywell Global Automation College, UOP (Honeywell organisation), Cybernetics, Universities
Geographic location Gauteng: Midrand and Mpumalanga: Secunda
Skills development Honeywell will provide training to industry presented by highly qualified trainers in accordance with Honeywell International requirements. The programme is new in South Africa as Honeywell was only offering technical training on its control and instrumentation systems internationally (Europe, Middle-East, Asian Pacific and Americas)
Investment value of project ZAR929,557
Small business assisted Rent office space from local SA business
Current status Project still very young and in its infant stage. Credits soon to be claimed
What was procured Midrand world-class training facility developed and fully equipped to offer training courses for operator level, maintenance level and engineering level
What was delivered Project was approved June 2009 and claiming of credits will commence once training delivery is under way
Successes New project, but full success is anticipated. A high demand for training in 2010 has been received, and prospects for generating revenue and profit are excellent
Name of project HOSAF RECYCLING PLANTObligor MAN FERROSTAAL SOUTHERN AFRICA (PTY) LTD
Project summary Hosaf Recycling (Pty) Ltd sought a loan to purchase suitable property for setting up a greenfield PET recycling plant in Gauteng. MAN Ferrostaal granted Hosaf a soft loan. Hosaf now recycles plastic bottles; Hosaf’s end products (PET fibres) are used for multiple applications, i.e. production of textiles
Partners in the project Hosaf Recycling (Pty) Ltd
Geographic location Gauteng
Number of jobs created 63
BEE ownership 100% owned by Hosaf Fibres (Pty) Ltd
Skills developmentTraining is provided for employees in the areas of health and safety, forklift operation, human resources, electronic engineering N3, production logistics and colour school training
Beneficiationofrawmaterials Raw materials are post consumer PET bottles which are reconstituted into PET pellets. These recycled pellets in turn are used to manufacture fibre for the textile, automotive and building (insulation) industries
Exports generated No export sales credits were generated
New business generated Local sales credits: Euros 9,521,733
Assistance for women, disabled or youth
Women are employed at the company
Current status This project continues successfully and is self sustainable. MAN Ferrostaal has successfully finalised this project in terms of its NIP obligation
What was procured Plant and machinery
What was delivered The plant in Alrode, Johannesburg was acquired and machinery that was procured was delivered
Successes Successful project, Hosaf is now self sustainable
Name of project IDC SME FINANCINGObligor THALES
Project summary Soft financing via IDCCredit lines arranged by Thales: 2005 – Calyon, USD50 million; 2009 – Socgen, USD30 millionIDC lending policy – 1 unit from IDC matched by 1 unit from borrower
Number of jobs created 1,800 supported
Investment value of project USD160 milllion investment financed
Name of Project ITALIAN PLASTIC TECHNOLOGIES (PTY) LTDObligor AGUSTA WESTLAND
Project summary Recycling plastic waste materials for pellets, cables, sheeting, piping and blast barriers for the mining industry
Partners in the project Italian Plastics Ltd, Novamet, Kantana Investments
Geographic location Gauteng
Number of jobs created 69
BEE outsourcing Local content 100%
New business generated USD2,603,062
Current status Closed
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Name of Project IST DYNAMICSObligor BAES SAAB
Project summary Provision of systems integration services, supply of light weight antennae
Partners in the project IST Dynamics, BAES SAAB
Geographic location Gauteng
Investment value of project ZAR100 million
Current status Active
What was delivered Antenna, integration services
Successes Successful project
Name of project LEPHALALE FET COLLEGEObligor SIEMENS LTD
Project summary Skills Development through recapitalisation for Technical Engineering studies in rural district, in support of energy infrastructure development and economic growth of Waterberg District and Limpopo province
Partners in the project Lephalale FET College
Geographic location Lephalale, Limpopo Province
BEE ownership – details Public FET College
Skills development Additional Eng studies students enrolled: • 2007: 139; 2008: 381p; 2009: >600Student pass rate: • 2007: 69.7%; 2008: 71.9%
Investment value of project ZAR20 million
Assistance for women, disabled or youth
Female engineering studies students enrolled as % of total: • 2007 = 36%; 2008 = 31%Female engineering studies student pass rate as % of total: • 2007 = 32%; 2008 = 35%
Social impact Majority of students are recruited from the rural area and surrounding schools of the Waterberg district and larger Limpopo province
Current status 50% of contract implemented. Execution of remainder awaiting internal Dept of Education investigation of activities and reports
What was procured Productive capital training equipment
What was delivered Funding for all procurement of all productive training equipment
Successes Successful project• Transparent and measurable performance targets which incentivised the college to perform at their best • Student transformation targets • Excellent college leadership•
Name of project LESEDI Obligor AREVA
Project summary Investment in a South African company, LESEDI, which provides maintenance services in the nuclear field
Partners in the project Shareholders are FRAMEX 51%, F Carruthers 20.4%, EP Mc Donald 20.1%, IS Boggon 2.55%, H Lakemeier 3.4%, LFM Trocado 2.55%
Geographic location Western Cape
Number of jobs created Additional payroll in 2007 (as approved): USD1,276,682• Additional payroll in 2008 (under approval): USD1,011,923•
BEE ownership 20.1% PDI ownership
Skills development Training expenditure in 2007 (as approved): USD222,370• Training expenditure in 2008 (under approval): USD22,461•
Exports generated 2007 (as approved): USD415,685• 2008 (under approval): USD154,478•
Current status Approved – end of project when 2008 credit claim is approved
Successes Successful project. Average turnover growth of 44% every year since the beginning of the project
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Name of project LIEBHERR TRAINING ACADEMYObligor LIEBHERR
Project summary Liebherr is funding the skills training of 75 trainees a year at the Ikaya Fundisa Techniskills Academy (IFTA) that offers technical training for artisans and apprentices across all sectors
Partners in the project A joint venture between IFTA and Liebherr Container Cranes, Ireland
Geographic location Roodepoort, Gauteng
Number of jobs created The scope of the project is for technical training. While every effort is made to place learners, this cannot be guaranteed. At least 75 learners will be trained per annum over a 7 year period
BEE ownership 64% black ownership
Skills development Learners are trained in the trades of: Fitting and Turning; Tool Jig and Die Making; Welding, Sheet Metal Working; Boiler making; Diesel and Petrol Mechanics; Auto Electrical; Earthmoving Equipment; Electricians and Millwrights
Investment value of project ZAR24.67 million
New business generated With the skills learnt at the Academy, qualified learners would have the opportunity to open their own business, if they desired
Small business assisted Yes – Liebherr has partnered with IFTA
Assistance for women, disabled or youth
Yes – HDI youth including women are trained in sought-after and marketable technical skills
Social impact Based on the research on hand, there is clearly a massive and growing need for skilled technical people in South Africa. Liebherr has committed to train a few hundred learners over a seven year period, injecting vital technical skills into the economy
Special features 81 Learners were trained in 2008, 40 learners in the first half of 2009; and an additional 40 learners are currently undergoing training
Current status On-going
What was procured Technical Skills Training
Challenges Certain challenges were encountered at start-up, which were addressed by IFTA during 2008:Transport problems• Learners dropping out due to personal reasons or lack of commitment• placement of newly- qualified learners•
Successes Successful project. A large number of learners have been trained already• High quality technical training is being provided. • Learners are in the theory, and have the opportunity to experience practical training in the well-equipped workshops•
Name of project LIMPOPO TEAObligor MAN FERROSTAAL SOUTHERN AFRICA (PTY) LTD
Project summary MAN Ferrostaal provided financial support for this agro-processing project, to grow, process and package Tshivhase green and black teas, a new South African brand of tea
Partners in the project Venteco (Pty) Ltd
Geographic location Mokumbani Village, Thulamela Municipality, Vhembe District, Limpopo Province
Number of jobs created 2,300+ during harvesting season
Beneficiationofrawmaterials Processing of the raw tea leaf to the finished product
Small business assisted Community builders from nearby villages were contracted to complete building construction and maintenance in 2008. The company upgraded the sport fields and access roads to the schools in the neighbouring areas using the company grader
Assistance for women, disabled or youth
Women are employed on the tea estates
Social impact Rural development, providing jobs in high unemployment area
Special features The company is procuring Rooibos tea from Nieuwouldtville (Pty) Ltd for use as a collateral product in the MIDI brand stable
Current status Equipment has been delivered and installed. Refurbishments are being carried out
What was delivered Extensive factory refurbishment has been undertaken since June 2007 following three years of idleness of the • processing lines and all the machines purchased were deliveredNew conveyor belts of the weathering troughs and two new dryers have been installed in the factory • The estate has also fitted a new floor system (poly-eurothyne material) in the factory • A new ablution block, which complies with all HACCP and health regulations, has been constructed• Four lines of Easy Pack packaging (tea bags for black tea) machines have been installed• Three Easy Pack packaging (loose black tea) machines and a blending machine have been installed • Two IMA C21s and one IMA C51 machines for packaging tea bagged black tea have been installed•
Challenges Lack of human capital in field of tea processing and husbandry• Fluctuating exchange rate•
Successes Successful project thanks to a committed labour force and effective implementation according to the business plan
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Name of project MAGWA TEA PLANTATIONObligor MAN FERROSTAAL SOUTHERN AFRICA (PTY) LTD
Project summary The project enabled rescue measures for the Magwa tea plantation near Port St. John’s. MAN Ferrostaal contracted an international tea expert on the restructuring of the tea plantation
Partners in the project Magwa Tea Estate Workers Trust, Eastern Cape Development Corporation and JV Gokal
Geographic location Transkei, Eastern Cape
Number of jobs created 1,050 permanent jobs and up to 2,000 seasonal jobs.
BEE ownership 100% owned by Eastern Cape Development Corporation
BEE outsourcing All major suppliers (non-import) are BEE suppliers
Skills development Production managerial & supervisory staff were given a short course on Agricultural Practices related • to Tea and Labour RelationsAdult literacy courses are conducted for the employees•
Beneficiationofrawmaterials Processing of the raw tea leaf to the finished product
New business generated No local sales credits were generated
Assistance for women, disabled or youth
50% of the workforce are women• Most seasonal employees are youths•
Social impact Rural development
Special features Largest employer in the area
Current status Magwa Tea Plantation continues operations but is still dependent on government for financial assistance• MAN Ferrostaal has successfully finalised this project in terms of its NIP obligation•
What was procured Refurbishment was carried out and some machinery was purchased
What was delivered Refurbishment was completed and the machinery procured was delivered
Challenges Competition from cheap duty-free imported teas from SADC countries
Successes Successful concept
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Name of project MAN TURBOObligor MAN FERROSTAAL SOUTHERN AFRICA (PTY) LTD
Project summary The project enhances an expansion of capacity of MAN Turbo Machinery (Pty) Ltd for the manufacturing of turbine blades This will enable MAN Turbo to address the growing local and international markets
Partners in the project MAN Turbo (Pty) Ltd
Geographic location Gauteng
Skills development In-house training is provided for employees
Beneficiationofrawmaterials Downstream beneficiation of steel
New business generated No local sales credits were generated
Assistance for women, disabled or youth
Women are employed at the company
Current status The company is progressing well in terms of new business activities
What was procured 2 x CNC Machines
What was delivered The above machines were delivered
Successes Yes The project’s capacity increased and they were successful with blades for exchange and refurbishment
Name of Project NOVARA PET PALLETSObligor AGUSTA WESTLAND
Project summary Provision of financial assistance in the establishment of a PET recycling facility for the production of PET pallets
Partners in the project AW / Winhold / Novara
Geographic location Krugersdorp, Gauteng
Number of jobs created 15
BEE ownership details BEE through parent company Winhold
BEE outsourcing details Local content 100%
Skills development New technologies and skills in the extension and production of material from waste PET
Beneficiationofrawmaterials Recycling of PET
Investment value of project GBP1,453,723
Exports generated To be determined
New business generated To be determined
Social impact Environmental advantages through recycling waste plastic that would have otherwise gone to landfillNovara plastic beds will benefit many low income individuals giving them an affordable hygienic bed
Current status Active
What was procured PET processing line and machinery
What was delivered Financial assistance for required start up
Successes Full success is still to be determined – generation of sales will be the true indicator. Project has helped develop a new technology in South Africa with the successful establishment of a PET processing line utilising waste materials to generate useable products. Novara’s concept to build recycled plastic beds is still new in the market – progress is being made and interest has been received from potential customers
Challenges Original sales targets have been more difficult to achieve than expected, due to reluctance in the industry to change from traditional wood pallets. Novara had to develop an alternative strategy, which has delayed sales
Name of project OIL & GAS PLATFORM SERVICE YARDObligor MAN FERROSTAAL SOUTHERN AFRICA (PTY) LTD
Project summary MAN Ferrostaal, together with its project partners, developed the Oil and Gas related business in the Harbour of Cape Town, to build a maintenance and service yard for oil and gas platforms
Partners in the project FerroMarine Cape (Pty) Ltd
Geographic location Cape Town, Western Cape
Number of jobs created/retained 1,000
BEE ownership 15%
Skills development Skills in this specific business will be secured
Investment value of project ZAR60 million
Assistance for women, disabled or youth
According to the company employment regulations of the Operating Company DCD Dorbyl
Social impact Securing of employment in the area
Current status Currently at Detailed Design Phase as the concept had to be changed due to the outcome of the Competitions Regulation Board
Challenges Delay of 2½ years before TNPA accepted and countersigned the business and lease agreements• Completion in time as TNPA forced FMC to sign contracts but never countersigned•
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Name of project OIL & GAS SALDANHAObligor MAN FERROSTAAL SOUTHERN AFRICA (PTY) LTD
Project summary MAN Ferrostaal, together with its project partners, developed the Oil and Gas related business in the Western Cape Province, to build a fabrication yard in Saldanha Bay for the construction of oil and gas platforms
Partners in the project FerroMarine Africa (Pty) Ltd
Geographic location Saldanha, Western Cape
Number of jobs created 914 – construction phase; 720+ – operational phase
BEE ownership 15%
Skills development Grinaker LTA as the Operating company needs to train at least 1,050 people on site, for example in the fields of welding, etc
Investment value of project R150 million
Assistance for women, disabled or youth
Yes, as part of the Company Regulations of Grinaker LTA
Social impact Rural development – employment opportunities in the area
Current status No work on site as yet. An initiative by MAN Ferrostaal and Grinaker LTA to market the site is accelerating the procurement of work for the site
What was procured FMA handed over a manufacturing site to the requirements of the operating company Grinaker LTA
What was delivered Everything requested was delivered (i.e. Cranes, Generators, Buildings .etc)
What worked Handing over of the site on time to the operating company
Challenges To procure work for the site up until now
Successes Successful project – site handed over to operating company on time
Name of project OMNIAObligor GFC – THYSSENKRUPP
Project summary Upgrading facility to reduce green house gasses and to generate Environment Certificates
Partners in the project Omnia Group (Pty) Ltd
Geographic location Sasolburg
Number of jobs created 20
Special features New technology for fertiliser plant to reduce or avoid air pollution
Current status In operation since Jan 2008
Successes Successful project
Name of project PROJECT LEADERS FOR SOUTH AFRICAObligor AREVA
Project summary Strategy and management training programme to the benefit of South African Engineers
Partners in the project La Sorbonne University, France
Geographic location Paris, France
Skills development Upskilling of 20 BEE engineers in strategy and management competencies and project leadership
Assistance for women, disabled or youth
35% of participants were women
Current status Approved and completed
Successes Successful projects. 20 BEE candidates from an engineering background were trained as project leaders
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Name of Project ROTORWAYObligor AGUSTA WESTLAND
Project summary Manufacture of Rotorway helicopters in South Africa, with assistance of obligor Agusta Westland – investment and technical support to enable certification of products for international export
Partners in the project Rotorway International, Aerosynergy, Agusta Westland
Geographic location Cape Town, Western Cape
Number of jobs created 14
BEE ownership Majority SA owners
BEE outsourcing Some composite components
Skills development Transfer of knowledge and skills in the type certification process required to enable helicopters to be sold for commercial operations
Investment value of project USD2,848,062
Exports generated To be determined
New business generated USD129,287
Small business assisted Yes
Special features Eventual export of South African built helicopters
Current status Active
What was delivered Technical expertise in the process and requirements to achieve type certification of Rotorway helicopters
Successes Project will be deemed successful once full certification is achieved. Transfer is progressing well – Rotorway has now achieved manufacturing organisational approval certification by the South African CAA – this is a major step towards achieving full certification
Name of project SABIE WOOD PELLETSObligor GFC – THYSSENKRUPP
Project summary Production plant for Wood Pellets
Partners in the project CGC & GF Green Energy (Sabie) Pty Ltd, IDC
Geographic location Sabie, Mpumalanga
Number of jobs created 80
BEE ownership IDC, Workers Trust
BEE outsourcing Collection and transport of raw material subcontracted to BEE companies
Skills development Training programme for workers to become machine operators
Investment value of project ZAR120 million
Exports generated ZAR60 million /Year
New business generated Fuel pellets for export
Special features Technology transfer
Current status Commercial operation started in Sept 2009
Challenges Shortage of electricity supply
Successes Successful project
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Name of project SAJ TECHNICAL COLLEGEObligor SIEMENS LTD
Project summary Skills Development through recapitalisation of privately owned technical college for Artisan and Learnership studies in support of Gauteng infrastructure development and economic growth of Ekurhuleni and greater Johannesburg metropolitan area
Partners in the project SAJ Training Competence Training Institute
Geographic location Ekurhuleni, Gauteng
Number of jobs created 9
BEE ownership – details 51% black owned
Skills development Additional Eng studies students enrolled: 2008/9 = 320Student pass rate: 2008/9 = 90%
Investment value of project ZAR20 million
Assistance for women, disabled or youth
Female engineering studies students enrolled as % of total: 2008/9 = 20%Female engineering studies student pass rate as % of total: 2008/9 = 20%
Social impact Majority of students are recruited from the surrounding townships and industrial areas of Ekurhuleni and larger Johannesburg metropolitan area
Current status 40% of contract implemented within 12 months from contract signature. Ongoing implementation now dependent on ongoing student throughputs in subsequent years
What was procured Productive capital training equipment
What was delivered Funding for all procurement of all productive training equipment
Successes Successful project, combining black enterprise development, with skills development to create a sustainable and • profitable business model to bring both black economic transformation and skills development Transparent and measurable performance targets coupled to a good risk mitigation methods, incentivised this • private college to perform at their best Excellent entrepreneurial leadership coupled with commitment for social transformation•
Name of Project STORMS RIVER ADVENTURESObligor AGUSTA WESTLAND
Project summary Tourism – investment in facilities at Storms River Adventure to increase visitors and simulate local economy
Partners in the project Augusta WestlandStorms River Adventure
Geographic location Tsitsikamma
Current status Active
Number of jobs created 10 direct jobs and indirect employment through increased visitor numbers
BEE ownership 65% BEE Score
BEE outsourcing Local Content = 100%
Skills development Project enables local women to run and establish a viable business with community focus
New business generated GBP137,613
Small business assisted 10 local women are employed in a PTY that gives them an initial 40% shareholding and in future total ownership
Assistance for women, disabled or youth
See above
What was delivered Finance provided
Materials procured New kitchen facilities
Successes Successful project. While not large in large size, it fulfils an important need in a local rural community. Storms River is a successful SMME and won the SMME company of the year in 2006
Challenges While small projects such as this generate great benefits in a local community, they are often overlooked due to the large amount of work involved for the obligors with a small credit return
Name of project TENESOLObligor THALES
Project summary Manufacturing of solar panels
Investment own contribution 20% equity
Turnover USD120 million
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BEE: Black Economic Empowerment
BoP: Balance of Payments
DBSA: Development Bank of South Africa
DPLG: Department of Provincial and Local Government
ECDC: Eastern Cape Development Corporation
EP: Export Promotion
FDI: Foreign Direct Investment
GBP: Great Britain Pound
GDP: Gross Domestic Product
GOS: Gross Operating Surplus
IDC: Industrial Development Corporation
IDD: Industrial Development Division
IPP: Industrial Participation Programme
NIPP: National Industrial Participation Programme
SAM: Social Accounting Matrix
SARB: South African Reserve Bank
SDP: Strategic Defence Programme
SIC: Standard Industrial Classification
SME: Small and Medium Enterprises
SMME: Small, Medium and Micro Enterprises
StatsSA: Statistics South Africa
the dti: Department of Trade and Industry
USD: US Dollars
ZAR: South African Rands
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the dti Campus, 77 Meintjies Street, Sunnyside
Private Bag X84, Pretoria, 0001
the dti Consumer Contact Centre, 0861 843 384 (Local)+27 12 394 9500 (International)
www.thedti.gov.za
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