Presented by: Andile ReveExecutive Vice-President (Sectors)

March 2001March 2001

Report back to - Report back to - Trade and Industry Trade and Industry

Portfolio CommitteePortfolio Committee

ContentsContents

• Vision, Mission and Core Strategies

• A transformed IDC

• The past financial year (2000)

• The current financial year (2001)

• IDC managed government programmes

VisionVision ... ...

“To be the primary driving force of commercially sustainable industrial

development and innovation to the benefit of South and

southern Africa”

Contribute to the generation of balanced, sustainable economic growth in southern Africa

Economically empower the southern African population

Promote entrepreneurship through the building of competitive industries and enterprises based on sound business principles

Mission ...Mission ...

Core Strategies ...Core Strategies ...

Providing risk capital to widest range of industrial

projects

Maintaining its financial independence

internal profitability divestments from mature assets borrowings

Identifying and supporting opportunities not yet addressed by the

market

Establishing local and global involvement &

partnerships in projects that are rooted in or

benefit SA and SADC

Building upon and investing in human capital in ways that systematically and increasingly reflect the

diversity of SA’s society

4

• Vision, Mission and Core Strategies

• A transformed IDC

• The past financial year (2000)

• The current financial year (2001)

• IDC managed government programmes

ContentsContents

IDC’s Operational Structure ...IDC’s Operational Structure ...

ProfessionalProfessionalServicesServices

Marius Mostert

Financial and Financial and FundingFunding

Gert Gouws

HR and Corporate HR and Corporate Support ServicesSupport Services

Lesé Matlhape

16 departments are tasked with providing the necessary operational services to the SBUs

13 strategic business units (SBUs), each focussed on specific economic sectors

CEO / PresidentCEO / PresidentKhaya Ngqula

SectorsSectors

Andile Reve

ProjectsProjects

Jaco Kriek

The successful completion of an internal restructuring exercise within the IDC and the introduction of client focused SBU’s and processes, improved finance

approval lead times, reduced by about two thirds.

IDC’s Focus AreasIDC’s Focus Areas

Empowering of emerging entrepreneurs

Support manufacturing, tourism development, agro-industries and small-scale mining

New initiatives:

telecommunications and IT

retail and service sectors

government tenders

venture capital

Continue with the establishment of internationally competitive, large, resource-based beneficiation projects and downstream value-added industries

Regional (SADC and Africa) development

IDC’s involvement in the rest of Africa ...IDC’s involvement in the rest of Africa ...

• IDC’s current SADC involvement: 30 projects in 9 SADC countries

• The IDC’s investment portfolio in the SADC region (excl. SA):

• aluminium smelting,

• mining activities,

• agriculture,

• manufacturing and

• tourism.

• Mandate extended to invest in the whole of AfricaSouth Africa

Swaziland

NamibiaBotswana

Angola

Zambia Mozambique

Democratic Republic of

CongoTanzania

Aluminium smelter

Heavy minerals

Mining

Tea

Cotton

Cashews

Tanzanite

Coal

Mining

Mining

Zimbabwe

Table grapes

Mining

Lesotho

Wattle

Sugar

Prawns

Prawns

Cashews

Food processing

Cashews

Tourism resort

Malawi

Pharmaceuticals

Distillery

Furniture

Mauritius

Seychelles

Mining

Mining

Sugar & Power

Timber

Bagging plant

• Vision, Mission and Core Strategies

• A transformed IDC

• The past financial year (2000)

• The current financial year (2001)

• IDC managed government programmes

ContentsContents

R

Annual Highlights Annual Highlights

• Increased investment assistance amounting to R4.2 billion vs. R3.3

billion in 99/00 (about 5.9% of national fixed investment);

• Total number of approvals increased by 78% over 99/00;

• Approval of a R300m venture capital fund;

• The registration of Exim Finance;

• The introduction of a flood relieve scheme (total value R300 million);

and

• The IDC’s involvement within SADC was enhanced and now comprises

30 projects.

11

IDC’s Financial Results ...IDC’s Financial Results ...

Ranked 29th in South Africa’s “Giants League” i.t.o. assets Ranked 29th in South Africa’s “Giants League” i.t.o. assets

Ranked 4th largest SA public corporation i.t.o. assets and 5th largest i.t.o net income

Ranked 4th largest SA public corporation i.t.o. assets and 5th largest i.t.o net income

Financially strong - Assets = R17.4 billion - Retained income = R631

million

Retained Income

300

400

500

600

700

800

1996 1997 1998 1999 2000R

m

Abridged Consolidated Income StatementsAbridged Consolidated Income Statementsfor the year ended 30 June (R’mil)for the year ended 30 June (R’mil)

Net income from operating activities 860 752 14Associated entities’ net retained loss (683) (177)Net capital profits 503 46

Net income before taxation 680 621 10Taxation (4) (199)

Net income after taxation 684 820 (17)Minority interest (3) 2

Net attributable income for the year 681 822Dividend 50 50

Retained income for the year 631 772

2000 1999 % Change

Abridged Consolidated Balance SheetsAbridged Consolidated Balance Sheetsas at 30 June (R’mil)as at 30 June (R’mil)

Financing of industrial undertakings 14 290 15 029 (5)Fixed assets and loans 1 352 1 181Other assets 1 792 1 743

Total assets 17 434 17 953

Capital and reserves 10 760 10 129 6Outside shareholders’ interest 2 58Long-term liabilities 5 276 6 299 (16)Other liabilities 1 396 1 467

Total funds 17 434 17 953

Debt / Equity ration 49% 62%

2000 1999 % Change

Performance: SBU approvals ...Performance: SBU approvals ...

Distribution by business unit (2000)

0 5 10 15 20 25 30

Agro-industries

New business development

Metal-based products

Chemicals, rubber and plastics

Wood, paper and other

Tourism

Textiles, clothing and leather

International finance

Agri projects

Large beneficiation

Mining, minerals and energy

% Share

Number

Value

IDC’s Development Impact ...IDC’s Development Impact ...

• Assisted 415 industrialists

• Generated R4 bn additional annual export earnings

• Created 17 600 additional jobs

• Contributed 5.9% to manufacturing investment in productive capacity

Investments facilitated during 2000:

• Maintained 1 233 permanent jobs

Empowerment Financing ...Empowerment Financing ...

Credit facilities for delivery on government

contracts

Wholesale financing

Warehousing of shares

Take-overs and acquisitions

Loan finance

Approvals to empowerment firms % of total number of approvals

6%

9%

14%

19%

27%

0%

10%

20%

30%

1996 1997 1998 1999 2000

SME Financing ...SME Financing ...

SME financing’s value - from 11% of approvals in 1996 to 42.3% in 2000

SME: Authorisations (R million)

0

100

200

300

400

500

600

<R1m R1 - R10m R10 - R20m R20 - R60m

Total assets

R m

illio

n

1998

1999

2000

Performance: Regional Development ...Performance: Regional Development ...

Approvals:July 1996 to June 2000

Promoted non-metropolitan development (54% of total number of approvals)

6%4%

7%5%

20%14%

2% 3%

4%4%

2%15%

16%7%

17%23%

20%23%

% of total approvals excl. Saldanha

- Value- Number

• Vision, Mission and Core Strategies

• A transformed IDC

• The past financial year (2000)

• The current financial year (2001)

• IDC managed government programmes

ContentsContents

Targets: SBU approvals (2001)Targets: SBU approvals (2001)

• 6% increase in number compared to 99/00 actuals

0 5 10 15 20

Agro-industries

Metal based products

Tourism

Wood, paper & other

Chemicals, glass & plastics

Wholesale & bridging finance

Textiles, clothing & leather

Entrepreneurial mining

Techno industries

Empowerment

Large beneficiation

Agri-projects

Mining, minerals & energy

% share

Value

Number

24%

• Value of approvals likely to increase by 14% by year-end from last year

• Aim to accomplish a more balanced portfolio (sectoral and regional)

• Vision, Mission and Core Strategies

• A transformed IDC

• The past financial year (2000)

• The current financial year (2001)

• IDC managed government programmes

ContentsContents

Management of Government ProgrammesManagement of Government Programmes

Name of Fund Funder/Donor Purpose Funds under management

Support Programme for Industrial Innovation

DTI Technology Promotion R109m per year

Small Mining FundDept of Minerals & Energy

Development of small scale mining ventures

R9,82m

Workplace Challenge DTI

Enhance productive efficiency through training of the social partners, and the application of best in practice principles

R0,470m

Danida DTI/Danish AidDraft new legal framework for South

Africa businessR0,365m

Norwegian Grant Fund DTI/Norwegian AidFacilitate restructuring of DTI and

R2,1m

National Empowerment FundDTI/IDC (R100m each)

Widening and deepening of empowerment by assisting "Black" businesses with equity participation R5,105m (at historic cost)

FRIDGE DTIResearch fund focussing on international competitive capability of local industry

R14m per year

23

Fund transferred to NPI

associated institutions

IDC handles establishment of fund