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Johannesburg - The Industrial Development Corporation (IDC) - the SA self-financing, state-owned national development finance institution - on Thursday posted strong results for the year ended March 2008, with a record R8.5bn in funding approval, up
from R5.9bn in the previous year.
The IDC says it expects the projects it funded in the year to contribute to the creation or retention of 33 200 jobs.
In line with the IDC's objectives of sustainable and equitable economic development, more than 40% of the expected jobs will be in rural areas, while 68% of the number of approvals benefited black enterprises and of the total number of approvals, 56% went to small and medium sized (SMEs) businesses.
Speaking at the results presentation CEO Geoffrey Qhena said: "Our strategy of Leadership in Development is paying off, and our funding activities are increasingly targeted at promoting regional diversification in our investment
patterns, facilitating broad-based economic empowerment to increase economic participation and funding SMEs in recognition of their capacity for accelerated job creation."
Over the past three years, the corporation has conducted research with stakeholders and has implemented plans accordingly to address gaps or failures in individual sectors of the economy.
"We are also sharpening our sectoral knowledge through our strategic business units, which are geared to develop sector expertise. As a result, we have successfully identified and invested in a range of companies engaged in new industries with enormous potential for example renewable energies and biofuels as well as innovative companies that are developing new markets or niches within their sectors for example in manufacturing and agriculture sectors," he said.
"Our strategic review also highlighted the fact that in order to promote entrepreneurism we need to go beyond addressing funding challenges and provide more targeted technical assistance to build entrepreneurial capacity," he added.
Although the current economic conditions will result in some challenges for the corporation, it also provides for opportunities.
"The country is experiencing capacity constraints throughout the economy, and the IDC is geared towards alleviating these constraints. The corporation will also be introducing specifically tailored products throughout the year
aimed at developing specific industries and groups of entrepreneurs," Qhena added.
The corporation's business model dictates that from time to time it exits mature investments to allow for funds to be reinvested. Plans are underway to introduce BEE partners in Foskor, a subsidiary that manufactures phosphate and
phosphoric acid, and list the company in 2009.
Profitability, excluding the once-off Kumba transaction in 2006/07, has grown by 47% to R4bn year on year. In addition, in the past year, the value of the IDC's assets grew to R90bn by March 2008 and equity to R76bn.
This was due largely to the strong performance of resource investments as a result of the global resources boom. This strong asset base is essential to fund the R60bn that the corporation plans to invest over the next five years.
- I-Net Bridge