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IDC expects to create 45 000 jobs

Sep 03 2012 17:05 Sapa

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Johannesburg - The Industrial Development Corporation (IDC) has increased levels of profitability for the last financial year, according to its 2012 integrated report released on Monday.

The value of funding increasing to R13.5bn from R8.7bn and profitability increased 22% to R3.3bn.

There were 293 funding approvals in 2012 compared to 221 in the previous year, and 45 900 jobs were expected to be created and saved in South Africa through funding approvals, compared to 39 400 in the previous financial year.

Forty percent of these jobs are based in rural areas.

To lower the cost of funding, the IDC sourced an additional R2bn from the Unemployment Insurance Fund (UIF) to use for funding more labour-intensive businesses.

It also secured R500m in low-cost funding from KfW, a German development bank, to encourage and promote investments in both energy efficiency and renewable energy in South Africa.

Problems in the last financial year included slower economic recovery resulting in lower levels of business confidence.

The ICD reported a higher incidence of applicants misleading the corporation.

The report covers the period April 1 2011 to March 31 2012.

From roadshows conducted a need to improve on response times for funding emerged, and turnaround time had been reduced.

The corporation's profitability was largely due to increased dividend income and increased gains from the disposal of investments, offset by reduced profitability from subsidiaries, mainly Foskor, and losses from equity-accounted investments.

The fair value of investments decreased by R902m in the 2011/12 financial year compared to an increase of R12.6bn in the previous year, largely due to a decline in the value of listed investments during the year.

The total assets of the group increased from R106.8bn to R112.2bn, mainly as a result of an increase in loans and advances.

This was funded mainly by borrowings, which increased by 49% to R9.9bn.

"Our balance sheet remains strong and provides a suitable base from which to deliver on our future objectives," chief executive Mvuleni Geoffrey Qhena said.

IDC funding has contributed to companies such as Limpopo-based Inline, the biggest achaar producer in South Africa, Cotton Traders, known for its "Granny Goose" bedding label and Kearney's Truck and Trailer.

It also invested in the movies "Semi-Soet", "Zambezia" and the still-in-production "Long Walk to Freedom".

An investment in the hospitality industry included the approval of R91.5m to partially fund a 122-room three-star hotel in Newlands, Cape Town.

In the long term, the business would provide Deaf SA, a co-shareholder, with a commercial income stream to alleviate the organisation's reliance on government subsidies.

New board members, who include Congress of SA Trade Unions general secretary Zwelinzima Vavi, were thanked for their contribution.

Board members were paid a total of R2.174m for the period.

Vavi was marked absent in the meeting he would have attended.

Board members are only paid for meetings attended and do not receive retainers.

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