The local chemicals industry plays a significant role to the country’s economy, contributing in the region of 5% to GDP and 25% of South Africa’s overall manufacturing sales. The sector-is a source of employment providing a livelihood to a large section of SA’s population.
Against this background, IDC’s Basic and speciality chemicals SBU, aims to develop both the local and regional upstream basic and speciality chemicals value chain. Accordingly, the unit offers finance, business support and continued engagement with industry stakeholders where relevant including a range of entities in this space.
The unit provides funding towards development of projects that seek to expand local production capabilities, replace imports, and enhance industry competitiveness, with the ultimate goal of lowering the cost to downstream consumers as well as overcoming supply challenges. The unit also invests in new chemical value chains, particularly those that give the industry a competitive edge.
The following sub sectors are our key focus areas:
- Oil and Gas
- Basic Chemicals
- Fertilisers
- Plastics in its Primary form
- Synthetic Rubber
- Speciality Chemicals from various sources
In addition, the unit provides funding to the development of smart technologies, green chemicals and new materials that provide unique market opportunities, as well as identifying opportunities for new consumer products, production capacity or localisation.
Outcomes
By providing both project development activities and industrial development capabilities, the unit envisages the following impact on the local and regional economies:
- Expansion and extension of existing industries that create, and/or preserve jobs and drive sustainable economic growth.
- Enabling the industry to achieve its potential and become globally competitive
- Providing assistance to start-up and building new sustainable businesses within the basic and speciality chemicals value chain
Doing business with the unit
Entrepreneurs that have developed a business proposal for the expansion of an existing manufacturing business or for the establishment of a new manufacturing venture in our key sub-sectors should apply for investment.
The unit assesses all important aspects relating to technical, commercial, financial, and economic and management appraisal of businesses and projects to ascertain sustainability and economic viability thereof.
in need of a partner to develop medium to large-scale projects that will have a significant industrial and socio-economic impact on the industry are also encouraged to consider applying for support. The process entails the following:
- Understanding the requirements of clients and preparing suitable financing structure
- Appraisal and detailed due diligence
- Coordinating with lenders/investors to ensure timely sanction of facilities
- Harmonizing the terms and conditions among all lenders/investors
- Documentation
Funding criteria
In assessing the suitability of an application, the unit considers the following:
- The business venture or project exhibits economic merit in terms of profitability and sustainability;
- Shareholders and owners make a reasonable contribution to the business venture which will be evaluated at the time of the application;
- Compliance with applicable environmental standards;
- The business venture or project should have a significant socio-economic impact such as job creation potential, value addition to raw materials, rural development, empowerment, township development; and
- The business has security, the form and nature of which must be related to your specific circumstances.
Applying for funding
We consider each application carefully. Please click here to apply online.
In addition to the specific requirements of the Basic and Speciality Chemicals SBU, applications must meet the IDC’s minimum requirements.
Source: IDC
