Our goal is to develop a competitive downstream chemicals industry (including plastics and pharmaceuticals) that will meet consumer demand in the local, regional and global markets. We aim to achieve this by investing in the development of projects/businesses that seek to create new or expand local manufacturing capabilities, replace imports and enhance competitiveness by lowering the cost of production through the introduction of new technologies.
The Chemical Products and Pharmaceuticals Strategic Business Unit offers funding, as well as industry and project development support, to businesses developing downstream chemicals, plastics and pharmaceuticals products. The manufacture of the following are key focus areas for the unit:
- Pesticides and other agro-chemical products.
- Paints, varnishes and similar coatings.
- Pharmaceuticals, medicinal chemicals and botanical products.
- Soaps, detergents, perfumes and toilet preparations.
- Man-made fibres.
- Plastic products, including plastics recycling.
- Medical devices.
We envisage that through the activities of this unit, we will achieve the following outcomes for the South African economy:
- Expand and extend existing industries in order to create and/or preserve jobs and drive sustainable economic growth.
- Enable the local industry to achieve its potential and become globally competitive.
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 focus areas should apply for funding.
The unit assesses all aspects of a transaction relating to technical, commercial, financial, economic and management appraisal of businesses and projects to ascertain the sustainability and economic viability thereof.
New or existing projects or businesses that have a significant developmental impact, for example, rural development, empowerment, job creation, township development and value addition, creation of black industrialists as well as youth ownership, are encouraged to consider applying for support.
The funding assessment process entails the following:
- Understanding the requirements of clients and preparing suitable financing structures.
- Detailed due diligence.
- Coordinating with lenders/investors to ensure timely sanction of facilities.
- Harmonizing the terms and conditions among all lenders/investors.
- Legal agreements and other necessary documentation.
Who should apply for funding?
We encourage new or existing companies within the downstream chemical products, plastics and pharmaceuticals sector that plan to create new or expand industrial capacity within the economy to apply. We can also consider the funding of expansionary BBBEE acquisitions in the sector where the majority of the acquisition funds remain within the target company for expansionary purposes (usually through an issue of shares).
For investments within South Africa:
- Debt funding minimum ZAR 1-million.
- Equity funding minimum ZAR 5-million.
- Funding limits:
- Start-up businesses: IDC maximum funding equates to 60% of the total funding requirement (for start-ups).
- Expansion projects: IDC can fund a full expansion if the equity structure (equity/assets) at peak is a minimum of 35%.
- Funding of historically disadvantaged persons: under special circumstances, the IDC will be prepared to extend finance in excess of the limits above.
- Preferred equity structure for start-up projects of at least 50% at peak.
For investments in the rest of Africa:
- The project must be of direct benefit to South Africa in any of the following ways:
- Must promote South African capital goods.
- Must develop and integrate regional value chains (source inputs/raw materials from elsewhere for processing in South Africa).
- Must promote South African ownership (25% or more) on the rest of the African continent.
(Note that the above conditions could in some cases be relaxed for South Africa’s neighbouring countries)
- The minimum size of the total project funding requirement must be:
- ZAR 5-million for SACU-based investments.
- USD 3-million for SADC-based investments.
- USD10-million for investments in countries outside SADC.
- The IDC will not fund more than 50% of the total funding requirement (for expansions not more than the existing asset base) – the funding amount will be a factor of the South African content/involvement.
- Rand, US Dollar and Euro-based funding are available.
Applying for funding
We consider each application carefully. Click here to apply online.