Theo Meintjes' presentation on the DTI Production Incentives for manufacturing companies willing to improve their competitiveness at the Cap40.

2. Manufacturing competitiveness
enhancement program
• Cash grants on investment cost
• Improve productivity & competitiveness
• Retain jobs.

3. Main Qualifiers
• Applicant company’s activities must include
manufacturing or Engineering services or conformity
assessment agency.
• At least 1 financial year of trading history
• BEE Level 4 or provide 2 year plan

4. How much?
A cash grant varying between 30% and 80% of
investment Cost.
Tax Exempt, but not really.

5. Qualifying investment costs
1. Upgrading and expansion of equipment and
buildings
2. Converting to Green technology & Energy saving
3. Improving competitiveness (soft issues)
4. Feasibility studies
5. Cluster initiatives

6. Also on offer
• Pre- and post production working capital loans
@ 6% p.a. from IDC

7. CLASSIFICATION
Size of applicant according to
BALANCE SHEET + ACC. DEPR.
Grant % varies from
component to component
R0 – R5 million Highest % grant
R5 – 30 million
R30 – R200 million
> R200 million Lowest % grant

8. MVA Limitation
This is an overall limitation on the first 4 cost types
• MVA = Manufactured sales less cost of materials
used.

9. Example: MVA calculation
Income
Statement
MVA
Calculation
Sales of manufactured goods 1 000 000 1 000 000
Sales of other goods and services 788 000 n/a
Total sales 1 788 000 1 000 000
Raw materials & Packaging 600 000 600 000
Operating cost 231 000 n/a
Administrative cost 97 000 n/a
MVA 400 000
Limit according to size of applicant, e.g.
R30m> <R5m= 25% R100 000

10. Size of
applicant
Expand Green Soft Feas.
study
Cluster MVA
%
R % % % % % %
<5m 50 50 70 70 80 n/a
>5 <30m 40 40 60 70 80 25
>30m <200m 30 30 60 50 80 20
>200m 30 30 50 50 80 10
MVA limit? Yes Yes Yes Yes No
Summary of grant percentages

11. CONCLUSION
• More generous than any program before.
• Fewer entry level requirements and performance
requirements than any program before.
• The only exclusions are, no subsidies on 2nd hand
assets, no vehicles and no leased buildings