The National Treasury and the Department of Trade and Industry (DTI), in conjunction with the Industrial Development Corporation, promote competitiveness and job creation / retention in the industrial sector by funding qualifying manufacturers through the two key components of the Manufacturing Competitiveness Enhancement Programme (MCEP):
- Industrial Financing Loan Facility; and
- Production Incentive Grant.
Industrial Financing Loan Facility of the Manufacturing Competitiveness Enhancement Programme
- Pre- / Post-Dispatch Working Capital Funding Facility; and
- The Industrial Policy Niche Projects Fund.
The Pre- / Post-Dispatch Working Capital Funding Facility offers funding to manufacturers at a preferential interest rate to improve competitiveness to reduce finance cost and improve competitiveness:
- Pre-dispatch funding covers working capital requirements from receipt of an order to dispatching goods to a customer, including production, raw material, packaging, and transportation costs.
- Post-dispatch funding covers working capital requirements from the date of dispatching goods to a customer to the date when the seller realises the proceeds of a sale, including performance bonds and performance guarantees.
Up to R50 million is offered at a fixed interest rate of 4 % repayable over 48 months.
The Industrial Policy Niche Projects Fund supports projects identified by the DTI and the IDC that focus on new areas with the potential to:
- Create jobs;
- Diversify manufacturing output; and
- Generate exports.
The Production Incentive Grant supports:
- Capital Investment in equipment upgrades and expansions that will create new jobs and protect existing jobs – these upgrades or expansions may include investment in electrical equipment.
- Green Technology and Resource Efficiency Improvement – projects that lead to resource efficiency and cleaner production processes.
- Business-level Competitiveness Improvement – enhancing conformity assessments and improving processes, products, and related skills development through the use of business development services.
- Feasibility Studies likely to lead to project plans that will result in newly manufactured products or processes or the creation of new markets that will result in a substantial increase in manufactured products.
- Cluster Competitive Improvement in support of economic growth and job creation – financial assistance to business clusters in the manufacturing sector to implement collaborative projects that will enhance their productivity and international competitiveness.
The following sectors are excluded from the MCEP:
- Greenfield projects or manufacturers in operation for less than a 12-month financial year; and
- Automotive component manufacturers with less than 25 % of their base-year turnover earned as part of the motor vehicle manufacturers supply chain may be considered for grants under the MCEP.
- Motor Industry Development Programme (MIDP);
- Automotive Production Development Programme (APDP);
- Clothing and Textile Competitiveness Programme (CTCP); and National Industrial Participation Programme.
Contact us for more information on how you can access the Manufacturing Enhancement Competitiveness Programme for your business.