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
This component of the MCEP encompasses the:
- 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.
Manufacturers that receive benefits from the following programmes will not be considered for MCEP grants:
- 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.