The IDC

1. The IDC Loyiso Jiya Chief Economist Industrial Development Corporation of South Africa Ltd 7 May 2002

2. IDC - Corporate Profile ... • Self-financing state-owned development finance institution • Provides financing to entrepreneurs engaged in competitive industries • Follows normal company policy and procedures in its operations • Pays income tax at corporate rates and dividends to its shareholder • Independent Board of Directors • Reports on a fully consolidated basis, with its Annual Report freely available to the public IDC Head Office Sandton

3. Vision ... “To be the primary driving force of commercially sustainable industrial development and innovation to the benefit of South and southern Africa”

4. Mission ... • Contribute to the generation of balanced, sustainable economic growth in southern Africa • Economically empower the southern African population • Promote entrepreneurship through the building of competitive industries and enterprises based on sound business principles

5. Core Strategies ... 4 Providing risk capital to widest range of industrial projects • Maintaining its financial independence • internal profitability • divestments from mature assets • borrowings Identifying and supporting opportunities not yetaddressed by the market Establishing local and global involvement & partnerships in projects that are rooted in or benefit SA and SADC Building upon and investing in human capital in ways that systematically and increasingly reflect the diversity of SA’s society

6. IDC’s Financial Results ... • Financial year 2000/2001 • Financially strong • Assets = R30 billion • Net income after tax and capital profits = - R 258 million • Ranked 29th in South Africa’s “Giants League” i.t.o. assets • Ranked 4th largest SA public corporation i.t.o. assets and 5th largest i.t.o net income

7. Investments facilitated over the past 6 years: • Contributed 10% to manufacturing investment in productive capacity IDC’s Development Impact ... • Created 89 000 additional jobs • Assisted 2 109 industrialists • Generated over US$3.2 bn in additional annual export earnings • Empowered the historically disadvantaged (31% of number of approvals in 2001) • Facilitated development in rural areas (agro-industries, SDI’s)

8. CEO / President Khaya Ngqula Sectors Raisibe Morathi Projects Jaco Kriek HR and Corporate Support Services Lesé Matlhape Sectors Andile Reve Professional Services Geoffrey Qhena Finance and Funding Gert Gouws Marketing & Corporate Affairs Neo Sowazi 21 departments are tasked with providing the necessary operational services to the SBUs 14 strategic business units (SBUs), each focussed on specific economic sectors IDC’s Operational Structure ...

9. CEO / President Khaya Ngqula Professional Professional Sectors Financial and HR, IT, Admin Projects Services Services Funding Geoffrey Qhena Andile Reve Jaco Kriek Gert Gouws Lesé Matlhape Role of the Sectors Division ... Financial and Service sectors Raisibe Morathi Funding • Sectoral focus and specialisation • Facilitate in sectoral development on a broad front ... • through the use of IDC’s basket of financial instruments • through the participation in development initiatives within sectors

10. Executive- Service Sectors Raisibe Morathi Executive- Sectors Andile Reve Chemicals William Smith Metal- Based Products Jan Weys Empowerment Sonja Loggenburg Techno-industries Gerrit van Wyk Entrepreneurial Mining & Beneficiation Muvhango Netshitangani Agro-Processing Shakeel Meer Textiles Willie Fourie Wood Paper, Other Dean Webster Wholesale, Guarantees, Gov. Tenders Trevor Mashabane Tourism Ben Nkosi Sectoral Business Units…

11. IDC’s Focus Areas • Empowering of emerging entrepreneurs • Support manufacturing, tourism development, agro-industries and small-scale mining • Regional (SADC and Africa) development • New initiatives: • telecommunications and IT • retail and service sectors • government tenders • venture capital • Continue with the establishment of internationally competitive, large, resource-based beneficiation projects and downstream value-added industries

12. Financial Products ... • Equity • Quasi-equity • Commercial loans • Wholesale finance • Share warehousing • Guarantees

13. Financing Criteria ... • Greenfield projects, expansions & rehabilitations • Relatively sizeable projects • Economic merit (profitability & sustainability) • Developmental impact (jobs, value addition, exports) • Fixed assets and the fixed portion of growth in working capital requirements • Reasonable financial contribution from owners • Security • Environmental requirements

14. Large Beneficiation Projects International Finance % of total number approved Empowerment % of total value approved Wood, Paper & Other Agro-industries Chemicals, Rubber & Plastics Tourism Metal Based Products Textiles, Clothing & Leather Mining, Mineral & Energy Projects Entrepreneurial Mining & Beneficiation Techno-industries Wholesale & Bridging Finance Agri-projects 0 5 10 15 20 25 30 35 40 Source: IDC Sectoral Exposure ... IDC Financing by Sector Business Unit Approvals: July 1997 to June 2001

15. Credit facilities for delivery on government contracts Wholesale financing Warehousing of shares Loan finance Take-overs and acquisitions Empowerment Financing ...

16. SME Financing ... • SME financing’s value - from 11% of approvals in 1996 to 67.2% in 2001 • Since 1996 the IDC has approved finance worth more than R7.6bn to 1 823 SME’s, creating more than 54 538 jobs and generating export earning in excess of R10.2 bn

17. Projects within the IDC ... CEO / President Khaya Ngqula Sectors Raisibe Morathi Projects Jaco Kriek HR and Corporate Support Services Lesé Matlhape Sectors Andile Reve Professional Services Geoffrey Qhena Finance and Funding Gert Gouws Marketing & Corporate Affairs Neo Sowazi • Focus on larger projects • Prefer infant developments with regard to products and/or technologies • Projects that require more active involvement from IDC • Involved in all the stages of project development • Focus on maximum development impact

18. Units within Projects ... Projects Jaco Kriek Public Private Partnership Monwabisi Manjezi Large Beneficiation Carlos Galego Minerals, Mining & Energy Sipho Mkhize Agri-Projects Guy Clarke

19. IDC’s Role in Projects ... • Identify project opportunities • Co-sponsor feasibility studies • Source financial and operating partners • Provide and arrange funding (e.g. export finance) • Provide equity stake • Assist with implementation via steering committee • Serve on board of directors

20. By acting as a catalyst for investments in productive capacity By identifying sound investment opportunities By assisting in the financing of imports of South African capital goods & services By supporting development initiatives such as SDIs By providing consultancy services IDC’s involvement in the rest of Africa ... Promoting Investment in Africa ...

21. Current & potential Africa (excl. SA) projects ... Hydro power Manufacturing Mining Phamaceuticals Prawns Mining & Mineral beneficiation Shopping Mall Aluminium Brewery Cashews Cotton Heavy Minerals Prawns Sesame seeds Sugar Timber Tourism Hotels Mining Shoping Mall Tea Hotels Port Expansion Horti and Floriculture Mining Tourism Mining Grape fruit Manufacturing Horticulture Manufacturing Parkade Sugar Tourism Mining Distillery Tanning Telcoms IDC’s involvement in the rest of Africa ...

22. International Finance ... • Export Finance:Loans to foreign borrowers to facilitate purchase of SA capital goods & services • Import Finance:Utilising lines of credit to finance the importation of capital goods & services into SA • Project Finance:Sourcing and arranging funding from diverse international lenders for major projects • Risk Mitigation:Risk mitigation products to hedge & structure political & commercial exposure in SADC • Trade Finance:Pre & post shipment working capital finance to exporters

23. Concluding Remarks ... • The IDC is at the front of industrial development in SADC • We are moving into non-manufacturing activities that yield development and financial returns • Highly profitable opportunities exist for investors in the South Africa • Together we can turn big ideas into big business!

24. Together we can turn big ideas into big business www.idc.co.za