The establishment of proper liaison channels between government and private enterprises regarding funding for manufacturing projects can guarantee that South Africa’s manufacturing sector remains internationally competitive, says business consulting and advisory company Incentives SA.
“The negative impact of the 2008/9 recession has resulted in the loss of about 200 000 jobs in the manufacturing sector. Increasing domestic input costs, as well as rental and property prices, have made it difficult for manufacturing businesses to be competitive,” states Incentives SA MD Rishad Ahmed.
Owing to this situation, he adds, manufacturing companies have not invested in new machinery and technology, further reducing their competitiveness on the local and international markets.
To mitigate the crisis, Department of Trade and Industry (DTI) and various other government programmes have disbursed more than R2-billion to assist businesses in becoming competitive.
Ahmed mentions that, since the start of government grant programmes, such as the Black Business Supplier Development Programme in 2010, more than 1 500 businesses have benefited from grants valued at R550-million.
The Manufacturing Competitiveness Enhancement Programme, which was launched in 2012, has allocated about R2-billion to manufacturing companies. This has resulted in more than 33 000 jobs being sustained in the manufacturing sector.
A projected investment of more than R4.2-billion is expected to be made available to industry in the near future.
Although these programmes have yielded positive results, companies have encountered challenges in providing the correct documentation and following the correct procedures to successfully obtain the grants provided by the DTI. This can be attributed to the proper channels not being followed by the manufacturing companies when applying for funding and companies not being aware of how to access the funds.
Being a consulting and advisory company, Incentives SA provides the link between government and private enterprises to guarantee that proper procedures are followed when applying for funding.
“Having been approached by various companies needing assistance in this area, we have been able to assist more than 110 South African companies, of which 90% are black-owned companies,” notes Ahmed.
To assist more companies nationally, Incentives SA has embarked on a campaign to increase awareness of the various grants and finance options available by engaging with various media companies active in various industries that operate in key sectors identified by government for funding, such as manufacturing.
The company also regularly hosts seminars in various provinces to create awareness of the incentives that are available.