Archives: April 25, 2022

The Clothing, Textiles, Footwear and Leather Growth Programme (CTFLGP) is a Programme of the Department of Trade, Industry and Competition (“the dtic”) to grow employment, improve overall competitiveness and to grow the clothing, textiles, footwear, leather and leather goods manufacturing industries. The CTFLGP is administered by the CTFLGP Desk (“Desk”) at the IDC on behalf of the dtic.

The CTFLGP has been simplified and revised to better meet the sector’s needs, as follows:

• Programme A: Competitiveness Improvement to drive increases in production output; job creation, transformation and sustainability in the sector.
• Programme B: Expansionary Working Capital to support product localisation, company growth and expansion.
• Programme C: Start-up Funding to support early-stage start-up companies still in development stages and fashion designers to drive broad based transformation.
• Programme D: Cluster Funding to develop groups of globally competitive companies to ensure a sustainable business environment able to retain and grow employment levels and support the vision and objectives of the Masterplan.

The incentive will support job growth, industry output, enhance the sector’s competitiveness, promote inclusivity and transformation, encourage industrial development and innovation while adjusting to technological disruptions.

The architecture of the scheme is aimed at bringing “additionality” in the following forms: localization & import replacement (onshoring product manufactured to SA), job creation (growth and sustainability), production output increase, increasing of exports and aligning to government policy on
transformation, women advancement, youth, etc. thereby aligning to the Masterplan aspirations.

Additionality is measured through the following three things:

• Growth in real output (e.g. sales volume, exports, etc.) focusing on import replacement,
• Job growth and
• Broadening participation (e.g. B-BBE transformation, start-ups,
• SME’s, targeted sub-groupings (Women, Youth and People With Disabilities).

Should you be interested in applying for the business grant, Dream Team Capital can assist you. Contact us today for professional assistance in streamlining your application for the Clothing, Textiles, Footwear and Leather Growth Programme.

Offering Criteria of Critical Infrastructure Reconstruction Programme

• Applicants must submit complete applications prior to development of infrastructure construction.
• This will be in the form of a cost-sharing grant of 50% of the total qualifying infrastructure costs to a maximum cap of R30 million.

Non Qualifying Costs

• Value Added Tax (VAT) payable in connection with the direct qualifying project costs.
• Maintenance and repair costs or any other costs incurred after the completion of the construction of the infrastructure and commissioning thereof.
• Costs associated with tendering documentation and the tendering process.
• Cost associated with research and development other than that improves the current product or develops the current product to the next generation.
• Equipment, tools and machinery for the purposes of manufacturing.
• Any other cost/s that the Adjudication Committee, in its sole discretion, may deem as non- qualifying.

Incentive Disbursement

• Approved applicants will enter into a contract with the dtic and payments of claims to approved projects will be based on qualifying deliverables.
• The approved applicant has to submit mandatory documents deemed necessary by the dtic for payments to be processed, such as a valid Tax Clearance Certificate.
• the dtic reserves the right to verify the existence of the supported deliverables and their quality.
• All payments will be governed by the terms and conditions of the contract between the approved applicant and the dtic.
• Payment to approved applicants will be subject to the submission and verification of claims by the dtic.
• All mandatory requirements must be fulfilled before any payment.

Going forward, incentive and Dream Team Capital can play an even more important role in the co-ordination, integration and reporting on the consolidated performance of the various fragmented energy efficiency initiatives in the country. Contact us today for professional assistance in streamlining your application for the Critical Infrastructure Reconstruction Programme incentive.

Critical Infrastructure Programme:

• Critical Infrastructure Programme is an investment incentive that the South African government is implementing to stimulate investment growth in line with the Industrial Master Plans and the National Industrial Policy Framework (NIPF).
• It is a cost-sharing (except in the case of state-owned industrial parks and distressed municipalities) incentive that is available to approved applicants as may be approved by the AC.
• The programme aims to leverage investment by supporting infrastructure, agro-processing projects, state owned testing facilities, South African film and television studios and cinemas, state-owned industrial parks, strategic feasibility studies and projects that alleviate dependency on the national grid, water and sanitation networks deemed critical or of a strategic nature, thereby lowering the cost of doing business.
• In the case of infrastructure projects alleviating dependency on the national grid, water and sanitation networks, the municipality/Eskom/relevant authority must be involved. The investor must obtain a concurrence from the municipality/Eskom/relevant authority that even if the infrastructure is within private control, the municipality/Eskom/relevant authority has documented concurrence that it has access to the infrastructure.
• Clean/green energy infrastructure for the purposes of selling to other institutions/customers on condition that the rate of supply takes the CIP grant into consideration, will qualify.
• Municipal/Eskom infrastructure projects located within a Special Economic Zone (SEZ) can be supported under CIP. However, the relevant authority must give concurrence that it has access to the infrastructure. Such infrastructure should not be funded/supported under the SEZ fund.
• Projects where the infrastructure and the investment are the same, that is, where the investment is the actual infrastructure, will be considered. The applicant must be transformed in terms of ownership and the projects must show meaningful black professionals participation in the management of the operations.

Should you be interested in applying for the incentive, Dream Team Capital can assist you. Contact us today for professional assistance in streamlining your application for the Critical Infrastructure Programme.

The Capital Projects Feasibility Programme (CPFP) is a cost-sharing grant that contributes to the cost of feasibility studies likely to lead to projects that will increase local exports and stimulate the market for South African capital goods and services.

Benefits

The grant is capped at R8 million to a maximum of 50% of the total costs of the feasibility study for projects outside Africa and 55% of the total costs of the feasibility study for projects in Africa.

Grant Approval

• The approval of the grant is calculated as a percentage of the total cost of the feasibility study and is payable according to completed milestones as pre-determined at approval stage by the dti.
• The approval of the feasibility study will be capped to a maximum reimbursable cost-sharing grant of R8 million.
• the dti’s grant contribution will be capped at five percent (5%) of the cost of the envisaged investment project limited to R8 million.
• The applicant is required to inform and request approval from the dti should the agreed milestone dates and/or scope of work change by sending a formal request and a revised schedule of milestones activities.
• If the approval is granted, the applicant will receive the approval letter with the Terms and Conditions which need to be accepted, the letter with Terms and Conditions must be signed and returned to the dti within ten (10) working days of deemed receipt. Failure to comply with requirement will render the approved grant to be withdrawn.
• the dti, or duly appointed representative, reserves the right to carry out inspections and site visits from time to time, on activities of the approved applicant in addition to technical reviews of project deliverables.

Should you be interested in applying for the incentive, Dream Team Capital can assist you. Contact us today for professional assistance in streamlining your application for the Capital Projects Feasibility Programme incentive.

The objectives of the Black Industrialists Scheme are to:

• Accelerate the quantitative and qualitative increase and participation of black industrialists in the national economy, selected manufacturing sectors and value chains; as reflected by their contribution to growth, investment, exports and employment; and

• Create multiple and diverse pathways and instruments for black industrialists to enter strategic and targeted manufacturing sectors and value chains

2. A black industrialist refers to a juristic person, which includes co-operatives incorporated in terms of the Companies Act, 2008 (as amended) that are owned by black South Africans as defined by the Broad-Based Black Economic Empowerment (B-BBEE) Act, that creates and owns value-adding industrial capacity and provides long-term strategic and operational leadership to a business. A black industrialist can be a natural person.

The following are characteristics of a black industrialist:

a. high levels of ownership (>50%);

b. dominant black ownership and management control may be considered for projects that are deemed strategic by the dti, but may need to include other shareholders to attract relevant skills, finance and scale-up the investment opportunities;

c. exercises control over the business;

d. takes personal risk in the business;

e. does business in the manufacturing sector with particular reference to IPAP focus areas;

and

f. makes a long-term commitment to the business and is a medium- to long-term investor

3. Black people refer to African, Coloured and Indian persons who are natural persons and:

a. Are citizens of the Republic of South Africa by birth or descent; or

b. Are citizens of the Republic of South Africa by naturalisation before the commencement date of the Constitution of the Republic of South Africa Act of 1993; or

c. Became citizens of the Republic of South Africa after the commencement date of the Constitution of the Republic of South Africa Act of 1993, but who, had it not been for the Apartheid policy, would have qualified for naturalisation before then.

d. The definition of “black people” now includes South African Chinese people as per the Pretoria High Court ruling on 18 June 2008.

3.4 The key focus areas of the programme will be on the following productive sectors:

a. Blue/ocean economy, including vessel building and repair

b. Oil and gas

c. Clean technology and energy

d. Mineral beneficiation

e. Aerospace, rail and automotive components

f. Industrial Infrastructure

g. Information communication technologies

h. Agro-processing

i. Clothing, textiles/leather and footwear

j. Pulp, paper and furniture

k. Chemicals, pharmaceuticals and plastics

l. Nuclear

m. Manufacturing-related logistics

n. Designated sectors for localisation

Going forward, Business Grants and Dream Team Capital can play an even more important role in the co-ordination, integration and reporting on the consolidated performance of the various fragmented energy efficiency initiatives in the country. Contact us today for professional assistance in streamlining your application for the Black Industrialists Scheme.

The People-carrier Automotive Investment Scheme (P-AIS)is designed to stimulate a growth path for the people carrier vehicles industry through investment in new and/or replacement models and components that will result in new or retention of employment and/or strengthen the automotive vehicles value chain.

Benefits

• Semi Knocked Down (SKD) Vehicle Assemblers
  • SKD investments that start production from 01 January 2012 to 31 March 2015 may qualify for a grant of 20% of the qualifying investment costs.
  • For an additional 5% the project must demonstrate that the investment will result in base year employment levels being maintained throughout the incentive period and during the model phase out period.
  • No new applications with a start of production (SOP) after 31 March 2015 will be considered for the P-AIS grant.
• Complete Knocked Down (CKD) Vehicle Assemblers
  • CKD investments that start production from 01 January 2012 to 31 March 2015, may qualify for a grant of 25% of the qualifying investment costs.
  • CKD investments that start production from 01 April 2015 onwards, may qualify for a grant of 20%.
  • For an additional 5% the project must demonstrate that the investment will result in base year employment levels being maintained throughout the incentive period and during the model phase out period.
  • For a second additional 5% bonus grant (cumulative 10%) the project must meet the set economic benefit criteria.
• Component Manufacturers
  • Component manufacturers may qualify for a grant of 25% of the qualifying investment costs.
  • For an additional 5% the project must demonstrate that the investment will result in base year employment levels being maintained throughout the incentive period and achieve at least two of the set economic benefit requirements.
  • For a second additional 5% (cumulative 10%) P-AIS grant, the project must meet the set economic benefit criteria.

Eligible Applicants

• Semi Knocked Down (SKD) Vehicle Assemblers
  • Mono-built motor vehicles for the transport of between 14 and 35 persons including the driver and with a vehicle mass exceeding 2000kg, trimmed or untrimmed and painted but not fitted with engines, transmission assemblies, axles, radiators, suspension components or braking equipment.
  • SKD investment projects should have a start of production of between 01 January 2012 and 31 March 2015.
• Complete Knocked Down (CKD) Vehicle Assemblers
  • People-carriers for the transport of between 10 and 35 persons including the driver with a vehicle mass exceeding 2000kg.
  • Floor panels, body sides or roof panels are not permanently attached to each other; the engine and transmission assemblies, axles, radiators, suspension components, steering mechanisms, braking or electrical equipment or instrumentation are not fitted to such floor pans or chassis frames; the bodies/cabs are not fitted to floor pans or chassis frames.
• Component Manufacturers
  • A component manufacturer that can prove that a contract is in place / a contract has been awarded / a letter of intent has been received for the manufacture of components to supply into the medium and heavy commercial vehicle manufacturer supply chain locally and/or internationally.
  • A component manufacturer that can prove that after this investment it will achieve at least 25% of total entity turnover or R10million annually by the end of the first full year of commercial production, as part of automotive (medium and heavy commercial vehicle) manufacturer supply chain locally and/or internationally.

Going forward, Business Grants and Dream Team Capital can play an even more important role in the co-ordination, integration and reporting on the consolidated performance of the various fragmented energy efficiency initiatives in the country. Contact us today for professional assistance in streamlining your application for the People-carrier Automotive Investment Scheme.

Eligibility Criteria of Medium and Heavy Commercial Vehicles Automotive Investment Scheme

Truck Manufacturers

• An existing or new manufacturer of medium and heavy motor vehicles (trucks) has to comply with the extent of assembly (i.e. C.K.D. definition as specified in Note 5 to Chapter 98.).
• The cab may be imported in an assembled and trimmed condition into South Africa until 31 March 2016.
• The engine and transmission, axles, radiators, suspension components, steering mechanisms, braking or electrical equipment and instrumentation may be imported into South Africa but have to be fitted to the floor pan or chassis frame of the truck within South Africa.
• The body or cab has to be fitted to the floor pan or chassis frame within South Africa.
• With effect from 1 April 2016 the amended CKD definition as specified in ITAC Report 419 will apply and projects with a start of production of 1 April 2016 and beyond that do not comply with the revised definition will not be supported.

Bus Chassis Manufacturers

• The chassis, engine and transmission assemblies must comply with the CKD definition of Note 5 as stipulated in Chapter 98 of the Customs and Excise Act”, 1964″.
• The chassis, engine and transmission must be assembled semi knocked down in South Africa and the hang-on parts (fuel tank, tyres, battery, wheel rims) for the chassis may be imported into South Africa but have to be fitted to the floor pan or chassis frame of the bus within South Africa.
• Projects with a start of production date from 1 April 2016 onwards will be required to comply with the amended CKD definition as specified. From this date projects that do not comply with the revised definition will not be supported under the MHCV-AIS.

Component Manufacturers, Deemed Component Manufacturers, Tooling companies and Bus and Truck Body Manufacturers.

• A component manufacturer that can prove that a contract is in place and/or a contract has been awarded and/or a letter of intent has been received for the manufacture of components to supply into the medium and heavy commercial vehicle manufacturer supply chain locally and/or internationally; and
• A component manufacturer that can prove that after this investment it will achieve at least 25% of total entity turnover or R10m annually by the end of the first full year of commercial production, as part of a medium and heavy commercial vehicle manufacturer supply chain locally and/or internationally.
• In the case of Bus Body Manufacturers where the contract is awarded by the entity to the original equipment manufacturer (OEM) to supply the chassis (for example if the Bid to supply busses was awarded to the Body Manufacturer), proof must be provided that the bid has been awarded and a contract has been entered to with the OEM for the supply of the chassis to the Body Manufacturing entity.

Should you be interested in applying for the incentive, Dream Team Capital can assist you. Contact us today for professional assistance in streamlining your application for the Medium and Heavy Commercial Vehicles Automotive Investment Scheme.

The Automotive Investment Scheme is a non-taxable, reimbursable cash grant in respect of qualifying investment in productive assets used in South African operations by:

• Certain original equipment manufacturers—a 20% grant
• Certain automotive component manufacturers—a 25% grant
• Automotive tooling manufacturers—a 25% grant
• New energy vehicle manufacturers—a 30% grant
• Energy efficient vehicle manufacturers—a 30% grant

Light Motor Vehicle Manufacturers

• Should have achieved or can demonstrate that it will achieve, within three years, a minimum of 50 000 annual units of production per plant.
• Should demonstrate that it will achieve within three years a minimum of 50 000 annual units of production per plant.

Component Manufacturers or Deemed Component Manufacturers

• A component manufacturer that can prove that a contract is in place and/or a contract has been awarded and/or a letter of intent has been received for the manufacture of components to supply into the light motor vehicle manufacturer supply chain locally and/or internationally;
• A component manufacturer that can prove that after this investment it will achieve at least 25% of total entity turnover or R10m annually by the end of the first full year of commercial production, as part of a light motor vehicle manufacturer supply chain locally and/or internationally.

Competitiveness Improvement Costs for Component Manufacturers, Deemed component Manufacturers and Tooling Companies

• The objective of this benefit is to improve the competitiveness of component manufacturers through the improvement of processes, products, quality standards and related skills development through the use of business development services.
• The grant will be limited to the competitiveness improvement costs incurred within the first three years after the start of production date and a total grant amount of R1 million per entity per three year cycle.

Should you be interested in applying for the incentive, Dream Team Capital can assist you. Contact us today for professional assistance in streamlining your application for the Automotive Investment Scheme.

The Aquaculture Development and Enhancement Programme, (ADEP) is an investment based cash incentive program available to those companies engaged in primary, secondary and ancillary aquaculture activities.

Qualifying Costs

The investment in qualifying owned land and/or buildings must constitute land and/or buildings at cost, acquired for the purpose of the aquaculture project(s) and must be owned by the applicant. The land and/or building costs must be directly associated with the purchase, renovation, or construction of an aquaculture facility for the investment project under consideration and be located on land or sea area that has been zoned for aquaculture commercial, industrial or mixed use. Expenditure incurred before the 1 April 2019 will not qualify.

Incentive Payment / Disbursement

The incentive is disbursed over two (2) payment periods based on a contract period, subject to the approved applicant meeting all the requirements of the economic benefit criteria and performance requirements.

Non-Qualifying Costs

• Operational costs, i.e. electricity, salaries, etc.
• Costs related to non-cultured fishing activities such as catching or harvesting of species from their natural habitat.
• Administration offices, change rooms and human resource offices.
• Operational costs, i.e. electricity, salaries, etc.
• Costs related to non-cultured fishing activities such as catching or harvesting of species from their natural habitat.
• Administration offices, change rooms and human resource offices.
• Second-hand (previously used) assets
• Hydroponic (plant & vegetables) portion of any production facility.

Benefits

Aquaculture Development and Enhancement Programme contribution is up to 50% (capped at R20m) of qualifying costs for new, upgrading or expanding projects, in:

• Machinery, equipment and tools;
• Bulk infrastructure (only in water & electrical infrastructure):
• Owned land (only applicable to small black enterprises);
• Buildings (ponds, cages, tanks,  etc.);
• Leasehold improvements, capitalised in the balance sheet, where lease agreement is at least 10 years;
• Rental costs, (only for small black enterprises), capped at R20 000 per month and claimable at stage two only.
• Aquaculture feed, up to a maximum of 10% of total costs, (capped at 20% for small black enterprises)
• Commercial vehicles or work boats (owned or capitalised financial lease), not to exceed 50% of total qualifying costs;
• Competitiveness improvement activities (e.g. skills development) up to R500 000;
• Environmental impact assessments (EIA) and permits authorisation and costs (only for small Black enterprises).
• Mentorship (only or small enterprises), up to R200 per hour, 8 hours per day capped at R200 000 per approved project or application.

Going forward, incentive and Dream Team Capital can play an even more important role in the co-ordination, integration and reporting on the consolidated performance of the various fragmented energy efficiency initiatives in the country. Contact us today for professional assistance in streamlining your application for the Aquaculture Development and Enhancement Programme initiative.

The Objectives of the Agro Processing Support Scheme:

The objective of the Agro Processing Support Scheme is to stimulate investment by South African agro-processing/beneficiation (agri-business) enterprises. The investment should demonstrate that it will achieve some of the following:

• Increased capacity,
• Employment creation,
• Modernised machinery and equipment
• Competitiveness and productivity improvement,
• Broadening participation.

Qualifying Processes/Projects

New and existing agro-processing/beneficiation projects. This can also involve a wide range of processing or beneficiation activities of post-harvest, that result in value addition and/or enhanced storage life, such as cleaning, sorting, grading, waxing, controlled ripening, labelling, packing & packaging, warehousing, canning, freezing, freeze drying, wood carving, extrusion, synthesizing, polymerisation, and various levels of processing that change agricultural product form. In the forestry value-chain may also include sawing, pulping, peeling and preservation.

The Scheme will be targeted at five (5) key identified sub-sectors (focus areas) as follows:

• Food and beverage value addition and processing (including Black winemakers);
• Furniture manufacturing;
• Fibre processing;
• Feed production; and
• Fertilizer production.

Interpretation of the focus areas within each sector will be at the discretion of the dti. Agro-processing/beneficiation activities will be considered based on economic impact in terms of job creation, geographic spread and strengthening supply chains.

Mandatory Conditions

The applicants must:

• Be a registered legal entity in South Africa in terms of the Companies Act, 1973 (as amended) or the Companies Act, 2008 (as amended); the Close Corporations Act, 1984 (as amended) or the Co-operatives Act, 2005 (as amended).
• Be a taxpayer in good standing.
• Be involved in starting a new Agro-processing/beneficiation1 operation or in expanding or upgrading an existing Agro-processing/beneficiation operation.
• Be B-BBEE compliant in terms of the B-BBEE codes (achieve level 1 to level 4) and submit a valid B-BBEE certificate of compliance or affidavit.
• Undertake an investment project which should result in retaining and creating direct employment.
• Indicate that the project will be able to boost the local capacity of identified product(s); or where possible prospects of export orientation.
• Adhere to sectorial minimum wage and legislative requirements governing the sector.
• Demonstrate that at least 50% of the inputs (raw materials) will be sourced from South African suppliers and that at least 30% of the inputs will be sourced from Black South African suppliers in particular.
• Where inputs cannot be sourced locally and from Black suppliers, applicants must provide a motivation including a sourcing plan to adhere to 4.1.8 within 2 years.
• Commencement date of the project or activities applied for must take place within 90 calendar days after the application has been approved.

Going forward, incentive and Dream Team Capital can play an even more important role in the co-ordination, integration and reporting on the consolidated performance of the various fragmented energy efficiency initiatives in the country. Contact us today for professional assistance in streamlining your application for the Agro Processing Support Scheme.