After the annual State of the Nation Address (SONA) and Budget speeches I always say that it is important to note that what’s in the speech and what work has to come out of the speech, are two very different things.
It’s very promising to see that within the energy and infrastructure sectors the activities being discussed in these speeches are slowly coming to market. Last year we saw the Infrastructure Fund managed by The Development Bank of Southern Africa (DBSA) come into play and just last month we saw that four water-related projects under the recently gazetted Strategic Integrated Projects (SIPs) are gearing up for implementation.
Infrastructure and energy-related projects as well as all manufacturers will be affected by the new Extended Producer Responsibility (EPR) Regulations. The EPR Regulations are set to see these projects being implemented in a much greener and sustainable way.
This is where we believe an opportunity exists for manufacturers who are looking to upgrade their facilities, but also for manufacturers who are looking to enter the market. The Regulation will increase the requirements for recycling, reduction, reuse and recovery rate, thus achieving one of the aims of the National Waste Management Strategy published earlier last year. It is also an opportunity for the government to work closely with industries that produce varying amounts of waste to enhance the country’s capacity to recycle, thus expanding the Circular Economy.
The EPR Regulation is a reminder that we cannot afford to produce products when we are not cognizant of the effect of these products on our environment.
The Black Industrialists Scheme (BIS) seeks to leverage the State’s capacity to unlock the industrial potential of black-owned and managed businesses within South Africa through deliberate, targeted and well-defined financial and non-financial interventions. The government is availing up to R50mil per project in the form of cash incentives (grants) to support majority black-owned manufacturers to grow within their respective industries. This allows black-owned businesses to upgrade machinery to comply with (for instance) the EPR Regulations and gain a competitive advantage through leaner and greener production practices. As infrastructure deployment plays a central role in South Africa’s Economic Reconstruction and Recovery Plan, there is an opportunity for Manufacturers within the building materials and construction sector, especially.
Ready for the boost
Guy Kawasaki, the famous Silicon Valley Venture Capitalist, once said: “Ideas are easy. Implementation is hard.” Businesses need to understand that accessing these funds is not just about having the idea and seeing the opportunity. It is all about establishing and building out the feasibility, or rather the bankability (as we like to call it), of the project. The bankability of a project is linked to the commercial and financial viability and sustainability of the project. You can easily build a sustainable project through:
- Engaging with the market and potential customers: Discuss your plans for extension and or the type of facility you are planning to build before starting the project. This will allow you to build strong relationships downstream and unveil opportunities you can capitalise on which you initially might not have thought of. Engaging in greener practices can allow potential customers to make room for your solution in their operations in a timely manner.
- The right teams/partners: Partnering with specialists, like Uzenzele, can help you to strategise your bankability and support you in developing winning bankable applications and direct your focus on what is important to the management teams of these funds.
- Knowledge: Getting access to these funds relies heavily on industry credibility and networks. Being certified and complying with industry norms and standards are a major winning factor. Similarly, having supplier and customer relationships you can leverage is critical. Your credibility shows you are a knowledgeable manufacturer that the industry would want to engage with. It shows you are keeping up with trends and changes and that you are engaging in sustainable business practices while addressing the manufacturing and industrial concerns, responsibly.
Get in line for your capital injection
In a world where a lot of our focus revolves around illness, we are seeing governments doing everything they can to return to an era of all-around health. It is important to note that government can’t do this alone and referring to the Budget, the minister of finance, Tito Mboweni, emphasised this when he stressed the importance of Public-Private Partnerships.
The South African government is also not expecting the Private sector to carry the burden alone – grants and incentives coming out of Government initiatives, such as the Black Industrialist Scheme, is proof of this.
The question is: are you ready to get in line for your capital injection? An injection that is not only going to boost your business but address our economic and environmental health holistically.
We are available. Reach out to discuss the bankability of your manufacturing projects, especially if it relates to the manufacturing of materials in construction. We are passionate to see private sector businesses benefit from Government’s Infrastructure Investment Plan. To take this plan from speech to practice Government needs strong local value chains they can tap into, and that’s where we come in to help you.