Industrial Development Corporation Basic and Speciality Chemicals SBU

Industrial Development Corporation Basic and Speciality Chemicals SBU Chemical Products and Pharmaceuticals SBU February 2016

Basic and Speciality Chemicals & Chemical Products and Pharmaceuticals SBU • The IDC Corporate Profile • SBU Focus Areas • Financing Criteria • Financial Instruments • Schemes and Incentives • Role in project development • Approaching the IDC

THE IDC: CORPORATE PROFILE • Established in 1940, the IDC is a self financing, State-owned development finance institution • The vision of the IDC is to be the primary source of commercially sustainable industrial development and innovation to the benefit of South Africa and the rest of the African continent • Provides financing to entrepreneurs engaged in competitive industries and enterprises based on sound business principles • Pays income tax at corporates and dividends to the shareholder The IDC’s Head Office in Sandton (Johannesburg), Cnr. Fredman Drive and West Street • Aims to maximize developmental and financial returns within an acceptable risk profile 3

SBU FOCUS AREAS SBU Industry Development Goal An industry that produces competitively and promotes expansion of the downstream chemicals industry • Identified by the government as a key driver of economic growth. UPSTREAM • South Africa's chemicals industry, including fuel and plastics fabrication as well as pharmaceuticals, is the largest of its kind in Africa. 4

SBU FOCUS AREAS • A Value Chain approach has been adopted • The Chemicals Value Chain dominates manufacturing in South Africa, adding significant value to the economy. 5

FINANCING CRITERIA • Financial assistance is provided for the development of new projects, expansions or What IDC doesn’t fund: rehabilitation of existing projects • R&D • Projects must exhibit sustainable profitability) economic merit (i. e. • IDC finances fixed assets and working capital requirements • Shared Risk i. e reasonable contribution expected from promoter/s • R 1 million minimum funding requirement • R 1. 4 billion maximum single transaction size • Security from borrower (debt only) • Environmental compliance required • Socio economic merits assessed • Exploration for oil and gas • Wholesale & retail activities • Refinancing of existing activities • Pure sale of shares for empowerment purposes (to be referred to the NEF) • Funding of less than R 1 m (refer to SEFA, if necessary) • Pure overdraft facilities 6

FINANCIAL INSTRUMENTS • We offer a wide array of financial instruments, including : – – – Equity Quasi-equity Commercial debt Guarantees Short-term trade finance Venture capital • BEE funding – Broad Based BEE • Start-ups, expansions, acquisitions (expansionary acquisitions only) – Black Industrialists • Start-ups, expansions, acquisitions • Multi criteria These may be provided singly or in combination Flexible deal structuring 7

SCHEMES AND INCENTIVES Through our DFD Department We offer a suite of preferential interest rate and equity return finance schemes, including : – Transformation and Entrepreneurial Scheme (TES) • Women Entrepreneurial Fund (supporting female entrepreneurs) • Development Fund (supporting blue collar workers trusts) • Equity Contribution Fund (entrant black entrepreneurs in 100% BEE • • owned businesses) Community Fund (supporting marginalised poor communities to obtain ownership) People with Disability Fund (supporting entrepreneurs with disabilities) – Risk Capital Facility (supporting BEE SME’s) – Gro-Ɛ Scheme (supporting job creation) – Gro-Ɛ Youth (supporting black entrepreneurs < 35 years of age) – Black Industrialists (supporting existing and new Black Industrialists) These may be provided in conjunction with IDC normal finance DTI offers a suite of grants and incentives Approach IDC directly for detailed information on each scheme 8

IDC ROLE IN PROJECT DEVELOPMENT • Co-sponsors feasibility studies • Identifies project opportunities • Provides and arranges funding (e. g. export and import finance, equity and loan funding) • Identifies suitable international and local DFIs, commercial and merchant banks and companies and export credit agencies as potential participants • IDC acts as a financial adviser in partnership with other financial institutions • Shares project risk with the sponsors and financial partners • Identifies strong operating partners 9

APPROACHING THE IDC • Online applications for funding can be lodged at www. idc. co. za • Contact regional office in Cape Town 28 th Floor ABSA Centre 2 Riebeeck Street, Cape Town PO Box 6905, Roggebaai, 8012 Tel: 021 4794 Fax: 021 419 3570 • Engage with Head Office for support (011 269 3000) 10

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THANK YOU 12