01 Oct Local jewellers backed by R100m Gold Loan Scheme
The R100-million Gold Loan Scheme will help local jewellery manufacturers both to increase their exports and to re-capture a big local market which is currently being served by imported products.
The country’s minerals beneficiation industry has received a major boost with the launch of the R100-million Gold Loan Scheme for emerging and established jewellery manufacturers.
The scheme is capitalised by the Department of Trade and Industry (the dti) and managed by the Industrial Development Corporation (IDC).
Unveiling the scheme at the IDC’s Sandton headquarters on Tuesday, 30 September 2014, Trade and Industry Minister Rob Davies said the initiative would help South African jewellers to grow their operations in order to supply both export markets and the local retail sector.
“The latest figures indicate that there are about 1 000 jewellery manufacturers left in the country and that production is down to 3 500 kilograms per annum, from 7 500 kilograms in 2004,” Davies said.
While local jewellery exports stood at R467-million in 2013, imports exceeded R1-billion – compared to exports of R466-million against imports of just R280-million in 2004.
Davies said the new scheme would help local manufacturers re-capture a big local market which was currently being served by imported products, as well as to increase exports to markets including the United States, where jewellery from African countries can enter duty-free under the African Growth and Opportunity Act (Agoa).
He added that the need for a facility to provide jewellery manufacturers with access to loans on favourable terms had originally been identified in the government’s Industrial Policy Action Plan (Ipap).
Working capital loans on favourable terms
Under the Gold Loan Scheme, emerging and established gold jewellery manufacturers that meet the IDC’s funding criteria will be assisted with working capital loans at a fixed interest rate of 3% per annum.
Funding will only be available for manufacturing activities taking place in South Africa, and manufacturers will be expected to make their own financial contributions as well.
Funds for the scheme have been sourced from the government’s Manufacturing Competitiveness Enhancement Programme (MCEP) Industrial Niche Projects Fund, which provides funding for new, emerging or niche manufacturing sectors.
A holistic approach to manufacturing challenges
Also speaking at the launch of the scheme, Shakeel Meer, Divisional Executive for Corporate Strategy at the IDC, said a holistic approach was required to address the challenges facing manufacturing.
“Working together with the manufacturing sector and identifying challenges that they have to deal with on a daily basis provided valuable input in the development of the Gold Loan Scheme,” Meer said.
He urged entrepreneurs to make use of the scheme in order to move jewellery manufacturing and minerals beneficiation forward in the country.
Applications for Gold Loan Scheme funding can be made online, through the IDC’s website www.idc.co.za, or submitted to the IDC’s offices.
Apart from the funding criteria particular to the scheme – see below – applicants must provide an executive summary and business plan, and comply with the IDC’s minimum funding requirements, which include:
- Compliance with international environmental standards.
- The IDC does not refinance fixed assets.
- As a guideline, the minimum that can be financed is R3-million.
Funding criteria: Gold Loan Scheme
- The client’s business must have economic merit.
- The client must require a minimum of 4kg and a maximum of 10kg of gold.
- The client must have a secured contract/s.
- Funding will only be provided for manufacturing activities taking place in South Africa.
- Financial contribution from owners will be required. This will be determined on a project-by-project basis.
- The client must have the requisite statutory approvals and documents for handling precious metals.
- Only existing businesses will be funded.
- Security will be required, to be determined on a project-by-project basis.
- The client must have adequate insurance against gold loss.
- Acceptable physical security and metals management systems will be required.
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