Limpopo

LIMPOPO

IDC Limpopo plays a pivotal role in growing the regional economy, tackling unemployment through the creation of sustainable economic opportunities. All this while simultaneously contributing to an inclusive economy funding black industrialists, women and youth-owned enterprises.

 

IDC Limpopo seeks to become substantially more proactive, focused on sectors that exhibit the highest potential for sustainable and jobs-rich industrial development.

ABOUT THE REGION

What are the key industries and sectors that you support?

  • Agriculture
  • Mining
  • Tourism

Opportunities in the region?

Agriculture, Mining and Tourism. Please refer to Funding opportunities for IDC in Limpopo below for more details.

What is your regional strategy and focus areas?

The IDC Limpopo seeks to play its role in growing the regional economy, tackling unemployment through the creation of sustainable economic opportunities while contributing to an inclusive economy funding black industrialists, women and youth owned enterprises. The principal goal is to become substantially more proactive, focused on sectors that exhibit the highest potential for sustainable and jobs-rich industrial development. The support includes identifying and assisting companies in distress because of the economic meltdown due to the Covid-19 pandemic.

What are your top three tips for someone applying for finance?

  • Tap into existing Government programmes
    Small business loans are one traditional avenue for funding, but they are often restricted to people with existing cash flow. Consider tapping into government programmes such as DTIC’s Black Industrialist Scheme to leverage equity when requesting finance for your business. This can be a slow and bureaucratic process so prepare yourself and do the research.
  • Submit a comprehensive Business Plan with a well-researched market.

Funding opportunities for IDC in Limpopo

Agriculture

 

Limpopo grows more tomatoes than any other place in the southern hemisphere – that includes South America where tomatoes originate. The province grows two thirds of the tomatoes in South Africa as well as three quarters of the country’s mangoes and 60% of the avocados.  It also has a number of game reserves all ripe for development and a wealth of mineral riches to be unearthed. Paradoxically, a shopper in Polokwane is more than likely paying more for that fruit than a shopper in Gauteng.  This is because some of these agricultural

 

products move from Limpopo – where they are grown – to Gauteng, where the products are packaged and brought back to Limpopo through grocery chain stores. “It means Polokwane residents, for example, are buying their fruit and vegetables less fresh because though they come from their own back yard, the produce travels all the way to Johannesburg or Tshwane and back,”.

 

The IDC’s solution is to foster beneficial platforms in Limpopo, which enjoys significant business opportunities for entrepreneurs with an interest in mining, agriculture and tourism, among others.

 

Despite so many tomatoes being grown in the province “up to 30% of those tomatoes are thrown away every year because of grading issues”. This is despite the demand in Europe for dehydrated products. This is where the IDC comes in – it identifies potential market gaps and, where entrepreneurs present good business plans, it can help fund and nurture those businesses.

 

Similar opportunities are available in the frozen vegetables space and though a few multinationals are playing in that space, they also only cater for domestic or household markets. Here there’s a chance for exporting a locally manufactured product.

 

The IDC in Limpopo primarily targets entrepreneurs who are already manufacturing to check if there is capacity for them to expand or diversify and add other products. We also make the entrepreneurs aware of some of the legislative requirements as well as offering financial and non-financial support in other areas.

 

The IDC interacts with would-be entrepreneurs and small business owners from all spheres of life, but it is those who have a clear idea of their market and how they are going to get their product to that market that are most likely to be successful. For example, an engineer in the mines and who has been doing that job and managing a section for some years, we find that those are the guys who have what it takes. So, there is this opportunity for them to jump to the other side and be the supplier or provider of services to the same industry that they are working in.

 

Mining

 

On the mining front, Limpopo is on a growth trajectory. It has just under 70 operating mines, mainly in the Sekhukhune area and Waterberg region. Close to 90 are in the pipeline, depending on whether there is water availability, which is usually an impediment for the development of new mines. That is also one of the reasons for the massive housing developments in rural Limpopo. It means more people are getting employed and more money is being pumped into the villages, and that is where the growth is taking place.

 

The mining developments are mainly in the platinum space. However, coal mining opportunities exist in the Waterberg area, from Thabazimbi all the way to the Vhembe district around the Makhado area. Coal has been around Mpumalanga for many years, but we have always known that there were big reserves in Limpopo. This explains why Eskom has one of its biggest new power stations, Medupi, in Limpopo.

 

The development of the new power station also led to the development of new junior mines coming in and taking advantage of supplying Eskom. “Anglo Platinum has offloaded some of its assets in North West and chosen to expand in Limpopo. The quality of the reserves is significantly better and the cost of extracting is less in Limpopo, because in North West they have to dig deeper. With the expansion of mines, you start seeing the development of new residential estates, shopping malls and with all that there is demand for private hospitals, schools and so forth.

 

One of the reasons behind the plan to have a special economic zone (SEZ) in Tubatse was to leverage the benefits of having up to 40 mines in the area. The idea is to locate all mining-related activities in one area to improve efficiency in trade. The SEZs bring in the private sector to be part owner of that development. The second SEZ in Limpopo is the Musina SEZ, which will host the R38.8 billion South African Energy Metallurgical Base Project. This project can transform the economy in Limpopo. Built off a mineral resource base, it will develop businesses around it that process the riches that come out of the ground.

 

The Limpopo provincial government and the local mining houses have given an undertaking that up to 20% of their spend would be in the province. This means increasing localisation and ensuring that where possible the companies operating there buy from Limpopo businesses.

 

“As the IDC we are looking at opportunities for import replacement. You will find that mines are consuming certain commodities and it is common to import these from overseas. We are looking into those opportunities to see how best we could set up small manufacturing.”

 

Tourism

 

Limpopo also has a lot of potential for growth in the tourism sector. Up to 80% of the Kruger National Park (KNP) is situated in Limpopo, but the first province that comes to mind when people think of the KNP is Mpumalanga. The province has not done enough to market Limpopo as a tourism destination. The province has 53 state-owned game reserves covering just over 200 000 hectares and this has the potential to create many opportunities. The IDC has over the years been very active in the tourism space. Our Tourism portfolio include Radisson in Polokwane, which is the first luxury hotel in Polokwane with 160 rooms and it is 100% black-owned,”

 

We also have hotel and lodge investments in Thohoyandou, Bela Bela and Tzaneen.

 

Manufacturing

 

Limpopo entrepreneurs are urged to takes advantage of government initiatives such as the department of trade and industry’s black industrialist programme, which funds up to 50% of the value of a project limited to R60 million. In this regard, the IDC sees Limpopo as what Gauteng was some 80 years ago. The resources are here and the is no other province that has the development opportunities like Limpopo.

 

The IDC is sector-focused and therefore there are businesses where it cannot get involved, such as retail and property.

Contact the Limpopo Regional Office: lp@idc.co.za

Mashweu Matsiela

Limpopo Regional Manager

Polokwane

73 Biccard Street
Maneo Building
Suite 1

 

Tel: 015 299 4080 4099
Fax: 015 295 4521
Email: lp@idc.co.za

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