Our sectors

Agro-industries

agroindustryThe Alice Kat Citrus Development Project in the Eastern Cape

The IDC's Agro-Industries Strategic Business Unit (SBU) provides support to a wide range of food and non-food production activities in the agricultural value chain. Currently, the SBU has over R5 billion of exposure and commitments in the Agro-Industrial sector and plans to increase its role in this highly important value chain. Our strategic focus is on:

(a) competitive import replacement in South Africa and the rest of the continent;
(b) support of job-rich sub-sectors with growth potential;
(c) rural development; and
(d) inclusive development models.

How do we fund?

There are two ways of doing business with the Agro-Industries SBU:

  • Credit Applications (Industrial Finance) – this is when IDC considers funding an existing operational or new business on the basis of a bankable business plan;
  • Project Development Finance – this is when the IDC considers with a strategic and industrial specific operating partner the funding of a portion of the development of a project that has not yet reached a bankable stage. Note that this option is only considered on an exceptional basis.

Who should apply for finance?

New or existing companies within the Agro-Industries sector that plan to create new or expanded job-rich industrial capacity within the economy. We can also consider funding of expansionary BBBEE acquisitions in the sector where the majority of the acquisition funds remain within the target company for expansionary purposes (usually through an issue of shares).

The Agro-Industries SBU provides support to a wide range of economic viable activities in the agro-processing (food and non-food), beverage and aquaculture sectors. Agro-processing is defined widely and can include businesses that do on-farm, first-tier processing as well as backward integrated agro-processing projects. The SBU is keen to work with agro-processors that increase their procurement from resource poor historically disadvantaged farmers or farming communities. (inclusive farming models).

What do we offer?

We provide bespoke funding solutions of up to R1 billion to the applicant via the following financial instrument suite: debt; mezzanine funding; pure equity instruments (applied in exceptional cases for IDC’s own account or on-behalf of BBBEE), trade finance and guarantees.

What differentiates us?

  • Balancing development returns and financial sustainability
  • The successful development of long term business relationships through the utilisation of innovative and customised financial solutions
  • A long term patient investor through good and difficult economic cycles
  • A highly experienced team with extensive expertise across the agro-industrial value chain;
  • The ability to leverage private sector and government support
  • A higher risk appetite and funding based on cash flow that are not inherently security reliant;
  • Special funding schemes that provide concessional funding for highly developmental projects
  • Participation in project development and the ability to fund start-up businesses with strategic co-investors
  • Customised repayment plans that could incorporate capital and interest moratoriums

Some investment guidelines

For investments in South Africa

  • The funding application must facilitate the creation of new industrial capacity and create new jobs.
  • Risk-sharing from operating private-sector investment partners is non-negotiable and the shareholders will have to guarantee the funding of shortfalls
  • Equity-related funding:
    • Only applicable to larger investments
    • Only when project is perceived of strategic importance
    • Only minority interests
  • Funding limits:
    • Start-up businesses: IDC maximum funding equates to 60% of the total funding requirement (for start-ups)
    • Expansion projects: IDC can fund a full expansion if the equity structure at peak is a minimum of 35%
  • Preferred equity structure for start-up projects of at least 50% at peak
  • BBBEE conditionality: We expect all business partners to have at least a level 5 or 4 accredited BBBEE rating or that they provide the IDC with an undertaking to achieve such rating within a specific time period

For investments in outside South Africa

  • The project must be of direct benefit to South Africa such as
    • promoting South African capital goods
    • development and integration of value chains (inputs/raw materials from SA)
    • promoting South African ownership (25% or more) on the Continent
  • (Note that the above conditions could in some cases be relaxed for South African neighbouring countries)
  • The minimum size of the total project funding requirement must be:
    • ZAR 5-million SACU-based investments
    • USD 3-million for SADC-based investments
    • USD10-million for investments in countries outside SADC.
  • The IDC will not fund more than 50% of the total funding requirement (for expansions not more than the existing asset base) – the funding amount will be a factor of the South African content/involvement.
  • Rand, US Dollar and Euro-based funding are available.

Exclusions

We do not fund:

  • Pure primary agricultural projects/applications – these will be referred to the Landbank
  • Pure land-based transactions/acquisitions
  • Hard liquor production facilities
  • Any tobacco and tobacco products
  • Wholesale trade and retail activities
  • Refinancing of existing financing facilities
  • Pure share acquisition transactions
  • Pure overdraft facilities

Applying for funding

Application for funding should be in writing, including a funding request letter, an executive summary and a complete business plan. Click here to apply online

Brochures

Our sectors

Our strategic business units work in three distinct areas: the services sector; within the mining and manufacturing sector; and in the agro-processing and new industries environment. MORE >

Our regional support

We make an impact across the country, helping develop new business, growing existing companies, boosting local economies and providing expertise wherever needed. MORE >

Annual report

Advancing Industrial Development covers our financial and non-financial strategy and performance aspects for 2015. MORE >

Our products

We offer a wide range of products from debt equity to providing working capital and equipment finance. MORE >

Our research

Stay informed and read our award-winning research reports, as our team keep tabs on the economic trends globally, regionally and locally. MORE >

Corporate responsibility

We are playing our part in improving the quality of life of all our communities, especially in rural and underdeveloped areas. MORE >

Doing business with us

This is your one-stop-shop where you can engage with us directly via our e-services. MORE >

Domestic Medium Term Note Programme

The Industrial Development Corporation of South Africa Ltd has established a ZAR15,000,000,000 Domestic Medium Term Note Programme (as amended and updated on 17 July 2012). You can read the memorandum here. MORE >

Report Fraud     Email idc@tip-offs.com     Call 0800 30 33 36     SMS 39640

PAIA Manual | Terms and Conditions | Employee Webmail | Contact us | Sitemap
© The IDC 2016, ALL RIGHTS NOT EXPRESSLY ALLOWED ARE RESERVED. P.O. Box 784055, Sandton, 2146, South Africa