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Boost for SA manufacturing sector

Manufacturing Competitiveness Enhancement Programme

Manufacturing Competitiveness Enhancement Programme

Pretoria – The launch of the Manufacturing Competitiveness Enhancement Programme (MCEP) has been a major boon to the manufacturing sector, says Trade and Industry Minister Rob Davies.

“One hundred and eighty-seven projects with grant requests of R2.3 billion have been received, and 60 have been approved with commitments of over R300 million since the launch of the MCEP in May,” said the minister on Wednesday.

The programme is a package of incentives designed for established manufacturers, with the aim of promoting competitiveness and ensuring job retention as the country’s manufacturing sector remains fragile.

The incentives have been designed to improve the general ability of the South African manufacturing industry to compete against imports and to compete globally in other export markets.

“We’re taking a leaf out of the books of the fast-growing emerging economies of Asia, where countries have relied on the manufacturing sector to drive economic growth and introduced strategies to raise competitiveness in their manufacturing sectors,” Davies said.

The programme is being positioned towards upgrading the competitiveness of relatively labour-intensive and value-adding manufacturing sectors impacted by the currency, the global economic crisis and electricity cost escalations.

“We believe that now is the time for manufacturers to invest in order to emerge much more competitively out of the current period of significant economic uncertainty,” he said.

MCEP cash grants and concessionary industrial financing facilities are available to companies operating in certain key manufacturing industries managed by the Department of Trade and Industry (dti) and the Industrial Development Corporation (IDC).

The dti administers five types of production incentive grants namely: capital investment; green technology and resource efficiency improvement; enterprise-level competitiveness improvement; feasibility studies; and cluster competitiveness improvement.

Industrial financing loan facilities, administered by the IDC, offer working capital facilities at a preferential fixed interest rate of 6%.

In addition, niche projects identified by the dti and the IDC that focus on new areas with the potential for job creation, diversification of manufacturing output – which would otherwise not be candidates for commercial or IDC funding – may be eligible for a MCEP grant. –

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