DTI halts manufacturing incentives
The Department of Trade and Industry has paused applications for its Manufacturing Competitiveness Enhancement Programme.
|||Johannesburg - The Department of Trade and Industry has paused applications for its Manufacturing Competitiveness Enhancement Programme (MCEP).
The department notes in a statement the suspension of applications is because of the “very large number of applications across the manufacturing sectors which now far exceed funds set aside for the programme”.
According to the DTI, the MCEP is one of the key action programmes of the Industrial Policy Action Plan (IPAP) 2012/13 – 2014/15. It provides enhanced manufacturing support to encourage manufacturers to upgrade their production facilities in a way that will sustain employment and maximises value-add in the short-to medium-term.
Trade and industry says more than R5 billion had originally been set aside for the programme, and this amount has now been fully committed.
The MCEP was launched in the wake of the global financial crisis of 2008 and applications are set to reopen next April, depending on funding, says DTI.
The programmes aims were to aid manufacturers “weather very adverse market conditions, secure higher levels of investment, raise competitiveness and retain employment”.
In its statement, the DTI says it is “confident these objectives have been met”. The programme has supported 1 153 entities with acquisition of capital equipment and reengineering of business processes to improve their competitiveness. All assisted enterprises have retained jobs and are committed to Black Economic Empowerment, it says.
However, the manufacturing sector has been battling current difficult economic headwinds, with areas such as steel having to retrench staff because of a lack of import protection.
The MCEP comprises sub-programmes: the Production Incentive (PI) and the Industrial Financing Loan Facilities, with the latter being managed by the Industrial Development Corporation.
The Production Incentive receives 80 percent of the rand value committed to the MCEP and applicants in fields such as green tech, competitiveness and capital investment may apply for grants.
The funding aspect provides working capital at a 6 percent interest rate for an amount of up to R30 million.
IOL