IDC invests in forestry sector business incubator
November 30, 2005
Johannesburg - SA's Industrial Development Corporation (IDC), through its Risk Capital Facility, has invested R19.1 million in the Fukamela Forestry and Wood Product Incubator - a wholly black owned and managed business incubator that supports the development of new and existing entrepreneurs in the forestry and agri-processing sector.
Risk Capital Facility was established in 2002 in response to the €54.9 million (R420.5 million) granted by the European Union (EU) to the South African government.
The Land Bank has also invested a total of R4.3 million in the Fukamela Niche Fund Trust - a trust funded by the EU through Risk Capital Facility, which is managed by the IDC and the European Investment Bank, a board of trustees and an investment committee.
Additionally, the IDC's Transport Business Unit will inject R1.6 million into the fund over a five-year period.
"These opportunities target rural communities' entrepreneurial development and support to ensure that poverty is alleviated. The opportunities create sustainable employment, enterprise development, black-owned and management entities, women ownership and management as well as employee ownership in the businesses," said Setlakalane Molepo, Head of Risk Capital Funding at the IDC.
Molepo added that the initiative is in line with the IDC's Leadership in Development strategy to catalyse economic activity in rural communities by identifying entrepreneurial projects, develop an environment of accountability for entrepreneurs and provide access to capital through the trust and other financial institutions.
Fukamela was established in 2002, with the vision to develop ideas and translate them into opportunities that benefit the communities in a meaningful and empowering manner.
The beneficiaries are three black companies in the areas of silviculture, forestry engineering and forestry logistics - Zikode Forestry Engineering, Ezara Forestry Logistics, and Kwambonambi Silviculture Contractors, who own between 50 percent and 70 percent respectively.
"This is the first time black contractors in the country have been capitalised and incubated to this extent in the forestry sector," said Maletsatsi Mosala of Hahisa Managers - a wholly owned and managed fund management and advisory company and joint fund managers to Fukamela Forestry and Wood Products Incubator.
The investment has created 436 sustainable jobs in rural areas of KwaZulu- Natal and Limpopo Provinces.
Fukamela is in partnership with Imbokodvo Lemabalabala, a broad-based BEE company, which is majority owned by 10 Traditional authorities with 8 000 beneficiaries and KOTI Investments Holdings, who are a shareholder in SQF and are involved at board level. SiyaQhubeka Forests and Hahisa Managers hold 74 percent and 26 percent shares in Fukamela respectively. - I-Net Bridge
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