AMENDED MANUFACTURING COMPETITIVENESS ENHANCEMENT PROGRAMME GUIDELINES

AMENDED MANUFACTURING COMPETITIVENESS ENHANCEMENT PROGRAMME GUIDELINES

BY BRIAN KAJENGO 

The Minister of Trade and Industry, Dr Rob Davies, approved the newly revised Manufacturing Competitiveness Enhancement Programme (MCEP) guidelines for implementation from 1 April 2014.

 The MCEP has been implemented by the dti since 4 June 2012 and as at 31 March 2014, 524 applications were approved with over R4 billion committed to support manufacturers and over 100 000 jobs to be sustained.

During the 2013/14 financial year, consultation with various stakeholders necessitated the amendments of the current MCEP guidelines which resulted in the latest revision of the guidelines published on 1 April 2014.

Furthermore, it learnt that the highest percentage grant benefit of 61% went to larger enterprises whilst only about 39% of the grant went to small and medium size enterprises, following which it decided that some tightening measures are required. These measures meant to support as many entities as possible and to ensure that the MCEP continues to support the entities targeted by the programme.

An analysis of the total grant approved also indicated that 4% of the total grant commitment went to small entities (with assets below R5 million), while 10% went to those with assets between R5 million and R30 million, 25% went to entities with assets between R30 million and R200 million and 61% went to entities with assets above R200 million.  

Prior to the revision of the guidelines published on 1 April 2014 in the 2013/14 financial year, the MCEP guidelines had been reviewed in July 2012 following various consultations and this review resulted in the relaxation of minimum requirements on capital investments and provided a clearer definition of total assets. Further comments and inputs received and version 3 of the guidelines was published in November 2012.

Components and focus areas affected by the recent revision are the introduction of total grant limit under Capital Investment, Green Technology, Enterprise-level Competitiveness Improvement and Resource Efficiency as well as Cluster Competitiveness Improvement which now has separate guidelines. Furthermore, clarification provided with respect to the registration requirements; bonus grants and the inclusion of manufacturers in the private sector defence industry.

 Over and above these amendments the Broad-Based Black Economic Empowerment (B-BBEE) requirement of MCEP amended to align with the B-BBEE policy as well to ensure that applicants meet this requirement within the period of three (3) years since the launch of the MCEP.