What is the Manufacturing Competitiveness Enhancement Programme (MCEP)?
The Manufacturing Competitiveness Enhancement Programme (MCEP) is a support scheme which offers manufacturing companies incentives to raise their competitiveness and retain jobs. It has a budget of R5.8-billion over a three-year period. The objective of the programme is to facilitate feasibility studies that are likely to lead to bankable business/project plans, which will result in investment in new components or products or processes not currently manufactured or performed by the applicant or in the creation of markets that will lead to a substantial increase in the manufactured products of the applicant.
The feasibility study component of MCEP offers a cost-sharing grant of 50% or 70% of the cost of the feasibility study, to be payable according to expected milestones. The cost-sharing grant percentage will be differentiated by enterprise size as follows:
- Applicants with total assets with a historical cost below R30 million may qualify for a grant of 70% of the cost of the feasibility study; and
- Applicants with total assets with a historical cost of at least R30 million may qualify for a grant of 50% of the cost of the study.
Applicants should submit a pre-feasibility study report in the prescribed format, confirming that the expected project minimum investment will be at least R30 million. The maximum grant for feasibility studies will be capped at R7.5 million.The grant is provided directly to approved applicants based on actual qualifying costs incurred and subject to jobs being retained.
The MCEP comprises two sub-programmes: the Production Incentive (PI) and the Industrial Financing Loan Facilities which will be managed by the dti and the Industrial Development Corporation respectively.
- Pre/Post-dispatch Working Capital Facility offers a working capital facility up to a maximum of R30 million for a period of up to four years, at a preferential fixed interest rate of 6%.
- Industrial Policy Niche Projects Fund: projects identified by the dti sector desks and IDC’s Strategic Business Units that focus on new areas with the potential for job creation, diversification of manufacturing output and contribution to exports, that would otherwise not be candidates for commercial or IDC funding, may be eligible for an MCEP grant that may be structured as part of the borrower’s equity contribution
The MCEP 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. The department will continue to honour all approved applications.
