The Production Incentive (PI) forms part of the overall Clothing and Textile Competitiveness Programme. The clothing and textiles competitiveness programme aims to help the industry upgrade its processes, products and people. This is expected to move the industry up the value chain to activities that are far more sustainable than competing against “sweatshop” labour practices and pervasive government subsidisation in other developing countries. Currently levels of profitability in the industry are so low that there is little appetite to upgrade. The production incentive programme is meant to encourage and support upgrading and competitiveness improvement programmes in the sector.
The production incentive programme consists of a combination of an Upgrade Grant Facility, which is meant to focus on competitiveness improvement and an Interest Subsidy for Working Capital Facility which is meant to support working capital requirements resulting from past and future upgrading interventions.
The benefit thus determined will be referred to as the Benefit Ceiling which is the maximum amount that will be available to an applicant in a specific financial year.
The MVA calculation must be based on audited financial statements not older than 15 months.
The MVA calculation must be independently verified by the company’s auditors and the auditors‟ confirmation letter submitted to the clothing and textiles competitiveness programme desk together with the benefit application.
A confirmation of the approved Benefit Ceiling will be issued to qualifying applicants. The amount available under the Benefit Ceiling can only be accessed on presentation of proof of qualifying expenditure to the satisfaction of the clothing and textiles competitiveness programme Desk, and/or the acceptance of liability for interest charges on a working capital loan obtained from the IDC or any reputable financial institution.
The production incentive programme specifically excludes goods manufactured for the automotive sector which qualifies for any incentive programme offered for that sector.
The incentive programme provides investment support to South African manufacturing entities in the clothing, textiles, footwear, leather and leather-goods industries based in South Africa.
The production incentive programme is available to the following (collectively referred to as the “the sector”):
- Clothing manufacturers;
- Textile manufacturers;
- Cut, Make and Trim (CMT) operators;
- Footwear manufacturers;
- Leather goods manufacturers and
- Leather processors (Specifically for Leather Goods and Footwear
- industries).
- Design Houses (Provided the design house partners with one or
- more CMT‟s)
Should you be interested in applying for the business grant, Dream Team Capital can assist you. Contact us today for professional assistance in streamlining your application for the Production Incentive.
