Industrial Development Corporation

Industrial Development Corporation of SA Ltd.
legal form	Corporation
founding	October 1, 1940
Seat	Sandton , South Africa
management	Tshokolo Nchocho ( CEO )
sales	6.638 billion rand (2018) excluding subsidiaries
Branch	Economic development, investment
Website	www.idc.co.za

The Industrial Development Corporation (IDC), wholly Industrial Development Corporation of SA Ltd. (German for example: "Industrial Development Company of South Africa"), is a state-owned company in South Africa to finance the construction of industrial structures and to direct investment by private partners within the framework of the country's industrial policy .

The state-owned company IDC was created in 1940 on the initiative of the South African Prime Minister Jan Christiaan Smuts in view of the effects of the Great Depression and began operations on October 1 in Johannesburg on the basis of the Industrial Development Act (Act No. 22/1940) . Today the IDC is based in Sandton , a Johannesburg district, and besides numerous domestic tasks it is active in 17 countries on the African continent with numerous projects (as of 2019).

Preconditions

The necessary preparations for its establishment lay in the department of the Minister for Trade and Industry, Richard Stuttaford , who had commissioned two specialists to develop the concept. They were AC McColm, a manager at ISCOR ( South African Iron and Steel Industrial Corporation ), and BH Friel, a lawyer from Johannesburg. Stutterford himself was his country's interior minister until 1939 and came from an influential trading house family with good contacts to partners in the United States and Great Britain . As minister, he was given the task of organizing the import and price controls enacted as part of the war economy and developing a concept for the South African economy, which should prepare it for the upheaval of its structures caused by the war .

Establishment and early activities

The IDC has played a crucial role in the rise of South Africa to an important industrialized country since the beginning and was closely connected with the development of the South African textile industry during the first two decades of its activity . In the course of this process, it became very important for the implementation of apartheid policy. Its founding chairman was Hendrik van der Bijl , who already created ISCOR and ESCOM. The chemist H. Jan van Eck was appointed as the first managing director.

The first company funded and managed by IDC was in the wool cleaning and processing industry ( Pinetown Woolwashery (Pty.) Ltd ). The industrial activities initiated by the IDC began together with British companies in January 1945. The first founding is Fine Wool Products of South Africa Limited on the Zwartkops River near Uitenhage . In cooperation with the Calico Printers Association from Manchester, the first South African combined cotton spinning , weaving and finishing complex ( Good Hope Textile Corporation (Pty) Ltd. ) followed near King William's Town , leading to the establishment of the Zwelitsha township and the construction of the Rooikrantz Dam led. Both industrial sites were in the vicinity of what was then the Ciskei reserve , the residents of which were recruited as low-wage workers. As a result, mass textile production was able to establish itself in South Africa as early as the 1950s, and this continued to expand until the early 1960s. Around 1965, these industrial companies were able to produce in the high-priced product sector.

The IDC used its funds to promote the emergence of large and capital-intensive companies from domestic owners. In addition, she tried to attract foreign capital and technical know-how .

With a new strategy, it pursued the goal of industrial decentralization of South Africa, which was expressed in a settlement policy that sought its locations in the immediate vicinity of native reserves. This counteracted the now undesirable migration of the black population from their agrarian residential areas to the large metropolitan areas of South Africa and used this group of people as a more controllable reservoir for permanently available low-wage work.

Role in the apartheid system

General

South African industrial policy after World War II saw strict import controls, which led to strong domestic growth and inflationary tendencies. The government therefore switched to a policy of consolidation, such as credit restrictions. It was based on statements made by the Viljoen Commission in 1959. The IDC management therefore sought support from the government with regard to import protection for its own industry, which they viewed as increasingly difficult for this sector.

With the election victory of the Boer nationalists under Prime Minister Daniel François Malan , the personnel in the leadership of the IDC also changed. The position of general manager was now taken by MS Louw from the Sanlam insurance group .

JM van Tonder, an entrepreneur from the Cape region, and AJ Bosman, formerly the trade consul of the South African Union in Berlin and later undersecretary in the Ministry of Trade and Industry, took the place of other executives.

With the personnel realignment, the African entrepreneurs used this state bank to strengthen their economic and political supremacy in southern Africa and, in their opinion, formed a “bulwark against Anglo-American capitalism”. This tendency towards concentration intensified when, in the tense situation following the Sharpeville riots of 1960, a flight of foreign capital available in South Africa began. This difficult situation could be compensated with the help of the Sanlam financial company and in this process the decisive influence in the IDC decisions shifted in favor of the Afrikaans.

The apartheid government made effective use of the possibilities of the IDC to implement its Border Industry Policy (German: Grenzzone-Industriepolitik) in the area around the reserves or later homelands . This was demonstratively implemented with a large British textile company from Lancashire not far from East London and presented in propaganda as a welfare policy for the benefit of the border industry as part of the policy for "Separate Development".

The English textile magnate Cyril Lord quickly seized the opportunities offered by the politically desired decentralization of industry and founded Cyril Lord (SA) Pty Ltd. An investment of 750,000 by the close of East London pound was placed. Lord concluded the agreement on this with the IDC.

By 1966, this investment, which was propagated as an example, resulted in a further 13 new entrepreneurs. This created the township of Mdantsane , with the aim of relocating the entire black population from East London there. At the same time, the population of Zwelitsha township increased. Parallel to these developments, the South African state supported the industrial expansion in the regions of King William's Town and Queenstown in order to give the existing companies further economic expansion opportunities. In total, the investment volume achieved was 15 million rand . It was expected that 9800 jobs would be gained, of which 7800 were planned for blacks.

A government commission for the search for suitable industrial sites in the vicinity of larger residential areas of the black population made recommendations for investment preparations. This commission, called the Permanent Committee for the Location of Industry and the Development of Border Areas (German for example: Standing Commission for Industrial Sites and Development of Border Areas ; what was meant were the boundaries of the Bantu Areas ), at the end of the 1960s increasingly focused on funding only those branches of industry in which particularly labor-intensive processes occurred. The IDC played an important role in implementing the requirements from the Commission. As part of the apartheid policy, the government pursued the goal of reducing this group of people in the metropolitan areas and settling them in rural areas, preferably in the reserves or later homelands , while at the same time making the most consistent use of as many cheap labor as possible . One of their relevant concepts was the industrial policy of the border areas , which received specific funding from the legislature with the Physical Planning and Utilization of Resources Act (Act No. 68/1967). In the IDC's annual report of 1968, however, it was noted that the industry developed a negative attitude towards new projects in the border areas because the “financing climate ” changed due to anti-inflationary measures in South Africa.

Examples of important location developments

In the course of the government's decentralization policy, several regional areas emerged as investment focal points. These included the late 1970s, close to the border areas ( border areas ), of which the most important are listed below:

• Bophuthatswana : Brits, Lichtenburg, Rosslyn, Rustenburg
• Ciskei : East London, King William's Town
• KaNgwane : Malelane, Nelspruit
• KwaZulu : Hammarsdale (Elangeni), Pietermaritzburg , Richards Bay , Stanger
• Lebowa : Phalaborwa , Pietersburg
• QwaQwa : Bethlehem , Harrismith
• Transkei : Zastron
• Venda / Gazankulu : Louis Trichardt .

On the basis of an agreement between Portugal and South Africa from 1969, the IDC financed the construction of energy and water management facilities on the Kunene in Angola and South West Africa . The complex investment project became known as the Cunene Project .

With the commissioning of the first South African aluminum smelting plant ( Alusaf Bayside Smelter ) on October 13, 1971 in the industrial area of Richards Bay by the IDC subsidiary ALUSAF, South Africa appeared worldwide as an aluminum producer. Aluminum production was based on the complete import of bauxite as a raw material.

Alternative development

In order to initiate a development in the area of ​​small and medium-sized enterprises influenced by government agencies, the Small Business Development Corporation (SBDC) was created in 1979 parallel to the IDC . It emerged as a result of the Carlton Conference and was a joint activity of private actors, especially promoted by Anton Rupert , and the apartheid state ( PPP ). This was an experimental approach in the field of business support. With the effect of a law of November 13, 1981, further areas of competence were transferred, previously from Development and Finance Corp. Ltd. and Indian Industrial Development Corporation , to the SBDC. The purpose of this concentration of tasks was to better distribute small businesses in previously underdeveloped areas, to promote regional cooperative-like commercial models in the homelands and to prepare for the creation of a development bank in this sector. As an experiment, a program of small loans was made available to applicants from the informal sector , of which 64 commercial enterprises initially made use. The SBDC also promoted the development or expansion of industrial parks, shopping centers, factories and the accommodation sector.

Work of the Industrial Development Corporation after 1994

Wendy Luhabe (center) at the World Economic Forum on Africa 2008 in Cape Town, former Chairwoman of the IDC and former Chancellor of the University of Johannesburg (2006–2012)

As part of the latest business strategy, IDC supports projects in the fields of energy and water supply, information technology, telecommunications and transport with the help of debt and / or equity. The IDC's action group includes domestic and foreign projects, especially in the neighboring countries of South Africa and in the countries of Central and East Africa. The IDC is entrusted with economic transformation processes on the basis of the government program Black Economic Empowerment , whereby “ black ” entrepreneurship is to be promoted. The commitment in this regard extends to the areas of tourism, insurance and lending, as well as within the pharmaceutical industry.

The state supervisory authority for IDC is the South African Economic Development Ministry and Department .

The individual projects she oversees include:

• the Gautrain project for local passenger transport in the greater Johannesburg area;
• the Cahora Bassa hydropower plant in collaboration with the Mozambican government;
• the state-owned company Broadband Infraco (Pty) Ltd. to further expand the telecommunications infrastructure in South Africa;
• equipping all border crossing points in the Democratic Republic of the Congo with control and communication systems based on the Internet.
• In Mozambique, IDC (24%) together with BHP Billiton (47%), Mitsubishi Corporation (25%) and the State of Mozambique (4%) have a stake in Mozambique Aluminum Smelter ( Mozal ) .

as well as the following projects:

• In March 2011, the South African Department of Mineral Resources and MMC Norilski Nikel signed an agreement for a strategic partnership for raw materials exploration. A component of this agreement is the establishment of a National Mining and Prospecting Fund (German: Nationaler Bergbau- und Erkundungs-Fund ), which, with the participation of the IDC, is to lead to a national resource exploration for the most important mineral raw materials. South Africa's President Jacob Zuma stated that, together with the Russian mining company, new approaches in the field of extraction and processing are to be broken.
• According to the government's industrial policy program for the period from 2012 to 2015, IDC, along with other domestic partners, is significantly involved in the further expansion of the South African space and defense sector. A line of development in favor of domestic products and technologies is being pursued.

The originally pursued project of the Pebble Bed Modular Reactor (PBMR) in the Koeberg nuclear power plant was discontinued in 2010.

IDC takes on loan financing for the South African film industry. Particular attention is paid to issues relating to population groups who were disadvantaged during apartheid. The Oscar- winning film Tsotsi was produced this way.

Selected IDC foundings

• 1950, South African Coal, Oil and Gas Corporation (SASOL) founded
• 1951, establishment of Unie-Fosfaat-Ontginningsmaatskappy (Eiendoms) Beperk , renamed Phosphate Development Corporation and 1987 FOSKOR (Pty), for the production of phosphates for the agricultural sector.
• 1951, South African Industrial Cellulose Corporation (SAICCOR) founded as a joint venture between IDC, SNIA (Viscosa) and Courtaulds.
• 1957, founding of the Industrial Finance Corporation of South Africa Ltd. (IFC), together with the state bank and private financial institutions, to attract domestic and foreign investors for industrial finance.
• 1965, Southern Oil Exploration Corporation (SOEKOR) founded together with SASOL.
• 1965, Atlas Aircraft Corporation of South Africa was founded for the production of aircraft and helicopters.
• 1967, founding of the Aluminum Corporation of South Africa (ALUSAF) in Richards Bay for the production of aluminum raw products (today operated by BHP Billiton ).
• 1971, the IDC begins a detailed exploration of heavy mineral sands (contents of ilmenite , rutile and zircon ) at Richards Bay . The commercial extraction of these raw materials started in 1977 by Richards Bay Minerals , in which, in addition to IDC, other foreign companies were and are involved.

Legislative consequences

• Industrial Development Amendment Act (Act No. 49/2001)

literature

• Eric Rosenthal: The Industrial Development Corporation of South Africa Ltd., 1940 to 1960, the story of the first twenty years . Johannesburg 1960
• Georg Siegfried Johannes Kuschke: Industrial development and the continent of Africa . Johannesburg 1962
• Ralph Horwitz: The Political Economy of South Africa . London 1967

Web links

• Official website (English)
• Industrial Policy Action Plan 2012/13-2014/2015 of the South African government (English)
• Brief description of current management staff at Bloomberg businessweek . at investing.businessweek.com
• Company profile at www.idc.mbendi.com (English)

Individual evidence

1. ↑ IDC: Board . on www.idc.co.za (English)
2. ↑ IDC: Annual Financial Statements 2018 . online at www.idc.co.za (English), PDF document p. 27
3. ↑ Horwitz 1967, p. 352
4. ^ Government of South Africa: Industrial Development Act 22 of 1940 . on www.gov.za (English)
5. ^ The National Government Handbook - South Africa: Industrial Development Corporation (IDC) . on www.nationalgovernment.co.za (English)
6. ^ IDC: Project footprint . www.idc.co.za (English)
7. ^ IDC: IDC's involvement in some of Southern Africa's recent major projects . African portfolio (outside SA) p. 18 ( Memento of the original dated August 8, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 2.6 MB) 
8. ↑ James Carol McDowell: A History of the South African Textile Industry. The Pioneering Phase, 1820-1948 . (University of Natal, Master thesis) Durban 2000, p. 154 ( Memento of the original from September 10, 2015 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 7.6 MB)  
9. ^ Gill Fraser: The story of Stuttafords. commemorating the first centenary of Stuttaford & Company Limited . Cape Town 1957, p. 38
10. ↑ McDowell, 2000, pp. 5, 80, 155-156
11. ↑ Horwitz 1967, p. 353
12. ↑ McDowell, 2000, pp. 164-166, 208
13. ↑ McDowell, 2000, pp. 157-158
14. ↑ Horwitz 1967, p. 353
15. ^ Union of South Africa: Report of the Commission of Inquiry into Policy Relating to the Protection of Industry . Pretoria 1958, p. 57
16. ↑ McDowell, 2000, p. 160
17. ^ Sanlam Life Insurance Limited: Our History . online at www.sanlam.com (English)
18. ↑ International Directory of Company Histories, Vol. 68 (2005): Sanlam Ltd. History . online at www.fundinguniverse.com (English)
19. ^ Charles H. Feinstein: An Economic History of South Africa: Conquest, Discrimination and Development . Cambridge 2005, p. 179, online at www.books.google.de
20. ↑ Horwitz 1967, p. 355
21. ^ Philip Ollerenshaw: Innovation and Corporate Failure: Cyril Lord in UK Textiles 1945-1968 . P. 6 (XIV International Economic History Congress), Helsinki 2006 (PDF; 83 kB)
22. ^ SAIRR : A Survey of Race Relations in South Africa 1966 . Johannesburg 1967, p. 157
23. ^ SAIRR: A Survey of Race Relations in South Africa 1969 . Johannesburg 1970, pp. 95, 97
24. ↑ 1967. Physical Planning & Utilization of Resources Act No. 88 . on www.nelsonmandela.org (English)
25. ^ Jacqueline Beck: Border Industries . In: The Black Sash, February 1968, pp. 7–8, online at www.disa.ukzn.ac.za (English, PDF)
26. ^ SAIRR: A Survey of Race Relations in South Africa 1979. Johannesburg 1980, p. 230
27. ^ SAIRR: A Survey of Race Relations in South Africa 1976 . Johannesburg 1977, p. 411
28. ^ Wim Naude, Derik Steyn, Elanie Steyn: Linking SMEs with large enterprises: a case study from South Africa's aluminum industry . Conference paper, 46th ICSB World Conference, Taipei, Taiwan, May 17-20 June, 2001 ( Memento of the original from June 3, 2013 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 257 kB)  
29. ^ Sheila T. van der Horst: The Changing Face of the Economy . In: Ellen Hellmann, Henry Lever (editor): Conflict and Progress. Fifty Years of Race Relations in South Africa . South African Institute of Race Relations , Johannesburg 1979, p. 110
30. ^ Paul Hendler: Capital Accumulation and the Allocation of Residential Buildings in African Townships on the Witwatersrand, 1980-1985 . University of the Witwatersrand, African Studies Institute. 1985 p. 5 (PDF; 1.4 MB)
31. ↑ Chris Cromhout: Creating and Expert Knowledge Basis . 2003, p. 1 ( Memento of the original from January 10, 2015 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 165 kB) 
32. ^ SAIRR: A Survey of Race Relations in South Africa 1981 . Johannesburg 1982, pp. 164-165
33. ^ SAIRR: A Survey of Race Relations in South Africa 1983 . Johannesburg 1984, p. 143
34. ↑ Peter Lekhethe, IDC: Financing project development in Africa . Tshwane International Trade and Infrastructure Investment Conference, May 27-28, 2009 (conference paper) ( Memento of the original from August 8, 2014 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 2.6 MB)  
35. ↑ Mark Tran: Mozambique smelting profits shoulderstand not fill foreign coffers, say campaigners . dated January 8, 2013. on www.guardian.co.uk
36. ^ Annual report 2011 from Norilsk Nickel. PDF document page 10. on www.nornik.ru
37. ↑ Keith Campbell: Russian miner, IDC to establish mining and prospecting fund in South Africa . In: Mining weekly (online), news from April 15, 2011. on www.miningweekly.com
38. ↑ Industrial Policy Action Plan 2012/13-2014/2015 Industrial Policy Program of the South African Government, PDF document page 111-112  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. (English)  
39. ^ South Africa's film industry. Industrial Development Corporation. on www.southafrica.info ( Memento of the original from July 10, 2013 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. 
40. ^ Making Tsotsi. on www.tsotsi.com ( Memento of the original from August 21, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  
41. ↑ SASOL website ( Memento of the original from April 15, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. 50 years of SASOL ( Memento of the original from March 16, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 10.5 MB)    
42. ↑ FOSKOR website ( memento of the original from September 19, 2012 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  
43. ^ EH Roux, DH De Jager, JH Du Plooy et al .: Phosphate in South Africa . In: Journal of the South African Institute of Mining and Metallurgy. Vol. 89 (1989), No. 5, pp. 129-139, ISSN  0038-223X . on www.saimm.co.za (PDF; 1.1 MB)
44. ↑ Sinclair Stone: Saiccor, The First Fifty Years . Cape Town 2002, p. 16, online at www.sappi.com (English, PDF) PDF document, p. 15–16
45. ^ Eberhard Hamer: The industrialization of South Africa since the Second World War . Gustav Fischer Verlag, Stuttgart 1964, p. 33
46. ↑ The case for mandatory sanctions against South Africa ( Memento of the original from July 21, 2015 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. . Conference paper of the ANC at the International NGO Conference for Sanctions against South Africa. June 30 to July 3, 1980 in Geneva. at www.anc.org.za  
47. ^ Atlas Aircraft Corporation of South Africa (PTY.) LTD.
48. ^ IDC: IDC's involvement in some of Southern Africa's recent major projects . P. 14 ( Memento of the original dated August 8, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 2.6 MB)  
49. ^ Rio Tinto Group : About Richards Bay Minerals. History . on www.riotinto.com (English)
50. ↑ Text on www.info.gov.za ( Memento of the original from June 9, 2011 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.