Vox has announced a new Home IT Support service for customers that need help with cybersecurity and IT maintenance. The subscription service includes access…
The Industrial Development Corporation (IDC) has concluded an agreement with an SA startup that plans to launch the country’s first production-based 3D metal printer by June.
The investment of R17-million in Metal Heart, approved last month, is the 11th deal concluded by the IDC’s new industries unit, since the unit’s launch in 2015. Six of the deals have been in new companies.
“They moved quickly,” says Gert Lombard, who says he and business partner Kim Gray initially met with the unit in November last year. The deal was approved two weeks ago.
The investment is in the form of a term loan and a minority equity stake in the firm.
The company has yet to begin operating, but has secured a deal with a large tooling and injection mould company in Gauteng which manufactures most of the SA-produced metal tools sold in local hardware stores.
An IDC-funded 3D printer will cut the time spent manufacturing metal by half
Lombard said the cost to produce fabricated metal items by 3D printer will be higher than those produced in traditional dye caste mouldings, but it will cut the time spent manufacturing the metal by about half.
In addition the manufacturer won’t have to invest in new capital investment, which could have cost over R20-million.
The IDC’s new business unit aims to help set up new strategic sectors which have the ability to create jobs and in which South Africa has a competitive advantage in.
It focuses on eight priority industries, namely: gas beneficiation, energy storage, fuel cells, medical devices, natural products, renewable inputs, additive manufacturing and nanotech.
Christo Fourie, head of the IDC’s new industries business unit, said his unit has approved funding of R107.1-million since its inception, of which R63.4-million is in six new companies (including five startups) and R43.7-million is in four existing companies.
In all, the funding consists of R26.4-million in startup equity, R20.4-million in growth equity, R6-million in term loans, R50-million in revolving credit facilities (to fund execution of orders) and R4.3-million in project expenditure.
Of the investments made in new companies, one investment each has been in energy storage, additive manufacturing and water, while three have been in nanotech.
Though water does not form part of the unit’s focus areas, Fourie said the investment was made as part of the funder’s industrial infrastructure business unit by agreement between the two units.
All six new companies are based in Gauteng. Three are youth-owned and managed and three are black-owned and managed. Each company has multiple founding shareholders with backgrounds ranging from engineering and law to the financial sector.
Fourie said in a 2015 interview with the government’s Public Sector Manager magazine, that the unit planned to invest about R900-million to R1-billion over five years.
He admitted that the unit got off to a slower than expected start, but pointed out that the unit aims to do over R220-million approval in the current financial year, with the aim of increasing this to R470-million a year by 2020.
Good progress has been made so far, particularly in priority industries
The idea of the unit is to work towards setting up whole industries. Fourie said good progress has been made so far, particularly in priority industries, namely energy storage, fuel cells and gas beneficiation.
He said industry development steering committees have been set up in the energy storage and fuel cells sectors. The committees have representation from all relevant industry stakeholders from both the public and private sector.
“Sub-working committees have also been established and these groups are busy executing various work packages,” he added.
However he said the changing economic environment poses the biggest challenge, specifically the assumptions around the future sources of, demand for and price of energy.
He said the unit is actively looking for entrepreneurs and is busy engaging its various networks such as universities, the Technology Innovation Agency and other science and research agencies.
To qualify for funding, Fourie said the business has to fit into one of the unit’s eight focus areas.
He said the unit has received about 50 deals but added that not all of these will mature into formal applications for funding. At least 20 of these have been rejected.
Featured image: Luke James via Flickr (CC 2.0, resized)