Presentation to the Portfolio Committee on Trade
Description: Presentation to the Portfolio Committee on Trade and Industry the dtis Third Quarter Performance Report 14 February 2017 Director-General Lionel October 1 Presentation Outline Strategic Goals and objectives Third Quarter: Key Achievements
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slide1. Presentation to the Portfolio Committee on Trade and Industry
the dti’s Third Quarter Performance Report
14 February 2017
Director-General
Lionel October 1<br>
slide2. Presentation Outline Strategic Goals and objectives
Third Quarter: Key Achievements
Financial Performance 2<br>
slide3. Strategic imperatives 1. To facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
2. Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic development objectives;
3. Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth; 4. Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner; 5. Promote a professional, ethical, dynamic, competitive and customer-focused working environment that ensures effective and efficient service delivery. Grow the manufacturing sector to promote industrial development, job creation, investment and exports Improved conditions for consumers, artists and opening up of markets for new patents players Strengthened capacity to deliver on the dti mandate Objectives Goals A dynamic industrial, globally competitive South African economy, characterised by inclusive growth and development, decent employment and equity, built on the full potential of all citizens. VISION 3<br>
slide4. Key Achievements: Quarter THREE 1 October– 31 December 2016 4<br>
slide5. Industrial Development SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation 5 MTU South Africa unveiled their upgraded workshop facilities in Cape Town in October 2016. These facilities are geared to locally assemble the diesel engines for the 232 diesel locomotives that China North Rail is to deliver to Transnet as part of the 1064 locomotive built programme.
Suppliers partaking contracts continue to face working capital challenges due to the delays in delivery schedules.
The Minister of the dti to intervene through bilateral engagements with the Minister of Public Enterprises.<br>
slide6. Industrial Development SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation 6 Provided tooling for castings of large valves at Yellow Star Foundry which resulted in the foundry supplying AVK –Premier valves Facility Layout to improve resource efficiencies at:
Ajax which resulted in 50% labour productivity improvement recorded;
Melcast which resulted in an 80% productivity improvement upon installation of roller conveyers; and
Forbes which placed the foundry in a much better position to demonstrate commitments towards meeting their environmental obligations with Department of Environmental Affairs (DEA) and Department of Labour (DoL). Formation of CAMASA (Commercial Aviation Manufacturing Association of South Africa) is intended to drive export growth in the aviation sector. Foundry Capacity Building<br>
slide7. Industrial Development SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation 7<br>
slide8. Industrial Development SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation 8 Signing of 2 additional NIP obligation agreements to the value of R200 million.
Finalised agreement on local manufacture and assembly of electronic devices;
Investment estimated at Euro 1 million.
Sales estimated at R1.1 billion over 3 years.
New jobs estimated at 100.
Finalised agreement on local manufacture of Smart Meters for export markets;
Investment estimated at R 2 million.
Sales estimated at R 196 million over 5 years.
New jobs estimated at 102.
Finalised agreement on export of Marine services;
Sales estimated at US$ 6 million over 4 years. Industrial Participation<br>
slide9. Industrial Development SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation 9 One designation proposal was submitted to Minister. The Instruction Note for Fire Fighting Vehicles was published and circulated to procuring entities by National Treasury in November 2016.
Local content verification by SABS commenced and three of the companies appointed under Phase 1 met the stipulated local content threshold of 70% for the tank and collector (i.e. Actom, Solid State Power and Adzam Solar). Industrial Procurement<br>
slide10. Industrial Development SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation 10 The South African Minerals Processing Cluster received R5.2 million (of R16.9 million) from the Gauteng Department of Economic Development in November 2016. This is a 3-year programme.
the dti/IDC delegation visited the second deepest mine in the world, Tau Tona to observe AngloGold’s prototype reef boring equipment using non-explosive extraction.
The Mineral and Petroleum Resources Development Act, 2002 (MPRDA) will be considered by the National Council of Provinces (NCOP) early 2017. Primary Minerals<br>
slide11. Trade, Investment & Exports SG 2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective 11<br>
slide12. Trade, Investment & Exports SG 2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective 12<br>
slide13. Trade, Investment & Exports SG 2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective 13<br>
slide14. Trade, Investment & Exports SG 2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective 14<br>
slide15. Trade, Investment & Exports SG2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective 15<br>
slide16. South African and Southern African Customs Union (SACU) positions advanced during the Third Continental Free Trade Area (CFTA) Negotiating Forum in October 2016, the fourth CFTA Negotiating Forum in November 2016 and Senior Trade Officials and African Union Ministers of Trade Meeting.
Coordination enhanced with Kenya, Egypt and Nigeria on multilateral trade issues and the CFTA negotiations.
The Economic Partnership Agreement (EPA) between the SACU and the European Union (EU) provisionally entered into force in October 2016 and the new agricultural market access under the EPA was implemented in November 2016.
Participated in the Deputy President’s working visit to Vietnam and Singapore held in October 2016.
The SIAL, Paris Trade Fair recorded the highest export sales from the overall number of national pavilions held during the quarter under review, totalling R25.5 million as reported by the exhibitors and total estimated export orders of R2.036 billion recorded within 6 months from the event. Trade, Investment & Exports SG2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective 16<br>
slide17. Trade, Investment & Exports SG2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective Facilitated SA-Russia Intergovernmental Committee on Trade and Economic Cooperation (ITEC) in November 2016 and organised and participated in SA-Russia Business Council.
Successfully organized 2 state visits (Kenya & Zambia) during the period under review. These visits yielded much success in terms of Memorandum of Understanding (MoUs) concluded on cooperation agreements on investment promotion, consolidating the political relations and intensifying business networks between the respective countries.
Exchanged initial draft MoU with the Gambia in November 2016.
Concerted number of engagements with stakeholders within the export value chain in order to advance the objectives of the Integrated National Export Strategy (INES).
Two new export formations were established namely: Publisher’s Association of SA and Aerosol Manufacturing Association.
Successfully participated in the first Brazil, Russia, India, China and South Africa (BRICS) Trade Fair where 32 leading South African companies were recruited and the anticipated six month sales as per the exhibitor questionnaires totalled in excess of R36 million with 171 trade leads registered. 17<br>
slide18. Special Economic Zones and Economic Transformation SG 3: Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth Coega Industrial Development Zone (IDZ) Eastern Cape launched the R11.5 billion Beijing Automobile International Corporation (BAIC) investment for automotives.
Dube Trade Port KZN signed a R1.3 billion agreement with CIPLA for the production of biosimilars.
Saldanha Bay IDZ Western Cape has to date, a pipeline of 34 investments worth R14 billion (letters of commitment).
OR Tambo IDZ Gauteng has attracted a total of R260 million new investments covering horticulture and metal refining.
Coega has been allocated 1000MW under Independent Power Producer (IPP), with an investment value of R25 billion. 18<br>
slide19. Special Economic Zones and Economic Transformation SG 3: Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth Richards Bay Industrial Development Zone KZN (RBIDZ) awarded 2000MW under Gas IPP, investment to be determined.
Two Industrial Parks were launched
Isithebe Industrial Park KZN was launched in October 2016.
Queendustrial (Komani) Eastern Cape Industrial Park was launched in November 2016.
An Industrial Parks Symposium was held in October 2016. 19<br>
slide20. Legislation and Regulation SG 4: Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner 20<br>
slide21. Administration & Co-ordination SG 5: Promote a professional, ethical, dynamic and competitive and customer–focused working environment that ensures effective and efficient services delivery 49% of women in senior management 3.32% people with disability Vacancy Rate reduced to 4.4% (SMS) Senior Management Service All eligible creditor payments processed well within 30 days with 99% processed earlier within 15 days. The Director-General of the dti awarded with the National Batho Pele Excellence Award
(Silver award for Best DG) 21<br>
slide22. Financial Performance As at 31 December 2016 22<br>
slide23. As at the end of December 2016, the year to date spending stood at R7 billion or 84.4% of the YTD budget of R8.3 billion.
Of the R7 billion spent by the department, transfers to incentives were 52%, followed by other transfers at 33%, and Compensation of Employees as well as Goods and Services at 9% and 6% respectively. Financial performance – 31 DECEMBER 2016 This includes amongst others, the Manufacturing Development Incentives, which contributes to the development of manufacturing industries and the Special Economic Zones investment incentives which attracts investments to further the objectives of the Industrial Development Action Plan. 23<br>
slide24. Transfers and subsidies - Incentives
In pursuit of the department’s mandate to facilitate the transformation of the economy to promote industrial development, investment, competitiveness and employment creation, an amount of R4.1 billion or 78% was disbursed to companies. The variance of 22% is mainly due to:
Outstanding compliance documentation required from applicants to finalise claims.
A due diligence process that must be conducted prior to claims being processed for payment.
Claims that could not be processed as they were found to be non-compliant with the guidelines.
Claims due for processing not yet received from applicants Financial performance cont 24<br>
slide25. Transfers and subsidies – other transfers
Included under other transfers are funds disbursed to public corporations, departmental agencies, non-profit organisations as well as foreign governments and international organisations. For the reporting period, an amount of R1.8 billion or 99.32% against the YTD projections of R1.8 billion was disbursed. Financial performance cont 25<br>
slide26. Compensation of employees
At the end of December 2016, the department’s expenditure on Compensation of Employees was R677 million or 96% of the YTD projections of R706 million
Â
Goods and services
Expenditure on goods and services, compared to the YTD projections was 88%. A lag in the projections is mainly due to invoices for services rendered but not yet received from the service providers Financial performance cont 26<br>
slide27. Financial performance cont Table 1: Per programme 27<br>
slide28. Financial performance cont Table 1: Per programme 28<br>
slide29. Q3 Performance matrix 1 October– 31 December 2016 29<br>
slide30. Quarter three report matrix- Programme 2 30<br>
slide31. Quarter three report matrix- Programme 3 31<br>
slide32. Quarter three report matrix- Programme 4 32<br>
slide33. Quarter three report matrix- Programme 5 33<br>
slide34. Quarter three report matrix- Programme 6 34<br>
slide35. Quarter three report matrix- Programme 7 35<br>
slide36. Quarter three report matrix- Programme 8 36<br>
slide37. Ke ya leboga Ke a leboha Ke a leboga Ngiyabonga Ndiyabulela Ngiyathokoza Ngiyabonga Inkomu Ndi khou livhuha Dankie Thank you 37<br>
the dti’s Third Quarter Performance Report
14 February 2017
Director-General
Lionel October 1<br>
slide2. Presentation Outline Strategic Goals and objectives
Third Quarter: Key Achievements
Financial Performance 2<br>
slide3. Strategic imperatives 1. To facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
2. Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic development objectives;
3. Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth; 4. Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner; 5. Promote a professional, ethical, dynamic, competitive and customer-focused working environment that ensures effective and efficient service delivery. Grow the manufacturing sector to promote industrial development, job creation, investment and exports Improved conditions for consumers, artists and opening up of markets for new patents players Strengthened capacity to deliver on the dti mandate Objectives Goals A dynamic industrial, globally competitive South African economy, characterised by inclusive growth and development, decent employment and equity, built on the full potential of all citizens. VISION 3<br>
slide4. Key Achievements: Quarter THREE 1 October– 31 December 2016 4<br>
slide5. Industrial Development SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation 5 MTU South Africa unveiled their upgraded workshop facilities in Cape Town in October 2016. These facilities are geared to locally assemble the diesel engines for the 232 diesel locomotives that China North Rail is to deliver to Transnet as part of the 1064 locomotive built programme.
Suppliers partaking contracts continue to face working capital challenges due to the delays in delivery schedules.
The Minister of the dti to intervene through bilateral engagements with the Minister of Public Enterprises.<br>
slide6. Industrial Development SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation 6 Provided tooling for castings of large valves at Yellow Star Foundry which resulted in the foundry supplying AVK –Premier valves Facility Layout to improve resource efficiencies at:
Ajax which resulted in 50% labour productivity improvement recorded;
Melcast which resulted in an 80% productivity improvement upon installation of roller conveyers; and
Forbes which placed the foundry in a much better position to demonstrate commitments towards meeting their environmental obligations with Department of Environmental Affairs (DEA) and Department of Labour (DoL). Formation of CAMASA (Commercial Aviation Manufacturing Association of South Africa) is intended to drive export growth in the aviation sector. Foundry Capacity Building<br>
slide7. Industrial Development SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation 7<br>
slide8. Industrial Development SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation 8 Signing of 2 additional NIP obligation agreements to the value of R200 million.
Finalised agreement on local manufacture and assembly of electronic devices;
Investment estimated at Euro 1 million.
Sales estimated at R1.1 billion over 3 years.
New jobs estimated at 100.
Finalised agreement on local manufacture of Smart Meters for export markets;
Investment estimated at R 2 million.
Sales estimated at R 196 million over 5 years.
New jobs estimated at 102.
Finalised agreement on export of Marine services;
Sales estimated at US$ 6 million over 4 years. Industrial Participation<br>
slide9. Industrial Development SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation 9 One designation proposal was submitted to Minister. The Instruction Note for Fire Fighting Vehicles was published and circulated to procuring entities by National Treasury in November 2016.
Local content verification by SABS commenced and three of the companies appointed under Phase 1 met the stipulated local content threshold of 70% for the tank and collector (i.e. Actom, Solid State Power and Adzam Solar). Industrial Procurement<br>
slide10. Industrial Development SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation 10 The South African Minerals Processing Cluster received R5.2 million (of R16.9 million) from the Gauteng Department of Economic Development in November 2016. This is a 3-year programme.
the dti/IDC delegation visited the second deepest mine in the world, Tau Tona to observe AngloGold’s prototype reef boring equipment using non-explosive extraction.
The Mineral and Petroleum Resources Development Act, 2002 (MPRDA) will be considered by the National Council of Provinces (NCOP) early 2017. Primary Minerals<br>
slide11. Trade, Investment & Exports SG 2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective 11<br>
slide12. Trade, Investment & Exports SG 2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective 12<br>
slide13. Trade, Investment & Exports SG 2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective 13<br>
slide14. Trade, Investment & Exports SG 2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective 14<br>
slide15. Trade, Investment & Exports SG2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective 15<br>
slide16. South African and Southern African Customs Union (SACU) positions advanced during the Third Continental Free Trade Area (CFTA) Negotiating Forum in October 2016, the fourth CFTA Negotiating Forum in November 2016 and Senior Trade Officials and African Union Ministers of Trade Meeting.
Coordination enhanced with Kenya, Egypt and Nigeria on multilateral trade issues and the CFTA negotiations.
The Economic Partnership Agreement (EPA) between the SACU and the European Union (EU) provisionally entered into force in October 2016 and the new agricultural market access under the EPA was implemented in November 2016.
Participated in the Deputy President’s working visit to Vietnam and Singapore held in October 2016.
The SIAL, Paris Trade Fair recorded the highest export sales from the overall number of national pavilions held during the quarter under review, totalling R25.5 million as reported by the exhibitors and total estimated export orders of R2.036 billion recorded within 6 months from the event. Trade, Investment & Exports SG2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective 16<br>
slide17. Trade, Investment & Exports SG2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective Facilitated SA-Russia Intergovernmental Committee on Trade and Economic Cooperation (ITEC) in November 2016 and organised and participated in SA-Russia Business Council.
Successfully organized 2 state visits (Kenya & Zambia) during the period under review. These visits yielded much success in terms of Memorandum of Understanding (MoUs) concluded on cooperation agreements on investment promotion, consolidating the political relations and intensifying business networks between the respective countries.
Exchanged initial draft MoU with the Gambia in November 2016.
Concerted number of engagements with stakeholders within the export value chain in order to advance the objectives of the Integrated National Export Strategy (INES).
Two new export formations were established namely: Publisher’s Association of SA and Aerosol Manufacturing Association.
Successfully participated in the first Brazil, Russia, India, China and South Africa (BRICS) Trade Fair where 32 leading South African companies were recruited and the anticipated six month sales as per the exhibitor questionnaires totalled in excess of R36 million with 171 trade leads registered. 17<br>
slide18. Special Economic Zones and Economic Transformation SG 3: Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth Coega Industrial Development Zone (IDZ) Eastern Cape launched the R11.5 billion Beijing Automobile International Corporation (BAIC) investment for automotives.
Dube Trade Port KZN signed a R1.3 billion agreement with CIPLA for the production of biosimilars.
Saldanha Bay IDZ Western Cape has to date, a pipeline of 34 investments worth R14 billion (letters of commitment).
OR Tambo IDZ Gauteng has attracted a total of R260 million new investments covering horticulture and metal refining.
Coega has been allocated 1000MW under Independent Power Producer (IPP), with an investment value of R25 billion. 18<br>
slide19. Special Economic Zones and Economic Transformation SG 3: Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth Richards Bay Industrial Development Zone KZN (RBIDZ) awarded 2000MW under Gas IPP, investment to be determined.
Two Industrial Parks were launched
Isithebe Industrial Park KZN was launched in October 2016.
Queendustrial (Komani) Eastern Cape Industrial Park was launched in November 2016.
An Industrial Parks Symposium was held in October 2016. 19<br>
slide20. Legislation and Regulation SG 4: Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner 20<br>
slide21. Administration & Co-ordination SG 5: Promote a professional, ethical, dynamic and competitive and customer–focused working environment that ensures effective and efficient services delivery 49% of women in senior management 3.32% people with disability Vacancy Rate reduced to 4.4% (SMS) Senior Management Service All eligible creditor payments processed well within 30 days with 99% processed earlier within 15 days. The Director-General of the dti awarded with the National Batho Pele Excellence Award
(Silver award for Best DG) 21<br>
slide22. Financial Performance As at 31 December 2016 22<br>
slide23. As at the end of December 2016, the year to date spending stood at R7 billion or 84.4% of the YTD budget of R8.3 billion.
Of the R7 billion spent by the department, transfers to incentives were 52%, followed by other transfers at 33%, and Compensation of Employees as well as Goods and Services at 9% and 6% respectively. Financial performance – 31 DECEMBER 2016 This includes amongst others, the Manufacturing Development Incentives, which contributes to the development of manufacturing industries and the Special Economic Zones investment incentives which attracts investments to further the objectives of the Industrial Development Action Plan. 23<br>
slide24. Transfers and subsidies - Incentives
In pursuit of the department’s mandate to facilitate the transformation of the economy to promote industrial development, investment, competitiveness and employment creation, an amount of R4.1 billion or 78% was disbursed to companies. The variance of 22% is mainly due to:
Outstanding compliance documentation required from applicants to finalise claims.
A due diligence process that must be conducted prior to claims being processed for payment.
Claims that could not be processed as they were found to be non-compliant with the guidelines.
Claims due for processing not yet received from applicants Financial performance cont 24<br>
slide25. Transfers and subsidies – other transfers
Included under other transfers are funds disbursed to public corporations, departmental agencies, non-profit organisations as well as foreign governments and international organisations. For the reporting period, an amount of R1.8 billion or 99.32% against the YTD projections of R1.8 billion was disbursed. Financial performance cont 25<br>
slide26. Compensation of employees
At the end of December 2016, the department’s expenditure on Compensation of Employees was R677 million or 96% of the YTD projections of R706 million
Â
Goods and services
Expenditure on goods and services, compared to the YTD projections was 88%. A lag in the projections is mainly due to invoices for services rendered but not yet received from the service providers Financial performance cont 26<br>
slide27. Financial performance cont Table 1: Per programme 27<br>
slide28. Financial performance cont Table 1: Per programme 28<br>
slide29. Q3 Performance matrix 1 October– 31 December 2016 29<br>
slide30. Quarter three report matrix- Programme 2 30<br>
slide31. Quarter three report matrix- Programme 3 31<br>
slide32. Quarter three report matrix- Programme 4 32<br>
slide33. Quarter three report matrix- Programme 5 33<br>
slide34. Quarter three report matrix- Programme 6 34<br>
slide35. Quarter three report matrix- Programme 7 35<br>
slide36. Quarter three report matrix- Programme 8 36<br>
slide37. Ke ya leboga Ke a leboha Ke a leboga Ngiyabonga Ndiyabulela Ngiyathokoza Ngiyabonga Inkomu Ndi khou livhuha Dankie Thank you 37<br>