Agro-Processing Support Scheme (APSS)

Agro-Processing Support Scheme (APSS)

The objective of the APSS is to stimulate investment by South African agroprocessing/ beneficiation (agri-business) enterprises. The investment should demonstrate that it will achieve some of the following:

  • Increased capacity,
  • Employment creation,
  • Modernised machinery and equipment
  • Competitiveness and productivity improvement,
  • Broadening participation.

Description of Qualifying Processes/Projects

New and existing agro-processing/beneficiation projects. This can also involve a wide range of processing or beneficiation activities of post-harvest, that result in value addition and/or enhanced storage life, such as cleaning, sorting, grading, waxing, controlled ripening, labelling, packing & packaging, warehousing, canning, freezing, freeze drying, wood carving, extrusion, synthesizing, polymerisation, and various levels of processing that change agricultural product form. In the forestry value-chain may also include sawing, pulping, peeling and preservation.

The APSS will be targeted at five (5) key identified sub-sectors (focus areas) as follows:

  • Food and beverage value addition and processing (including Black
  • winemakers);
  • Furniture manufacturing;
  • Fibre processing;
  • Feed production; and
  • Fertilizer production.

Interpretation of the focus areas within each sector will be at the discretion of the dti. Agro-processing/beneficiation activities will be considered based on economic impact in terms of job creation, geographic spread and strengthening supply chains.

Mandatory Conditions

The applicants must:

  • Be a registered legal entity in South Africa in terms of the Companies Act, 1973 (as amended) or the Companies Act, 2008 (as amended); the Close Corporations Act, 1984 (as amended) or the Co-operatives Act, 2005 (as amended).
  • Be a taxpayer in good standing.
  • Be involved in starting a new Agro-processing/beneficiation1 operation or in expanding or upgrading an existing Agro-processing/beneficiation operation.
  • Be B-BBEE compliant in terms of the B-BBEE codes (achieve level 1 to level 4) and submit a valid B-BBEE certificate of compliance or affidavit.
  • Undertake an investment project which should result in retaining and creating direct employment.
  • Indicate that the project will be able to boost the local capacity of identified product(s); or where possible prospects of export orientation.
  • Adhere to sectorial minimum wage and legislative requirements governing the sector.
  • Demonstrate that at least 50% of the inputs (raw materials) will be sourced from South African suppliers and that at least 30% of the inputs will be sourced from Black South African suppliers in particular.
  • Where inputs cannot be sourced locally and from Black suppliers, applicants must provide a motivation including a sourcing plan to adhere to 4.1.8 within 2 years.
  • Commencement date of the project or activities applied for must take place within 90 calendar days after the application has been approved.
  • Agro-processing/beneficiation (Food, Furniture, Fibre, Feed and Fertilizer processing)

Grant Offering

The scheme offers a twenty percent (20%) up to a thirty percent (30%) cost sharing grant to a maximum of twenty million-rand (R20 million) over a two (2) year investment period, with a last claim to be submitted within six (6) months after the final approved milestone. The cost-sharing grant percentage will be differentiated by (qualifying) enterprise and investment size as follows:

Type of Applicant Historical Costs of Assets Qualifying Investment Costs Grant Percentage Maximum Grant Amount
New Entity N/a R 1 million up to R10 million 30% R3 million
Existing Entity < R10 million R 1 million up to R10 million 30% R3 million
Existing Entity > R10 million > R10 million 20% R20 million
New N/a > R10 million 20% R20 million

Eligibility Criteria

An applicant must submit a completed application form and business plan with detailed agro-processing/beneficiation activity(ies), budget plans and projected income statement and balance sheet, for a period of at least three (3) years for the project. The project/business must exhibit economic merit in terms of sustainability.

The application must be submitted within the designated application window period, prior to start of processing/beneficiation or undertaking activities being applied for.

Any assets bought and taken into commercial use or competitiveness improvements costs incurred before applying for the incentive will be considered as non-qualifying.

For existing entities, submit latest financial statements, reviewed by an independent external auditor or accredited person, not older than eighteen (18) months.

The approved entity may not reduce its employment levels from the average employment levels for a twelve-month period prior to the date of application, and these employment levels should be maintained for the duration of the incentive period/ agreement. That is, the total number of employees in the entity (inclusive of full-time and full-time equivalent) in each year of the incentive period may not be less than base year employment for a twelve (12) month period prior to the date of submission of the application, as defined above.

Any reduction in the total number of employees over the duration of the incentive, will disqualify the applicant. Any claims not yet evaluated or paid will immediately lapse and no obligation will accrue to the dti on such claims.

Minimum qualifying investment size, including competitiveness improvement cost,

will be at least one million rand (R1 million).

Qualifying Assets and Investment Costs

The APSS offers support on a cost-sharing basis towards:

New Machinery and Equipment

  • New machinery and equipment (owned or capitalised financial lease), tools, and forklifts, at cost and will also include green technology, energy and resource efficiency equipment.

Commercial Vehicles

  • New commercial vehicles (owned or capitalised financial lease) are only eligible if such vehicles are to be used for commercial purposes linked to the production process. This includes vehicles such as collection, delivery and distribution vehicles. Commercial vehicles must be registered in the name of the applicant.
  • Investments in commercial vehicles may not exceed 25% of the qualifying investment in machinery and equipment, up to a maximum grant amount of two million rand (R2 million).

Buildings

  • The investment in buildings must not exceed the qualifying investment in machinery, equipment and tools and is limited to a maximum grant amount of two million rand (R2 million).

Competitiveness Improvement Costs

  • Competitiveness costs to a maximum of ten percent (10%) of the qualifying investment in machinery and equipment and limited to a maximum grant amount of two million rand (R2 million).
Focus Areas Categories Consulting Fees and Expenses
Conformity Assessment Certification Quality management improvement, Environmental management improvement, process capability improvement and Product quality improvement

Cost of Installing or improving quality management systems;

Costs for preparations for certification and pre/initial assessment costs

Accreditation Costs for preparations for
accreditation and pre-/initial
assessment
Information Technology and Logistics Systems Acquisition and deployment of systems Acquisition software for
integrated production
management information
systems

Non-Qualifying Costs

  • The following is a list of costs that do NOT qualify under this scheme:
  • Land;
  • Staff wages and salaries, and staff related costs incurred in implementing any of the above projects;
  • Passenger vehicles (i.e. such as sedans, luxury 4X4s, SUVs and People Carrier Minibuses, even if registered in the entity’s name);
  • VAT and finance charges on assets;
  • Rates and Taxes;
  • Costs incurred before approval.
  • Increase in investment cost as a result of exchange rate fluctuations and submitted after acknowledgement of the application or claim.

 

P.O. Box

P O Box 73477, FAIRLANDS, 2030

z

Phone

Andre: 083 640 3057

Hours

08:00 – 17:00

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