NATIONAL COUNCIL OF PROVINCES
INTERDEPARTMENTAL TRANSFER
WRITTEN REPLY
PARLIAMENTARY QUESTION NO 287
DATE OF PUBLICATION : 2 AUGUST 2013
Mr D A Worth (DA-FS) to ask the Minister of Economic Development:
(1) (a) What amount has the Industrial Development Corporation (IDC)
spent in the Free State in respect of the development of the Vrystaat
Koöperasie Beperk (VKB) poultry abattoir in Reitz and (b) what other
amounts have been spent on the project by the (i) Department of
Agriculture, Forestry and Fisheries and (ii) Department of Rural
Development and Land Reform;
(2) what guarantees have been provided by VKB members with regard to the
quotas of chickens to be supplied to the abattoir;
(3) whether any other (a) private or (b) corporate shareholders are
providing capital for this project; if not, what is the position in
this regard; if so, what are the relevant details?
CW385E
REPLY
I am advised by the IDC that:
1. (a) The IDC spent R84 million to date of a total approved funding
of
R129 million for the abattoir.
(b) This question should be directed to the affected Departments.
2. No guarantees have been requested because the supply is regulated by
an outgrower-specific supply agreement, which incentivises outgrowers
performance e.g. if the mortality of broilers are less than the target
agreed upon, the outgrowers receives increased income . Most of the
poultry is supplied by members of VKB Ltd.
3. Yes, 62.6% of the funding is provided by private/corporate
shareholders. The shareholders in the project are VKB (76.9%) and
Texisat (23.1%) (owned by the BBBEE workers trust). VKB and Texisat
contributed equity and shareholdersâ loans. The IDC funded the portion
of Texisatâs contribution to equity and the shareholdersâ loans.
Commercial debt is provided by IDC (long term debt) and VKB (working
capital finance).
| |IDC approved |VKB funding |Total project |
| |funding | |funding (incl. IDC|
| | | |portions) |
|Equity |R33, 480,000 (via | |R171,357,000 |
| |preference shares |R137,877,000 | |
| |to the workers | | |
| |trust company) | | |
|Debt (incl. |R95,771,000 | |R174,243,000 |
|Capitalised | |R78,472,000 | |
|interest) | | | |
| |R129,251,000 |R216,349,000 |R345,600,000 |