EDITION 2 | June 2021
Impact
Empowerment
Ventures’
stakeholder
publication
INSIDETHEPAGES
Page2
Who We Are
Page3
Section12J
Page5
OurProjects
Page13
TheTeam
EnRRICHing Lives
Enhanced, Risk-controlled Returns
To make a difference in the communities in which we Invest: for Change and Hope.
Who We Are
Over 1,340
organisations
WHAT IS IMPACT INVESTING?
currently All investments have consequences - not just for individual investors, but also for
communities and for the economy at large. In addition to creating financial returns for the
investor, investments must create jobs and expand the provision of goods and services.
manage They must have positive effects on families, communities, society and the environment.
Impact investing goes well beyond just avoiding harm and can be defined as:
investments made into private companies with the intention to secure a measurable
USD 502 billion positive, social, economic and environmental impact, alongside healthy financial returns.
We at IEV focus all of our attention on UN SDG number 8 of the Development Goals:
in impact https://sdgs.un.org/goals
investing
Investments can be made into:
assets
• Town delevopments
worldwide • Agricultural projects
• Student accommodation
• Tourism companies
• Cosmetics business
• Retail and lesiure centre
• Manufacturing operations
• Clean energy motoring To be considered for such
investment, businesses must
company meet the following criteria:
• Technology and security
1. ROBUST COMMERCIAL MERIT
2. APPROPRIATE AND EFFECTIVE
MANAGEMENT
3. MANAGEABLE RISK
4. APPROPRIATE USE OF
TECHNOLOGY
“We at IMPACT Empowerment Ventures, firmly believe that economic
recovery in South Africa will ONLY come from Small and Medium sized business
growth and through employing more and more people.
Our company’s expertise (until 30 June 2021) is focussed on the most
appropriate funding model for the achievement of SME growth, namely Section
12J of the Income Tax Act (S12J).
WE have designed an appropriate funding solution, that releases capital for the
sustainable growth of SMEs. We call it, redemptive capital.”
Dave Humphrey, Director of Impact Empowerment Ventures
https://impact12j.co.za/
Section 12J
Tax payer decides to become a
S12J investor
Complete ‘Commitment to Invest’
form before 30 June 2021
1
2
3
Makes an investment in Impact
Empowerment Ventures
Section
4 Receives a S12J Certificate
12J is the
5 The investment capital is
HOW placed in owner-run SME
6 A share certificate submitted to
SARS with the annual tax return
7
8
A Tax Refund is received by the tax
payer from SARS and is paid over to
the lender
The S12J investment matures after 5
years, with a potential healthy pay-out
Section 12J
Advantages of Impact Empowerment Ventures’
Section 12J
• Staff can directly support local small businesses
• Company tax can be allocated to the company’s B-BBEE rating when investing in
Enterprise Development
• It is super tax-friendly
• It potentially improves overall portfolio outperformance
• It can achieve important socio-economic benefits
• S12J is a great Treasury initiative for the distribution of YOUR taxes
• It helps re-capitalise and fund SMEs
• You could boost your income
Features of Impact Empowerment Ventures’
Section 12J
th
• A securing deposit of R25 000 needs to be paid before the 30 of June 2021
• Capital Gains Tax will be charged at the end of 5 years
• A S12J investment is still valid for the 2021/2022 tax year
• Your investment has the potential for healthy growth over the 5 year period
Requirements for Impact Empowerment Ventures’
Section 12J
• An investor must have a taxable income for the relevant year of at least R1.1 million
• The maximum investment for individuals and trusts is R2.5 million
• The ceiling for a company investor is R5 million
• The investment is tied-up for 5 years
• Two people can join forces, and together make a R1 million S12J investment
Our S 12J Projects
Community catalysts can boost
jobs in towns and townships
“A new approach to employment is needed, and growth must come from new
seeds, new seed capital. We must stop thinking big; we must think small. I
advocate a community-based approach to job creation, with seed-funds in towns
and townships, fostering new growth in new businesses while also supporting the
expansion of the existing business base.”
Chris Hart, member of Impact Empowerment Ventures’ investment committee.
Estimates of the number of jobs lost in SA due to the Covid-19 crisis have risen as high as 3-million.
Whatever the actual figure, the scale is devastating, especially when you note how many breadwinners
have five, six or more family members who depend on their meagre monthly wage packet.
Unemployment in SA was dire before Covid-19. It has now reached the proportions of a biblical
plague. The government has limited resources to boost job creation, the private sector has limited
capacity, and trade unions have divided loyalties between preserving the jobs of their own members
and the wider good.
A new approach to employment is needed, and growth must come from new seeds, new seed capital.
We must stop thinking big; we must think small. I advocate a community-based approach to job
creation, with seed-funds in towns and townships, fostering new growth in new businesses while also
supporting the expansion of the existing business base.
I am talking about community catalysts. For now, this can be done with the backing of a venture capital
tax incentive known as section 12J (S12J), but soon this support measure is to be removed and we will
need other innovative support measures.
Click here to read the full article
Business Chambers taking part in this initiative
JUNE | IMPACT 5
Our S 12J Projects
Invest in
Diversified
Agriculture
Mosemane Holdings has been established as
a vehicle which is committed to investing in Why Agriculture?
and helping to assist farmers to establish
diversified factory farming. The company is Danie Jordaan, a senior lecturer at the
governed by a team of experts and key department of Agricultural Economics of the
University of Pretoria, is one of those who
stakeholders in the industry. They share the
unified vision of reviving the rural economy, stresses the criticality and complexity of the
restoring rural towns, and building on best process that ensures the produce from a farm
gets to the consumer’s table. This process
practices.
provides an enormous value-offering for the
Mosamane Holdings is a holding company that economy, as well as all the role players. It
was established to invest in its own managed includes the provision of a safe, affordable
projects and initiatives at Mosamane Farm. variety of food.
Mosemane is a farm close to Rosendal, a A lamb chop, for instance, needs to be used
small farming town in the Eastern Free State
Province of South Africa, close to the border of within three to four days from the lamb being
Lesotho. slaughtered. The animal would most likely have
been located in the Northern or Eastern Cape,
It also intends to transfer its experience and where it was slaughtered, processed and sent to
knowledge to the farming activities of other the distributors all over the nation – all within this
entities, located in other geographical areas. It short period.
plans to empower people living in the deep Most South African farmers are small-scale
rural areas and to establish factories to add
value to the produce of these farms. farmers. The industry structure currently allows
agriculture corporations to grow, yet it keeps the
Agriculture in South Africa is smaller farmers in their already-dire
failing, according to Kevin circumstances.
Wakeford, Chairman of the Board The future of agriculture in South Africa will
of Directors of Mosemane. depend on the changes which are made to this
structure. The consumer culture, for instance,
He says this is quite simply because farmers has evolved so that more sophisticated products
do not determine the prices of the food that are preferred. Smaller farms are mostly family-
they produce, so the current system is not owned, and those without a succession plan will
conducive to the survival of the farmer. Those most likely be bought out by corporates. African
who sell supplies to the farmers, and those agriculture has a lot of export potential; the
who buy from them, are the ones who benefit problem is, however, producing the large
most, instead of the farmers themselves. quantities required abroad with insufficient
resources.
He warns that if we allow agriculture to
collapse in South Africa, urbanisation will This can perhaps be rectified by enhancing
increase, food production will decrease, and market accessibility to smaller farmers. The
this will result in increased both in imported private sector can make a big difference with its
produce and in higher prices. support for this transformation process. By
adopting vertical integrations by the farmer,
Mosemane aims to industrialise agriculture, to other benefits are unlocked - such as the
cultivate a new marketplace for farmers where availability of good and healthy wholesome
the farming community is transformed, and foods - and the farmers receive their fair share
rural farming is revitalised of the income generated along the value chain.
JUNE | IMPACT 6
Our S 12J Projects
Jamie studied Civil Engineering at the University of
Witwatersrand, and his career started in
construction and encompassed large projects such
THE ‘MIELIEPAP’ as the construction of the Gautrain. The short-term
nature of these projects encouraged him to start a
business to supply a product that will always be in
ENGINEER demand.
“People eat mieliepap every day in
South Africa,” says Jamie. The long-term goal
is to mill 5 tonnes per hour.
Ultra Maize provides an opportunity to invest in
the production of South Africa’s most beloved
staple foods – maize meal.
Most of the funding for the project was acquired
through Impact Empowerment Ventures’ (IEV)
Section 12J financing model. IEV also provided
constant support and advice in the early days of
this venture, which produces a product for which
there is strong and growing demand. In
2019/2020, the consumption of processed maize
in South Africa was approximately 5.2 million
metric tons - an increase of roughly 1.6 percent JamieAllen and Dave Humphrey, Director of
Impact Empowerment Ventures
compared to 2018/2019.
Jamie Allen is the proud owner of Ultra Maize
maize meal. Uncertain times inspired him to tap
into the maize meal market, so he bought a flour
mill from China and used it to found a factory.
The machine arrived late in December. January
saw the assembling of the machine. In mid-
March, he met some farmers from whom he
bought maize meal to sell whilst refining their
own product.
The company has had much lower start-up costs
than might have been feared, thanks to all the
detailed planning and innovative thinking.
Jamie and his colleague, Lucky, went from spaza
shop to spaza shop through which they had sold
6-7 tonnes of maize meal. They visited around
150 spaza shops, the product got traction among
the local people and the demand increased.
They also roped in micro-entrepreneurs to sell
the product within communities - which was an
excellent idea, as people prefer to buy what is
widely known as ‘mieliepap’ close to where they
live, simply because it is too heavy to carry long
distances.
The entrepreneurs launched their first container
factory shop on the first of May in Malvern, and it
is planned to be the first of many. They have also
landed their first sale of 80 bags to a local Spar in
Malvern.
Jamie pursued a business venture that made
sense in the South African context, adapted to
the consumer and entered the maize meal
market which is not the most accessible, being
very competitive and dominated by established
brands.
JUNE | IMPACT 7
Our S 12J Projects
BILATYE FARMING
Bilatye Farming is a commercially viable
The operations will include the cultivation of
and profitable dairy farm located at the
Bilatye Irrigation Scheme in the Eastern the land, investing in good system
Cape Province. It is an excellent management, the training of farmers,
acquisition of new equipment, upgrading
investment, as the demand for its output
infrastructure, irrigation, and refining the
of milk and dairy products is assured.
supply chain process.
Bilatye farming is a joint venture established
The latest technology will be used in the
between FarmInvest, an agriculture
rotary dairy parlour, with automated cup
investment company, and Bilatye Mkhonjane
Secondary Cooperative, a cooperative removers, teat spraying and an automated
established in the Chris Hani District in the cow sorting system.
Eastern Cape, which was set up to support
The business will produce fresh milk that will
agriculture development in the area.
be sold to bulk milk buyers in the Eastern
Cape. More value-adding services are being
FarmInvest was established in 2016 to
planned for the second phase of the project.
channel international investment into
agricultural development in South Africa. The
company assisted the first black-owned wine The Bilatye farm has adequate water for its
farm in South Africa, which was established operations, which is supplied from the Xonxa
dam. The water is pumped from the river to a
in 2016, and its other activities extend all the
buffer dam, from which it gravitates to an
way to Uganda.
irrigation system.
For the last two years, FarmInvest has
The project will start up with a herd of 650
helped to train local small farmers –
medium-sized crossbreed cows. Additional
supporting the implementation of health
programmes, and technical training - and cows and heifers will be purchased during
providing mentorship. The Bilatye Irrigation the second and third years of the project,
and the total number of cattle is due to reach
Scheme land had been uncultivated for
1,800 in the fourth year.
about 20 years and the development of the
land promises high potential.
Lieb Venter, the Managing Director of
FarmVision, which is the holding company of
The venture will operate as an intensive
FarmInvest, has extensive experience in
dairy producer based on a 770-ha pasture.
There will be a combined herd of 1,800 rural economic development, providing
cows, and approximately 30,000 litres of milk opportunities in agriculture.
will be produced daily.
JUNE | IMPACT 8
Our S 12J Projects
Impact Empowerment
Ventures invites you to
Invest in an exciting
Clean Energy and
Engineering solution
GAZTRON is the sole distributor of Prins GAZTRON uses a portable refueling infrastructure
Autogas bi-fuel products, a world leader in the along main routes and in high density locations.
development of alternative fuel systems for more
than 30 years, providing an OEM approved and To achieve their goals, they focus on three core
cost-effective alternative fuel solution for a wide values, namely:
range of engine types. Prins is distributed in 50 Quality, Innovation and Customer Care.
countries globally.
Some of the Investment benefits of the GAZTRON
This high-tech sequential gaseous injection S12J share class include:
system (VSI System) reduces fuel cost and CO2
emissions, by converting petrol and diesel • GAZTRON may be a start-up, but already has had
engines to run on Liquid Petroleum Gas (LPG) a few million Rand injected into the company this
and Compressed Natural Gas (CNG) without year, ahead of this S12J fundraise. The forecasted
losing drivability or performance. returns (ERR) are planned at 15% p.a
• GAZTRON is scale-able and replicable
countrywide
This alternative fuel immediately results in • Large off-take agreements are about to be
lowering emissions like CO2, NOx and particles. confirmed after this S12J fundraise
Autogas is cleaner, convenient, affordable and • Margins are high with input costs stable and
widely available here in South Africa today. controllable
• The positive IMPACT both socio-economic through
job creation, and SME ownership are very exciting
indeed.
Click here to view some of
our latest developments HOW LONG DOES THE GAZTRON LP GAS
CONVERSION TAKE?
We are the only company that can convert your
vehicle to gas in one day, regardless of whether it is
a car, delivery vehicle or a truck.
Darren and Justin Oates, founders and
directors of GAZTRON, each hold a BEng WHAT TYPES OF VEHICLES CAN BE
Mechanical degree from the University of CONVERTED TO GAS?
Pretoria. These twins specialize in Motor
Vehicle Engineering, Telematics and Through GAZTRON, Prins’ gas equipment provides
Dynamics. They compete in the Volkswagen approved LPG, CNG and LNG supply systems
Polo Cup and are members of the Total consistent with most of today’s car engines on the
Excellium Racing Team in South Africa. market, even turbocharged engines, without
They have over 10 years experience in Motor incurring any technical problems.
Racing dealing with many key stakeholders in
this very competitive sport.
For more information visit
https://gaztron.co.za/ JUNE | IMPACT 8
Our S 12J Projects
STUDENT
ACCOMMODATION
Thathomo is a development project involving the
“The youth of today, are conversion of an office block into student
accommodation.
the leaders of The building is situated in Braamfontein, less
tomorrow.” than a kilometre from Wits University. It will
consist of 84 rooms spanning 6 stories, with
accommodation for 427 students. It will be fully
Nelson Mandela
equipped with internet, a study facility,
Thabo Mongoato, the man behind Thathomo Pty recreational spaces, and there will be retail
Ltd, responded to a call from the heart when shops on the ground floor.
pursuing this student accommodation venture.
He was brought up in a rural town in the Eastern The conversion project is estimated to begin at
Cape. He attended the University of Cape Town, the end of the year, with full completion planned
where he completed his degree in B. Pharm. “It by May 2022 and the first student intake by June
was a complete culture shock relocating from my 2022.
dire circumstances to one of the biggest cities in Thabo states that Thathomo has raised
South Africa to obtain further education,” says significant investment capital since he
Thabo. collaborated with Impact Empowerment Ventures
His background drove his passion to impact in early 2019, with about 47 investors so far for
society, specifically to contribute to transforming the upcoming tax year. He says that S12J is a
the student life experience through the wonderful vehicle that can provide SMME’s with
development and provision of accommodation. the opportunity to enter the property market.
Students from a disadvantaged background
usually come from a large family crammed into a
small structure - and it is Thabo’s dream to
empower this youth through the provision of an
affordable environment, which is conducive to
learning. This, in turn, will help to unlock their
academic potential, instead of the country
missing out on the potential contribution of a
generation.
The President of South Africa, Cyril Ramaphosa,
has made infrastructure development the basis
of his Economic Reconstruction and Recovery
Plan for the Coronavirus-battered economy.
Meanwhile, the Government’s National
Development Plan has increased fivefold over
the last 6 years from 5.9 billion to 34 billion,
which indicates a significant foreseeable
increase in the demand for student
accommodation during the next decade.
The Development Bank of South Africa has
named student accommodation as one of its top
priorities- in line with President Ramaphosa’s
Recovery Plan.
FEBRUARY | IMPACT 11
JUNE | IMPACT 9
Our S 12J Projects
Not only will rabbit meat production support the
RABBIT MEAT economy, but it also supports a healthy lifestyle.
Rabbit meat is:
• Healthy white meat
The healthy option • High in protein
• Low in calories
This kind of investment will help to boost the • Low in saturated fat
education opportunities for South Africa’s • Contains no antibiotics or growth hormones
highly-vulnerable youth, increasing their • High in vitamin B3 and B12, phosphorus,
chances to find eventual employment. potassium and selenium
The benefits of rabbit farming include:
The rabbit meat market is expected to • No greenhouse gases
continue an upward consumption trend over • Rabbits consume little water
the next decade. Market performance is • And they consume less food per kg of meat
forecast to retain its current trend pattern, produced compared to other farmed meats
expanding with an anticipated Compound
Annual Growth Rate of +2.3% for the eight-
year period from 2017 to 2025, which is
projected to bring the market volume to
1.8 million tonnes by the end of 2025.
Globally, the untapped export market potential
of rabbit meat is valued at R1 812 million. At
regional level, the European Union (EU)
exhibits the largest untapped export market
potential, while Southern Africa ranks number
eleven from the top.
With reference to the local demand of meat, to
fulfil the food demand for South Africa’s
growing population which is at an annual rate
of 1.4%, it is important to find different means Globally, though, rabbit meat has been consumed
of food production such as rabbit meat. for many years in countries such as Spain, Italy
Farming with rabbits is becoming popular and France, which proves that it does have a
because the production requirements are place in the kitchen and a good chance of gaining
extremely cost-effective, easy to produce at wider traction in the SA market.
small scale and ideal for backyard production,
food security and income generation. South Africa’s rabbit meat producer association
RASA has seen an exponential increase in
Rabbit Meat Deli is a business with massive members with the recent revival of the industry.
potential. The idea for it came when its RASA has expanded from 38 members to 98
founder Cavin Barbery realised that rabbit members and rabbit meat has been categorised
meat is an extremely healthy type of meat. as an agri-commodity in the Animal Improvement
According to the World Health Organisation, Act of 2019.
rabbit meat is one of the healthiest options
available - due to its high protein and low-fat This rabbit meat producer has partnered with us at
content. Impact Empowerment Ventures, and we are
supporting the development of the business. We
There is a strong investment case for this had already been involved in reviving and
company - the business concept and model assisting the South African rabbit meat industry,
can support franchises in all the major cities - and have a well-established understanding of the
nationally and internationally. It has industry.
diversified revenue streams and has already
seen extensive growth in a remarkably short We are confident that the expansion of the rabbit
period. meat sector in South Africa will ensure that many
jobs and business opportunities will be created.
The meat provides an alternative to the
industrial meat supply chain that COVID-19
may have exposed as a threat to humanity.
However, the challenge is to educate people
JUNE | IMPACT 10
Potential Investments
SCIN offers an excellent S12J Selemo Valley Farms is the Umthiqua – which means land
investment opportunity. It largest Chrysanthemum of grace, is a Western Cape
provides a range of high-end producer in South Africa, and is agriculture business. It aims to
spa treatments at affordable based in TarIton, Gauteng. A become a sustainable producer
prices in prime locations. The strategically located farm with of high-nutrition agricultural
first award-winning SCIN was at established infrastructure and products - known as superfoods.
the Wembley Medispa in Cape access to key transport hubs. These include avocados,
Town and was one of the first They have a track record of macadamia nuts, blueberries,
medical spas in South Africa. supplying horticultural products chicken and eggs. They will
The company now has over a to international markets, supply an international market
decade of experience and has including the UK, Australia, and also plan to expand
received numerous international Japan and the Middle East. employment and production by
accolades. It aims to expand They also have strong local sharing their experience with
the chain of branded MediSpas customer relationships with a other start-ups.
in South Africa. key customer, Woolworths.
This investment opportunity is in the first Va Nkuna MotorCity, which will be in a
regional mall being developed in Limpopo. The Motorcity will consist of a Tyre Fitment
Centre, an Alarm and Sound Fitment Centre, an Auto Spares Retail Centre, a Used
Vehicle Showroom, and an Automotive Aftermarket Repair & Maintenance Centre.
The long-term goal is to set up similar automotive centres in areas near cities. These
will be rolled out in partnership with a commercial property developer over three to five
years. It is also intended to expand the business across the automotive sector value
chain.
The Zwelakhe Shopping Centre development will cater for a population in the
Engcobo Local Municipality of the Eastern Cape which is starved of bright,
attractive and modern shopping facilities. It is well-placed to attract large
numbers of visitors as it is located next to a national road, the R61. As well as
proving an exciting and much-needed new retail and leisure centre, it will give a
boost to the local economy by ensuring significant job creation.
JUNE | IMPACT 11
Our People
SHEKLETON Director- Executive
MARINDA Business
HUMPHREY Africa South Agriculture
Ngoye
View
DAVE Director-
NDLANGAMANDLA Business Consultant–
ZETHU Development Africa South
MPONGWANA Executive
LOYISO Relationship
NXUMALO Development Africa South Elixir Africa
SIFISO Business Consultant–
CONTACT US
[email protected] +27 11 480 8634 www.impactinafrica.com
JUNE | IMPACT 13