MCEP, Cents & Sense

Clarice Oelofse
 October 14, 2014
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Food Safety

Also known as The Manufacturing Competitive Enhancement Programme (MCEP) .

This incentive programme mentioned above, was introduced by the Department of Trade and Industry (DTI), with the aim to encourage businesses to expand and upgrade their facilities. It will run until 2018. The calculation of a grant can vary between 30% - 50% of your investment.

What you might be interested in: Capital Investment: Machinery & Equipment, Tools and Improvement & additions to buildings
In a nutshell:

  • Entities with total assets below R 5m will qualify for 50% of the cost of the new assets, but not exceeding R5m
  • Entities with total assets between R 5m and R 30m will qualify for 40% of the cost of the new assets, but not exceeding R30m
  • Entities with total assets of R30m and above will qualify for 30% of the cost of the new assets, but not exceeding R30m

Cluster Competitiveness Improvement
The following interventions will be subsidized up to 70% by the MCEP grant:

  • Conformity assessment certification (Quality Management improvement & accreditation)
  • Skills Development (SAQA Accredited)
  • Logistics improvements & IT systems (acquisition and deployment of production related software systems)
  • Procurement process improvement
  • Process Improvement e.g. international standard manufacturing practices
  • Product improvement & development
  • Conformity assessment of products
  • Product efficiency - including fees for the design of production information systems
  • Consumer acceptability studies
  • Packaging design

Who qualifies?

  • MCEP is available to South African-registered entities engaged in manufacturing
  • Must be operational for at least 1 full financial year
  • Applicants must achieve at least level four B-BBEE contributor status in terms of the B-BBEE codes of good practice or must submit a plan to demonstrate achieve a level four B-BBEE contributor status within a period of two years
  • The approved project may not result in a reduction of the base-year employment levels
  • Application must be submitted at least 60 days before start of operation. In other words, the grant can only be claimed for investments / projects to be commissioned in the future (at least 60 days from submission of application).


  • A minimum investment of R 500,000 in Machinery & Equipment is required for companies with existing assets below R 5m
  • R 1m for entities with total assets between R 5m and R 30m
  • R 2m for entities with assets above R 30m
  • A valid tax clearance certificate (or proof of application to SARS for a new TCC) 
  • Audited financial statements are required
  • Existing job levels may not decrease or made obsolete over the 2 year claim period.

So what’s the catch? You must fund the project upfront (yip the minimum of R500 000) and then expect the Dti to repay you within a year, once the application has been approved.

Next month we will draw up a mini budget for a small food safety manufacturing oulet.

This article was written with help from Chandre Conradie (Umkhonto Development Solutions). Email: chandre@udsol.co.za | 082 804 2516 


Download the grant guidelines here.

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