We build industry - Lesotho National Development Corporation

NewsJanuary—March,2013We build industry

NewsPage 2LNDC VisionBy 2020, LNDC shallbe a leading institutionin industrial and commercialdevelopmentin the SADC region,through expanded anddiversified sustainablehigh quality investmentsthat will createwealth and jobs forBasotho.Mission StatementTo promote economicgrowth by facilitatingthe development ofsustainable medium tolarge enterprisesthrough promotionand establishment ofdomestic and foreigndirect investment.Notice is hereby given to all interestedBasotho who have suitablebuildings that can be rented andused as factory shells by industrialiststo register such buildingswith the LNDC.The requiredbuildings should conform to theLNDC’s standards and other legalrequirements.FactoryBuildingsWantedWhen registering, the followingfeatures should be clearly stated:plot number, location, size(strictly 500m² or bigger), titledeed, height, and available infrastructuresuch as installed electricityin kva, water in kilolitres,etc.For further details, contact theoffice of the Head – InvestmentServices Division at LNDC, P/BagA96, Maseru, 5 th Floor, Block A,Development House, KingswayStreet, Maseru.Tel. : +266 22312012Fax: +266 22310038Email: info@lndc.org.lsInside this issue:From the CEO’s Desk 3His Majesty King Letsie III Leads an Investment PromotionMission to Dubai4A Bags and Tents Manufacturing Company sets up atThetsane Industrial EstateLesotho’s Consul Generals to Germany on a Tour of LNDCProjects56Source Africa Event 7Training on Best Practice Procedures in Investment Promotion,SME Development and Export Promotion8LNDC Addresses Final Year University Students on EmploymentOpportunities9“Why Lesotho” 10

NewsPage 3From the CEO’sDeskDevelopment finance initiativeConsultations with a number of keystrategic partners will commence duringthe next quarter to initiate a programtowards implementing the Corporation’sstrategic vision of becoming afully-fledged development finance institution.Discussions have begun withthe SADC DFRC towards developingan action plan that will include aroadmap. Furthermore, a mission bythe European Investment Bank will visitMaseru to initiate discussions on assistingthe Corporation to develop financingmechanisms for local initiatives.Services hub initiativeAs part of its investment diversificationprogram, the Corporation will finaliseconsultations with key potential strategicpartners aimed at establishing aframework for facilitating Business ProcessOutsourcing sector projects. Theon-going discussions are with Fujitsu tosecure its investment which will serveas an anchor project.Furthermore, within the services sectorstrategic framework, the Corporationwill pursue a cluster development strategythat will facilitate investments byservice providers in the mining sector.The key objective is to develop aframework and related infrastructure tofacilitate core service providers to themining industry to locate and offer theirservices from a hub to be developedwithin the Ha Belo industrial estate.In addition, the Corporation is discussingthe development of an office parkthat will serve as a hub for ICT basedcompanies. The objective is to providerequisite infrastructure to boost thegrowth of local ICT companies in thesame manner that the Corporation providesindustrial infrastructure to themanufacturing sector.Property portfolio rationalisationstrategyThe rationalisation of the managementof the property portfolio will be finalisedduring the coming quarter to ensure amore strategic management of theportfolio and a streamlined service provision.The Corporation will also revise itsrental policy to ensure that it is supportiveof its mandate of growing the economyand driving economic empowerment.Investment promotionThe Corporation is preparing for aninvestment drive in South Africa thatwill be held towards the end of 2013.This investment drive will focus on anumber of key sectors including automotive,textiles and light electronics.Financial managementThe Corporation will begin implementationof a 5-year revenue strategy.Among its key objectives will be to increasethe Corporation’s revenue basethrough, among others, rationalisationof its cost structure, identification ofnew investment opportunities to generateincreased revenue and a review ofthe existing equity portfolio.On the basis of this new revenue strategy,the Corporation aims to issue dividendsto its shareholder every financialyear.

NewsPage 4His Majesty King Letsie III Leadsan Investment Promotion Missionto DubaiVerbatim“It is desirableto diversifyasmuch aspossible sothat Lesothomayfully exploitall productsectorswhich qualifyfor exporttoworld markets,”saysHis MajestyKing LetsieIII.Lesotho’seconomicdevelopmenthas reliedmainly on thegarment industry.Whilethere are fears that the sector’s life span might be timing out,another threat is the fact that concessions under the AGOAinitiative are also time bound. However, Lesotho is aware andbracing up for the test. This was highlighted by His MajestyKing Letsie III in March 2013, at the Indian Club in Dubai,Prince Sheikh Mohammed, received a warm reception fromthe Indian business community.His Majesty highlighted that his visit was primarily meant toencourage improvements in cultural ties and increase tradeand investmentflowsbetween theUnited ArabEmirates andLesotho, aswell as theSouthern Africanregion as awhole.Their Majesties with Lesotho Investor, Mr. Rajan Lall on their left and Dr. Ram Buxanion their rightInviting membersof theIndian businessfraternityin Dubai toconsider buildingsoundbusiness relationshipswithBasotho businessmen andwomen, theKing encouragedjoint ventureson numerousbusinessprojects that include the following:where he apprised about 80 Business men of Indian origin inDubai on the business climate in Lesotho, also enticing themto expand and, or establish new investments in the MountainKingdom.Their Majesties King Letsie III and Queen ‘Masenate MohatoBereng Seeiso who were in Dubai as state guests of the ruler,The tourism sector: development of hotels, lodges, tour operation,aquaculture, canoeing and high altitude facilities;Light engineering (automotive, electronics)ICT services (including technology and call centers)(Continued on page 5)

NewsPage 5Environmental and green industriesAgro processingConstruction, mining and quarrying, plant and machineryAviationPharmaceuticalHis Majesty assured the audience of the capability of his Kingdomto trade and manage huge investments. “Our commitmentto the rules of multilateral trade and commitment todeveloping a trade policy regime based on internationallyagreed norms has enhanced our competitiveness,” said HisMajesty, adding that “Lesotho has attracted foreign direct investmentfrom global giants such as Philips, Telefunken; buyersof international repute such as Levi Strauss and GAP, whilemany others have outsourced some of their production toLesotho.”The Chairman and Managing Director of the Garment Trimsand Accessories, who recently established a manufacturingoperation in Lesotho, Mr. Rajan Lall, said it was not news toanybody that “Africa is the next future, and the African continentis the future.”Testifying to his experience in Lesotho as an investor, Mr. Lallsaid, “We, as successful business men are always looking foropportunities to invest or participate in trade, in any part ofthe world, but we all have different apprehensions on the continent,that scare us away.” said Mr. Lall. However, he mentionedthat he had already ventured into investing in Lesothoand was content with the attention and support he had received.“We have set up in Kenya, and are setting up a verybig investment in Lesotho, with the assistance of the LesothoNational Development Corporation,” he added.Mr. Lall described back-up support from the authorities inLesotho such as the fast clearance of all license applicationsand approvals for all kinds of permits required for set-up,company registration, to mention a few.“Basically, for me, Lesotho is the place to invest and I wassurprised that they could do so much for me in such a shorttime. I felt that this opportunity had to be passed on to you,my friends. We should try to do more because there are a lotopportunities in Lesotho”, he said.A Bags and Tents ManufacturingCompany Sets up at ThetsaneIndustrial EstateThe LNDC CEO, Mr. Joshua Setipa has announcedthe establishment of a new company, LSA Manufacturing(Pty) Ltd to manufacture various bags andtents for both the retail and promotional markets.The company has been allocated an 1800m² factorybuilding at the Thetsane Industrial Estate.The CEO says this is the second product and marketdiversification project to set up in Lesotho this year.“We, at LNDC are very excited by the realization ofour product and market diversification strategy. Theproduct range is very dynamic and cuts across varioustypes of consumers”, Setipa says.The company will produce a range of protectionbags for camping, a range of promotional bags forindividual corporate clients, roof top and trailer tentsfor camping, and in-house facilities to embroiderand screen print on garments and promotional items.The target market for camp cover and tents is allmajor outdoor, leisure and camping entities inSouthern Africa. LSA will also explore this growingmarket in Europe. A Lesotho-based garmentmanufacturing company, Saxenburg Trading hasalso contracted LSA for its embroidery work.The company aims to extend its services to includeother clothing manufacturers in Lesotho as well ascorporate entities for their branding requirements.LSA Manufacturing will initially create 150 jobs,increasing to 200 at full capacity in two (2) years’time.

NewsPage 6Lesotho’s Consul Generals to Germany on a Tour of LNDC ProjectsBRIEF BY LNDC ON INVEST-MENT OPPORTUNITIESA group of Lesotho’s Consul Generals to Germany visitedLesotho and held discussions with the Management ofLNDC on areas of cooperation with the German businesscommunity.They were also taken on a tour of various LNDC projects such asPhilips, Maseru E Textiles and African Clean Energy which manufacturesenergy saving stoves.The Consuls were accompanied by the former Lesotho Ambassadorto Germany, His Excellency, Dr. Makase Nyaphisi. The LNDCCEO, Mr. Joshua Setipa hosted a welcome dinner for the delegation.FINISHED GARMENTS ATMASERU E TEXTILESENERGY SAVING STOVE PRODUC-TION AT AFRICAN CLEAN ENERGY

NewsPage 7resource personfor theworkshop.“This event willshow casewhat Lesothocan producewhile at thesame timebroadening our client base. Securing more ordersfrom buyers will result in creating more jobsfor our people.” Setipa said.In preparation for participation of local textileand footwear manufacturers in the African Textile,Apparel and Footwear Trade Event, LNDCAnd USAID-Southern African Trade Hub jointlyThe training was aimed at providing the participatingcompanies with skills to display productsand manage their respective booths. It also coveredareas on how to deal with buyers and whatsuppliers need to focus on in order to get interestfrom prospective buyers.SOURCE Africa 2013 will be held in CapeTown on the 9th –12th April 2013 and it willbring together business leaders and decision makersfrom across Africa, providing opportunitiesfor international buyers to network with Africanmanufacturers.convened a two-day workshop on exhibitionskills. The workshop was held on the 5th and6th March, 2013.The LNDC CEO, Mr. Joshua Setipa officiatedat the opening of the workshop and welcomedMrs. Joy Donovan, a Trade Show Specialist andMrs. Joy Donovan,Trade Show SpecialistThe event will promote African manufacturedproducts as well as facilitate professionally designedmatchmaking programmes and manufacturingplant visits.Africa is a growing sourcing destination and theSOURCE Africa event presents an opportunityfor African manufacturers to showcase Africanmade textiles, apparel, footwear and services tointernational and African buyers.So far, 8 local manufacturing companies and 11foreign-owned companies have confirmed theirparticipation at the Source Africa event. The LesothoPavilion is expected to house about 22 exhibitors.

NewsPage 8Training on Best Practice Procedures in InvestmentPromotion, SME Development and ExportPromotionThe Embassyof Ireland inLesotho commissionedtheInternationalDevelopmentIreland (IDI)to undertake aweek long inhousetrainingprogrammefor the LNDCstaff consistingof bestpractice lectureson themain areas ofinvestmentattraction (FDI and SME development) and trade promotionas well as workshops, discussion sessions,group and individual exercises. The lectures includedpractical examples and relevant case histories fromIrelandand numerousdevelopingcountriesaroundthe world.Speakingat thetrainingsession, the Irish Ambassador, H.E. Gerry Gervin,said, “As part of initiativesintended to help our Africancounterparts; the Irish governmentintroduced an Ireland-Africanstrategy in2012 to assist all its Africanpartner countries to ventureinto business developmentprojects in order to attractmore investors in the country”. He added that it wastherefore, the responsibility of the Irish Embassy inLesotho to effectively implement this strategy as anothermechanism of fostering and strengthening therelationship between the two countries.The facilitators, Mr. Eamonn Sheehy and Mr. JohnFrom left to right: Mr. Eamonn Sheehy, IDI; H.E. Gerry Gervin, IrishAmbassador and Mr. John Magill, IDIMagill emphasizedthat whileLNDC is the leaddevelopmentagency, it mustalso work closelywith relevantstate and governmentbodiesto create “TeamLesotho” inorder to developand foster a supportiveenvironmentfor investment, exports and job creation.In closing, the Chief Executive Officer, Joshua Setipaexpressedgratitude tothe Irish governmentforthe technicalsupport to thegovernmentof Lesothoadding that,“The Corporationis committed to applying the lessons learnt fromthe training and ensuring thatthe highest professional standardsare set for all contactswith potential investors”. Headded that the LNDC staffneeds to keep in mind a provenfact that “Satisfied investorsattract more investors”.Other participants included officials from the LesothoTourism Development Corporation, BEDO as well asthe Ministry of Trade and Industry, Cooperatives andMarketing.Participants

NewsPage 9LNDC Addresses Final Year University Studentson Employment OpportunitiesHow do relevant bodies ensure creation of opportunitiesfor local entrepreneurs? This was the topic of theevening at the first ever gala dinner organised by final yearBachelor of Commerce Students of the National Universityof Lesotho (NUL) in March this year. LNDC sponsoredparticipation of B Com students at the dinner to the tune ofM20,000.00.Mr. SemetheRaleche, InvestmentPromotionManager atthe LesothoNational DevelopmentCorporationaddressedtheyouth on programsthatLNDC has designedin orderto support anddevelop entre-He also mentioned that LNDC has developed an EnterpriseDevelopment Facility which encompasses four packages,namely, the on-going Partial Credit Guarantee Scheme, EquityFinancing, Wholesale Financing and Private Sector SupportProgrammes to assist entrepreneurs.“When you graduate, you will either opt to be employed orto go into business, however there are challenges faced bythe private sector as well as graduates choosing to go intobusiness” Raleche said. “Access to finance is a major impediment.It involves access to working capital, and access tocapital for start-up or expansion of an existing business”.“However, some of the programmes that we have developedare designed to address this challenge,” said MrRaleche.“Another challenge that has been identified is the local entrepreneurs’inability to access or even to identify growthmarkets”, he said. Raleche also says the high lack of businessdevelopment skills in the services industry is a matter ofconcern which requires re-training of qualified professionals.preneurs. He noted that about 2,000 students graduate eachyear from NUL and this is ahuge number when taking intoconsideration that there areother higher learning institutionsin the country.Speaking at the gala dinner,Raleche asked, “Has anyoneof you ever questioned whatopportunities exist, for instance,in the textile industry”?He explained that LNDCwould soon link newly graduatedstudents to the industry through its Industrial InternshipProgramme to provide exposure and practical skillswhich will enhance their employment prospects in the industrialsector as well as to enhance an entrepreneurial culture.The forum was meant to shed some light to students aboutalternatives that they could explore to alleviate unemploymentand to inform them about opportunities available inentrepreneurshipandjob creationupon completionof theirstudies.The Honourable Thesele Maseribane, Minister of Gender,Youth, Sports and Recreation as well as other GovernmentMinisters, attended the event.

NewsPage 10WhyLesotho?Political StabilityLabourA stable social and political environment which is investor friendly.A free enterprise and free market economic system which formsthe basis for sustained development and growth.A young abundant predominantly English speaking, literate andwell motivated labour force with a tradition of manual dexterityat competitive wage rates.Market Access55 million consumers in Southern African Customs Union(SACU).Preferential access to 260 million consumers in the SouthernAfrican Development Community (SADC) market. Duty and quota-free access to the United States market (310million consumers) through the African Growth and OpportunityAct, (AGOA).Export of all Lesotho-made products to the EU (500 millionconsumers) duty free under SACU EPA Agreement.Preferential trade agreements between SACU and MERCOSUR(Argentina, Brazil, Paraguay and Uruguay) as well as SACU EFTA(Iceland, Liechtenstein, Norway and Switzerland)Lesotho also enjoys preferential market access, duty and quotafree in countries such as Australia, Canada, Japan, New Zealand,Turkey and Nordic countries.Tax / Financial Incentives0% corporate tax on profits earned by manufacturing companiesexporting outside SACU.Corporate tax rate of 10% on profits earned on exports withinSACU.No withholding tax on dividends distributed by manufacturingcompanies to local or foreign shareholders.Unimpeded access to foreign exchange.Easy repatriation of manufacturing profits.Training costs are allowable at 125% for tax purposes.Payments made in respect of external management skills androyalties related to manufacturing operations are subject towithholding tax of 10%.Import VAT credit facility that provides for an input tax creditupon importation and local purchasing of raw materials and capitalgoods.Bank administered foreign currency accounts are permissible. Double taxation agreements with R.S.A. and U. K.Industrial InfrastructureServiced industrial and commercial sites, factory shells and commercialbuildings are available for rental at competitive rates.Special incentives for construction of investor-financed factorybuildings.Easy access to Gauteng and the Durban harbour.Full government support on trade and investment issues.Backstopping services from the Lesotho National DevelopmentCorporation in relation to procurement of all permits, licenses,and company registration.We are on the Web!www.lndc.org.lsBlock A, Development HouseKingsway StreetPrivate Bag A96Maseru 100, LesothoPhone: +266 22312012Fax: +266 22310038E-mail: info@lndc.org.ls