AMSCO AMSCO PRESENTATION PRESENTATION TO NEPAD HR TO NEPAD HR DIASPORA DIASPORA

WHAT IS AMSCO?WHAT IS AMSCO?

AMSCO is a joint venture between AMSCO is a joint venture between the UNDP, the private sector arm of the UNDP, the private sector arm of the World Bank (IFC), the African the World Bank (IFC), the African Development Bank, several Development Bank, several Development Finance Institutions Development Finance Institutions (DFIs) and several corporate giants.(DFIs) and several corporate giants.

AMSCO SHAREHOLDERSAMSCO SHAREHOLDERS

AMSCO’s shareholders include the following:AMSCO’s shareholders include the following:

United Nations & other multi-state United Nations & other multi-state Institutions – Institutions –

AMSCO SHAREHOLDERS (Cont’d)AMSCO SHAREHOLDERS (Cont’d)

One of AMSCO’s DFI shareholders is -One of AMSCO’s DFI shareholders is -

AMSCO SHAREHOLDERS (Cont’d)AMSCO SHAREHOLDERS (Cont’d)

AMSCO’s private sector stakeholders includeAMSCO’s private sector stakeholders include

RESULT OF STAKEHOLDER RESULT OF STAKEHOLDER COLLABORATIONCOLLABORATION

Preparation of African Training and Preparation of African Training and Management Services (ATMS) Project Management Services (ATMS) Project Document.Document.

Solicitation of support of all African Solicitation of support of all African governments.governments.

Creation of trust fund to support delivery of Creation of trust fund to support delivery of project documentproject document

COMPONENTS OF ATMS PROJECT COMPONENTS OF ATMS PROJECT DOCUMENTDOCUMENT

The African Management Services CompanyThe African Management Services Company (AMSCO(AMSCO) )

– – a specially constituted joint venture company that a specially constituted joint venture company that acts as the Operational Unit of the ATMS Project.acts as the Operational Unit of the ATMS Project.

The Capacity Building FundThe Capacity Building Fund ( (Stichting Trust Stichting Trust FundFund))

– – A trust which provides grant funds for client A trust which provides grant funds for client companies in Africa assisted by the ATMS Project, companies in Africa assisted by the ATMS Project, but which cannot afford the full costs of the services.but which cannot afford the full costs of the services.

AMSCO MISSION STATEMENTAMSCO MISSION STATEMENT

To offer world class management To offer world class management and capacity building services to and capacity building services to Private Sector companies in Southern Private Sector companies in Southern Africa, particularly Small & Medium Africa, particularly Small & Medium Enterprises (SMEs), to enable them Enterprises (SMEs), to enable them achieve profitable, competitive and achieve profitable, competitive and sustainable levels of operation. sustainable levels of operation.

AMSCO OPERATIONAL AMSCO OPERATIONAL CENTRESCENTRES

AMSCO Offices are in the following countries AMSCO Offices are in the following countries and cover the regions against them.and cover the regions against them.

GhanaGhana -- Anglophone West AfricaAnglophone West Africa

GhanaGhana -- Francophone West Francophone West AfricaAfrica

KenyaKenya -- East AfricaEast Africa

South AfricaSouth Africa -- Southern AfricaSouthern Africa

SUMMARY OF AMSCO BENEFITSSUMMARY OF AMSCO BENEFITS

Recruitment of suitably qualified and Recruitment of suitably qualified and experienced, hands-on managers and experienced, hands-on managers and secondment of such managers to African secondment of such managers to African businesses. businesses.

The Average contract period is 3 years. In The Average contract period is 3 years. In exceptional cases the secondment may exceptional cases the secondment may exceed 3 years. exceed 3 years.

AMSCO Managers cannot be citizens or AMSCO Managers cannot be citizens or residents of the countries to which they are residents of the countries to which they are seconded as they would not qualify for the seconded as they would not qualify for the various AMSCOvarious AMSCO diplomatic immunities and diplomatic immunities and privilegesprivileges..

SUMMARY OF AMSCO BENEFITS (Cont’d)SUMMARY OF AMSCO BENEFITS (Cont’d)

Facilitation of residence and work permits. Facilitation of residence and work permits. AMSCO seconded managers do not require AMSCO seconded managers do not require ordinary work permits in the countries of ordinary work permits in the countries of operation. They are accredited by the Ministries operation. They are accredited by the Ministries of Foreign Affairs under the auspices of UNDP. of Foreign Affairs under the auspices of UNDP. They can therefore start working immediately They can therefore start working immediately their accreditations are completed by the UNDPtheir accreditations are completed by the UNDP

AMSCO Managers are not required to pay AMSCO Managers are not required to pay income tax on their emoluments. A possible tax income tax on their emoluments. A possible tax break for the businesses. break for the businesses.

AMSCO Managers are entitled to import AMSCO Managers are entitled to import personal effects (including a vehicle) duty-free personal effects (including a vehicle) duty-free within the first six months of their assignments. within the first six months of their assignments.

Other BenefitsOther Benefits::

Business Linkages and networking using Business Linkages and networking using AMSCO's extensive network.AMSCO's extensive network.

Possible references to potential Equity Possible references to potential Equity and Loan partners.and Loan partners.

Fund raising (grant funding) from Fund raising (grant funding) from AMSCO's stakeholders.AMSCO's stakeholders.

DETAILS ON AMSCO ROLEDETAILS ON AMSCO ROLE

AMSCO'S CORPORATE MANAGEMENT DEVELOPMENT AMSCO'S CORPORATE MANAGEMENT DEVELOPMENT PROGRAMME FALLS UNDER THE FOLLOWING CATEGORIES:PROGRAMME FALLS UNDER THE FOLLOWING CATEGORIES:

1.1. Management AssistanceManagement Assistance

the recruitment and secondment of experts with the the recruitment and secondment of experts with the appropriate skills and experience to client companies. appropriate skills and experience to client companies.

The mandate of the AMSCO managers is to assist the The mandate of the AMSCO managers is to assist the client companies to client companies to inter aliainter alia, ,

- set up the businesses, - set up the businesses, - install management systems, - install management systems, - improve operational and financial performance and - improve operational and financial performance and - transfer capacity to local managers to succeed the - transfer capacity to local managers to succeed the

AMSCO personnel. AMSCO may also help businesses AMSCO personnel. AMSCO may also help businesses arrange technical rehabilitation.arrange technical rehabilitation.

DETAILS ON AMSCO ROLE (Cont’d)DETAILS ON AMSCO ROLE (Cont’d)

2.2. Training / Capacity BuildingTraining / Capacity Building

Because AMSCO's role in any company is intended to be Because AMSCO's role in any company is intended to be transitional, it seeks to ensure that local successor transitional, it seeks to ensure that local successor managers undertake comprehensive management managers undertake comprehensive management development programmes with the objective of building a development programmes with the objective of building a well-trained team of local senior executives in each client well-trained team of local senior executives in each client company. The services of AMSCO are provided to client company. The services of AMSCO are provided to client companies under contract at cost (including recovery of companies under contract at cost (including recovery of actual expenses).actual expenses).

Using grant subsidies provided by donors, AMSCO may Using grant subsidies provided by donors, AMSCO may subsidize the cost of the programme to SMEs who cannot subsidize the cost of the programme to SMEs who cannot afford to pay the full cost. In conjunction with the Client afford to pay the full cost. In conjunction with the Client Companies, AMSCO designs practical job-orientated Companies, AMSCO designs practical job-orientated management development programmes fitted to their management development programmes fitted to their particular needs and specific educational and professional particular needs and specific educational and professional background of the respective trainees.background of the respective trainees.

CRITERIA FOR ALLOCATION OF STICHTING CRITERIA FOR ALLOCATION OF STICHTING SUBSIDIES/GRANT FUNDINGSUBSIDIES/GRANT FUNDING

1. In principle, AMSCO's SME clients may 1. In principle, AMSCO's SME clients may qualify for a training subsidy to assist in qualify for a training subsidy to assist in meeting a portion of the cost of AMSCO meeting a portion of the cost of AMSCO sponsored management development and sponsored management development and training programmes for staff of the training programmes for staff of the companies in line with the overall objective companies in line with the overall objective of the ATMS Project. Larger clients may of the ATMS Project. Larger clients may qualify for training subsidy only in qualify for training subsidy only in exceptional cases (i.e. compelling exceptional cases (i.e. compelling development case) with prior approval from development case) with prior approval from AMSCO's Stichting (Trust Fund) Board.AMSCO's Stichting (Trust Fund) Board.

CRITERIA FOR ALLOCATION OF STICHTING CRITERIA FOR ALLOCATION OF STICHTING SUBSIDIES (Cont’d)SUBSIDIES (Cont’d)

2.2. Any subsidy for training shall not exceed 33% of Any subsidy for training shall not exceed 33% of the total training budget of the company as the total training budget of the company as determined by AMSCO through a review and determined by AMSCO through a review and determination of the company’s training determination of the company’s training requirements. The training budget must clearly requirements. The training budget must clearly indicate cost items, total amount, and the indicate cost items, total amount, and the allocation between the client and Stichting.allocation between the client and Stichting.

Clients must cover a minimum of 67% of the Clients must cover a minimum of 67% of the training cost to demonstrate an interest in and training cost to demonstrate an interest in and recognition of the value of staff development as recognition of the value of staff development as a worthwhile investment to ensure the long-a worthwhile investment to ensure the long-term survival of the enterpriseterm survival of the enterprise

CRITERIA FOR ALLOCATION OF STICHTING CRITERIA FOR ALLOCATION OF STICHTING SUBSIDIES (Cont’d)SUBSIDIES (Cont’d)

3. The client must agree, as part of the 3. The client must agree, as part of the management services agreement and also management services agreement and also part of the contract with the Stichting, to part of the contract with the Stichting, to implement the training programme implement the training programme identified and based on a need assessment identified and based on a need assessment by AMSCO, and to provide periodic reports by AMSCO, and to provide periodic reports to AMSCO on the progress of the training to AMSCO on the progress of the training programme including agreed targets and programme including agreed targets and performance indicators. performance indicators.

Subsidy limits for Training GrantsSubsidy limits for Training Grants

For "stand-alone" companies, a maximum subsidy For "stand-alone" companies, a maximum subsidy of US$50,000 may be approved and allocated for of US$50,000 may be approved and allocated for training.training.

For a "Group" of companies (e.g., AMSCO clients For a "Group" of companies (e.g., AMSCO clients belonging to the same group with several belonging to the same group with several managers), the maximum subsidy for training managers), the maximum subsidy for training may be US$125,000.may be US$125,000.

In exceptional cases, the Stichting Board may In exceptional cases, the Stichting Board may approve subsidies beyond the limits stated aboveapprove subsidies beyond the limits stated above

DETAILS OF SME’sDETAILS OF SME’s Small enterprisesSmall enterprises

up to 50 employees, up to 50 employees, asset size US$3m, asset size US$3m, turnover US$3m.turnover US$3m.

Medium enterprisesMedium enterprises up to 300 employees, up to 300 employees, assets size US$15m, and assets size US$15m, and turnover US$15m turnover US$15m

Large enterprisesLarge enterprises everything bigger than mediumeverything bigger than medium

Portfolio Review - Portfolio Review - GeneralGeneral

Between 1989 and 2000, AMSCO Between 1989 and 2000, AMSCO appointed some 520 Managers to 240 appointed some 520 Managers to 240 mainly small & medium sized companies mainly small & medium sized companies in 26 countries in Sub-Saharan Africa for in 26 countries in Sub-Saharan Africa for an average of 3 years. With the assistance an average of 3 years. With the assistance of these managers and AMSCO Capacity of these managers and AMSCO Capacity Building Specialists, more than 7,000 Building Specialists, more than 7,000 employees received on-the-job training employees received on-the-job training within their companies and/or additional within their companies and/or additional external training. AMSCO currently has external training. AMSCO currently has some 250 Managers seconded to some 250 Managers seconded to businesses in 23 countries in Africabusinesses in 23 countries in Africa

AMSCO'S PRE-REQUISITES FOR PARTNERSHIP AMSCO'S PRE-REQUISITES FOR PARTNERSHIP WITH CLIENT COMPANIESWITH CLIENT COMPANIES

Business Plan and/or Strategy Paper with financial Business Plan and/or Strategy Paper with financial projections for at least three years. projections for at least three years.

Details of Directors of the Company – names and Details of Directors of the Company – names and addresses. If Directors are corporate entities, then addresses. If Directors are corporate entities, then details of Registered Offices and Directors of such details of Registered Offices and Directors of such entities.entities.

Details of Shareholders of the Company - names, Details of Shareholders of the Company - names, addresses and equity stakes. If shareholders are addresses and equity stakes. If shareholders are companies, then details of Registered Offices and companies, then details of Registered Offices and DirectorsDirectors

AMSCO'S PRE-REQUISITES (Cont’d)AMSCO'S PRE-REQUISITES (Cont’d)

Job Description for the position(s) in question Job Description for the position(s) in question and remuneration limits. and remuneration limits.

Personal specification (qualifications & Personal specification (qualifications & experience) required of the expert/manager(s).experience) required of the expert/manager(s).

Emoluments and benefits package.Emoluments and benefits package. Bearing in Bearing in mind, the specific needs of each and the mind, the specific needs of each and the collective needs of associated companies in any collective needs of associated companies in any business grouping, AMSCO works with business grouping, AMSCO works with companies to structure job descriptions and the companies to structure job descriptions and the functions of AMSCO Managerfunctions of AMSCO Managerss

AMSCO'S PRE-REQUISITES (Cont’d)AMSCO'S PRE-REQUISITES (Cont’d)

For going concerns; Annual audited For going concerns; Annual audited financial results for past three years and financial results for past three years and projected financials for three years.projected financials for three years.

For newly incorporated For newly incorporated companied/operations, projected companied/operations, projected financials for three years.financials for three years.

Details of the current Management Team Details of the current Management Team of the Company - names, positions and of the Company - names, positions and number of years in company.number of years in company.

AMSCO'S PRE-REQUISITES (Cont’d)AMSCO'S PRE-REQUISITES (Cont’d)

Upon receipt of the above-described Upon receipt of the above-described information and following a successful information and following a successful internal review of the information supplied internal review of the information supplied by the applicant for AMSCO assistance, by the applicant for AMSCO assistance, AMSCO begins the process of recruiting AMSCO begins the process of recruiting and accrediting AMSCO Managers and and accrediting AMSCO Managers and providing the associated benefits to the providing the associated benefits to the business enterprise.business enterprise.

REVIEW OF SAMPLE AMSCO REVIEW OF SAMPLE AMSCO PROJECT IN SOUTH AFRICAPROJECT IN SOUTH AFRICA

BREATHETEX CORPORATIONBREATHETEX CORPORATION

Port ElizabethPort Elizabeth

Breathetex Corp. (Pty) Ltd.Breathetex Corp. (Pty) Ltd.An SME success storyAn SME success story

South African CSIR develop textile technology in high South African CSIR develop textile technology in high performance breathable fabrics over 5 yrs on mandate of performance breathable fabrics over 5 yrs on mandate of National Defense ForceNational Defense Force

In 1999 CSIR decides to commercialize lamination In 1999 CSIR decides to commercialize lamination technologytechnology

Breathetex consortium including majority black Breathetex consortium including majority black empowerment consortium won bidempowerment consortium won bid

Breathetex secure CSIR as technology partner for further Breathetex secure CSIR as technology partner for further R&D and raised funds from stakeholders; Brait technology R&D and raised funds from stakeholders; Brait technology & innovation fund, Vantage Capital and IDC (through EIB)& innovation fund, Vantage Capital and IDC (through EIB)

Breathetex - The ProductBreathetex - The Product

Waterproof breathable fabricsWaterproof breathable fabrics

Uses latest screenprint technologyUses latest screenprint technology

Laminates lightweight breathable membranes to Laminates lightweight breathable membranes to textilestextiles

Generate strong bond between fabric and membraneGenerate strong bond between fabric and membrane

Lamination process & products meets environmental Lamination process & products meets environmental requirementsrequirements

Breathetex - The Breathetex - The ChallengesChallenges

Commercialize technologyCommercialize technology

Build export oriented businessBuild export oriented business

Convert old style govt. work ethic into Convert old style govt. work ethic into entrepreneurial cultureentrepreneurial culture

Overcome perception of “deepest, darkest” AfricaOvercome perception of “deepest, darkest” Africa

Develop and offer commercially competitive Develop and offer commercially competitive products to international markets worldwideproducts to international markets worldwide

Breathetex – In partnership Breathetex – In partnership with AMSCOwith AMSCO

Need to improve productivity and capture new Need to improve productivity and capture new markets leads to AMSCOmarkets leads to AMSCO

In Nov.2003, AMSCO seconds expert in lamination In Nov.2003, AMSCO seconds expert in lamination technology to fill position of Product technology to fill position of Product Development, Sales & Marketing ManagerDevelopment, Sales & Marketing Manager

Responsibilities include Product development, Responsibilities include Product development, technical competency training, market technical competency training, market development, IT and quality control.development, IT and quality control.

Breathetex - The ResultsBreathetex - The Results

Doubled production volumes from 597,856 Doubled production volumes from 597,856 in 2003 to 1,502,500 in 2004in 2003 to 1,502,500 in 2004

Turnover improved significantly: R28m Turnover improved significantly: R28m (2003), R40m in 2004(2003), R40m in 2004

Job creation (24): 28 employees 2003; 52 Job creation (24): 28 employees 2003; 52 employees (2004)employees (2004)

Breathetex - The AwardsBreathetex - The Awards

Winner, Science & Tech AwardsWinner, Science & Tech Awards

Winner, Eastern Cape Exporter of the yearWinner, Eastern Cape Exporter of the year

Finalist, Technology Top 100, Corporate CategoryFinalist, Technology Top 100, Corporate Category

Winner (Manufacturing Sector) African SMME AwardWinner (Manufacturing Sector) African SMME Award

Winner (Southern Africa) African SMME AwardWinner (Southern Africa) African SMME Award

Overall Winner, African SMME Award 2004Overall Winner, African SMME Award 2004

AMSCO HR CONTACT AMSCO HR CONTACT

JohannesburgJohannesburg :: Pulane Mogoere Pulane Mogoere

(+27 11 219 (+27 11 219 5012)5012)

( + 27 11 268 ( + 27 11 268 0088)0088)

e-maile-mail : pulane@amscobv.com : pulane@amscobv.com