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CONTENTS Eastern Cape Business 2022/23 edition
Introduction Foreword
A unique guide to business and investment in the Eastern Cape.
3
Special features Regional overview of the Eastern Cape A new national park could further boost Eastern Cape tourism.
The Eastern Cape sends citrus and cars to the world
Lemons to China and bakkie-making kits to Kenya are new items in the export basket.
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14
Economic sectors
Manufacturing general
32
Aspen is making vaccines for Africa.
Banking and financial services
35
36
Manufacturing automotive
33
Digital services are expanding and improving.
Education and training
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Development finance and SMME support
Nelson Mandela University has a new Medical School.
Wild Coast farmers are supplying new markets.
ABOUT THE COVER: From top left. Nxuba Wind Farm (Enel); Transnet National Ports Authority, Coega SEZ (TNPA); The Magwa and Majola Tea Estates are being revitalised and crops are again being sold after a dormant period. Magwa Enterprise Tea (MET) is wholly owned by the Eastern Cape Provincial Government and managed by the Eastern Cape Rural Development Agency (ECRDA). Located in Lusikisiki, 45km from Port St Johns, there are plans to upgrade the tourism facilities to include conference facilities, an 18-hole golf course and a hotel (MET); Nelson Mandela Bay Stadium (Kierran Allen Photography/NMBS); Wild Coast waterfall (ECDC).
EASTERN CAPE BUSINESS
EASTERN CAPE EASTERN CAPE BUSINESS BUSINESS
THE GUIDE TO BUSINESS AND INVESTMENT IN THE EASTERN CAPE PROVINCE
GUIDE TO BUSINESS AND INVESTMENT IN THE GUIDETHE TO BUSINESS AND INVESTMENT IN THE CAPE EASTERN CAPE PROVINCE THE EASTERN PROVINCE
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Volkswagen has celebrated 70 years of making cars in South Africa.
2022/23 2023 EDITION EDITION
31
The Covid-19 fourth wave badly dented hospitality’s recovery.
2021/22 EDITION
Tourism and film
2021/22 EDITION
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The Eastern Cape’s long coastline has enormous potential.
CAPE EASTERNEASTERN CAPE BUSINESS BUSINESS EASTERN CAPE EASTERN CAPE BUSINESSBUSINESS 47556
Oceans Economy
2020 EDITION
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Investment in solar and wind projects is ramping up.
THE GUIDE TO BUSINESS AND INVESTMENT IN THE EASTERN CAPE PROVINCE
THE GUIDE TO BUSINESS AND INVESTMENT IN THE EASTERN CAPE PROVINCE
2019 EDITION
Renewable energy
2020 EDITION
24
Managing water supplies is crucial for citrus growers.
2019 EDITION
Agriculture and agro-processing
THE GUIDE TO BUSINESS AND INVESTMENT THE GUIDE TO BUSINESS AND INVESTMENT IN THE EASTERN CAPE PROVINCE IN THE EASTERN CAPE PROVINCE
ECDC CEO Ayanda Wakaba
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FOREWORD
Eastern Cape Business A unique guide to business and investment in the Eastern Cape.
Credits Publishing director: Chris Whales Editor: John Young Managing director: Clive During Online editor: Christoff Scholtz Designer: Tyra Martin Production: Aneeqah Solomon Ad sales: Gavin van der Merwe Sam Oliver Tahlia Wyngaard Tennyson Naidoo Gabriel Venter Vanessa Wallace Shiko Diala Administration & accounts: Charlene Steynberg Kathy Wootton Distribution and circulation manager: Edward MacDonald Printing: FA Print
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he 2022/23 edition of Eastern Cape Business is the 15th edition of this successful publication that, since its launch in 2006, has established itself as the premier business and investment guide for the Eastern Cape. The Eastern Cape’s strengths in the citrus and automotive manufacturing are noted in a special feature on provincial exports in this edition. Citrus is cultivated in several areas of the province, but most notably in the Sundays River Valley, the country’s single biggest supplier of citrus from one distinct area. Three towns and two Special Economic Zones host original equipment manufacturers (OEMs) and automotive component companies. Volkswagen has been making cars in Kariega for 71 years, Mercedes-Benz in East London has gone past its 60th anniversary and Ford (engines) and Isuzu are staples of the Gqeberha economy. The regional economy notes developments in the film and tourism sectors, with the exciting prospect of a new national park being proclaimed in the province. Overviews are provided on the key economic sectors of the province and the potential of the Oceans Economy and the prospects of oil and gas for this coastal province are examined. The major business chambers in the province have made contributions to the journal. To complement the extensive local, national and international distribution of the print edition, the full content can also be viewed online at www.easterncapebusiness. co.za. Updated information on the Eastern Cape is also available through our monthly e-newsletter, which you can subscribe to online at www.gan.co.za, in addition to our complementary business-to-business titles that cover all nine provinces as well as our flagship South African Business title. In 2020 the inaugural edition of African Business was published. ■ Chris Whales Publisher, Global Africa Network | Email: chris@gan.co.za
PUBLISHED BY
DISTRIBUTION
Eastern Cape Business is distributed internationally on outgoing and incoming trade missions, through trade and investment agencies; to foreign offices in South Africa’s main trading partners around the world; at top national and international events; through the offices of foreign representatives in South Africa; as well as nationally and regionally via chambers of commerce, tourism offices, airport lounges, provincial government departments, municipalities and companies. Member of the Audit Bureau of Circulations
Global Africa Network Media (Pty) Ltd Company Registration No: 2004/004982/07 Directors: Clive During, Chris Whales Physical address: 28 Main Road, Rondebosch 7700 Postal address: PO Box 292, Newlands 7701 Tel: +27 21 657 6200 | Fax: +27 21 674 6943 Email: info@gan.co.za | Website: www.gan.co.za ISSN 1995-1310
COPYRIGHT | Eastern Cape Business is an independent publication published by Global Africa Network Media (Pty) Ltd. Full copyright to the publication vests with Global Africa Network Media (Pty) Ltd. No part of the publication may be reproduced in any form without the written permission of Global Africa Network Media (Pty) Ltd.
Pet Nutrition; Nelson Mandela University; SOLA; Sundays River Citrus Company; Walmer Park Shopping Centre; Wild Coast Sun. DISCLAIMER | While the publisher, Global Africa Network Media (Pty) Ltd, has used all reasonable efforts to ensure that the information contained in Eastern Cape Business is accurate and up-to-date, the publishers make no representations as to the accuracy, quality, timeliness, or completeness of the information. Global Africa Network will not accept responsibility for any loss or damage suffered as a result of the use of or any reliance placed on such information.
PHOTO CREDITS | Acoustex Group; Angus Burns/WWF South Africa; BAIC Group; BTE Renewables; Citrus Growers’ Association of Southern Africa; Coega Development Corporation (CDC); Sandy Coffey; Enel Green Power; Ford Motor Company South Africa; Lona Group; Montego
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MESSAGE
Welcome to the Eastern Cape, the Home of Legends! A newly-minted One Stop Shop for investors and three well-provisioned Special Economic Zones are among the benefits on offer for investors into the Eastern Cape, as outlined by Ayanda Wakaba, CEO of the Eastern Cape Development Corporation.
Ayanda Wakaba, CEO of the Eastern Cape Development Corporation
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Industrial Development Zones in South Africa, the East London Industrial Development Zone, and Coega Industrial Development Zone, with the newly-established Wild Coast Special Economic Zone all ideally situated for easy access to world markets. Responsible for the facilitation of investment and trade in the province, the Eastern Cape
he Eastern Cape is a vibrant province of unmatched beauty with a wealth of natural resources and a worldclass manufacturing industry which includes South Africa’s leading automotive manufacturing industry. Often referred to as a “world in one province”, the Eastern Cape boasts the most successful EASTERN CAPE BUSINESS 2022/23
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MESSAGE
Development Corporation (ECDC) has been repositioned as a central economic development agency for the province. The ECDC’s strategic thrust fosters advocacy work which promotes provincial economic transformation, inclusive growth and competitiveness, investor-focussed solutions, pioneering innovation in key growth sectors, operational efficiency and financial sustainability. At the ECDC, we place emphasis on the implementation of trade and investment programmes which intend to leverage on the inherent economic potential of the province. These activities encourage trade and investment in the priority sectors of the Eastern Cape economy which have a high potential for job creation, beneficiation and opportunities for the development of a competitive local SMME sector. For the ease and convenience of doing business in the Eastern Cape, the InvestSA One Stop Shop Eastern Cape, which is a South African presidential investment facilitation initiative implemented in partnership with the Department of Trade, Industry and Competition, serves as a vehicle to reduce the administrative burden often experienced by investors. The InvestSA One Stop Shop Eastern Cape facility thus acts as a single point of contact for investor interface, queries and aftercare. Matters relating to regulatory compliance, licensing and permits, interface with local authorities and communities are among the services the InvestSA One Stop Shop Eastern Cape prides itself on. The ECDC welcomes you to the unmatched potential of the Eastern Cape Province. Realise the Eastern Cape, it’s Yours to Explore. ■
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FOCUS
Eastern Cape Development Corporation Key priority sectors.
All of the province’s original equipment manufacturers (OEMs) have made commitments to expand or upgrade their production lines in recent months: Mercedes-Benz South Africa (East London); Volkswagen SA (Kariega); BAIC (Coega SEZ); Ford Motor Company and Isuzu (Gqeberha). As recently as March 2022, the Africa Auto Group committed to an investment of R550-million to enter the injection moulding industry in Nelson Mandela Bay. With more than half of the wind power projects in the national government’s renewable energy plan allocated to the Eastern Province, the region can truly be called the Wind Power Province. A green hydrogen project has been announced which holds enormous potential for opening up a completely new sector. Manufacturing for the renewable energy sector is another potential area of growth, and the province’s Special Economic Zones are uniquely positioned to host such activity. One of the competitive advantages of investing in the Eastern Cape lies in the two Special Economic Zones in East London and at Coega, which hosts a deepwater port. Both SEZs are strategically situated on major transport and shipping routes and provide purpose-built infrastructure for investors wishing to produce and manufacture for the Southern African Development Community and world markets. An integrated database system has been developed and maintained by the SEZs. Through this portal, potential investors have ready access to skilled, semi-skilled and unskilled labour resources. ■
The Oceans Economy holds great promise for the Eastern Cape. ECDC Board Chairperson Vuyani Jarana and the Chief Executive Officer Ayanda Wakaba visited four businesses taking advantage of the province’s vast coastline in August 2021.
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he Eastern Cape Development Corporation (ECDC) focuses on seven growth sectors which are all aligned to the Provincial Economic Development Strategy and Provincial Development Plan. These sectors are: • Agriculture and agro-processing • Sustainable energy, generation and component manufacture • Oceans Economy • Automotive • Light manufacturing • Tourism, infrastructure and product • Film The Eastern Cape has experienced sizeable local and international investment in key sectors such as automotive, renewable energy and forestry. The film and tourism sectors received a boost with the filming of Survivor South Africa: Immunity Island on the Wild Coast, which not only boosted the regional economy by R10-million and created more than 100 jobs but will sell the province to a large television audience.
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The shooting of the latest version of the Survivor TV series will further boost the popularity of the spectacular Wild Coast. Credit: ECDC
Fast-tracking projects and lowering the cost of doing business
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he Eastern Cape Development Corporation (ECDC) is the host of the Eastern Cape Investor One Stop Shop. The Investor One Stop Shop initiative is geared towards providing investors with services to fast-track projects and reduce government red tape when establishing a business. It is part of the government’s drive to become investor friendly by improving the business environment by lowering the cost of doing business as well as making the process easier. One Stop Shops house government entities such as the South African Revenue Service (to help with customs and tax), Home Affairs, Environmental Affairs, Eskom and the Companies and Intellectual Properties Commission under one roof. An investor can make an appointment, meet a government representative and be guided by the representative through the process of setting up a business. The One Stop Shops simplify administrative procedures for issuing business approvals, permits and licences and thereby remove bottlenecks that investors may face in establishing and running businesses.
The offering includes, but is not limited to: • Providing an accessible entry point for investors in need of regulatory compliance. • Enhancing regulatory and legal processes. • Improving approval turnaround timeframes. • Providing information on incentives (tax, land, training, free trade zones, etc). • Providing pre-approval information (market data, costs, incentives, project approval, local partners, etc). • Providing post-approval information (facilitation of permit approvals, information relating to import of equipment and raw materials, central bank profit repatriation, etc) to investors.
Contact details Address: 12 Esplanade, Quigney, East London Tel: +27 87 131 1450 Email: info@investeasterncape.co.za Website: www.ecdc.co.za
EASTERN CAPE
Participating national government entities InvestSA is a division of the South African Department of Trade, Industry and Competition (the dtic) • Business registry: Companies and Intellectual Property Commission (CIPC) • Tax authority: South African Revenue Service (SARS) • International Trade Administration Commission (ITAC) • National Regulator for Compulsory Specifications (NRCS) • Public electricity utility: Eskom • Municipal Infrastructure Support Agent (MISA) •
Visa facilitation Visa and permit applications can be made at Visa and Permit Facilitation Centres. Applications are then assessed by the Department of Home Affairs in Pretoria. Non-South Africans with a legal residency permit in South Africa can apply for a visa or permit at these centres. There are centres in every province. In the Eastern Cape there is an office in East London. The South African government is reviewing its critical skills list as well as taking steps to make it easier for people who qualify to apply. The Eastern Cape invitation The Eastern Cape InvestSA One Stop Shop and ECDC team can advise you on investment opportunities and assist investment and trade opportunities from the same offices. The Eastern Cape team is committed and qualified to assist and guide you from concept to investment phase. We look forward to hearing from you and partnering with you to make your investment a success! ■
A REGIONAL OVERVIEW OF
EASTERN CAPE PROVINCE A new national park could further boost Eastern Cape tourism By John Young
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The north-eastern segment of the province is the site of a possible future national park, which would bring to five the number of national parks in the province, joining the Addo Elephant, Camdeboo, Garden Route and Mountain Zebra National Parks. These parks not only look after animals but also protect quite distinct types of vegetation. If the proposed Grassveld National Park is established high in the mountains above the village of Rhodes and near to the border with Lesotho, it would be South Africa’s 20th. The conservation goal behind the park is to preserve grasslands through agreements with landowners and farmers who would continue to farm the land responsibly. The land of the Batlokoa community (pictured) is near the famous Naude’s Neck Pass. As a source of clean water, the area is a hugely important resource and worth preserving for that reason too. The falling water shown in the main
ourism is one of the sectors that was hit hardest by Covid-19. Many events were cancelled, foreign visitors were absent from attractions such as the Addo Elephant National Park and the Baviaanskloof World Heritage Site and guest houses and hotels struggled to make ends meet. Although times were tough for the “Adventure Province”, there was some good news out of a sector that still retains enormous potential for growth and has been identified by the Eastern Cape Development Corporation (ECDC) as a priority sector. The ECDC invested R2-million in attracting the TV series Survivor South Africa: Immunity Island and that will undoubtedly pay off when the series is aired in great interest from domestic and international travellers in the spectacular Wild Coast region. The immediate economic impact of the filming was estimated at R10-million with 103 jobs created to support the project. EASTERN CAPE BUSINESS 2022/23
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SPECIAL FEATURE
all travel. This is something the Eastern Cape does well, with the National Arts Festival and a variety of sporting events such as Iron Man being hosted by the province. In the week before the Omicron variant shocked some countries into banning travel, St Francis Links successfully hosted the South African PGA Championship and showed how well multiple companies, guest houses and sponsors can work together to create something of international quality. The tournament also brought employment opportunities to the region. Other than tourism and film, the following sectors have been identified by the ECDC as priority sectors: agriculture and agro-processing, sustainable energy, the Oceans Economy, automotive, light manufacturing. Each of these categories is the subject of an updated economic overview in this journal. The ECDC’s mandate is to plan, finance, coordinate, market, promote and implement the development of the Eastern Cape in industry, commerce, agriculture, transport and finance, which it does through three core units. Diversification is an important part of provincial plans. An example of this is the Business Process Outsourcing (BPO) sector. BPO has received a boost with the establishment of an ICT Academy in Mthatha. Enrolment in 2022 increased to 100. The centre is a partnership between the provincial government and Liquid Intelligent Technologies South Africa. In 2021, more than 7 520 young people benefitted from the R363-million which various Sector Education and Training Authorities (SETAs) put into training programmes in the following sectors in the province: manufacturing, engineering and related services, public sector, mining, banking, chemical, local government, wholesale and retail, education, training and development and insurance. With three ports and two large airports, the Eastern Cape is well suited to logistics activity. The Cookhouse-Blaney rail branch line is now working. Having this connection operational and linked to the Agriport Terminal at the East London port reduces the costs of logistics and fits into a major national and provincial goal of moving goods from road to rail.
Credit: Angus Burns/WWF South Africa picture on this page is described by Andrew Weiss of the WWF as “heading towards the Mzimvubu River and the Indian Ocean” while another small stream at the top of the mountain is destined to join the Orange River in the west. Weiss also described rock paintings of eland and reedbuck “with the unusual addition of dogs and a fat-tailed sheep”. The Grassveld National Park project of the South African National Botanical Institute (SANBI) has already recorded 1 131 species of plant life on the iNaturalist app. In addition to national parks, the Eastern Cape has 15 provincial nature reserves and a multitude of luxury private game reserves. Shamwari Private Game Reserve reported that its non-paying guests were thriving on all the special attention they received during lockdown. Shamwari’s Wildlife Rehabilitation Centre took in Milly, an adult meerkat who had been not well looked after as a pet. The centre’s staff kept her mentally and physically stimulated and she has learnt to crack her own raw eggs, to go with a healthy number of blueberries which make up her diet. The events sector was just about to restart before the Omicron variant put a stop to
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The South African PGA golf tournament at St Francis Links showed how events can be linked to employment opportunities. Here the expanded ground staff follow the last group of golfers in on the final day – and earn some applause of their own for putting on a fine tournament. Credit: Sandy Coffey Special Economic Zones Transnet National Ports Authority (TNPA) has established new national headquarters at the Port of Ngqura within the Coega Special Economic Zone (Coega SEZ). The value proposition of the Port of Ngqura is that as a deepwater port strategically positioned within an SEZ, it can provide integrated, competitive and efficient port services as a global transhipment hub ideally positioned on the east coast of Africa. Transnet has agreed that the tank farm and manganese storage facility at the Port of Gqeberha is to be moved to the Port of Ngqura. This will open up prime waterfront space to tourism and hospitality businesses. The Eastern Cape’s two SEZs are key drivers in the province’s strategy to attract investors. At the Coega SEZ, major current investors include BAIC SA (R11-billion), the Dedisa Power Peaking Plant (R3.5-billion), FAW SA (R600-million) and CEMZA, a cement company (R600-million). Even though Covid-19 had an effect on activity in the SEZ, construction continued during 2020. The following facilities were built: two for logistics companies (DHL Logistics and APLI), a multi-user facility and the new Aquaculture Development Zone, which is being developed at a cost of R259-million. This aligns with the Oceans Economy master plan, which aims to leverage the province’s coastal assets in terms of fishing, bunkering, oil and gas industry development, tourism and marine transport and manufacturing. The Coega Development Corporation (CDC), which is assisting in the rollout of infrastructure EASTERN CAPE BUSINESS 2022/23
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projects in different parts of South Africa, is assisting Eastern Cape provincial departments, public entities and municipalities to package projects to attract funding. The East London Industrial Development Zone (ELIDZ) has a strong suit in automotive suppliers, anchored around the proximity to the Mercedes-Benz South Africa facility. The ELIDZ has also received recent investments in a diamond cutting and polishing and condom manufacturing. An established market for Liquefied Natural Gas (LNG) exists within the Coega SEZ. The existing 342MW Dedisa Power Peaking Plant at Coega already has environmental authorisation for a 400kV transmission line between the plant site and the Dedisa substation which reduces costs for future investors. A draft scoping report has been prepared for an integrated LNG terminal and gas-to-power plant. National government has named the Coega SEZ as the potential site for a 1 000MW Liquefied Natural Gas (LNG) plant. The value to the regional economy of the project is estimated at R25-billion. Imported LNG would be used as feedstock initially, while exploring local sources. Drilling off the southern coast has revealed vast resources in the Brulpadda field in the Southern Outeniqua Basin. If some of this gas could be recovered, the two SEZs on the Eastern Cape coast would become critical to its utilisation. Activity in the oil and gas sector would in turn stimulate the maritime sector. The potential of the Oceans Economy is receiving attention
SPECIAL FEATURE to two existing engine lines, is over and above the company’s national commitment of R15.8-billion to be spent on the Silverton assembly plant and various factories that supply the company. By the start of 2018, Volkswagen South Africa had spent more than R6.1-billion on its plant in Kariega, an investment that enabled the manufacture of more than 400 000 sixth-generation Polos by 2021. More than 80% of these vehicles were exported. The investment by the joint venture comprising BAIC, one of China’s biggest vehicle manufacturers, and the Industrial Development Corporation was launched in 2016. In September 2020, the first vehicles manufactured and assembled at the Coega SEZ plant were delivered to dealerships. The company claims that two of its models (the D20 hatchback and sedan, and the X25 SUV) have directly created 1 000 jobs and indirectly created 5 000 jobs in South Africa. ■
and Nelson Mandela University’s Ocean Campus is one of the leaders in this new field. The South African International Maritime Institute (SAIMI) has new headquarters in Port Elizabeth. Economic strengths The Eastern Cape continues to punch above its weight in terms of export volumes. A separate article elsewhere in this journal digs down into the details of this aspect of the provincial economy, but a glance at the three winners in a particular category in Exporter of the Year run by Exporters Eastern Cape shines a light on the province’s strengths. Three companies were recognised in Best Exporter, Corporate (export turnover greater than R200-million): Purem Port Elizabeth (Eberspächer SA, automotive) received a merit award for improvement in profitability; San Miguel Fruits South Africa won a merit award for increased export turnover and profitability with the winner being SMA Engineering South Africa (engines and power transmissions). These companies neatly represent the automotive and fruit sectors, the two biggest earners from exports. The biggest winner on the night was Volkswagen South Africa, but each of the province’s other OEMs are regularly “winners” in the sense that Isuzu, Ford and Mercedes-Benz routinely ship tens of thousands of vehicles and engines to every part of the globe. Isuzu recently launched the first locally engineered and produced seventh-generation D-MAX bakkie, using for the first time a new body shop at the Struandale manufacturing plant and a new chassis assembly line at the company’s Kempston Road facility. The initial R10-billion that Mercedes-Benz invested in making its East London factory ready for the production of the latest C-Class was supplemented in 2021, when the first vehicles rolled off the floor, by news that an additional R3-billion was to go into building three new assembly lines, a new body shop and more advanced robots. Ford Motor Company’s Struandale engine plant in Gqeberha will receive R600-million to prepare the plant to make the 3.0L V6 turbodiesel engine for the company’s Ford Ranger, which is put together in Tshwane. This amount, which includes upgrades
Milly the meerkat. Credit: Shamwari Private Game Reserve
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Northern Cape 2%
LESOTHO
Eastern Cape 8%
SPECIAL FEATURE
nomy at a glance Western Cape 14%
South African economy at a glance
centage contribution of each province to national GDP.
RCE: STATS SA WWW.STATSSA.GOV.ZA
EATURE
Insight into the South African ecomomy. FEATURE secured tens of thousands of newSPECIAL seats on direct
MOZAMBIQUE
nds South African mining production flights to and from the city). able: • Companies are successfully trading into Africa. ncreased by 116.5% April markets 2021.are booming with d signs for the economy include: year-on-year • Niche in agricultural ZIMBABWE
MOZAMBIQUE
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Limpopo everal provincial governments and investment macadamia nuts being the most successful. 7% gencies are establishing trade relations and Pecan nuts have done well and wine and grape NAMIBIA udy programmes with BRICS countries. State exports to China are growing. Largest contributors % increase % contribution Mpumalanga school and7%tertiary level is sits to and from China immediately before and • Private education atGauteng 35% North West growing ter a major BRICS summit in 2018 gave an inSWAZI6% as a sector. LAND and cation that Ramaphosa holds high hopes for • New banking licences have been issued Platinum Group Metals 276.1%several more 39.2% are in the pipeline. creased trade with the biggest of the BRICS KwaZuluFree State Natal 5% came on line in 2017 and ations. Two-way trade between the countries in • New stock exchanges 16% 017 was worth $39.1-billion. South Africa wantsCape more are expected.LESOTHO Northern 2% Gold 177.9% • Investment16.6% in infrastructure (especially ICT and o grow tourist numbers from China. South Africa railways) is strong. Nedbank’s report on capital ecame the first country in the world to export expenditure in South Africa stated that the eef to China in 2017, to go with existing exports Cape projects announced in the first half f iron ore, platinumore and fruit and wine. 208.2%29 largeEastern 8% Manganese 14.2% ourists are visiting South Africa in record numof 2018 were valued at R63.9-billion (Financial Western Cape ers (Cape Town’s Air Access programme Mail). The renewable energy programme 14%has
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149.1%
13.3%
Percentage contribution of each province to national GDP. SOURCE: STATS SA WWW.STATSSA.GOV.ZA
Mercedes-Benz SA
SOUTH AFRICAN BUSINESS 2019
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nto Africa. ming with successful. and grape
Trends flights to and from the city). Table: South African mining production
Companies are successfully trading into Africa. Good signs for the economy include: • Niche agricultural markets are booming with • Several provincial governments and investment macadamia nuts being the most successful. agencies are establishing trade relations and Pecan nuts have done well and wine and grape study programmes with BRICS countries. State exports to China are growing. Largest contributors % increase % contribution visits to and from China immediately before and • Private education at school and tertiary level is growing as a sector. after a major BRICS summit in 2018 gave an indication that Ramaphosa holds high hopes for • New banking licences have been issued and Platinum Group Metals 276.1%several more 39.2% are in the pipeline. increased trade with the biggest of the BRICS nations. Two-way trade between the countries in • New stock exchanges came on line in 2017 and more are expected. 2017 was worth $39.1-billion. South Africa wants Gold 177.9% • Investment16.6% in infrastructure (especially ICT and to grow tourist numbers from China. South Africa railways) is strong. Nedbank’s report on capital became the first country in the world to export expenditure in South Africa stated that the beef to China in 2017, to go with existing exports of iron ore, platinumore and fruit and wine. 208.2%29 large projects Manganese 14.2%announced in the first half • Tourists are visiting South Africa in record numof 2018 were valued at R63.9-billion (Financial bers (Cape Town’s Air Access programme has Mail). The renewable energy programme
Increased by 116.5% year-on-year in April 2021. •
able: South African mineral sales Mineral sales increased by 152.7% ear-on-year in April 2021.
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SOUTH AFRICAN BUSINESS 2019
Source: world exports.com 40.9%
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Table: South mineral sales Source: world African exports.com
Mineral sales increased by 152.7% year-on-year in April 2021. Largest contributors
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Credit: Unsplash
10 REASONS WHY YOU SHOULD INVEST IN SOUTH AFRICA
01.
HOT EMERGING MARKET Growing middle class, affluent consumer base, excellent returns on investment.
02.
MOST DIVERSIFIED ECONOMY IN AFRICA
South Africa (SA) has the most industrialised economy in Africa. It is the region’s principal manufacturing hub and a leading services destination.
LARGEST PRESENCE OF MULTINATIONALS ON THE AFRICAN CONTINENT SA is the location of choice of multinationals in Africa. Global corporates reap the benefits of doing business in SA, which has a supportive and growing ecosystem as a hub for innovation, technology and fintech.
04. 03.
FAVOURABLE ACCESS TO GLOBAL MARKETS
05.
The African Continental Free Trade Area will boost intra-African trade and create a market of over one billion people and a combined gross domestic product (GDP) of USD2.2-trillion that will unlock industrial development. SA has several trade agreements in place as an export platform into global markets.
SA has a progressive Constitution and an independent judiciary. The country has a mature and accessible legal system, providing certainty and respect for the rule of law. It is ranked number one in Africa for the protection of investments and minority investors.
06.
ABUNDANT NATURAL RESOURCES
SA is endowed with an abundance of natural resources. It is the leading producer of platinum-group metals (PGMs) globally. Numerous listed mining companies operate in SA, which also has world-renowned underground mining expertise.
08.
ADVANCED FINANCIAL SERVICES & BANKING SECTOR SA has a sophisticated banking sector with a major footprint in Africa. It is the continent’s financial hub, with the JSE being Africa’s largest stock exchange by market capitalisation.
PROGRESSIVE CONSTITUTION & INDEPENDENT JUDICIARY
07.
WORLD-CLASS INFRASTRUCTURE AND LOGISTICS
A massive governmental investment programme in infrastructure development has been under way for several years. SA has the largest air, ports and logistics networks in Africa, and is ranked number one in Africa in the World Bank’s Logistics Performance Index.
YOUNG, EAGER LABOUR FORCE SA has a number of world-class universities and colleges producing a skilled, talented and capable workforce. It boasts a diversified skills set, emerging talent, a large pool of prospective workers and government support for training and skills development.
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09. 10.
EXCELLENT QUALITY OF LIFE
SA offers a favourable cost of living, with a diversified cultural, cuisine and sports offering all year round and a world-renowned hospitality sector.
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SOUTH AFRICAN BUSINESS 2020
The Eastern Cape sends citrus and cars to the world Lemons to China and bakkie-making kits to Kenya are new items in the export basket. The first consignment of Eastern Cape lemons is given a last inspection at the Maydon Wharf Fruit Terminal in Durban. Credit: Citrus Growers’ Association of Southern Africa
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of citrus fruit being accepted into the Philippines. The citrus industry has been identified in the National Development Plan as a priority sector because it employs many people and it can improve the country’s balance of payments. According to the Sundays River Valley Citrus Producers Forum, black citrus farmers have increased the volumes of their exports by 40%, with a total of 1.6-million cartons exported in 2020. However, exporting fruit of the Eastern Cape is not as straightforward as it might seem. All of South Africa’s ports have been struggling in recent times to keep up with demand. The province’s three ports are no exception, with some of the citrus fruit originating in the Eastern Cape having to be trucked to Durban or Cape Town, adding costs to the operation. The industry also battles with a shortage of shipping containers and high demand for cold-storage facilities. In April 2021, an MSC vessel was diverted to Gqeberha to offload 1 995 refrigerated containers just in time for the citrus-picking season. There is a global shortage of these specialised containers.
hursday 17 February 2022 was a red letter day for farmers in the Sundays River Valley and for South Africa’s citrus industry. On that day, a first shipment of lemons was loaded onto ships from the fruit terminal in Durban harbour en route to China. The long and complicated procedure of becoming compliant with health and import procedures started with work done by Citrus Research International (CRI) scientists in 2013. CRI and the National Department Agriculture, Land Reform and Rural Development hosted scientists from China in 2015 and negotiations have continued ever since. South African citrus growers spend R150-million annually on research which is then used by the DALRRD in their international negotiations. In this case, it paid off with a R325-million deal which has the potential to grow exponentially. South Africa hopes to eclipse Argentina and Chile as suppliers of lemons to China, targeting 25 000 tons of lemons to that country by 2024. Exports of grapefruit, oranges and soft citrus to China totalled 130 000 tons in 2020. More good news from South-East Asia came in the form of a first consignment EASTERN CAPE BUSINESS 2022/23
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FOCUS
Investors are investing and exports are growing The Trade, Investment and Innovation Unit of the ECDC is committed to promoting trade with and investments into the Eastern Cape.
Entrepreneurs graduating from the Exporter Development Programme run by the ECDC in partnership with the Nelson Mandela Bay Business Chamber.
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he Trade, Investment and Innovation Unit markets the Eastern Cape to investors, supports existing investors, promotes exports and the ECDC as an implementing agent for development initiatives. Trade Promotion The Trade Promotion Unit provides opportunities to export-ready local businesses to penetrate local and foreign markets by means of non-financial support. Major export markets are Germany, Hong Kong, the US, China, Netherlands, Namibia and India. Once a company has been assessed as “exportready”, the unit facilitates annual trade missions, exhibitions and thematic workshops to offer networking platforms, trade/export knowledge and access to prospective clients in targeted countries. Investment The Investment Promotion Unit is the official investment promotion agency of the Eastern Cape Province. The unit actively markets the province
ECDC contact details Address: 1 Moore Street, Quigney, East London Tel: +27 43 704 5604 Email: info@ecdc.co.za Website: www.ecdc.co.za
and facilitates foreign and local direct investment. Services include lobbying for conducive policy, aftercare investor services, assistance to investors to access incentive schemes and local business networks, providing market information and facilitating access to greenfield and brownfield sites. Investors will find four universities and a number of TVET colleges which offer high-impact tertiary education. Set-up costs for new business are extremely competitive in terms of land and rental prices, construction costs and overall input costs. The Eastern Cape has three ports, four airports and good road and rail links and offers easy access to domestic, SADC and global markets. Local, provincial and national government have a range of investment incentives available for new and existing operations. These incentives range from manufacturing rebates to preferential production factor costs. Innovation The Innovation sub-unit facilitates strategic domestic and international investment into sectordriven, catalytic innovation projects. The sub-unit facilitates investment and growth into new industry sectors introduced by the global shift to the Fourth Industrial Revolution. This is achieved through: support for catalytic and high-impact projects that can unlock economic activity and promote local beneficiation and diversifi cation; promotion of new products that encourage import substitution; growth of a pipeline that creates viable opportunities for the Development Finance and Properties Development units and for government and entrepreneurs. ■
EASTERN CAPE BUSINESS 2022/23
SPECIAL FEATURE management. Merit awards were given in the SJM Flex Environmental Award to the Coega Development Corporation, Purem, Isuzu and Volkswagen Group South Africa. Volkswagen also won Best Exporter Original Equipment Manufacturer (OEM) with Isuzu being recognised for skills development and transformation initiatives. In recent years, each of the province’s OEMs has been steadily increasing export volumes, often breaking new records in successive years. In 2016 Mercedes-Benz recorded a new high for the month of April of 10 674 vehicles exported through the Port of East London. Over seven years to 2021, 650 000 C-Class models were built, of which more than 90% were exported. Volkswagen has sent 326 000 Polos into the global market since 2018. An interesting addition to the export basket of Isuzu Motors is pick-up kits in knocked down (KD) format which are being sent to Isuzu East Africa, an affiliate in Kenya. Ford makes engines at its plant in Struandale, Gqeberha. The company wants to persuade national government to upgrade the railway line between Gauteng (where it makes its vehicles) and Gqeberha so that it can send parts up the line to Tshwane and export its vehicles out of the port. Fully 75% of the company’s product is exported to more than 100 markets around the world. In September 2020, Ford led automotive exports with 6 995 vehicles. ■
The Eastern Cape is the second-largest citrusproducing province with the Sundays River Valley being the country’s single biggest production area. South Africa is the world’s second-largest exporter of citrus fruit. A national export record was achieved in 2020, with 146-million cartons of fresh citrus being exported (second only to Spain). Citrus yielded R3.4-billion in exports for the Eastern Cape. National citrus exports have grown by more than 40% in the past decade to about R20-billion per year. The Citrus Growers’ Association of Southern Africa forecasts an increase from the current 150-million 15kg cartons to 200-million in the next five years, and this is projected to grow still further to 255-million by 2030. Automotive strength The list of winners at the annual awards function for Exporters Eastern Cape Exporter of the Year gives a good indication of the strength of the province’s automotive and automotive supply sectors. Exporters Eastern Cape is a non-profit organisation comprised of members from export companies, freight forwarders, financial institutions and shipping lines. The Nelson Mandela Bay Business Chamber’s Enterprise Development Programme has several parts: the Export Development Programme is the latest initiative. The Eastern Cape Development Corporation offers extensive support to exporters through its Trade Promotion Unit which facilitates annual trade missions, exhibitions and workshops to offer networking platforms, share knowledge and gain access to prospective clients. Acoustex Group, a Gqeberha-based automotive component manufacturer, won Exporter of the Year 2021, in addition to the prize for best exporter in the medium enterprise category. The company created a new product line by acquiring a company and increased direct and indirect export turnover to 12 countries by 24%. Among the products produced by Acoustex are sound deadeners, moulded insulation parts, carpets, parcel trays, tailgate covers and back-panel components. Other companies in the group make vehicle protection kits, vehicle protection seat covers and technical laminated fabrics for medical and domestic use. An interesting category prioritised environmental accreditation and environmental EASTERN CAPE BUSINESS 2022/23
The Acoustex Group was Exporter of the Year in 2021. Credit: Acoustex Group
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FOCUS
Property and infrastructure projects are promoting growth The Property Management and Infrastructure Unit of the ECDC provides the framework for businesses to operate. development, particularly in underdeveloped areas. The unit also facilitates strategic alliances regarding multi-tenanted residential complexes so as to maximise revenue and minimise costs.
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Credit: AIDCEC
he ECDC manages a substantial property portfolio which enables it to rent out industrial and commercial premises at affordable rates or sell property to appropriate investors. The ECDC also functions as the manager of large infrastructure projects for the Eastern Cape Provincial Government. Property Management The Property Management Unit offers small-tomedium enterprises suitable premises at affordable rates through its diverse property portfolio. When it is in the interests of the corporation, the ECDC will consider selling its property to the investor. The ECDC is one of the biggest property owners in the province with residential, commercial, manufacturing and warehousing space. Large areas of vacant land zoned for residential and commercial purposes are also available. The following suite of services is offered: facilitate commercial and industrial activity; assist new investors to find properties; facilitate SMME
ECDC contact details Address: 1 Moore Street, Quigney, East London Tel: +27 43 704 5604 Email: info@ecdc.co.za Website: www.ecdc.co.za
Infrastructure (Strategic Projects) The ECDC has been entrusted by the Eastern Cape government to manage some of its special functions and projects such as the integrated infrastructure programme and a number of large-scale development projects. This unit provides the following services: • Planning and monitoring • Facilities and property management • Industrial Parks Revitalisation Programme The primary objectives of this programme are to stimulate economic growth through supporting of SMMEs; to build SMME zones to accommodate SMME start-ups; make the parks an investment destination of choice; devise and introduce incentive schemes for potential investors, to allocate properties to sustainable businesses showing growth and intending to employing local labour. The parks in the programme are Dimbaza Industrial Park, Butterworth Industrial Park, Vulindlela Heights Industrial Park, Queendustria Park, Fort Jackson Park, Buffalo City Automotive Aftermarket Incubator (shown in the photograph).
Socio-economic and enterprise development This area of the unit’s work will be achieved through setting up and managing an SMME database, training and mentoring of SMMEs, placement and recruitment of local labour management, technical and nonaccredited training and intern placement and training. ■ •
EASTERN CAPE BUSINESS 2022/23
The Chamber has built a relationship with the metro to ensure we create an enabling environment within which businesses thrive. To this end, the Chamber has created initiatives to actively attract investment into our city.
executive@bkcob.co.za Bathandwa Njobe | communications@bkcob.co.za
Port expansion remains one of Chamber’s main focus areas, with Transnet still the main stakeholder keeping the future of our region and investors’ interests alive. Present lobby refers to the expansion of the Container Terminal, the widening and deepening of the Port itself. As simple as it is, those three activities will in fact make Buffalo City a more desirable location. Widening the net also remains one of our guiding principles, and engaging with as many stakeholders as possible toward economic growth sits at the top of our agenda. As we engage we focus on the collaboration rather than the exception and recently a number of MOUs have been agreed in structuring those engagements. The Chamber’s own projects succeed because we invite participation, and the Call-2-Action with related waste recycling has introduced a new way of approaching the everlasting challenge of littering and waste collection. On the record, the Border-Kei Chamber of Business has and will continue to support the development of the N2 Wild Coast road development, with the strong belief that the new highway will usher in a new corridor of/for development - a feature this region is sorely lacking.
Lizelle Maurice
Lizelle Maurice is a child of the Eastern Cape Soil. She did everal tertiary courses through Coronation nursing College, Unisa, Damelin & UCT. She owns Park Place Boutique Guest House, which has won her National Tourism Department’s Lilizela Awards in the Emerging Tourism Entrepreneur of the Year category. She was appointed as the BKCOB’s Executive Director in 2021.
PROFILE
PROFILE
The Nelson Mandela Bay The Nelson Mandela Bay Business Chamber Business Chamber The Nelson Mandela The Nelson Mandela Bay Nelson Mandela BayBay Business Chamber Business Chamber Business Chamber PROFILE
PROFILE
A catalyst for economic growth in the region. A catalyst for economic growth in the region.
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OverChamber 120 entrepreneurs have benBusiness Chamber successfully hostowners and international markets. and companies’ organisation also Chief Executive Officer Executive environment for businesses and attract the fifth phase ofOfficer. the Enterprise To be a leading catalyst investments. for economic development throughout efited from this programme. tional relations to formMandela a vitalBay. link between business owners and ed the Meanwhile, fifth phasethe of pilot the Enterprise Development Programme, Nelson phase of international markets. enhance Development Programme, with from which SMEsgrow graduated in Mission theSince Business Chamber’s Exporter Vision itsand inception insmall 2014, March 2019. Mission businesses. In 2018 the Business SMEs setprogramme to graduate in March 2019. 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By influencing theof factors andteams key stakeholders a competitive Development Programme concludthrough Thatstructured figure hasmulti-level grown fortraining, the doing business. The task teams are: entrepreneurs have By influencing the factors and are: key stakeholders that create a competitive ed at The task teams enabling business environment. theOver end120 of withsupport. 10 comTask Teams mentoring and2018, linkage 2019/2020 intake with 19 The • Infrastructure Task Team Events • Water Task Team benefited from this programme. enabling business environment. participants registered. The - Roads and Stormwater Sub-group panies finishing this programme in its The Nelson Mandela Bay Business Chamber has established a structure programme runs over nine months • Roads and Storm Water Task Team Events at the Nelson Mandela Bayof Meanwhile, the pilot phase programme is aimed empow- Water year. Thefacilitated programme isthe aimed at of task teams to theSub-group ease of doing business. The task teams are: first and is by at Nelson • facilitate SME Task Team Business Chamber keep business ering SMEs to position themselves - Electricity Sub-group the Business Chamber’s Exporter Task teams Mandela University Business School • Water and •Electricity empowering SMEs to position themElectricity and Energy Task Team owners up to date and informed as emerging exporters. • SMME Task Team Development Programme for TheTransport Nelson Mandela Bay Business Chamber has established a structure • Transport andChamber Logistics Task onas athe wide variety of topics affecting and eWatchdog. and The •Nelson Mandela Bay Business hasTeam established a structure selves emerging exporters. •Logistics Special Projects Task Team 2018/2019 had 10 participants. of three task teams divided into sub-groups, to facilitate the ease of • Metro Collaboration Task Team business in Nelson Mandela Bay. With an unemployment rate of • Safety and Security Events of seven task teams to facilitate the ease of doing business. That figure has grown foroffer the doing business. taskand teams are: Task Team • The Trade Investment Regular networking functions Events ataugurs the Nelson Mandela Bay 40.7%, this well for Nelson The task teams are:Enterprise Development and Exporter Development 2019/2020 intake with 19 •Enterprise Infrastructure Task Team Business Chamber keep business The Nelson Mandela Bay Business Chamber Enterprise Develop-Mandela Bay as small businesses Development Programme • Water Task Team owners up to registered. date and informed mentCAPE Programme was launched in 2014, to develop the skills thatparticipants Theas -Nelson Roads Mandela and Stormwater Sub-group EASTERN BUSINESS 2019 12 and entrepreneurship are seen The Bay Business Chamber Enterprise Development Events at the Nelson Mandela Bay • Roads and Storm Water Task Team programme is aimed at empow- Water Sub-group vehicles to drive job creation. Programme was launched in 2014, to develop the skills that enhance Business • SME Task Team Chamber keep business ering SMEs to position themselves Electricity Sub-group EASTERN CAPE BUSINESS 2020 22 One of the graduates, Yolanda and grow small businesses. • andTeam Energy Task Team owners up to date and informed as emerging exporters. • Electricity SMME Task Bukani, the Managing Director Now in its eighth phase, the programme is funded by the Eastern • and Logistics Task Team on a wide variety of topics affecting • Transport Special Projects Task Team of Black Excellence, saidBay. the Cape Development • Metro CollaborationCorporation Task Team (ECDC) and is geared towards business in Nelson Mandela Events programme empowered her developing sustainable SMEs through an enabling and creative enterprise • Trade and Development Investment Taskand Team Regular networking functions offer Enterprise Events at the Nelson Mandela Bay as an entrepreneur with many development programme, and also Exporter to facilitateDevelopment the effective combination Business Chamber keep business The Nelson Mandela Bay Business Chamber Enterprise Developcritical skills to successfully run of skills development, coaching and mentoring using lessons learnt from owners up to date and informed mentCAPE Programme was launched in 2014, to develop the skills that EASTERN BUSINESS 2019 her business. previous phases. 12
Enterprise Development and Exporter Development
Vision
Mission
Task Teams
Events
EASTERN CAPE BUSINESS 2020 EASTERN CAPE BUSINESS 2022/23
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“Entrepreneurship is a lonely journey and without the necessary support, it’s easy to give up. But through this programme, I had the privilege of networking with other entrepreneurs and we shared each other’s journeys and, in the process, created a solid networking platform. “The mentorship was the greatest source of inspiration because it has helped us to traverse the challenges of running a business and how to overcome them. From here onwards, I foresee exponential growth in my business and hopefully I will be able to create more employment for the Bay’s youth because currently, opportunities are quite few,” Bukani said. Events Events at the Nelson Mandela Bay Business Chamber keep business owners up to date and informed on a wide variety of topics affecting business in Nelson Mandela Bay. Regular networking functions offer business owners the chance to make new professional contacts. The Business Chamber’s flagship events – the Annual Business Chamber Golf Day, the Annual Ladies’ Breakfast and the Annual Banquet – are highlights on the Bay’s business and social calendar. Publications and marketing As another value-added service to members, the Nelson Mandela Bay Business Chamber provides members with a variety of publications across print and electronic platforms, including our quarterly printed member magazine, Infocom, and the printed annual Business Guide. Help desk In line with its vision of providing an enabling environment for business, the Business Chamber set up an Ease of Doing Business help desk in 2018. The help desk assists members through reducing red tape and engaging with the Nelson Mandela Bay Metro regarding these members’ obstacles in conducting business. The Business Chamber also engaged with the city’s leadership in 2018 towards the goal of establishing a One Stop Shop for existing and potential investors and will continue these engagements in this year (2022). Business Intelligence Desk The Chamber has an business intelligence desk which is aimed at providing business intelligence to different stakeholders. It helps with: • Access to business intelligence to support longer-term decisionmaking • Access to immediate intelligence to make day-to-day decisions • Dedicated research to develop and grow priority sectors • Project management
The Feather Market Centre has been repurposed as a modern conference centre in the heart of Gqeberha. Credit: Nelson Mandela Bay Tourism Certificates of Origin A Certificate of Origin is a document which states the origin of goods being exported and this “origin” is a key requirement for applying tariffs and other important criteria. As an accredited provider of this service, the Nelson Mandela Bay Business Chamber signs Certificates of Origin and offers exporters the opportunity to certify electronically through the ECOO system. Corporate Social Investment Because the majority of our membership’s workforce is based in the city, the region of Nelson Mandela Bay is the direct beneficiary of their Corporate Social Investment programmes – including skills development initiatives, bursaries and scholarships. Many of our member companies significantly contribute to alleviating poverty and specifically unemployment in the region of Nelson Mandela Bay through various initiatives purposed to grow the local economy. ■
CONTACT DETAILS Address: 200 Norvic Drive, Greenacres 6045 | Tel: +27 (0) 41 373 1122 | Fax: +27 (0) 41 373 1142 Email: info@nmbbusinesschamber.co.za | Website: www.nmbbusinesschamber.co.za
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EASTERN CAPE BUSINESS 2022/23
KEY SECTORS Overviews of the main economic sectors of the Eastern Cape Agriculture and agro-processing Renewable energy Oceans economy Tourism and film Manufacturing general Manufacturing automotive Education Banking Development finance and SMME support
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The film industry is a huge potential growth area for the Eastern Cape. The ECDC invested to support the filming of the popular TV series Survivor: Immunity Island, with the spectacular scenery of the Wild Coast as a backdrop. Season 8 was filmed in 2020 and Season 9 returned to the province for filming in January and February of 2022.
OVERVIEW
Agriculture and agro-processing Managing water supplies is crucial for citrus growers. SECTOR INSIGHT African Port Logistics and Infrastructure is investing R300-million at the Coega SEZ.
Citrus fruits have been cultivated in the Sundays River Valley for decades. Credit: Sundays River Citrus Company
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ooking for fruits and new cultivars that can stand up to periods of dry weather is one of the ways that the Eastern Cape’s citrus farmers are tackling climate change. The Riverside Kat River Farm was purchased by the Lona Group in 2012 and has recently started expanding production of Orri mandarins, a fruit that was developed in Israel. The late-ripening tree is hardy and resistant to several diseases. The Lona Group has a national footprint and produces approximately 14 000 tons of citrus annually. The Kat River is a tributary of the Great Fish River. The Sundays River Valley is South Africa’s biggest citrus producer from a defined area. The valley’s harvest in 2021 was 30.5-million cartons and this is anticipated to increase to 40-million by 2026. The province as a whole is the country’s second-largest cultivator of citrus. The Sundays River Valley irrigation scheme was started in 1920s. Darlington Dam (also known as Lake Mentz) was built on the river and a series of canals were constructed to supply water to farms from Kirkwood at the upper end of the valley to Addo. More than 4 000 people are employed in citrus in the Sundays River area, with that figure more than doubling in the picking and packing season. Further west, there is about 6 600ha of land under citrus in the Gamtoos Valley, which exports about nine-million cartons every year. More than 100 farmers are dependent on the Kouga Dam for water in this region, but the dam has recorded consistently low levels in recent years and has to supply the towns of Hankey and Patensie and the Nelson Mandela Bay metro.
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The provincial government put in place various relief measures for farmers during the Covid-19 outbreak. A sum of R417-million was invested in 107 agricultural initiatives in various value chains, including production in grain, red meat, citrus fruit, macadamia, poultry and cannabis. Small-scale farmers received infrastructure support to the value of R160.5-million. Getting small-scale farmers connected to agro-processing value chains is a major goal for agricultural policy-makers. This lies behind the creation of the Wild Coast Special Economic Zone (SEZ) near Mthatha. The 5 000ha Ncora Irrigation Scheme is seen as a model for the SEZ, which has attracted interest from AngloGold Ashanti and Exxaro. The Eastern Cape Department of Rural Development and Agrarian Reform (DRDAR) has several programmes to support smallscale farmers. The Eastern Cape Development Corporation (ECDC) supports agro-processing through loans and equity arrangements: projects that have received financial support include aquaculture, the production of dietary fibre from pineapples and bamboo products. The rich natural grasslands of the Eastern Cape have the
Coega Dairy is one of the Eastern Cape’s largest agro-processing facilities. Credit: Coega Development Corporation potential to produce high-value organic meat, a product that is increasingly popular in health-conscious international markets. There are about 70 000 people employed on commercial farms across the Eastern Cape, with a further 436 000 people dependent on smaller farms, mostly in the east. The Magwa-Majola Tea Estate is making some progress towards rehabilitation, with the support of the provincial government. Bulk sales for 2021 generated R18.5-million and plans are underway to commercialise and diversify production at the estate to improve sustainability. The National Woolgrowers’ Association of SA (NWGA), with a membership base of 4 500 commercial and 20 000 communal members, is based in Gqeberha, as is Cape Wool SA. The Eastern Cape provides approximately a quarter of South Africa’s milk and the industry is further expanding as producers are favouring high-rainfall coastal areas such as the Tsitsikamma region. South Africa produces about 54% of the world’s mohair and Gqeberha is the mohair capital of the world. Farms around the small towns that dot the open plains south of Graaff-Reinet, Aberdeen, Somerset East, Jansenville and Willowmore, routinely produce nearly half of South Africa’s production. The office of the South African Mohair Growers Association (SAMGA) is in Jansenville. Grootfontein College of Agriculture, the only tertiary educational institute in the country to offer a programme aimed at Angora goat farming and mohair production, is in Middelburg. Processing of mohair takes place in Kariega, Gqeberha and Ntabozuko (Berlin) outside East London. The mohair value chain includes brokers, buyers, processors, spinners, manufacturers and retailers. The SAMIL company has divisions all along the value chain. The Stucken group controls Mohair Spinners South Africa, Hinterveld (a mill) and the processing company Gubb & Inggs in Kariega. Ouma Rusks are still made in Molteno where they were invented.
Cabdbury Chocolates operates a big site across the lake from the Nelson Mandela Stadium in Gqeberha and Nestlé makes 11 kinds of chocolate at its factory in East London. The Sasko mill in Gqeberha is the province’s only big milling plant. Deciduous fruits such as apples, pears and apricots are grown primarily in the Langkloof Valley. Another crop in which the Eastern Cape leads national production is chicor y. The province’s pineapple crop is grown in the same part of the Sunshine Coast that produces chicory. The Eastern Cape holds 21% of the country’s cattle (about 3.2-million), 28% of its sheep (seven-million) and 46% of its goats, making it the largest livestock province by a large margin. Coca- Cola Sabco and SAB’s Ibhayi brewery are the major beverage manufacturers in Gqeberha and Distell has a bottling plant in the city. Sovereign Foods in Kariega is the country’s fourth-biggest producer of poultry. ■
ONLINE RESOURCES Citrus Growers’ Association of Southern Africa: www.cga.co.za Eastern Cape Rural Development Agency (ECRDA): www.ecrda.co.za Milk Producers Organisation: www.mpo.co.za South African Mohair Growers Association (SAMGA): www.angoras.co.za
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The Responsible Mohair Standard has restored trust South African mohair is once again popular with global fashion brands.
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he mohair industry has embraced the Responsible Mohair Standard as we are all aware that the consumer of today is rightfully far more conscious, not only of the impact of their purchases on the environment, but also the impact their purchases have on the people producing the goods. The Responsible Mohair Standard is all-inclusive and is very specific as to its requirements in respect of the environment and welfare of the animals and all individuals employed in the production of mohair products. There is no doubt that having Samil’s manufacturing operations certified under the Responsible Mohair Standard has opened new opportunities for trade throughout the world. However, the dynamic team at Samil feels compelled to ensure that not just the Samil manufacturing operations but all mohair operations owned or run in partnership with Samil, must also be RMS certified. Samil therefore embarked on a concerted drive to have all the Angora goat farms which are either owned or run in partnership with Samil Farming were also certified as RMS. This was no mean task as there are more than 30 farming operations in the Samil Farming portfolio in and around the Karoo region. However, the Samil Farming Manager, Andries Coetsee, and his very able assistant, Nienke Scholtz, embraced the challenge and Samil is proud to announce that, as of the end of August 2021, all Samil mohair operations are proudly RMS certified.
Products stored and handled include fish, poultry, meat, fruit, vegetables and dairy.
Through the determined efforts of Mohair South Africa, in conjunction with The Textile Exchange, in ensuring the development of the Responsible Mohair Standard, the mohair industry has been able to regain the trust, not only of the big fashion brands, but also 6 Cold storage facilities of the world. inclearly SA &beNamibia This can seen in the record mohair prices currently being achieved as brands the world over are scrambling to reintroduce RMScertified mohair articles into their product ranges. The knock-on effect is that jobs that had previously been in jeopardy are now secured and, due to the new-found appetite for mohair, more jobs have been created.
r the last 50 years we’ve become Africa’s leading cold and Namibia. The benefits of RMS certification We have multiple quality accreditations and are containere operation by being just as committed to your product After the PETA exposé in 2018, the South African mohair industry are. friendly with de - stuffing and palletisation offerings. We also became a pariah and many of the top fashion brands vowed to no ry second of the Every day products. of the year. perfect provide bonded warehousing and blast freezing at selected longer useday. mohair in their ThisWith put nearly 30 000 people iance, accountability and efficiency. Andand a cool at risk of being unable to earn a living feedattitude, their families. facilities as well as local container door-to-door transport and rse. logistics solutions. two quayside and four inland operations offer over Put your goods in our care: visit www.ccslogistics.co.za, 0 metric tons of multi-temperature warehousing in SA call +27 87 350 7350 or email customerservice@ccslogistics.co.za AFRICAN BUSINESS 2022 68 SOUTH | www.opportunityonline.co.za 42 EASTERN CAPE BUSINESS 2022/23 26
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Sharing Africa’s beauty with the world SAMIL produces and processes mohair, the noble fibre.
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outh African Mohair Industries Limited (SAMIL) is the link between mohair producers, processors and consumers. Our vision is to be an innovative South African company specialising in the production and processing of natural fibres, as well as speciality spun yarns. Mohair, the fleece of the Angora goat, is: the noble fibre, known as the diamond fibre lustrous, resilient and offers exceptional colour reflection one of the world’s most beautiful sustainable natural fibres a symbol of luxury and exclusivity.
African Expressions Our local brand African Expressions was born of the desire to share Africa’s natural beauty with the rest of the world. Through our unique range of yarns, we express the essence of that which makes Africa magical. Our network of local farmers, who farm in optimal Angora goat conditions, breed stock which bear excellent fibres. This ensures that our yarns are naturally soft to the touch, easy to knit and luxuriously versatile. SAMIL divisions Farming: SAMIL Farming was established with the primary objective of stabilising and possibly increasing mohair supply to the processors. Combing: SAMIL Natural Fibres Combing is in Berlin, outside East London in the Eastern Cape. As mohair processing has decreased in other parts of the world, SAMIL Combing has become one of the world’s leading processors. Unlike many processing plants SAMIL Combing focusses on and is committed to processing only mohair. Trading: Through a strong support base of affiliated companies, partners and agents, SAMIL has established strong connections throughout the world for the purchase and sale of raw materials and finished goods. South Africa processes in excess of 80% of the world’s mohair production. The advantage of having both top-making and spinning operations in South Africa, as well as access to raw material produced within the company, is that SAMIL is able to offer lots guaranteed from origin, a rare luxury in today’s business environment. Spinning and dyeing: SAMIL Spinning is a global manufacturer of outstanding quality mohair yarns, producing a wide and exclusive range of mohair and mohair blended fancy and fine-spun yarns in both fine-count and coarser varieties. We are internationally renowned for our superior product range and cater for the hand knitting, machine knitting, weaving, hosiery and decor markets. Although we specialise in pure mohair, we also blend mohair with a range of other natural and man-made fibres. Yarns can be custom dyed to any shade at SAMIL’s state-of-the-art dye house. Genetic research: The latest venture under the SAMIL umbrella is the research project called ANGELA which aims to enhance Angora goats and the mohair kidding rates to the improvement of the different hair qualities. The project will make available its results to all in the mohair community. Contact details Tel: +27 41 486 2430 | Email: yarns@samil.co.za | Website: www.samil.co.za
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OVERVIEW
Renewable energy Investment in solar and wind projects is ramping up. SECTOR INSIGHT Zero-carbon methane is to be made at Humansdorp.
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Credit: BTE Renewables
n addition to leading the way in attracting wind power projects, the Eastern Cape is making good progress in trying to ensure that the community trusts that arise from these and other renewable energy projects actively benefit communities. According to the South African Wind Energy Association (SAWEA), 16 wind projects were secured for the province in the course of the first four windows of bidding of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). As of the middle of 2020, the value of the projects was estimated at nearly R20-billion with R4.6-billion committed to communities living and working near wind projects. From 2017, SAWEA started running workshops for community trusts, municipal officials responsible for economic development, the national IPP office and wind farm representatives. Of the R4.6-billion mentioned above, some 42% was allocated to skills development and educational programmes. Among the skills identified as needing to be enhanced were governance, fiduciary oversight and the ability to critically assess development projects. As a coastal province, the Eastern Cape has obvious advantages, but the availability of wind is not the only factor. As SAWEA notes, “Wind farms are constructed according to the quality of the wind resource and ease of connection to the national grid.” Both Cookhouse and Stormberg have been listed as Energy Development Zones which means that they are one of the planned national transmission corridors, allowing for direct access to the grid for wind farms in these areas. South Africa’s National Development Plan (NDP) requires 20 000MW of renewable energy by 2030 and wind power technology, together with solar photovoltaic, are the two primary methods that are being deployed in pursuit of that target. More than half the wind farm projects so far approved have been allocated to the province. The Kouga area west of Jeffreys Bay and the Cookhouse/Bedford area about 95km north-west of Makhanda (Grahamstown) represent two wind power hubs, with a collective capacity of 1 185MW.
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In May 2021 it was announced that the 123MW Golden Valley Wind Energy Facility near Cookhouse south of Cradock in the Sarah Baartman District Municipality had reached commercial operations. This means that the energy requirements of about 120 000 households will be met. Just a few kilometres east of Cookhouse there are a further two wind farms, both awarded to Enel Green Power (EGP) in the fourth round of the REIPPPP. The Nxuba and Nojoli wind farms will respectively produce 140MW and 88MW and represent what might be called Enel’s Eastern Cape mountain area investment. On the coast they have built wind farms at Oyster Bay and Gibson Bay, west of the 138MW Jeffreys Bay Wind Farm, which is run by Globeleq and was one of the country’s first big wind energy facilities. The Provincial Government of the Eastern Cape is collaborating with the National Department of Employment and Labour to train young people in digital technology and solar energy. The Youth Digital eXponential ( YDx) Project is funded by the Unemployment Insurance Fund and is to be implemented by the South African Digital Content Organisation. As of February 2022, 500 young people were participating.
OVERVIEW
Green power Humansdorp could become the site of a plant that produces e-methanol from green hydrogen and gas created from locallysourced biomass. Three companies have signed an agreement to do a feasibility study: ENERTRAG South Africa, Earth & Wire and 24Solutions. The abundant wind and solar resources of the area would create the renewable energy to form the green hydrogen. Green hydrogen qualifies as such if the process to make it used only renewables. All of the electricity produced by renewable energy facilities would be used by the electrolyser (for the green hydrogen), desalination and e-methanol plants. ENERTRAG’s German parent has considerable experience in innovation and is working with Sasol on aviation fuel alternatives. In 2011 it opened the world’s first hybrid wind to hydrogen power plant. Earth & Wire has signed agreements across South Africa with landowners on 400 000ha of land which the company intends using to build renewable energy facilities. The short-term focus is on wind and solar projects close to completion in Mpumalanga, Gauteng and the Eastern Cape. Green hydrogen is very much the flavour of the month, in the aftermath of the negotiations at the COP26 conference. The Coega SEZ has been chosen by Hive Hydrogen SA as the location of a Green Hydrogen project which will be fully operational by 2026. The project will see a green ammonia plant constructed, valued at approximately $4.6-billion. The main development partners are BuiltAfrica and Hive Energy of the UK who have formed
Hive Hydrogen SA but various other partners are involved. Local salt manufacturer Cerebos will supply desalinated water to the project. The hydrogen will be separated from the oxygen by an electrolyser, and hydrogen and nitrogen will be combined to form green ammonia which will be stored in liquid form at a tank at the Port of Ngqura, from where it can be exported around the world. Gas company Afrox is another partner, although there is no intention currently to convert the oxygen to pharmaceuticalgrade product as that market is currently well served. The plant will have its own dedicated power supply. Another renewable energy investor in the Coega SEZ is Seraphim Solar Cell Manufacturing that is investing R362-million to increase the local content of its solar value chain. ■
The SAB Ibhayi brewery in Gqeberha is getting power from the sun. Credit: SOLA
OVERVIEW
Oceans economy The Eastern Cape’s long coastline has enormous potential.
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SECTOR INSIGHT he Coega Aquaculture Development Zone (ADZ) was launched in 2020. It is intended to be a catalyst for unThe Ocean Sciences Campus locking the Eastern Cape’s aquaculture value chain and is is Nelson Mandela expected to be an enabler for job creation. University’s newest. The 100-hectare ADZ is located in Zone 10 of the Coega Special Economic Zone (Coega SEZ) and the R206-million first phase created 500 construction jobs. The Eastern Cape Development Corporation (ECDC) expects it to create a further 5 600 operational jobs. The Oceans Economy is seen as a previously untapped resource where enormous progress can be made in areas such as maritime repair and maintenance (via the province’s three ports), support for oil and gas exploration and paying more attention to fishing and aquaculture. An Oceans Economy Master Plan has been created and so far, 73 co-operatives have been awarded 15-year licences by the National Department of Forestry, Fisheries and the Environment (DFFE). The Coega Aquaculture Development Several cluster development programmes aim to develop Zone. Credit: CDC specific industries by bringing together expertise and logistical support. Marine manufacturing is the focus of the Mandela Bay export terminal at the Port of Ngqura. Composites Cluster (MBCC). With funding from the Eastern Cape This follows a decision by Transnet to Department of Economic Development, Environmental Affairs and move the fuel tanks and manganese Tourism (DEDEAT) and the National Department of Trade, Industry and ore away from the Port of Gqeberha, Competition (dtic), the MBCC targets skills development, innovation in which could unlock enormous value the field of composites and improving the value chain. in terms of creating a waterfront Although both the Coega SEZ and the East London Industrial attractive to tourists. This area could Development Zone (ELIDZ) have programmes to attract companies potentially link with the city’s major in a wide range of sectors (Coega has 14 distinct business zones), greenbelt, otherwise known as the developments in the Oceans Economy and the oil and gas sector are Baakens River Valley. showing the greatest promise. The South Africa International Ports are vital to the functioning of the Oceans Economy. Transnet has Maritime Institute (SAIMI) aims to budgeted R1-billion to establish boat-building and ship-repair facilities at develop the contribution of the the Port of East London as well as a Maritime Training College as part of maritime sector to the economy by Operation Phakisa, the national programme to fast-track key projects. coordinating education, training and Transnet has appointed the Coega Development Corporation (CDC) research with partner institutions. The as the implementing agent for the creation of a R3.4-billion manganese Ocean Sciences Campus is Nelson ONLINE RESOURCES Mandela University’s newest campus Coega SEZ: www.coega.co.za and is a hub for transdisciplinary, East London IDZ: www.elidz.co.za post-graduate ocean sciences Ocean Sciences Campus (NMU): www.oceansciences.mandela.ac.za research, teaching, innovation and South African International Maritime Institute: www.saimi.co.za engagement. ■ EASTERN CAPE BUSINESS 2022/23
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OVERVIEW
Tourism and film The Covid-19 fourth wave badly dented hospitality’s recovery. SECTOR INSIGHT A major golf tournament attracted a host of sponsors.
The final shot. Dean Burmester won the South African PGA Championship at St Francis Links. Credit: Sandy Coffey
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he exciting win by Dean Burmester in the South African PGA Championship at St Francis Links should have been a shot in the arm for Eastern Cape tourism leading into the high summer of 2020. Instead, it was shots in the arms for Covid patients as the fourth wave descended on South Africa within days of the highly successful event, condemning many tourist establishments to more months of little or no income. Domestic tourism continued but the UK’s decision to put South Africa on a “no-fly” list had drastic consequences. Small crowds were allowed to watch the golf tournament, which was presented by the PGA of South Africa in association with St Francis Links and the Eastern Cape Parks and Tourism Agency (ECPTA). Other sponsors and supporters included Dirk Ellis Motors, Cape St Francis Resorts, the Sunshine Tour, Allesverloren Wines and SPAR. This indicated how important golf tourism might be in the provincial mix. Infrastructure upgrades are ongoing at several tourism sites run by the ECPTA: the National Department of Tourism is funding the Interpretation Centre at Bavianskloof (a World Heritage Site) in the amount of R42-million; a further R9-million will be spent on a hiking trail; the National Department of Forestry, Fisheries and the Environment (DFFE) will spend R45-million on the chalets at Cape Morgan. Work has been completed on the Silaka Nature reserve in Port St Johns at a cost of R11-million, another DFFE project. The ECPTA is tracking and profiling tourists’ needs and their perception about the province. The
ONLINE RESOURCES Eastern Cape Parks and Tourism Agency: www.visiteasterncape.co.za Mandela Bay Development Agency: www.mbda.co.za
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film industry has great potential for growth. The ECDC invested to support the filming on the Wild Coast of the popular TV series Survivor: Immunity Island, which brought excellent returns in terms of finance and exposure. The interior of the Eastern Cape is home to several highend private game reserves such as Shamwari, Mount Camdeboo and Kariega Game Reserve. Some luxury game lodges are located within national parks, such as the Gorah Elephant Camp, which is run by Hunter Hotels and forms part of the Addo Elephant National Park. Premier Hotels has two hotels in East London, the Mpanga Private Game Reserve and it manages the East London International Convention Centre. The Radisson Blu in Port Elizabeth offers five-star luxury overlooking Pollock Beach. Tsogo Sun has five Eastern Cape properties. The Courtyard Hotel, City Lodge Hotel and Road Lodge are close to one another on Port Elizabeth’s beachfront and allow the group to cater to three distinct markets with a total of 442 rooms. East London has a Road Lodge. Sun International runs the Wild Coast Sun and the five-star Boardwalk Casino and Entertainment World in Port Elizabeth. ■ EASTERN CAPE BUSINESS 2022/23
OVERVIEW
Manufacturing general Aspen is making vaccines for Africa. SECTOR INSIGHT Montego Pet Nutrition is Graaff-Reinet’s biggest employer.
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he Aspen Pharmacare facility in Gqeberha will make hundreds of millions of doses of the Johnson & Johnson Covid-19 vaccine for South Africa and Africa. A consortium of development finance organisations, including the World Bank’s International Finance Corporation, made €600-million in financing available to the South African company in the course of 2021 to assist it in ramping up production of the vaccines. By 2022, the facility should be making about 500-million doses annually. Aspen’s earlier investment of R3.3-billion to scale up production for vaccines for Africa created 1 775 jobs, of which 52% went to women. The provincial government aims for more diversification in manufacturing and is targeting sectors where the province already has a competitive advantage (such as wool and mohair), are labour intensive, will have a broad impact and have low barriers for SMME entry. A fibre-processing plant to spin wool and mohair fibre into yarn is planned, as is a textile mill to focus on cotton, poly-cotton and acrylic fabric. The latter is planned for the IDZ in East London, which is already home to Da Gama Textiles, whose factory has the capacity to produce 45-million square metres of fabric per annum. Da Gama makes the popular and distinctive shweshwe fabric, using its own unique printing process. Several cluster development programmes aim to develop specific industries by bringing together expertise and logistical support. A NonAutomotive Manufacturing (NAM) Cluster concentrates on training, supplier development, energy efficiencies and developing new markets. Swedish concern Fagerhult Group has entered the South African market via an acquisition of the factory of Port Elizabeth’s Lighting Innovations, and the
ONLINE RESOURCES Coega Development Corporation: www.coega.co.za East London Industrial Development Zone: www.elidz.co.za Eastern Cape Development Corporation: www.ecdc.co.za
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two subsidiary companies Arrow Lighting and Beacon Lighting. Montego Pet Nutrition, Graaff-Reinet’s biggest private employer, has recently installed an impressive array of solar panels on the roof of its facility (pictured). More than 200 staff members work in the Karoo town’s factory. First National Battery, a Metair Group company, has one factory at Fort Jackson and two factories in East London. Mpact runs two corrugated packaging convertor facilities in the Eastern Cape, at Deal Party in Port Elizabeth and Gately Township, East London. Bodene, a subsidiary of Fresenius Kabi, makes intravenous medicine in Port Elizabeth. East London hosts Johnson & Johnson’s finance, operations and research and development divisions. The Eastern Cape’s two Special Economic Zones play an important role in attracting investors to the province. Located in East London near of the port and at the deepwater port of Ngqura 20km north of Port Elizabeth, the East London Industrial Development Zone (ELIDZ) and the Coega SEZ provide the infrastructure that will allow the region to expand and diversify its economy. ■
OVERVIEW
Manufacturing automotive Volkswagen has celebrated 70 years of making cars in South Africa. SECTOR INSIGHT A rail corridor to Gauteng would boost the automotive sector.
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olkswagen celebrated 70 years of making cars in South Africa in 2021. In August of that year, the Kariega plant of Volkswagen started exporting the newest version of the Polo vehicle. In 2019, a new production record was achieved when 161 954 vehicles were made, contributing materially to the overall total of four-million that was achieved for the brand towards the end of 2020. The 520 963m² Kariega facility is one of four plants worldwide that makes right-hand drive Polos but the only one in the world that makes the Polo GTI. Ford Motor Company makes engines (pictured) for the Ford Ranger pickup and Everest SUV at its Struandale plant and it has committed to invest R600-million for modernising and growing its local operations. This is a part of a bigger investment which includes the vehicle assembly operations in Gauteng. Ford has initiated discussions about the feasibility of developing a sophisticated rail corridor between Gauteng and the Eastern Cape. The company wants to send parts to Pretoria and export cars through the Port of Gqeberha. The Coega Special Economic Zone (SEZ) is host to the first phase of a major investment by Chinese automotive manufacturer Beijing International Automotive Corporation (BAIC). The total investment by BAIC will total R11-billion and significantly add to the province’s already strong reputation for excellence in the automotive sector. Both
ONLINE RESOURCES Automotive Industry Development Centre: www.aidc.co.za Coega Development Corporation: www.coega.co.za Eastern Cape Development Corporation: www.ecdc.co.za
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Coega SEZ and the East London Industrial Development Zone (ELIDZ) have areas dedicated to automotive and automotive components manufacture. Mercedes-Benz South Africa’s new C-Class project (W206) has sparked several other related investments, which collectively will create 2 078 new jobs over two years. Most of this is happening in the ELIDZ, which has made a commitment to localising the 2nd- and 3rd-tier automotive components that are not currently in South Africa. The production of the C-Class vehicle is a technological marvel and the plant regularly wins international awards for quality. The installation of a new sequencing centre, to be installed by Automotive Logistics Solutions (an AHI company), will make the assembly line even more efficient. Home-grown manufacturer of powertrain and catalytic converter assembly systems, Jendamark, exports to 18 countries. Continental Tyre South Africa is producing a 19-inch tyre for the first time at its New Brighton facility in Port Elizabeth. Isuzu SA has completed its consolidation project, with truck and bakkie manufacturing now taking place at its new headquarters in Struandale, Port Elizabeth. ■ EASTERN CAPE BUSINESS 2022/23
OVERVIEW
Education and training Nelson Mandela University has a new Medical School. SECTOR INSIGHT A science centre has been built at Cofimvaba.
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elson Mandela University’s Missionvale Campus is now registered to offer the MBChB (Bachelor of Medicine and Bachelor of Surgery) qualification. This brings to 10 the number of medical schools in South Africa and is the province’s second, with Walter Sisulu University being the other academic medical facility in the province. The registration by the South African Qualifications Authority (SAQA) was a lengthy process, covering contracts and agreements with various other bodies, the curriculum, infrastructure, equipment and staff requirements. Two new cerebral palsy centres have been established, at the Nelson Mandela Academic Hospital and the Cecilia Makiwane Hospital. A R50-million science centre, named after Albertina Nontsikelelo Sisulu, has been built in Cofimvaba. The centre will enhance the teaching of maths, science and technology and further widen career choices of students. The national Accelerated School Infrastructure Delivery Initiative (ASIDI) allocated 298 schools to the province and, as of February 2022, 168 schools (56%) had been completed. St George’s Preparatory School, founded in 1936 and located opposite the famous cricket ground in Gqeberha, has become the latest addition to the private Curro group of schools. The acquisition doubles Curro’s presence in the province, with the centrally-based preparatory school joining Westbrook Curro, which is located in the Westbrook Estate off the old Cape Road in the city’s western suburbs. The Eastern Cape has eight Technical and Vocational Education Training (TVET) colleges, most of which have more than one campus: Buffalo City, Port Elizabeth, Lovedale, King Hintsa, Ingwe, King Sabata Dalinyebo, Ikhala and Eastcape Midlands College. An amount of R569million will be spent on building four new TVET campuses to expand
ONLINE RESOURCES Eastern Cape Department of Education: www.ecdoe.gov.za Technology Innovation Agency: www.tia.org.za
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the accessibility of these colleges. These new facilities are two new Ikhala TVET College campuses (Sterkspruit and Maletswai), a new Eastcape Midlands campus in Graaff-Reinet and a new Ingwe TVET college campus in Ngqungqushe (Lusikisiki). The National Department of Higher Education and Training has been investing heavily in student accommodation in the province. This programme has seen an additional 2 000 beds added at the Nelson Mandela University in Gqeberha, 2 047 student beds at the University of Fort Hare, 3 000 beds at Walter Sisulu University and 1 000 beds at King Hintsa TVET College. Rhodes University has a strong reputation for research, which has been enhanced by the addition of the Biotechnology Innovation Centre. The University of Fort Hare is leading three innovative studies into biogas, including a project investigating compressed biogas for public transport. The South African National Energy Development Institute (SANEDI) is working with Fort Hare on biodigesters for households. Walter Sisulu University (WSU) and the University of South Africa (Unisa) offer vocational training (diplomas) and academic programmes (degrees). ■
OVERVIEW
Banking and financial services Digital services are expanding and improving. SECTOR INSIGHT Two mutual banking licences have been approved.
Credit: Walmer Park Shopping Centre
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he growing use of smartphones is creating new opportunities for banks and other financial service providers to bring banking services to a bigger proportion of the population. A recent addition to the market is Standard Bank’s low-cost MyMo account. With free electronic transactions, unlimited card swipes and a low monthly fee, the MyMo account is ideal for low-income earners, micro-entrepreneurs and the poor. Customers do not have to visit branches to sign up for the account. They can take a selfie on the mobile app. Standard Bank, which is Africa’s biggest bank, made its start in Gqeberha. Entrepreneur John Paterson launched Standard Bank in London in 1862 and opened its first branch in what was then Port Elizabeth in 1863. The initial spark was the discovery of diamonds in Kimberley but gold prospectors soon needed financing too, so 1866 saw the opening of a branch in Johannesburg. The bank continues to have a presence in Govan Mbeki Avenue. Two new licences for mutual banking have been approved nationally, despite the collapse of VBS, a Limpopo-based mutual bank. The nature of the South African market lends itself to mutual banking. Both the Young Women in Business Network (YWBN) and Bank Zero will use the mutual model. Naspers Foundry is one of several investment funds looking for opportunities in the financial sector. Insurance technology is of particular interest, together with credit services and payment systems.
ONLINE RESOURCES Auditor-General of South Africa: www.agsa.co.za Financial Sector Conduct Authority: www.fsca.co.za South African Institute for Chartered Accountants: www.saica.co.za
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Capital Appreciation, which is partowned by the Public Investment Corporation, is already invested in a software developer, a credit card payment terminal provider and has R500-million available for further investments. African Rainbow Capital has a stake in the investment company and is the owner of TymeBank, which received a banking licence in 2017 and is expanding rapidly. Discovery Bank officially launched in March 2019 and is experiencing rapid growth with deposits of R3.7-billion. Discovery Bank is applying the behavioural model it uses in its health business to reward good financial behaviour. Another relatively new bank is Capitec. Investment holding company PSG has reduced its holding in Capitec Bank from 32% to 4%, earning about R4-billion by selling those shares. The financial and business services sector is responsible of 19.2% of the Eastern Cape’s Gross Domestic Product (StatsSA). The sector provides employment for 141 000 people. Agricultural finance is an important factor in the Eastern Cape. Production loans, vehicle financing and revolving credit plans all play an important role in keeping farmers and agroprocessors in business. ■ EASTERN CAPE BUSINESS 2022/23
OVERVIEW
Development finance and SMME support Wild Coast farmers are supplying new markets.
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ueens Greens, a small farming company, has recently expanded into new markets with the support of the Wild Coast Sun. A new borehole and irrigation system (pictured) has been provided to Queens Greens, enabling them to go beyond being a supplier to the resort and to start supplying local markets with fresh produce. The Wild Coast Sun’s Enterprise Development Programme has trained and supported seven local SMMEs, which employ a total of 42 people. The resort aims to achieve 90% procurement of all goods and services from BBBEE level 1 suppliers within the next five years. In early 2022, the Wild Coast Sun hosted a two-day SMME Business and Networking Conference which was attended by 150 people. Among the bodies represented were the Small Enterprise Development Agency (Seda), the Eastern Cape Department of Economic Development, Environmental Affairs and Tourism (DEDEAT), the Eastern Cape Gambling Board, the Winnie MadikizelaMandela Local Municipality and the Small Enterprise Finance Agency (Sefa), as well as several SMME financing houses. Work is underway to refurbish several state-owned industrial parks. Not only will areas like the Dimbaza Industrial Park assist SMMEs with affordable space, the programme has so far created 379 jobs and involved 71 local SMMEs. Provincial government departments are encouraged to buy from SMMEs and the current administration had spent by December 2021 58% of its procurement budget (R24.3-billion) purchasing from local suppliers. The National Department of Small Business Development (DSBD) has a Shared Economic Infrastructure Facility, which is investing R34.7-million in support of Eastern Cape projects: the KwaNtozonke Product Market in King Sabata Dalindyebo Municipality and the Chris Hani Co-operative Development Centre in Chris Hani District. A further R1.9-million has been allocated to 141 informal and micro businesses in the Amathole and Joe Gqabi district municipalities. Volkswagen South Africa (VWSA) has a project called Ntinga (“to soar” in Xhosa) whereby suppliers receive training and are mentored for 18 months.
ONLINE RESOURCES Eastern Cape Development Corporation: www.ecdc.co.za Eastern Cape Rural Development Agency: www.ecrda.co.za
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SECTOR INSIGHT The upgrade of industrial parks is creating work.
Two of the Eastern Cape Development Corporation’s seven business units are devoted to small business: Development Finance and Enterprise Development. The ECDC has several financial products tailored to SMMEs. The ECDC and the Technology Innovation Agency (ITA) jointly run the TIA-ECD Innovation Seed Fund Programme, which aims to identify and cofund earlier stage technology innovation projects. Help Desks have been established to support small business in Port Elizabeth and East London. The Small Enterprise Development Agency is an agency of the DSBD which gives non-financial support to entrepreneurs through training, marketing and assistance in the writing of business plans. The Seda Technology Programme (Stp) helps potential businesses become trading entities. ■
FOCUS
Supporting Eastern Cape business The Eastern Cape Development Corporation boosts the local economy with targeted programmes. Services include: business networks; advisory support; business plan development; feasibility studies; due diligence; mentorship and coaching; quality management support; marketing support; intellectual property registration support and management; pre-commercialisation studies; skills development; information workshops and seminars. Participants in the Mdantsane Motor Mechanic Enterprise Development Programme received toolboxes to celebrate having their businesses registered.
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he Business Development Services Unit of the Eastern Cape Development Corporation (ECDC) forms the backbone of the enterprise development ecosystems which ensures the sustainability of business. Business Support The Business Support sub-unit provides non-financial pre-investment and post-investment support, ensuring that businesses are ready for finance, market ready and poised for long-term growth. Ongoing support is available through mentorships, market access opportunities as well as business and financial management advice. The unit offers both strategic and operational services to equip small businesses to perform to their full potential, with increased profitability and improved management processes that enhance their long-term viability. The Business Support sub-unit promotes a culture of entrepreneurship, improvement in business competitiveness and facilitates access to market and to education and training for SMMEs.
ECDC contact details Address: 1 Moore Street, Quigney, East London Tel: +27 43 704 5604 Email: info@ecdc.co.za Website: www.ecdc.co.za
Development Finance The Development Finance sub-unit manages the ECDC’s business finance product offering and assists enterprises gain access to finance. Through both short-term and long-term products, the ECDC has set itself apart as the financial service provider of choice for initiatives that bring a meaningful development impact. With an understanding of the historical lack of access of small-to-medium enterprises to finance, the ECDC uses adequate management capacity and business viability as key lending criteria. ECDC Access, the category name for short-term finance, offers products geared towards facilitating efficient cash flow management. “Access” denotes the values of flexibility, convenience, efficiency and transparency. ECDC Future, the category name for long-term finance, offers long-term debt finance vehicles, one covering commercial property and another dealing with equity finance. The ECDC’s business finance products are best suited to applications that facilitate job creation and/or retention, economic empowerment, value addition, rural/township development and increased export income. Any greenfield initiative that leads to expansion and rehabilitation will be eligible for application for finance. The ECDC aims to provide efficient client service for the entire duration of the contract term. Monthly account management and quarterly report-back visits will gauge the health of the business. ■
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Eastern Cape Provincial Government A guide to the Eastern Cape’s provincial government departments. Visit www.ecprov.gov.za Office of the Premier Premier: Oscar Mabuyane Office of the Premier Building, Independence Avenue, Bhisho 5605 Tel: +27 40 609 6644 | Fax: +27 86 681 9493 Website: www.ecprov.gov.za
Department of Public Works and Infrastructure MEC: Babalo Madikizela 5 Qasana Bldg, Independence Avenue, Bhisho 5605 Tel: 0800 864 951 | Website: www.ecdpw.gov.za Department of Rural Development and Agrarian Reform MEC: Nonkqubela Pieters Dukumbane Bldg, Independence Ave, Bhisho 5606 Tel: +27 40 602 5006 | Fax: +27 40 635 0604 Website: www.drdar.gov.za
Department of Cooperative Governance and Traditional Affairs MEC: Xolile Nqata Tyamzashe Bldg, Room 2124, 2nd Flr, Bhisho 5605 Tel: +27 40 609 5656/8 | Fax: +27 40 639 2163 Website: www.eccogta.gov.za
Department of Safety and Liaison MEC: Weziwe Tikana Gxothiwe Arches Building 7, Taylor St, King Williams Town 5601 Tel: +27 43 605 6800 | Fax: 086 558 0224 Website: www.ecprov.gov.za
Department of Economic Development, Environmental Affairs and Tourism MEC: Mlungisi Mvoko 2nd Flr, Beacon Hill, Hockley Cl, King Williams Town 5600 Tel: +27 43 605 7000 | Fax: +27 43 605 7303 Website: www.dedea.gov.za
Department of Social Development MEC: Siphokazi Mani-Lusithi Phalo Ave, 5th Flr, Dukumbana Building, Bisho 5605 Tel: +27 43 605 5419 | Fax: +27 43 605 5000 Website: www.ecdsd.gov.za
Department of Education MEC: Fundile Gade Steve Tshwete Education Bldg, Zwelitsha Zone 6, Zwelitsha 5608 Tel: +27 40 608 4200 | Fax: +27 40 608 4040 Website: www.ecdoe.gov.za
Department of Sports, Recreation, Arts and Culture MEC: Fezeka Nkomonye 5 Eales St, King Williams Town 5600 Tel: +27 43 604 4101 | Website: www.ecsrac.gov.za
Department of Health MEC: Nomakhosazana Meth Dukumbane Bldg, Independence Ave, Bhisho 5605 Tel: +27 40 608 1117 | Fax: +27 40 608 1118 Website: www.echealth.gov.za
Department of Transport MEC: Weziwe Tikana Gxothiwe Flemming St, Schornville, King Williams Town 5601 Tel: +27 43 604 7400 | Fax: 086 298 5598 Website: www.ectransport.gov.za
Department of Human Settlements MEC: Nonceba Kontsiwe 31-33 Phillip Frame Rd, Waverly Park, Chiselhurst, East London 5247 Tel: +27 43 711 9901/2/3 | Fax: +27 43 711 9797 Website: www.ecdhs.gov.za EASTERN CAPE BUSINESS 2022/23
Provincial Treasury MEC: Mlungisi Mvoko Provincial Treasury, Tyamzashe Bldg, Bhisho 5605 Tel: +27 40 353 9944 | Fax: +27 40 101 0731 Website: www.ectreasury.gov.za
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LISTING
Eastern Cape Local Government A guide to the Eastern Cape’s metropolitan, district and local municipalities. ALFRED NZO DISTRICT MUNICIPALITY Erf 1400, Ntsizwa Street, Mount Ayliff Tel: +27 39 254 5000 | Fax: +27 39 254 0343 Email: info@andm.gov.za Website: www.andm.gov.za Matatiele Local Municipality Tel: +27 39 737 8100 Fax: +27 39 737 3611 Website: www.matatiele.gov.za Ntabankulu Local Municipality Tel: +27 39 258 0056 Fax: +27 39 258 0173 Website: www.ntabankulu.gov.za Umzimvubu Local Municipality Tel: +27 39 255 8500 Fax: +27 39 255 0167 Website: www.umzimvubu.gov.za Winnie Madikizela-Mandela Local Municipality Tel: +27 39 251 0230 Fax: +27 39 251 0917 Website: www.mbizana.gov.za AMATHOLE DISTRICT MUNICIPALITY 3-33 Phillip Frame Road, Chiselhurst, Cambridge, East London Tel: +27 43 701 4000 | Fax: +27 43 742 0337 Email: info@amathole.gov.za Website: www.amathole.gov.za Amahlathi Local Municipality Tel: +27 43 683 5000 | Fax: +27 43 683 2970 Website: www.amahlathi.gov.za Great Kei Local Municipality Tel: +27 43 831 1028 | Fax: +27 43 831 1483 Website: www.greatkeilm.gov.za Mbashe Local Municipality Tel: +27 47 489 5800 | Fax: +27 47 489 5800 Website: www.mbhashemun.gov.za
Mnquma Local Municipality Tel: +27 47 401 2400 | Fax: +27 47 491 0195 Website: www.mnquma.gov.za Ngqushwa Local Municipality Tel: +27 40 673 3095 | Fax: +27 40 673 3771 Website: www.ngqushwamun.gov.za Raymond Mhlaba Local Municipality Tel: +27 46 645 7400 Fax: +27 46 645 2562 Website: www.raymondmhlaba.gov.za BUFFALO CITY METROPOLITAN MUNICIPALITY 117 Oxford Street, Cnr North and Oxford Streets, Trust Centre, East London Tel: +27 43 705 2000 | Fax: +27 43 743 1688 Website: www.buffalocity.gov.za CHRIS HANI DISTRICT MUNICIPALITY 15 Bells Road, Komani Tel: +27 45 808 4600 | Fax: +27 45 838 1556 Website: www.chrishanidm.gov.za Emalahleni Local Municipality Tel: +27 47 878 0020 | Fax: +27 47 878 0112 Website: www.emalahleni.gov.za Engcobo Local Municipality Tel: +27 47 548 5600 | Fax: +27 47 548 1078 Website: www.engcobolm.gov.za Enoch Mgijima Local Municipality Tel: +27 45 807 2606 Fax: +27 45 807 2637 Website: www.enochmgijima.org.za Intsika Yethu Local Municipality Tel: +27 47 874 8700 | Fax: +27 47 874 0010 Website: www.intsikayethu.gov.za
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EASTERN CAPE BUSINESS 2022/23
LISTING Inxuba Yethemba Local Municipality Tel: +27 48 801 5000 Fax: +27 48 881 1421 Website: www.iym.co.za Sakhisizwe Local Municipality Tel: +27 47 877 5200 Fax: +27 47 877 0000 Website: www.sakhisizwe.gov.za JOE GQABI DISTRICT MUNICIPALITY Cnr Cole and Graham Streets, Barkly East Tel: +27 45 979 3000 Fax: +27 45 971 0251 Website: www.jgdm.gov.za
Mhlontlo Local Municipality Tel: +27 47 553 7000 | Fax: +27 47 553 0189 Website: www.mhlontlolm.gov.za Nyandeni Local Municipality Tel: +27 47 555 5000 | Fax: +27 47 555 0202 Website: www.nyandenilm.gov.za Port St Johns Local Municipality Tel: +27 47 564 1207 Fax: +27 47 564 1206 Website: www.psjmunicipality.gov.za
Elundini Local Municipality Tel: +27 45 932 8100 | Fax: +27 45 932 1094 Website: www.elundini.org.za
SARAH BAARTMAN DISTRICT MUNICIPALITY 32 Govan Mbeki Avenue, Port Elizabeth Tel: +27 41 508 7111 Fax: +27 41 508 7000 Website: www.sarahbaartman.co.za
Senqu Local Municipality Tel: +27 51 603 1300 | Fax: +27 51 603 0445 Website: www.senqumunicipality.co.za
Blue Crane Route Local Municipality Tel: +27 49 807 5700 | Fax: +27 49 892 4319 Website: www.bcrm.gov.za
Walter Sisulu Local Municipality Tel: +27 51 653 1777 Fax: +27 51 653 0056 Website: www.wslm.gov.za
Dr Beyers Naude Local Municipality Tel: +27 49 807 5700 | Fax: +27 49 892 4319 Website: www.camdeboo.gov.za
NELSON MANDELA BAY METROPOLITAN MUNICIPALITY City Hall, Vuyisile Mini Square, Govan Mbeki Avenue, Nelson Mandela Bay Tel: +27 41 506 3208/9 Fax: +27 41 506 2422 Website: www.nelsonmandelabay.gov.za OR TAMBO DISTRICT MUNICIPALITY OR Tambo House, Nelson Mandela Drive, Myezo Park, Mthatha Tel: +27 47 501 6400 Fax: +27 47 532 6518 Website: www.ortambodm.gov.za Ingquza Hill Local Municipality Tel: +27 39 252 0131 Fax: +27 39 252 0699 Website: www.ihlm.gov.za King Sabata Dalindyebo Local Municipality Tel: +27 47 501 4000 | Fax: +27 47 531 3128 Website: www.ksd.gov.za
Kouga Local Municipality Tel: +27 42 200 2200 | Fax: +27 42 200 8606 Website: www.kouga.gov.za Kou-Kamma Local Municipality Tel: +27 42 288 7200 | Fax: +27 42 288 0797 Website: www.koukammamun.co.za Makana Local Municipality Tel: +27 46 603 6111 Fax: +27 46 622 9700 Website: www.makana.gov.za Ndlambe Local Municipality Tel: +27 46 624 1140 Fax: +27 46 624 2669 Website: www.ndlambe.gov.za Sundays River Valley Local Municipality Tel: +27 42 230 7700/0077 Fax: +27 42 230 1799 Website: www.srvm.gov.za
Coca-Cola Beverages South Africa is creating employment and stimulating economic growth Bizniz in a Box is building an ecosystem of viable micro-businesses. A number of small business owners in Mdantsane in the Eastern Cape are ready to take their ventures to the next level after they were selected to be part of the Bizniz in a Box (BiB) initiative which seeks to empower township and rural entrepreneurs as part of building a more inclusive economy. Entrepreneurs in and around the Mdantsane taxi rank have taken ownership of their containers which have been fully customised and fitted out with kitchens. The business owners also received tables, coolers and start-up stock, as well as dust coats, aprons and Covid-19 PPE. Coca-Cola Beverages South Africa (CCBSA) sees BiB as the ideal platform to support emerging and small businesses, particularly those run by young people and women. The BiB programme further offers the opportunity to learn business skills. Bizniz in a Box envisages an ecosystem of viable micro-businesses offering complementary products and services in township communities, alongside the local spaza shop, covering a range of services, from business centres providing Internet access, car washes, fast-food shops or mini bakeries.
Critical to growth Sakhumzi Ncapayi, the CCBSA District Manager, says, “We understand how critical the SMME sector is to our economic revival following the Covid-19 pandemic, and the important role small businesses will play in the future growth of South Africa and Africa.” Bizniz in a Box was first piloted in 2015 in the Free State. By the end of 2020, through Bizniz in a Box, CCBSA and its partners had trained 749 young entrepreneurs and helped 224 of them to take their businesses to the next level, creating 185 additional jobs by employing shop assistants. Beneficiary Siyamthanda Soxusa, 26, says of her fast foods take-away business, “Bizniz in a Box means so much to me because before I was working in a small container. I bought stock every day and ended with minimal profit. With this initiative, everything is convenient and I can see the growth in my business.” Buffalo City Metro spokesperson Samkelo Ngwenya said at the launch, “We are delighted that the Bizniz in a Box programme has reached Mdantsane and we believe that this empowerment initiative will lead to the transformation of not only this area, but the lives of our people.”
Top left: Siyamthanda Soxusa is seeing growth in her business. Bottom left: Anda Mabamba, 35, in front of fast food outlet Zoe’s Kitchen, which is now run as part of Bizniz in a Box. Right : Nolubabalo Katshwa, 50, is one of the beneficiaries of CCBSA’s Bizniz in a Box programme.
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