KwaZulu-Natal Business 2020/21 by Global Africa Network Media

2020/21 EDITION

KWAZULU-NATAL BUSINESS THE GUIDE TO BUSINESS AND INVESTMENT IN KWAZULU-NATAL PROVINCE

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DURBAN CHAMBER OF COMMERCE AND INDUSTRY NPC

BUY LOCAL INVEST LOCAL Let’s come together and heal as a nation. Let’s focus on Renewing, Restoring and Rebuilding successful partnerships and investment opportunities so we can get back to promoting our city as the ideal destination for business and pleasure to the rest of the world. Your support coupled with our world-class infrastructure, innovative business environment and ever evolving investment opportunities, means we can get back to ‘connecting continents’ in no time.

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Tel: +27 31 311 4227 Email: invest@durban.gov.za web: invest.durban

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Extensive first-world road, rail, sea and air

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The city of Durban (eThekwini Municipality) is South Africa’s second most important economic region

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Dube 0 TradePort 11 and King Shaka International1 Airport - 60year Master Plan - driving growth of aerotropolis, or airport city 0 01 00 1

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Rated in top 5 ‘Quality of Living’ cities in Africa and Middle East by Mercer Consulting in 2015 Named one of the New 7 Wonders Cities by the Swiss-based New 7 Wonders Foundation in 2014 1 01 00 1

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DURBAN CHAMBER DURBAN CHAMBER OF COMMERCE AND CHAMBER OFDURBAN COMMERCE AND INDUSTRY NPC OF COMMERCE INDUSTRY NPC AND INDUSTRY NPC

#InBusinessForABetterWorld 2

#InBusinessForABetterWorld #InBusinessForABetterWorld

WHO WE ARE AND WHAT WE AREWE ABOUT WHO ARE AND WHAT WE ARE ABOUT

The Durban Chamber of Commerce and Industry was established in 1856 and is one of the oldest and largest metropolitan chambers in Africa. As a business-based and member-focused organisation, weand work to protect and promote the interests The Durban Chamber of Commerce Industry was established in 1856 and is of the oldest and largest metropolitan Africa. As a business-based of theone eThekwini business community and tochambers facilitateinand promote economic growth member-focused organisation, we work to protect and promote the interests in theand region in partnership with key stakeholders. of the eThekwini business community and to facilitate and promote economic growth in the region in partnership with key stakeholders.

VISION

In Business for a Better World To beInrecognised a world-class Business foras a Better World business chamber and a united voice of business in the eThekwini Municipal and chamber beyond. and a united voice of To be recognised as a world-class area business business in the eThekwini Municipal area and beyond.

MISSION

To contribute towards creating a conducive economic and business environment contributeMunicipal towards creating a conducive economic business environment in theTo eThekwini area and beyond, as well as and providing services in the eThekwini arealarge and beyond, as well as providing services specifically relevant Municipal to small and businesses operating in the region. specifically relevant to small and large businesses operating in the region.

ANAN ORGANISATION ORGANISATIONOF OFGROWTH GROWTH The Durban Chamber represents leading multi-nationals, corporates,small, small, The Durban Chamber represents leading multi-nationals, large large corporates, medium and micro-sized enterprises (SMMEs) and start-ups in promoting inclusive medium and micro-sized enterprises (SMMEs) and start-ups in promoting inclusive and sustainable economic growth and development andbeyond. beyond. and sustainable economic growth and developmentin ineThekwini eThekwini and Join Join the Durban Chamber andand take advantage memberbenefits benefits the Durban Chamber take advantageofofour ourexclusive exclusive member and business-focused services grow yourbusiness. business. and business-focused services to to grow your ADVOCATING ADVOCATING AND AND INFLUENCING POLICY INFLUENCING POLICY DECISIONS THAT AFFECT THE DECISIONS THAT AFFECT THE INTERESTS OF BUSINESS INTERESTS OF BUSINESS

OFFERING BUSINESS OFFERING BUSINESS SUPPORT SERVICES SUPPORT SERVICES AND ADVICE AND ADVICE

PROVIDING BUSINESS PROVIDING BUSINESS INFORMATION RELEVANT INFORMATION RELEVANT TO BUSINESS TO BUSINESS

Legislation and By-laws

Business and Personal Credit Reports

Durban Chamber Online Newsletter

Business and Personal Credit Reports

Durban Chamber Online Newsletter

Business Regulations Marketing Analysis and Research

Networking CompanyOpportunities Registration

Dispute Resolution Policy Focus Weekly Update

Marketing Analysis and Research

Company Registration Workshops and Seminars

Policy Focus Weekly Update

Business Regulations

Networking Opportunities

Dispute Resolution

Workshops Seminars Businessand Consultation Business Consultation

Chamber Square, Lion Match, Office Park, 892 Umgeni Road Chamber Square, Lion Match, Durban, 4001

Office Park, 892 Umgeni Road Durban, 4001

www.durbanchamber.co.za 3

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Excellent service in your time of need matters to us. Metropolitan has been awarded the leader classification for the fourth year in a row by the South African Customer Satisfaction Index (SACSI). Furthermore, we have also been recognised by Ask Afrika as the 2019 Industry Winner in their Orange Index for Service Excellence. For your trust and continued partnership in helping us achieve what matters to you, we say thank you! Find out more at metropolitan.co.za Winner of multiple awards for service excellence.

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Petroleum Agency SA is a key player in a vital sector South Africa’s oil and gas exploration and production sector an excellent investment

As stated in the National Development Plan (NDP), the government’s intention is to “enable exploratory drilling to identify economically recoverable coal seam and shale gas reserves, while environmental investigations will continue to ascertain whether sustainable exploitation of these resources is possible. “If gas reserves are proven and environmental concerns alleviated, then development of these resources and gas-to power projects should be fast-tracked.” The plan also calls for the need to incorporate a greater share of gas in South Africa’s energy mix, through importing liquefied natural gas (LNG), using shale gas if reserves prove commercial, and developing infrastructure for the import of LNG, mainly for power production, over the short to medium term. Petroleum Agency SA plays an important role in developing South Africa’s gas market by attracting qualified and competent companies to explore for gas in the country, as well as monitoring and regulating their activities. In addition to ensuring operators always comply with the law, a major area of focus is increasing the inclusion of historically disadvantaged South African-owned entities in the upstream industry. South Africa needs large discoveries of indigenous gas as well as fair access to opportunities and social licence to develop a healthy gas market. Currently, natural gas supplies about just 3% of South Africa’s primary energy. A significant challenge facing the development of a major gas market in South Africa is the extreme dominance of coal as a primary energy source, and industry’s historic reliance on coalgenerated electricity.

A lack of extensive gas transport and reticulation infrastructure goes hand in hand with this, while other challenges include uncertainty about volumes of indigenous gas available to industry; security of supply; switching and conversion costs; gas pricing; and negativity around the ongoing use of fossil fuels. End users require certainty before committing, while explorers look for a guaranteed market. On a more positive note, opportunities for gas lie in the realisation of South Africa’s NDP and the Integrated Resource Plan (IRP). Both call for indigenous hydrocarbons – conventional and unconventional – and independent power production to play an increasing role in the nation’s energy mix. The national power utility also intends to replace coalfired power stations with gas-fired counterparts, in line with the vision of the NDP. The advent of gas-fired power stations will represent a ready, indigenous market for operators that make discoveries of gas in South Africa, ensuring it will be far easier to monetise smaller discoveries that may otherwise have remained undeveloped. As custodian, Petroleum Agency SA ensures that companies applying for gas rights are vetted to make sure they are financially qualified and technically capable. Applicants also need to have a good track record in terms of oil and gas exploration activity, as well as regard for the environment. This applies to both local and foreign companies. Oil and gas exploration requires enormous capital outlay and can represent a risk to workers, communities and the environment. Applicants are therefore required to prove their capabilities and safety record and must carry insurance for environmental rehabilitation.

Driving South Africa’s emerging gas sector while ensuring a well-regulated and responsible environment is a key mandate of Petroleum Agency SA, as is assisting operators with monetising smaller discoveries that may otherwise remain undeveloped, through advertising these opportunities to potential partners. OUR VISION A diverse upstream industry contributing to energy security through sustainable growth in exploration and development of oil and gas.

SOCIAL AND LABOUR PLANS In addition, all planned activities can only be carried out after completion of an environmental impact assessment and under an approved environmental management plan, after consultation with the public as well as interested and affected parties. Explorers are also required to contribute to skills development through the agency’s Upstream Training Trust. Oil and gas exploration in South Africa is regulated in terms of the Mineral and Petroleum Resources Development Act (MPRDA) of 2002, which stipulates that applicants for production rights are required to submit social and labour plans (SLPs) to assist in transforming the industry, promoting employment and advancing social and economic welfare in South Africa. Applicants must develop and implement, where applicable, comprehensive SLPs that cover human resources-development programmes, community development, housing and living conditions, and employment equity.

OUR MISSION To promote, facilitate and regulate exploration and sustainable development of oil and gas contributing to energy security in South Africa.

In addition to the MPRDA, other acts also regulate the sector – including the National Environmental Management Act, the Royalties Act, the Mining Titles Registration Act and the National Water Act. These acts and regulations have served the upstream industry well and are all in line with international standards. Minister of Mineral Resources Gwede Mantashe and President Cyril Ramaphosa have recently stated that oil and gas exploration and production activities should have their own standalone legislation, separate from that applicable to hard mineral mining. This legislation is being drafted and the agency is part of the team at the Department of Mineral Resources working on it. In today’s world, oil and gas remain the most critical of energy resources, and Petroleum Agency SA is in full support of those entering the South African oil and gas exploration and production industries. The Agency is fully committed to ensuring that our government and policy-makers sustain the sector for the benefit of all involved and will do everything in its power to advance the industry.

ABOUT PETROLEUM AGENCY SA Petroleum Agency SA was established in 1999 by Ministerial directive and is mandated through the Mineral and Petroleum Resources Development Act, 2002 (Act No.28 of 2002) together with the National Environmental Management Act, 1998 (Act No.107 of 1998). These Acts provide for Petroleum Agency SA to evaluate and promote oil and gas potential exploration and production activities in South Africa, to regulate oil and gas exploration and the production industry and to archive all geotechnical data produced through oil and gas exploration. The Agency acts as an advisor to the government on issues regarding oil and gas exploration and production and carries out special projects at the request of the Minister.

CONTENTS

CONTENTS KwaZulu-Natal Business 2020/21 Edition

Foreword

A unique guide to business and investment in KwaZulu-Natal.

Special features Regional overview of KwaZulu-Natal

KwaZulu-Natalâ&#x20AC;&#x2122;s ports are shaping up

Manufacturers are investing and export volumes are on the rise. Construction of the Durban Cruise Terminal got underway in 2019.

Economic sectors Agriculture 26 Sugar 28 Forestry and paper

Mining 32 Engineering 33 Oil and gas

Construction and property

Tourism

Manufacturing 40 Automotive 41 Energy 42 Water

Banking and financial services

Education and training

KWAZULU-NATAL BUSINESS 2020/21

ABOUT THE COVER: The Port of Durban handles containers, automotive imports and exports, break-bulk and agricultural commodities. Transnet reported that the port handled 2.96-million twenty-foot equivalent units (TEUs) in 2018. The figure of 487 000 vehicles handled by the port in the same year was the highest since 2013. Photo: Transnet

Africa Biomass Company Buy your own Bandit wood chipper Bandit the only logical choicebiomass for wood chippers in or hire us to deal with your

Your caring family trading as world leaders in the wood chipping industry.

P CHIPPER HIRE & SALES trading as Africa Biomass Company (ABC) is a wood chipping company that provides wood recycling services, supplying biomass according to specification. ABC is one of the best go-to wood chipper equipment sales and services agents.

Africa, which are now fitted on SABS-approved trailers.

ABC understands wood recycling

With a comprehensive understanding of the operational challenges of wood recycling in South Africa, ABC has established state-of-the-art facilities to service, repair and rebuild wood chipper equipment of Wood chipper services any brand and size. ABC’s facilities are operated by a • Agricultural: orchard / vineyard recycling and remarkable team of very experienced and suitably qualified engineers, technicians and65XP artisans. mulch spreading A small selection of Bandit wood chippers (from left to right): Model 75XP Engine; Model PTO and theor Intimidator™ 12XPC. An equally remarkable team of field-service • Biomass for generation of heat electricity Company Slogan technicians deliver repairs, maintenance and parts • Site clearing and preparation to clients’ sites to optimise uptime and efficiency. • River rehabilitation in riparian zones Become an owner of a Bandit chipper Africa Biomass Company is the authorised dealer For more information on the Bandit, see page 27. • Workshop, field services, parts and spares for Bandit Industries in Southern Africa. All existing and new customers are welcome • Operator training services: SETA-certified ABC has built up a substantial fleet of Bandit to contact us if they want to become the wood chippers for use by the company as part The most experienced owner of the top-class range of Bandit • Manufacturing workshop Company Slogan

of our wood recycling services, but ABC also equipment. Industries have delivered biomass producer in Bandit Africa offers a whole range of Bandit wood chippers successful recycling solutions to basically The X-factor in wood chippers to clients who want to invest in the Bandit range. every corner of the planet.

Dimensional Bandit chippers are designed with quality,wood chips are produced by the removal production andchippers longevity in mind. Hand-fed of alien invasiveAtrees in ripariantozones, previously ABC is the authorised dealer for Bandit wood commitment support chippers are mounted on custom-built, SABSABC, however, now has in Africa. Bandit combines first-world technology and deemed as impossible. Africa Biomass Company is fully equipped approved trailers. Owning a Bandit wood and stocked to service and repairthe any job Bandit thefront knowledge and technology to get experience with third-world functionality. This makes chipper will always put you in the seat of machine anywhere in South Africa. We own reliable wood chipping operations. done. These wood chips are then used a fully-equipped parts warehouse (650m²), In many cases, the Bandit wood chipper sets a greenmanufacturing applications department asaswell as field the benchmark for other brands in the wood in agri-industrial services to ensure that for partseither are always to coal heatreadily or chipping industry. We are ready to supply the er alternative available and our own, as well as our clients’ right Bandit wood chipping solution with advice electricity production. Bandit wood chippers are not out of commission and aftercare to your doorstep. All existing and longer than they have to be. new customers are welcome to contact us to Geographical footprint www.abc.co.za become the owner of Bandit equipment.

CAPE(Western BUSINESS 2020 9 is located in WESTERN ABC Worcester Cape), Kirkwood (Eastern Cape), Nelspruit (Mpumalanga) and Upington (Northern Cape). We operate in all nine provinces in South Africa and also across the borders into Sub-Saharan Africa, including Namibia, Botswana, Zimbabwe, Mozambique, Zambia, Malawi, Tanzania, Kenya and Nigeria. ■

www.abc.co.za

FOREWORD

KwaZulu-Natal Business A unique guide to business and investment in KwaZulu-Natal.

Credits Publisher: Chris Whales Publishing director: Robert Arendse Editor: John Young Managing director: Clive During Online editor: Christoff Scholtz Art director: Brent Meder Designer: Simon Lewis Production: Lizel Olivier Ad sales: Gavin van der Merwe, Sam Oliver, Jeremy Petersen Gabriel Venter, Vanessa Wallace, Themba Khumalo, Shiko Diala and Sandile Koni. Administration & accounts: Charlene Steynberg and Natalie Koopman Distribution & circulation manager: Edward MacDonald Printing: FA Print

he 2020/21 edition of KwaZulu-Natal Business is the 12th issue of this highly successful publication that, since its launch in 2008, has established itself as the premier business and investment guide for the KwaZulu-Natal Province.

In addition to the regular articles providing insight into each of the key economic sectors of the province, there is a special feature on the vital role played by ports in the province, from the coal exported from Richards Bay to the new cruise liner terminal addition to the Port of Durban. The 10th anniversary of the 2010 FIFA World Cup coincides with the birthday of the Moses Mabhida Stadium, an iconic design that has become a standard feature on the KwaZulu-Natal sporting and events calendar. Likewise the Durban ICC which continues to burnish the province’s reputation as meetings and convention centre.

To complement the extensive local, national and international distribution of the print edition, the full content can also be viewed online at www.kwazulunatalbusiness.co.za. Updated information on KwaZulu-Natal 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, our flagship South African Business title and the new addition to our list of publications, African Business, which was launched in 2020. ■ Chris Whales Publisher, Global Africa Network Media | Email: chris@gan.co.za PUBLISHED BY

DISTRIBUTION

KwaZulu-Natal 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.

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

Member of the Audit Bureau of Circulations

ISSN 1995-1310

COPYRIGHT | KwaZulu-Natal 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. PHOTO CREDITS | Bell Equipment, Bidvest, Enterprise iLembe, eThekwini Municipality, Hulamin, Illovo Sugar, iStock, KZN Department of Education, Mondi, Moses Mabhida Stadium/Kevin Sawyer, MSC Cruises, RBM Mines,

KWAZULU-NATAL BUSINESS 2020/21

Transnet National Port Authority, Umgeni Water, WK Construction. DISCLAIMER | While the publisher, Global Africa Network Media (Pty) Ltd, has used all reasonable efforts to ensure that the information contained in KwaZulu-Natal 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.

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KWAZULU-NATAL BUSINESS 2020/21

SPECIAL FEATURE

A regional overview of KwaZulu-Natal By John Young

Manufacturers are investing in the province and export volumes are on the rise as the province’s two main ports upgrade and expand.

Dube TradePort) are key components of the strategy of attracting investors to the province. Dube TradePort attracted R7-billion between 2012 and 2019 and the same amount is expected to accompany the development of Phase 1A and Phase 1F of the Richards Bay Industrial Development Zone (RBIDZ). Two investors in 2019 were edible oils manufacturer Wilmar Processing SA, which is investing more than R1-billion in a plant, and Elegant Afro Line, which will spend about R900million on its chemicals plant. There are plans to establish a clothing and textiles SEZ in the province to build on the province’s established strength in the sector and an automotive supplier park will be in operation by 2021. Toyota and Bell Equipment play a big

lmost a third of South Africa’s manufactured exports are produced in KwaZulu-Natal. A number of domestic and international manufacturers are either buying into the province or building new facilities in order to export finished goods. The Mara Group’s R1-billion investment in a smartphone factory at the Dube TradePort is the latest in a string of inward investments that KwaZulu-Natal has received. This includes expenditure of more than R1.2-billion by Arçelik, the Turkish owner of Defy, at the company’s three South African plants (two of which are in the province) and R4.5-billion by Nyanza Light Metal in a titanium dioxide pigment plant at Richards Bay. The Special Economic Zones (SEZs) at Richards Bay and King Shaka International Airport (the

KWAZULU-NATAL BUSINESS 2020/21

SPECIAL FEATURE dissolving pulp. Sugar, tourism and forestry and paper are other important sectors driving growth and employment in KwaZulu-Natal. In his 2020 State of the Province address, Premier Sihle Zikalala listed the sectors which are to be targeted for investment in the future. These are: • Aloe processing • Bio-ethanol • Renewable energy • Fish processing • Innovation hubs • Oceans Economy. KwaZulu-Natal has a long coastline that stretches from Port Edward in the south to the iSimangaliso Wetland Park in the north. The province’s contact with the sea has brought obvious benefits: fishing, fine beaches enjoyed by millions of tourists and two great ports. These ports export vast quantities of minerals (mostly through Richards Bay) and manufactured goods (Durban) and serve as an important conduit

role in the automotive sector while the Engen Oil Refinery is a strategic asset. The province’s existing infrastructure, good soils and fine weather provide a solid base for future growth. KwaZulu-Natal already has significant capacity in heavy and light manufacturing, agriprocessing and mineral beneficiation, all of which is supported by South Africa’s two busiest ports (Richards Bay and Durban), the country’s busiest highway (the N3), a modern international airport and pipelines that carry liquids of all types to and from the economic powerhouse of the country around Johannesburg in the interior. Sappi’s dissolving pulp mill at Umkomaas south of Durban (below) is one of the province’s most significant industrial sites as it produces huge quantities of a material that is used in viscose staple fibre, which in turn is used in clothing and textiles. Together with production volumes from Sappi’s mill in neighbouring Mpumalanga province, the company is the world’s largest manufacturer of

KWAZULU-NATAL BUSINESS 2020/21

SPECIAL FEATURE

Geography

for imports of all sorts. The Richards Bay Coal Terminal exports massive quantities of coal while the Port of Durban is the busiest port in Africa. However, planners want to massively increase the economic benefits that the ocean can bring. An Oceans Economy Review Workshop has come up with a range of sub-sectors that can help grow the provincial economy and invite foreign direct investment: • Marine transport and manufacturing • Offshore oil and gas exploration • Aquaculture • Marine protection and ocean governance • Small harbours • Coastal and marine tourism. Strategies to grow the Oceans Economy dovetail with ongoing projects to boost the capacity of the province’s ports and to explore for gas and oil in the Indian Ocean. If oil rigs were to start visiting the KZN coastline on a regular basis, the shiprepair industry would grow exponentially. The Oceans Economy is one of the focus areas that has been chosen by national government to be part of Operation Phakisa, a focused, goaldriven attempt to jump-start a specific economic sector. Overall, Phakisa intends creating a million jobs by 2033 and injecting R177-billion into national GDP. The decision to build a cruise-ship terminal at the Port of Durban is a good example of the kind of decision that is in line with an “Oceans Economy” approach.

KWAZULU-NATAL BUSINESS 2020/21

The mixed topography of the province allows for varied agriculture, animal husbandry and horticulture. The lowland area along the Indian Ocean coastline is made up of subtropical thickets and Afromontane forest. High humidity is experienced, especially in the far north, and this is a summer rainfall area. The centrally-located Midlands is on a grassland plateau among rolling hills. Temperatures generally get colder in the far west and northern reaches of the province. The mountainous area in the west – the Drakensberg – comprises solid walls of basalt and is the source of the region’s many strongly running rivers. Regular and heavy winter snowfalls support tourist enterprises. The Lubombo mountains in the north are granite formations that run in parallel.

Regions

KwaZulu-Natal has 10 district municipalities and a metropolitan municipality, the most of any province in South Africa. In economic terms, the province offers diverse opportunities.

Southern region This area is the province’s most populous. The city of Durban has experienced booms in sectors such as automotive, ICT, film and call centres. The promenade now reaches all the way to the

SPECIAL FEATURE

SPECIAL FEATURE get colder in the far west and northern reaches of the province. The other major urban The mountainous areaisinEmpangeni the westwhich – the centre Drakensberg – comprises wallseducational of basalt and has solid several i n s t i t umany t i o n strongly s. Th e running King is the source of the region’s S h a winter k a I snowfalls n t e r n a t support ional rivers. Regular and heavy Airport is adjacent to inthe tourist enterprises. The Lubombo Mountains the Dube TradePort, a Special north are granite formations that run in parallel. Economic Zone (SEZ) which is attracting investors.

Regions

mines are being reopened by new coal companies Southern region to cater for the country’s power stations’ demand This areafuel. is the province’s The city of for the Game farms,most troutpopulous. fishing and hiking Durban experienced booms in such are parthas of an attractive package forsectors tourists, andas automotive, film anddestination call centres.for Major investZululand is ICT, a popular cultural ments are taking at the PortinofAnglo-Boer Durban and experiences. Theplace region is rich there is a possibility the old airport south of as the War history which that includes battle sites such Islandlwana and Rorke’s Drift. ■ if the money can be city could become another port,

Geography Eastern region

Standerton

KWAZULU-NATAL BUSINESS 2016/17

15 14

SWAZILAND

Mpumalanga

Piet Retief

N11

Volksrust

Paulpietersburg

Vrede

Newcastle

Pongola

R33

Utrecht

R69

R34

Vryheid

Free State N3

R34

Dundee R68

R74

eMpangeni

Kranskop

R33

Stanger

Howick

PIETERMARITZBURG

Ballito uMhlanga

Pinetown R56

iXopo

Harding

Darnall

Tongaat

Underberg

Eastern Cape

Richards Bay

Gingindlovu

Greytown

Mooi River

St Lucia

Mtubatuba

Estcourt

Kokstad

Melmoth

Colenso

Winterton

Hluhluwe

Hlabisa

uLundi

R33

Ladysmith

R74

Mkuze

R65

N11

Bergville

R66

Nongoma

Glencoe

Harrismith N5

The mixed topography the province allows for varAlthough most of thisofarea is very rural, Richards Bay is one of animal the country’s industrial hotspots ied agriculture, husbandry and horticulture. because of area its coal terminal, port Ocean and aluminium The lowland along the Indian coastline Richards Bay Industrial is smelters. made upThe of subtropical thickets andDevelopment Afromontane Zone High (RBIDZ) is a major economic node in itself Forest. humidity is experienced, especially in and the possibility of a power plant being the farwith north, and this is a summer rainfall area. The built, the RBIDZ Midlands could become energy hub. centrally located is on aangrassland plaMining is an rolling important in this region. teau among hills.sector Temperatures generally

N17

Bethal

N17

KWAZULU-NATAL PROVINCE Ermelo

RA LESOTHO KE NSB ERG

Midlands Meander is a popular tourist destination.

KwaZulu-Natal has 11 district municipalities, the The economic powerhouse is Newcastle in the most of any province in South Africa and, in economnorth-west: coal mining, steel processing and icmanufacturing terms, the province offers diverseSome opportunities. are major activities. old coal

MOZAMBIQUE

harbour and the Point development will benefit. Major investments are taking place at the Port of Durban with the current centrepiece being the Convention Centre Complex, which Terminal hosts the Durban Cruise Terminal. The Container is annual Tourism Indaba. also undergoing an extensive overhaul. province's climate lends itselfare to well everyutilised, kind of The Durban’s conference facilities outdoor pursuit and its excellent beaches are always but many opportunities still exist in chemicals popular. Big sports events are regularly hosted in and industrial chemicals, food and beverages, KwaZulu-Natal, which has become something of infrastructure development and tourism. Further a south, home plans to mass-participation events such as the are in place to upgrade Margate’s airport and Port Shepstone’s beachfront. Comrades Marathon and the Dusi Canoe race. The province has excellent game and nature reserves. Western region Isimangaliso Wetland Park is a World Heritage Site and helps to fund 80 small businesses associated Alsoitsknown Midlands, with businessasasthe a tourist site. this is a fertile agricultural region popular The building of thewhich King hosts Shaka the International annual Royal Show. It produces sugar cane, Airport to the north of Durban allows tourists tofruit, get animal products, forestry and dairy products. to superb beaches and game farms very quickly, Pietermaritzburg is the provincial capital and and the airport has its own industrial development home to a major aluminium producer along with zone, the Dube TradePort. New international direct several manufacturing concerns, including textiles, flights have beengoods announced; furniture, leather and food.4.5-million The city haspassengood gers passed through the airport in 2014/15, almost transport links along the N3 national highway, 300 000 of whom wereand foreign visitorsarts or tourists (ACSA). excellent schools a lively scene. The

Northern region

DURBAN aManzimtoti

uMzinto

uMkomaas

INDIAN OCEAN

Hibberdene uMtentweni Port Shepstone Margate Southbroom Port Edward

Motorway

Main Road Railway

KWAZULU-NATAL BUSINESS 2020/21

SPECIAL FEATURE

KwaZulu-Natal’s ports are shaping up to receive more ships Construction of the Durban Cruise Terminal got underway in 2019.

MSC Orchestra arrives in Durban on maiden visit. Image: MSC Cruises

SA and Africa Armada Consortium, KCT will spend about R220-million on the financing‚ construction‚ maintenance and operation of the cruise terminal for a 25-year concession period. Construction began in 2019. The cruise terminal will cover a 32 000m² area that will cater for two ships and at least 5 000 passengers. A ship with 2 000 passengers is worth in the region of R2-million per day for the host city. The number of annual passengers is expected to grow from the current 200 000 to more than 700 000 by 2040. Durban’s hosting of 60 ships per annum is expected to rise to 150 or more. South Africa attracts 0.5% of the world’s cruiseship market which comprises about 15.4-million passengers annually. MSC Musica uses Durban as her base port and is joined by MSC Opera during the summer months, sailing from Durban to Mozambique and

he KwaZulu Cruise Terminal (KCT ) consortium has won the contract from Transnet National Ports Authority (TNPA) to finance, build and run the new Durban Cruise Terminal. The terminal is expected to start functioning for the 2020/21 cruise season. Within the Port of Durban there are a number of specialised facilities. One of the busiest is the Container Terminal and that is the subject of a large upgrading project. The Port of Richards Bay, the link to the world for South Africa’s coal exporters, is constantly adding to its facilities, the latest being a floating dock, for which approval has been given to be constructed within the port. The cruise terminal is an important step forward for Durban and fits in well with the larger project that links the port to the upgraded southern end of the promenade, the Durban Point Waterfront. A joint venture between MSC Cruises KWAZULU-NATAL BUSINESS 2020/21

SPECIAL FEATURE terminal was recently built for Petredec by Bidvest Tank Terminals. Ship repair is another option which will open up other opportunities in marine manufacturing. TNPA has approved in principle the construction of a floating dock near the existing Small Craft quay. TNPA will have to create new onshore infrastructure and do some dredging before it can call for tenders from the private sector to build the dock, which would be able to handle large and ultra-large cargo vessels (Capesize). Richards Bay is a deepwater port. Among its 13 berths are terminals that handle dry-bulk ores, minerals and break-bulk cargo. The quay of the Richards Bay Coal Terminal (RBCT) is 2.2km long with six berths and four shiploaders. The 276ha site contains a stockyard that can store 8.2-million tons while the terminal itself has a design capacity of 91-million tons per year. More than 900 ships visit RBCT every year. ■

other destinations in the Indian Ocean. A popular offering is the “Tour to Nowhere” cruise. In 2019 MSC Orchestra made its first visit to Durban. Container terminal Several projects are underway within the Port of Durban to increase capacity. Transnet National Ports Authority (TNPA) and Transnet Port Terminals (TPT ) are combining to upgrade infrastructure and buy new equipment to improve efficiencies at the Ro-Ro terminal (vehicles and break bulk) and Maydon Wharf (mixed cargo and agriculture) but the biggest project is at the Durban Container Terminal (DCT). DCT has a capacity of 3.6-million TEUs (twentyfoot equivalent units) and the current project aims to extend that beyond five-million TEUs. The Brics New Development Bank has approved a loan of $200-million for the DCT expansion project. Drydock Durban’s drydock complex is undergoing a series of refurbishments and upgrades. The R48-million 35m outer caisson was the first project to be completed and now it’s the turn for the inner caisson and drive system to be fixed, at a cost of R61.5-million. Two Durban companies, Lodemann (Managing Contractor) and Channel Construction (Design and Build), are responsible for the project, which will ensure the sustainability of the shiprepair sector within the port. TNPA states that the multiplier effect in the marine sector creates five jobs for every direct job. The drydock project created direct jobs for 29 skilled employees. Richards Bay The Richards Bay Coal Terminal (RBCT) is the key component of the port on the northern coast of KwaZulu-Natal but the port’s managers and associated Special Economic Zone (SEZ) are looking to diversify beyond the other types of freight which also form part of the port’s key mandate. Chief among the diverse offerings being looked at are alternative energy generation and opportunities in the gas sector. A feasibility study is being done on a gas-to-power plant and a large new liquid petroleum gas import and storage

Drydock construction. Image: Transnet

KWAZULU-NATAL BUSINESS 2020/21

ADVERTORIAL

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MONEY EXPERTS BRING 21ST CENTURY BANKING TO ALL COMMUNITIES At the heart of Nedbank’s business strategy is its belief that its sustainability depends on its ability to integrate into the communities in which it operates.

iphamandla Ndhlovu, Provincial General Manager for Retail and Business Banking in KwaZulu-Natal (KZN), explains: ‘Nedbank has continued to deliver on its brand promise, which is to use our financial expertise to do good for individuals, families, businesses and communities in which we operate. Our client-centred strategy has enabled us to reach out to our individual and business clients in time of need during the Covid-19 national lockdown.’

The Nedbank Contact Centre and advanced digital innovation, including the awardwinning Nedbank Money app, enabled the bank to continue serving clients in the comfort of their homes. Ndhlovu says that for small- and medium-business clients, Nedbank continues to deliver end-to-end solutions through a dedicated business manager. ‘Our business managers are supported by a team of experts across the bank to deliver seamless banking solutions. Our bigger-picture business approach ensures that we are able to take a holistic view of the business by understanding the vision, cashflow cycle, and transactional and capital expenditure needs of the business.

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…we made donations to Doctors on Call and the Aurum Institute to help kickstart Covid-19 projects …

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As a responsible corporate citizen, Nedbank in KZN has sought partnerships with businesses in the province to respond to the Covid-19 challenges. ‘Over and above the broad Covid-19 relief measures that all commercial banks committed to, among other initiatives we made donations to Doctors on Call and the Aurum Institute to help kickstart Covid-19 projects that have benefitted our communities immensely. We also continue to participate in the discussions with local government to support local economic recovery initiatives,’ Ndhlovu says. If you are interested in taking your business to its next level or need information about Nedbank’s specialised service offering, please call Siphamandla Ndhlovu on +27 83 637 8552, send an email to SiphamandlaN@Nedbank.co.za or visit www.nedbank.co.za.

ADVERTORIAL

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SOLUTIONS FOR SMALL BUSINESS AIMED AT CREATING JOBS AND GROWING THE ECONOMY Nedbank’s Provincial Manager of Retail Relationship Banking for KwaZulu-Natal, Melanie Reddy, explains how Nedbank is committed to partnering with businesses for growth.

‘S

mall businesses are the mainstay of the economy and Nedbank provides small-business owners with support that goes beyond banking,’ she says. ‘Covid-19 has dealt entrepreneurs a major blow and, naturally, they are overwhelmed and anxious about the future of their businesses. Since the lockdown many small businesses have had no income, but mounting operational expenses, and some did not qualify for traditional funding nor certain relief aids available. Nedbank is proud to be involved in various ways to help mitigate the economic impact of the crisis on this vital sector.’ Through the launch of the South African Future Trust (SAFT), established by Nicky and Jonathan Oppenheimer, Nedbank helped facilitate the distribution of loans to small businesses on behalf of the SAFT. The main aim of the SAFT is to keep companies in business and protect jobs to fast-track South Africa’s economic recovery after the pandemic by extending direct financial support to employees of South African small and medium-sized enterprises (SMEs) at risk of losing their jobs. In addition, BackaBusiness is an innovative and relevant

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Nedbank helped facilitate the distribution of loans to small businesses on behalf of the SAFT.

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way in which Nedbank is helping small businesses during this challenging time. It offers an opportunity for people to show their support for small businesses to ensure their survival. Loyal customers, family and friends, and society at large can join the movement to pay now and redeem a reward from the business owner once trading resumes.

‘Beyond this Covid-19 relief, our experts are available to provide all the support you need,’ says Reddy. Initiatives such as SimplyBiz.co.za, The Essential Guide for Small-business Owners, business registration services and free small-business seminars are all geared to support SMEs. If you wish to tap into our small-business expertise to reach your business goals, please call Melanie Reddy on +27 10 223 2823, send an email to MelanieR@nedbank.co.za or visit www.nedbank.co.za/business.

ADVERTORIAL

see money differently

NEDBANK BUSINESS BANKING AIMS TO SUPPORT ALL BUSINESS SECTORS Matthew Moore, Nedbank’s Provincial Business Banking Manager for KwaZulu-Natal, says that his team are specialists in commercial industries, agriculture and the public sector.

‘A

t Nedbank Business Banking we believe that you need a flexible, resilient financial partner who not only understands your circumstances and aspirations, but also provides you with relevant solutions and a banking experience that is hassle-free, allowing you to concentrate on what’s most important to you – running your business,’ says Moore.

Our bigger-picture banking approach enables us not only to provide you with the banking solutions you need, but also to give you a holistic view of how our products are connected to create a framework that yields maximum impact across every facet of your business and beyond. We know that success in business is about partnerships, and that is why we put the building of deep, lasting, value-adding relationships at the centre of everything we do. This means your goals are our goals, your vision is our vision, and your success is our success – while you rely on our additional support that is most needed in times of change and uncertainty. In the agricultural sector particularly, Nedbank understands that if the various challenges it faces are not addressed, it will threaten economic growth, food security,

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… Nedbank has developed innovative funding solutions designed to support farmers …

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employment and investment. ‘By using our financial expertise to do good, we partner with our agricultural clients to contribute to a growing, competitive, transformed and climate-resilient agricultural sector.’

To this end Nedbank has developed innovative funding solutions designed to support farmers with sustainable farming interventions, ranging from water efficiency mechanisms and cutting-edge irrigation to renewable-energy financing. Moore says that Nedbank’s leadership position in renewable-energy finance is helping many farmers and agribusinesses to benefit from cleaner, more reliable and affordable power generation than the national grid can provide. If you are interested in taking your business to the next level, please contact Matthew Moore on +27 84 240 6799, send an email to Matthewmo@nedbank.co.za or visit www.nedbank.co.za/business.

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NEDBANK BUSINESS BANKING HELPS PUBLIC SECTOR SEE MONEY DIFFERENTLY Nedbank is committed to delivering easy and innovative banking solutions to government, municipalities and state-owned enterprises throughout South Africa.

But the bank's role goes beyond providing banking solutions to these vital entities. As money experts who do good, Nedbank strives to empower the people behind the public sector. 'We help them save time by providing onsite help from our dedicated teams and through our market-leading Nedbank Money app and other digital solutions. We also help them save money through our preferential banking solutions and our award-winning Financial Fitness and Consumer Education Programme. The programme helps them manage their money better by providing budgeting and

‘’

Nedbank strives to empower the people behind the public sector.

money management training, equipping their staff members to deal with everyday money management challenges better.' With the exclusive benefits available to municipal staff members who bank with Nedbank, savings of more than R2 000 a year in fees alone are made possible. These staff members also enjoy free personal card delivery and pay no initiation fees, benefit from the Greenbacks Programme, get free basic travel insurance and an additional 20% discount on top-up travel insurance, twelve airport lounge visits a year and a free wills consultation and drafting service.

To find out more about how Nedbank can partner with your organisation to grow a greater South Africa, please contact Sithembiso Cele on +27 83 647 2486, send an email to SithembisoC@nedbank.co.za or visit www.nedbank.co.za/business.

Nedbank Ltd Reg No 1951/000009/06. Authorised financial services and registered credit provider (NCRCP16).

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ithembiso Cele, Nedbank's Provincial Manager for the Public Sector in KwaZulu-Natal, says that given the strategic importance of the public sector to the economy and the country at large, Nedbank has a dedicated public sector team to provide financial solutions that enable the broader mandate of service delivery. ‘We understand that the various spheres of government and their agencies face unique challenges, and are ready and able to draw on the bank’s innovative, seamless and hassle-free products to help build a greater nation.’

OVERVIEW

KEY SECTORS Overviews of the main economic sectors of KwaZulu-Natal Agriculture 26 Sugar 28 Foresty and paper 29 Mining 32 Engineering 33 Oil and gas 34 Construction and property 35 KWAZULU-NATAL BUSINESS 2020/21

Tourism 36 Manufacturing 40 Automotive 41 Energy 42 Water 43 Banking and financial services 44 Education and training 45

OVERVIEW

Port of Richards Bay Pic:KWAZULU-NATAL Transnet National Ports Authority BUSINESS 2020/21

OVERVIEW

Agriculture Small-scale farmers are set to benefit from the value chain. Sector Insight South Africa gets 18% of its milk from KwaZulu-Natal.

n 2018 a summit was held to draw up an Agricultural Development Masterplan for the province. The plan includes priorities such as the expansion of irrigable land, improving market access for producers and adding value to agricultural products before they reach local and international markets. The Provincial Government of KwaZulu-Natal wants to use government’s buying power to develop agricultural value chains for the benefit of new and small-scale farmers and producers. A pilot programme is running in three districts and the eThekwini metro. A group of women farmers from uMkhanyakude supply Enterprise iLembe with 1 000 crates of tomatoes as part of the project. Enterprise iLembe is the development arm of the iLembe District Municipality and is looking for investors to further develop an agriprocessing hub near the King Shaka International Airport and Dube TradePort. Among the new lines of agricultural produce being investigated is cannabis. A Cannabis Investor Protocol has been launched and a unit established at the Moses Kotane Institute to assist entrepreneurs and cultivators.

KWAZULU-NATAL BUSINESS 2020/21

There are only 16 farmers in all of South Africa doing what Ross Lowe does on his farm in Richmond, which is to cultivate golden kiwifruit. He believes that the particular strain of kiwifruit he has chosen is the best in terms of taste and yield and he has awards to prove it. Typically for the modern KwaZulu-Natal farmer, he also intends to increase his export volumes. So-called superfoods have potential to grow the agricultural sector via greatly increased exports: these include avocados, pecans and dates. Another possibility is macadamia nuts (already a thriving sector in other parts of the country) and in new areas such as cannabis and the farming of rabbits. The National Department of Rural Development and Land Reform (DRDLR) has launched an Agri-parks programme to support small-scale farmers and to boost other businesses related to agriculture such as abattoirs and transport operators. KwaZulu-Natal is one of four provinces where pilot projects have been carried out. The plan is to have an Agripark in each of South Africa’s 44 district municipalities with farmers owning at least 70% of the venture.

OVERVIEW BANDIT – EXPERIENCE THE BEST OF BOTH WORLDS First-world technology and quality combined SABS-approved roadworthy trailers built at Africa with African simplicity. The main woodchipper Biomass Company in Worcester, South Africa. unit is manufactured by Bandit Industries, Inc. Engine-powered woodchippers are fitted with 35-plus years’ experience with Tier 3, South African standard, diesel or in innovation and international petrol engines, depending on the woodchippers’ research. These units specification or clients’ preference. Electric and PTO are shipped to options are also available in various Bandit models. South Africa The add-ons are specifically handpicked to give where they are you the best set-up and will provide you with a fitted onto well-balanced woodchipper that will outperform most other chippers in Africa.

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There are three components to the fully realised Agri-park concept: • Farmer Production Support Unit: links farmer with markets, collection and shortterm storage, local processing and mechanisation. • Agri-hub: equipment-hire, processing, pack aging, logistics and training. • Rural Urban Market Centre: contract-based links to local and international markets, long-term storage and market intelligence. Agriculture is the focus of a wide-ranging initiative in the Ulundi district. A grouping called ULUMA has been formed which aims to help farmers, SMMEs and co-operatives to benefit in a holistic way from the produce they farm. The Zululand District Farmers Association, several other NGOs and Standard Bank are working together with the Mangosuthu University of Technology (MUT) and the Innovation and Technology Business Incubator (Invotech) to expose farmers to new issues and techniques.

Agricultural assets Of KwaZulu-Natal’s 6.5-million hectares of agricultural land, 18% is arable and the balance is suitable for the rearing of livestock. The province’s forests occur mostly in the southern and northern edges of the province. The coastal areas lend themselves to sugar production and fruit, with subtropical fruits doing particularly well in the north. KwaZulu-Natal produces 7% of South Africa’s citrus fruit. The Coastal Farmers Co-operative represents 1 400 farmers. TWK is a R6-billion operation that originated in forestry (as Transvaal Wattlegrowers Co-operative) but which is now a diverse agricultural company with seven operating divisions. It has 19 trade outlets in the province and 21 in Swaziland and Mpumalanga. Beef originates mainly in the Highveld and Midlands areas, with dairy production being undertaken in the Midlands and south. The province produces 18% of South Africa’s milk. KwaZulu-Natal’s subsistence farmers hold 1.5-million cattle, which represents 55% of the provincial beef herd, and their goat herds account for 74% of the province’s stock. The Midlands is also home to some of the country’s finest racehorse stud farms. The area around Camperdown is one of the country’s most important areas for pig farming. Vegetables grow well in most areas, and some maize is grown in the north-west. Nuts such as pecan and macadamia thrive. KwaZulu-Natal has two colleges offering higher qualifications in agriculture, Cedara in the Midlands and the Owen Sitole College of Agriculture near Empangeni. ■

Online Resources Fresh Produce Exporters Forum: www.fpef.co.za KwaZulu-Natal Agricultural Union: www.kwanalu.co.za KZN Dept of Agriculture & Rural Development: www.kzndard.gov.za Milk Producers Organisation: www.mpo.co.za National Dept of Agriculture, Forestry & Fisheries: www.daff.gov.za Royal Agricultural Society of Natal: www.royalshow.co.za

KWAZULU-NATAL BUSINESS 2020/21

OVERVIEW

Sugar Tongaat Hulett is undergoing massive restructuring.

n June 2019 share trading in Tongaat Hulett was suspended. Many accounting irregularities came to light and the upshot was that the company was forced to restructure to pay off huge debts. This comes at a time when the sugar industry is described in Engineering News as being “in the intensive care unit” by the Executive Director of the South African Sugar Association (SASA). Sales into the Southern African Customs Union (SACU) have markedly declined in recent years but under a SACU protocol, Eswatini will sell about 500 000 tons to South Africa, free of any duty. Among the measures taken by Tongaat Hulett are the sale of its starch business to Barloworld (for R5.3-billion) and sale of 5.18% of the company’s shares to Evanstan Investments, which now becomes one of the company’s biggest investors.

KwaZulu-Natal is South Africa’s biggest sugar producer. Most of South Africa’s 14 sugar mills are in KwaZulu-Natal, as are the headquarters of the biggest companies. The industry employs 65 000 directly and indirect employment is estimated at 350 000. About 40% of local production is exported. The SACGA represents in the region of 23 000 growers (including 651 small-scale farmers) who produce around 20-million tons of cane. In the 2019/20 season, about two-million tons of saleable sugar was produced. A new industry structure, allowing

Online Resources South African Cane Growers’ Association: www.sacanegrowers.co.za South African Sugar Association: www.sasa.org.za South African Sugar Technologists Association: www.sasta.co.za Sugar Milling Research Institute: www.smri.org

KWAZULU-NATAL BUSINESS 2020/21

Sector Insight South Africa will receive half-a-million tons of dutyfree Eswatini sugar. for multiple grower associations, has been agreed to by the SACGA, the Department of Trade, Industry and Competition (dtic) and the relevant parliamentary portfolio committee. Neither of the Big Two companies relies exclusively on South African sugar earnings: Tongaat Hulett has a big property portfolio and Illovo draws most of its profit from operations elsewhere in Africa. Diversification is vital for the future of sugar producers and power generation will be an important part of that. Illovo and Tongaat Hulett are the major operators of sugar mills. Other millers are Gledhow, ULC, Umfolozi and Tsb (which has a further two mills in Mpumalanga). Illovo has four mills, three sugarcane estates, four sugar factories, a refinery and three downstream operations that make products such as furfural, furfuryl alcohol, ethyl alcohol and lactulose. The four mills run by Tongaat Hulett are located on the North Coast while the central refinery is in Durban and the animal-feed plant, Voermol, is near Tongaat. The Sugar Terminal at Maydon Wharf, Durban, serves 11 mills and can store more than half-amillion tons of sugar. It also has a molasses mixing plant. ■

OVERVIEW

Forestry and paper Mondi and Sappi are global giants. Sector Insight Mondi’s primary listing has moved to London.

he Mondi Group, which has distinct KwaZulu-Natal roots, has grown into an international behemoth with 26 000 employees and operations in more than 30 countries. In 2019 Mondi announced that its primary listing will from now on be in London and the JSE will carry the company’s secondary listing. The company, whose forestry operations are shown here, will spend more than R8-billion on its South African operations in the period to 2023. Mondi’s Merebank Mill produces a range of office paper products including the well-known brand, Mondi Rotatrim. Uncoated woodfree reels are manufactured for the South African and Sub-Saharan African markets. At Richards Bay, eucalyptus fibre is used to make a premiergrade bleached hardwood pulp and a white top kraft linerboard is also produced. Major investments at Richards Bay have not only increased the number of products being made, but improved air quality, reduced water consumption and reduced the amount of solid waste produced on the site. The export of about one-million tons of dissolving wood pulp earned Sappi the winner’s trophy in the “Large Exporter” category at the KZN Exporter of the Year Awards in 2019. Approximately 220 TEU equivalent containers (20-foot containers) of Sappi products pass through the Durban Port every day. The long-running awards ceremony is hosted by the Durban Chamber of Commerce. Sappi was also a winner at the first KwaZuluNatal Investor Awards, a Trade and Investment KZN (TIKZN) event. On that occasion Sappi won the category “Investor operating in KZN with a Global Footprint.” Sappi has a considerable global footprint:19 production facilities on three continents (of which five are in Southern Africa) and 12 800 employees in over 35 countries.

Sappi’s Stanger Mill is situated close to sugar fields from which it takes bagasse (dry sugar cane pulp) for use in its production processes. Typek office paper is made at this mill, which has the capacity to produce 80 000 tons of paper and 30 000 tons of tissue. At the company’s Tugela Mill up to 200 000 tons per annum of containerboard (corrugating medium) can be manufactured from recycled and virgin fibre. It also produces 25 000 tons of lignosulphonate in powder form and 35 000 tons per annum of liquid product. A big focus for Sappi is dissolving wood pulp which is sold as a raw material to converters around the world who produce from it a range of products such as textiles, cellophane wrap and pharmaceuticals. The giant Sappi Saiccor mill 50km south of Durban is the world’s biggest manufacturer of dissolving wood pulp. The mill’s capacity is being increased to 890 000 tons via a multi-year investment project called Project Vulindlela. A total of R7.7-billion has been allocated to the project which will result in more than 2 000 construction jobs and about 120 full-time jobs.

KWAZULU-NATAL BUSINESS 2020/21

OVERVIEW EXTENDED PRODUCER RESPONSIBILITY MAKES THE CIRCULAR ECONOMY BIGGER AND BETTER

Pulp for rayon, sponges, and cellophane. Many of these products are recyclable, which means they can be diverted from landfill and made into new products. Process waste is used to make compost, biochar and fertiliser for the agricultural sector and the young seedlings that are destined to replace harvested trees.

By paying their dues towards an extended producer responsibility (EPR) programme, paper manufacturers, importers and brand owners can extend their producer responsibility beyond their own factories and their customers’ hands. Pulp and paper products are made from sustainably farmed trees. Certified to international forestry standards, South Africa’s plantations are the source of thousands of everyday products. Copy paper. Newspapers. Tissue. Packaging. Nampak produces crêpe paper at Verulam and Rafalo produces tissue paper. SA Paper Mills is another paper producer. Mpact’s upgrade of its Felixton mill has increased capacity and improved efficiency. The project cost R765-million and takes overall production up to 215 000 tons and a lightweight container-board option has been included in the product lines. This is in response to market demand for lighter packaging. Mpact has plastics and paper operations, with the paper section divided into three divisions: paper manufacturing, corrugated and converted paper products and recycling.

Timber The National Depar tment of Agriculture, Forestry and Fisheries reports that South Africa has a shortage of sawn timber. TWK has announced that it wants to buy 11 000 hectares of forest land to support its woodchip sales and timber exports. TWK, which listed on ZAR X in 2017, runs a woodchip production and export facility in Richards Bay, with an annual

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capacity of 900 000 tons of woodchips. Two kinds of woodchip are produced: Acacia mearnsii and mixed eucalyptus. Exports are primarily to pulp and paper producers in India, China and Japan. Demand for woodchips was exceptionally high in the first half of 2019, but this led to an oversupply and a dip in prices in the second half of the year. The KwaZulu-Natal provincial government’s strategy of creating Industrial Economic Hubs (IEHs) includes the development and expansion of wood processing in the Harry Gwala District Municipality. Timber plantations are found in five parts of the province: northern KwaZulu-Natal, Midlands, southern KwaZulu-Natal, Zululand and Maputaland. Close to half-a-million hectares – 38.5% of the land in South Africa devoted to forestry – is allocated to timber plantations. Of this area, 70% is devoted to hardwoods and the balance to pine, the only softwood grown in large quantities in South Africa. The percentage of privately-owned forest land is 93.4%. Merensky has plantations in the Dargle forest while Sappi and Mondi have holdings across the province, and in other parts of South Africa. The Merensky Group operates one softwood sawmill and a panel-processing plant in Kokstad that is geared to manufacture according to customers’ needs in any sector. Export is done through the Port of Durban. NCT Forestry Co-op Limited is a timber-marketing entity with 1 800 shareholding members, representing a total area of 300 000ha. R&B Timber Group has three pole treatment plants and is headquartered in Harding. Natal Forest Products, a Richmond-based company, is part of the R&B Group. Flaxton Treated Timbers operates out of Ixopo. ■

KWAZULU-NATAL BUSINESS 2020/21

Online Resources Forestry South Africa: www.forestry.co.za KwaZulu-Natal Department of Agriculture and Rural Development: www.kzndard.gov.za Paper Manufacturers of South Africa: www.thepaperstory.co.za South African Institute of Forestry: www.saif.org.za Technical Association of the Pulp and Paper Industry of South Africa: www.tappi.org

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OVERVIEW

Mining Titanium dioxide is made from minerals mined in northern KwaZulu-Natal.

he crisis affecting South Africa’s power utility, Eskom, is causing South32, the Australian owners of the Hillside aluminium smelter, to rethink their operations there. Some analysts have suggested that part of the reason that Eskom is in crisis is the bad pricing arrangements that were signed with the previous owners of the smelter. If the advantageous rates that used to apply are not repeated when the price is negotiated again in 2020, the business model will have to change. In 2019 about 400 workers took early retirement or voluntary retrenchment packages.

Images: RBM Mines Most of the product from the smelter (high-quality primary aluminium ingot) is exported but some liquid metal form is sent to Isizinda Aluminium which supplies Hulamin, a company that has had a rolling mill in Pietermaritzburg since 1949. Hulamin is the only major aluminium rolling operator in the region and it makes rolled products and extrusions. Other processing facilities in the province include the steel plant owned by ArcelorMittal in Newcastle and Safa Steel’s metal-coating factory in Cato Manor. RBM mines the minerals sands of the northern KwaZulu-Natal coast and operates out of Richards Bay. The main products of the RBM mine are zircon, rutile, titania slag, titanium dioxide feedstock and high-purity iron. Tata Steel KZN’s high-carbon ferrochrome plant at Richards Bay went into business rescue and then liquidation before being bought by Luxembourg-based Traxys Africa in the middle of 2016, after a court ruled in its favour. Traxys has chrome mines in Mpumalanga and Limpopo provinces. Tata Steel did not have its own mines.

Online Resources Geological Sciences, University of KZN: www.geology.ukzn.ac.za Minerals Council South Africa: www.mineralscouncil.org.za National Department of Mineral Resources: www.dmr.gov.za

KWAZULU-NATAL BUSINESS 2020/21

Sector Insight The Hillside aluminium smelter is grappling with electricity issues. The KZN Sands mineral sands operation comprises a central processing complex in Empangeni and the Fairbreeze Mine. Expenditure over several years (which started in 2016) is expected to rise to R5-billion as it expands. Tronox, which is listed on the New York Stock Exchange, is the major shareholder in KZN Sands. Some of the coalfields of the province have been revived. Petmin’s Somkhele Anthracite Mine, north of Richards Bay, has one of the biggest reserves of open-pit anthracite in South Africa, with measured and indicated reserves of more than 51-million tons across its four areas.

Finnish company Metso is spending about R53-million on building a second furnace at its Isithebe foundry in the iLembe District Municipality. This is in response to increased demand for large crusher wear parts. The KwaZulu-Natal foundry is one of five foundries the company runs on four continents. ■

OVERVIEW

Engineering The engineering sector needs a reliable supply of steel.

ne of the largest independent wire manufacturers in the country, Hendok Group, is steadily increasing its exports to other African countries. With more than 1 000 employees at the factory in the Phoenix Industrial Park in Durban, the company makes a wide variety of wires and is the country’s biggest producer of nails. ArcelorMittalSA is Africa’s biggest steelmaker and it has a plant at Newcastle, but tough times in the steel business have meant that the company has shut down some of its facilities. The first to be shuttered was Saldanha in the Western Cape and an analysis of the profitability of other centres is underway.

Western Aqueduct project. Image: WK Construction Marine repair and engineering form a significant sector in the province, with established companies such as EBH South Africa offering comprehensive services at the ports of Durban and Richards Bay. Both ports are expanding and will continue to attract engineers. Dormac, which is headquartered in the Bayhead area of the Port of Durban, is best known for its marine engineering but it offers specialised services to the sugar industry and provides machinery for industrial giants like Toyota and Defy. A big project that has created a lot of work for engineers is the multiyear Western Aqueduct project to bring fresh water to greater Durban. The Western Aqueduct Joint Venture comprising three companies, Knight Piésold Consulting, Naidu Consulting and Royal Haskoning DHV, acted as agents for eThekwini Water and Sanitation. Stefanutti

Online Resources Consulting Engineers South Africa: www.cesa.co.za Engineering Council of South Africa: www.ecsa.co.za Southern African Institute for Industrial Engineering: www.saiie.co.za South African Wire Association: www.sawa.co.za

Sector Insight The School of Engineering at UKZN offers great variety. Stocks Pipelines played a big role, and there were opportunities for excellence and innovations in areas such as break-pressure tanks which were designed by Royal Haskoning DHV and built by ICON Construction. All of the province’s biggest industries require sophisticated engineering skills: aluminium smelters in Richards Bay and steel works in Newcastle, Richards Bay and Cato Ridge. There are also chemicals and plastics production plants, and large automotive works. The Transnet Engineering (TE) plant in the Port of Durban houses six business units and has 3 555 employees. The Coach unit upgrades coaches and the Auxiliary business is the main supplier of rail wagon tarpaulins to Transnet Freight Rail. The Port Equipment Maintenance unit and units specialising in wheels and locomotive overhaul are other entities. The School of Engineering at the University of KwaZuluNatal offers a variety of degree options, ranging from undergraduate qualifications to doctorates. The School offers eight areas of specialisation including Bioresources, Electronic and Computer Engineering and Land Surveying. ■

KWAZULU-NATAL BUSINESS 2020/21

OVERVIEW

Oil and gas A huge LPG storage facility has been built at Richards Bay.

he supply of liquid petroleum gas (LPG) is set to be made easier and more reliable with the erection of the 22 600-ton Mounded LPG Facility at Richards Bay. Bidvest Tank Terminals has constructed the R1-billion storage facility for Petredec, which trades, transports and distributes LPG and other commodities. South Africa’s annual consumption of LPG, currently at 400 000 tons, is expected to rise to 600 000 tons. If a private partner can be found, a liquid natural gas (LNG) plant will produce 2 000MW at Richards Bay. This forms part of national government’s allocation of 3 126MW to natural gas in its medium-term energy policy to 2030.

The world’s four largest LPG storage tanks at the Bidvest Tank Terminals site in Richards Bay. Image: Bidvest The National Department of Mineral Resources and Energy (DMRE) decided in 2016 that one of the first two gas-to-power plants to be constructed under the Independent Power Producer Procurement Programme would be allocated to Richards Bay. This has the potential to turn the Richards Bay Industrial Development Zone (RBIDZ) into an energy hub. The fact that neighbouring Mozambique has significant offshore deposits is a factor in this ambition. To produce its allocation of 2 000MW, the plant would have to use a million tons a year of LNG. An indication of the scale of activity in Mozambique came in 2019 when Anadarko Petroleum, a US company, signed off on a $20-billion project to build an LNG plant. The projected spin-offs for the South African economy are estimated to top R7-billion.

Online Resources National Energy Regulator of South Africa: www.nersa.org.za Petroleum Agency SA: www.petroleumagencysa.com South African National Energy Association: www.sanea.org.za South African Petroleum Industry Association: www.sapia.co.za

KWAZULU-NATAL BUSINESS 2020/21

Sector Insight Italian company Eni is looking for hydrocarbons. Eni, one of the world’s biggest energy companies, has an agreement with Sasol Petroleum International to explore for hydrocarbons off the coast of KwaZulu-Natal. The regulator and promoter of oil and gas exploration in South Africa, Petroleum Agency South Africa, has awarded coalbedmethane-gas exploration rights in KwaZulu-Natal to NT Energy Africa, which has a partnership with the Central Energy Fund. These awards are for onshore exploration. The Petroleum Agency SA is an agency of the National Department of Energy. Getting fuel to the province of Gauteng is the key mission of the new multi-purpose pipeline (NMPP). Refined products such as jet fuel, sulphur diesel and both kinds of octane petrol are carried. The infrastructure of Transnet Pipelines is said to reduce the number of fuel tankers on South African roads by about 60%. KwaZulu-Natal is home to two major oil refineries and is the first link in the pipeline chain that links Gauteng province, the industrial heartland of South Africa, with vital fuels. The Port of Durban handles 80% of South Africa’s fuel imports. KwaZuluNatal is thus a key player in the country’s oil and gas industry. ■

OVERVIEW

Construction and property Durban’s beachfront promenade now extends from the harbour to Blue Lagoon.

private company is tackling urban regeneration in Durban, one building at a time. Serial property investor Jonny Friedman of Urban Lime has carefully selected certain precincts with potential for a mix of uses, including offices and accommodation. Pioneer Place, Durban Club Chambers, 320 Pixley and Florida Road are among their investments. Friedman is also invested in converted warehouses in London and various Cape Town properties. This private initiative chimes with a public programme that aims to make Durban’s inner city “Africa’s leading, most vibrant, liveable, walkable City Centre”. This is the Inner City Local Area Plan (LAP) for Durban. Developed for the eThekwini Municipality by a Joint Venture called IPPU, which comprises Iliso, TPI, PMSA, UrbanEcon including Cox Architecture, Urban Solutions, Urban Earth, Jo Lees and Joe Kitching. A major milestone was reached in November 2019 when the beachfront promenade extension reached the harbour. This means that residents anywhere in the city can now step onto the promenade, from the harbour in the south to Blue Lagoon in the north. The project began in early 2018 and cost R400-million. The Point Waterfront Development (directly behind the latest extension to the promenade) is a major project that is transforming what was an under-utilised and somewhat rundown part of the city into a vibrant, multi-use precinct. Some projections put the total potential investment value of the project at R40-billion and the number of permanent jobs to be created at 6 750. It offers a mix of office space, retail shops, residential dwellings and leisure options. The 55ha site has already seen significant investment. A cruise terminal in the harbour backing on to the Point has been approved, while other major projects in the inner city include the Warwick Junction transport interchange and the Centrum Government Precinct which will formalise the relationship between buildings such as the International Convention Centre and a related hotel, the library, council chambers and the redevelopment of Gugu Dlamini Park. According to the organisers of the 2019 KZN Construction Expo, infrastructure will attract more than R200-billion in investment over seven years and R35-billion will be spent over 15 years at the Port Waterfront development. The King Shaka International Airport and Dube TradePort are also attracting property investments.

Online Resources Construction Industry Development Board: www.cidb.org.za Master Builders Association KwaZulu-Natal: www.mba-kzn.co.za SA Estate Agency Affairs Board: www.eaab.org.za SA Institute of Valuers: www.saiv.org.za

Sector Insight Durban could become the continent’s most liveable city. Two new industrial parks are being developed: Cornubia is part of a larger project near Umhlanga and Clairwood in Durban South will offer more than 300 000m² of A-grade industrial space. Tongaat Hulett Developments ( THD) launched the nTshongweni Urban Development on either side of the busy N3 highway west of the city in 2018. The Cornubia project covers 1 300ha about 7km from the airport and encompasses indust-rial, commercial, residential sections. The southern part of the project will cater for 24 000 homes, industrial development and more than one-million square metres of commercial floor space, all complemented by public open spaces (430ha) and social and community facilities. KwaZulu-Natal has a number of brick companies and four cement factories. Three of these are run by NPC at Simuma, Durban and Newcastle, and the company has a further six sites for concrete and two for aggregate. NPC is part of the Intercement group. Lafarge has several aggregate quarries and eight Readymix plants around the province. The company’s grinding operation in Richards Bay closed in 2017. ■

KWAZULU-NATAL BUSINESS 2020/21

OVERVIEW

Tourism Hotel groups are investing in new properties and refurbishment.

Moses Mabhida Stadium. Image: Kevin Sawyer

dventures don’t come more hair-raising than throwing yourself into the void above a sports stadium, but that’s what thousands of visitors to the Moses Mabhida Stadium have been doing for a decade. The SkyCar, a funicular trip over the top of the roof, is under repair but bungy-jumping is still very popular, as is the “Adventure Walk” on the south side of the stadium. The 56 000-capacity stadium is home to a professional soccer team and forms part of a sporting precinct that includes the province’s professional rugby franchise, the Kings Park Stadium, and has greatly increased KwaZulu-Natal’s ability to host big events such as the Fact Durban Rocks and the Monster Jam. The other major events asset in the province’s largest city is the Durban International Convention Centre (Durban ICC). A major international football conference was due to be held at the venue in March 2020, with the FIFA secretary-general slated to speak. However, the global health scare related to the Covid-19 virus saw that event (and many others) postponed or cancelled. The 2019 Africa’s Travel Indaba attracted 342 first-time buyers out of a total of 1 663 buyers from more than 80 countries, cementing the event as a major date on the tourism industry’s calendar. The meetings, incentives, conference and exhibition sector (MICE) is a priority sector for the provincial government. The Convention Bureau has booked dozens of events and conferences since 2012, bringing more than R3-billion into the provincial economy. More than 7 000 delegates are annually attracted to Africa’s Travel Indaba

KWAZULU-NATAL BUSINESS 2020/21

Sector Insight Moses Mabhida Stadium has become an iconic symbol of KwaZulu-Natal. to exhibit South Africa’s assets to international tour operators. The city has secured the Indaba until 2022. A number of new initiatives are expanding options for visitors. These include the creation of a new Cruise Terminal (dealt with separately in this journal), the development of caves at Ngodini and Ndumo, and the upgrading of the Mandela Capture Site near Howick. Another potential growth area is health tourism. Upwards of seven-million people travel the world annually for procedures, and South Africa is well placed to receive a percentage of this

OVERVIEW market. Richards Bay has hosted a conference on issues such as investment, training and the development of products for this growing sector. The combined contribution of retail and tourism to provincial GDP is 14%.

Hotels Research by Tourism KwaZuluNatal shows that the coastal province consistently has the best hotel occupancies in the country. Tsogo Sun spent R1.6-billion on refurbishing its Suncoast complex on Durban’s Golden Mile. Suncoast Casino Hotels & Entertainment covers a huge area and offers a wide variety of entertainment options. The recent upgrade included the addition of seven new restaurants, new retail outlets, a new theatre and an event venue, and increased space at the casino. More underground parking was created and the whole complex was given a fresh look. Tsogo Sun has four other hotels on the Golden Mile and six hotels in Durban with a further four in nearby Umhlanga, where one of the group’s most luxurious hotels, the 89-room Beverly Hills, is located. A “megahotel” was created with the amalgamation of the Southern Sun North Beach and Southern Sun Elangeni hotels. Premier Hotels & Resorts will spend about R420-million on two new hotels at Umhlanga. Currently under construction, the hotel complex is located alongside the Gateway Theatre of Shopping next to Umhlanga Ridge. The four-star Premier

Hotel will have 130 rooms while the three-star Splendid Inn by Premier will be equipped with 64 bedrooms. The group has hotels and resorts in six provinces. A new Radisson Blu Hotel will open in Umhlanga Rocks as part of the ambitious R3-billion Oceans Umhlanga development. Some construction work has been halted because of problems experienced by construction companies, but it seems that the hotel and the shopping mall sections of the planned complex are going ahead. A 207-room Hilton Garden Inn planned to be operating at Umhlanga Arch in 2020. Hilton Durban acquired a new owner in 2018 when Bin Otaiba Hotels bought it, together with four hotels in Johannesburg, Port Elizabeth and Cape Town. The upgrading of the Point area between the beach and the Port of Durban has resulted in major investments. The Docklands Hotel at the Durban Waterfront is a four-star Signature development that cost about R100-million to develop. The Royal Hotel in the heart of Durban is one of eight Three Cities Group hotels in the province. The Golden Horse Casino Hotel is a Three Cities property, and the Group administers the International Hotel School in Westville that is also hosts the Christine Martin School of Food and Wine.

Drakensberg Amphitheatre. IFA Hotels & Resorts runs several luxury properties including the Zimbali Coastal Resort and Zimbali Lakes Resort. Signature Life Hotels has 13 properties and Gooderson Leisure has a varied portfolio. Sibaya Casino and Entertainment Kingdom, a Sun International property, is north of Durban between Umdloti and Umhlanga. The casinos in Newcastle (Century City), Empangeni (Tusk Umfolozi Casino) and Pietermaritzburg (Golden Horse Casino) are run by Century Casinos Newcastle, Peermont Global and Akani Msunduzi Management respectively. ■

Online Resources Durban International Convention Centre: www.icc.co.za Ezemvelo KZN Wildlife: www.kznwildlife.com Moses Mabhida Stadium: www.mmstadium.com Tourism KwaZulu-Natal: www.zulu.org.za

KWAZULU-NATAL BUSINESS 2020/21

OVERVIEW

Manufacturing New factories are being built at Dube TradePort and Cornubia.

new plant to make washing machines has created 75 jobs at the Durban plant of white-goods manufacturer Defy. The R121-million investment is part of a R1.2-billion investment programme which Turkish company Arçelik Global has been following since it bought Defy in 2011. The company has another plant in at Ezakheni (near Ladysmith) and one in the Eastern Cape. Indian generic drug manufacturer Cipla is to build a new facility at Dube TradePort to complement its existing factory in Durban. LG Electronics South Africa has opened a R21-million factory and distribution centre in Cornubia, north of Durban. Expansion of production normally heralds an uptick in the economy. Unfortunately, the fact that more aluminium products are going to be made by Hulamin’s extrusion facility in Pietermaritzburg reflects the fact that the company has closed one of factories in another province. The company believes its restructuring is working well, and its beverage business is doing well. Hulamin also makes rolled products (pictured) at Edendale, Pietermaritzburg and at Camps Drift. The manufacturing sector contributes 17.7% to the provincial Gross Domestic Product (GDP) of KwaZulu-Natal. The strongest export sectors are base-metals (32% including aluminium), mineral products such as ores, vehicles and chemical products. New opportunities in the Blue economy (ship-building and maintenance, oil-rig repair and servicing) and the Green economy (solar panel manufacture, solar, biogas and wind energy plant construction, management and maintenance, heating and cooling devices) are set to grow in KwaZulu-Natal with the allocation of geographical hubs to support these sectors, and the introduction of policies and incentives designed to make them competitive. The Richards Bay Industrial Development Zone has been identified as an area that can attract investment in both of these sectors while the Port of Durban already has a strong boat-building and maintenance sector. The nine-tug contract put out by Transnet National Ports Authority (TNPA) is worth R1.4-billion and was won by Durban-based Southern African Shipyards Durban. iLembe District Municipality is intended as the renewable energy hub of the province, with renewable energy components manufacturing as a key subsector.

Online Resources Aluminium Federation of South Africa: www.afsa.org.za Chemical and Allied Industries’ Association: www.caia.co.za Enterprise iLembe: www.enterpriseilembe.org.za Manufacturing Circle: www. manufacturingcircle.co.za Plastics SA: www.plasticsinfo.co.za

KWAZULU-NATAL BUSINESS 2020/21

Sector Insight Defy is hiring. There are 219 clothing companies in the province. Textile manufacturer Africa Bespoke Apparel launched its R81-million factor y in Verulam, while Canvas and Tent Manufacturing has more than 400 employees in Ladysmith. Carpet manufactur-ers Belgotex Floorcoverings and Ulster Carpets have facilities in Pietermaritzburg and Durban respectively, while Böhler Uddeholm produces tooling materials and welding consumables in Pinetown. The chemicals and petrochemicals subsector makes up 17% of the province’s manufacturing output, with industrial chemicals accounting for nearly a third. Two large oil refineries and a sophisticated sugar milling and refining industry underpin the provincial chemical manufacturing. Steel and aluminium are other heavy manufacturing products. Sappi Saiccor ’s Umkomaas plant is the world’s biggest producer of specialised cellulose, with production edging upwards every year towards full capacity of more than 800 000 tons per annum. KwaZulu-Natal produces nearly a third of South Africa’s plastic requirements. Nampak has several packaging facilities in the province and Mpact ’s Pinetown facility specialises in FMCG containers. ■

OVERVIEW

Automotive Toyota is to spend R2.4-billion on a new vehicle line.

n a year in which South Africa’s total vehicle exports topped 350 000, it was perhaps not surprising that Durban’s Car Terminal boasted a record of putting more than 500 000 fully-built-up units (FBUs) through the port in 2018/19. The figure includes FBUs that are not motor vehicles and includes vehicle imports. Toyota’s popular Fortuner is exported at a rate of about 150 per month. The company’s plant, just a few kilometres south of the harbour at Prospecton, is to receive a R2.4 billion investment injection in order to produce a new passenger vehicle from the end of 2020. The Toyota Hybrid Synergy Drive vehicle will be produced as a variant. Toyota sells about a quarter of the vehicles sold in South Africa, and accounts for the same proportion of export volumes. The company’s total investment of R4.2billion between 2019 and 2021 includes other manufacturing projects and a huge increase in warehousing capabilities. The other large-scale original equipment manufacturer in the province is Bell Equipment. Between the Toyota plant and the Richards Bay facility of heavy-equipment manufacturer Bell Equipment, upwards of 11 000 people are employed. In 2019 Bell won the “Major Contributor to Innovation and Technological Advancement in KZN” award and the “Exporter of the Year” award. Exports to more than 80 countries make up about 40% of the company’s turnover and local content of those exports is at 70%. Bell is best known for its heavy equipment which is primarily used in the mining and construction sectors. Another manufacturer of earthmoving equipment is Dezzi, with 18 offices and branches. In 2018 AIH Logistics started assembling Mahindra and Bolero bakkies from kits imported from India on a 5 000m² site at Dube TradePort. The Mathe Group’s tyre recycling plant at Hammars-dale has increased capacity to 150 000 used truck tyres per year and should exceed 200 000 soon, while Powerstar assembles

Online Resources Automotive Industry Development Centre: www.aidc.co.za Durban Automotive Cluster: www.dbnautocluster.org.za National Association of Automobile Manufacturers of South Africa (NAAMSA): www.naamsa.co.za National Association of Automotive Component and Allied Manufacturers (NAACAM): www.naacam.co.za

Image: Bell Equipment

Sector Insight Bell Equipment is scooping awards. trucks in Pietermaritzburg on a site formerly used by Super Group. KwaZulu-Natal’s substantial automotive components sector includes large manufacturers such as GUD Filters, while 39 companies (with 17 000 employees) are members of the Durban Automotive Cluster. Trade and I nvestment KwaZulu-Natal estimates that the province’s component automotive manufacturers enjoy a combined turnover approaching R10-billion. The Behr Group has an air-conditioning and cooling systems factory in Durban. Ramsay Engineering supplies cross-car beams for BMW and Ford. Funding was received from the Industrial Development Corporation (IDC) to buy new tool-making technology to make this possible. ■

KWAZULU-NATAL BUSINESS 2020/21

OVERVIEW

Energy The sugar industry is ready to sell excess power.

outh Africa’s shortage of reliable electricity supply came into sharp focus in 2019. The country’s sugar industry, which is particularly strong in KwaZulu-Natal, says it generates far more power than it needs but national government is hesitating in allowing companies to sell to the grid. Encouraging signs were given that government was moving in this direction in the President’s State of the Nation Address and in remarks made by the Minister of Minerals Resources and Energy at the Investing in African Mining Indaba in February 2020, but no licences or concrete proposals were immediately forthcoming. The managing director of Illovo Sugar SA, Mamongae Mahlare, told the Sunday Times in March that the sugar industry is in real need of some other source of income to offset tough times. Selling energy to the grid (and investigating biofuel and bio-energy) are “key” to the sector’s future, she told the newspaper. At the company’s Eswatini mill, Ubombo, it has a commercial supply agreement with the Eswatini Electricity Company. Sugar plant. Image: Illovo Sugar The province’s other sugar giant, Tongaat Hulett, produces between 12MW and 14MW of power at its mills and believes that the national sugar industry could generate between 700MW and 900MW. A 17MW biomass project represents the province’s only approved project in terms of the national Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). An open cycle gas turbine plant at Shakaskraal in the iLembe District Municipality can be converted to gas-fired technology, a method which energy planners are encouraging. The 670MW plant came on stream in 2017. Its project company, Avon Peaking Power,

Online Resources National Department of Energy: www.energy.gov.za National Energy Regulator: www.nersa.org.za South African National Energy Development Institute: www.sanedi.org.za

KWAZULU-NATAL BUSINESS 2020/21

Sector Insight Richards Bay hopes to attract LNG investors. is jointly owned by a community trust, Mitsui (Japan), Legend Power Solutions (South Africa) and ENGIE of France. As part of the provincial government ’s strategy to boost regional development, the iLembe District has been named as an Industrial Economic Hub (IEH) for the renewable energy sector. Khanyisa Projects has set up 26 biodigesters which produce gas for cooking at Ndwedwe in the iLembe District. The project forms part of the Working for Energy programme of the South African National Energy Development Institute (SANEDI) which promotes the use of sustainable clean energy in rural areas. The Richards Bay Industrial Development Zone (RBIDZ) has been named as the site for 2 000MW liquefied natural gas (LNG) plant in terms of national government’s gas-to-power plan. RBIDZ is also the site of a new biomass plant. Biomass technology is at the centre of the conversion scheme of South African Breweries at its Prospecton plant south of Durban. Methane-gas emissions from a nearby effluent plant are piped to the plant where they are converted to electricity. ■

OVERVIEW

Water Two new dams are under construction.

wo new dams will add 800-million litres of water per day to the available supply in KwaZulu-Natal. As part of the lower uMkhomazi bulk water scheme, utility Umgeni Water will spend about R26-billion on the Smithfield Dam and R2.4-billion on the Ngwadini Dam. Umgeni Water currently supplies more than 400m³ of potable water to its six large municipal customers: eThekwini Metropolitan Municipality, iLembe District Municipality, Sisonke District Municipality, Umgungundlovu District Municipality, Ugu District Municipality and Msunduzi Local Municipality. The company has five dams, 10 waterworks, five water-treatment plants and two waste-water works. Large parts of the northern part of the province are served by Mhlathuze Water. The utility has assets valued at more than R3-billion and its area of supply covers 37 000m². Clearing pit toilets in remote rural areas and on steep inclines presents an engineering challenge. In response to a Water Research Commission project on the subject, Partners in Development, a Pietermaritzburg-based engineering and project management company, has developed the eVac pit-emptying machine. It’s lightweight, mobile and has strong sucking power. New technology has been installed at the Verulam Wastewater Treatment Works of the eThekwini Municipality. Murray & Roberts Water and its European technology partner, Organica Water, has installed an environmentally-friendly system that uses 30% less energy and produces 30% less sludge. Richards Bay has installed a 10-container desalination plant next to the municipal water-treatment plant at Alkanstrand. The first mobile sea-water purification unit in South Africa, it comprises 10 containers and is located adjacent to the water-treatment plant at Alkantstrand. It can deliver 10 megalitres of drinking water. However, the high cost of electricity means that the unit is used sparingly. Solar energy is being investigated as a possible alternative. In 2018 JG Afrika delivered a R72-million desalination plant to South32’s Hillside aluminium smelter in the same town. The area north of the Durban central business district is one of the fastest-growing urban areas in South Africa, with a

Online Resources Mhlathuze Water: www.mhlathuze.co.za National Department of Water and Sanitation: www.dwa.gov.za Partners in Development: www.pid.co.za Umgeni Water: www.umgeni.co.za Water Research Commission: www.wrc.org.za

Sector Insight Pietermaritzburg engineers are tackling pit toilet clearance. number of large office and accommodation projects going ahead simultaneously. This is a welcome development for the economy, but the new buildings also create pressure on infrastructure.

Image: Umgeni Water The multi-year, R250million Northern Aqueduct Augmentation project was initiated in 2014 and the fifth phase of the project is underway. This will provide water for Durban North, Umhlanga, Newlands, KwaMashu, Phoenix and Cornubia. Nedbank sponsors the clearing of alien vegetation in the country’s water-catchment areas, including in KwaZuluNatal. The Nedbank sponsorship of the WWF’s Water Balance Programme has seen water flowing more freely in the Umgeni catchment area. ■

KWAZULU-NATAL BUSINESS 2020/21

OVERVIEW

Banking and financial services The Port of Durban will expand with a loan from the new Brics bank.

he Brics New Development Bank has made a $200-million loan for the expansion of the container terminal in Durban. The busy port is currently stretched beyond capacity and waiting time for trucks can be extremely long. Activist groups in Durban’s southern suburbs are opposing the loan and the expansion, saying that further development will increase pollution in the area and lead to even more dangerous traffic congestion. Up the coast at Richards Bay, the World Bank’s International Finance Corporation (IFC) has committed $2-million to a feasibility study on the construction of a liquefied natural gas (LNG) storage and regasification terminal. The study’s costs are shared with Transnet and a private investor will be sought if the feasibility study is positive.

Durban Container Terminal. Image: Transnet In 2017 Tyme Digital received a licence to run a bank. By early 2019, TymeBank was available in 500 Pick n Pay and Boxer stores and more than 50 000 customers had an account. Tyme stands for Take Your Money Everywhere; the bank does not have a branch network. African Rainbow Capital began as the venture’s BEE partner but in 2018 bought out the Commonwealth Bank of Australia. Second to market among the country’s new banks was Discovery Bank, which officially launched in March 2019. Discovery Bank will apply the behavioural model it uses in its health business to reward good financial behaviour. The Discovery group is already a giant on the JSE with a market value of R83-billion and access to millions of customers.

Online Resources Association for Savings & Investment South Africa: www.asisa.org.za Financial Sector Conduct Authority: www.fsca.co.za Insurance Institute of South Africa (KwaZulu-Natal): www.iikzn.co.za South African Institute for Chartered Accountants: www.saica.co.za

KWAZULU-NATAL BUSINESS 2020/21

Sector Insight The International Finance Corporation is investigating energy options. Three state entities are merging to create the new Human Settlements Development Bank: the National Housing Finance Corporation, the Housing Loan Fund and the National Urban Reconstruction and Housing Agency. The focus will be on financing housing for poorer households and for large state-funded housing projects. Part of the drive is to integrate cities better and to combat the legacy of the spatial divide that apartheid left behind. Private sector investment will be required. The Chartered Institute of Government Finance, Audit and Risk Officers (Cigfaro) advises institutions, trains its members in public finance and promotes the interests of professionals in the public sector. It also develops and assesses qualifications and advises tertiary institutions on the requirements for courses. The South African Institute for Chartered Accountants International provides training in financial reporting standards for SMMEs while the Insurance Institute of KwaZulu-Natal (IISA) holds regular education workshops. The institute’s mentorship programme is run in association with the Musifunde Training Centre. ■

OVERVIEW

Education and training Maths and science is in focus.

Maths and Science School of Excellence is due to open in 2020 at La Mercy, north of Durban. The long-planned project (pictured) on the site of a closed primary school is back on track and is part of a wider provincial programme that includes a Special School for Autism (2020) and two Schools of Excellence scheduled to be started in 2021; for Agriculture in Umgungundlovu and Maritime studies in Umlazi. KwaZulu-Natal has 2.8-million school pupils, many of whom are in rural areas. Transport is provided to 350 schools, covering 59 000 pupils, and 2 400 bicycles have been made available under the Shovakalula programme. There are two universities and two universities of technology in KwaZulu-Natal, and the national distance university, the University of South Africa (Unisa), has a presence in five locations. USB Executive Development offers business courses for executives. The University of KwaZulu-Natal has opened a new Chemistry Postgraduate Research Facility at the School of Chemistry and Physics in Pietermaritzburg. The Durban University of Technology (DUT) has six faculties operating in seven campuses in Durban and in the Midlands. DUT is well known for its outstanding graphic-design school and offers one of only two chiropractic programmes in South Africa. The University of Zululand offers diploma and degree courses on two campuses at Empangeni and Richards Bay. The unbundling from the successful Curro group of a separate tertiary entity which listed on the JSE as Stadio Holdings is a good indicator of the growth of the private sector in education. Stadio currently has three institutions: Southern Business School, AFDA (the School for the Creative Economy) and the Embury Institute for Higher Education which has a campus in Musgrave, Durban. There are seven schools in KwaZulu-Natal operating under Curro brands. Advtech, the other big private company in the sector, already has 27 tertiary campuses nationally, in addition to its 78 schools operating under a variety of labels. Advtech operates 10 educational sites in KwaZulu-Natal.

Online Resources KwaZulu-Natal Department of Education: www.kzneducation.gov.za National Department of Higher Education and Training: www.dhet.gov.za National Research Foundation: www.nrf.ac.za

Sector Insight Majuba TVET College is a new Centre of Specialisation for boiler-making.

Image: KZN Dept of Education

Training KwaZulu-Natal has nine Technical and Vocational Education and Training (TVET) Colleges with a total enrolment around 80 000. Coastal KZN TVET College gives students practical experience through facilities such as the Nongalo Industrial Park. The college hosts the Samsung Engineering Academy, a Tooling Centre of Excellence and a manufacturing plant for sanitary towels. The college has several sites on the South Coast and caters for 15 400 students. Majuba TVET College has recently been appointed as a Centre of Specialisation for boiler-making. The Mnambithi TVFET College is located in the Battlefields Route tourism area and offers National Diploma courses in tourism and other qualifications. A satellite campus operates at Estcourt. ■

KWAZULU-NATAL BUSINESS 2020/21

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INDEX

INDEX Africa Biomass Company â&#x20AC;¦..................................................................................................................................... 9, 27 Citiq Prepaid............................................................................................................................................................................IBC Chartered Institute of Finance Audit and Risk Officers (CIGFARO)..................................................... 11 Durban Chamber of Commerce and Industry ................................................................................................... 2 Durban International Convention Centre (Durban ICC) ..................................................................... OBC Fibre Circle ........................................................................................................................................................................ 30, 31 Indaba Lodge, Richards Bay........................................................................................................................................... 38 Invest Durban ........................................................................................................................................................................IFC Metropolitan........................................................................................................................................................................ 4, 46 Nedbank ..............................................................................................................................................................................20-23 Petroleum Agency South Africa ................................................................................................................................... 6 Transnet Pipelines ................................................................................................................................................................ 16

KWAZULU-NATAL BUSINESS 2020/21

AFRICA’S SMARTEST CONVENTION CENTRE The Durban ICC has always aimed to position itself as “Africa’s Leading Convention Centre” but having invested in the latest, cutting-edge meeting technology, the centre is re-inventing itself as the continent’s leading high-tech convention centre. “Without moving away from our existing market positioning we are adding this competitive

edge and aiming to also be recognised as “Africa’s Smartest Convention Centre”, said Durban ICC Chief Executive Officer, Lindiwe Rakharebe. The Centre is offering a range of innovative solutions such as Hybrid events, Livestreaming, Video-on-Demand, and Remotepresentation events. For the uninitiated, a Hybrid Event is simply the combination of a traditional face-to-face event with an online

component, which extends the reach of the conference to a wider audience using technology like live-streaming. The best part is that companies are taking advantage of this kind of event solution even during the lockdown by using the technology on offer and not having to wait until live events fully start up again. Some are even able to reach much larger audiences by taking their events online than they would have with their traditional live event.

The virtual events offer a range of benefits, for instance, the digital delegate can: • Get all the content of the live event from the comfort and safety of their homes • Watch the speakers via the video feed and view any presentations via the picture in picture mode • Engage remotely with the event in real time via the event’s chat or social media channels • Share the content with others in their organisation directly without having to repeat it themselves second-hand to their colleagues • Choose to consume the event content at a later time if that suits their schedule • View selected elements from the event programme which pertain to their area of interest.

While this is just the latest addition to the ever-evolving range of tech offerings available at the Durban ICC, as the Centre has always taken pride in being on the leading edge of the latest developments in this space. The Durban ICC hosted its own live-stream event in September 2019 and has subsequently run several successful events of this kind for its clients. “There is no shortage of new innovations out there, but it’s our job to incorporate the meaningful

ones which make our clients’ lives easier into the Durban ICC customer experience”, added Scott Langley, Durban ICC’s Director of Marketing, Sales and Events.

system into their complex. The Centre has also invested heavily in its massive video screens and interactive digital totems in the past year.

The Durban ICC boasts the country’s fastest convention centre Wi-Fi network and that which is able to support the most concurrent users. It was also the first centre in the country to offer indoor Google Maps and to incorporate the ‘whatthreewords’ navigation

No wonder it is also being recognised as Africa’s Smartest Convention Centre.

KwaZulu-Natal Business 2020/21

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