Investors are showing confidence in the KwaZulu-Natal economy

Investors are showing confidence in KZN

Private and public entities are expanding operations and creating new opportunities.

Harbour expansions, a new film studio, infrastructure spending by major cities and the state and several city-sized property developments – these are some of the big investments into the KwaZulu-Natal economy currently underway.

The scale and variety of these investments illustrate the size and diversity of the regional economy which ranges from mining, steel and chemical manufacturing to automotive works, agri-processing and clothing and textiles. Recent investments in the expanding tourism sector are covered in a separate article.

The New Development Bank, a BRICS initiative, has approved a loan of $200-million in support of the reconstruction of the Durban Container Terminal berth. This will allow Transnet to expand the capacity of the port and to cater for bigger vessels. At Richards Bay, Transnet has committed to investment of R7.5-billion to 2023. Money has been allocated to improving the coal rail line, expanding the rail yard and the port itself. There will be 45 projects in all.

The Richards Bay Industrial Development Zone (RBIDZ) is attracting investment as a node of development as it offers attractive incentives and support for investors. Sectors being targeted include agri-processing, ICT and telecommunications, manufacturing (proximity to aluminium works opens possibility for the manufacture of discs, pistons and beverage cans), logistics

and renewable energy. 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.

Film-maker Anant Singh has plans to transform the old Natal Command site at North Beach into eThekwini Film City. He owns most of the land and the municipality is in favour of the project. Singh told City Press that the projected cost of the project is R7.5-billion.

Two of the province’s biggest companies, Sappi and Mondi, are diversified global operators and they have both recently made major investment commitments. Resp onding to President Cyril Ramaphosa’s appeal for investments to drive the South African economy in 2018, Sappi committed to R7-billion and Mondi to R8-billion. Sappi spent R4.3-billion on increasing its capacity in dissolving pulp in the six years to 2018 and will spend R2.7-billion on its Saiccor plant in KwaZulu-Natal. Mondi noted that its exports from KwaZulu-Natal annually earned about R4-billion.

A 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 Arçelik Global, the Turkish company, has been following since it bought Defy in 2011. The company has another plant in KwaZulu-Natal in Ezakheni (near Ladysmith) and in East London in the Eastern Cape.

In 2018 the eThekwini Metropolitan Municipality decided to apply for a R1-billion load for capital projects. The city’s integrated development plan will include expenditure on water and sanitation infrastructure, roads and electrification projects. Infrastructure throughout the province will attract more than R200-billion to 2025 according to information supplied by the KZN Construction Expo.

Major developments north of the city of Durban continue to transform the economy and the landscape. The King Shaka International Airport and the associated Dube TradePort has made a big impact, as has the conversion by sugar giant Tongaat Hulett of its land holdings into property developments.

Dube TradePort is a 3 000-hectare development that encompasses the airport and is ideally situated for any logistics business due to its proximity to Africa’s busiest cargo port (at Durban) and 140km from the deepest natural harbour in the southern hemisphere where the Port of Richards Bay and the Richards Bay Industrial Development Zone are located.

Dube TradePort is a Special Economic Zone which has: • Dube Cargo Terminal. • Dube Tradezone: Suitable for warehousing, manufacturing, assembling, cargo distribution, etc. • Dube City: 12 hectares of office, retail and hospitality space. • Dube Agrizone: intended to support growing, packaging and distribution high-value perishables and horticultural products. • Dube iConnect: the precinct’s dedicated IT and telecommunications provider and the only locally-hosted cloud service in the province.

Industrial parks

The Provincial Government of KwaZulu-Natal intends establishing one industrial park within each of the province’s 10 district municipalities, focussing on existing strengths. These industryfocused hubs will attract new investments and help existing businesses through economies of scale and by improving access to markets and supply chains.

There is one metropolitan municipality in KwaZulu-Natal. Construction on the industrial park in the eThekwini Metropolitan Municipality, an automobile supplier park, is expected to begin in 2019.

In most of the other areas, land has been secured and feasibility studies have been completed. The design of the parks and the provision of infrastructure is currently underway and some tenants have been identified. The Department of Economic Development, Tourism and Environmental Affairs is the implementing agency on behalf of the Provincial Government.

By way of example, the iLembe District Municipality will be the focus of investment in renewable energy. The N2 is the main arterial running through the district, giving excellent access to both Durban and Richards Bay. The Dolphin Coast is a major node for tourism. With the King Shaka International Aiport (KSIA) and the Dube TradePort lying just south of the iLembe District in the eThekwini Municipality, a partnership has been created between the two municipalities and the provincial government to develop a renewable energy technology innovation hub. Enterprise iLembe (Pty) Ltd drives investment into the area. At Ndwedwe 26 biodigesters produce gas for cooking as part of the Working for Energy programme of the South African National Energy Development Institute (SANEDI).

The Small Harbours and State Coastal Property unit of the National Department of Public Works wants to see coastal properties revitalised. Initiatives are under discussion for Port Edward (new harbour, fish processing, fishing and leisure), Hibberdene (waterfront and a Music City) and Port Shepstone (boat building and repairs and a new economic zone).

Making a real impact

As Black Umbrellas, we are passionate about the socio-economic impact we make to our clients and partners. We believe that every rand invested by our partners/donors must yield a positive result and tangible impact. The SMEs we support continue to make significant positive strides to the outlook of this country.

Our model is aimed at supporting emerging and existing 100% black-owned businesses through a threeyear incubation programme so that they are able to emerge as independent, viable businesses.

KwaZulu-Natal power milestones collectively achieved by our SME clients

Turnover Net Profit Jobs Created Salaries Paid Net Asset Value

R530 435 388 R65 202 494 1704 R134 118 299 R211 091 877

The success of our programme and SMEs has been recognised by entities such as Zululand Chamber of Commerce and Industry (ZCCI) and Business Women’s Association (BWA). Here a number of our clients have scooped prestigious awards such as the BWA Zululand Emerging Entrepreneur of the year (2016/ 2017), ZCCI Emerging Business of the year (2017), ZCCI Micro Business of the year (2017) as well as the People’s Choice Award at Black Umbrellas’ National Enterprise Development Awards (2018).