Industrial parks and Special Economic Zones

Industrial parks and Special Economic Zones Dedicated zones and good rates are encouraging manufacturing.

A Forestry Industrial Technology Park at Sabie will increase the value derived from the province’s trees.

South African industrial planners are creating Apart from attracting foreign direct industrial parks and Special Economic investment (FDI) and boosting employment, Zones (SEZs) as a means to cluster SEZs can also play a role in adding new together businesses that can benefit from sectors or sub-sectors to an economy. proximity to one another and as a way to boost local Various industrial parks (private or manufacturing through incentives and tax rebates. public) are pursuing similar goals. The The policy aims to attract new skills and develop emphasis in most of these initiatives is on new industries. beneficiation, mainly of minerals but also

Key goals behind the establishment of SEZs are: of agricultural products. South Africa’s most • to encourage industries to develop in clusters, recent Industrial Policy Action Plan (IPAP) leading to economies of scale, skills-sharing and has a manufacturing focus, so beneficiation easier access by suppliers supports the diversification of the economy. • to create industrial infrastructure to promote investment A good example of the thinking on this • to promote cooperation between the public and subject is illustrated by the focus on forestry private sectors of the Mpumalanga Department of Economic • to use the zones as a launching pad for other Development and Tourism (DEDT). The developments. department wants Mpumalanga to follow the example of Finland where every part of a tree is processed into products that have value. A memorandum of understanding signed by South Africa with Finland holds potential for Mpumalanga, as does the planned creation of a Forestry Industrial Technology Park at Sabie. DEDT has also asked the state forestry company, SAFCOL, to relocate its head offices to the province. SAFCOL is South Africa’s thirdEbrahim Patel, Minister of Trade and Industry, largest state-owned enterprise (SOE) and it meets trainees at the Highveld Industrial Park. had revenues in 2017/18 of R926-million.

Prime office and industrial space available

Highveld Industrial Park offers unique variety in a prime location.

Highveld Industrial Park has over 60,000m² of prime warehousing and workshop space available for rental, industrial workshops – from 420 to 3,500 square metres. Vacant property is also available for greenfield projects, situated on 650 hectares of prime land.

The warehouses and workshops are suitable for diverse purposes, including steel fabrication, warehousing, heavy and light vehicle and machinery maintenance. Six office blocks offer furnished and unfurnished office space which are also suitable for functions and training.

Where is Highveld Industrial Park?

Within 80km of eight Eskom power stations 90km from Pretoria via the N4

120km from Johannesburg on the N12 200km from Mbombela on the N4 Has an internal rail and road network.

Facilities: value-added services on-site

Diesel supply facility

Electricity supplied directly from the Eskom grid

Methane-rich natural gas directly supplied by

Sasol

Abundant raw water and on-site purification

Round-the-clock maintenance services

Specialised environmental and laboratory support services

On-site rail siding

Canteen and laundry facilities 24/7 security and access control

Emergency services: medical and fire-fighting

Other technology parks in the pipeline are the Petro-Chemical Industrial Technology Park (Govan Mbeki Municipality), Mining and Metal Industrial Park (eMalahleni Municipality) and the Agricultural Industrial Park in Mbombela.

A major government-led initiative in Mpumalanga is the Nkomazi SEZ which boasts geographic and logistical advantages and opportunities, given its proximity to the Mozambique border and the Mozambican port of Matola. Located in the town of Komatipoort, the SEZ will provide access to Mpumalanga’s neighbouring provinces Gauteng and Limpopo and the neighbouring states of Eswatini and Mozambique.

An agri-hub within the SEZ will deal with the whole value chain from growing fruit through to processing, marketing and logistics. Having manufacturing facilities at the core of the hub will enable a variety of businesses to be established, both upstream (to supply the plant) and downstream (to deal with the products of the plant).

Highveld Industrial Park

An excellent example of a private initiative in the field of generating growth through the intelligent use of property is the Highveld Industrial Park in eMalahleni.

Now a thriving industrial park, the site had been home to Evraz Highveld Steel and Vanadium. When that company went into business rescue the

property was repurposed as an industrial park.

Tenants have reacted enthusiastically to the new offering. The number of tenants grew by mid-2019 to over 40, having just topped 20 in early 2018. Tenants include a training centre funded by the Construction Sector Education and Training Authority (CETA), several engineering concerns and a mining equipment refurbishment company.

The property’s developers were able to leverage all the advantages of the steel company’s site, which is well located in terms of its access to the industrial heartlands of two provinces, Mpumalanga and Gauteng. Two iron plants and a steel plant offer fully-equipped metallurgical and steel-making facilities, supported by environmental monitoring services and metallurgical and chemical laboratories.

In addition, there are good rail and utility connections, water supply and purification facilities and a ready supply of gas from several sources. Sasol operates in Mpumalanga and supplies methane-rich natural gas, while industrial gas producers African Oxygen and Air Liquide both have plants on the premises.

In 2019 Novo Energy opened a natural-gas compression facility within the park. Fed by the Sasol natural-gas pipeline, the plant operates all day, every day and supplies natural gas via its fleet of trucks to customers in a wide variety of sectors.

Highveld Industrial Park has many types of workshops, storage areas and offices, together with canteens, parking areas, change rooms and a clinic.

Johan Burger, CEO

Is there a clustering of enterprises taking place?

It was always the intention to create an Industrial Park that operates as a “one stop shop” where businesses are able to operate with ease and we are pleased to see these synergies developing between the tenants. The park offers a host of support services, some of which are offered by current tenants and others through inhouse expertise. This ranges from diesel supply, compressed natural gas supply, security services, onsite laboratory and environmental support services to emergency services.

What are the logistical advantages the park enjoys? Highveld Industrial Park has large-scale infrastructure to deal

INTERVIEW Diversity of tenants shows Highveld Industrial Park’s versatility

CEO Johan Burger highlights the diverse range of services enjoyed by industrial and office tenants of Mpumalanga’s newest industrial park.

with the high level of traffic and heavy operations including road infrastructure, on-site weighbridges, tipplers and cranes. The park is ideally situated in the heart of South Africa’s coal-producing region and within 80 kilometres of eight Eskom power stations. It is on the outskirts of eMalahleni situated next to the N4 highway and close to the N12. One of South Africa’s largest private sidings is directly linked to the Richards Bay and Maputo line and in the past two years coal, in excess of threemillion tons, has been moved through the site.

What is your unique selling proposition?

We are logistically well situated and able to provide the necessary support services to our clients on-site, which includes provision of security, maintenance and utilities. The current team are all ex-employees of Evraz Highveld and have specific skills, which range from environmental to engineering.

We pride ourselves on the diverse nature of the businesses we have on-site and are able to accommodate with ease; no business is too big or too small. We have a number of facilities – ranging from offices to large heavy industrial workshops – and we can accommodate everything in between.

How significant is the recent purchase by ArcelorMittal of Highveld Structural Mill?

This is a significant milestone as ArcelorMittal will be one of our anchor tenants at Highveld Industrial Park. However, this purchase is also important for the country as it secures a strategic steel manufacturing asset, which is the only one of its kind in Africa.

Introducing the Mpumalanga Economic Regulator

The Mpumalanga Economic Regulator (“MER”) is a newly established public entity, reporting to the Department of Economic Development and Tourism (“DEDT”) in Mpumalanga, charged with the mandate to provide for the regulation of the gambling and liquor industries in the Province and to provide for any other matters connected therewith.

The entity was established on 16 October 2017, marking the beginning of a journey as a new provincial public entity, aiming to achieve a cohesive and streamlined approach to gambling and liquor regulation in the Mpumalanga Province.

The establishment of the MER is a culmination of a merger between the Mpumalanga Gambling Board (“MGB”) and the Mpumalanga Liquor Authority (“MLA”).

Our approach

We balance robust industry supervision to prevent and minimise harm associated withthe abuse of alcohol and social impacts associated with problemgambling.This facilitates a regulatory environment which enables adiverse and vibrant industryand recognises the social and economic benefits around responsible industry development. We have leveraged on the gambling and liquor regulation to develop holistic approaches to these issues through enhancements in licensing, compliance, education and administration.

We take a risk-based and intelligence led approach to ensure our resources are applied where the risk is greatest and to minimise the burden on responsible industry. We engage with stakeholders to appreciate current and emerging issues, to influence policy dialogue and to encourage positive compliance behaviours and best practice within the industries.

We are committed to ethical principles of honesty, transparency, integrity, non-discrimination, respect for human dignity, professionalism and accountability. We are accountable to our stakeholders for ensuring that the entity’s business is conducted in accordance with the highest standards of corporate governance, as well as ethical and moral behaviours.

We continuously monitor and review the regulatory environment for opportunities to improveregulatory efficiencies and effective enforcement ofapplicable legislation, as well as minimising harm caused by problem gambling and the abuse of alcohol. There are fundamental reforms on both thegambling and liquor regulation underway.

A snapshot of the regulatory environment in Mpumalanga

Since 1994, South Africans have begun to enjoy newfound freedom to participate in all social spheres, including the age-old recreational activity, gambling. By legalising this form of entertainment, government ensured a decrease in criminality and clandestine behaviour that existed prior to the legislation of the sector.

Mpumalanga was the first province to establish a gambling regulator in South Africa, post the legalisation of gambling in 1994; and the first to introduce the legalised gambling in South Africa, i.e. casinos and limited payout machines (“LPMs”).

The MER and predecessor entities introduced various economic growth projects in the gambling industry; 3 licensed casinos and the fourth casino license which is still being considered, 2 route operators linked to 213 site operators, 8 bingo operators, 4 independent site operator licences, 37 betting outlets and 1 totalisator operator linked to 27 branches/agencies.

The industry acts as a catalyst to create a thriving urban hub around it, which includes malls, hotels and recreation facilities.Jobs are created, new enterprises emerge, and inevitably, other investors are attracted to the region.This type of symbiotic development of infrastructureworks hand inhand with the tourism sector, contributing tothe influxof visitors to a region.

Chief Executive Officer: Bheki Mlambo

In addition, industry operators are liable to pay levies and taxes, which contribute enormously to government’s social development commitments. The MER takes responsibility for ensuring that these finances are accurately tallied and collected.

On 01April 2016, the MLAwas de-linked from the DEDT, to become a stand-alone public entity, until the merger in October 2017. In terms of liquor licences, the entity and its predecessor entities has granted approximately 6000 liquor licences.

The entity is incredibly active in promoting the safe and responsible use of gambling and liquor as a form of entertainment. It’s no secret that gambling and liquor can become habit-forming and have the potential to affect not only families and their livelihoods, but the economy of a region negatively, which is something the MER takes very seriously.

It is the board’s mandate to adopt an honest and open policy when it comes to the potential negative side of these two industries, by educating people of all cultures and socio-economic backgrounds to gamble responsibly and drink responsibly.

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