South African Business 2024 by Global Africa Network Media

UTH AFRICAN SINESS THE GUIDE TO BUSINESS AND INVESTMENT IN SOUTH AFRICA

2024 EDITION

2021 EDITION

SOUTH AFRICAN BUSINESS

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

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THIS IS WHY WE MATTER...

CONTENTS

CONTENTS South African Business 2024 Edition

Introduction Foreword

A unique guide to business and investment in South Africa.

Special features An economic overview of South Africa

Provinces of South Africa

The CEOs of South Africa’s biggest companies are supporting government in tackling the challenges that are getting in the way of economic growth. Renewable energy solutions are taking off and big mining projects are producing valuable product. A snapshot of South Africa’s nine provinces.

Collaborating to put young people to work 22 Youth unemployment remains a stubborn national problem but creative solutions are increasingly coming to the fore.

Economic sectors Agriculture

Mining

Energy

Oil, gas and petrochemicals

Engineering

Manufacturing: general

Manufacturing: automotive

Avocados are proving a fruitful investment. Impala Platinum has gained control of Royal Bafokeng Platinum. Sasol’s partnerships are defining a new direction for the energy giant.

A production rights request follows significant offshore gas finds. Engineers are making the switch to renewable energy possible. Glass group expansion creates 300 jobs.

BMW celebrated 50 years of making cars in South Africa in 2023.

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Commercial Banking

Make Nedbank Manufacturing your next big move. If you are looking for an industry leader who understands the sector, then partner with a bank that sees the bigger picture. We have designed a bespoke offering that will support your manufacturing business needs, and our dedicated team has the knowledge and expertise to help your business grow. So, why not partner with Nedbank Manufacturing? Think bigger. Think Nedbank Commercial Banking. For more information about our bespoke offering, scan the QR code or e-mail us at manufacturing@nedbank.co.za.

Nedbank Ltd Reg No 1951/000009/06. Licensed ﬁnancial services and registered credit provider (NCRCP16). T&Cs apply.

CONTENTS

Construction and property

Water

Transport and logistics

Tourism

Telecommunications

ICT

Development finance and SMME support

Education and training

Banking and financial services

Student accommodation is a growing sector. Solar power is a water solution. A regional airport could become an international hub. New hotels are being built. The Competition Commission has blocked a fibre merger. Retailers are pouring money into digital infrastructure. The SA SME Fund has launched a venture capital fund.

Sol Plaatje University celebrated its 10th anniversary in 2023. Carbon credits and green investing are catching on.

References Key sector contents

SOUTH AFRICAN BUSINESS THE GUIDE TO BUSINESS AND INVESTMENT IN SOUTH AFRICA

2021 EDITION

SOUTH AFRICAN BUSINESS

2024 EDITION

Overviews of the main economic sectors of South Africa.

THE GUIDE TO BUSINESS AND INVESTMENT IN SOUTH AFRICA

ABOUT THE COVER: Main image: Tsitsikamma Community Wind Farm, Cennergi Services. Bottom left: fruit packing, ZZ2; Springboks, Muhammad/Brand SA; Cullinan Diamond Mine, Petra Diamonds; auto worker, BMW Group; Sasol One, Sasolburg, Sasol. JOIN US ONLINE

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SOUTH AFRICAN BUSINESS 2024

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FOREWORD

South African Business A unique guide to business and investment in South Africa.

Credits Publishing director: Chris Whales Editor: John Young Managing director: Clive During Online editor: Christoff Scholtz Designer: Tyra Martin Production: Yonella Ngaba Ad sales: Gavin van der Merwe Sam Oliver Shiko Diala Gabriel Venter Vanessa Wallace Graeme February Tahlia Wyngaard Tennyson Naidoo Lungisa Maseti Administration & accounts: Charlene Steynberg Kathy Wootton Sharon Angus-Leppan Distribution and circulation manager: Edward MacDonald Printing: FA Print

elcome to the 12th edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by an e-book edition at www.southafricanbusiness.co.za. A special feature in this journal focusses on the relationship between tertiary education, training and the jobs market. The youth unemployment rate is referenced in a discussion of the various measures that are being taken in the public and private sectors to help prepare young people for work, or to encourage them to start businesses. The role of the country’s Sector Education and Training Authorities (SETAs) is highlighted. Regular pages cover all the main economic sectors of the South African economy. This includes tracking the rapidly evolving renewable energy landscape and reporting on the progress of exploration and discoveries of oil and gas off the coast and on land. Landmarks such as BMW’s 50-year celebration of making cars in South Africa are noted and a snapshot of each of the country’s provinces is provided. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at www. globalafricanetwork.com. These unique titles are supported by a monthly business e-newsletter with a circulation of over 23 000. The Journal of African Business joined the Global African Network stable of publications as an annual in 2020 and is now published quarterly. ■ Chris Whales Publisher, Global Africa Network | Email: chris@gan.co.za

PUBLISHED BY

DISTRIBUTION

South African Business is distributed internationally on outgoing and incoming trade missions, through trade and investment agencies; to foreign offices in South Africa’s main trading partners around the world; at top national and international events; through the offices of foreign representatives in South Africa; as well as nationally and regionally via chambers of commerce, tourism offices, airport lounges, provincial government departments, municipalities and companies. Member of the Audit Bureau of Circulations

ISSN 2221-4194

COPYRIGHT | South African 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.

Government News Agency; Stag African; Anton Swanepoel; Transnet National Ports Authority; Versofy Solar; Wits Business School; YES; John Young; ZZ2. DISCLAIMER | While the publisher, Global Africa Network Media (Pty) Ltd, has used all reasonable efforts to ensure that the information contained in South African Business is accurate and up-to-date, the publishers make no representations as to the accuracy, quality, timeliness, or completeness of the information. Global Africa Network will not accept responsibility for any loss or damage suffered as a result of the use of or any reliance placed on such information.

PHOTO CREDITS | Airlink; Ardagh Group; BMW Group; CHIETA; Coca- Cola Beverages South Africa; De Beers Group; Ford Motor Company; Glencore; Grinaker-LTA; Impala Platinum; Meatmaster SA; MTN; ORBIT TVET College; Petra Diamonds; Radisson Blu; Sasol; SA

SOUTH AFRICAN BUSINESS 2024

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

AN ECONOMIC OVERVIEW OF

SOUTH AFRICA

Calling itself “Business for South Africa”, the group first came together in response to the Covid pandemic in 2020 and helped to coordinate the successful vaccination rollout of 2021. Spokesmen for the grouping have said that they are responding to national priorities in the spirit of building a prosperous future together. The first steps in a move by the state to partner with the private sector in boosting efficiency at ports were taken in 2022: deals were signed at the Port of Durban, Richards Bay and at East London. In 2023, these first steps became a giant leap when International Container Terminal Services Inc (ICTSI), a Philippines-based port operator, was announced as the preferred partner for a joint venture (JV) to run the Durban Container Terminal with Transnet. Part of the plan for Durban Container Terminal Pier 2 is to increase traffic in such a way that it will be able to increase its handling capacity from the present 2.9-million TEUs (two-

s 2023 drew to a close, concerns about the functioning of South Africa’s ports and railways became more urgent. Transnet, the state-run utility which has six divisions covering ports, port terminals, railways, engineering, pipelines and property, is investigating partnerships with private operators, but the immediate priority is to fix dockside cranes and unload ships. President Cyril Ramaphosa himself visited the Port of Richards Bay, pictured, and promised swift action. The inability of the state’s other big utility, Eskom, to ensure a reliable supply of electricity has been a concern for some time. In response to these large national problems, the Chief Executive Officers of 130 South African companies have made a joint commitment to help. In addition to logistics and energy, crime is the third area of focus for a series of Working Groups which regularly meet and report to the President every six weeks.

SOUTH AFRICAN BUSINESS 2024

PHOTO: TNPA

SPECIAL FEATURE million 20-foot equivalent units) to 11-million TEUs by 2032. The 2022 deal involving a 15-year concession for the loading of grain at one of Durban’s agricultural terminals was won by Afgri, one of South Africa’s biggest agricultural firms. Afgri will deal with the operation and maintenance of all landside operations, and the deal includes a similar arrangement at East London. The other two terminals in Durban are operated by SA Bulk Terminals and Bidvest Bulk Terminals. A similar plan to concession certain dedicated rail lines to private operators has not gone smoothly. The private sector was initially very interested in the idea of running currently closed branch lines to a railhead delivering grain in the Free State or coal in Mpumalanga, for example. However, the length of contract time offered to the private operators was not long enough for them to feel it was worth their while. There was only one bid so the whole process has been put on hold while the model is reworked.

Eskom’s Hex BESS site at Worcester is the largest battery storage project in Africa. debt) rank as the biggest risks to the South African economy. Opportunities for private consortiums are expanding and every window of the REIPPPP has been oversubscribed so there is an appetite to enter the South African energy market. The Northern Cape has attracted the bulk of solar projects, and the Eastern Cape has become the home of the wind farm but the Western Cape has a good mixture of both modes of renewable energy. It also has an enthusiastic metropole, Cape Town, and a provincial administration determined to take full advantage of nature’s bounty. Following the announcement by the City of Cape Town that residents could get cash for power in late 2022, Versofy Solar received 1 500 enquiries in the month of January and has experienced a surge of orders for rooftop installations since then. In 2023 a major wind farm project was announced for Mpumalanga, proving that preconceptions about renewable energy resources in that province were wrong. Eskom’s unbundling will be another spur to growth. The legal separation of transmission is the first step, and considerable progress was made on this in 2023. The other two elements, generation and distribution, will follow. The idea is not to privatise the entities but to find private partners and to allow for competition within the various fields. The R130-billion pledged at COP26 by the EU, the US, Germany, France and the UK to assist South

Seeing opportunity in a crisis The conversation about the global climate crisis has seized the limelight across the world in a way that few other topics have since World War II. The debate in South Africa has its own unique contours, particularly as so much of the country’s electricity generation comes from coal, about 80%. The fact that many people would lose their jobs if coal mines close down is an important factor in calculations, and a key reason why South Africa is at the forefront about the need for a “Just Energy Transition”. In addition to this, Eskom has not been able to avoid regular power cuts. An excellent programme exists to procure the energy that South Africa needs to expand the economy, the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). In Round Five of the REIPPPP, the cheapest solar generation cost was 37.5c/kWh while the best wind cost was 34.4c/kWh. These represent remarkably low costs. When President Ramaphosa announced that private power investors could create up to 100MW of power without having to wait for licensing, he potentially opened up a path to growth. The utility’s inability to provide enough electricity to power the economy (and its huge PHOTO: SA Government News Agency

SOUTH AFRICAN BUSINESS 2024

Rooftop solar installations surged on news that the City of Cape Town would buy power from individual households. and immediately after Covid, but major activity is still underway in the sector. Vedanta Zinc International’s project in the Northern Cape may the catalyst for the establishment of a Special Economic Zone (SEZ) and an uptick in other mining investment. Already, copper mines in that province are being revived. Sibanye-Stillwater, which quickly became a major player in PGMs, continues to acquire assets in the green metals and processing cluster while Afrimat, best known for many years for concrete and construction materials, has built up a much more varied portfolio by buying mines in three provinces. In June 2023 it went back to its roots in a sense: the company’s Construction Materials division was enlarged by the purchase of Lafarge South Africa Holdings. The biggest mining news in 2023 was that De Beers Venetia Diamond Mine started producing. This long-term conversion project of the mine to an underground mine will extend its life to 2045 and perhaps beyond. Grain crops such as maize, wheat, barley and soya beans are among the country’s most important crops. Only rice is imported. Wine, corn and sugar are other major exports. Basing economic growth on a devaluing currency is not the best long-term method of boosting economic growth, but high-value agricultural exports and increased numbers of high-spending international tourists hold some promise for helping to get the South African economy back on a growth path. ■

Africa’s transition from oil and coal to greener technologies is not straightforward; it comes as a mixture of grants, risk-sharing instruments and concessional finance but it will allow South Africa to fund projects that will help the country to move away from fossil fuels without further stretching Eskom’s precarious finances. Eskom made a breakthrough in December 2022 when South Korean company Hyonsung Heavy Industries broke ground at Elandskop signalling the first project in Eskom’s Battery Energy Storage System (BESS) project. The 8MW facility will move to producing an additional 144MW in the second stage of the project. In 2023, a larger project at Worcester, Hex BESS, was launched. Another company that will be involved in Phase 1 of the national rollout of these projects is Chinese company Pinggao. In Cape Town a Swedish firm has spent $30-million setting up an assembly factory for lithium batteries and Bushveld Energy, a subsidiary of Bushveld Minerals, is producing vanadium battery electrolyte at its factory in East London. An Eastern Cape project involving nascent local utility Earth & Wire expects to start delivering batteries in the first half of 2024. US firm Ambri has the contract to deliver a 300MW/1 200 MWh battery system for a combined wind and solar system near Humansdorp. Traditional sectors Gold mining is declining in volumes (even while prices rise), platinum group metals (PGM) prices have gone off the highs experienced during SOUTH AFRICAN BUSINESS 2024

PHOTO: Versofy Solar

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10 REASONS WHY YOU SHOULD INVEST IN SOUTH AFRICA

01.

HOT EMERGING MARKET Growing middle class, affluent consumer base, excellent returns on investment.

02.

MOST DIVERSIFIED ECONOMY IN AFRICA

South Africa (SA) has the most industrialised economy in Africa. It is the region’s principal manufacturing hub and a leading services destination.

LARGEST PRESENCE OF MULTINATIONALS ON THE AFRICAN CONTINENT SA is the location of choice of multinationals in Africa. Global corporates reap the benefits of doing business in SA, which has a supportive and growing ecosystem as a hub for innovation, technology and fintech.

04. 03.

FAVOURABLE ACCESS TO GLOBAL MARKETS

05.

The African Continental Free Trade Area will boost intra-African trade and create a market of over one billion people and a combined gross domestic product (GDP) of USD2.2-trillion that will unlock industrial development. SA has several trade agreements in place as an export platform into global markets.

SA has a progressive Constitution and an independent judiciary. The country has a mature and accessible legal system, providing certainty and respect for the rule of law. It is ranked number one in Africa for the protection of investments and minority investors.

06.

ABUNDANT NATURAL RESOURCES

SA is endowed with an abundance of natural resources. It is the leading producer of platinum-group metals (PGMs) globally. Numerous listed mining companies operate in SA, which also has world-renowned underground mining expertise.

08.

ADVANCED FINANCIAL SERVICES & BANKING SECTOR SA has a sophisticated banking sector with a major footprint in Africa. It is the continent’s financial hub, with the JSE being Africa’s largest stock exchange by market capitalisation.

PROGRESSIVE CONSTITUTION & INDEPENDENT JUDICIARY

07.

WORLD-CLASS INFRASTRUCTURE AND LOGISTICS

A massive governmental investment programme in infrastructure development has been under way for several years. SA has the largest air, ports and logistics networks in Africa, and is ranked number one in Africa in the World Bank’s Logistics Performance Index.

YOUNG, EAGER LABOUR FORCE SA has a number of world-class universities and colleges producing a skilled, talented and capable workforce. It boasts a diversified skills set, emerging talent, a large pool of prospective workers and government support for training and skills development.

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09. 10.

EXCELLENT QUALITY OF LIFE

SA offers a favourable cost of living, with a diversified cultural, cuisine and sports offering all year round and a world-renowned hospitality sector.

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SOUTH AFRICAN BUSINESS SOUTH AFRICAN BUSINESS 20232020

SPECIAL FEATURE SPECIAL FEATURE

Provinces of South Africa A snapshot of South Africa’s nine provinces.

Eastern Eastern Cape Cape

Free Free State State

Gauteng Gauteng

Capital: Bhisho Bhisho Capital: Maintowns: towns:Port Gqeberha (formerly Main Elizabeth, East Port Elizabeth), East London, London, Uitenhage, GraaffKariegaMthatha, (formerlyGrahamstown Uitenhage), Reinet, Graaff-Reinet, Mthatha, Makhanda (Makhanda) Population: 66916 916200 200(2015) (2015) Population: Area:168 168966km² 966km²(13.8% (13.8% Area: ofSouth South Africa) Africa) of

Capital: Bloemfontein Bloemfontein Capital: Maintowns: towns:Welkom, Welkom, Sasolburg, Sasolburg, Main Parys, Kroonstad Kroonstad Parys,

Capital: Johannesburg Johannesburg Capital: Main towns: towns:Tshwane Tshwane Main (including Pretoria), Pretoria),Ekurhuleni, Ekurhuleni, (including Vanderbijlpark, Roodepoort Roodepoort Vanderbijlpark,

Population: Population: 22 817 817900 900(2015) (2015) Area: Area:129 129825km² 825km²(10.6% (10.6% of of South South Africa) Africa)

Population: 13 13200 200300 300(2015) (2015) Population: Area: 18 18178km² 178km²(1.5% (1.5% Area: of South South Africa) Africa) of

Premier: Premier: Lubabalo Oscar Oscar Mabuyane Mabuyane (ANC) (ANC) Lubabalo

Premier: Premier: Sefora Ntombela MxolisiHixsonia Dukwana (ANC) (ANC)

Premier: Premier: Panyaza Lesufi (ANC) David Makhura (ANC)

Keysectors: sectors: Automotive, Automotive, Key agriculture, agri-processing, agro-processing, agriculture, forestry, finance, finance, retail, retail, tourism, tourism, forestry, renewable energy. energy. renewable Infrastructure: Coega Coega Industrial Industrial Infrastructure: Development Zone, Zone, East East London London Development IndustrialDevelopment DevelopmentZone, Zone, Industrial ports of of East East London, London, Port Port ports Elizabeth and and Ngqura, Ngqura, airports airports at at Elizabeth Gqeberha andand EastEast London. Port Elizabeth London.

Key sectors: sectors: Financial Financial and and banking, Key manufacturing, trade, creative banking, manufacturing, trade, industries, media. media. creative industries,

Notable tourism tourismassets: assets:Addo Addo Notable ElephantNational NationalPark, Park, Mountain Mountain Elephant Zebra National National Park, Park, Wild Wild Coast, Coast, Zebra Jeffreys Bay, Bay, National NationalArts Arts Festival. Festival. Jeffreys

Key Keysectors: sectors: Agriculture, Agriculture, agri-processing, agro-processing,chemical chemical manufacturing, manufacturing, mining, transport and and logistics. logistics. Infrastructure: Infrastructure: Maluti-A-Phofung Maluti-A-Phofung Special Special Economic Economic Zone, Zone, Bram Bram Fischer International InternationalAirport, Airport, Fischer University of of the the Free Free State, State, University Central University University of of Technology, Central N8 Corridor. Corridor. N8 Notable tourism tourism assets: assets: Vaal Vaal Notable River, Gariep GariepDam, Dam,Golden Golden Gate Gate River, HighlandsNational NationalPark, Park,Cherry Cherry Highlands Festival, Mangaung African Festival, Cultural Festival Festival (Macufe). (Macufe). Cultural

Provincial government government website: website: Provincial www.ecprov.gov.za www.ecprov.gov.za Eastern Cape Cape Development Development Eastern Corporation: www.ecdc.co.za www.ecdc.co.za Corporation:

Provincial government government website: website: Provincial www.freestateonline.fs.gov.za www.freestateonline.fs.gov.za Free State StateDevelopment Development Free Corporation: www.fdc.co.za www.fdc.co.za Corporation:

SOUTH SOUTHAFRICAN AFRICANBUSINESS BUSINESS2021 2024 SOUTH AFRICAN BUSINESS 2020

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Infrastructure: OR Tambo Infrastructure: InternationalAirport, Airport, Gautrain, Vaal Special International Economic Zone, Gautrain, major major universities and research universities and instituinstitutions, largeresearch convention tions, large centres, centres, FNBconvention Stadium (Soccer City). FNB Stadium (Soccer City). Notable tourism assets: Cradle of Notable tourism assets:Museum, Cradle of Humankind, Apartheid Humankind, Hill, Apartheid Museum, Constitution Magaliesberg, Constitution Magaliesberg, Soweto tours,Hill, Dinokeng. Soweto tours, Dinokeng. Provincial government website: Provincial government website: www.gauteng.gov.za www.gauteng.gov.za Gauteng Growth and Gauteng Growth and DevelopDevelopment Agency: ment Agency: www.ggda.co.za www.ggda.co.za

FEATURE SPECIALSPECIAL FEATURE SPECIAL FEATURE

KwaZulu-Natal KwaZulu-Natal

Limpopo Limpopo

Mpumalanga Mpumalanga

Capital: Pietermaritzburg Pietermaritzburg Capital: Main towns: towns: Durban, Durban, Newcastle, Newcastle, Main Ballito, Port Port Shepstone, Shepstone, Ballito, Empangeni, Ulundi Ulundi Empangeni, Population: 10 10 919 919100 100(2015) (2015) Population: Area: 125 125755km² 755km²(7.7% (7.7% of Area: South Africa) of South Africa) Premier: Nomusa Dube-Ncube (ANC) Premier:

Capital: Polokwane Polokwane Capital: Main towns: towns: Musina, Musina, Ba-Phalabora, Main Bela-Bela, Steelpoort, Tzaneen, Ba-Phalabora, Bela-Bela, Thohoyandou Steelpoort, Tzaneen, Thohoyandou Population: 55 726 726 800 800 (2015) (2015) Population: Area: 125 125 755km² 755km²(10.2% (10.2% of Area: South Africa) of South Africa) Premier: Chupu Stanley Mathabatha (ANC) Premier:

Sihle Zikalala (ANC) Key sectors: Chemicals, dissolving pulpsectors: manufacture, forestry, Key Chemicals,sugar, dissolving automotive, textiles and footwear, pulp manufacture, sugar, forestry, mining, oil textiles and gas, logistics. automotive, and footwear, Infrastructure: King Shaka mining, oil and gas, logistics. InternationalKing Airport, Infrastructure: ShakaDube TradePort, Richards Bay Industrial International Airport, Dube TradePort, Development Zone,Development ports of Richards Bay Industrial Richards and Durban, Albert Zone, portsBay of Richards Bay and Luthuli International Convention Durban, Albert Luthuli International Centre Complex. Convention Centre Complex. Notabletourism tourism assets: HluhluweNotable assets: HluhluweiMfoloziPark, Park, the Drakensberg iMfolozi the Drakensberg mountains,iSimangilso iSimangaliso Wetland mountains, Wetlands Park,Durban Durbanbeaches, beaches, South Park, South Coast, Coast, Zulu heritage, cultural historical heritage, Zulu cultural historical battlefields. battlefields.

Chupu Stanley Mathabatha (ANC) Key sectors: Mining, agriculture, tourism, logistics. Key sectors: Mining, agriculture,

Notable tourism tourism assets: assets: Kruger Kruger Notable National Park, Park, Mapungubwe Mapungubwe National World Heritage Site, Makapans Heritage Site, Makapans Valley, Valley, Marula Waterberg Marula Festival,Festival, Waterberg Biosphere. Biosphere.

Capital: Mbombela Capital: Mbombela Main towns: Emalahleni, Main towns: Emalahleni, Middelburg, Sabie,Lydenburg Middelburg, Sabie, Lydenburg Population: 283900 900(2015) (2015) Population: 44283 Area: 76 495km² (6.3% of Area: 76 495km² (6.3% South Africa) of South Africa) Premier: Refilwe Premier:Mtshweni-Tsipane (ANC) Refilwe Mtshweni-Tsipane (ANC) Key sectors: Agriculture, forestry, mining, steel manufacturing, Key sectors: Agriculture, forestry, petrochemicals, pulp and paper, mining,generation, steel manufacturing, power tourism. petrochemicals, pulp and paper, power generation, tourism. Infrastructure: Nkomazi Special Infrastructure: Nkomazi Special Economic Zone, Mbombela Economic Zone, Mbombela International Fresh Produce International Fresh Produce Market, Maputo Development Market, Maputo Corridor, KrugerDevelopment Mpumalanga Corridor, Kruger Mpumalanga International Airport. International Airport. Notable tourism tourismassets: assets:Kruger Kruger National Park,Blyde BlydeRiver RiverCanyon, National Park, Canyon, Makhonjwa BarbertonBarberton Makhonjwa Mountains Mountains (a UNESCO World (a UNESCO World Heritage Site). Heritage Site).

Provincial government website: Provincial government website: www.limpopo.gov.za www.limpopo.gov.za Limpopo Economic Limpopo Economic Development Development Agency: Agency: www.lieda.gov.za www.lieda.gov.za

Provincial government website: Provincial government website: www.mpumalanga.gov.za www.mpumalanga.gov.za Mpumalanga Economic Growth Mpumalanga Economic Growth Agency: www.mega.gov.za Agency: www.mega.gov.za

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SOUTH AFRICAN BUSINESS 2021 SOUTH SOUTHAFRICAN AFRICANBUSINESS BUSINESS2020 2024

Provincial government website: Provincial government website: www.kznonline.gov.za www.kznonline.gov.za Trade and Investment KwaZuluTrade and Investment KwaZuluNatal: www.tikzn.co.za Natal: www.tikzn.co.za

tourism, logistics. Infrastructure: Musina-Makhado Special Economic Zone, Infrastructure: Musina-Makhado Fetakgomo-Tubatse Special Special Economic Zone, N1 Economicand Zone, highway and highway rail N1 network, new rail network, new Medupi power Medupi power station. station.

SPECIAL FEATURE

Northern Cape

North West

Northern Cape

North West

Population: 1 185 600 (2015) Area: 372 889km² (30.5% of Population: 1 185 600 (2015) South372 Africa) Area: 889km² (30.5% of South Africa) Premier: Dr Zamani Saul (ANC) Premier: Dr Zamani Saul (ANC) Key sectors: Agriculture, mining, renewable astronomy. Key sectors:energy, Agriculture, mining, renewable energy, astronomy. Infrastructure: Upington Industrial Park, Sol Plaatje University, Vaalharts Irrigation Scheme, Infrastructure: Upington Special Square Kilometre Array telescope Economic Zone, Sol Plaatje project, Namakwa University, VaalhartsSpecial Irrigation Economic Zone. Scheme.

Population: 3 707 000 (2015) Area: 104 882km² (8.6% of Population: 3 707 000 (2015) South104 Africa) Area: 882km² (8.6% of South Africa) Premier: Bushy Maape (ANC) Premier: Professor Tebogo Job Mokgoro (ANC) Key sectors: Mining, agriculture, agri-processing, automotive Key sectors: Mining, agriculture, components. automotive agri-processing, components. Infrastructure: Hartbeespoort Dam, Pelindaba nuclear research Infrastructure: Hartbeespoort unit, North-West University, Dam, Pelindaba nuclear research Bakwena Highway. unit, NorthPlatinum West University, Bakwena Platinum Highway.

Notable tourism assets: Six national parks including the Kgalagadi Transfrontier Notable tourism assets: Park, Six Orange River, flower national parksspring including the displays, diamond routes. Kgalagadi Transfrontier Park,

Notable tourism assets: Sun City, Mmbatho Palms Hotel Casino Convention Resort, Pilanesberg Notable tourism assets: Sun City, National Park, 18 Hotel luxuryCasino lodges in Mmbatho Palms Madikwe Game Reserve. Convention Resort, Pilanesberg

Orange River, spring flower displays, diamond routes.

National Park, 18 luxury lodges in Madikwe Game Reserve.

Provincial government government website: website: Provincial www.northern-cape.gov.za www.northern-cape.gov.za Department of of Economic Economic Department Development and and Tourism: Development Tourism: www.northern-cape.gov.za/dedat www.northern-cape.gov.za/dedat

Provincial government website: www.nwpg.gov.za Provincial government website: North West Development www.nwpg.gov.za Corporation: www.nwdc.co.za North West Development

SOUTH AFRICAN BUSINESS 2024 SOUTH SOUTH AFRICAN AFRICAN BUSINESS BUSINESS 2021 2020

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Capital: Kimberley Main towns: Douglas, Upington, Capital: Kimberley De Aar, Port Nolloth, Main towns: Douglas,Colesberg Upington, De Aar, Port Nolloth, Colesberg

Capital: Mahikeng Main towns: Klerksdorp, Capital: Mahikeng Rustenburg, Brits, Potchefstroom Main towns: Klerksdorp, Rustenburg, Brits, Potchefstroom

Corporation: www.nwdc.co.za

Western Cape

Capital: Cape Town Main towns: Capital: CapeStellenbosch, Town George, Plettenberg Bay, Beaufort Main towns: Stellenbosch, West, Oudtshoorn, Worcester, George, Plettenberg Bay, Beaufort Malmesbury West, Oudtshoorn, Worcester, Population: 6 200 100 (2015) Malmesbury Area: 129 462km² (10.6% of Population: 6 200 100 (2015) South129 Africa) Area: 462km² (10.6% of South Africa) Premier: Alan Winde (DA) Premier: Alan Winde (DA) Key sectors: Agriculture, agriprocessing, and grapes, Key sectors: wine Agriculture, agrifinancial services, manufacturing, processing, wine and grapes, tourism, oil and gas, boatbuilding. financial services, manufacturing, Infrastructure: Cape Town, tourism, oil andPorts gas, of boatbuilding. Saldanha and Mossel Mossgas Infrastructure: Ports ofBay, Cape oil-to-gas refinery, Cape Town Town, Saldanha and Mossel Bay, International Airport, Cape Town Mossgas oil-to-gas refinery, Cape International Convention Town International Airport,Centre, Cape Koeberg nuclear power station. Town International Convention NotableKoeberg tourism nuclear assets: Table Centre, power Mountain, Garden Route National station. Park, Karoo National Park, West Notable tourism assets: Table Coast National Park,Route Kirstenbosch Mountain, Garden National Botanical Gardens, Park, Karoo NationalCape Park,Point, West V&A Waterfront, Plettenberg Coast National Park, Kirstenbosch Bay, RouteGardens, 62, ZeitzCape Museum Botanical Point,of Contemporary Art. V&A Waterfront, Plettenberg Bay, Route 62, Zeitz Museum of Provincial government website: Contemporary Art. www.westerncape.gov.za Wesgro: www.wesgro.co.za Provincial government website:

www.westerncape.gov.za Wesgro: www.wesgro.co.za

SPECIAL FEATURE

FOCUS

Sectoral strengths of South African provinces SECTORAL STRENGTHS OF SOUTH AFRICA’S PROVINCES

A wide variety of investments are available.

Gauteng: • Financial and business services • Information and communications technology • Transport and logistics • Basic iron and steel, steel products • Fabricated metal products • Motor vehicles, parts and accessories • Appliances • Machinery and equipment • Chemical products, pharmaceuticals • Agro-processing

North West: • Mining • Agriculture and agro-processing • Tourism • Metal products • Machinery and equipment • Renewable energy (solar)

Limpopo: • Mining • Fertilisers • Tourism • Agriculture • Agro-processing • Energy, including renewables (solar)

KwaZulu-Natal: • Transport and logistics • Tourism • Motor vehicles, parts and accessories • Petrochemicals • Aluminium • Clothing and textiles • Machinery and equipment • Agriculture and agroprocessing • Forestry, pulp and paper, wood and wood products

Northern Cape: Mining Agriculture and agro-processing Fisheries and aquaculture Renewable energy (solar, wind) Jewellery manufacturing

• • • • •

Western Cape: • Tourism • Financial and business services • Transport and logistics • ICT • Agriculture and agro-processing • Fisheries and aquaculture • Petrochemicals • Basic iron and steel • Clothing and textiles • Renewable energy (solar, wind)

Mpumalanga: • Mining • Tourism • Forestry, paper and paper products, wood and wood products • Agriculture and agroprocessing • Metal products

Eastern Cape: Motor vehicles, parts and accessories • Forestry, wood and wood products • Clothing and textiles • Pharmaceuticals • Leather and leather products • Tourism • Renewable energy (wind)

•

Free State: • Agriculture and agro-processing • Mining • Petrochemicals • Machinery and equipment • Tourism

Source: Industrial Development Corporation (IDC); The Case for Investing in South Africa, Executive Summary Source: Industrial Development Corporation (IDC) (South African Investment Conference, 2018). Page | 40

SOUTH AFRICAN BUSINESS 2021

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SOUTH AFRICAN BUSINESS 2024 SOUTH AFRICAN BUSINESS 2020

INVESTMENT OPPORTUNITY: Northern Cape

BOEGOEBAAI SPECIAL ECONOMIC ZONE The GH2 hub of Western SADC PROJECT BACKGROUND Green hydrogen has many downstream uses that could contribute to the creation of new industries in the Northern Cape and enable the industrialisation of industries nationally. There is also a potentially lucrative global export market where demand is growing rapidly. The province boasts several competitive advantages for the production of green hydrogen. • High renewable energy potential and established RE industry • Less complex topography • 300km of shoreline • Large mineral deposits • International accessibility PROJECT LOCATION Boegoebaai is approximately 60km north of Port Nolloth and 20km south of the border between Namibia and South Africa in the Richtersveld Local Municipality area. PROJECT DESCRIPTION The Boegoeberg Special Economic Zone is envisaged as a hub for the production and export of green hydrogen.

The project is of strategic importance and will enable the overarching attainment of a Just Energy Transition. PROJECT PROGRESS • Sasol has completed the prefeasibility phase of the green hydrogen and renewable energy facility. • Evaluation of port and rail quotation process is complete and Transnet management is assessing approval for port location and successful bidders. • The draft master plan has been developed and initial engagements with various stakeholders (public and private) has commenced. • Agreement for land access has been signed between Northern Cape Economic Development Agency (NCEDA) and the Community Property Association (CPA) as well as NCEDA and Sasol. • Completed prefeasibility designs for the SEZ infrastructure. • Sanral has approved plans to upgrade R382 road. • A fuel-bunkering concept study has been completed and will be published. • Masts are to be erected for wind, bat and bird studies. • Strategic Environmental Assessment (SEA) for port and SEZ to be issued to market.

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INVESTMENT INVESTMENT OPPORTUNITY OPPORTUNITY : Northern Cape

BOEGOEBAAI DEEPWATER PORT ZONE NAMAKWA SPECIAL ECONOMIC National Cabinet has approved the designation of the Namakwa SEZ in Aggeneys in the Northern Cape. The proposed designation is done in terms of the Special Economic Zones Act, 2014 (Act 16 of 2014) and the proposed SEZ is part of the Presidential Investment Drive. • The Namakwa SEZ will unlock mining beneficiation, production of green hydrogen, infrastructure development, renewable energy and agro-procession. • More than R29-billion in investments has already been committed for phase one of the SEZ. These include commitments from Vedanta Zinc (R16-billion), Frontier Rare Earth (R13-billion), Hive Energy (R200-million) and RRS Trade and Investment (R100-million).

SEZ. It is proposed that a smelter be built to treat zinc concentrate produced at Gamsberg. The zinc concentrate produced at the existing concentrator plant will be treated in the smelter using the conventional roast-leach-electrowinning (R-L-E) process.

TARGETED SECTORS • Mining Zinc, granite, copper, rare earths, rare quartz, slate • Mineral processing Zinc processing plant, zinc smelter, copper processing plant • Petro-chemical Sulphuric acid, fertiliser, paint, hydrogen production, explosives MISSION • Manufacturing Create an industrial hub for the West Coast and a catalyst for Super alloys, batteries, galvanising steel industrialising the western SADC area. • Transport Mining and agricultural, regional and depots PROJECT LOCATION • Engineering and suppliers Aggeneys is 66km from Pofadder and 110km from Springbok. Renewable energy, transport, construction • Pharmaceuticals ECONOMIC IMPACT Zinc, food additives • Operations will add R1.1-billion to state tax revenue annuall • Localisation and supplier development • Opex will add R5.8-billion to national GDP annually Incubator, skills development The project to create products of the Northern Cape that previously had to be transported • Capex will add R6.7-billion in one-off value to aGDP deepwater port over great distances by rail or road. High-value minerals and • Capex will add R1.6-billion in one-off value to tax EXTENT products from the mining industry will be exported, at revenue Boegoebaai beneficiated hectares crops and agricultural products. Products is aligned to the as540.26 will high-quality VALUE PROPOSITION B o e g o e b e r g from the Industrial Corridor running west into and beyond the The value proposition of the Namakwa SEZ is based on theEconomic existence Northern JOBS Cape can potentially all be exported. In addition, new Special of the Gamsberg Zinc Mine and the proposed building a smelter During construction, 500 jobs produced will be created withBoegoeberg about 3 250 Zoneofand is beingby products such as green9 ammonia, with the Vedanta Zinc International. These would be the anchor tenants of the permanent jobs once the zone is fully operational. conducted under Special Economic Zone, will be exported close to source. strict project management guidelines. TARGETED SECTORS The deepwater port project • Export is the biggest greenfield project • Maritime in the Northern Cape in 26 years and promises great economic and • Logistics social benefits. ECONOMIC IMPACT PROJECT LOCATION An investment into the project of R16.8-billion is estimated to have Boegoebaai is 20km from the South Africa / Namibia border in the the following effects: Richtersveld Local Municipality. • Economic internal rate of return of 44% • Net present value of R44-billion PROJECT ADVANTAGES • Economic cost benefit ratio of 2.46 • Proximity to mining and agricultural sector activities • Short distance from coast to deep water JOBS During construction 2 971 jobs will be created. There will be 400 VALUE PROPOSITION jobs in the operational phase and a further 13 819 indirect and The port will be in a position to export many of the resources and induced jobs will be created.

SPECIAL FEATURE

Collaborating to put young people to work Youth unemployment remains a stubborn national problem but creative solutions are increasingly coming to the fore. By John Young learnerships, internships, short-course skills programmes and apprenticeships. SETAs are well placed to act as the linking factor between tertiary institutions and private companies or to ensure collaboration between NGOs and industry. Every industry is covered by the SETA network and companies must contribute a skills levy to the appropriate SETA. This occurs within a National Skills Development Strategy. Role of skills Whether the goal is to prepare to work for someone else (get a job) or to encourage entrepreneurship (start a business), the need for skills remains essential. Depending on the priority, the skills training programme would be biased in favour of workspecific skills (welding, computer skills, handling equipment) or business-related capabilities (keeping track of cashflow, marketing). The South African Council for Graduates Cooperative (SACGRA) sets out to support both approaches, striving to develop both “competent graduates that can become successful entrepreneurs or competitive employees” and like many such hubs, SACGRA offers advice, mentorships and links to markets and opportunity. What makes SACGRA stand out is its focus on co-operatives. Co-operatives are a successful model already widely adopted across South Africa for savings clubs known as “stokvels”. Old Mutual estimates that more then 800 000 such stokvels represent a value of R45-billion. SACGRA aims to professionalise co-operatives and prepare them to participate in two private-sector initiatives that have become a big part of the South African economic landscape, namely Supplier Development Programmes and Enterprise Development Programmes. In terms of these programmes, large companies are obliged to or choose to help build up and train

In launching MTN Xlerator in 2023, CEO Charles Molapisi explained how the scaledup Enterprise and Supplier Development programme is intended to boost supply chains, drive economic growth and create jobs.

t is in everyone’s interests that the rate of youth unemployment in South Africa comes down. StatsSA has published figures suggesting that as many as 60% of the 15-24 age group are unemployed. The rate for the 25-34 cohort is above 40%. The single, simplest solution would be for the national economy to grow faster, but because making that happen is actually extremely complex, other solutions have to be found. And this is where collaboration between business and industry, the education sector and non-governmental organisations (NGOs) becomes vital. Since 1998, South Africa has had Sector Education and Training Authorities (SETAs). These vocational-skills-training organisations were established by an act of parliament and there are currently 21 of them. SETAs create and manage

SOUTH AFRICAN BUSINESS 2024

SPECIAL FEATURE business owners (ED) which might be part of their supply chain (SD). The programmes often overlap, as it makes business sense for a large mining operation, for example, to have a successful local bus company supply its transport needs. The same would apply to cleaning and maintenance services, catering and many other categories. Given a steady client and a reliable income, these local businesses are much more likely to succeed in the long term and to create employment as they grow. So widespread have ED and SD programmes become that national awards are now presented annually. The Business Day Supplier Awards has no fewer than 11 categories and an overall winner. That winner in 2021 was Tiger Brands, whose R100-million Dipuno Enterprise and Supplier Development Fund impressed the judges and which was cited as an illustration of the best kind of collaboration between the private sector, government, mining houses and their pipeline partners. The financial sector has an important role in this environment. Old Mutual’s Masisizane Fund is geared to finance small, medium and microenterprises (SMMEs) and it is often to funds such as these that participants in SD programmes turn. Venetia Mine, a De Beers Group mine in northern Limpopo, has more than 50 SMMEs enrolled in incubation programmes and 34 locally owned companies are doing business with the mine. This kind of cooperation creates jobs and can lead to expansion. A woman-owned business which was supplying accommodation on the mine is now in the process of expanding into the nearby town in the form of a hotel which will be in a position to grow its clientele beyond visitors to the mine. Another example of collaboration across sectors that leads to employment is underway in the small Northern Cape town of Kuruman. Mining company Assmang is working with EduPower Skills Academy in a programme that combines skills training, enterprise development and community upliftment. Training is provided to potential call-centre operators while support is given to entrepreneur to set up a call centre. Once the trainees complete their 12-month learnerships, they are available to employed in the new business. The country’s biggest private sector youthPHOTO: CHIETA

The Chemical Industries Education and Training Authority, CHIETA, is establishing SMART Skills Centres around the country to boost training in digital skills. employment programme is YES4YOUTH. The idea is for private businesses and corporates to take in young people for 12 months of work experience. Run since 2019, the programme had by 2023 reached the milestone of one-million placements. Curriculum relevance The old debate about how much broad education should be in a curriculum in contrast to how much skills training there should be, is a debate that won’t ever be resolved. What can be improved is the agility of educational and training institutions. When the economy needs new skills, how fast can the country’s training providers react? The Chemical Industries Education and Training Authority (CHIETA) is showing how it might be done. Recognising that South Africa is going to need specialists in green hydrogen, CHIETA has set out to focus on the kind of skills that this highly specialised economic sector is going to need. Few people know about electrolysers, fuel cells and the storage requirements of hydrogen. CHIETA has developed a list of 17 specific training and skill requirements as it anticipates that about 14 000 jobs might be created in this new energy sector. Another body exhibiting flexibility is the Food and Beverages SETA, FoodBev SETA. In

SOUTH AFRICAN BUSINESS 2024

SPECIAL FEATURE

YES4YOUTH gives young people work experience. 2023, it issued, together with the BRICS Business Council, the “Atlas of Emerging Jobs in the Food and Beverage Sector”. Taking into account global trends that include mechanisation, the atlas shows that bio-nutritionists, farm technicians and integration software engineers are going to be in demand. Many of these are jobs that did not exist 20 years ago, and some of the jobs that will exist in 20 years’ time have not even been thought of by the authors of the atlas. Some universities are also showing an ability to adapt. Enterprises University of Pretoria is the skills division of the university and its short-course offering shows admirable variety. In listing its courses in advertising material, the unit flags the courses that are “trending”. These include project risk management, mine closure and rehabilitation, water quality management and information security management. Enterprise UP issued 11 185 certificates in 2022. Business schools also need to examine their curriculums to ensure relevance. One way of SOUTH AFRICAN BUSINESS 2024

staying relevant is to hire people who are active in business. Enterprise UP has 148 “subject matter experts” collaborating with staff members from 67 departments. Hlengani Mathebula became a professor at the University of Limpopo’s Turfloop Graduate School of Leadership in 2023. He has been the managing executive of ABSA Private Bank and is the founder of Ignite Africa Advisory Services Group. Writing in the Sunday Times, Mathebula argued that students attending business schools should also have work experience because, without it “very little of what these schools teach will make sense, putting students at a disadvantage”. Mathebula’s larger argument is that business schools can play a role in helping rich South Africans understand and work with poorer South Africans. He writes that a business school’s first challenge is to provide skills where both kinds of South Africans can “find common ground that will transform the dominant leadership trajectory and in that way transform the country”. ■

PHOTO: YES4YOUTH

WE MAKE STEAM

Steinmüller Africa (Pty) Ltd. is one of the enterprises in Bilfinger Power Africa (Pty) Ltd., the South African subsidiary of German based Bilfinger SE. For years, we have been adding value to the power, mining, paper pulping and broader industry through comprehensive valve supply, valve maintenance and heat treatment solutions. www.steinmuller.bilfinger.com

WORK Engineering design services Boiler pressure parts Commissioning, field and testing services Bellows Headers Induction bending of HP/HT piping Heat treatment (workshop and in situ) HP Heaters Piping technology Pipe supports Plant erection services Explosive welding MEMBER OF THE BILFINGER GROUP OF COMPANIES

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KEY SECTORS Overviews of the main economic sectors of South Africa Agriculture Mining Energy Oil and gas Engineering Manufacturing: general Manufacturing: automotive Construction and property Water Transport and logistics Tourism Telecommunications ICT Development finance and SMME support Education and skills training Banking and financial services

30 32 36 38 40 42 43 44 45 46 47 50 52 54 58 59

BMW Group headquarters in Midrand, Gauteng. Plant Rosslyn in Pretoria has produced more than 1.6-million vehicles since the company started making cars in South Africa 50 years ago. They have been exported to more than 40 countries worldwide, including 14 African nations. BMW has produced many models and began on the best-selling BMW X3 in 2018. From 2024 the BMW X3 will be made as a plug-in hybrid for export. An investment of R4.2-billion will adapt the factory to electrical specifications. PHOTO: BMW Group

OVERVIEW

Agriculture Avocados are proving a fruitful investment. SECTOR INSIGHT Companies are bidding for troubled Tongaat Hulett.

he biggest tomato producer in the southern hemisphere has started planting and trading in avocados. ZZ2’s new R128-million processing facility in Limpopo for avocados and tomatoes is complete. With floor space of 11 200m² the facility is large, but then everything about ZZ2 tends to be on a big scale. The company’s website gives a figure for tomato production of 190 000 tons, a total which allows ZZ2 to cater for all market channels and income groups. The main operations of the company are in Limpopo but it has facilities in the Western Cape, Eastern Cape, Gauteng, North West, Mpumalanga and Namibia. ZZ2 grows a large assortment of fruits including mangoes, onions, dates, cherries, apples, pears, stone fruit, almonds and blueberries. There are ambitious plans to increase market share in avocados, a highly sought after and popular export product. A joint venture between ZZ2, Mission Produce and Criterion Africa Partners will see more than 1 000ha of avocado orchards developed, but ZZ2 will continue to develop other orchards independently. So far, the Selokwe Agri JV has planted 250ha. The EU market has the best potential, with average per capita consumption in that area currently less than half that of the US. South Africa has an edge over Peru in that the season begins before the South American’s peak period and the aim is to supply the popular Hass variety all year round. Core Fruit has been contracted to handle the logistics and transportation of product to Europe. SOUTH AFRICAN BUSINESS 2024

According to Fruit SA, 324 000 South Africans are employed in the fresh fruit industry, which accounted for 35% (or R63-billion) of the country’s agricultural exports in 2021/22. South Africa is the world’s second-largest exporter of citrus fruit. A national export record was achieved in 2020, with 146-million cartons of fresh citrus being exported (second only to Spain). In the sugar industry, South Africa has for a long time been used to the dominance of two large companies, Illovo and Tongaat Hulett. The latter group going into business rescue in 2020 was a major shock, not only to the many businesses which rely on the sugar producer in KwaZulu-Natal, but because the company has a long history and has become one of the biggest corporate names in the South African economy. In 2022 seven former Tongaat Hulett senior executives appeared in court on charges of fraud for allegedly backdating sales agreements of the company’s property division to score better bonuses. The business rescue practitioners (BRP), Metis Strategic Advisors, managed to keep 2 500 employed at the company and PHOTO: ZZ2

OVERVIEW

Maydon Wharf, Durban, serves 11 mills and can store more than half-a-million tons of sugar.

National assets

invested more than R400-million in off-crop capital maintenance between December 2022 and April 2023. In 2023, the BRP produced a statement which read, in part: “It is beyond question that the successful rescue of especially THL’s sugar operations in South Africa will save tens of thousands, possibly hundreds of thousands, of direct and indirect jobs. We take this responsibility very seriously and are confident that Tongaat Hulett has a future.” A number of bids to buy the company have been made. The sugar industry itself faces many challenges, not least the imposition of a sugar tax and imports from countries such as Brazil, India and Thailand. Diversification is vital for the future and power generation will be an important part of that. Neither of the Big Two companies relies exclusively on South African sugar earnings: the troubled Tongaat Hulett has a big property portfolio and Illovo draws most of its profit from operations elsewhere in Africa. A start has been made on tackling the many challenges faced by the sugar industry: the Sugarcane Value Chain Master Plan 2030 has been signed. Of the 10 443 farmers who supply Tongaat Hulett, 94% are smallscale farmers. The Illovo Small-Scale Grower Cane Development Project used 119 local contractors to develop the fields of 1 630 new growers on 3 000ha. SA Canegrowers represents 23 866 growers and is responsible for the production of 18.9-million cane tons. The Sugar Terminal at

ONLINE RESOURCES Agricultural Research Council: www.arc.agric.za Grain SA: www.grainsa.co.za SA Table Grape Industry: www.satgi.co.za South African Berry Producers’ Association: www.berriesza.co.za

PHOTO: MeatmasterSA

AgriSA states that the amount of agricultural land in South Africa in 2016 stood at 93.5-million hectares. This represents 76.3% of South Africa’s total land mass of 122.5-million hectares and about 3% less than in 1994. A total of 70% of South Africa’s grain production is maize, which covers 60% of the cropping area of the country. KwaZulu-Natal and Mpumalanga produce sugar, but volumes are down. The Free State Province supplies significant proportions of the nation’s sorghum, sunflower, potatoes, groundnuts, dry beans, and almost all of its cherries. South Africa is famous for its fruit, of which 35% is citrus, 23% subtropical and nuts, 26% pome fruit, 11% stone fruit and 9% table grapes. Most of South Africa’s citrus and subtropical fruit comes from the eastern part of Limpopo. There are about 3 500 wine producers in South Africa, with the majority located in the Western Cape. The Eastern Cape is the largest livestock province, which includes Angora goats, from whom mohair is taken. The province is the centre of the country’s mohair value chain. South Africa has a beef herd of 14-million. South Africa’s milk producers normally produce about 3.3-billion litres of milk every year. ■ SOUTH AFRICAN BUSINESS 2024

OVERVIEW

Mining Impala Platinum has gained control of Royal Bafokeng Platinum.

sale that was first mooted in 2021 was finally resolved in June 2023 when Northam Platinum agreed to sell its stake in Royal Bafokeng Platinum (RBPlat) to Impala Platinum (Implats). That sale took Implats’ holding in RBPlat to 91% after it had bought 9.26% of the company from Public Investment Corporation (PIC) earlier in the year to give it a majority holding. The RBPlat platinum group metals (PGM) facility, which lies directly south of Sun City, is adjacent to Implats Rustenburg’s land. The Impala Rustenburg operation comprises a nine-shaft mining complex and concentrating and smelting plants. The big sale coincided with a decline in the global prices of some of the PGMs such as palladium and rhodium. Whereas platinum attracted a price of $1 070 not long ago, in November 2023 it was trading at $869. Although the prospects for PGMs are good in support of the nascent hydrogen economy, a slowing Chinese economy and the expanded market for electric vehicles are negative factors. In July 2023, as scheduled, De Beers Group celebrated the beginning of production at its Venetia Mine, pictured, in the northern part of Limpopo Province. The long-term, $2.3-billion conversion project of the diamond mine to an underground mine began in 2012 and will extend the life of the mine to 2045 or beyond. The

SOUTH AFRICAN BUSINESS 2024

SECTOR INSIGHT De Beers’ giant conversion project has started producing diamonds. mechanised underground operation will deliver up to seven-million tons of kimberlite ore per year to produce fourmillion carats of diamonds. Construction of the mine, which employs 4 300 local people, is now 70% complete. In the Northern Cape, the Namakwa Special Economic Zone in Aggeneys is being envisioned as an industrial cluster for mining and agriculture services, beneficiation and manufacturing. The hub of this PHOTO: De Beers Group

SEZ will be what is the biggest new mine project in the country, the Gamsberg project of Vedanta Zinc International, which will deliver 600 000 tons of zinc when phase three is complete. The provincial government is using the mine’s multifaceted activities (and possible future smelter) as the basis for the SEZ which forms part of a larger “multi-nodal” corridor envisaged for the province. Copper is one of the most important elements needed to power the renewable energy transformation and so it’s no surprise that areas mined historically for that mineral in the Northern Cape are now back in the news. Batteries need copper, as do systems used to transmit energy from solar or wind sources. Electric vehicles contain an average of 85kg and, according to the CEO of newly formed Copper 360, Jan Nelson, the world had a stock of copper equal to only three weeks supply at a certain point in February 2023 (Financial Mail, 23 February 2023). Copper 360 was formed in November 2022 following a reverse takeover of copper producer Big Tree Copper (a producer of copper) and SHiP Copper (a mining company). The company listed on the AltX of the JSE in April 2023. Copper 360 produces 1 200t/y of A-grade copper cathode and has set a target of achieving 7 700t/y inside two years. Three new copper flotation plants are being built at a cost of R280-million. With 280 new employees over the last two years and plans to recruit a further 1 000 staff members in the next two years, global copper demand is clearly also good news for the town of Nababeep. Founded in 1860 by the Okiep Mining Company, Nababeep is in the Namakwa District Municipality just north of Springbok. An old zinc mine at Prieska that produced a million tons of zinc and 430 000 tons of copper before it closed in 1991 is being revived by Australian miner Orion Minerals. Orion Minerals has secured a funding package of $87-million from subsidiaries of Triple Flag Precious Metals. The funding is conditional on the rest of the plan for the mine’s development also receiving funding and on the approval of South Africa’s regulatory authorities. Afrimat continues to expand its commodities portfolio with the purchase for R300-million of Coza Mining, an iron-ore mining company in the Northern Cape.

Prospects and exploration Mzila Mthenjane, the newly appointed CEO of Minerals Council South Africa, the mining industry employers’ body, co-authored an

article for the Sunday Times in October 2023 in which it was stated that: “We would see a relatively quick shift in our economy if the Department of Mineral Resources and Energy expedited approvals for more than 5 000 prospecting and mining right applications and mining permits.” Citing Stats SA figures that mining employed 477 574 people in Q2 2023 and that for every person directly employed, a fur ther 10 people are dependent on the industry for their livelihoods, Mthenjane and Otsile Matlou, COO of law firm ENSafrica, argued that “billions of rands of latent investments and future spending [are] locked up in these applications”. Among the things that the authors called for are the introduction of a “transparent, corruption-free, off-the-shelf digital mineral rights management system known as a cadastre”. In August 2023, an announcement was made that a winning bidder for a new cadastral system had been identified for the tender which had gone out in March 2023. Final arrangements still had to made, and the name of the company was not known as of the last week of November. ■

ONLINE RESOURCES Council for Geoscience: www.geoscience.org.za Minerals Council South Africa: www.mineralscouncil.org.za National Department of Mineral Resources and Energy: www.dmr.gov.za

SOUTH AFRICAN BUSINESS 2024

FOCUS

Mind the Gap The uncertainty gap between organisational objectives and operational targets can be reduced, according to leading African-based specialist mining service provider, Ukwazi.

hen examining the general downward trend of commodity prices over recent years, uranium yellowcake has been a notable exception, with a recent upward trend. Gold has remained relatively stable, but platinum group metals (PGMs) and copper have seen a substantial decline from the highs achieved in early 2021. Bulks such as manganese ore, bauxite and specifically coal, are materially down from the peaks reached late in the Covid-19 pandemic, while chrome has not regained its pre-2017 commodity-crisis levels. Many operations, particularly across Southern Africa, are currently facing significant challenges. These stem from Transnet’s logistical obstacles, amplified postCovid-19 production cost escalation and declining commodity prices. Mines are now prioritising cost control and aligning production with sales projections, placing the onus on production teams to meet strategic goals amid market pressures. Bridging the gap Whenever you travel on the London subway there are signs that warn you, “Mind the Gap”. In recent years, the disparity between strategic mining plans and the practical, implementable mining plans accessible to mining operational teams has grown considerably. This gap subsequently fosters widespread uncertainty within the execution environment, ie, what must be done and the “how” of what must be done practically. In the same vein, while most mining organisations do adhere to welldefined planning horizons and put notable effort in producing these plans – in a sequential manner and at specific intervals, they often lack practical guidance. At Ukwazi, we strongly believe that when a plan serves as basis for evaluating a mine’s performance or the performance of its operational team, it should be tailored for those specific purposes; aligning with the business’ strategic objectives while also providing clear, instructional

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and practical guidance. Simply put, it must extend beyond providing spatial guidance alone. Closing the gap As you increase uncertainty by imposing top-down strategic models for operational control, frustrations will mount and needless stress will burden an already demanding production environment, making it progressively difficult to retain outstanding operational and mining management teams. As such, the uncertainty gap between organisational objectives and operational targets needs to be reduced by developing pragmatic and cohesive mining budget plans that are audience-driven and outline sufficient practical requirements. It should be all about creating certainty. The result? A production team well positioned to perform in line with their respective performance indicators and organisational incentives. So, how do we effectively close the gap? Well, ultimately mining engineering and mine planning constitute pivotal technical and organisational disciplines. The effective implementation of the budget-mine-planning horizon requires active engagement from the intended audience, the operational team in this case, and a technical team that has insight into the strategic objectives of the mine and an in-depth understanding of the sequential nature of mine deployment. Further to this, the operational teams should receive outputs that equip them with the practical tools needed to adequately meet their requirements. At the end of the day, cultivating this collaborative approach should be a standard practice in every mining organisation. ■ www.ukwazi.com PHOTO: Dominik Vanyi on Unsplash

OVERVIEW

Energy Sasol’s partnerships are defining a new direction for the energy giant.

series of international and domestic partnerships that Sasol has signed in recent months illustrate that the company has decided that the energy future must be markedly different to the present. A disruption of the company’s AGM by climate activists and doubts about the company’s carbon-reduction strategy expressed by some big investors have helped bring that awareness to broader public attention. International chemicals and energy company Sasol has several large plants in the Free State and Mpumalanga, pictured, and is the dominant national player in these sectors. Products manufactured by Sasol include synthetic fuel, petroleum, paraffin, jet fuel, creosote, bitumen, diesel and lubricants. The primary feedstock for synthetic-fuel production is coal. With more than 30 000 employees and a presence in 30 countries, the decisions Sasol makes have a big impact. Subsidiary company Sasol ecoFT is producing sustainable fuels and chemicals from green hydrogen and sustainable carbon sources via the Power-to-Liquids process and using the Fischer-Tropsch technology (FT) which has helped set the company apart in its field. In 2010 Sasol flew the world’s first passenger aircraft using fully

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SECTOR INSIGHT A market for carbon credits has been created.

synthetic jet fuel and it has been investigating solutions ever since. Sasol is part of a consortium based at its Secunda operations called HyShiFT with Linde, Enertrag and HydRegen, a spinoff company from the Department of Chemistry of the University of Oxford. The project aims to invest in about 500MW of renewable energy that will supply a 200MW electrolyser for green hydrogen production, resulting in PHOTO: Sasol

OVERVIEW approximately 45 000 tons a year of sustainable aviation fuel (SAF). In 2021, agreements were signed with Toyota and the Industrial Development Corporation (IDC) relating to green hydrogen and Sasol joined the Hydrogen Council. With the IDC, Sasol aims to develop a green hydrogen market in South Africa, develop policy guidelines, support pilot projects and investigate funding options for the nascent sector. One such project involves investigating the possibilities of developing a Special Economic Zone (SEZ) in the Northern Cape dedicated to the production of green hydrogen. The feasibility studies regarding the Boegoebaai SEZ are ongoing and Sasol is a key player in this potentially transformative project. Battery storage is increasingly becoming an important part of hybrid projects and a move in November 2023 by the JSE, Africa’s biggest stock market, signalled another landmark on the renewable energy landscape. JSE Ventures has initiated a Voluntary Carbon Market together with US company Xpansiv, with the aim of creating a market for carbon credits.

Generation plans When big companies start investing in a sector, then it’s clear that that sector should be taken seriously. Resources company Exxaro started investing in renewable energy earlier than most. Rolling blackouts have been a feature of South African life since 2008 and the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was introduced in 2011 to encourage the private sector to start generating power. Exxaro subsidiary Cennergi’s bid to produce power in the Tsitsikamma area of the Eastern Cape via a 95.3MW wind farm was accepted by the Department of Energy in 2012. Since then, the 134.4MW Amakhala Emoyeni has been built in the Bedford area and Cennergi Services has evolved into a company that builds, manages and operates renewable energy projects that it owns as well managing assets for third parties. It has seven projects in four provinces. Exxaro’s huge coalmine at Grootgeluk in Limpopo (which supplies Eskom power plants) will be the site of an 84MW solar project and Northam Platinum is building a 10MW solar plant at its Zondereinde smelter. Implats is using natural gas to supply its refinery in Springs. In Phase one of the project 20 Doosan fuel cells are generating 8MW of power. The long-term goal is to generate 22-30MW. Certain manufacturing companies that have access to biomass that results from the manufacturing process, such as woodchips for

ONLINE RESOURCES HyShiFT: www.hyshift.org National Energy Regulator of South Africa: www.nersa.org.za South African Independent Power Producers Association: www.saippa.org.za South African Wind Energy Association: www.sawea.org.za

Sappi and bagasse in the case of sugar producers such as Tongaat Hulett and Illovo, are in a position to produce their own energy. However, there are industries where signing offtake agreements with renewable energy producers is the more logical route to take. In fact, even PGM miner Ivanhoe Mines, despite having its own plans to produce solar power, has signed an offtake agreement with Renergen in order to have access to that company’s electricity powered by renewable sources. Amazon has signed deals to have exclusive rights to renewable power produced from dedicated projects in the Northern Cape. Telecoms market-leader Vodacom has gone beyond the idea of having a single power producer. In a landmark deal brokered in 2023, Vodacom and Eskom have agreed to “virtual wheeling” whereby Vodacom will source power from multiple independent power producers. Wheeling refers to sending power through the grid. At the moment Eskom is the sole owner and operator of the national grid. The Department of Public Enterprises intends for Eskom to be broken up into separate entities, one of which would be a transmissions company. The City of Cape Town has initiated a pilot project whereby 15 commercial suppliers can sell electricity to third parties via the city’s grid, a development that will be very closely watched. The chair of the South African Independent Power Producers Association, Tommy Garner, told the Sunday Times, “It is very important for the electricity market in South Africa that you split Eskom into three entities.” ■ SOUTH AFRICAN BUSINESS 2024

OVERVIEW

Oil and gas A production rights request follows significant offshore gas finds. SECTOR INSIGHT The national regulator has approved a gas plant for Richards Bay.

Exploration off the southern coast has produced excellent results.

otalEnergies has applied to Petroleum Agency South Africa (PASA) to convert its exploration right into a production right, a move that may have major significance for the oil and gas sector in the region. The TotalEnergies-led consortium, after making world-class discoveries off South Africa’s southern coast off Mossel Bay in the Outeniqua Basin, has now made the decision to proceed to the next phase. The exploratory drilling campaign employed 195 South Africans with specialist skills, but the potential spinoff is enormous for the SOUTH AFRICAN BUSINESS 2024

Western Cape and South Africa, if the find leads to drilling and commercialisation. As David van der Spuy, Manager: Resource Evaluation Manager at PASA, explains, “It is critical for the development to go ahead, not only because it will avert the closure of the gasto-liquids (GTL) plant in Mossel Bay and the loss of 1 500 direct jobs, but also because of the economic effects this will have on the surrounding area.” PASA has noted the significance of international oil companies committing to exploration off South Africa’s coast and has a stated goal to move beyond exploration to development and production. More exploration will guarantee that interest is maintained. The next phase of the project, a gas-market development period, is not the same as an immediate decision to start building pipelines and decks, but it is a step along the way. The Luiperd and Brulpadda discoveries were made in the Block 11B/12B areas. The joint venture has decided to give up a northern portion of its right, reducing the proposed area to be PHOTO: Anton Swanepoel

OVERVIEW worked to 12 000km², whereas the exploration right extended to more than 18 000km². TotalEnergies’ joint venture partners in Block 11B/12B include QatarEnergy and Canadian Natural Resources. If the process moves further along to the point where TotalEnergies obtains all the environmental permits it needs and starts to develop the resource, some estimates suggest that gas could begin to flow by 2026. Another area of considerable interest is Block 5/6/7 off the West Coast. Says Van der Spuy, “The area under licence is bigger than the licence area of the south coast and in our opinion holds great potential. TotalEnergies and its partners have submitted a work programme for initial drilling of up to five exploration wells in the area.” A major milestone was achieved in July 2022 for the Virginia Gas Project in the Free State, owned by Renergen subsidiary Tetra4. That was when “natural gas to plant” was achieved. This test allows for the system to be comprehensively tested, with the inlet line from the gas-gathering system opened to the process plant and then on to the natural gas filtration and pre-compression system. In September 2023, commercial operations of the company’s liquified natural gas (LNG) plant began. Helium production will follow but at the time of writing some delay had been experienced. Whereas it took nine years to find the R1.2-billion needed to fund the first phase of Virginia Project, investors are now looking very keenly at its prospects. An amount of R3.6-billion has been invested by Ivanhoe Mines to secure some offtake rights and the Central Energy Fund has purchased a 10% stake in Tetra4 for R1-billion.

Gas future Van der Spuy reports that apart from the biogenic gas discovery being worked on by Tetra, the country also has “other types of unconventional gas onshore, such as coal-bed methane and shale gas”. The National Energy Regulator of South Africa (Nersa) has approved an application from national utility Eskom to build a 3 000MW gas power station in Richards Bay. An allocation of 3 126MW to natural gas has been made in the national medium-term energy policy to 2030. The National Department of Mineral Resources and Energy allocated one of the first two gas-topower plants to be constructed under the Independent Power Producer Procurement Programme (IPPPP) to Richards Bay. This has the potential to turn the Richards Bay Industrial Development Zone (RBIDZ) into an energy hub.

Another site has been identified within the Coega SEZ in the Eastern Cape but no plans have been published. The Western Cape Provincial Government is lobbying for Saldanha to receive a licence to run such a plant. Environmental groups have lodged appeals in an attempt to stop the building of the plant, which is a step along the pathway outlined by national government to use gas as a “transitional fuel”, away from fossil fuels towards greener sources of power. In reaction to the announcement in 2022 by Shell Downstream South Africa and bp Southern Africa of a “spend freeze” and a pause in operations at the SAPREF oil refinery in Durban, the Provincial Government of KwaZuluNatal intends facilitating meetings with these companies and other interested parties to try to find a way to restart operations. The refinery accounts for roughly 35% of the country’s refinery capacity and is likely to be offered for sale. Durban’s other oil refinery, Enref, was hit by a fire in December 2020 and there are plans to convert it to a storage facility. Astron Energy’s 100 000 b/d refinery Cape Town resumed operations in 2023 after being offline for nearly three years. A fire closed the refinery in 2020. Natref in Sasolburg is South Africa’s only inland crude oil refinery and is a joint venture between Sasol Oil and Total South Africa. ■

ONLINE RESOURCES Council for Geoscience: www.geoscience.org.za Petroleum Agency South Africa: www.petroleumagencysa.com South African Oil and Gas Alliance: www.saoga.org.za South African Petroleum Industry Association: www.sapia.co.za

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OVERVIEW

Engineering Engineers are making the switch to renewable energy possible. SECTOR INSIGHT Pay-for-use models make new technologies more accessible.

he Redstone Concentrated Solar Thermal (CSP) power plant project (pictured) is the largest investment so far in terms of the South African Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The large undertaking, located near Postmasburg in the Northern Cape, has also given Grinaker-LTA’s Civil Engineering division a substantial foothold in one of South Africa’s fastest-growing economic sectors, renewable energy. Many South African engineering concerns are filling their order books with renewable energy infrastructure orders as the country aims to generate more power from solar, hydro-electric and wind plants and fit more rooftop solar panels to houses and businesses. Some of the key aspects which Grinaker-LTA was responsible for included hot and cold storage tank bases, civil works, the steam generation structure and the molten salt pump towers. The 100MW plant is the first project-financed CSP with molten-salt-central receiver in the world. ACWA Power, a Saudi developer, investor and operator of power generation plants, and Chinese engineering company SEPCOIII Electric Power Construction Limited, managed the project and they jointly appointed Grinkaker-LTA as the contractor to execute the construction of the project’s critical structures. SOUTH AFRICAN BUSINESS 2024

Also in the Nor thern Cape, engineering skills are being expanded by new work associated with radio astronomy. Local artisans from the town of Carnarvon have built telescopes for a radio telescope array project, the 350-dish HERA project, which is led by the US National Science Foundation with the South Africa Radio Astronomy Observatory (SARAO) acting as the local partner, responsible for systems engineering and construction, among other duties. At one point, the construction team grew to 20 and many news skills were learnt. When dairy company Clover decided to consolidate its national operations into just four plants, technological expertise was needed to make sure those factories were able to cope with greater demand. One such company was Energy Partners Refrigeration (EPR) who were contracted to tackle a number of issues, including increased power requirements to higher refrigeration load as well as increased steam demand and pressure requirements. The upgrade of the cooling structure featured the installation of a new 10MW ammonia system and 16% of all the electricity used by the new system is generated by solar PV. An innovative aspect of PHOTO: Grinaker-LTA

OVERVIEW

the project is that Clover has a Cooling-as-a-Service (CaaS) contract, a payper-use model that removes the large upfront investment cost as a barrier to improved efficiencies and improved environmental performance. Marine repair and engineering form a significant sector in the Western Cape and KwaZulu-Natal, with established companies such as EBH South Africa offering comprehensive services. Both KwaZulu-Natal 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. The Engineering Council of South Africa has a programme where trainees can earn certificates in specific disciplines from a range of institutions. The qualifications are in line with the council’s Exit Level outcomes. Six of South Africa’s biggest construction companies have established a R1.25-billion skills fund. Several partnerships between the public and private sectors are trying to address the skills deficit. The Skills Development Amendment Act is intended ONLINE RESOURCES Consulting Engineers South Africa: www.cesa.co.za Engineering Council of South Africa: www.ecsa.co.za South African Consulting Engineering Firms: www.consultsa.co.za Southern African Institution of Civil Engineering: www.civils.org.za

to improve the situation. One of the most exciting engineering projects in South Africa is the Msikaba Bridge project that forms part of the new N2 toll road between Port Edward in KwaZulu-Natal and Umtata in the Eastern Cape. The CME JV (Concor – MECSA Construction Joint Venture) is the main contractor and it has had to stop work more than once because of protests of various sorts. Sophisticated techniques are required to ensure that the 580m cable-stayed structure, which will span the 198m-deep Msikaba Gorge, is stable. The deck will be supported by 34 cable tendons connected to two 128m-high pylons. Winds have been known to blow at 100km/h at the site. ■

SUPPLYING INDUSTRIAL AND SPECIALTY GAS PRODUCTS TO THE SOUTHERN AFRICAN REGION www.airproducts.co.za

OVERVIEW

Manufacturing Glass group expansion creates 300 jobs.

SECTOR INSIGHT Manufacturers are responding to global trends.

rdagh Group is a large multinational with 63 metal and glass-production facilities in 16 countries, with more than 20 000 employees. The group’s 2022 acquisition of Consol Glass created Ardagh Glass Packaging – Africa, and led to immediate investment in an expansion of the glass-container plant in Nigel, Gauteng. The two new furnaces that have been added to the facility, at a cost of R3-billion, are expected to create 300 new jobs and have made it the biggest of its kind in Africa. Other Gauteng facilities of the group are located at Wadeville and Clayville and there is a Western Cape factory in Bellville. The group’s other continental assets are in Ethiopia, Kenya and Nigeria. Another company to make an investment in Gauteng is TFG, with the opening of a clothing manufacturing facility in downtown Johannesburg. Workers at the Nugget Street factory are making T-shirts for the Jet brand and blankets and bags for various CSI projects. Up to 40 hearing-impaired students from the St Vincent School for the Deaf are being trained and employed at the factory. TFG, which counts Foschini, TotalSports and Markhams among its brands, has been buying up clothing factories for nearly a decade and is now in a position to respond more quickly to fashion trends than when it was more dependent on imports. Among TFG’s acquisitions were Prestige Clothing Maitland and Prestige Clothing Caledon. The group plans to increase the percentage of locally made clothing items from the current level of 35% to 55%. Two stockwatchers in the Financial Mail (FM) have referenced trends that are worth watching, and noted that certain companies are gearing up to respond. Marc Hasenfuss noted a “vibrant sprawl of niche packaging operations” in supporting Caxton, previously a company

associated with printing and publishing only, as a stock pick. Niches include flexible packaging (for wine bladders) and cups for takeaway drinks. The growing home delivery market post-Covid is driving the need for more containers. Another FM correspondent, Anthony Clark, praised Omnia Holdings for its focus on “future farming”, and predicted a good year for agriculture in 2024. Sappi has spent R7.7-billion on expanding its dissolving pulp plant in KwaZulu-Natal. The project aims to boost the annual production capacity of dissolving pulp (DP) at Saiccor Mill by an additional 110 000 tons annually, taking production to 890 000 tons a year and reinforcing the company’s position as the world leader in the manufacture of Lyocell, a cutting-edge material of the future. Lyocell is a form of rayon consisting of cellulose fibres made from dissolving pulp that is reconstituted by dry jet-wet spinning. The fully biodegradable and compostable fibre is used to make textiles. ■

ONLINE RESOURCES Chemical and Allied Industries’ Association: www.caia.co.za Manufacturing Circle: www.manufacturingcircle.co.za South African Textile Federation: www.texfed.co.za

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PHOTO: Ardagh Glass Packaging – Africa

OVERVIEW

Manufacturing: automotive BMW celebrated 50 years of making cars in South Africa in 2023.

uring the celebrations around the 50th anniversary of making vehicles at its Rosslyn Plant in Tshwane, BMW Group announced that from 2024 the BMW X3 will be made as a plug-in hybrid for export. This will entail an investment of R4.2-billion in adapting the factory to electrical specifications. More than 300 employees will receive specialised training at the plant, which was BMW’s first-ever foreign facility. Since then, Plant Rosslyn has produced more than 1.6-million vehicles to date and exported them to more than 40 countries worldwide, including 14 African nations. Apart from BMW, Pretoria is also home to Nissan and Ford. The Tshwane Automotive Special Economic Zone (TASEZ) is a project of the Gauteng Province, the Department of Trade, Industry and Competition (dtic) and the City of Tshwane. Ford Motor Company has initiated discussions about the feasibility of developing a sophisticated rail corridor between Gauteng and the Eastern Cape because the company assembles diesel engines in Gqeberha, pictured. Ford wants to send parts to Pretoria and export cars through the Port of Gqeberha. Ford makes engines for the Ford Ranger pickup and Everest SUV at its Struandale plant and it has committed to invest R600-million for modernising and growing its local operations, which employ about 850 people. A further R5.2-billion will enable hybrid-electric Ranger bakkies to be built in Gauteng. The 520 963m² facility of Volkswagen South Africa in Kariega (formerly Uitenhage) is one of four plants worldwide that makes right-hand-drive Polos but the only one in the world that makes the Polo GTI. Both the Coega Special Economic Zone and the East London Industrial Development Zone (ELIDZ) have areas dedicated to automotive and automotive components manufacture. Mercedes-Benz South Africa’s new C-Class project (W206) has sparked several other related investments, which collectively will create 2 078 new jobs over two years at the East London plant. Home-grown manufacturer of powertrain and catalytic converter assembly systems, Jendamark, exports to 18 countries from its facility in Gqeberha. Continental Tyre South Africa is producing a

ONLINE RESOURCES Automotive Industry Development Centre: www.aidc.co.za Naamsa | The Automotive Business Council: www.naamsa.co.za National Association of Automotive Component and Allied Manufacturers: www.naacam.org.za

PHOTO: Ford Motor Company

SECTOR INSIGHT Ford is investing R5.2-billion to build hybrid-electric Rangers.

19-inch tyre for the first time at its New Brighton facility in Port Elizabeth and Isuzu SA has completed its consolidation project, with truck and bakkie manufacturing now taking place at its new headquarters in nearby Struandale. The Automotive Production and Development Programme (APDP) has been extended to 2035, 15 years beyond its original expiry date. State suppor t for the industr y has helped it thrive, but manufacturers are expected to increase local content levels. The industry itself is looking to Africa for new markets and is urging national government to release policy guidelines on electric vehicles. ■ SOUTH AFRICAN BUSINESS 2024

OVERVIEW

Construction and property Student accommodation is a growing sector. SECTOR INSIGHT A R1-billion green bond has been raised by a REIT.

ne of the greatest differences between the society that existed under apartheid South Africa and the post-democratic dispensation is in the expansion of educational opportunities. Several companies came into being to provide this new student population with accommodation at tertiary institutions. Stag African, which has built a substantial student housing project at the University of Fort Hare in the Eastern Cape, pictured, is active in three provinces. South Point has created a 1 195-bed complex in Braamfontein to go with no fewer than 15 other sites in Johannesburg and it is active in five other cities. Respublica offers rooms in six cities and there are several other companies. The boom in building and developing student accommodation has been supported by the fact that many students are funded by the National Student Financial Aid Scheme (NSFAS), providing some security for investors in the sector. Controversies related to NSFAS have recently caused some concern, but demand remains strong. TUHF is among the financing companies that provide funding for housing projects. In TUHF’s case, inner city property investors are the focus of the company’s commercial property financing operations. This includes student accommodation and a township backyard rental finance product called uMaStandi which has recently been expanded. Another aspect unique to post-apartheid South Africa is the awareness of environmental issues. A third green bond for the real estate investment trust (REIT ) of Redefine Properties was oversubscribed when it went to market in August 2023. An amount of R1-billion has been allocated across three, five and seven years.

ONLINE RESOURCES Afrimat Construction Index: www.afrimat.co.za Construction Industry Development Board: www.cidb.org.za SA Reit Association: www.sareit.co.za South African Property Owners Association: www.sapoa.org.za

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Green buildings are now considered mainstream in the construction industry, and star ratings from Green Building Council South Africa (GBCSA) are expected in commercial, industrial and residential projects. The bond was listed on the JSE in the Sustainability Segment, a further sign that every sector is responding to the climate crisis. Covid-19 provided a sharp shock for many business sectors, but with the move towards working from home accelerated by the pandemic, none is going to have to look harder at its models for sustainability than the office rental sector. Logistics, often taken for granted in normal times, became an even more important component of the supply chain during the global lockdown and in the months that followed. FNB, which publishes a regular property barometer, has done an in-depth analysis of previous crises to help understand what may occur in the post-Covid property market. According to John Loos, a property strategist at FNB Commercial Property Finance, the most vulnerable sector is likely to be Retail Property. Smaller neighbourhood centres, with more essential items and greater convenience, will be less vulnerable. ■ PHOTO: Stag African

OVERVIEW

Water Solar power is a water solution.

n off-grid, solar-powered groundwater harvesting system has been developed by Coca-Cola Beverages South Africa (CCBSA). The Coke Ville Project, pictured, was launched in 2020 and not only harvests groundwater but treats it as well. Over time, the project has expanded to several provinces and is proving of great benefit to communities, especially in times when power outages are experienced. Water wheelbarrows are distributed as part of the project to enable residents to transport water easily. In KwaZulu-Natal an amount of R30-million has been set aside for 28 solar-powered boreholes with elevated tankstands to be constructed in the Harry Gwala District Municipality. Phase 1 of the Vaal Gamagara Water Supply Scheme (VGWSS) has been completed in the Northern Cape, bringing much-needed water to several communities and mining companies. Some R10billion will be spent in completing phase 2, an extension of pipelines from the Vaal River to the town of Hotazel, including reticulation to communities living along the path of the pipeline. The private sector and national government are partners in the project. One of the small towns that will benefit from phase 2 is Danielskuil, a town that in 2022 was briefly in the news spotlight. The town ran out of water because it had rained too much. Massive thunderstorms overwhelmed the town’s systems, already under pressure because of electrical outages and theft. Places like the normally dry Northern Cape will increasingly be the focus of attention as the earth warms and extreme events become more common. Municipalities in the Northern Cape (as in many other provinces) have consistently struggled to supply good services to citizens. With the declaration of the entire province as a Priority Human Settlements Development Area by the National Department of Human Settlements, this situation could improve. Another partnership between the public and private sectors will see the Vaalharts Irrigation Scheme revitalised, leading to greater certainty for fresh produce producers, assistance for local municipalities in providing water to residents and a doubling of

ONLINE RESOURCES National Cleaner Production Centre South Africa: www.ncpc.co.za National Department of Water and Sanitation: www.dws.gov.za South African Water Research Commission: www.wrc.org.za Water Institute of South Africa: www.wisa.org.za

PHOTO: CCBSA

SECTOR INSIGHT Phase one of the Vaal Gamagara Bulk Water Scheme has been completed.

the amount of land available to emerging farmers. The three entities involved are the National Department of Water and Sanitation, the Vaalharts Water User Association and the Infrastructure Fund. The project was gazetted as one of the Strategic Integrated Projects (SIPs) in 2020 and falls under the Presidential Infrastructure Coordinating C o m m i s s i o n ( P I CC ) . T h e existing scheme is one of the largest irrigation schemes in the world, covering 39 000ha under irrigation and extending it to Taung in the North West will give it even greater reach. The scheme currently has 1 000km of concrete-lined canals and more than 300km of concrete drainage. ■ SOUTH AFRICAN BUSINESS 2024

OVERVIEW

Transport and logistics A regional airport could become an international hub. SECTOR INSIGHT The City of Cape Town wants to revive rail.

here are plans to make more use of Hoedspruit Airport, the airport that is most often associated with the Orpen Gate of the Kruger National Park. In 2022, 61 000 of the people who passed through Hoedspruit were European tourists but there is potential to increase this traffic substantially. CemAir offers flights to Johannesburg and Cape Town and Airlink connects to destinations such as the Victoria Falls in Zimbabwe, Maun in Botswana and Vilanculo in Mozambique. The Limpopo Department of Transport and Community Safety is working on a strategy to develop the airport to further boost the tourism sector. The Polokwane International Airport (PIA) is wholly owned by the provincial government and run by the Gateway Airports Authority Ltd (GAAL), an agency of the Department and Transport. It has the potential to be an important regional cargo airport. In the Western Cape, the administrations in charge of the City of Cape Town and the province have plans to better coordinate transport. The City of Cape Town conducted a feasibility study in 2022 on taking over the management of passenger rail services from PRASA. The city wants to have a fully-integrated system, which would include rail. In 2022 the city’s Urban Mobility Directorate published an updated Comprehensive I ntegrated Transpor t Plan (CITP), outlining the strategies and plans for improving the transport environment in the metropole for five years to 2028. The Transport and Urban Development Authority ( TDA), located within the municipality, is responsible for planning, costing, contracting, regulating, monitoring, evaluating, communicating, managing and maintaining the City of Cape Town’s transport infrastructure, systems, operations, facilities and network. The provincial government is following the city’s

ONLINE RESOURCES African Rail Infrastructure Association (ARIA): www.aria.org.za Airlines Association of Southern Africa: www.aasa.za.net South African Heavy Haul Association: www.saheavyhaul.co.za

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lead with the establishment of a Mobility Department. Large amounts of money are to be spent on various forms of public transport in the short term. Investments in rapid transit systems in the big metropolitan areas are being followed by cities such as Polokwane and Rustenburg. In Limpopo’s provincial capital of Polok wane, operations of the Leeto La Polokwane public transport system were launched in 2021. The South African Depar tment of Transpor t has several agencies and businesses reporting to it. Among them are Air Traffic and Navigation Services Company, Airports Company South Africa (ACSA), National Transport Information System, Road Accident Fund, South African Civil Aviation Authority, South African Maritime Safety Authority (SAMSA), South African National Roads Agency Limited (SANRAL) and Passenger Rail Agency of SA (PRASA). South Africa has 22 000km of railway lines and 747 000km of roads, 325 019 heavy-load vehicles and the road freight industry employs 65 000 drivers. There are 135 licensed airports in the country, 10 of which have international status. ■ PHOTO: Airlink

OVERVIEW

Tourism New hotels are being built. SECTOR INSIGHT A Green Tourism Incentive Programme is available.

he Industrial Development Corporation, one of South Africa’s biggest institutional investors, is active in the tourism sector. Among its products is the Green Tourism Incentive Programme, which incentivises privately owned tourism companies to move towards using renewable energy and efficient water utilisation. It also supports local economic development, such as initiatives in Limpopo to develop new hotels in the Musina area. The northern parts of that province are experiencing a boom in business tourism due to an uptick in mining operations. Elsewhere in the Vhembe District Municipality, the African Century Group is building a four-star Premier Hotel at Thohoyandou and the team behind the venture expects to fill its 120 rooms. A similar trend can be seen in the Northern Cape, where the Country Hotels group has developed a three-tier offering covering most of the province, spurred in part by the rapid rise of the renewable energy sector in that province. In Durban, the Radisson Blu Hotel in Umhlanga (pictured), shortly after celebrating its one-year anniversary in July 2023, received two awards from Durban Tourism, the Visitor Experience and Restaurants Award as well as the Meetings, Exhibitions and Special Events (MESE) Award. Premier Hotels & Resorts has two new properties in Umhlanga and recently restored its Cutty Sark property, further down the coast in Scottburgh. Turkish Airlines returned to King Shaka International Airport in 2022. Two of the airline’s Istanbul-Johannesburg flights now extend to Durban on Thursdays and Saturdays and it has plans to increase these to four weekly flights. A new direct flight from Durban to Harare in Zimbabwe

ONLINE RESOURCES African Business Travel Association: www.abta.co.za South African National Parks: www.sanparks.co.za South African Tourism: www.southafrica.net

PHOTO: Radisson Blu

was launched by Airlink in April 2022. These new flights are in addition to Emirates flying five flights a week from Durban directly to Dubai and the fourweekly direct flights that Qatar Airways offers. South African National Parks (SANParks), which runs nearly 70% of South Africa’s 509 state and protected areas, has a number of public-private partnerships and held an investment summit in 2022 to showcase a further 100 opportunities in 12 national parks. There are currently 60 PPPs in operation in South Africa. Sun City announced in October 2022 that it would spend about R1.1-billion on projects at its Sun City Resort. The R295-million Lefika Villas development will see 58 threeand four-bedroom villas added to the resort’s accommodation options for members of Sun International’s Sun Vacation Club. The Palace will gain a spa and a gymnasium and 320 bedrooms are to be refurbished. There are 711 745 people employed in the tourism industry nationally, with road transport (29%), food and beverages (20%) and accommodation (19%) absorbing the largest numbers. The sector contributes 9% to South Africa’s gross domestic product (GDP). ■ SOUTH AFRICAN BUSINESS 2024

FOCUS

Polokwane International Airport is soaring to destined glory The company responsible for Polokwane International Airport has a new board in place and a turnaround strategy is already delivering dividends.

Turnaround strategy The board developed a turnaround strategy that is intended to achieve financial and operational sustainability and expand the operating model. The goal is to implement the full mandate of GAAL, which includes managing all of the airports that fall under the control of the entity. The strategy is embraced by the Provincial Government and funding has been approved to implement improvements and revenue-generation projects. To ensure the successful implementation of the strategy, critical vacancies have been filled, including CEO and CFO. Optimising human capital has yielded results and improvements are evident as GAAL managed to address the South African Civil Aviation Authority (SACAA) safety findings and continues to retain a Category 7 operating licence. The audit outcome has improved and there is a steady increase in revenue due to increases in flight and passenger movement. Current rental tenants have been retained and the occupancy rate for the airport has increased. New rentals have led to a 25% revenue increase.

Modgadi Matli, Acting CEO, GAAL

olokwane International Airport (PIA), based in Polokwane, the capital city of Limpopo Province, is a gateway to the SADC region, a pillar of safe air travel that promotes convenient connectivity of the province to other major transport hubs. PIA is managed by Gateway Airports Authority Limited (GAAL) under the chairmanship of Mr Victor Xaba. The shareholder, the MEC of the Limpopo Department of Transport and Community Safety, in 2021 embarked on a robust recruitment process to appoint a competent board to address leadership instability and improve governance. The board members have brought to the entity a combination of skills in aviation, engineering, finance, legal and human resources which will be critical to ensuring the success of GAAL.

SOUTH AFRICAN BUSINESS 2024

Turnaround strategy at a glance: • Appoint competent board • Fill vacancies • Ensure financial sustainability • Expand operations • Implement the full mandate of GAAL • Pursue cargo facility potential • Generate more revenue • Attract investors

FOCUS

Potential investors GAAL has identified opportunities for investment and strategic partnerships on revenue-generating projects. The Limpopo Investment Conference 2023 has unlocked engagements with potential investors. PIA is strategically situated at heart of Limpopo, which makes it the ideal location for the provincial logistics hub, thus establishment of cargo services is at the pulse of the turnaround. Other investment opportunities include resuscitation of the fuel farm, repurposing of old aircrafts into a restaurant, refurbishment and operating PR Mphephu Airport, cold storage facilities, conference facilities, rental of offices, advertising space and hangars. The steady and consistent improvements that are already visible at the airport, coupled with the plans that are in the turnaround strategy is an assurance that PIA, GAAL other airports under its mandate are soaring to their destined glory. ■

Technically advanced facilities PIA is equipped with two crossing runways sufficient to accommodate large aircraft of the size of Boeing 747 and Airbus A346. Runway 05/23 is fully lit with a runway-lighting system and is equipped with a simple approachlighting system to complement the RNAV procedure and to enable access to the airport in bad weather conditions. The airport has an apron with parking capacity of 74 000m² and is able to accommodate nine B747-type aircraft and 13 B737/A321-type aircraft. There are 16 hangars of 540m² and one 6 450m² hangar, with the immediate potential of setting up multi-functional cargo facility and aircraft maintenance services. PIA is built on 945 hectares of land, with potential to acquire more as cargo companies take up more space. Airport Rescue and fire-fighting protection level is currently at category 7, meaning that the airport can regularly service aircraft in the categories B737-800 and A320.

Contact details: Polokwane International Airport Gateway Drive, Polokwane Tel: +27 15 288 0122 Website: www.gaal.co.za

PHOTO: Airlink | PHOTO: Pixabay/Pexels

SOUTH AFRICAN BUSINESS 2024

OVERVIEW

Telecommunications The Competition Commission has blocked a fibre merger.

n 2023 the Competition Commission blocked a proposed deal in which Vodacom would buy a stake in Maziv, a holding company with two fibre units. The two companies behind the proposed merger, which had previously won approval from the country’s telecommunications regulator, intend taking the matter to the Competition Tribunal on appeal. The Commission argues that 5G fixed wireless access (FWA) and fibre compete in the same market and that the link-up would reduce that competition to the detriment of the consumer. One of the fibre units within Maziv, Vumatel, announced in March 2023 that it had reached the milestone of having connected twomillion South African homes to the Internet while Dark Fibre Africa, which is a provider of open-access connectivity infrastructure, is also the national leader in its field. Maziv is part of Community Investment Ventures Holdings (CIVH), which is the telecom infrastructure division of the Remgro Group. Vodacom and MTN are the two biggest providers of mobile phone services in South Africa, with more than 70% of the market between them. Telkom and Cell C are the other two major operators. The SA Connect project, intended to connect 5.8-million sites across South Africa to high-speed Internet by 2026, received an additional R3-billion in 2023 from National Treasury. The Department of Communications and Digital Technologies, the implementing entity, wants to see remote rural areas having better access to technology. As of 2021, National Treasury has appointed four companies as service providers to government, through its new mobile communication services contract, known as RT15-2021. The contract covers all entities of the state and is expected to allow for significant cost saving through better controls. The contract, which was previously held by Vodacom, is now shared between Cell C, MTN, Telkom and Vodacom. The transversal contract is for uncapped data for different categories of employees and includes mobile devices for packages from all service providers. Nearly 450 organs of state participated in the previous contract.

ONLINE RESOURCES Department of Communications and Digital Technologies: www.dcdt.gov.za Independent Communications Authority of South Africa: www.icasa.org.za State Information Technology Agency: www.sita.co.za Wireless Access Providers Association: wapa.org.za SOUTH AFRICAN BUSINESS 2022

SECTOR INSIGHT The national broadband project has received additional funding.

This included 38 national departments, 99 provincial depar tments, 106 local government departments and 207 other state institutions. The National Department of Communications is responsible for the Independent Communications Authority of South Africa (ICASA), the regulator of communications, broadcasting and postal services, the South African Broadcasting Corporation (SABC) and three other agencies. The Wireless Access Providers Association (WAPA) has a large and growing membership. WAPA is a nonprofit which aims to be a liaison between wireless Internet service providers (WISPs), ICASA, network operators, service providers and consumers. It offers information to members on regulations and technical training and lobbies on behalf of the sector. ■ PHOTO: MTN

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OVERVIEW

ICT Retailers are pouring money into digital infrastructure.

ver since Covid-19 turbocharged online shopping, retailers have been racing to get ahead in the digital game. Figures released in September 2023 showed Takealot, a local service majority owned by Naspers, topping the polls in traffic, followed by two international giants in Shein and Amazon. An interesting entry at number four was Bash, the e-commerce platform of TFG, formerly known as the Foschini Group. More than 500 brands can be purchased using TFGMoney, a bank account created with TymeBank. Other successful e-commerce retail operations include Sixty60 (Checkers), Massmart (Makro, Game and Builders) and the JD Group (Everyshop). TFG is building a 75 000m² distribution centre in Gauteng with the intention of delivering 70% of all its online sales, and all of its fashion items, through that single site. As South Africa joins the global trend towards online shopping, data centres are going up all over the country. The latest to join the trend is software company Oracle which has chosen Johannesburg as the headquarters of its African cloud region. All of the company’s cloud regions (data centres) worldwide will be 100% powered by renewable energy by 2025. Teraco stores data in Johannesburg, Durban and Cape Town while Africa Data Centre (ADC), part of the Liquid Telecom Group, has purchased a Tier IV data centre in Johannesburg. In 2022 Oracle announced an interconnect service between itself and Microsoft Azure data centres. This allows customers of both companies to export data from one to the other at no cost. The companies are competing with Google Cloud and Amazon Web Services (AWS), among others. AWS announced at the 2023 South Africa Investment Conference that its investment plan for South Africa to the end of 2029 amounts to R46-billion. By the end of 2022, R15.6-billion had already been invested. The AWS Africa Region was created in 2020 when AWS opened a data centre in Cape Town. The Council for Scientific and Industrial Research (CSIR) in Pretoria will host a new body aimed at preparing South Africa for the Fourth

ONLINE RESOURCES Business Process Enabling SA: www.bpesa.org.za Independent Communications Authority: www.icasa.org.za Technology Innovation Agency: www.tia.org.za

SOUTH AFRICAN BUSINESS 2024

SECTOR INSIGHT Amazon Web Services will spend R46-billion in South Africa. Industrial Revolution (4IR), the South African Affiliate Centre of the World Economic Forum. South Africa has not only been home to many pioneer ing bank ing apps on mobile phones, but the country’s operators continue to offer unprecedented innovation and le vels of ser vice. Ar thur Goldstuck noted these trends in S e p te m b e r 2 0 2 2 , f u r t h e r pointing out that the Reserve Bank will also speed up EFTs between banks with the introduction of a Rapid Payments Programme. Bank Zero not only uses biometric authentication for logging in, but offers zero-cost banking. B o t h MT N a n d Vo d a c o m a re o f fe r i n g m u c h m o re sophisticated apps than when they first ventured into fintech: MTN MoMo has diverse offerings and VodaPay encompasses payment, lending, insurance and cash for emergencies. ■

OVERVIEW

Development finance and SMME support The SA SME Fund has launched a venture capital fund. SECTOR INSIGHT The Industrial Development Corporation loaned R7.6-billion to black industrialists.

Glencore supports Moeding Transport in Limpopo.

ne the country’s biggest institutional investors is the Industrial Development Corporation (IDC). Apart from taking stakes in large companies in sectors like steel and agriculture that have strategic significance, the IDC has a product called SME Connect. A collaborative model sees the IDC provide funding and business support while a corporate might guarantee to buy goods or services from the small business operator. Most big companies in South Africa have two main programmes to support SMMES: enterprise development (ED) and local supplier development (or procurement). Sometimes they are combined as enterprise supplier development (ESD). Venetia Mine in northern Limpopo, a De Beers Group mine, has more than 50 SMMEs enrolled in incubation programmes and 34 locally-owned companies are doing business with the mine. Another Limpopo initiative has led to the growth of Moeding Transport, a company that has been supplying services to Glencore Ferroalloys’ Lion Smelter for several years. The contract has enabled the company to grow, and it was recently further boosted by the donation by Glencore of two 65-seater buses. In Rustenburg, Impala Rustenburg has invested R8.6-million in the development of a Economic Inclusion Centre that serves as a small business hub for SMMEs in and around the mining community. Apart from the physical facilities on offer, advice on market access and funding is also available. SOUTH AFRICAN BUSINESS 2024

Among the IDC’s other focus areas are black industrialists (to whom R7.6-billion was loaned in 2022), black-empowered and black-owned companies (R6.5billion) and women-owned businesses (R1.1-billion). The increased number and scope of the Business Day Supplier Development Awards gives an indication of how developed this aspect of support for small enterprise has become in the South African business community. The process of helping small businesses become bigger businesses has sparked creativity across sectors such as retail and mining and collaboration with other companies has become the norm in promoting supplier development. Through the Spar Rural Hub, the retail group supports small-scale farmers and creates markets for their products. The Spar Group has established The Spar Academy of Learning where learnerships and skills programmes are offered. This is to support the business owners who take up the ownership model offered by Spar, which, PHOTO: Glencore

OVERVIEW

The Economic Inclusion Centre in Rustenburg. unlike the franchise model, means that independent retailers have more independence when it comes to decisions within the store and in terms of who to buy from. Spar’s independent retailers in Southern Africa grew from 2 440 in 2021 to 2 508 in 2022. Woolworths reports that it spent R450-million in 2022 on procurement from 34 SMME beneficiaries of its ESD programme. Examples include a security company (Comet Security), a manufacturer of babywear and underwear (Davis Clothing) and pet food (K9 Pet Food), all of which have expanded their businesses on the programme and started employing more staff as a result. Altogether, the company contributed R2.9-billion towards the revenue of 917 SMMEs in its value chain up to end of the financial year in June 2022.

Funds and schemes In 2023 the SA SME Fund set up its third fund, a dedicated venture capital fund. In August first close was reached with a figure of R700-million, achieved with some support from the pension fund sector. The SA SME Fund is a fund of funds, investing in fund managers who will support startups and new ventures, rather than itself investing in projects. It was established with the support of 50 of South Africa’s biggest companies and its first fund had a fairly broad remit, which included fintech, biotech and supporting universities in turning research into business ventures. The focus of the second fund was debt funding. As Hilary Joffe pointed out in Business Day, South Africa “ranks only fourth in Africa” in venture capital, despite a strong private equity industry. Joffe cited the SA Venture Capital Association, which reported that in 2021, the venture capital industry invested R1.3-billion in 129 startups.

ONLINE RESOURCES Business Day Supplier Development Awards: www.sdawards.co.za National Department of Small Business Development: www.dsbd.gov.za Small Business Institute: www.smallbusinessinstitute.co.za Small Enterprise Development Agency: www.seda.co.za

PHOTO: Impala

In the North West, the Provincial Government is investing in digital infrastructure. SMMEs will be able to use the newly-established Mafikeng Digital Innovation Hub as a co-working environment and to get support in using digital tools. The South African National Roads Agency Limited (SANRAL) actively supports small businesses wherever it works in South Africa. Subcontracts are routinely awarded for maintenance such as the patching of potholes, fencing and the cutting of grass verges. Part of the rationale behind a national programme to revive industrial parks is to benefit SMMEs. The National Department of Trade, Industry and Competition (the dtic) has invested R40-million in the Nkowankowa Industrial Park in Limpopo, an initiative which has helped to create 174 direct jobs. In the northern reaches of the province, more than 300 jobs have been created with the revitalisation of the Thohoyandou Industrial Park, which has achieved a 91% occupancy rate. The dtic is trying to stimulate township and rural economies through programmes such as the Enterprise Investment Programme (EIP). The National Department of Small Business Development (DSBD) has several programmes to assist SMMEs and co-operatives. The Small Enterprise Development Agency (Seda), a subsidiary of the DSBD, has 42 incubation centres under its Seda Technology Programme (STP). In Mpumalanga, Seda supports several incubators: Furntech, furniture manufacturing, White River; Mobile AgroSkills Development & Training, agricultural training, Nelspruit;Mpumalanga Stainless Initiative (MSI), stainless-steel processing, Middelburg (with Columbus Stainless); Timbali floriculture, Nelspruit; Ehlanzeni TVET College Rapid Incubator Renewable Technologies, Nelspruit. ■ SOUTH AFRICAN BUSINESS 2024

OVERVIEW

Education and skills training Sol Plaatje University celebrated its 10th anniversary in 2023.

SECTOR INSIGHT s part of a programme to spread skills to young people living in rural areas, an eco-friendly SMART Skills Centre South Africa has three is to be built in Sabie, the centre of the timber sector in types of public universities. Mpumalanga. The timber structure is the result of a partnership between the Chemical Industries Education and Training Authority (CHIETA) and the South African Forest Company Limited (SAFCOL). CHIETA aims to provide digital technology and online learning to help young people compete in the job market and the Mpumalanga SMART Skills Centre is just one of several that are being initiated across the country. Among the forestry-related skills that the centre will focus on are drone operators, but it will also respond to national skills needs such as fitters and turners. SAFCOL will cover the cost of erecting the eco-friendly wooden structure and CHIETA will supply the equipment. In November 2023, the Decade of the Artisan Programme will have run its course. The Department of Higher Education and Training set targets for skilled graduates and established Centres of Specialisation Wits Business School launched a new MBA at Technical Vocational Education and Training (TVET ) in Health Leadership in 2023. colleges around the country. For example, ORBIT TVET College in the North West offers diesel The Council for Scientific mechanic training at its Mankwe campus and electrical training at and Industrial Research (CSIR) Brits as part of the Centre of Specialisation programme. Centres of has established a Learning Specialisation aim to produce: Factory to support companies in training staff in relevant and • A skilled and capable workforce up-to-date skills. The training • Increased availability of intermediate-level technical skills is offered free and via a variety • Increased delivery of qualified artisans in 13 priority trades of methods: online, virtual, hybrid and practical training In KwaZulu-Natal the Elangeni TVET College has achieved trade on the CSIR campus in Pretoria. test centre accreditation in two disciplines, Welding and Electrical, Among the subjects covered and in 2023, had 50 artisans in training. Higher Education and are the Internet of Things, Training Minister Dr Blade Nzimande has called on principals of Digital Lifestyle Management, TVET colleges to prioritise work placements for students. Additive Manufacturing and Beyond TVET colleges, the private sector actively offers training Big Data Analytics. in basic and advanced skills. Shorter courses such as the twoTh e S o u t h e r n Af r i c a n week bricklaying course offered by cement-maker PPC are greatly Wildlife College, offering appreciated by job-seekers, all the more so because the courses are diploma and short courses in free. PPC is working together with the private Motheo Academy in conservation, is a joint World Johannesburg. Other courses for small business owners or “bakkie Wide Fund for Nature South builders” are offered, such as construction management.

SOUTH AFRICAN BUSINESS 2024

Thought leaders with impact Wits Business School leads research in areas critical to the continent’s sustainability.

launching in March 2024, which seeks to address the many challenges facing the healthcare sector, both locally and globally. WBS has also announced the imminent launch of a new Centre for Entrepreneurship, the result of a collaboration with the private sector which seeks to sustain the economic revitalisation of South African cities and townships. In the Executive Education division at Director and Head of WBS, WBS, impactful leadership Professor Maurice Radebe. means providing delegates with the tools to adapt to change and disruption through soft skills such as agility and resilience, along with hard skills such as digital business. Programmes are taught by both academics and industry experts. “We get people from business to teach business and in this way, we embrace the concept of ‘pracademia’ to ensure real-world impact,” says Leoni Grobler, Director of Executive Education at WBS. WBS has recently attained accreditation with the Association of African Business Schools (AABS) and reaccreditation with AMBA. The school is now shifting its focus to achieving American and European accreditation through AACSB and EQUIS. “WBS is on an exciting journey to becoming globally recognised as an African thought leader, using our reputation for academic excellence as a foundation for delivering programmes that are strongly research-based and relevant to our context and our collective future as Africans,” says Radebe. ■

ew leadership, a new strategy and international accreditation – Wits Business School (WBS) is consolidating its position as a leading African business school. Almost three years after Professor Maurice Radebe took the helm as Director and Head of WBS, the School is experiencing a turnaround, as evidenced by the growing number of corporate clients and students affiliated to the school. For Radebe, a former energy executive at Sasol Oil, leading the turnaround at WBS was an opportunity for him to give back, not only to WBS, his alma mater, but to society: “When the opportunity arose, I realised this is very much in line with my purpose, which is to develop the next generation of leaders who are ethical and who have a passion to make a difference.” Developing impactful leadership is at the heart of the School’s mission and the golden thread that runs through its programmes, whether academic or executive short courses. The MBA programme at WBS is centred around a “Leadership Quest”, an independent study component which challenges the students to reflect on their leadership style and beliefs and identify the gaps that need to be closed to become a great leader. “Our country and continent are rich with young talent. As business schools, we need to tap into this talent and develop it. We need to invest in the next generation of leaders who can take Africa into an inclusive and sustainable future. This means leading with purpose, integrity and accountability, while at the same time developing an entrepreneurial and innovative mindset,” says Radebe. To this end, WBS has established three centres of excellence which focus on developing the latest research in areas critical to Africa’s future. These include Energy Leadership, Digital Business and African Philanthropy and Resource Mobilisation. The school recently announced a new MBA in the field of Healthcare Leadership,

SOUTH AFRICAN BUSINESS 2024

OVERVIEW

Africa (WWF-SA) and Peace Parks Foundation initiative. The college is located near the Orpen Gate on the edge of the Kruger National Park.

Universities There are three types of public universities in South Africa: traditional universities, which are academic in focus and award degrees; universities of technology, which have a vocational emphasis and can award diplomas and certificates; and comprehensive universities which offer a combination of both types of qualification and can confer degrees and diplomas. The addition of two universities in the provinces of Mpumalanga and the Northern Cape means that every South African province now has a university. The official launch of the University of Mpumalanga was in October 2013, with the first cohort of 169 students registered in just three programmes in 2014. By 2024, the plan is to offer approximately 70 qualifications to over 8 000 students. That is the year in which the university’s first doctoral graduates will be capped. Research relevant to the needs of the province can now be done at local level. With Sol Plaatje University celebrating its 10th anniversary in 2023, the chances of indigenous young people being able to study on its campus have been boosted by large donations from two Anglo American subsidiaries. Kumba Iron Ore and De Beers Group are among the biggest mining companies active in

A team of students from ORBIT TVET College competed successfully in an international AI competition run by Intel. the Northern Cape. Their donations of R20-million and R5-million towards the university’s Lesedi La Afrika Fund will support scholarships and social impact projects. The fund has set a target of R100million over the next three years. SPU has seen major growth in its enrolment figures and staff recruitment in recent years, with 60% of its academic staff having PhDs. As part of its sustainable growth, the institution is committed to community engagement and scholarly activity. The first intake of students at the Kimberley campus of Sol Plaatje University in 2014 was 124. For the 2023 academic year a total of 28 454 applications (undergraduate and postgraduate) were received by SPU. This is an increase of just under 9 000 against the applications received for 2022. Another milestone was reached in the university’s young history when the Risk and Vulnerability Science Centre (RVSC) celebrated its first birthday, on 9 September 2022. As the Northern Cape is water-scarce, the unit’s location is highly relevant. RVSC is a programme of the Department of Science and Innovation under the Global Change Research Plan for South Africa – funded through the National Research Foundation’s Global Change programme. Most of South Africa’s universities have business schools attached to them, offering MBAs, management diplomas and a variety of short courses. ■

ONLINE RESOURCES Centres of Specialisation: www.dhet.gov.za National Department of Science and Innovation: www.dst.gov.za Sol Plaatje University: www.spu.ac.za TVET colleges: www.tvetcolleges.co.za University of Mpumalanga: www.ump.ac.za

SOUTH AFRICAN BUSINESS 2024

OVERVIEW

Banking and financial services Carbon credits and green investing are catching on.

arbon credits and renewable energy certificates can now be traded on Africa’s largest stock exchange, following the launch in 2023 of the JSE Ventures Voluntary Carbon Market. JSE Ventures is collaborating with US company Xpansiv, which has experience in global environmental markets. South Africa has had carbon taxes since 2019. One of South Africa’s newer stock exchanges, the Cape Town Stock Exchange (which started life as 4AX), oversaw the listing of an initial tranche of preference shares of the Gaia Renewables REIT, a fund that caters to investors who want to have a stake in the burgeoning renewable energy economy. It is expected that more investors will want to be part of a sector that is showing enormous potential. TymeBank is taking the concept of “retail banking” to another level. Having run banking kiosks within retailers such as Pick n Pay and Boxer for several years, TymeBank has signed a deal with TFG, a group that has a big presence all across South Africa. What used to be known as the Foschini Group has 34 brands, including Markhams, Totalsports, Jet and Dial a Bed, and 30-million customers. In the short term, TymeBank will have access to 600 TFG kiosks, taking the bank’s total in South Africa to 1 450. Another relatively new bank is Capitec. Investment holding company PSG has reduced its holding in Capitec Bank from 32% to 4%, earning about R4-billion by selling those shares. Discovery Bank reported in 2022 that it was signing up 750 new clients every day which puts it on course to achieve more than 600 000 customers by 2024. The bank, which launched in 2019, has already opened more than one-million accounts. Long-term insurer and asset manager Liberty has delisted from the JSE and has been integrated into the Standard Bank Group. Financial services group Old Mutual received permission from the prudential authority of the South African Reserve Bank to apply for a banking licence. The bank will spend R1.75billion on setting up the bank and intends to launch in 2024.

ONLINE RESOURCES Financial Sector Conduct Authority: www.fsca.co.za Insurance Institute of South Africa: www.iisa.co.za South African Institute of Chartered Accountants: www.saica.co.za

PHOTO: John Young

SECTOR INSIGHT The JSE has launched a carbon-trading market.

African Bank has signalled that it is ready to grow, with an agreement to buy Grindrod Bank and an R80-million deal to purchase lender Ubank. After going into administration in 2014, African Bank took some time to recover and is still halfowned by the Reserve Bank but it has materially added to its retail client base and the addition of more than 4.5-million clients with the purchase of the troubled Ubank, which had as its base mine workers, will further strengthen its position. The R1.5-billion purchase of Grindrod Bank gives African Bank a stronger position in business lending. SOUTH AFRICAN BUSINESS 2024

OVERVIEW The South African state has promised a huge infrastructure drive and has established an entity called Infrastructure South Africa (ISA) to coordinate and encourage catalytic projects. The business and investment communities are also interested in infrastructure but in the context of climate change, the emphasis is increasingly on sustainability. Sanlam, established in 1918 as a life insurer, is now a financial services company with five main divisions, including Corporate, Personal Finance and Emerging Markets. Santam focusses on shortterm insurance. With its headquarters in Bellville, Sanlam is Africa’s largest insurance company. Sanlam Investments has launched a Sustainable Infrastructure Fund which primarily invests in senior or subordinated debt across a wide range of South African infrastructure assets, with the ability to invest up to 10% in equity. Sanlam Group will invest R6-billion in the fund and aims to attract a further R5-billion from institutional investors. Investments will be made in housing, transport, health, water, waste, communication, conventional energy and renewable energy, a fast-growing sector with enormous potential. Large-scale infrastructure projects like the Berg River Voelvlei Augmentation Water Scheme (BRVAS), pictured, are examples of the kind of

projects that need to attract investment from a variety of sources. Even when National Treasury is the main funder, complications can arise. Managed by the Trans-Caledon Tunnel Authority (TCTA), the BRVAS project could only go ahead once offtake agreements had been signed. In October 2022, the City of Cape Town Council approved a R2.3billion Water Supply Agreement (WSA) with the Department of Water and Sanitation (DWS). ■

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South African Business 2024

Articles inside

Banking and financial services

Thought leaders with impact

Education and skills training

Development finance and SMME support

ICT

Telecommunications

Polokwane International Airport is soaring to destined glory

New hotels are being built. Tourism

Transport and logistics

Water

Construction and property

Manufacturing: automotive

Manufacturing

Engineering

Oil and gas

Energy

Mind the Gap

Mining

Agriculture

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