23 minute read
A regional overview of the Western Cape
The Saldanha Bay Industrial Development Zone is targeting the marine and oil and gas sectors. Credit: SBIDZ
Cape Town’s new stock exchange is based on smart technology, something the Western Cape is rapidly becoming famous for. Special economic zones at Atlantis and Saldanha aim to tap into growing markets – maritime, oil and gas and renewable technologies.
By John Young
As a way for the Western Cape to show off its growing reputation as a tech-friendly destination, the launch of the Cape Town Stock Exchange in August 2021 was an ideal event.
When several new bourses launched in 2017 most of them put an X in their names and all of them based themselves in Johannesburg. In 2021, 4AX made the move south and rebranded as the Cape Town Stock Exchange. Not only does this give the exchange immediate access to a global brand, but it puts them at the heart of an area which has been home to financial institutions for as long as there have been banks and insurance companies in South Africa.
A more recent trend has seen asset managers setting up in the Cape. Of the 20 finalists named for the 2020 Morningstar South Africa Fund Awards, 13 have their headquarters in the Cape. Seven of the top 10 managers in the Plexcrown Ratings of 2019 are based in Newlands (MiPlan), Victoria & Alfred Waterfront (Allan Gray), Claremont (Coronation), Bellville (PSG and Boutique CI), Pinelands (Old Mutual) and Westlake (Prescient).
Cape Town also, according to the Global Financial Centres Index (GFCI), ranks second in Africa in 2020 (behind Mauritius) in competitiveness as a financial centre. The ranking is an aggregate of indices covering five things: business environment, financial sector development, human capital, infrastructure and reputation. Neighbouring Stellenbosch is advancing its reputation for technological innovation and the output of the region’s four universities and six TVET colleges ensures that the tech sector has the necessary human capital.
Cape Town’s share of national employment in the financial sector is about 20% and the contribution to gross value-added (GVA) is 15%.
More recently, the city has become home to several financial technology (fintech) incubators: according to Tracxn there were 173 fintech startups in Cape Town in 2021 and French Tech Labs operates out of Century City.
There are 22 active incubators and accelerators in the region which provide networking and marketing opportunities and links to funders and markets. The City of Cape Town has installed 848km of fibre-optic cable and the sector supports more than 40 000 jobs with established brands such as Amazon and Panasonic and startups such as Luno, Yoco, Jumo and SweepSouth. Cape Town hosts more than half of all startups in South Africa.
Technology has also been embraced by entities such as the Western Cape Department of Agriculture which graduated its second group of drone pilots in 2021, having trained 13 pilots the year before.
Investment
The province has a dedicated investment agency, Wesgro. The Investment Promotion Unit of Wesgro has been working with various regions within the Western Cape to attract investment and accelerate exports. Seminars have been held in the Cape Winelands, the West Coast and the Garden Route.
In recent years, the biggest investments have been in renewable energy and manufacturing. Other important sectors are agro-processing, aviation, business services, education and training, financial services, real estate, ICT, light manufacturing, oil and gas, timber, tourism, waste beneficiation and clean energy.
Encouraging investment in Cape Town has been recognised as something that needs a full-time office and a strategy. Invest Cape Town is an agency of the city that works to create the best possible conditions to attract investors. Areas of focus include broadband access, energy security, the reduction of red tape and improving air access to the city.
A Red Tape Reduction Unit has been successful at a provincial level. The plan is to now set up similar units at municipal level.
The Provincial Government of the Western Cape has announced that it intends creating a portfolio of investment projects that can attract private finance. In addition, a commitment has been made to invest in infrastructure.
Another vehicle for attracting investment is the creation of Special Economic Zones (SEZ) and Industrial Development Zones (IDZ). Large industrial operations already exist at Saldanha and the Port of Saldanha Bay is the portal for the export of South Africa’s iron ore. The Saldanha Bay Industrial Development Zone (SBIDZ) is becoming a hub for a range of maritime repair activities and oil rig maintenance and repair.
The National Department of Trade, Industry and Competition (dtic) and the provincial government have collectively invested R500-million in core infrastructure, a lease agreement has been signed with TNPA, and a phased approach to development has begun. The SBIDZ fits neatly into two overarching visions: Operation Phakisa and Project Khulisa, the targeted growth strategy of the Western Cape Provincial Government which includes servicing and repairing of oil rigs as a priority.
The Western Cape is lobbying hard for Saldanha Bay to be a site for a gas-to-power plant. If a gas plant is built at Saldanha, then it could be a catalyst for the use of gas in many other sectors such as manufacturing and residential.
The Atlantis Special Economic Zone (ASEZ) is attracting investors in the Greentech market. An early investor in the zone was GRI Towers South Africa, a wind turbine tower manufacturer. With new renewable energy projects such as solar parks and wind farms being rolled out every month, this sector is on a steep growth path. The conversion by South Africa’s key markets to electric vehicles will have an effect on the country’s automotive manufacturers; ASEZ is hoping to attract the makers of new components for the new age.
Economy
Finance, business services and real estate combined contribute 28% to the gross domestic product (GDP) of the Western Cape. The financial services and insurance sector are key components of the economy.
Although agriculture only accounts for 4.3% of GDP on its own, the sector is responsible for the fruit and vegetables that contribute to agro-processing
Green technology and manufacturing for the renewable energy market are the focus of the Atlantis Special Economic Zone. The large blue building is the premises of early investor, wind turbine tower manufacturer GRI Towers South Africa. Credit: ASEZ
which accounts for nearly 40% of the province’s export basket. (Agro-processing accounts for 8.1% of GDP.) Citrus, wine, apples and pears, grapes, fruit juice, fruit and nuts and tobacco all appear in the top 10 of the province’s exports. Seventy percent of South Africa’s beverage exports come from the Western Cape. Grapes and wine sales to Europe remain strong, but the Chinese market is becoming increasingly important.
The province has a diverse manufacturing sector ranging from textiles, clothing, footwear, boatbuilding and furniture to coke and refined petroleum products. Excluding agro-processing, other manufacturing makes up 6.9% of GDP.
Energy
The province and the City of Cape Town are lobbying national government for a greater role for municipalities in the generation and distribution of energy. The potential of renewable energy is being realised through the national independent power producer programme and there is a strong lobby to build a gas-to-energy plant in the province.
The City of Cape Town and the Western Cape Provincial Government are investing in resilience. A market intelligence report covering energy, renewable energy, water and waste was created by GreenCape to map the assets and challenges in these areas.
In addition to trying to attract green investment into the province, the province is working for improved regulations related to smallscale embedded generation (SSEG). Cape Town also wants to be able to rent out its infrastructure to a power producer who can supply a user via that infrastructure.
Much of this work is done by a unit called the Sustainability Energy Markets within the Energy Directorate. Another area of focus for this group is to investigate energy use by lowincome households.
The Cape Peninsula University of Technology’s Energy Institute is a leader in research in the field of electricity. The South African Renewable Technology Centre (SARETEC) on the Bellville campus of CPUT offers courses such as Wind Turbine Service Technician and Solar Photovoltaic Service Technician and various short courses such as Bolting Joint Technology.
The Centre for Renewable and Sustainable Energy Studies is at the University of Stellenbosch where a new School for Climate Studies has been launched. The University of Cape Town has the Energy Research Centre and the University of the Western Cape is doing research on the possibilities of hydrogen as an energy source. ■
The perfect destination for a post-lockdown visit
The Western Cape citrus sector has bounced back and is set to break records while the film industry is showing strong signs.
Agro-processing is a large part of the success story of Western Cape agriculture. Credit: RFG Foods
Wesgro is the official tourism, trade, investment and film promotion agency for Cape Town and the Western Cape. Western Cape Business asked Wesgro how it is going about tackling the tough new environment for travel, trade and tourism.
What steps are in place to take the Air Access programme forward? The Cape Town Air Access project approved its recovery strategy in June 2020 and this was to ensure that airlines could return to Cape Town as soon as restrictions were lifted locally and internationally. Part of the lobbying effort was convincing the South African government to lift travel restrictions sooner rather than later, which was successfully done with a number of industry partners when international flights resumed in October 2020. The team is now focussing on making sure all previous airlines return to Cape Town and that routes remain sustainable through the recovery period.
The project will therefore continue with its core route development and support strategy of route retention, route expansion and new route establishment for Cape Town and the Western Cape. What are the broader outlines for the rejuvenation of the tourism sector? The tourism sector had an incredibly tough time in 2020 and 2021, and although inbound tourism numbers are beginning to show a promising increase, we need to continue to monitor the progress of the industry. The resumption of activity will come with its own challenges in terms of maintenance of top-quality guest experience as well as in terms of working capital for businesses needing to reopen their operations after such an extended period of closure.
The assistance of tourism SMMEs through training and continued red tape reduction is also key. We need to ensure that our tourism assets are correctly maintained, and we continue to support the regional and local tourism offices during this period of reopening.
Wesgro will continue to promote Cape Town and the Western Cape as the perfect destination for a post-lockdown visit.
Did activities continue under lockdown to encourage trade and investment? The Wesgro export unit was able to leverage digital solutions and during the 18-month period from 1 April 2020 – 30 September 2021 was able to support exporters with: • 63 virtual/hybrid export education and awareness networking sessions • Virtual export training: 10 courses, 216 companies, 70 companies mentored • 64 virtual/hybrid/in-market export and OFDI missions to support exporters connecting with international markets.
Are there priority sectors that Wesgro is targeting? • Agriculture, agro-processing, agribusiness, furniture • Manufacturing and value-added products
A street scene in Afghanistan. Or is that a Cape Town street dressed for the fourth season of Homeland? Credit: The Big Picture Company
• Green industries • Cosmetics, natural ingredients, organic • Services • Clothing, textiles, leather, footwear • Boatbuilding and auxiliary services • Health tech and medicinal cannabis • Aerospace and defence
Are some sectors recovering better than others? The year 2021 saw a remarkable rebound in the agricultural sector, both in terms of output and associated export earnings. One of the most noteworthy success stories has been in the citrus sector, with the Citrus Growers Association of Southern Africa (CGA) forecasting that the South Africa citrus industry would likely break all export season records with an estimated 158.7-million cartons in 2021. South Africa exported 146-million tons of fruit in 2020. If the estimate is reached, it would represent a third consecutive season of record export volumes.
Export earnings speak directly to this with citrus fruits the province’s largest exported product in 2020, with associated export earnings of R18.8-billion exported in 2020, an increase of 55% on 2019. Apart from a good grower’s year in 2020, the increase in demand from this product group globally was supported by the immune-boosting properties of citrus. Petroleum oils have traditionally been the province’s largest export commodity in terms of earnings.
A number of other traditional agricultural commodities have reported significant growth, including apples, blueberries, pears and wine. Is the film sector making a comeback? According to the City of Cape Town’s Film Permit office, film bookings have doubled since 2020. They report that the permits include four international projects, plus multiple local TV series. Communications plans for foreign projects are controlled to help drive audiences to go to cinema or distribution, and this could be years away from projects on locations shooting in the province. Note that our Cape Town Film Studios (Wesgro owns 10%) is fully booked for the next two years.
Wesgro helped to support the amazing projects that came out of the Cape Town International Animation festival. Animation projects take years of work and are a great job creator. Many projects in production and distribution were shared.
A partnership to develop more capacity in the industry has been announced, with 10 000 learners being identified, 6 000 creatives being empowered, and 200 jobs being created by a series of partnerships between Triggerfish and E4D. As Gavin Watson, the team leader for E4D noted, the animation industry is attractive to young people and is growing fast. He also added that the opportunities for animation extend outside the traditional film industry, within fields like advertising, app and web design, architecture, engineering, gaming, industrial design, medicine, and the motor industry, not to mention growth sectors like augmented reality and virtual reality. Wesgro agrees with this sentiment and looks forward to further industry gains during Cape Town’s Africa Games Week in September. ■
Green technology manufacturers welcome at Atlantis SEZ
Business Development Executive Jarrod Lyons explains how the ASEZ offers a great location to trade with Africa and to benefit from South Africa’s renewable energy procurement programme.
The Atlantis Special Economic Zone (ASEZ) for green technologies is located on the West Coast of South Africa, in the Cape Town Metro. The zone is dedicated to manufacturing and provision of services in the green technology space. Wind turbines, solar panels, insulation, biofuels, electric vehicles, materials recycling and green building materials are examples of green technology that are welcomed.
The Atlantis Special Economic Zone SOC (ASEZCo) has undertaken over the past few years to establish itself as a globally-competitive company operating state-of-the-art infrastructure in Cape Town. The ASEZCo is equipped to assist both local and foreign investors in landing their green technology manufacturing investment in a seamless, well-managed process which eliminates unnecessary red tape and promotes a fast-tracking to market.
As a value proposition, the ASEZ offers Greentech manufacturers benefits from colocation and clustering. Our partners’ competitive advantage rests on making more productive use of inputs, which requires continual innovation. We achieve this through the Living Lab by providing our partners with a platform to share knowledge, resources and outputs in a manner which promotes profitability through resource efficiency.
Our established partnerships with tertiary institutions contribute to our ability to provide our partners with well-curated skills driven by their needs, as well as the needs of a transitioning, traditional, coal-based economy to a green economy.
The ASEZCo has enterprise development initiatives in place, which provide our partners with a suitable list of entities from which they can procure goods and services. Integration into our Living Lab bodes well for new partners, as we assist them in identifying collaborative opportunities with existing partners and facilitating engagements, which will lead to an
improvement in the overall triple-bottom-line of all partners located in the ASEZ.
New partners sought The Business Development Unit of the ASEZCo has placed a tremendous amount of its marketing energy in the community-focused communications and events for the direct benefit of the community. There comes a time, however, when community expectations need to be met. This can only be done through the landing of new and expansion of existing partners in the ASEZ with the view to create jobs and employment opportunities for the broader SMME network in the Atlantis and surrounding areas.
The Business Development Unit has taken the stance of a more commercially-focused entity by reaching out to specifically targeted investors who want to benefit from integrating into the Living Lab of the ASEZ.
The unit benefits from expertise in the green economy and leverages relationships with organisations like Wesgro and GreenCape to remain relevant in green economy investment promotion. With ASEZCo’s comprehensive understanding of Greentech value chains, the unit has the ability to identify partners with capabilities of servicing the needs of the South African and African Greentech markets.
Servicing the growing African market with green technologies which contribute to sustainable infrastructure development is a superb way in which SEZs can make a difference. The ASEZ for green technology manufacturing is perfectly suited to enhance trade opportunities with Africa and the rest of the globe as it is well located on the southern tip of Africa close to two ports with capabilities of landing and exporting bulk goods, as well as containers filled with sub-components.
With the awarding of 25 projects in Round 5 of the REIPPPP, and the stringent localisation requirements associated with the REIPPPP, the ASEZ is well positioned to capitalise on component manufacturing opportunities to service the IPP projects recently awarded. The ASEZCo is utilising this market opportunity to coordinate a collaborative sales pitch to partners which can establish their manufacturing facilities in the ASEZ.
This collaborative approach encompasses InvestSA (the dtic), Wesgro, InvestCT and GreenCape and has demonstrated significant success in the past. We continue to engage with potential partners with our ASEZ and are adamant that we will achieve significant success in this regard over the next 12 to 18 months. ■
CONTACT For additional information on investing in Atlantis Special Economic Zone and understanding the Greentech landscape in South Africa, please contact Jarrod Lyons at jarrod@atlantissez.co.za
The Atlantis SEZ has dedicated Infrastructure and Integrated Ecosystem (IES) teams. Integrated Ecosystem Executive Ellen Fischat explains how they help to create shared value.
The IES team, left to right: Christelle Brown, Ellen Fischat (Integrated Ecosystem Executive), Michael Webster, Ursula Wellmann, Charlotte Perang and Florenchia Solomons.
The Atlantis Special Economic Zone Company (ASEZCo) for green technologies aims to harness the green economy for growth and increased job opportunities.
It does this by driving sustainable, socioeconomic development and job creation, while positioning itself as a world-class eco-industrial park through its Living Lab. A Living Lab (LL), in contrast to a traditional laboratory, operates in a real-life context with a user-centric approach. The physical or organisational boundaries of a Living Lab are defined by purpose, scope and context. The scope, objectives, activities, resources and degree of participation and boundaries of a living laboratory are open for definition by its participants. These participants consist of multi-disciplinary stakeholders, from public to private sector, tertiary to research institutions and most importantly the local community and civic society. Industries adopting Living Labs share an approach to finding innovative solutions to open and real-world contexts, as opposed to closed laboratory settings.
The task of convening and connecting the multi-disciplinary stakeholders falls mostly on the Infrastructure and Integrated Ecosystem (IES) teams, both supporting the ASEZCo’s establishment as a resource-efficient, carbonneutral and socially-inclusive industrial hub. Through its positioning as this eco-industrial park the ASEZ aims to attract Greentech investors who embody the elements and ethos of green technology manufacturing. It also means bringing the principles of the green economy into how the Atlantis SEZ is run and how the utility service needs of the investors are ultimately met and delivered.
In recent years, purpose has gained momentum in business. With societal issues on the rise, government and community resources are under pressure. And increasingly, consumers expect organisations to step in and play a greater role in advancing social or environmental issues.
But, while companies understand the moral imperative in delivering value for all stakeholders, a huge opportunity exists in seeing the business imperative. This can be explained through a simple but powerful idea: a company’s success and social progress are interdependent. This is the key principle of shared value.
Tourism companies can’t thrive if a pandemic prevents us from travelling. Food suppliers can’t thrive if extreme weather events spoil farmers’ crops. Farmers can’t thrive if supply chains are fragmented. And communities go hungry when there is limited access to food supplies. And financial services can’t thrive amid financial hardship.
In this context, purpose has an important place within business strategy. When used to its full potential, it can reach beyond risk mitigation – or doing no harm – to actually create new value for business (and society). Shared value is a framework designed to create business solutions to social and environmental problems. Put differently, it’s a means to deliver on your purpose, profitably.
Shared value The creation of both societal and business value is integral to shared value.
Societal value comes from vastly improving the conditions in which we live; advancing health outcomes, education, employment, financial or digital inclusion, service access and participation and/or helping to reduce our impact on the environment.
Meanwhile, business value can range from increased revenue or market share to improved productivity, greater efficiency, reduced costs, improved quality, a more secure supply chain or a more skilled or productive workforce.
The principle of striving towards shared value in our work with the local community, existing industrialists and new investors is underpinned by commitment to positive contribution towards the United Nation’s Sustainable Development Goals (SDG). The SDGs form a blueprint of addressing global inequities and achieving a more sustainable future for all.
Working in close collaboration with the Infrastructure team, the IES team supports the Atlantis community through skills and enterprise development, coupled with community integration. This is done to enable the Atlantis community, notably its youth, to tap into increased job opportunities, locally as well as in the buoyant green economy. Green skills development and growing technical capabilities within the community form part of the ASEZCo’s strategic objectives, aligned to the legislative requirement of the SEZ Act to grow the regional economy and drive socio-economic impact. This includes a range of interventions to support the skills development pipeline, some starting at foundational level, going through to school, college and ultimately at the workplace.
The IES programmes are anchored by intentional, continuous and wider stakeholder community engagement, through our Community Stakeholder Network (CSN). This elected group of community leaders hail from a variety of sectors, such as small business and informal traders, education, youth, women and people with disabilities, Early Childhood Development, faithbased and traditional council and cultural groups. The CSN serves as a conduit for meaningful communication between the ASEZCo and the Greater Atlantis Community, therefore ensuring dialogue between the public and private sector and the community at large. The principles of multi-stakeholder engagement and collaboration provide a feeding ground for fostering local innovation, the co-creation of solutions and a conducive business environment.
References https://sharedvalue.org.au/about/shared-value/ https://www.un.org/sustainabledevelopment/ sustainable-development-goals/
Jacques Moolman, President of the Cape Chamber of Commerce and Industry.
Jacques Moolman
If there is one thing in which private enterprise and the profit motive excel above all its other virtues, it is in its flexibility. Unlike large institutions and state-owned enterprises, the private sector’s small, medium and micro enterprises are quick to react to market demand and indeed to all sudden changes.
The Covid-19 pandemic is a case in point. It demanded swift changes to operating methods, often making the difference between survival and shutting up shop.
The Cape Chamber is an example. Its team made a change to remote working within 24 hours of the first lockdown. It then concentrated on help and support for its members, ending its first financial year of the pandemic better off, despite taking a hit from a depleted customer base.
Now, having made the transition to a new normal, we and everyone else have to accept that the economy has changed. The country is essentially bankrupt – financially and morally. Unemployment, crime and corruption are now permanent attributes of the country. That means not simply hoping that things will get better but making sure that we will get better at dealing with reality.
The Chamber is now better positioned for doing so because of decisions we made in the years before lockdown. Since we are not state-sponsored, we were determined to retain our fierce independence, so we made revenue generation key. That meant a single-minded concentration on engagement with our customers, our members.
Because we recognise the competitive currency in the future will be innovation, we have a mantra at the Chamber, “If no one dies, the risk is acceptable.”
We also abandoned three-year plans. We set our strategy for two days ahead. What we are getting good at is planning the strategy – that’s more than 150 strategy sessions a year – and we get to monitor and respond to each one. It is this practice of planning that is invaluable. The plan itself is just the outcome.
Learning is indeed the greatest gift the universe can give us. As long as we can learn, “We are alive.” That is why I am confident that the private sector in the Cape will bounce back and survive whatever challenges are presented.
The entrepreneurial spirit in the Cape goes back at least 217 years as the Chamber itself proves since it is now entering its 218th year. That resilience is not unique to us. Nor is innovation.
Both are in the very marrow of the private sector of the province.
WECBOF
makes it happen!
The Western Cape Business
Opportunities Forum (WECBOF)
provides a platform for businesses to establish and maintain contact with fellow entrepreneurs; to have access to opportunities, information and training; and to have representation on a number of relevant forums of government and other associations focussed on growing and enhancing the commercial sector, with a specific focus on small, medium,
and micro enterprises (SMMEs).
WECBOF is widely recognised and respected as a powerful voice for business in the Western Cape; we are a provincial service organisation with our focus and attention firmly on the national and international business pulse.
