Unlocking investment opportunities in SA

The Richards Bay Industrial Development Zone (RBIDZ) currently has R133.43 billion worth of projects in the pipeline. We spoke to Thabane W. Zulu, CEO of the RBIDZ to find out more...

Looking back at the past five years, what progress has the RBIDZ achieved?

One of our biggest achievements to date is the progress we have made in developing our pipeline. Currently the value of our pipeline is R133.43 billion with R131,6 billion worth of investment under different stages of development and R1,83 billion operational investors. The pipeline consists of a mix of projects within the RBIDZ priority sectors.

A key highlight is the first phase of Nyanza Light Metals, the Product Testing & Development Centre, which was operationalised in March 2022. Nyanza intends to build an 80 000 ton per annum (tpa) titanium pigment processing plant in three phases. The initial Investment for phase 1 is R200.3 million and has thus far created 23 operational jobs. The commercial plant is expected to break ground in October 2023 and to reach financial close at approximately R9 billion, which will unlock 800 construction jobs and 550 operational jobs once completed (expected in October 2026).

The Wilmar Processing SA – Ubuntu Project, a crude palm oil beneficiation plant, started construction in October 2022, with approximately R1.270 billion out of a budget of R1.5 billion, operational as of 30 March 2023. Full commissioning is expected to be concluded by November 2023. At full operation, the plant is expected to create 202 operational jobs. The plant is also expected to create indirect opportunities and jobs through operations. We have also successfully developed and serviced two world-class industrial estates with a total size of over 224 hectares.

Through the tough economic conditions caused by the Covid-19 pandemic, the RBIDZ was able to retain all operational investors within the zone, which include Sizabantu Piping Solutions Molecor (SPSM), a partnership between a local entity and a Spanish partner. SPSM invested an additional R106 million during the period and created an additional 26 operational jobs.

The key sectors for RBIDZ are listed as agro processing, ICT and Techno Park, metals beneficiation, marine industry development, and energy. How are these sectors progressing?

In the agro-processing sector, the RBIDZ, in partnership with the KwaZulu-Natal Department of Agriculture and Rural Development (KZN DARD), has been appointed as the implementing agent for the development of the first agri-hub in KwaZuluNatal. The fresh produce agri-hub within the RBIDZ is expected to serve as a prototype in the implementation of six other agri-hubs within the province.

In the energy sector, the RBIDZ pipeline consists of numerous proposals to develop LNG fired power plants to serve as interventions to the energy crisis that the country is currently experiencing. Eskom has also proposed a 3 000MW gas-fired power plant for which Environmental Impact Assessment (EIA) approval has been granted. The investment value is approximately R73 billion, which will create 2 000 construction jobs and between 80 to 100 operational jobs. The power plant coupled with S34 Ministerial Determination on IPP power procurement by the Department of Mineral Resources and Energy is expected to contribute highly to alleviating the power crisis that the country is currently going through.

The metals beneficiation sector resonates with the RBIDZ’s focus by virtue of the minerals that are in abundance for further downstream beneficiation and production of value-added goods, including heavy vehicles, for export markets.

The Aluminium Roadmap developed by the Department of Trade, Industry and Competition (the dtic) identifies the Richards Bay area as critical in the development of downstream beneficiation of aluminium in South Africa.

Furthermore, the RBIDZ is in the process of acquiring the IsiZinda Cast house which houses the facilities such as the rod plant, cast house, and rim plant of the former South32 Bayside smelter. The RBIDZ intends to use the facilities to promote local beneficiation of aluminium locally. The RBIDZ has already attracted a project worth R373 million to revitalise the rod plant within the property.

In terms of ICT and Techno Park, in collaboration with the department of Economic Development, Tourism and Environmental Affairs (EDTEA), plans are in motion for the development of a fullyfledged Technopark which aims to put in motion digitisation-related activities.

To stimulate innovation and technology in the region, especially amongst the youth, the RBIDZ has allocated land for the development of a fullyfledged and operational Technopark within the Phase 1A complex. The Technopark will monitor emerging technologies and seek innovation opportunities that are linked to the needs of RBIDZ investors, as well as enterprises within the wider Richards Bay area. It will also act as a catalyst for attracting, developing and retaining innovation and technology skills in the area. In addition, the Technopark will provide valuable insights and intellectual resources from which other sectors can benefit.

In marine industry development, we are investigating the opportunities of implementing a back of port operation to assist in decongesting the Richards Bay Port.

Which sectors does SA have the capacity to be a global leader in?

With the transitioning energy sector in South Africa, one would be tempted to prioritise this sector significantly because it is the driver of the economy, regardless of the sector. The challenges facing the energy sector are detrimental to sustainable growth of any country.

Considerations must also be given to the local beneficiation of raw materials mined within the country. The shift of the world towards cleaner energies provides the opportunity for the country to be a global player in producing components that are required for the transition to clean energies. This includes mining and beneficiation of materials for green energy transition like solar and wind power.

Technology and digitalisation revolution is also growing in terms of new technologies and artificial intelligence.

There is a high dependency on the agricultural sector. The biodiversity and the coastline served by two commercial ports supports the cultivation of marine and agricultural products supported by a mixed farming climate.

Manufacturing is regarded as the growth accelerator and accounts for a larger percentage in the Gross Domestic Product because of its intensity. It is dominated by industries such as automotive, chemicals, metals and textiles, clothing and footwear.

What is required to unlock these opportunities?

South Africa requires a combination of factors, including infrastructure, access to investment incentives, regulatory reforms, and Public-Private Partnerships (PPP).

Some key aspects that can facilitate investment in South Africa include:

1. Adequate infrastructure: This includes transportation, energy, telecommunications, and logistics, which is vital for businesses to operate efficiently. Investment opportunities are often more attractive in regions with well-developed infrastructure or areas that show significant investment in infrastructure development.

2. Access to investment incentives: Government often provides incentives to attract investment, such as tax breaks, grants, or special economic zones.

3. Regulatory reforms: Implementing businessfriendly regulations and reducing bureaucratic hurdles can attract investment and foster a conducive environment for entrepreneurship. Streamlining licensing processes, improving contract enforcement, protecting intellectual property rights, and ensuring transparency in regulatory procedures are essential to unlock opportunities.

4. Public-private partnerships: Collaboration between the government, private sector, and industry associations can unlock opportunities in various sectors. Public-private partnerships can be established to develop infrastructure projects, promote sector-specific initiatives, and share resources and expertise. Such collaborations can leverage the strengths of each stakeholder and drive sustainable development.

We are aware of challenges that may arise, and as such we have mitigation plans in place consisting of strategic interventions such as comprehensive environmental impact assessments, adopting environmentally friendly technologies, and collaboration with relevant stakeholders (government, private sector and communities).

How are operations encouraging sustainable growth for SMMEs?

The RBIDZ has a capacity building training programme in areas such as project management, health and safety, quality management, financial management, the application of information technology, and marketing and advertising. These programmes are executed annually targeting a particular number of SMMEs.

In the past financial year (2022-2023) a total of R7 199 423.34 was recorded for SMME cumulative procurement expenditure inclusive of contract participation goals.

The RBIDZ’s Nal’ithemba Enterprise Development Programme focuses on various sectors of the economy with the aim of creating linkage opportunities for SMMEs through investors.

Nal’ithemba is a sector focused incubation programme that will be rolled-out with a R6 million budget over a period of three years and includes

About Thabane Zulu

components of development, such as phased masterclass training, and paying attention to different areas of learning, workshops with financing and sector specific training partners.

What are the strengths of RBIDZ in terms of strategic planning, resources, location, and sustainability initiatives that would appeal to investors?

The RBIDZ is linked and located closest to the international deep-water port of Richards Bay in KwaZulu-Natal. The province is the host of the country’s two busiest ports; Richards Bay and Durban and plays a vital role in national logistics and international trade. The Port of Durban’s annual throughput of containers is about one million, more than 60% of the country’s total, whereas the Port of Richards Bay is the main coal export harbour.

Incentives provided by RBIDZ to investors include:

• Reduction in corporate income tax from 28% to 15%.

• VAT exemption for supplies procured in South Africa.

• Duty-free on imports for production-related raw materials including machinery and assets used in production.

• Location in a secured and Customs Controlled Area (CCA).

• World–class industrial infrastructure. www.rbidz.co.za | invest@rbidz.co.za

Thabane Zulu is employed as the Chief Executive Officer for RBIDZ – Special Economic Zone tasked with the responsibility of accelerating industrial development and attracting domestic and foreign direct investments utilising international competitiveness. He was previously: Director-General for the Department of Mineral Resources and Energy; DirectorGeneral for Human Settlements; and Director for International Trade and Development for Africa and the Middle East for Department of Trade, Industry and Competition. Qualifications include: MBA; B Administration (Hons); and B Administration. Thabane has been recently recognised by the African Energy Leadership Organisation (US: Houston, Texas) and conferred with the African Energy Leadership Commendation Award for his active role in driving sustainable energy development projects in the country.