Chapter 1 Investment
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IDC’s role in driving the country’s growth
In 2010, the Industrial Development Corporation (IDC) celebrated its 70th anniversary. From its first loan of R3 000 which launched the Ouma Rusks brand in 1941, the IDC has grown into a development institution charged with enhancing the industrial capacity not only of South Africa, but the rest of the continent. By providing developmental finance to meet the government’s national development priorities, the IDC has helped shape this growing nation’s economy, positioning itself to help put South Africa on a new growth path. The IDC’s role in sustainable economic development has evolved in line with the economic challenges facing South Africa. It not only supports large development projects, but 46
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promoting entrepreneurship – the lifeblood of the economy. During 2010, the organisation approved funding of R9,4bn to businesses in South Africa, helping to create and save 25 000 jobs and fulfilling its mission of contributing to sustainable economic growth. It will play a critical role in helping government achieve its target of creating employment over the next decade. To do this, the IDC plans to provide increased funding to enterprises in line with sectors identified in the new growth path plan and the Industrial Policy Action Plan. The IDC’s role in business development is more than that of a financier. It provides technical support to enterprises, linking them with appropriate incentives. The IDC’s commitment to
investing in growth sectors is underpinned by its core values of partnership, professionalism and passion. Investment principles are based on good corporate governance, as well as broadbased and expansionary black economic empowerment. Greening South Africa’s economy To support government’s efforts to make the South African economy less carbon intensive over the coming decades, the IDC has adopted a pro-active approach to the development and investment in green industries and technologies. It aims to be a lead financier in green industrialisation in South Africa, focusing on different components of the green economy, in particular energy
efficiency interventions and renewable energy projects. The IDC’s green investment strategy promotes projects that will reduce carbon emissions, utilise renewable energy resources and create jobs in a green economy. For instance, it granted funding to Solar Heat Exchangers, a company specialising in the installation of solar-heating solutions for both the domestic and commercial markets. This is in support of government’s target of installing 1 million solar water heaters by 2014 to replace energyconsuming electrical geysers. Increasing electricity prices and improved environmental awareness has helped convince many consumers to convert to solar power from electrical
geysers and the market is also expected to benefit from approximately 250 000 new houses being built each year as part of government’s housing programme. The IDC also approved a loan to African Realty Trust (ART), one of the biggest family-owned citrus farming operations in South Africa for a fuel-switch project. The project will not only result in savings for ART in terms of fuel costs, but will also qualify for Verified Emission Reduction (VER) income once the project has been commissioned and is operational. The funding will be used to upgrade ART’s existing peel drier furnaces to use wood biomass as fuel instead of coal. Not only will the project help the company to move away from fossil-fuels Best of South Africa
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but will utilise waste generated in the timber production process, which would otherwise be land-filled. ART is a major job creator in the Limpopo Province and through the fuel switch project more job opportunities will be created. A workers trust will also be established and 10% of the VER revenue will be paid to this trust for the benefit of ART’s workforce to assist with housing development and educational programmes. In support of government’s new growth path plan, the IDC will play a coordinating role in the green economy. It is developing an energy efficiency programme to encourage local industries to improve energy efficiency and green their buildings. The IDC’s purpose extends to the identification and development of project opportunities, and finding additional investors in renewable energy projects. Finding innovative solutions for affordable housing The South African government has built 1,2 million houses, shelter to at least five million people. Yet, it is still confronted with a backlog of between two to three million houses to be built over the next few years. The IDC is collaborating with fertiliser manufacturer, Foskor to use gypsum, a waste product generated in its production process to build pre-cast panels for buildings. Using a technology developed in Australia called RapidWall, the IDC aims to gain the necessary regulatory approval to manufacture the prefabricated panels in South Africa. Compared to conventional brick and mortar building costs, Rapidwall houses are up to 20% cheaper and can be built in just a few hours. The panels are also able to bear loads and can be used to build schools, clinics, libraries and multi-story buildings. Rapidwall is ideal for use in affordable housing projects and the IDC has secured exclusive rights for the patented technology for use in South Africa and other parts of Africa. RapidWall was awarded the prestigious 2009 Global Gypsum Product of the Year award and was recognised as a Good Practice by the United Nations Habitat business awards for sustainable urbanisation. A house made from the panels has also been built in Richards Bay to showcase the prefabricated walling system to housing departments as well as the private sector. Beneficiation of rare metals South Africa is the world’s second largest producer of titanium minerals after Australia, with approximately 40-45% of the world’s “Tiomin” ores (Ilumenite, Rutile and Zirconium Silicate).These ores are mined and a basic beneficiation into titanium slag and zircon sand (concentrates) is performed and then exported without major beneficiated value-add. To beneficiate these ores into high-value pigments and extract high-value Titanium, zirconium and silicon metals requires very specialised technologies which are guarded and owned by 48
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companies in the US, Russia and France. The IDC has collaborated with the National Empowerment Fund , Magnesium & Metals of Russia and Rare Metals Industries of South Africa by investing R40 million in a feasibility studies to develop a project to beneficiate Tiomin ores. The beneficiation project aims at constructing an unprecedented and worldfirst integrated pure metals refinery complex producing Titanium, Zirconium , Magnesium and Silicon with their respective derivative products. Depending on the final outcome of the feasibility studies, the full capital cost of the project is estimated to be over US$1,5 billion, in what would be a ground-breaking venture from a South African and global perspective. Access to the pure minerals creates the potential for downstream local industries to emerge, such as the production of microchips for computers and mobile phones, lightweight alloys for aerospace, semiconductions, poly-voltaic panels to harvest solar energy and various products for the pharmaceutical industry. It is expected that the project will generate at least 2,800 skilled jobs during the construction phase and in excess of 5,000 permanent jobs once the plant is fully operational. Developing rural areas The IDC helps create capital intensive industries that lead to industrialisation and the development of self sustaining local economies. At Richards Bay, the IDC funded Alusaf, Richards Bay Minerals, and IOF. At Secunda, Sasol was established, while Foskor and PMC were founded by the IDC in Phalaborwa. The IDC has also helped develop industries and jobs in Saldanha Bay through Saldanha Steel, Duferco and Namaqua Sands. Three decades ago these areas were classified as rural or semi-rural. They have now grown into well-developed towns with strong economic bases. The IDC has invested R3.5 billion in the Kalagadi Manganese Project, which has the potential to have a similar significant impact in the rural towns of Hotazel and the Coega Industrial Development Zone. Both are in poor provinces that qualify for the equality of provinces initiative. A manganese ore mine producing 3 million tons per annum (tpa) and a 2.4 million tpa sinter complex will be established at Hotazel in the Northern Cape, with construction to commence by late 2011. In addition a 320 000 tpa ferromanganese alloy production facility is to be constructed at Coega in the Eastern Cape. Ferromanganese is an essential ingredient in the production of steel, a commodity expected to show good growth in the next decade. The total capital outlay of the Project is R11.9 billion. Although highly capital intensive in nature, the project will bring great benefit for the South African economy through its strong linkages with domestic suppliers of goods and services. An estimated R8.9 billion will be
spent locally during the construction phase alone. During the operational phase it is estimated that R7.6 billion will be spent in the domestic market during the first full year of production. This will boost sales of supplies such as chemicals, fabricated metals, energy, machinery and equipment, transport services and a range of other goods and services. The impact of the project will be economywide. Not only will Kalagadi generate increased economic activity throughout various sectors of the South African economy, it will create much needed jobs.
www.idc.co.za Best of South Africa
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The Development Bank of Southern Africa (DBSA)
What is the Development Bank of Southern Africa about? The Development Bank of Southern (DBSA) was established in 1983 to perform a broad-based economic development function within the homeland constitutional dispensation that prevailed at the time. In 1994, the new constitutional and economic dispensation in South Africa led to the transformation of the Bank’s role and function. In 1997, the DBSA was reconstituted in terms of Development Bank of Southern Africa Act (No. 13 of 1997) as a development finance institution. The constitution and conduct of the DBSA Board of Directors are primarily governed by the DBSA Act and further regulated by the Public Finance Management Act (No. 1 of 1999) and the Companies Act (No. 61 of 1973). 50
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Mandate The DBSA’s mandate is to provide financial, technical and other assistance to achieve the objects of the Bank as provided for in the DBSA Act. Its focus is in its investment activities on infrastructure funding broadly defined and with the object of acting as a catalyst to maximise private sector access to opportunities in the provision of public funding. Objectives of the Bank The main objectives of the Bank are the promotion of economic development and growth, human resources development, institutional capacity building, and the support of development projects in the region. The ancillary objectives of the Bank are to assist other international, national, regional and provincial initiatives in order to achieve an
integrated finance system for development, and to assist national, international and private sectors bodies with the management of specific funds. Vision A prosperous and integrated region, progressively free of poverty and dependency. Mission To advance development impact in the region by expanding access to development finance and effectively integrating and implanting sustainable development. Strategic objectives • Promote broad-based economic growth, job creation, cooperation, integration and prosperity • Build human and institutional capacity • Co-deliver social and economic infrastructure • Serve as a centre of excellence for development financing , effectiveness and good governance • Engender sustainability, externally and internally To support the strategy of the DBSA, investments in infrastructure assets are made within the following three broad segments: • Social transformation; Support the creation of sustainable living environments and alleviate basic services backlogs • Economic stimulation: Support the growth of the economic base and employment opportunities • Capacity development: Support the upliftment of human capital in the areas where growth and development are constrained by lack of education and skills Roles Financier • Loans • Equity investments • Co-funding • Grants • Development expenditure Advisor To build institutional, financial and knowledge capacity for development: • External training • Subsidiary lending • Technical assistance grants
Partner To leverage private, public and community stakeholders in the development process: • Co-funding • Mobilise funding for clients Integrator To mobilise and link stakeholders, resources and initiatives for sustainable development outcomes Implementor To originate and facilitate key intervention for building capacity and providing development solutions:
• Project implementation in collaboration with clients (Siyenza Manje programme) • External training
Development Bank of Southern Africa 1258 Lever Road, Headway Hill Midrand, South Africa PO Box 1234, Halfway House Midrand 1685, South Africa Tel: +27 11 313 3911 Fax: +27 11 313 3086 www.dbsa.org Best of South Africa
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Introducing Trade & Investment KwaZulu-Natal Trade and Investment KZN is a South African trade and inward investment promotion agency, established to promote the province of KwaZulu-Natal as an investment destination and to facilitate trade by assisting local companies to access international markets.
Our Vision To make the province of KwaZulu-Natal the premier investment destination and the leader in international trade. Our Mission • Develop export trade and investment opportunities. • Provide professional and comprehensive services to investors, exporters and traders 52
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• Support and facilitate export development and export trade • Brand and market investment opportunities • Link investment opportunities to the development needs of KwaZulu-Natal Services In actively promoting business investment in KwaZulu-Natal, Trade and Investment
KwaZulu-Natal provides a range of services, which include: • Project Appraisal »» Scientifically analysing prospective project viability in financial, cost benefit, social and environmental terms. • Site Identification and Evaluation »» Undertaking the co-ordination, preplanning and evaluation of sites and post site visits. • Sector Economic Data Provisioning »» Providing and disseminating market intelligence as regards economic, sectoral and desktop data. • Backward and Forward Linkages »» Facilitating secondary and downstream opportunities for Black Economic Empowerment and small and medium enterprises. • Business Permits (under the auspices of the Department of Trade and Industry) »» Assisting in the submission of recommendations to the Department of Home Affairs as regards business permit provision. • Agreement Brokering »» Ensuring the satisfactory and successful conclusion of necessary agreements by relevant parties and stakeholders. • Joint Venture Facilitation »» Sourcing of joint venture partners, domestic and foreign, for both KwaZuluNatal and international companies. • Capital-Raising »» Facilitating the development of capitalraising opportunities on behalf of project promoters. • General Business Advice »» Providing wide-ranging investment advice regarding locations, business conditions, regulations, labour practices and business services. • After-Care Services »» Facilitating local and foreign business retention, expansion and after-care services. • Incentives »» Marketing of national and local government incentives. • Inward and Outward Investment Promotion Missions »» Hosting and co-ordinating inbound foreign and local business delegations and undertaking outbound missions promoting KwaZulu-Natal as a premier investment destination.
• Project Profiling »» Profiling local project-based investment opportunities through local and international exhibitions, seminars and conferences. In its promotion of export trade opportunities, Trade and Investment KZN, offers the trader a comprehensive bouquet of services, which include: Export Development Capacity-Building programmes, detailing: • Export registration requirements • Trade agreement compliance requirements • Manufacturing rebate compliance requirements • Export incentive schemes • Customs compliance requirements • Pre and post shipment finance mechanism • Export marketing and investment assistance scheme • General system of preference requirements • Freight and logistics in international trade • International marketing • INCOTERMS • Insurance Market Intelligence, ensuring the obtaining of sufficient information about particular local manufacturers, including: • The source of present products and services • Product and country specific features
• Government regulations • Potential buyers • Exploring business opportunities for exports in specific markets • Leads generated by the E-export platform portal Market intelligence, ensuring the obtaining of sufficient information about particular local manufacturers, including: • Exporter details • Product descriptions • Company profiles and marketing material • Black Economic Empowerment status Export Promotion Market Development Programmes, facilitating trade promotional programmes designed to bring willing buyers and willing sellers into contact with one another, including • National exhibitions • Individual exhibitions • Outward selling missions • Inward buying missions • E-export platform • E-trade platform • Intra-trade business to business facilitation KEY PERSONNEL MEC for Finance and Economic Development: Michael Mabuyakhulu Chairperson of TIKZN Board: Mr Peter Staude Chief Executive Officer: Mr. Zamo Gwala
Durban Office Trade & Investment House Kingsmead Office Park Kingsmead Boulevard Stalwart Simelane Street Durban, 4001, South Africa Tel: +27 31 368 9600 / +27 31 368 7050 Fax: +27 31 368 5888 E-mail: info@tikzn.co.za Gauteng Office Financial Place 99 George Storrar Avenue Groenkloof, Pretoria, 0181 Tel: +27 12 346 4386/6763 www.tikzn.co.za Best of South Africa
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Enterprise ilembe iLembe District situated on KwaZulu Natal’s North Coast has growth, development, business and infrastructure and is one of the fastest growing districts in South Africa
Fuelled by local talent and a spirit of entrepreneurship, iLembe is strategically placed between Africa’s two busiest harbours, Durban and Richards Bay Harbour, iLembe is also located along the highest priority development corridor of the province of KwaZulu-Natal, dissected by the N2 national highway running from Durban up through Richards Bay to Swaziland and Mozambique. The district is also located within 20 kilometres of the new King Shaka Airport and Dube Trade Port which now connects the province directly, to local and global markets. Ongoing collaboration between local business, government and industry has seen fostered growth in the region’s key economic sectors - Agriculture, Manufacturing, Tourism and Commerce and Services, all of which play a vital role in the district’s economy. iLembe District established an Economic Development Agency known as Enterprise iLembe whose mandate it is to drive economic development and to promote investment opportunities in the region. The philosophy that drives Enterprise iLembe is built on global best practice principles 54
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in Local Economic Development. “Local Economic Development is a participatory process where local people from all sectors work together to stimulate local commercial activity, resulting in a resilient and sustainable economy. It is a tool to help create decent jobs and improve the quality of life for everyone, including the poor and marginalized.” This is reflected in the Industrial Development Strategy developed around the District. “We think global and act LOCAL”. Investment opportunities are identified through private sector engagement, public sector and gap analysis. Imperative to Enterprise iLembe pursuing or supporting a project is driven by the Agency Strategy and whether the project idea meets the Agency’s Value Statement “Economic Development that will change the lives of our people”. Projects must be Specific, Measureable, Achievable, Realistic and within a Timeframe (SMART), and have socio-economic benefits linked to it. Enterprise iLembe has a Project Management Unit that assists in this process, with experienced Project Managers in the key sectors identified.
The iLembe region is also known as the North Coast – Jewel of the Zulu Kingdom with a glorious stretch of coastline fringed with golden beaches and caressed by the warm waters of the Indian Ocean. Patches of coastal forest give way to rolling green hills of sugar cane, which, in turn, spill into the rich hinterland of the province. With its unique mix of luxury resorts and wide variety of affordable accommodation the North Coast has long been recognised as a prime domestic and international holiday destination. It boasts a rich cultural heritage with strong Eastern, European and French Mauritian influences. The traditional home of the Zulu people, it was settled by colonials and later by Indian people who originally arrived as indentured labourers to work in the sugar cane fields. As a result there is a unique cultural mix, which provides fascinating insights into the history of this region. As one of the best positioned districts in the country and a strong anticipation of ongoing growth and development, iLembe is the investment destination of choice.
Enterprise iLembe PO Box 593 Ballito 4420 Cnr Link Road & Ballito Drive Ballito, KZN, SA Tel: +27 32 946 1256 Fax: +27 32 946 3515 Email: info@enterpriseilembe.co.za www.enterpriseilembe.co.za Best of South Africa
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Sugar – Cost Competitive The South African sugar industry is one of the world’s leading cost competitive producers of high quality sugar and makes an important contribution to employment, particularly in rural areas, to sustainable development and to the national economy.
77 000 jobs, which represents a significant percentage of the total agricultural workforce in South Africa. Indirect employment is estimated at 350 000. In addition there are approximately 35 300 registered cane growers. Approximately one million people, more than 2% of South Africa’s population, depend on the sugar industry for a living.
According to independent surveys of the costs of production of more than 100 global sugar industries, the South African sugar industry consistently ranks amongst the top 15. Its excellent export infrastructure, world-renowned agricultural and industrial research platforms and efficient industry organisation are key drivers of excellence. It is a diverse industry combining the agricultural activities of sugarcane cultivation with the manufacture of raw and refined sugar, syrups, specialised sugars and a range of byproducts. The canegrowing sector comprises approximately 35 300 registered sugarcane growers farming predominantly in KwaZulu-Natal, with a substantial investment in Mpumalanga and some farming operations in the Eastern Cape. Sugar is manufactured by six milling companies with 14 sugar mills operating in these canegrowing regions. 56
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The industry produces an estimated average of 2.2 million tons of sugar per season. About 70% of this sugar is marketed in the Southern African Customs Union (SACU). The remainder is exported to markets in Africa, Asia and the Middle East. Sugar and the Economy The South African sugar industry makes an important contribution to the national economy, given its agricultural and industrial investments, foreign exchange earnings, its high employment, and its linkages with major suppliers, support industries and customers. Based on revenue generated through sugar sales in the SACU region as well as world market exports, the South African sugar industry generates an annual estimated average direct income of R8 billion. Employment Direct employment within the sugar industry is approximately
Broad-based Black Economic Empowerment The industry is a major contributor to rural development. This holistic approach includes the promotion of economic transformation, social investment and sustainable environmental practices. In addition to initiatives undertaken as an industry, the South African Cane Growers’ Association and the sugar milling companies undertake development projects and are involved in Broad-based Black Economic Empowerment (BBBEE) through a range of important initiatives. Economic Transformation The industry’s initiatives in the area of economic transformation could best be summarised under its commitment to BBBEE, with focus on land reform, agricultural support services, human resources development and enterprise ownership. Land Reform The South African sugar industry has long recognised the need to promote diverse ownership of agricultural land under sugarcane and have a range of support instruments in place to promote the sustainability of such initiatives. As a result, 19% of freehold land under sugarcane has already been transferred to black growers. In order to progress the industry’s target of 30% black ownership of freehold sugarcane land by 2014, the industry established in 2004 an independent land reform entity,
called Inkezo Land Company. Inkezo’s primary objective is to streamline transfer of ownership by identifying sellers and buyers, streamlining processes of land reform and promoting the sustainability of the new ventures through outsourced support service providers or partners. Inkezo has facilitated the transfer of land previously owned by white farmers to more than 1300 black growers. However, the restitution of land to dispossessed communities has since emerged as a fundamental determinant of the future sustainability of the sugar industry. The industry has consequently expanded its focus on land reform to deal with land restitution processes and outcomes. This expanded activity, and Inkezo, has been incorporated into the South African Sugar Association. The industry’s enlarged focus can be summarised as managing and facilitating both pre and post settlement support for land redistribution and land restitution processes. Agricultural Support Services The industry has a long history of promoting and supporting small-scale farmers on tribal land. Building on the extensive infrastructure and network of
the growers and millers, the industry has been able to engage effectively in ongoing delivery related projects. Mentorship programmes focusing on business skills and grower support extension services are deployed to support cane growing activities. The South African Cane Growers’ Association has bolstered its regional economic service to provide local level support to new medium-scale black growers who have entered the industry since 1994, including beneficiaries of the government’s land reform programme. The milling companies provide extensive services in support of the cane-growing operations of small- medium- and large-scale black farmers. The South African Sugar Association provides in-field training to growers, offers certified courses in sugarcane agriculture and provides technology transfer and extension. Enterprise Ownership Substantial progress has been made towards improving the ownership profile of the industry. Initiatives embarked upon by South African milling companies have resulted in increased black ownership of
sugar manufacturing capacity. The sugar industry’s involvement in social investment includes projects in the areas of Enterprise Development, Health and Welfare, and Human Resource Development. Education The Sugar Industry Trust Fund for Education (SITFE) was launched in 1965 as a private sector initiative, and is one of South Africa’s oldest education and training programmes. To date SITFE has provided bursaries to more than 9 000 students, financed school building projects, given assistance to tertiary institutions, and worked with community-based educational authorities to improve overall education standards.
The SASA Shukela Training Centre (Pty) Ltd is a wholly owned subsidiary of the South African Sugar Association. Shukela Training Centre (STC) is a provider of agricultural and engineering training. Research conducted by the South African Sugarcane Research Institute (SASRI) contributes to the profitability and sustainability of the industry whilst encouraging environmentally responsible farming practices. Outputs from the various research programmes at the Institute are transformed into practical knowledge and technology products.
www.sugar.org.za Best of South Africa
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Wesgro, the Investment and Trade Promotion Agency of the Western Cape Wesgro is the official Investment and Trade Promotion Agency for the Western Cape, located in Cape Town, South Africa.
We are the first point of contact for foreign importers, local exporters and investors wishing to take advantage of the unlimited business potential in Cape Town and the Western Cape. Wesgro works closely with key players including the South African Government, Business, Labour, the City of Cape Town, District Municipalities and rural local authorities. Wesgro is a Schedule 3C Public Entity as defined in the Public Finance Management Act 1999 (Act 1 of 1999), as amended. The Western Cape Investment and Trade Promotion Agency Law Act 3 of 1996 as amended (the “Act�), is the Provincial Legislation responsible for the establishment of the Western Cape Investment and Trade Promotion Agency (Wesgro). The Directors 58
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of Wesgro confirm their commitment to the King II Report on Corporate Governance for South Africa 2002 (the “King Report 2002”). Responsible corporate citizenship and sound governance practices remain one of the top priorities of the Board, its committees and management. Wesgro provides cutting edge intelligence to exporters and investors which includes information on foreign markets, export opportunities, international regulation of trade and export statistics. We also offer intelligence on the Western Cape’s economy, sectors and related investment opportunities, local business conditions and government regulations. Wesgro facilitates trade and investment processes using our insight and experience in
international commerce. Our range of services allows for seamless support for business people wanting to invest in the Western Cape as well as for exporters wanting to penetrate international markets. Wesgro has established strategic relations with selected local, national and international partners. These include industry and business associations, government and other private sector stakeholders. Using our networks, we provide strategic marketing support to publicly launch your investment in the Western Cape and promote your product in the international market. Our vision is to grow the economy through Trade and Investment opportunities to benefit the people of the Western Cape. A part of our mandate is to attract
and facilitate foreign and domestic direct investment into the Western Cape. We aim to grow exports of products and services of the Western Cape through development of export capability, demand and market access. We also aim to grow exports of products and services of the Western Cape through development of export capability, demand and market access. Wesgro provides access to the Western Cape community, which includes foreign business networks, political decision makers, government institutions, business and labour organisations.
For more information about our organisation visit our website www.wesgro.co.za Best of South Africa
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The Free State Development Corporation – Driving investment into the province
Sasol - www.mediaclubsouthafrica.com
Thabo Makweya - Acting CEO
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The Free State economy has changed from being dependent on the primary sectors of mining and agriculture to a more export-oriented economy, with the northern region of Fezile Dabe contributing 70% of the manufacturing output in the province. The South African petrochemicals giant Sasol, located in this region, is responsible for the production of liquid fuels, olefins, organic solvents and industrial mineral derivates. With a planned expansion, Sasol is looking to double the production of hard wax products in the country by 2014. The Free State Province is actively driving new investments and job creation initiatives into the province through the Free State Development Corporation (FDC). The corporation was traditionally responsible for enterprise and property development however, with the recent incorporation of the investment and export
facilitation services, the FDC will now become a driving force in contributing to the economic growth of the province. In an effort to develop the Free State into the agro-industry hub of South Africa, a set of initiatives intended to exploit and benefit the value adding capacity of the province have been conceptualized. One of these initiatives, the establishment of a food processing park in Harrismith, intending to host multi -national companies in the food production sectors, is already in an advanced stage of planning, with another major project in this sector being an integrated beef production and handling cluster for the export of organic beef to Europe and Asia. The Free State is positioning itself as a major centre for Business Processing and Outsourcing and offshoring (BPO&O) Bloemfontein is at the centre of Telkom’s switching centers and sits on both national and international optical-fibre
routes. Numerous call centers of varying capacities are already operating in Bloemfontein, taking advantage of the available infrastructure and talent pool. The FDC is also targeting the pharmaceutical and medical sector for investment. The springboard for this sector is the recent injection of a R35 million investment in the establishment of a high tech medical supplies manufacturing facility in Kroonstad. This project will be a pilot for other manufacturing entities to be set up in Parys and Sasolburg, which will ultimately form part of the Free State “manufacturing triangle”. Parys has been earmarked for the establishment of a full safety product manufacturing facility while the location of the Sasol plant in Sasolburg has prompted the decision to locate a medicals product extrusion plant in the area. Other international medical supplies companies are already earmarking the Free State as an investment destination which
will act as a springboard into Africa for their products. The establishment of a Medical Centre of Excellence in Bloemfontein, a state of the art facility to manufacture patented medical products, will have long term benefits for job creation within the province. The transport and logistics sector plays a crucial support role in the Free State economy, mainly due to the province’s strategic location. The province intends exploiting this strategic position through two major initiatives, the N8 Corridor Development and the Harrismith Logistical Hub. In an effort to bridge the digital divide, the Free State Provincial government has conceptualized a number of projects in the Telecommunications, Information Communications Technology sector which include an Information Communications Technology Road Map, Regional Innovation Systems, and a Broadband Network System. The Renewable Energy sector is another key focus area of the FDC, with a recent commitment from an Asian country to manufacture solar panels and geysers in the Bloemfontein area with a job creation potential of 1,000 new jobs. Other initiatives in this sector are already being investigated. In order to resuscitate and redevelop the abandoned or unused gold mines in the Welkom area, the FS is looking at commissioning a mine mitigation study. Potential industries that
have been identified to assist in creating employment to replace the jobs lost due to the decrease in mining activities are the recycling of precious metals and batteries, solar-power manufacturing and mine related tourism to name a few. A tyre recycling plant is planned for Sasolburg where the rubber will be used to manufacture artificial sport pitches, rubber asphalt and bitumen rubber, roof tiles and rubber for car assembly. The realization of all of these investments into the province is a result of an extensive investment promotion strategy of the Free State aimed at attracting investments into the province to create an inclusive and diversified economy for the creation of jobs. The FDC is looking at this investment drive as being a catalyst to not only job creation, but also as a transfer of skills into the local community, allowing new micro and medium enterprises to evolve and contribute to the provincial economy.
Tel: +27 51 400 0800 www.fdc.co.za Best of South Africa
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A smart focus on trade and investment in the North West Province Invest North West aims to promote and facilitate trade and investment opportunities that create value for investors and jobs for the people of the North West Province.
Sasol - www.mediaclubsouthafrica.com
Invest North West (INW) is the provincial trade and investment agency of the North West Province. INW is at the cuttingedge of international trade and investment promotion with a mandate to develop the economy of the North West Province, focusing on fixed direct investment (FDI) promotion and facilitation, export promotion and development of sectorspecific programmes in mining, manufacturing, renewable energy and agriculture. INW is a section 21 company established under the auspices of the Department of Economic Development and Tourism in the North West Province (DEDT). INW’s strategic intent is to provide vision; leadership and direction to key growth sectors in the provincial economy; to 62
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increase the level of FDI flow; and assist in the development of trade in the second economy to enhance its capacity to export to various markets. The services offered by Invest North West to potential investors include: Destination marketing; Facilitating fixed direct investment (foreign/ domestic); Facilitating linkages to international markets; Expedite business expansions Populating the value chain of new and existing businesses & Policy advocacy. The strategic focus is to ensure effective and efficient facilitation of economically viable and sustainable projects with high impact (at least 50 jobs) and or high value (R10-million). “INW’s strategic intent is to provide vision, leadership and direction to key growth sectors
in the provincial economy, to increase the level of FDI flow, and assist in the development of trade in the second economy...” 10 Reasons why to Invest in the North West Province of South Africa 1. Good infrastructure (road network, airports, hospitals, schools) 2. Low cost of electricity, water, land and factory rentals and adequate industrialisation 3. Easy access to markets in the SADC region and Africa 4. Fastest growing province in SA between 2002 and 2003 5. Affordable pool of labour (skilled and unskilled) 6. Home to more than 20 trans-national companies (TNC’s) and local companies reinvesting in the province
7. Scoped projects ready for investment, supported by a solid financial services sector 8. Good quality of life 9. Malaria-free region 10. A province that is serious about business The services offered by Invest North West include: • Identifying and packaging viable investment opportunities • Facilitating linkages to business markets • Facilitating joint ventures • Providing information on financing options • Giving advice on feasibility studies and business plans • Giving advice on financial and investment incentives • Assisting with work permits • Providing assistance in obtaining suitable land or factory space • Providing assistance in populating the value chain of new investments and existing businesses Invest North West also assists investors in accessing project finance and acquiring export/ import permits and is knowledgeable about the provincial key competitive advantages. INW can confirm that most determinants for FDI consideration can be addressed. Industry identification and screening processes are used to arrive at target markets for investment promotion. This ensures that Invest North West focuses on the promotion of sectors in the Province that can compete successfully on an international basis. Trade promotion and development with the South African economy becoming increasingly integrated into the global economy, there is a growing need for local businesses to diversify and become exporters of goods and services. We aim to ensure growth in the value of exports by providing access to foreign markets for North West products. The North West Province has enormous potential as many locally made products can compete successfully in the global arena. Invest North West has assisted various businesses throughout the Province in accessing these global markets. These companies have now built profitable and sustainable
relationships with their foreign trade partners. Trade services offered to existing and potential exporters include: • Compilation of a database of exporters and potential exporters in the Province • Providing advice on export issues • Facilitation of outward trade missions • Invitations to meet with inward trade missions • Exhibiting products at local and international trade fairs • Capacity building seminars and workshops • Linking of foreign buyers to local exporters • Circulating trade leads and enquiries • Networking opportunities • Facilitating export promotion incentives • Advice on export incentives (EMIA) • Researching and identifying suitable markets In its quest to support regional cooperation in the Southern African Development Community (SADC), Invest North West has compiled country briefs in order to promote intra-regional trade. These will also assist exporters in taking advantage of their preferential access to a wider market.
Tel: +27 14 594 2570 Fax: +27 14 594 2575 Email: inw@inw.org.za www.inw.org.za
Photo: Graeme Williams, MediaClubSouthAfrica.com
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