6 years ago

Eastern Cape Business 2017 edition

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The 2017 edition of Eastern Cape Business is the 10th issue of this highly successful publication that, since its launch in 2006, has established itself as the premier business and investment guide to the Eastern Cape Province. The Eastern Cape enjoys an abundance of natural and human resources, as well as established industrial infrastructure that drives the economy of the province. This includes three ports and two industrial development zones which are home to a wide range of manufacturers and exporters. The 2017 edition includes an in-depth look at the province’s two Industrial Development Zones, a focus on skills development and investment climate information from the Nelson Mandela Business Chamber and the Border-Kei Chamber of Business.


A REGIONAL OVERVIEW OF THE EASTERN CAPE PROVINCE With massive new investments in the automotive sector, renewable energy and agriprocessing, the Eastern Cape is set to expand on its strengths and create new opportunities in the Oceans Economy. The largest mall to be constructed in South Africa since 2004 has opened in Port Elizabeth. The Bay West Mall is a sign of confidence in the Eastern Cape economy. Other major investments in the automotive sector (by established players such as Volkswagen SA and Mercedes-Benz SA and by two large Chinese concerns) and in energy (wind and gas generation) are the cause of this optimism. The agri-processing sector continues to attract new investments, such as Famous Brands’ new tomato paste factory at the Coega Industrial Development Zone. With 250 shops, an ice rink and cinemas, the R2-billion Bay West Mall is the first part of what will become the 320ha Baywest City Precinct on the western edge of Port Elizabeth. It is a regional facility that is attracting shoppers from towns such as Jeffrey’s Bay and Humansdorp, but the long-term plan envisages an entire city being developed on the site. Abacus Asset Management and the Billion Group are the joint developers. The Billion Group is led by Sisa Ngebulana who made his start in property in East London. Billion’s other Eastern Cape asset is the BT Ngebs Mall in Mthatha. The Oceans Economy at this stage is an idea, but it is an idea with massive potential. National government has several programmes to promote ship-building and repair, aquaculture, offshore oil and gas, marine protection and governance, and marine transport and manufacturing. The Nelson Mandela Metropolitan University (NMMU) is building an Oceans Campus and already has several research chairs studying this potentially very lucrative field. The province’s coastlines stretches along 800km and it has three ports and two associated industrial development zones geared to attracting investments in new sectors. The Port of Port Elizabeth took delivery of two new tugs in 2016, part of a R1.4-billion plan by Transnet National Ports Authority to increase efficiency at South Africa’s harbours. Two major airports at Port Elizabeth and East London provide good air links and smaller towns such as Mthatha and Bhisho have airports. Mthatha has recently received upgrades and SA Express announced in 2016 five direct flights per week to and from Cape Town. EASTERN CAPE BUSINESS 2017 8

SPECIAL FEATURE The Umzimvubu Multipurpose Development Project is an impressive development that incorporates a multi-purpose dam to supply water for new irrigation, hydropower generation and domestic water supply. The Eastern Cape Development Corporation is a development financier and it is supporting enterprises in the growing ICT and film sectors through the Eastern Cape Information Technology Initiative (ECITI). Economy Both the of the province’s metropolitan municipalities are centres of manufacturing and have their own industrial development zones. The East London Industrial Development Zone (ELIDZ) is very strong in the automotive components sector, with several companies providing services to Mercedes-Benz SA. Mercedes-Benz exports its cars out of the Port of East London and the factory, which regularly wins quality accolades, manufactured its one-millionth vehicle in 2015. East London also has manufacturing capacity in food and beverages (Nestlé, Cadburys), pharmaceuticals (Aspen), packaging (MPact) and batteries (First National Batteries). Summerpride Foods make pineapple juice, a speciality of the province. The Coega IDZ (CIDZ) is served by the Port of Ngqura and is close to Port Elizabeth. The biggest news for CIDZ in 2016 was the announcement of an R11-billion investment by Chinese state auto manu- facturer Beijing Automobile Corporation (BAIC) and South Africa’s Industrial Development Corporation. This follows the R600-million investment of First Automotive Works (FAW), also a Chinese enterprise. Famous Brands has made its second investment into CIDZ, adding a tomato paste factory to its dairy. The Dedisa gas-fired power plant started operating at CIDZ in 2016, and national government announced that Coega would be one of the sites for a 1 000MW Liquefied Natural Gas (LNG) plant. The value to the regional economy of the latter project is estimated at R25-billion. The Eastern Cape has been the destination of choice for renewable energy investors. A quarter of the projects so far approved in the national private producers’ programme have been allocated to the Eastern Cape, mostly in wind energy. One of the greatest strengths of Eastern Cape manufacturing is in automotive and automotive parts. With Mercedes-Benz SA in East London, Port Elizabeth is home to Volkswagen SA, General Motors, Ford (engines) and component manufacturers like Goodyear, Continental Tyre SA, SJM Flex SA, Bridgestone, Halberg Guss and Shatterprufe. Port Elizabeth is a leader in the manufacture of catalytic converters where Corning, BASF, Formex, Umicore Catalyst, Eberspacher and Tenneco South Africa are some of the companies in the field. Geography The Eastern Cape extends over 169 580 square kilometres, representing 13.9% of South Africa’s land mass. The dry western interior is one of the country’s premier sheep-rearing destinations. The mountainous regions of the north and east of the province support timber plantations while the coastal belt in the south-west is well-watered and is good for dairy farming. The province has spectacular beaches stretching from the surfer’s paradise at Jeffrey’s Bay all the way to the famed Wild Coast. The province has a strong agricultural base. Aside from being one of the world’s major sources of mohair, the province offers perfect farming conditions for a wide range of produce. The fertile Langkloof 9 EASTERN CAPE BUSINESS 2017

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