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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.

OVERVIEW Forestry The

OVERVIEW Forestry The private sector is working with community land owners to boost timber production. The Eastern Cape has large swathes of land that have been identified as suitable for forestry, to add to the already sizable industry in the province. According to the Eastern Cape Rural Development Agency (ECRDA), government plantations have more than 15 000ha of unplanted areas which would be easy to develop: they do not require high initiation costs (environmental impact assessments) because no licence is required. The Eastern Cape’s forestry sector comprises 130 000ha of plantations, 46 sawmills, two chipboard operations, 10 pole treatment plants, a veneer plant and six charcoal plants, which collectively process about 770 500 cubic metres of timber annually. The region is well-served by wood-processing facilities such as the R1.3-billion board plant outside Ugie that is owned by JSE-listed Steinhoff’s subsidiary company, PG Bison. Another of the province’s major forestry stakeholders is Amathola Forestry, along with their sister company Rance Timber’s Kubusi and Sandile Sawmill near Stutterheim, producing 45 000 cubic metres of sawn board annually. About 75% of the province’s plantations are controlled by the private sector. Forestry South Africa has set up a Business Development Unit to empower small-scale timber growers. The ECRDA aims to transform unproductive communal land assets through commercial forestry development. The ECRDA’s Sinawo project in Mbizana has started selling timber to Sappi and is fast approaching commercialisation of all its operations. In 2015/16 the project earned about R7-million from the sale of timber and the total ONLINE RESOURCES Eastern Cape Department of Rural Development and Agrarian Reform: Eastern Cape Rural Development Agency: Forestry SA: Institute for Commercial Forestry Research: Department of Agriculture, Forestry and Fisheries: South African Institute for Forestry: SECTOR INSIGHT 40 new jobs can be created for every 25ha planted. employee count rose to 208. Sappi and PG Bison are supporting these community initiatives. Paper and packaging group Sappi is working with the ECRDA and with several communities in the Eastern Cape to establish forestation programmes. At Mkambathi a total of 668ha has been planted and Sappi has agreed to buy 65% of the timber produced and to give technical support where it can. As much as 100 000 hectares of land is suitable for forestry in the Eastern Cape, much of it on communal land. Government is keen to find private investors who will partner with local communities. If all of the projects come to fruition, there is potential for an additional 1.8-million cubic metres of new timber to be processed and for 40 new jobs to be created for every 25ha planted. Downstream opportunities created by new plantations include a planned treated-pole plant in Butterworth and a paper and pulp mill in Mthatha, which has also been selected as a future furniture-sector incubator. EASTERN CAPE BUSINESS 2017 36

Aquaculture Fish from the Karoo will soon be a popular dish. OVERVIEW “Catch of the day” is about to take on a new meaning, with the fish coming from the semi-desert Karoo region. “Karoo Catch” is the brand name for freshwater fish produced by Blue Karoo Trust, a project taking shape near the town of Graaff-Reinet. A central farm will be supported by 39 outgrowers and the aim is to produce about 14 000 tons of fish on an annual basis. The intended market is organisations that need protein in bulk such as hospitals, schools and government institutions. South African love to eat pilchards but the catch has been decreasing every year. An alternative canned fish in tomato sauce will use tilapia, carp or catfish. The risk capital unit of the Eastern Cape Development Corporation (ECDC) is supporting the venture and there have been contributions from local government, national institutions and a foreign donor. Fish farming was high on the agenda in September 2016 at the inaugural South African Oceans Economy Symposium hosted by the Nelson Mandela Metropolitan University (NMMU) and Strategic Partners, South Africa. The conference was called “Investing in blue growth and sustainable solutions for Southern Oceans: Lessons from Nordic countries”. Aquaculture forms a big part of the South African government’s fasttrack Operation Phakisa strategy. One initiative is tackling 24 projects across South Africa by 2019 so there should be great opportunities for private investors. The intention is to increase the aquaculture sector’s revenue from about half a billion rand today, to R1.4-billion in 2019. Another initiative aims to reduce waiting times for processing of applications ONLINE RESOURCES Aquaculture Association of South Africa: Aquaculture Development and Enhancement Programme: Coega IDZ: East London Industrial Development Zone: Operation Phakisa: South African International Maritime Institute: South African Institute of Aquatic Biodiversity: SECTOR INSIGHT A symposium on the oceans economy was held in PE in 2016. and approvals from 890 days to 240 days. Pure Ocean Aquaculture and Ocean Wise are located within the East London IDZ. At Zone 10 in the Coega IDZ, 250ha has been set aside for fresh fish farming and 100ha for marine farming. A processing plant and research and development and training facilities are planned. The Coega Development Corporation estimates that 34 250 tons of abalone, Dusky Kob and seaweed could be harvested. The National Department of Science and Technology (DST) is working with Irvin & Johnson in running a marine finfish grow-out pilot in the waters of Algoa Bay. The Aquaculture Development and Enhancement Programme (ADEP), a programme of the Department of Trade and Industry (dti), offers a reimbursable grant up to R40-million for new projects, or to expand or upgrade existing projects. 37 EASTERN CAPE BUSINESS 2017

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