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Eastern Cape Business 2020 edition

  • Text
  • Eastern
  • Cape
  • Mohair
  • Mandela
  • Nelson
  • Nedbank
  • Banking
  • Economic
  • African
  • Province
  • Edition
The 2020 edition of Eastern Cape Business is the 13th edition of this highly successful publication that, since its launch in 2006, has established itself as the premier business and investment guide for the Eastern Cape. The Eastern Cape’s investment and business opportunities are highlighted in this publication. One of the province’s unique economic assets, the mohair industry, is highlighted in a special feature while the occasion of the 10th birthday of the Nelson Mandela Bay Stadium is celebrated in an article on tourism and events. Overviews are provided on the key economic sectors of the province, including the increasingly important Special Economic Zones and energy, where the Eastern Cape is leading the nation in attracting investment in wind power. The major business chambers in the province have made contributions to the journal.


SPECIAL FEATURE A regional overview of the Eastern Cape By John Young While long-standing stalwarts like the mohair sector and the automotive industry continue to thrive, the province’s two Special Economic Zones hold the key to expanding and diversifying the Eastern Cape’s economy. A national competition found a Port Elizabeth automotive components company to be the country’s “Factory of the Year” in 2019. This follows the award of “Africa’s Industrialist of the Year” to a Port Elizabeth entrepreneur whose automation company exports to 18 countries. It comes as no surprise that the automotive sector in the Eastern Cape produces excellence and innovation. The long-term presence of Mercedes-Benz South Africa, Volkswagen South Africa, Isuzu and Ford has now been bolstered by a multi-phase R11-billion investment by Beijing Automotive Group South Africa at the Coega Special Economic Zone (SEZ). The automotive components and service industry from which the two award-winners sprung is similarly diverse, Image: Coega Development Corporation with everything from tyres, windshields and batteries to catalytic converters being manufactured and exported. Eberspächer South Africa, an exhaust systems manufacturer, won the 2019 Factory of the Year competition, which is run by management consultants AT Kearney. Quinton Uren won the Industrialist award for the work of his company, Jendamark Automation. The manufacturing assembly solutions that the company creates in Port Elizabeth are exported to 18 countries. International orders make up 90% of the company’s business. The kind of technical excellence represented by the two award winners is something of a signal of a way forward for the regional economy – investment in high-value manufacturing and EASTERN CAPE BUSINESS 2020 6

SPECIAL FEATURE services to stimulate growth and job creation. The investment pathway presented by the Eastern Cape Development Corporation (ECDC) in preparation for the 2019 Eastern Cape Investment Conference specified nine sectors within manufacturing where the province wants to attract investment: • Maritime • Pharmaceuticals • Green/renewables • Agri-processing • Materials • Light manufacturing • Automotive • Petrochemicals • Capital goods. The ECDC, the official investment promotion agency of the Eastern Cape, further outlined the factors that make the province an attractive investment destination: transport infrastructure, land, labour, government incentives and raw materials. Sectors with high potential in the province include agriculture, mining and energy, manufacturing, tourism, construction and knowledge-based services. Eastern Cape Premier Oscar Mabuyane reported in 2019 that several large investment commitments have been made in the province. At the time of the conference he was MEC for Economic Development, Environmental Affairs and Tourism. He cited: • SAB, R438-million plant upgrade • Mercedes-Benz SA, R10-billion • Aspen Pharmacare, R3.4-billion • Nestlé, R663-million • Yekani Technologies, R1-billion at Coega SEZ • MultiChoice, R900-million at ELIDZ • Volkswagen SA, R6.1-billion • BAIC, R11-billion at Coega SEZ. Since that conference, mining company Bushveld Minerals has announced that it will spend about R150-million on a vanadium electrolyte plant in East London. The product will be used in vanadium redox flow batteries by Bushveld and by international customers. East London is home to First National Battery, a subsidiary of Metair. The presence of two Special Economic Zones (SEZs) in the province helps make the Eastern Cape attractive to investors. The facility in East London is in the process of changing its official status from Industrial Development Zone (IDZ) to SEZ but it remains a kind of SEZ. In the period March 2019 to January 2020, the Coega SEZ (shown in the main picture) signed four new lease agreements with organisations that will collectively invest more than R100-million. This comes after a most productive 2018/19 period when R2.6-billion was invested by 18 entities. The variety of investments received by the two SEZs is detailed further in a separate article elsewhere in this journal. A work bench in the country’s top factory. Image: Eberspächer South Africa Perhaps the most consequential investments into the SEZs are in the automotive and energy sectors. Although the automotive investments are not game-changers in the sense that a new sector is being introduced, the scale of the investments is impressive. With two new Chinese car-makers (FAW and BAIC) in the Coega SEZ, increased production volumes will ensure that jobs are created. The sector already accounts for more than 400 000 jobs in the province. In support of tourist initiatives in the eastern parts of the province and to bolster the economy of rural areas, the South African National Roads Agency is working on projects valued at nearly R7-billion, while the project pipeline for to 2021/22 is budgeted at more than R5-billion. 7 EASTERN CAPE BUSINESS 2020

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