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Eastern Cape Business 2021-22

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The 2021/22 edition of Eastern Cape Business is the 14th edition of this 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. The fact that the province is home to the majority of wind power projects as part of the country’s drive to promote renewable energy is the subject of a special feature. Overviews are provided on the key economic sectors of the province, including the vital contribution that the agricultural and automotive sectors continue to make on the province’s economic trajectory. References are made to the potential of the Oceans Economy and to the prospects of oil and gas for this coastal province. The major business chambers in the province have made contributions to the journal.

OVERVIEW Agriculture and

OVERVIEW Agriculture and agro-processing Cannabis producers are thinking of automotive applications. SECTOR INSIGHT Coega SEZ has an Aquaculture Development Zone. The province’s Special Economic Zones use their connection to the ocean to promote aquaculture. Credit: ELIDZ The provincial government’s stimulus fund has invested R206-million in the development of a 100ha Aquaculture Development Zone in the Coega Special Economic Zone (CSEZ). The East London Industrial Development Zone (ELIDZ) already has several companies operating in the aquaculture sector. A marine tilapia project is a project of the Sustainable Infrastructure Development Symposium. The Eastern Cape Rural Development Agency and the Mbhashe Municipality are implementing the project to benefit more than 15 000 small-scale farmers who will supply the fish farms with feed. The OR Tambo District Municipality has purchased refrigerated containers. Legislation to control the production and commercialisation of cannabis is being developed and the Eastern Cape provincial government is investigating the building of a cannabis plant. The automotive sector currently imports hemp plastic which can apparently be replaced by products made from cannabis. Labat Healthcare South Africa has rolled out the first of a planned series of franchise businesses under the label, Labat Cannabis Warehouse. Medical marijuana is just one of the many products being targeted. Others include cannabidiol (CBD) oils and capsules, oral sprays, terpenes, cannabis-infused foods and energy drinks. The company intends extending its cultivation of cannabis in greenhouses, primarily in Gauteng and the Eastern Cape, to 40 000m². Getting small-scale farmers connected to agro-processing value chains is a major goal for agricultural policy-makers. This lies behind the creation of a Special Economic Zone (SEZ) on the Wild Coast. The 5 000ha Ncora Irrigation Scheme is seen as a model for the SEZ, which has attracted interest from Anglo- Gold Ashanti and Exxaro. The Eastern Cape Department of Rural Development and Agrarian Reform (DRDAR) has several programmes to support small-scale farmers. The Eastern Cape Development Corporation (ECDC) supports agro-processing through loans and equity arrangements: projects that have received financial support include aquaculture, the production of dietary fibre from pineapples and bamboo products. There are about 70 000 people employed on commercial farms across the Eastern Cape, with a further 436 000 people dependent on smaller farms, mostly in the east. The National Woolgrowers’ Association of SA (NWGA) is based in Gqeberha formerly Port Elizabeth, as is Cape Wool SA, which used to be known as the South African Wool Board. The NWGA has a simple motto: “more sheep: more wool” which it tries to achieve through its Production Technology Services which is offered to a membership base of 4 500 commercial and 20 000 communal members. EASTERN CAPE BUSINESS 2021/22 26

OVERVIEW Agricultural assets The Eastern Cape provides approximately a quarter of South Africa’s milk, and the industry is further expanding as producers are favouring high-rainfall coastal areas such as the Tsitsikamma region. South Africa now produces about 54% of the world’s mohair and Gqeberha is the mohair capital of the world in the sense that its port handles the bulk of South African exports, many companies have their headquarters there and the sector association, Mohair South Africa, is based there. Farms around the small towns that dot the open plains south of Graaff-Reinet, Aberdeen, Somerset East, Jansenville and Willowmore routinely produce nearly half of South Africa’s production. The office of the South African Mohair Growers Association (SAMGA) is in Jansenville. Grootfontein College of Agriculture, the only tertiary educational institute in the country to offer a programme aimed at Angora goat farming and mohair production, is located in Middelburg, north of Graaff-Reinet. Processing of mohair takes place in Kariega (Uitenhage), Gqeberha and Ntabozuko (Berlin) outside East London. The mohair value chain includes brokers, buyers, processors, spinners, manufacturers and retailers. The SAMIL company has divisions all along the value chain. This covers farming, combing, trading, spinning and dyeing. The Angora Genetics Laboratory (ANGELA) was established in 2013 to improve yields. The Stucken group controls Mohair Spinners South Africa, Hinterveld (a mill) and a processing company called Gubb & Inggs in Kariega. Ouma Rusks are still made in the small town where they were invented, Molteno. Cadbury operate a big site across the lake from the Nelson Mandela Stadium in Gqeberha and Nestlé makes 11 kinds of chocolate at its factory in East London. The Sasko mill in Gqeberha is the province’s only big milling plant. The Eastern Cape is the country’s second-largest producer of citrus fruit. A national export record was achieved in 2020, with 146-million cartons of fresh citrus being exported (putting South Africa only behind Spain). Citrus yielded R3.4-billion in exports for the Eastern Cape. Oranges make up the vast majority of citrus products. Deciduous fruits such as apples, pears and apricots are grown primarily in the Langkloof Valley. Another crop in which the Eastern Cape leads national production is chicory. The province’s pineapple crop is grown in the same part of the Sunshine Coast that produces chicory. The Eastern Cape Rural Development Agency (ECRDA) has partnered with a community to plant the popular nut at Ncera in the Tyume Valley north of Alice. The Eastern Cape holds 21% of the country’s cattle (about 3.2-million), 28% of its sheep (seven-million) and 46% of its goats, making it the largest livestock province by a large margin. The rich natural grasslands of the Eastern Cape have the potential to produce high-value organic meat, a product that is increasingly popular in healthconscious international markets. Coca-Cola Sabco and SAB Limited’s Ibhayi brewery are the major beverage manufacturers in Gqeberha and Distell has a bottling plant in the city. Sovereign Foods in Kariega is the country’s fourth-biggest producer of poultry. ■ ONLINE RESOURCES Eastern Cape Rural Development Agency (ECRDA): www.ecrda.co.za Milk Producers Organisation: www.mpo.co.za National Woolgrowers’ Association of South Africa: www.nwga.co.za South African Mohair Growers Association (SAMGA): www.angoras.co.za 27 EASTERN CAPE BUSINESS 2021/22

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