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Free State Investment Prospectus

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THE FREE STATE, with 2.8-million residents, accounted for 5% of South Africa’s population in 2017/18 and contributed proportionately to the GDP. In 2018 (the latest available data), the real economy (represented by agriculture, mining, manufacturing and construction) made up 27% of the Free State’s output. The largest real-economy sector was mining at 11% of the provincial economy, followed by manufacturing at 9%, agriculture at 4% and construction at 3%. The Free State contributed 10% of national agriculture and 7% of national mining, but just 4% of national manufacturing and 3.5% of national construction.

CONTENTS 01 FOREWORD by

CONTENTS 01 FOREWORD by the Premier of the Free State, the Honourable SH Ntombela 02 FOREWORD by the Honourable MP Mohale, MEC for Economic, Small Business Development, Tourism and Environmental Affairs 03 FOREWORD by Dr M Nokwequ, the HOD of the Department of Economic, Small Business Development, Tourism and Environmental Affairs 06 INTRODUCTION TO THE FREE STATE 07 FREE STATE ECONOMIC OVERVIEW 08 KEY SECTORS OVERVIEW INVESTMENT OPPORTUNITIES BLOEM WATER 10 • Infrastructure: Mangaung Water Augmentation Project – Xhariep Pipeline 10 • Infrastructure: Design and construct steel bypass 11 • Infrastructure: Construction of Tabali 11 • Infrastructure: Extend treatment capacity of Rustfontein FREE STATE DEVELOPMENT CORPORATION (FDC) 12 • Renewable energy: Sorghum-based bio-ethanol refinery in Bothaville 12 • Renewable energy: The country’s first liquefied natural gas 13 • Manufacturing: Scrap metal 21 22 23 23 24 24 18 18 19 19 20 20 MALUTI-A-PHOFUNG SPECIAL ECONOMIC ZONE (MAPSEZ) 13 • Agro-processing: Slaughtering approximately 360 000 pigs per year 14 • Chemicals: Starch chemicals producer 14 • Agro-processing: Beef export to China 15 • Agro-processing: Establishment of Agri-Park at MAPSEZ 15 • Agro-processing: Establishment of a bio-gas facility 16 • Agro-processing: Processing of bottled beverages at MAPSEZ 16 • Textile: Human hair manufacturing 17 • Logistics: Development of an inland Agri-Hub facility 17 • Infrastructure: Bulk earthworks project • Infrastructure: Repair of waste treatment plant • Infrastructure: Realignment of intersections on the N5 • Infrastructure: Transnet Freight Rail design stage • Infrastructure: Development of a park • Infrastructure: Construction of the SEZ office DEPARTMENT OF ECONOMIC, SMALL BUSINESS DEVELOPMENT, TOURISM, AND ENVIRONMENTAL AFFAIRS (DESTEA) • Infrastructure: Phakisa Raceway mixed developments MANGAUNG METROPOLITAN MUNICIPALITY INVESTOR-READY ANCHOR PROJECTS • Infrastructure: Airport Development Node (ADN) • Infrastructure: Cecilia Park Development DEPARTMENT OF AGRICULTURE AND RURAL DEVELOPMENT • Agriculture: Aquaculture • Agriculture: Apples • Agriculture: Poultry • Agriculture: Broiler Poultry 05

Introduction to the FREE STATE THE FREE STATE Province lies in the heart of South Africa, with the Kingdom of Lesotho nestling in the hollow of its bean-like shape. Lying between the Vaal River in the north and the Orange River in the south, the region is one of flat, rolling grassland and fields of crops, rising to lovely mountains in the north-east. The province is the granary of South Africa, with agriculture central to its economy, while mining on the rich goldfield reefs is its largest employer. In May 2011, Mangaung, comprising Bloemfontein, Botshabelo and Thaba Nchu, became South Africa’s newest metropolitan authority. It has an established institutional, educational and administrational infrastructure, and houses the Supreme Court of Appeal, the University of the Free State and the Central University of Technology. Economic towns include Welkom, the hearts of the goldfields and one of the few completely preplanned cities in the world; Odendaalsrus, CAPITAL CITY BLOEMFONTEIN is the capital city of the province of Free State of South Africa; and the judicial capital of the nation. also a gold-mining town; Sasolburg, which gets its name from the petrochemical company Sasol; Kroonstad, an important agricultural, administrative and educational centre; Parys, on the banks of the Vaal River; QwaQwa, a vast and sprawling settlement known for its beautiful handcrafted items; and Bethlehem, gateway to the Eastern Highlands. The Free State is the third-largest province in South Africa, but it has the second-smallest population and the second-lowest population density. The culture has an interesting dynamic, centred on traditional cultures but built on the influences of the early European settlers. Out of this has come a uniquely South African culture, which not only reflects the province’s historical past, but also the great diversity of its people. Close to 2.8-million people live in the Free State, with two-thirds speaking Sesotho, followed by Afrikaans as the next most-spoken language. LANGUAGES THE MAIN LANGUAGES are Sotho 64.2%, Afrikaans 12.7%, Zulu 7.5%, Tswana 5.2%, Xhosa 4.4% and English 2.9% FREE STATE ECONOMIC OVERVIEW THE FREE STATE is situated in the heart of the country, between the Vaal River in the north and the Orange River in the south. This province is an open, flat grassland with plenty of agriculture that is central to the country’s economy. Mining is its largest sector. Bloemfontein is the capital city and is home to the Supreme Court of Appeal, as well as the University of the Free State and the Central University of Technology. The province also has 12 gold mines, producing 30% of South Africa’s output. The Free State is strategically placed to take advantage of the national transport infrastructure. Two corridors are of particular importance: the Harrismith node on the N3 corridor between Gauteng and KwaZulu-Natal, and the N8. The N1 connects Gauteng to the Western Cape. Bram Fischer International Airport in Bloemfontein handles about 250 000 passengers and 221 000 tons of cargo a year. Manufacturing also features in the provincial economic profile. This sector makes up 14% of the provincial output, with petrochemicals (via Sasol) accounting for more than 85% of the output. Structure and economic growth THE FREE STATE, with 2.8-million residents, accounted for 5% of South Africa’s population in 2017/18 and contributed proportionately to the GDP. In 2018 (the latest available data), the real economy (represented by agriculture, mining, manufacturing and construction) made up 27% of the Free State’s output. The largest real-economy sector was mining at 11% of the provincial economy, followed by manufacturing at 9%, agriculture at 4% and construction at 3%. The Free State contributed 10% of national agriculture and 7% of national mining, but just 4% of national manufacturing and 3.5% of national construction. 06 07

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