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Gauteng Business 2016 edition

  • Text
  • Manufacturing
  • Mining
  • Development
  • Investment
  • Business
  • Network
  • Gauteng
  • Economic
  • Province
  • Provincial
  • Infrastructure
  • Economy
  • Automotive
  • Sector
  • African
  • Johannesburg
The 2016 edition of the Gauteng Business and Investment Guide is the premier business and investment guide for the Gauteng province and the Gauteng Growth and Development Agency (GGDA). In addition to detailed profiles of key provincial organisations, including the GGDA, the Automotive Industry Development Corporation Centre (AIDC), the Gauteng Investment Centre, the Gauteng IDZ, the Gauteng ICT Park SEZ and Constitution Hill, this edition includes well-researched economic and demographic data on the province, as well as insights into the province’s five development corridors and the new industries and development nodes in these corridors; a focus on Gauteng as a global city region; and key growth sectors for the province.

OVERVIEW transform the

OVERVIEW transform the CoT into a more attractive region in order to create partnerships with investors interested in setting-up automotive manufacturing facilities with the view to exporting components into the Southern African market as well as to existing international trading partners. The programme aligns strongly with a number of policy drivers at national, provincial and municipal level. The expected strategic benefits of the TAC programme are as follows: • Economic growth • GDP growth • Infrastructure development • Attract Investment both foreign and domestic • Create Enterprise Development opportunities • Create thousands of jobs • Increase tax revenue • Support Government’s strategic objectives Finally, a range of incentives are available to firms and investors within the automotive industry in Gauteng. The value of incentives provided through the national Department of Trade and Industry amounts to around R5.9-million. Such incentives are a key factor in encouraging firms within the automotive industry to upgrade or expand their facilities within the province. For instance, Tata is considering converting its assembly plant in Gauteng into a full-scale production facility. This would be the company’s first big assembly plant to be developed outside India. Investment opportunities • Export of automotive components • Joint ventures with existing manufacturing companies • Non-core activities such as distribution and transport Pharmaceuticals South Africa’s pharmaceutical sector is worth approximately R20-billion annually. Although there are more than 200 pharmaceutical firms in the country, large companies tend to dominate the field, with Aspen (34 percent) and Adcock Ingram (25 percent) the two key players, followed by Sanofi, Pharmaplan and Cipla Medpro. A number of large pharmaceutical firms have made significant investments in South Africa. Adcock Ingram, for instance, has invested heavily in its South African operation. The company is planning to spend R1-billion on new developments and upgrades in Gauteng. The private sector accounts for 80 percent of pharmaceutical industry sales by value and 20 percent by volume, while this ratio is reversed in the case of the public sector. The public sector dispenses comparatively cheap pharmaceutical products to its users in public hospitals and GAUTENG BUSINESS 2016 102

OVERVIEW healthcare centres within South Africa, whereas pharmaceutical products produced by the private sector in South Africa serve a niche market. Investment opportunities: • Joint ventures with small manufacturers • Marketing of pharmaceuticals • R&D of new, innovative products • Scientific services such as clinical trials. Steel-related industries Within South Africa, most of the industry’s steel is produced and consumed in Gauteng. Metal products, machinery and equipment are produced predominantly in the Emfuleni Local Municipality, which is at the heart of South Africa’s iron and steel industry. Vanderbijlpark and Vereeniging in southern Gauteng are synonymous with steel production in South Africa. There are as many as 35 aluminium processing firms operating in Gauteng, involved in both secondary processing to produce foils, cans, bars, rods and sheets, with final fabrication in the form of die-casting and sheet metal work. Within Gauteng, the automotive and packaging industries are the chief consumers of these products. With domestic production of crude steel amounting to 7.6-million tons in 2010, South Africa was ranked the 21st largest crude steel producing country in the world by the World Steel Association. South Africa is also the largest steel producer in Africa, producing nearly half (47 percent) of the continent’s total crude steel output in 2010. There is a relatively large domestic market for steel products within South Africa. Local sales of primary carbon steel products (as reported by SAISI members) were estimated at 4.2-million tons in 2010. Domestically, the main consumers of steel products are the mining, manufacturing, building and construction sectors, while a significant share is destined for the export market. With respect to the latter, 1.2-million tons of ferrous-scrap was exported from South Africa in 2010. The national government provides a range of incentives to support steel-related industries in South Africa. These are available through the Investment Support, Small Business Development, Empowerment Finance, Competitiveness Improvement, Techno-Industry Development Finance and Export Assistance programmes. In addition, the COSM Trust has created a privately owned fund to support exporters of value-added steel products. ArcelorMittal, based in Vanderbijlpark, produces flat iron and has been a major employer in the province since 1947. Another key industry player, AECI, is located in Modderfontein near Johannesburg. AECI is comprised of two principal divisions: AEL Mining Services (with a large factory site) and Chemical Services, which presides over 20 separate companies (including Senmin, the group’s mining Chemicals Company). Investment opportunities • Joint ventures with small stainless steel manufacturers • Marketing and export of stainless steel products • Manufacturing of final products, such as pipes and tubes • Non-core activities such as distribution and transport • With Gauteng’s proximity to key trading partners, ports and logistics arteries, the manufacturing sector is sure to continue to thrive in the region. 103 GAUTENG BUSINESS 2016

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