Special Economic ZonesA vital component of national and provincial policy to driveinclusive growth.De Beers is a storied name in the history ofthe growth of the South African economy.So it was a significant event when amajor subsidiary, De Beers SightholderSales South Africa, relocated all its operationsto Johannesburg in 2023. More specifically, to abuilding in Sky Park in Kempton Park: De Beersis supporting the initiatives of national andprovincial government to promote economicgrowth via Special Economic Zones (SEZs).The OR Tambo SEZ is located at the OR TamboInternational Airport and has among its focus areasthe consolidation of all companies operating inSouth Africa’s mineral beneficiation sector.De Beers, which has two diamond mines inSouth Africa, is responsible for the sale of 90% ofthe world’s diamonds by value.The National Department of Trade, Industryand Competition (dtic) is the lead agent in thecreation of SEZs, which are part of the nationalIndustrial Policy Action Plan (IPAP). SEZs aredesigned to attract investment, create jobs andboost exports.Choosing where to position an SEZ isbased on many considerations. As MaotoMolefane, Acting Deputy Director General of theDepartment of Trade, Industry and Competition(dtic) explains, “SEZs are established on the basisof the economic potential of a region. This couldeither be comparative or competitive advantagesand the SEZ programme is used as a sweetenerto attract foreign and domestic investors. SEZsare used to accelerate industrialisation throughcoordinated planning and the development ofstate-of-the-art infrastructure.”Molefane believes that SEZs contributeto the attractiveness of SA as an investmentdestination: “By offering world-classinfrastructure, fiscal incentives, a protectedenvironment and an easy-to-navigate businessenvironment using One Stop Shops, SEZshave directly contributed to the country’sattractiveness. The zones have 167 operationalinvestors and almost half of these are FDIs.”An updated approach to the developmentof SEZs advocates for integrated multi-use withimproved living standards supported by industrialdevelopment, commercial spaces, tourism,better schools, entertainment, healthcare andrecreational facilities.GAUTENG BUSINESS 20258PHOTO: De Beers
SPECIAL FEATURENational government also promotesinvestments through tax legislation. The SEZ TaxIncentive was introduced into the Income Tax Actto promote investment, growth and job creationin the South African manufacturing sector andthe development of designated regions.The taxpayer must be a “qualifying company”to be able to qualify for this incentive. Qualifyingcompanies can benefit from the followingpreferential benefits: a preferential corporateincome tax rate of 15%; an accelerateddepreciation allowance of 10% on cost of anynew and unused buildings or improvementowned by the qualifying company.Gauteng plansIn Gauteng, the Gauteng Growth andDevelopment Agency (GGDA) is the driverof the SEZ programme, which will result ineach of the province’s district or metropolitanmunicipalities hosting an SEZ. Each of thosezones will emphasise the strengths of that area,so for example logistics is another OR Tambospeciality, given its proximity to the airport. Theexisting concentration of large manufacturingenterprises within the Ekurhuleni MetropolitanMunicipality makes that sector another obvioustarget, with the Jewellery Manufacturing Precinct(JMP) a good example of that convergence.The province’s SEZs are at different stagesof development. The OR Tambo SEZ is a goodexample of advanced progress. Together withDe Beers, a gold refinery has been established inthe JMP, it has become the home of bodies suchas the South African Diamonds and PreciousMetals Regulator, Belgian company Pluczenikhas launched its facilities and more than a dozenSMMEs are active in the precinct. The othercomponent of Precinct 1 of the SEZ is devoted tofruit and vegetable processing of In2Food, whichhas the largest refrigeration plant in the world.Phase 1 of the development of the TshwaneAutomotive Special Economic Zone (TASEZ) waslaunched in November 2019 with Ford MotorCompany’s operations at its core, and the SEZ hasgrown in stature ever since. Initial governmentinvestment of R3.9-billion has been more thanmatched by Ford and its suppliers.Ford itself made a capital investment of R15.8-billion in pursuit of increased production whilesuppliers have invested more than R5.6-billion.This has led to 3 291 jobs being created withinthe zone, with more than 65% of the workforcesourced from surrounding townships. Of thesejobs, 39% were filled by women and 59% by youth.Three district municipalities across the southof Gauteng will host the Vaal Special EconomicZone (Vaal SEZ) which will have multiple sectorsrepresented and be located at multiple sites.The area already has many industrial assets andinfrastructure and is well served by transportroutes. Among the targeted sectors are agroprocessing,logistics, the low-carbon economy,light manufacturing and the Blue Economy,which seeks to take advantage of the Vaal River.The GGDA has established a subsidiary to run theprocess of establishing the SEZ.Plans for a West Rand SEZ are in place withthree sectors being targeted: agro-processing,including new market facilities and exploringthe growth of the cannabis sector; bus andautomotive manufacturing linked to the existingplant of the Busmark company (the ChamdorAutomotive Hub is already functioning); andrenewable energy - a large solar plant is to be builtby six contractors on land donated by miningcompany Sibanye-Stillwater.The West Rand is well connected in terms oftransport links via the N12 and N14 highways, itis near to Lanseria Airport and it has significanttourism assets, including the Magliesbergmountain range and the Cradle of Humankind. ■The Tshwane Automotive Special Economic Zonehas attracted multiple investors, which in turnhas created hundreds of jobs.PHOTO: TASEZ9 GAUTENG BUSINESS 2025
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