KwaZulu-Natal Business 2017-18 edition

SPECIAL FEATURE future

SPECIAL FEATURE future growth. KwaZulu-Natal already has significant capacity in heavy and light manufacturing, agriprocessing and mineral beneficiation, all of which is supported by South Africa’s two busiest ports (Richards Bay and Durban), the country’s busiest highway (the N3), a modern international airport (King Shaka International) and pipelines that carry liquids of all types to and from the economic stronghold of Gauteng province in the interior. Toyota and Bell Equipment play a big role in the automotive sector while the Engen Oil Refinery is a strategic asset. Sugar, tourism and forestry and paper are the other important sectors driving growth and employment in KwaZulu-Natal. A number of bodies support investment into the province. Chief among these is Trade & Investment KwaZulu-Natal (TIKZN), which offers expert advice and support in every aspect that potential investors might need. Support is also offered to existing investors who might want to expand their business or start exporting products. A Provincial One-Stop-Shop is being established to facilitate getting all the paperwork done as fast as possible for new investors. Bodies such as the South African Revenue Service (SARS) and Home Affairs will be involved in this process. Three entities that work hard to attract investment in their own right are Richards Bay Industrial Development Zone (RBIDZ), Dube TradePort and eThekwini Municipality. The latter body’s dedicated unit is called Durban Investment Promotion (DIP), which in turn works with bodies such as the Durban Chamber of Commerce and Industry and TIKZN. In his 2016 State of the Province address, Premier Mchunu announced these investments in the RBIDZ: titanium plant (R4.5-billion); biomass plant (R2-billion); pipe manufacturing plant (R300- million); paint manufacturing (R16-million); logistics services (R20-million). A number of big projects have been undertaken in recent years in the province, or have been approved for implementation in the near future. These so-called “catalytic projects” are big enough to stimulate other sectors of the economy and to contribute significantly to regional GDP. Perhaps the biggest recent announcement was the decision by the national Department of Energy (DoE) that one of the country’s first two gas-to-power plants to be constructed under the Independent Power Producer Programme, is to be allocated to Richards Bay. A private partner will invest in and run the plant which will be located within the RBIDZ. This is not only big news in terms of the amount of money being invested and the number of jobs that will be created, it has the potential to create a whole string of downstream businesses supplying gas, servicing gas and fired by gas. KWAZULU-NATAL BUSINESS 2017/18 14

SPECIAL FEATURE The variety of sectors into which these catalytic projects are taking place shows that KwaZulu- Natal has a diverse economy. Three examples illustrate this: • Colenso Smelter Park Project (R39-billion in first phase, power generation) • Point Waterfront Development (luxury apartments, hospitality, offices, retail) • Cipla at Dube TradePort (R1.3-billion, bio-similar pharmaceutical manufacturing plant). New sectors Two new sectors are catching the eye of investors in KwaZulu-Natal. One relates to the ocean, and the other is energy generation. KwaZulu-Natal has a long coastline that stretches from Port Shepstone in the south to Kosi Bay Nature Reserve in the north. The province’s contact with the sea has brought obvious benefits: fishing, fine beaches enjoyed by millions of tourists, and two great ports – the ports of Durban and Richards Bay. These ports export vast quantities of minerals (mostly through Richards Bay) and manufactured goods (Durban) and serve as an important conduit for imports of all sorts. The Richards Bay Coal Terminal exports massive quantities of coal while the Port of Durban is the busiest port in Africa. However, planners want to massively increase the economic benefits that the ocean can bring. An Oceans Economy Review Workshop has come up with a range of subsectors that can help grow the provincial economy and invite foreign direct investment: • Marine Transport and Manufacturing • Offshore Oil and Gas Exploration • Aquaculture • Marine Protection and Ocean Governance • Small Harbours • Coastal and Marine Tourism. Strategies to grow the so-called Oceans Economy will easily dovetail with any and all of the plans to boost the capacity of ports at Durban and Richards Bay and to explore for gas and oil in the Indian Ocean. Ship-building and ship repairs is an existing industry but it is currently not very big. If oil rigs were to start visiting the KZN coastline on a regular basis, this industry would grow exponentially. The Oceans Economy is one of the focus areas that has been chosen by national government to be part of Operation Phakisa, a focused, goal-driven attempt to jump-start a specific economic sector. Overall, Phakisa intends creating a million jobs by 2033 and injecting R177-billion into national GDP. The decision to build a cruise-ship terminal at the Port of Durban is a good example of the kind of decision that is nicely in line with an “Oceans Economy” approach. The KwaZulu-Natal Maritime Institute is part of a restructured Sharks Board offering training programmes with national ports and logistics operator, Transnet. Since 2012, 800 students have been studying maritime-related courses. The other big potential growth area in KwaZulu- Natal is energy. Several licences have been granted for offshore exploration and the hope exists that something will be found, a hope partly based on the close vicinity of the vast gas fields off the coast of Mozambique. If energy does not come from the sea through offshore drilling for oil or gas, there is plenty of potential on land. So far KwaZulu- Natal has trailed the rest of South Africa when it comes to the innovative and exciting REIPPPP. Tens of billions of rands and hundreds 15 KWAZULU-NATAL BUSINESS 2017/18