A REGIONAL OVERVIEW OF
A REGIONAL OVERVIEW OF KWAZULU-NATAL Stability has been restored after a turbulent 2021 and companies are looking at investing in increasing capacity. Provincial and national government are ramping up spending on infrastructure. The province’s ports are the focus of programmes designed to encourage private investment. By John Young In 2021, citizens and businesses in KwaZulu-Natal were starting to get used to the disruptions caused by Covid-19 when in July, a series of riots broke out. The other province hit by riots was Gauteng. Thankfully the riots lasted less than a week but, like Covid-19, they brought tragedy in their wake. Some have claimed that the riots were linked to the court case of former President Zuma, being pursued in various cases linking him to alleged corruption during his terms of office as president and deputy president. While it is true that many of his supporters took to social media to stoke up violent sentiment, nothing happened at the courts where Zuma was appearing or at the jail to which he had been consigned. Foreign truckers were attacked on the N3 (a recurrence of earlier attacks) and shops were looted and burnt. The resilience of KwaZulu-Natal residents and business owners was tested. Many insurance claims have been lodged but some businesses, such as the packaging business burnt to the ground in the course of the riots, have closed their doors. Companies in the logistics and storage sector were boosted by the move to home shopping that came with the Covid-induced lockdowns. This is a trend that had been growing for some time and that was accelerated by the pandemic. On the energy front, President Cyril Ramaphosa’s announcement that private investors could generate up to 100MW without having to go through a tangled web of licence procedures was a boon for the province’s larger companies. The likes of Sappi and Mondi produce great quantities of biomass waste and all of the province’s sugar producers are potentially generators of electricity. Many of them already are producing power for their own use, now they can sell it to the grid. The signing of a long-term contract for energy supply by Eskom and South32 for its Hillside Aluminium smelter was another very welcome step KWAZULU-NATAL BUSINESS 2022/23 8
SPECIAL FEATURE King Shaka International Airport. in the energy field. The deal expires in 2031. The first steps in a move by national government to partner with the private sector in boosting efficiency at ports were taken in 2022: deals were signed at the Port of Durban and at Richards Bay. A 15-year concession for the loading of grain at one of Durban’s agricultural terminals was won by Afgri, one of South Africa’s biggest agricultural firms. Afgri will deal with the operation and maintenance of all landside operations, and the deal includes a similar arrangement at East London. The other two terminals in Durban are operated by SA Bulk Terminals and Bidvest Bulk Terminals. Tourism is a key sector in the KwaZulu-Natal economy and provides livelihoods to many thousands of families in urban and rural areas. The closing of borders brought real hardship to many areas. The first half of 2019 brought in a total of R14.4-billion in tourist spending and the year as a whole delivered an increase of 8% in international visitor numbers. The newly-created Cruise Ship Terminal at the Port of Durban was ready to welcome guests, but it would be at least a year before cruises could resume. Investment Between May 2019 and February 2020, inward investment commitments to the value of more than R15-billion were made. These included amounts pledged in most of the priority sectors identified by the provincial government, namely agro-processing, healthcare, manufacturing, renewable energy and tourism and property development. Other priority sectors include aloe processing, bio-ethanol fuel, fish processing and, more broadly, the Oceans Economy. In his 2021 State of the Province Address (SOPA), KwaZulu-Natal Premier Sihle Zikalala announced that through the two SEZs and investment drives the province had secured the following projects: • Coconathi, a R50-million agro-processing factory specialising in healthcare products, Dube TradePort • Ubuhle Towels, a R130-million investment has created 200 permanent jobs in Richards Bay • Ndumo Retail Development, a R100-million investment project in a shopping centre, taxi rank and service station. The project is expected to create 400 construction jobs • Vodacom South Africa, R1-billion 5G network rollout in Durban. The company also spent R320-million in 2020/21 on building new longterm evolution (LTE) base station sites in urban and rural areas • Unitrade, a R105-million investment for the manufacture of Ford Ranger and VW Amarok components, KwaDukuza • The Frymax potato chips company, a R380- million investment, 600 new jobs created in Verulam • Goodlife Foods, a R70-million investment • Hesto Harnesses, a R900-million investment in support of a big order from Ford Motor Company Southern Africa which will support 3 300 jobs, Stanger These investment projects will produce a total 3 435 permanent jobs. Beside these projects, the provincial government is working on an investment pipeline, through the SEZs, of R22-billion. Special Economic Zones (SEZs) The Special Economic Zones (SEZs) at Richards Bay and King Shaka International Airport (the Dube TradePort) are key components of the strategy of attracting investors to the province. 9 KWAZULU-NATAL BUSINESS 2022/23
