6 years ago

Mpumalanga Business 2017 edition

  • Text
  • Development
  • Energy
  • Renewable
  • Tourism
  • Network
  • Government
  • Business
  • Economy
  • Africa
  • Africa
  • Investment
  • Business
  • Mpumalanga
  • Province
  • Provincial
  • Mbombela
  • Banking
  • African
  • Mining
Mpumalanga Business 2017 is the seventh edition of this highly successful publication that has since its launch in 2008 established itself as the premier business and investment guide to Mpumalanga Province. Supported and utilised by the Mpumalanga Economic Growth Agency (MEGA), Mpumalanga Business is unique as a business journal that focuses exclusively on Mpumalanga.


SPECIAL FEATURE smelters in the province, and a thriving forestry sector dominates the economy of the eastern parts of Mpumalanga. A downturn in the commodities cycle has reminded all economic planners that relying too heavily on one or two resources is not a wise strategy. Mpumalanga has been investing heavily in infrastructure in order to attract investors. The type of investment that is being targeted is beneficiation or manufacturing. The raw materials that leave the province earn good money for farmers and miners, and the dollars earned from exports help the nation balance its books. But if the minerals or fruits were to have value added to them before they leave South Africa’s shores, then they would earn a great deal more. Also, more jobs would be created. This is one of the reasons for Special Economic Zones (SEZs). One of them is strategically located along the Maputo Corridor at Nkomazi. Infrastructure to support investment will be built at the SEZ, and different rules will apply in the zone, encouraging investors with less red tape and a focus on a particular economic activity. Tax advantages and proximity to the Port of Matola (Mozambique) should attract investors in the logistics or dry port sectors. The road infrastructure of Mpumalanga is good but it takes a hammering from coal haulage trucks. In successive years, the Provincial Government of Mpumalanga has spent R2.3-billion (2015/16) and R2.4-billion on road maintenance and construction. A huge investment is being made on the railways that run to and through Mpumalanga. This includes upgrading the commuter railway linkages to the province from the province of neighbouring Gauteng and building new railway lines to transport coal through Swaziland and on to either Richards Bay or Maputo. Information and Communications Technology (ICT) is another form of infrastructure that has been receiving investment in recent times. A provincial ICT Strategy has been developed to coordinate and implement steps to improve ICT performance in the province. In addition to provincial and national government spending on infrastructure, MEGA (the provincial government’s economic growth agency) is establishing a Provincial Infrastructure Fund to pool private funds in order to tackle various publicprivate projects. Provincial Premier David Mabuza reported in his State of the Province address in February 2016 that there has been interest in this type of infrastructural investment from China, Italy and Russia. Economy Mpumalanga has rich and varied mineral resources and fertile soil that supports diverse farming. The province is also host to a number of important companies in the manufacturing sector, with internationally renowned firms such as Sasol (synthetic fuels and chemicals) and Xstrata (ferrochrome) having large operations in the province. The steel industry took a knock when Ervaz went into business rescue in 2015. The province’s rich agricultural produce is used by companies such as McCain, Nestlé and PepsiCo and there are also pulp and paper plants (Sappi and Mondi), fertiliser facilities and textile manufacturing concerns. The decision by Sappi to start producing chemical cellulose at its Ngodwana Mill has significantly increased the manufacturing capacity of the province. The country’s major power stations, three of which are the biggest in the southern hemisphere, are located in Mpumalanga. The building of the new Kusile Power Station is one of the biggest current infrastructure projects in the country. New coal mines are under construction and several existing mines are receiving expensive upgrades to enhance productivity and extend their lives. Eskom owns several mines that other MPUMALANGA BUSINESS 2017 12

SPECIAL FEATURE companies run for them, but it wants to change some of its contracts. Sasol, the integrated oil, gas and chemicals company, runs several plants at Secunda. Products manufactured at the complex include synthetic fuel, petroleum, paraffin, jet fuel, creosote, bitumen, diesel and lubricants. The primary feedstock for synthetic-fuel production is coal, and the plant is located in the heart of Mpumalanga’s coalfields. More than 80% of South Africa’s coal is sourced in Mpumalanga, with the town of eMalahleni (Witbank) being the centre of the industry. Other minerals found in the province include gold, platinum-group minerals, chromite, zinc, cobalt, copper, iron and manganese. These minerals support a strong manufacturing sector. The southern half of the eastern limb of the platinum-rich Bushveld Igneous Complex runs south towards the towns of Lydenburg and Machadodorp. Deposits of chromite, magnetite and vanadium in this area are the basis of the ferro-alloy complex in Witbank-Middelburg and Lydenburg. Nkomati Mine is South Africa’s only pure nickel operation. Columbus Stainless in Middelburg is a major producer of stainless steel, while Middelburg Ferrochrome and the Nelspruit-based Manganese Metal Company are among other important, heavy industrial companies. Mining is responsible for 21.8% of provincial GRP, wholesale, retail, catering and accommodation is 13%, manufacturing (12%) and general government services (10.8%) are other major contributors. Finance, real estate and business is 9.4%. Further east and south, sugar is the major crop. The Mpumalanga forestry sector is one of the most important in the country: 11% of the total land area of Mpumalanga is covered either by plantations or natural forests. Geography The geography of the province is sharply delineated by the Drakensberg escarpment, which forms the dividing line between the western grasslands at high altitude (Highveld) and the subtropical component to the east, the Lowveld. The central region of the province is mountainous, with some dramatic landscapes presenting exciting vistas for visitors. The Lebombo Mountains rise in the east. The area south of the capital city of Mbombela (Nelspruit), near Barberton, has some of the world’s oldest rocks forming the Crocodile River Mountains. Most of the province receives summer rainfall, often via thunderstorms. Frost is common on the Highveld, but is almost absent in the subtropical regions where fruit, nuts and citrus thrive. Differences in temperature and rainfall between the Highveld and Lowveld can be considerable. Large parts of the province are located in the so-called Middleveld comprising high-plateau grasslands. Forestry operations are found in central and south-eastern Mpumalanga, but the heart of this important industry is around Sabie in the north-east. Agriculture The southern and northern Highveld regions produce large quantities of field crops such as barley, soya beans, maize, grain and sorghum. Potatoes also flourish in this area. The Nelspruit district in the Lowveld is South Africa’s second-biggest producer of citrus fruit, while vegetables of all sorts do well in this area too. One of the fastest-growing agricultural sectors is macadamia nuts. These are cultivated in the Lowveld and are exported in ever-growing volumes. 13 MPUMALANGA BUSINESS 2017

Other recent publications by Global Africa Network: