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Northern Cape Business 2020/21 edition

  • Text
  • Development
  • Africa
  • Tourism
  • Sectors
  • Agriculture
  • Trade
  • Business
  • Investment
  • Infrastructure
  • Cape
  • Mining
  • African
  • Zinc
  • Kimberley
  • Province
  • Municipality
  • Economic
  • Northern
The 2020/21 edition of Northern Cape Business is the 10th issue of this highly successful publication that has, since its launch in 2009, established itself as the premier business and investment guide for the Northern Cape Province. Officially supported and used by the Northern Cape Department of Economic Development and Tourism, Northern Cape Business is unique as a business and investment guide that focuses exclusively on the province. In addition to comprehensive overviews of sectors of the economy, this publication has a particular focus on specific, packaged, investment opportunities. These include plans for the establishment of Special Economic Zones (SEZs) within the province, which have specific incentives designed to make investment into the Northern Cape even more attractive. The hi-tech exploits of astronomers and engineers in search of a landspeed record are the focus of an article on engineering sector while the rapidly expanding solar energy sector which continues to attract significant capital is discussed in some detail.


SPECIAL FEATURE • Sulphuric acid (including pharmaceutical, automotive batteries and paper 9 bleaching) • Fertiliser • Explosives • Paints There is another category of potential investors in the SEZ who will provide ancillary services to the companies 7 using the by-products of the mine and smelter complex. These include: • Construction • Engineering • Transport • Storage • Housing Engineering & supplies • Mine • Agri • Renewable energy • Transport • Construction Pharmaceuticals & food • Zinc • Food Additives • Hoodia Regional Exports 8 Agriculture • Agriculture supplies • Agriculture volume consolidation • Agriculture processing & packaging 10 6 Manufacturing • Galvanising-Steel, wire, tube • Super alloys-automotive, nuclear • Batteries • Roofing Localisation & Supplier Development • Incubator • Skills Development Regional Inputs NAMAKWA SEZ Economic Cluster A third category of investor will provide power, over and above what is available from the national grid. All of the enterprises within the SEZ will require power, so the opportunity exists for independent power producers to propose alternative energy sources. The Northern Cape is already the country’s leading province with regard to solar power, and there are also a number of windpower projects operating throughout the province. A total of 18 investments were made into the province between January 2011 and March 2016. Companies from a wide array of countries were among the successful investors including Enel Green Power (Italy), ACWA Power International (Saudi Arabia), Mainstream Renewable Power (Ireland) and Accione (Spain). 1 Mining • Zinc • Granite • Copper • Rare Earth • Rose Quartz • Slate 5 Transport • Mine & Agriculture • Regional • Depot + Services • Agri consolidation 3 Petro-chemical • Sulphuric acid • Fertilizer • Explosives • Paints • Hydrogen production • Fertilizer Phosphates 2 Mineral Processing • Zinc processing plant • Zinc smelter • Copper processing plant Contruction • Mine • Smelter • Housing • Regional • Harbour • Dam 4 Regional Consolidation Benefits of SEZ investment The planned Namakwa SEZ reflects a trend in South African industrial planning. National government is supporting the idea of creating industrial parks and SEZs as a means to cluster together businesses that can benefit from proximity to one another and as a way to boost local manufacturing through incentives and tax rebates. The policy aims to attract new skills and develop new industries. SEZs are created in terms of an act of the national parliament, the Special Economic Zones Act of 2014 (Act 16 of 2014). The act defines an SEZ as “geographically designated areas of the country that are set aside for specifically targeted economic activities and supported through special arrangements and systems that are often different from those that apply to the rest of the country”. Lower corporate tax rates and duty-free imports NORTHERN CAPE BUSINESS 2020/21 16

SPECIAL FEATURE are among the advantages that accrue to investors. Key goals behind the establishment of SEZs are: • To encourage industries to develop in clusters, leading to economies of scale, skillssharing and easier access by suppliers • To create industrial infrastructure to promote investment • To promote cooperation between the public and private sectors • To use the zones as a launching pad for other developments. Apart from attracting foreign direct investment and boosting employment, SEZs can also play a role in adding new sectors or subsectors to an economy. Various industrial parks (private or public) are pursuing similar goals. The emphasis in most of these initiatives is on beneficiation, mainly of minerals but also of agricultural products. South Africa’s most recent Industrial Policy Action Plan has a manufacturing focus, so beneficiation supports the diversification of the economy and strengthens the country’s ability to make things. The current suite of incentives consists of tax incentives, administered by SARS; grants, administered by the DTIC; and various incentives offered by the municipalities where the SEZ is located. The SARS-administered tax incentives are as follows: • Corporate Income Tax Incentive: Businesses located in a SEZ may be eligible for a reduced rate of 15 percent. • Building Allowance: Businesses and operators may be eligible for the building allowance which allows companies to reduce their taxable income linked to expenditure incurred on the cost of any new or unused building or improvement. This allowance may be claimed at a rate of 10% per annum. • Employment Tax Incentive: Allows employers hiring people, regardless of age, to reduce the amount of employees’ tax paid on behalf of their employees whilst leaving the wage received by the employee unaffected. It allows employers hiring people to reduce the amount of employees’ tax paid by the employer. This creates a cost-sharing mechanism between employers and government. • Customs and Excise Incentive: Goods imported into a customscontrolled area (CCA) situated in a SEZ are relieved from applicable import customs, excise duties and economic restrictions whilst stored and undergoing manufacturing (which includes processing, cleaning and repair) within the CCA. Goods manufactured in the CCA and subsequently supplied to the local domestic market are subject to the payment of the import customs and excise duties that were relieved at time of importation on the imported goods (raw materials). The liability for customs and excise duties, which enjoyed relief on imported goods used in manufacturing in the CCA, cease upon subsequent export. • Value-Added Tax Incentive: Goods and services that are acquired from the domestic market are charged with VAT at 0% and the import of goods is exempt from VAT. This applies only in the SEZs CCA. ■ * This information is taken from the Draft Scoping Report, Non- Technical Summary, prepared by SLR Consulting, January 2020. Contact Details Address: Northern Cape Department of Economic Development and Tourism, Metlife Towers, Corner Stead and Knight Street, Kimberley 8300 Enquiries: Riaan Warie (Director: Trade & Investment Promotion) Tel: +27 87 310 7683 • Fax: +27 53 831 3668 Fax2email: 086 641 9321 • Cell: 079 877 2828 Email: or Website: Enquiries: Mr Hendrik Louw (Director: Regional Economic Development) Email: Tel: +27 53 802 1638 • Cell: +27 81 323 2533 17 NORTHERN CAPE BUSINESS 2020/21

Other recent publications by Global Africa Network:

African Business 2020 edition
South African Business 2020 edition
KwaZulu-Natal Business 2020-21 edition
Northern Cape Business 2020/21 edition
Eastern Cape Business 2020 edition
Western Cape Business 2020 edition
Free State Business 2020 edition
Mpumalanga Business 2019/20 edition
Limpopo Business 2019-20 edition
Gauteng Business 2019-20 edition
KwaZulu-Natal Business 2019-20 edition
Northern Cape Business 2019/20 edition
Free State Business 2019 edition
Eastern Cape Business 2019 edition
North West Business 2019 edition
Western Cape Business 2019 edition
South African Business 2019 edition
Limpopo Business 2018-19 edition
Mpumalanga Business 2018-19 edition
Northern Cape Business 2018-19 edition
Gauteng Business 2018-19 edition
KwaZulu-Natal Business 2018-19 edition
Eastern Cape Business 2018 edition
North West Business 2018 edition
Western Cape Business 2018 edition
Free State Business 2018 edition
South African Business 2018 edition
Limpopo Business 2017-18 edition
Mpumalanga Business 2017-18 edition
Gauteng Business 2017-18 edition
KwaZulu-Natal Business 2017-18 edition
Northern Cape Business 2017-18 edition
North West Business 2017 edition
Free State Business 2017 edition
Eastern Cape Business 2017 edition
Western Cape Business 2017 edition
South African Business 2017 edition
Mpumalanga Business 2017 edition
Limpopo Business 2016-17 edition
KwaZulu-Natal Business 2016-17 edition
South African Business 2016 edition
Gauteng Business 2016 edition
Eastern Cape Business 2016 edition