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South African Business 2019 edition

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The 2019 edition of South African Business is the seventh edition of this annual guide to business and investment in South Africa. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as Special Economic Zones and African trade provide unique insights, together with comprehensive overviews of critical economic sectors. Other special features focus on the exciting new possibilities in renewable energy, airports as engines of regional growth and the maritime sector as an entirely new prospect for South African entrepreneurs and businesses. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed at


SPECIAL FEATURE and manufacturing. Transnet National Ports Authority is spending heavily on upgrading the nation’s ports. One statistic illustrates the potential: South Africa does maintenance on only 5% of the 13 000 vessels that uses its ports and services 4-5% of the approximately 130 rigs that pass along the coast each year. Large quantities of oil are transported around the Cape of Good Hope every year: 32.2% of West Africa’s oil and 23.7% of oil emanating from the Middle East. South African companies are alert to this potential. More than 7 000 direct jobs were created in the Western Cape ship and rig repair sector in 2015. Port Elizabeth has positioned itself at the centre of the academic side of the Oceans Economy. Nelson Mandela University launched the Ocean Sciences Campus in 2017 and the South African International Maritime Institute (SAIMI) has chosen the city as its base as it sets about supporting the sector through research and training. SAIMI runs the National Cadet Programme which is paid for by the National Skills Fund. The curriculum for these institutions ranges from the law of the sea, shipping and transport, to aquaculture, boat-building, oil and gas exploration, repair and maintenance and environmental management. The university has four marine sector chairs funded by the South African Research Chair Initiative (SARChI) and the National Research Foundation (NRF). Special Economic Zones South Africa has a number of licenced Special Economic Zones (SEZs), some of which are called Industrial Development Zones (IDZs). The best established of these are the coastal IDZs at Saldanha, Coega (Port Elizabeth), East London and Richards Bay. These areas are central to the Oceans Economy strategy because of their strategic positions and the favourable environment created for investment by specific legislation related to SEZ tariffs, tax deductions and grants. The first illustration of national commitment to the strategy came late in 2016 with the allocation by the Department of Energy of two Liquefied Natural Gas (LNG) plant options, one each to the IDZs of Richards Bay and Coega. The Saldanha Bay Industrial Development Zone is central to a plan to grow the oil and gas sectors although it was not allocated a possible LNG plant. Large industrial operations already exist at Saldanha and the Port of Saldanha Bay is the portal for the export of South Africa’s iron ore. The SBIDZ is set to become a hub for a range of maritime repair activities and oil rig maintenance and repair. The ports of Ngqura and East London are well positioned to act as container transit points and the skills set of the Eastern Cape’s workforce, particularly in the automotive and automotive parts sector, could be attractive to repairers and manufacturers in marine subsectors. Both Eastern Cape IDZs have aquaculture sections. The East London IDZ already has investors such as Pure Ocean Aquaculture and Ocean Wise. Durban’s annual throughput of containers is about one-million, more than 60% of the country’s total. As part of Operation Phakisa, the Port of Durban is upgrading its dry dock and buying new cranes to speed up operations. There is also an ambitious plan to dig out the old airport south of the city, connect the big hole to the sea and make it a harbour; this would allow Toyota to roll their new vehicles directly from the factory floor to the hold of a ship. The Port of Durban is already home to a variety of maritime companies. EBH-SA has been in the business marine engineering and repairing ships since it began as Elgin Brown and Hamer in 1878. To improve their competitiveness, three South African shipbuilders (SAS, Damen Shipyards Cape Town and Nautic Africa) have agreed to pool their resources on contracts. Cooperation pacts like this one might be a good template for the nation’s ports and the rig/boat repair and servicing sector. With the Angolan and Mozambique oil and gas industries growing bigger every day, it is unlikely that one port could cope with demand anyway. The Port of Richards Bay has added a new berth on average every second year. It has deepwater infrastructure and the huge Richards Bay Coal Terminal, the country’s primary site of export for coal. The Richards Bay IDZ intends becoming an energy hub. SOUTH AFRICAN BUSINESS 2019 58

FOCUS Partnering for maritime growth SAIMI supports maritime research and innovation. SAIMI hosted maritime business students from the Massachusetts Maritime Academy, USA, on an experiential learning tour in January 2018 to understand the South African maritime sector. Pictured with the group at the Port of Ngqura are (front, from left) senior student Nick Zaia, the academy’s South African-born Dr Portia Ndlovu and Transnet representative Ntshantsha Buyambo. The South African International Maritime Institute (SAIMI) supports research and innovation that will help unlock the growth potential of the local maritime industry. SAIMI worked in collaboration with other research roleplayers to draw up the Maritime Research, Innovation and Knowledge Management Roadmap which presents a vision, and sets objectives and action steps for South Africa to be globally recognised as a maritime nation by 2030. The map provides direction for research, innovation and technology development to support achievement of the Operation Phakisa growth objectives in the Oceans Economy. It also guides SAIMI’s knowledge management strategy. The next step is dissemination and implementation of the road map, and SAIMI is working with the Council for Scientific and Industrial Research (CSIR), universities and leading research centres, to support postgraduate studies and commission new high-level research in key areas. Launched in late 2016, the road map is the result of an extensive review of existing tertiary qualifications, research and innovation activity and current strategies, together with wide-ranging stakeholder consultation in charting the way forward. It is aligned to the vision and objectives of Operation Phakisa in the Oceans Economy and integrates the research and innovation needs of the maritime economy, which takes in everything from aquaculture to tourism, environmental protection to oil and gas exploration, and maritime transport and manufacturing. Another initiative is to drive a maritime awareness campaign to develop a national maritime culture and consciousness, contributing to awareness of maritime economic opportunities, the development of a sustainable blue economy, and the profile of South Africa as a maritime nation. SAIMI also acknowledges the importance of interacting with other major institutions, not only in South Africa, but also on the African continent and in the global maritime industry. Work on SAIMI’s Africa Focus is well underway with leading teams from Kenya, Ghana and Nigeria all part of the research process. Partnerships are also being explored with universities and maritime authorities in China and Southeast Asia. 59 SOUTH AFRICAN BUSINESS 2019

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