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Western Cape Business 2021

  • Text
  • Tourism
  • Renewables
  • Energy
  • Transport
  • Business
  • Investment
  • Oil
  • Gas
  • Agriculture
  • Port
  • Overview
  • Economic
  • Manufacturing
  • Nedbank
  • Provincial
  • African
  • Banking
  • Sector
  • Western
  • Cape
The 2021 edition of Western Cape Business is the 14th issue of this highly successful publication that, since its launch in 2005, has established itself as the premier business and investment guide for the Western Cape. The Western Cape has several investment and business opportunities. In addition to the regular articles providing insight into each of the key economic sectors of the province, a special feature on thriving agricultural exports gives insight into the details of what fruits and wines go where. An interview with the Port Manager of the Port of Cape Town provides more understanding of the scale of the logistics operation that is a major port. Another special feature examines the City of Cape Town as a national headquarters for the thriving asset management sector. The cover picture reflects an exciting new find of gas condensate off the south-eastern coast, a potential game-changer for the Western Cape and South African economies. This new development is covered in the overview of the oil and gas sector.

OVERVIEW Banking and

OVERVIEW Banking and financial services The Western Cape has the digital edge. The potential for disruption in the banking and financial services sector is almost limitless. The Western Cape’s evolution into a technology hub helps to explain why banks, insurance providers, asset managers and venture capitalists are increasingly choosing to make their headquarters there. There are more than 40 000 jobs in the technology sector (more than double the total of Nairobi and Lagos combined, Wesgro) and formal employment in the financial sector exceeds 50 000. Together with business services, the financial sector comprises the biggest contributor to the provincial economy. According to Wesgro, 75% of the venture capital deals that happen in South Africa originate in the Western Cape. Most financial firms based in Cape Town have a long history, some going back as far as 1845 when Old Mutual started. One of the most successful disruptors in recent times has been Stellenbosch-based Capitec Bank, which is steadily increasing its customer base by providing banking for business and individual customers in what it describes as a simple manner. In May 2020, investment holding company PSG announced that it would reduce its holding in Capitec Bank from 32% to 4%, earning about R4-billion by selling those shares. Another banking newcomer, Tyme, reported in October 2020 that it had 2.4-million customers, up from 1.4-million at the end of March. A 400% increase in the use of services such as airtime and electricity purchases was also noted. Discovery Bank officially launched in March 2019 and is experiencing rapid growth with deposits of R3.7-billion. Discovery Bank is applying the behavioural model it uses in its health business to reward good financial behaviour. The African Institute of Financial Markets and Risk Management (AIFMRM) aims is to meet the demands for skills by developing local talent. It is supported by the Western Cape Provincial Government, the University of Cape Town, Barclays Africa Group, FirstRand and Liberty. ONLINE RESOURCES Banking Association South Africa: www.banking.org.za Financial Sector Conduct Authority: www.fsca.co.za Insurance Institute of South Africa: www.iisa.co.za South African Institute of Chartered Accountants: www.saica.co.za SECTOR INSIGHT PSG is reducing its stake in Capitec. The head offices of financial firms are dotted all over Cape Town. These include Old Mutual and Foord (Pinelands), Futuregrowth and Coronation (Newlands), Prudential (Claremont), Sygnia (Green Point), Sanlam (Bellville) and Allan Gray (Waterfront). PSG has its headquarters in Stellenbosch and is well represented in rural towns. Insurers such as Santam and Metropolitan Life are based in Bellville. A newcomer to the Cape financial services sector is Nomura, a Japanese financial holding company. The green bond issued by the City of Cape Town is a sign of the climate change times. South Africa’s third-ever green bond attracted bids over R4-billion on an initial offering on projects worth R1-billion. The lead arranger for the bond was Rand Merchant Bank. ■ WESTERN CAPE BUSINESS 2021 44

Development finance and SMME support Entrepreneurs are saving the environment. OVERVIEW Small businesses in the Breede River and Riviersonderend catchment areas are making money from clearing invasive species. Avocado Vision has developed a “Green Business Value Chain” in partnership with the Department of Environment, Forestry and Fisheries, environmental organisations and corporates. By turning the unwanted species into sought-after products, a sustainable business is created while simultaneously replenishing water-table levels and restoring grasslands. About 200 species are regarded as invasive and work is being done with 120 SMMEs across South Africa to identify opportunities. The Western Cape Government runs a Premier’s Advancement of Youth Internship Programme which in 2019 had 1 118 participants. There are several Youth Cafes in different parts of the province, where unemployed young people can get advice and training and have access to computers and WiFi. Many startups find the cost of finding and hiring premises prohibitive. Flexible working spaces such as those offered by Workshop17 offer a solution. The company has sites in Paarl, the Gardens and at the Watershed at the V&A Waterfront. The Watershed itself is a popular venue for designers and crafters to display their wares. More than 90% of stock sold out of the Watershed is made locally and some design companies, such as leather product maker Wolf and Maiden, have moved into more exclusive retail space elsewhere in the Waterfront. A study has shown that revenue earned by small enterprises at the V&A Waterfront in 2018 was R329-million, up from R78-million in 2007. Two of the Western Cape’s universities, Stellenbosch and Cape Town, are the first collaborators with the University Technology Fund which aims to commercialise innovations and inventions coming out of tertiary institutions. The UTF will have considerable financial clout as it is a part of the South African SME Fund, an offshoot of the CEO Initiative which ONLINE RESOURCES SA SME Fund: sasmefund.co.za Small Enterprise Development Agency: www.seda.co.za Small Enterprise Finance Agency: www.sefa.org.za SECTOR INSIGHT Workshop17 has three flexible working spaces in the Western Cape. brought together 50 major corporations, the Public Investment Corporation, the Unemployment Insurance Fund and the Compensation Commission. Among the businesses receiving support from the SA SME Fund are Masisizane which helps black entrepreneurs buy petrol stations and Hyrax, a company which emerged from research done at the University of the Western Cape into which HIV-positive people were resistant to certain drugs. The National Department of Small Business Development (DSBD) has several programmes to assist SMMEs and cooperatives. The Small Enterprise Development Agency is an agency of the DSBD and gives non-financial support to entrepreneurs through training, assistance with filling in forms, marketing and creating business plans. Seda has established a Rapid Incubator in partnership with the Centre for Entrepreneurship (CFE) at False Bay TVET College, Westlake Campus.■ 45 WESTERN CAPE BUSINESS 2021

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