Mpumalanga Business 2018-19 by Global Africa Network Media

2018/19 EDITION

MPUMALANGA BUSINESS THE GUIDE TO BUSINESS AND INVESTMENT IN MPUMALANGA PROVINCE

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MP U MA L A NGA

SASOL SECUNDA OPERATIONS

The core of Sasol’s Southern African Operations

Sasol is an international integrated chemicals and energy company. Through our talented people, we use selected technologies to safely and sustainably source, produce and market chemical and energy products competitively to create superior value for our customers, shareholders and other stakeholders. The company's Secunda Operations are the core of Sasol's Southern African Operations, producing a wide range of petroleum products including diesel, petrol and jet fuel, as well as chemical products which include ethylene, propylene and ammonia value chains. The operations contribute to job creation, sustainable development and security of supply in chemicals and energy. The site is host to the following entities: Sasol Mining, Secunda Synfuels Operations, Secunda Chemicals Operations, Sasol Energy and Group Technology. Sasol Mining operates ve coal mines in Mpumalanga that supply feedstock for the Secunda Synfuels Operations complex. The coal is mainly used as gasication feedstock and to generate electricity. Sasol Mining also exports coal from its Twistdraai Export Plant to international power generation customers. As some of these mines are approaching the end of their useful lives, new developments are underway to ensure continued supply through the company's Mine replacement programme. Secunda Synfuels Operations operates the world's largest coal-to-liquid manufacturing facility, producing synthesis gas (syngas) through coal gasication and natural gas reforming. The operating hub uses proprietary technology to convert syngas into synthetic fuel components, pipeline gas and feedstock for producing chemicals. Secunda Chemicals Operations is a large-scale integrated chemical product manufacturing facility that produces and adds further value to the Sasol chemicals value chains. Secunda Chemicals Operations also provides Sites Services, Infrastructure Maintenance and Product Logistics Services for the Secunda site. The Energy Business is key to Sasol's growth aspirations inside and outside South Africa, manages the marketing and sales of all Sasol’s oil, gas and electricity products in Southern Africa. Group Technology manages Sasol's research and development, technology innovation and management, engineering services and capital project management portfolios. The function contributes towards Sasol's fuels and chemicals businesses to maintain growth and sustainability through appropriate technological solutions and services. As an active corporate citizen, Sasol invests meaningfully in communities close to its operations with the main objective of sustainably contributing to the broader socioeconomic development of the Mpumalanga province as well as South Africa.

For more information visit www.sasol.com.

CONTENTS

CONTENTS Mpumalanga Business 2018/19 Edition.

Introduction Foreword 6 A unique guide to business and investment in Mpumalanga. Mpumalanga Economic Growth Agency (MEGA) Driving trade and investment in Mpumalanga.

Special features Regional overview A new World Heritage Site will boost regional tourism.

Investment incentives 16 A range of incentives are available to investors, companies, entrepreneurs and co-operatives. Establishing a business South Africa has eased the barriers to doing business for locals as well as international companies and individuals.

Mpumalanga’s major projects Mpumalanga’s mega projects aim to attract investors in a wide range of sectors.

Economic sectors Agriculture and agri-processing Macadamia nut production is expanding every year.

Mining 33 The provincial government may start a mining company. Forestry and paper Sustainable resource management is a priority for timber companies.

Oil and gas A natural gas pipeline runs to Mpumalanga’s Special Economic Zone.

MPUMALANGA BUSINESS 2018/19

CONTENTS Water 44 Nearly R2-billion is to be spent on bulk water and sanitation. Manufacturing 48 Highveld steel works lives again as an industrial park. Transport and logistics The Moloto Corridor is a key regional route.

Tourism 52 A famous old bridge is the setting for the Kruger National Park’s newest luxury accommodation. Banking and financial services All the major banks have agricultural divisions.

Development finance and SMME support A small loan can make a big difference.

Education and training The University of Mpumalanga is expanding.

Government Mpumalanga Provincial Government An overview of the Mpumalanga provincial government departments.

Mpumalanga Local Government An overview of Mpumalanga municipalities.

References Sector contents

Index 64 Maps Mpumalanga municipal map.

ABOUT THE COVER: Credit: Sasol. The Sasol Octene plant. The Sasol complex at Secunda is one of the most significant features of the Mpumalanga economy.

MPUMALANGA BUSINESS 2018/19

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FOREWORD

Mpumalanga Business A unique guide to business, investment and tourism in Mpumalanga.

CREDITS Publisher: Chris Whales Publishing director: Robert Arendse Editor: John Young

he 2018/19 edition of Mpumalanga Business is the ninth issue of this highly successful publication that since its launch in 2008 has established itself as the premier business and investment guide for the province. Mpumalanga has several investment and business opportunities in a wide range of sectors. In addition to the regular articles providing insight into each of the key economic sectors of the province, there are special features on major projects in Mpumalanga and informative articles on what incentives are available to investors and how to establish a business in South Africa. The Mpumalanga Economic Growth Agency (MEGA) outlines in this journal what lies in store for potential investors in the province. To complement the extensive local, national and international distribution of the print edition, the full content can also be viewed online at www.mpumalangabusiness.co.za. Updated information on Mpumalanga is also available through our monthly e-newsletter, which you can subscribe to online at www.gan.co.za, in addition to our complementary business-to-business titles that cover all nine provinces as well as our flagship South African Business title.

Online editor: Christoff Scholtz

Chris Whales Publisher, Global Africa Network Media Email: chris@gan.co.za

Manager: Edward MacDonald

DISTRIBUTION Mpumalanga Business is distributed internationally on outgoing and incoming trade missions; through the Mpumalanga Economic Growth Agency (MEGA); at top national and international events; through the offices of foreign representatives in South Africa; as well as nationally and regionally via chambers of commerce, tourism offices, trade and investment agencies, airport lounges, provincial government departments, municipalities and companies.

Design: Tyra Martin Production: Lizel Olivier Ad sales: Sydwell Adonis, Joseph Gumbo, Gavin van der Merwe, Sam Oliver, Gabriel Venter, Siyawamkela Sthunda, Vanessa Wallace, Jeremy Petersen, Shiko Diala and Reginald Motsoahae Managing director: Clive During Administration & accounts: Charlene Steynberg and Natalie Koopman Distribution & circulation

Printing: FA Print

PUBLISHED BY Global Africa Network Media (Pty) Ltd Company Registration No: 2004/004982/07 Directors: Clive During, Chris Whales Physical address: 28 Main Road, Rondebosch 7700 Postal address: PO Box 292, Newlands 7701 Tel: +27 21 657 6200 | Fax: +27 21 674 6943 Email: info@gan.co.za | Website: www.gan.co.za ISSN 2222-3274

Member of the Audit Bureau of Circulations COPYRIGHT | Mpumalanga Business is an independent publication published by Global Africa Network Media (Pty) Ltd. Full copyright to the publication vests with Global Africa Network Media (Pty) Ltd. No part of the publication may be reproduced in any form without the written permission of Global Africa Network Media (Pty) Ltd. . PHOTO CREDITS | Pictures supplied Anglo American Coal, Artographers/ Graskop Gorge Lift Company, Barberton Makhonjwa Mountains Lands World Heritage Site Project (BMML), Columbus Stainless, Chris Kirchoff/ Brand SA, Federale Stene, Highveld Industrial Park, MEGA, iStock, Raubex, Sasol, SA Tourism, Thebe Tourism Group, TWK Agri.

MPUMALANGA BUSINESS 2017/18

Art director: Brent Meder

DISCLAIMER | While the publisher, Global Africa Network Media (Pty) Ltd, has used all reasonable efforts to ensure that the information contained in Mpumalanga Business is accurate and up-to-date, the publishers make no representations as to the accuracy, quality, timeliness, or completeness of the information. Global Africa Network will not accept responsibility for any loss or damage suffered as a result of the use of or any reliance placed on such information.

A REGIONAL OVERVIEW OF

MPUMALANGA

A new World Heritage Site will boost regional tourism. By John Young

he decision by UNESCO to afford World Heritage Site status to the Makhonjwa Mountains near Barberton will boost geological tourism to the province and supports the efforts of the province to diversify its offering. Major projects to improve tourist experiences are underway at the Graskop Gorge (where a transparent lift takes tourists into the depths of the gorge), a skywalk is to be built at God’s Window and a cable car is planned for Three Rondavels. The international body’s decision has also had the effect of expanding the curriculum at the relatively new University of Mpumalanga. On the basis of the UNESCO ruling, UMP will offer geology as part of a BSc in 2019, to supplement existing courses in education, agriculture and hospitality. Several investment projects aimed at providing infrastructure in the tourism sector have been put MPUMALANGA BUSINESS 2018/19

forward by the Mpumalanga Economic Growth Agency (MEGA). Mpumalanga hosted the 2017 National World Tourism Day in September, an event which was intended to move an already healthy economic sector into an even bigger creator of wealth and jobs. Heritage and cultural tourism are in the spotlight because Mpumalanga is already a leader in nature reserves and parks. There is a special focus on BRICS countries and provincial authorities are investigating a tourism airlift route between Moscow and Mpumalanga. Mpumalanga has rich and varied mineral resources and fertile soil that supports diverse farming operations. South Africa’s major power stations, three of which are the biggest in the southern hemisphere, are in Mpumalanga. The building of the new Kusile power station is one of the biggest infrastructure projects in the country’s history.

SPECIAL FEATURE The province also hosts large companies in the manufacturing sector, with internationally renowned firms such as Sasol (pictured below, mining, synthetic fuels and chemicals) and Xstrata (ferrochrome) having large operations in the province. Columbus Stainless in Middelburg is a major producer of stainless steel, while Middelburg Ferrochrome, Thos Begbie and the Nelspruit-based Manganese Metal Company are among other important heavy industrial companies. 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 dissolving wood pulp at its Ngodwana Mill has significantly increased the manufacturing capacity of the province. York Timbers is a leading forestry company and the sugar mills and refinery of RCL Foods (formerly TSB Sugar) are large contributors to the provincial economy. 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 syntheticfuel production is coal, and the plant is 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 Metals, chromite, zinc, cobalt, copper, iron and manganese. 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.

Beneficiation of minerals and agricultural produce The Nkomazi Special Economic Zone and the International Fresh Produce Market are two major initiatives which aim to drive economic growth, boost value addition within the province and create jobs. A major goal of the provincial government’s Mpumalanga Economic Growth and Development Path (MEGDP) is to expand the industrial base of the provincial economy. The focus is on beneficiation, agri-processing and value-chain development. These projects are the subject of a separate article elsewhere in this publication. The biggest companies in Mpumalanga’s most significant sectors have been investing heavily in infrastructure and operations. Global energy and chemicals company Sasol regularly spends tens

MPUMALANGA BUSINESS 2018/19

SPECIAL FEATURE of millions on upgrades and improvements at its Secunda complex. The Sasol Synfuels refinery is the only commercial coal-to-liquid fuel plant in the world and constitutes a key component in South Africa’s oil and gas sector. In July 2017 Sasol announced that the synfuel plant produced a record annual output. Sasol Mining is also very active in the province: just three projects with which it is currently engaged are valued at more than R8-billion. Exxaro Resources is investing R3.8-billion in a new mine at Belfast. Another global giant, Sappi, has invested heavily in the conversion of its massive Ngodwana Mill and other companies in the paper and forestry field such as Mondi and York Timbers make large contributions to the province’s economic growth. The restarting of the Evraz Highveld steel mill in 2017 was particularly good news, after the company went into business rescue two years before. ArcelorMittal South Africa is supplying feedstock to the mill and has an option to purchase. However, operations will be reduced significantly, whatever option is pursued. This has opened up an opportunity on the property on which the steel mill operated. It has been rebranded the Highveld Industrial Park and is inviting manufacturers, distributors and commercial enterprises to set up shop in a well-resourced area with excellent infrastructure and logistics links. The Provincial Government of Mpumalanga has been talking to several foreign countries about investments in the province. An assembly plant for

Minsk Tractor Works is one of the outcomes of this activity, and several agreements relating to training and trading have been signed. Russia, Belarus, China and Oman are some of the countries that Mpumalanga is engaged with. Overseeing infrastructure development in the province is the responsibility of the Department of Public Works Roads and Transport, which must ensure that various departments’ projects are coordinated. When it comes to major projects, a new unit will be established in the Office of the Premier, the Provincial Project Management Unit. A large 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 in Mozambique. 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.

Geography The Drakensberg escarpment sharply divides 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 dramatic landscapes presenting exciting vistas for visitors. The Lebombo Mountains rise in the east. The southern and northern Highveld regions produce large quantities of field crops such as barley, soybeans, maize, grain and sorghum. Potatoes also flourish in this area. 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. One of the fastest growing agricultural sectors is macadamia nuts. These are cultivated in the Lowveld and are exported in ever-

Columbus Stainless runs the only stainless-steel mill in Africa.

MPUMALANGA BUSINESS 2018/19

SPECIAL FEATURE growing volumes. The Nelspruit district in the Lowveld is South Africa’s second-biggest producer of citrus fruit. The Graskop Gorge Lift Company has built a dramatic way to view the “Edge of the Lowveld” (pictured). Large parts of the province are in the so-called Middleveld comprising high-plateau grasslands. Forestry operations are found in central and southeastern Mpumalanga, but the heart of this important industry is around Sabie in the east. 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. Large sugar operations are found in the south-east of the province. The province has excellent roads and railway connections and is well served by airports, airstrips and heliports. The Kruger Mpumalanga International Airport and Hoedspruit Airport are the province’s two main airports. The Maputo Development Corridor is a transportation corridor comprising road, rail, border posts, port and terminal facilities, running from Pretoria in Gauteng through Mpumalanga to the Port of Maputo in Mozambique. The corridor supports high volumes of cross-border freight services. Industry and tourism benefit from the concentration of resources and ease of transportation. This international initiative emphasises Mpumalanga’s excellent location as a logistics and transport hub.

MPUMALANGA BUSINESS 2018/19

MPlJM/\1 /\ GA PLACE OF THE l�IN SUN

@mega_mpumalanga

@MEGAMpumalanga

Tel: +27 (0) 13 755 6328 Fax: 013 755 1756 eMail: info@mega.gov.za

Mpumalanga Economic Growth Agency

www.mega.gov.za

MPUMALANGA BUSINESS 2018/19

The provincial economy is highly diverse with signicant activity in mining, agriculture, stainless-steel production, petrochemicals, pulp and paper, manufacturing and tourism. Mpumalanga's position and resources make it a valuable transport and logistics hub. In addition to good infrastructure, abundant natural resources and fertile soils, the province also boasts great scenic beauty, making it a desirable place in which to live and work. The Mpumalanga Economic Growth Agency (MEGA) facilitates investment in the province and is always keen to talk to potential investors.

Maputo Development Corridor

Special Economic Zone

The Maputo Development Corridor (MDC) is a Spatial Development Initiative linking Gauteng, Mpumalanga, the Nkomazi SEZ and the Port of Maputo in Mozambique. The MDC incor porates road, rail, the SEZ, border posts, port and terminal facilities along one of the most industrialised strips in Southern Africa.

The Nkomazi Special Economic Zone (SEZ) is positioned on the Maputo Development Corridor in the border town of Komatipoort (which straddles Mpumalanga Province and Mozambique).

The longest part of the corridor runs through Mpumalanga Province. Infrastructure along the corridor has been upgraded and it provides investors and exporters with good access to the markets of East Africa, the Indian Ocean rim and East Asia. The MDC forms part of a greater transport axis that seeks to link the Atlantic and Indian oceans via Southern Africa and a network of corridors exists in the region.

SOUTH AFRICA

LYDENBU MIDDELBURG

JOHANNESBURG

Other identified opportunities in the SEZ include mining services, mineral beneficiation, agro-processing (which could leverage the provincial citrus and sugar industries) and activities relating to import, distribution and local manufacture of automobiles. SEZs are a key initiative of the South African government and the Department of Trade and Industry (the dti) is making a package of tax incentives available to qualifying companies located in approved SEZs.

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MPUMALANGA ECONOMIC GROWTH AGENCY The Mpumalanga Economic Growth Agency (MEGA) is the official Economic Development Agency of the Provincial Government of Mpumalanga. The Maputo Development Corridor (MDC) is a Spatial Development Initiative linking Gauteng, Mpumalanga, the Nkomazi SEZ and the Port of Maputo in Mozambique. The MDC incorporates road, rail, the SEZ, border posts, port and terminal facilities along one of the most industrialised strips in Southern Africa. The longest part of the corridor runs through Mpumalanga Province. Infrastructure along the corridor has been upgraded and it provides investors and exporters with good access to the markets of East Africa, the Indian Ocean rim and East Asia. The MDC forms part of a greater transport axis that seeks to link the Atlantic and Indian oceans via Southern Africa and a network of corridors exists in the region. MEGA offers a range of services relating to trade promotion, investment, funding and property management.

Population: 4.1 million

Trade promotion

Area covered 83 000km2.

Export and import enquiries Market information and contacts Advice on customs duties and foreign trade documentary requirements Market research Information on regional trade issues and preferential trade agreements Organising foreign trade and investment Missions and exhibitions Providing counselling and training to SMMEs regarding export issues Advising local business on technical trade issues Promoting and facilitating provincial access to Export Marketing and Investment Assistance Scheme Promoting and facilitating provincial access to the Sector Specific Assistance Scheme (SSAS)

Investment promotion

Targeting investors via the media, the MEGA website, incoming and outgoing delegations, foreign embassies, exhibitions, chambers of commerce and municipalities Facilitating feasibility studies Providing investment information, intelligence and research Assisting with obtaining factory space and/or land Advising on commercial statutory requirements Facilitating joint ventures via the identification of local partners Providing opportunities for emerging B-BBEE businesses Assisting in identifying potential suppliers of raw materials and feedstock Assisting with the lodging of investment incentive claims with the dti

MPUMALANGA BUSINESS 2018/19

Funding MEGA funds SMMEs and businesses that specialise in agro-processing, mining, energy, manufac turing, construction, trade, transport, forestry, services, government and community. Preference is given to businesses owned by historically disadvantaged individuals.

Property management MEGA owns and manages a number of industrial and commercial properties around the province. The Property Development and Management Programme is geared to build and maintain a property portfolio that can: • Generate income • I lelp to achieve organisational sustainability • ,acilitate employment creation

Our commitment MEGA is focused on customer needs and provides innovative solutions with a high level of service. Don't hesitate to make contact if you are inter ested in exploring some of the opportunities that Mpumalanga offers.

Cor.1tact ir.1fo Mega Head Office ABSA Square Building, 20 Paul Kruger Street, Mbombela, 1200, Mpumalanga, South Africa Postal Address: PO Box 5838, Mbombela, 1200 Tel:+27 13 752 2440 eMail: trade-invest@mega.gov.za [kandustria Office (Bronkhorstspruit) 215 Iridium St, Ekandustria, Bronkhorstspruit, 1028 lei:+ 27 13 933 3421 eMail: phineas.makgopela@mega.gov.za Secunda Office Office A, Secunda Town Centre, Rautenbach Street, Secunda, 2302 Tel:+27 (0) 17 634 8458 cMail: nimrode.dlamini@mega.gov.za Siyabuswa Office Siyabuswa Shopping Centre, Main Road, Siya buswa, Dr JS Moroka Rural, 0472 lei: +27 13 973 1049 eMail: lazarus.mahlangu@mega.gov.za Johannesburg Office 33 Scott Street,Waverley, Johannesburg, South Africa lei:+27 83 469 6899 cMail: liying.dong@mega.gov.za

The Mpumalanga Economic Growth Agency (MEGA) facilitates investment in the province and is always keen to talk to // potential investors.

South African investment incentives The South African government, particularly the Department of Trade and Industry, has a range of incentives available to investors, existing companies, entrepreneurs and co-operatives across many sectors.

• Conceptualisation of the project –

outh Africa wishes to diversify its economy and incentives are an important part of the strategy to attract investors to the country. The Department of Trade and Industry (the dti) is the lead agency in the incentives programme, which aims to encourage local and foreign investment into targeted economic sectors, but the Industrial Development Corporation (IDC) is the most influential funder of projects across South Africa. There a variety of incentives available and these incentives can broadly be categorised according to the stage of project development: MPUMALANGA BUSINESS 2018/19

including feasibility studies and research and development (grants for R&D and feasibility studies, THRIP, Stp, etc) • Capital expenditure – involving the creation or expansion of the productive capacity of businesses (MCEP, EIP, CIP, FIG, etc) • Competitiveness enhancement – involving the introduction of efficiencies and whetting the competitive edge of established companies and commercial or industrial sectors (BBSDP, EMIA, CTCIP, etc)

SPECIAL FEATURE • Some of the incentives are sector-specific, for

• Co-operative Incentive Scheme, which is a 90:10

example the Aquaculture Development and Enhancement Programme (ADEP), Clothing and Textile Competitiveness Improvement Programme (CTCIP) and the Tourism Support Programme (TSP).

matching cash grant for registered primary co-operatives • Sector Specific Assistance Scheme, which is a reimbursable 80:20 cost-sharing grant that can be applied for by export councils, joint action groups and industry associations.

Manufacturing Incentives for SMMEs Key components of the incentive programme are the Manufacturing Incentive Programme (MIP) and the Manufacturing Competitiveness Enhancement Programme (MCEP). The initial MCEP, launched in 2012, was so successful that it was oversubscribed with almost 890 businesses receiving funding. A second phase of the programme was scheduled for launch in 2016. The grants are not handouts as the funding covers a maximum of 50% of the cost of the investment, with the remainder to be sourced elsewhere. The Enterprise Investment Programme (EIP) makes targeted grants to stimulate and promote investment, BEE and employment creation in the manufacturing and tourism sectors. Aimed at smaller companies, the maximum grant is R30-million. Specific tax deductions are permissible for larger companies investing in the manufacturing sector under Section 12i of the Income Tax Act.

A lot of emphasis is placed on the potential role of small, medium and micro enterprises in job creation and a number of incentives are designed to promote the growth of these businesses. These include: • Small Medium Enterprise Development Programme (SMEDP) • Isivande Women’s Fund • Seda Technology Programme (Stp). • Seda is the Small Enterprise Development Agency, an agency of the Department of Small Business Development that exists to promote SMMEs.

Trade-related incentives The Export Marketing and Investment Assistance (EMIA) Scheme includes support for local businesses that wish to market their businesses internationally to potential importers and investors. The scheme offers financial assistance to South Africans travelling or exhibiting abroad as well as for inbound potential buyers of South African goods.

Other incentives Other incentives available to investors and existing businesses in more than one sector include the: • Technology and Human Resources for Industry Programme (THRIP) • Support Programme for Industrial Innovation (SPII) • Black Business Supplier Development Programme (BBSDP), which is a cost-sharing grant offered to black-owned small enterprises • Critical Infrastructure Programme (CIP) that covers between 10% and 30% of the total development costs of qualifying infrastructure

ONLINE RESOURCES Department of Trade and Industry: www.thedti.gov.za Industrial Development Corporation: www.idc.co.za Mpumalanga Economic Growth Agency: www.mega.gov.za Official South African government incentive schemes: www.investmentincentives.co.za

MPUMALANGA BUSINESS 2018/19

Establishing a business in SA South Africa has eased the barriers to doing business in South Africa for locals as well as international companies and individuals.

Bank account A business bank account must be opened in the company’s name with a bank in South Africa.

outh Africa has a sophisticated legal, regulatory and banking system. Setting up a business in South Africa is a relatively straight-forward process with assistance being offered by organisations such as the Department of Trade and Industry and provincial investment agencies like the Mpumalanga Economic Growth Agency (MEGA). South African law regulates the establishment and conduct of businesses throughout the country. Tax, investment incentives, regulations governing imports, exports and visas are uniform throughout the country. The particular environment varies from province to province with regard to the availability of human and natural resources, the infrastructure and support services, business opportunities and the quality of life. In this respect, MEGA can offer specific advice about the business environment in the province. Business is regulated by the Companies Act and the Close Corporation Act, which cover accounting and reporting requirements. Under new legislation, no new Close Corporations can be created but CCs can convert to companies.

Registration with the receiver of revenue • As a Provisional Taxpayer • As a VAT vendor • For Pay As You Earn (PAYE) income tax payable on money earned by employees • For Standard Income Tax on Employees Registration with the Department of Labour Businesses employing staff will have to contact the Department of Labour regarding mandatory contributions to the Unemployment Insurance Fund (UIF). Register with Compensation Commissioner for Compensation Fund: Files with the Compensation Fund (in the Department of Labour) for accident insurance (Workmen’s Compensation). Registration with the local authority Relevant only to businesses dealing in fresh foodstuffs or health matters. Other procedures • Checking exchange control procedures (note that non-residents are generally not subject to exchange controls except for certain categories of investment) • Obtaining approval for building plans • Applying for industry and export incentives

Registration of company The company must be registered with the Companies and Intellectual Properties Commission, (CPIC) in Pretoria within 21 days of the company being started. There are a range of administrative procedures that need to be fulfilled. MPUMALANGA BUSINESS 2018/19

SPECIAL FEATURE • Applying for import permits and verifying import

• Is the prospective employee appropriately qual-

duties payable • Registering as an exporter if relevant and applying for an export permit

ified and do they have the relevant experience?

Business permits Foreign nationals who wish to establish their own business or a partnership in South Africa must, apart from having sufficient funds to support themselves and their family, be able to invest at least R2.5-million in the business. The funds must originate overseas, be transferable to South Africa and belong to the applicant (ie emanate from the applicant’s own bank account). The business must also create jobs for South African citizens. After six months to a year, proof will have to be submitted that the business is employing South African citizens or permanent residents, excluding family members of the employer. Applications for work permits for self-employment can only be lodged at the South African Consulate or Embassy in the applicant’s country of origin. The processing fee is US$186. The applicant would also have to lodge a repatriation guarantee with the consulate/embassy equivalent to the price of a one-way flight from South Africa back to his or her country of origin. This guarantee is refundable once the applicant has either left South Africa permanently or obtained permanent residence. Any application for an extension of a business permit may be lodged locally. The processing fee per passport holder is R425. Some countries also need to pay R108 per return visa. A list of countries to which this applies is available from the Department of Home Affairs. MEGA assists investors in applying for the relevant work permits to conduct their business.

Business entities There are a variety of forms which businesses can take, including private and public companies, personal liability companies, non-profit companies, state-owned companies and even branches of foreign companies (or external companies). Branches of foreign companies fall under Section 23 of the Companies Act of 2008 and are required to register as “external companies” with the CIPC. An external company is not required to appoint a local board of directors but must appoint a person resident in South Africa who is authorised to accept services of process and any notices served on the company. It must also appoint a registered local auditor and establish a registered office in South Africa. Patents, trademarks and copyrights Trademarks (including service marks) are valid for an initial period of 10 years and are renewable indefinitely for further 10-year periods. Patents are granted for 20 years, normally without an option to renew. The holder of a patent or trademark must pay an annual fee in order to preserve its validity. Patents and trademarks may be licensed but where this involves the payment of royalties to non-resident licensors, prior approval of the licensing agreement must be obtained from the dti. South Africa is a signatory to the Berne Copyright Convention. Permits for foreign nationals Work permits In considering whether or not to grant a work permit, the Department of Home Affairs will first evaluate the validity of the offer of employment by conducting a number of checks to confirm the following: • Has the Department of Labour been contacted? • Has the position been widely advertised? • Is the prospective employer able to prove that he or she has tried to find a suitably qualified local employee prior to hiring a foreigner?

What would MEGA do for you? MEGA will help new businesses by assisting in project appraisal and packaging, putting investors in touch with relevant agencies and government departments, alerting investors to investment incentives and setting up joint ventures where required. A full description of the services offered by MEGA is reflected elsewhere in this publication.

MPUMALANGA BUSINESS 2018/19

SPECIAL FEATURE

Zoning in on fresh produce Mpumalanga’s mega-projects aim to attract investors in a wide range of sectors.

• Vast mineral resources, which

fire the province’s many coal-fired power stations and underpin the ferro-alloy complex around Middelburg, where Columbus Stainless runs the only stainless-steel mill in Africa.

everal large private-sector investment projects are under way in Mpumalanga. These include the ongoing upgrades and conversions at the Ngodwana Mill by Sappi (forestry and paper) and the various plants of Sasol at Secunda (petrochemicals and liquid fuels), mining ventures in the coal sector (Anglo American coal, Sasol, Exxaro and Nkomati Anthracite are all spending heavily) and tourism (Thebe Tourism Group has multiple projects). These projects illustrate the diversity of the provincial economy which has large concerns in the sectors mentioned above and others in segments as different as stainless steel, sugar, ferro-alloys and potato chips. A provincial plan intends to use these strengths to further develop labour-intensive manufacturing industries and to encourage the development and localisation of supply chains. To achieve this, two major projects are being implemented: • the Nkomazi Special Economic Zone • the Mpumalanga International Fresh Produce Market. Both big projects leverage the province’s main strengths. These include: • Unique location and logistical advantages: Maputo Development Corridor; Moloto Corridor; borders with Mozambique and Swaziland; major highways and rail links; proximity to South African industrial heartland and large population of Gauteng Province • Mpumalanga generates 80% of South Africa’s energy and several pipelines run through the province • Extraordinary agricultural riches, which can be exported or used in agri-processing MPUMALANGA BUSINESS 2018/19

Nkomazi Special Economic Zone The Nkomazi Local Municipality has designated land for the SEZ which will be established in terms of 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”. Infrastructure at an SEZ supports the targeted sectors and attracts foreign investors with a strong focus on beneficiation of local produce or materials. Skills transfer is another stated aim behind the SEZ programme. Situated in the border town of Komatipoort, this multi-sector SEZ is the axis of economic integration between the provinces of Mpumalanga, Gauteng and Limpopo and the neighbouring states of Swaziland

SPECIAL FEATURE and Mozambique. The region is one of the most industrialised and productive areas in Southern Africa and the Maputo Development Corridor provides linkages west to the economic heartland of South Africa and eastwards to the ports of Mozambique. Proximity to the Mozambican port of Matola would support a dry port or logistics base. The SEZ focus is on infrastructure and manufacturing: transport, warehousing and logistics facilities, agri-processing, automotive support platforms and infrastructure to support companies operating in the mining and mineral sectors. Options for investors include bonded warehouses, a distribution centre, a container yard, truck stops and a petrol depot (with maintenance, fitment, and repair facilities). Other opportunities include phosphate for fertilisers, the production of ammonia and urea and the beneficiation of fluorspar for downstream agri-chemicals and fluorine production. Food processing and packaging for large retailers is another option. Potential products to be made include subtropical juice concentrate, lemon oil and lemon juice concentrate.

Mpumalanga International Fresh Produce Market An International Fresh Produce Market (IFPM) is under construction at Mbombela. To support the market, the Mpumalanga government is establishing seven Agri-hubs to provide a stable supply of fresh produce to the market. The 248ha site is in Mbombela, the provincial capital. It is situated within the Maputo Development Corridor (MDC), which is South Africa’s leading Spatial Development Initiative (SDI) linking Mpumalanga, Gauteng Province and the Nkomazi Special Economic Zone with the deep-water Port of Maputo in Mozambique. Private investors are sought to be partners in building the top structure; services are being laid on by the province. The SEZ’s location enables access to the SADC market with 280-million consumers, the EAC market with 140-million consumers and preferential access to lucrative Asian and EU markets. The market will serve farmers and customers from Mpumalanga, South Africa and regional markets in Swaziland and Mozambique. The market will cater for expected growth in the production of tropical and subtropical crops and vegetables. The potential is huge: • Mpumalanga currently generates R950-million in turnover from subtropical fruit. The sector employs about 13 000 people. • The region exports more than 10-million cartons of avocadoes every year. A large proportion of South Africa’s grain, citrus, sugar and soft fruits come from Mpumalanga. The province is one of the key exporters of macadamia nuts, a subsector that is growing rapidly. The plan

intends for agri-processing in the province to grow exponentially. The tropical and subtropical crops which thrive in Mpumalanga include avocadoes, bananas, citrus, ginger, granadillas, guavas, litchis, macadamia nuts, mangoes, papayas and pineapples. Vegetables produced are potatoes, tomatoes, pumpkins, sweet corn, onions, sweet potatoes, beetroot, carrots, green peas, cauliflower, cabbage and green beans. The IFPM will provide trading halls for fruit and vegetables, markets for meat, fish, and flowers, complementary cold-storage and ripening facilities and pallet handling. There will also be processing facilities, an export hall and bulk-breaking facilities for retail outlets. There will be a customs office and commercial services such as banking and restaurants will be available. A food bank is to be established for NGOs. Helping small-scale farmers and co-operatives gain access to new domestic and international markets is among the aims of the Fresh Produce Market. MPUMALANGA BUSINESS 2018/19

SPECIAL FEATURE

Power stations like the Kendall Power Station produce fly ash as a byproduct. A beneficiation plant for fly ash is an investment opportunity.

Infrastructure

Tourism

The projected increase in platinum and chrome output in the Steelpoort area at the border of Mpumalanga and Limpopo Provinces is putting increasing strain on road and rail infrastructure. To address infrastructure concerns, MEGA is now implementing the KUKA Steelpoort Ropeway Ore Transporting Project which will act as a means of transport of chrome and platinum ores from the mines to the smelters. The funding for all Ropeway Projects in Steelpoort area is likely to be between R50-million and R350-million. The cost for the Lion Ropeway Project is projected at R220-million. Aerial ropeways of over 100km long can be constructed, consisting of a series of sections linked by automatic transfer stations.

The province attracts over onemillion tourists a year to the natural wonders of the Bourke’s Luck Potholes, God’s Window, the Blyde River Canyon and the Kruger National Park. MEGA is seeking investors to build an exclusive five-star hotel and top-quality restaurant located at the Bourke’s Luck Potholes on the Highveld part of Blyde River Canyon Nature Reserve. There are also innovative expansion plans for God’s Window, a famous lookout point on top of a 700m high cliff in the Drakensburg Mountains overlooking the Lowveld Escarpment – one of Africa’s prime wildlife and game reserves destinations. MEGA is planning to build a “Sky Walk” tourism attraction – an income generating, cantilevered glass walkway and viewing deck suspended off the edge of the God’s Window cliffs, giving 360° panoramic views out and 700 metres down through a glass floor.

Manufacturing Fly ash has become a problem for South Africa’s power utility Eskom and it is selling some to cement manufacturers. The remainder is buried or put in ash ponds. Fly ash is produced by coal-powered power plants during the combustion of coal. The beneficiation of fly ash in Mpumalanga, which houses most of Eskom’s power stations, is becoming a lucrative economic opportunity. MEGA is seeking investors to develop a fly ash beneficiation plant. The proposed plant would be built in Emalahleni with an estimated cost of R17-million and the plant size is projected at 500 tons per nine-hour production shift. Fly ash is successfully used to enhance the quality and economy of concrete. Other uses of fly ash include brickmaking, dam building and as a cement extender during the manufacturing of cement. MPUMALANGA BUSINESS 2018/19

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FOCUS

Mpumalanga Stainless Initiative Columbus Stainless supports MSI to beneficiate stainless steel.

pumalanga Stainless Initiative (MSI) was established in 2001 and registered as a non-profit company on 24 December 1999. MSI is located in Middelburg, the home of stainless steel and just a few kilometres from Columbus Stainless (Pty) Ltd, Africa’s only producer of stainless steel flat products. MSI has entrenched itself as the only technology-based business incubator in the stainless steel sector that specialises in nurturing sustainable small and medium-sized enterprises (SMEs) through stainless steel. Columbus Steel has a vision of growing the economy through stainless steel beneficiation. This can be achieved through their mission of nurturing sustainable SMEs and using their values of product innovation, service excellence and integrity. MSI is predominately targeting unemployed, struggling or dormant stainless steel goods manufacturers who have work experience or are running their businesses in the informal sector. Assistance is also offered to graduates or entrepreneurs, who have experience in manufacturing or engineering of stainless steel finished products. One of the key objectives is also to assist people who have an interest in starting a business and have the potential to create employment opportunities for the community.

What MSI offers MSI’s service offering centres on incubation services such as mentoring, monitoring, evaluation and coaching. We use shared infrastructure, technology and knowledge exchange platforms to uplift SMEs in terms of: • Legislative and governance compliance (SARS, CIPC). • Linking the SME to funding and market networks like Columbus, MEGA and other organisations. • Financial management such as obtaining annual financial statements and day-to-day invoicing. • HR management such as assistance with recruitment of workers. • Facility and technology access control. Gaining access to shared machines to manufacture clients’ products. • Operations and production management. On-time delivery of quality products. MPUMALANGA BUSINESS 2018/19

mpumalanga stainless initiative

•

Quality management and adherence to customer needs and ISO9001. Design management, ensuring compliance in terms of patents, trademarks and intellectual property (IP). Branding and helping to create public awareness and exposure for the product. Networking in terms of events, workshops and expos.

The support generated through the partnership with Columbus Stainless (Pty) Ltd has allowed small businesses to be showcased in terms of procurement opportunities and support services.

Active support During the 2017/18 financial year, Columbus supported MSI SMEs to the value of R600 000 in procurement of manufactured finished goods as well as direct purchases of advanced machines with the latest technology. This was done through Columbus Stainless’ Enterprise and Supplier Development programmes. Columbus Stainless further subsidised MSI in terms of operating costs, personal protective equipment, meeting expenses and the training of

FOCUS

Solar drier manufactured by Madingoana Steel. Seen here is Jenny Nawa from Feed a Child feeding vegetables to be dried in the feeder.

staff. Through the support given by Columbus Stainless a total of 12 jobs was created. Additional support is given in terms of technical assistance, skills development, quality assurance, networking platforms, events and marketing for the benefit of the SMEs. SME Zovuya

Product Stainless steel coaster sets, certificates and photo frames for Columbus’ long-service award function.

Replica

Solar driers for Feed-A-Child. Laser-cut South America stainless steel map.

JKHANG

Year-end gift steak pans for Columbus Stainless.

Live TECH

Carrols Café balustrades and stainless steel artistic trees.

Bailment

Business card holders for Middelburg Chamber of Commerce and Industry banquet gift.

Golden Steel Engineering

Golf day trophies.

The road ahead sees Columbus and MSI forging a Service Level Agreement in order to improve lead times and the quality of goods produced. MSI will also continue to lobby for more private sector involvement. Columbus and MSI urge all companies who have a need for stainless steel goods to involve MSI and have custom-made products made by SMEs. This will help to grow entrepreneurs, develop skills and create jobs in our community.

Partners MSI is a member of the Southern African Stainless Steel Development Association (SASSDA) and the Southern African Technology Business Te c h n o l o g y Incubation Association (SABTIA).

Our stakeholders are •

•

APPLICATIONS: Applications for access to MSI services can be made by: Tel: +27 (0)13 246 1528 Email: admin@mpstainless.co.za Website: www.mpstainless.co.za

• •

Department of Small Business Development (DSBD) via the Small Business Development Agency (Seda) through their Te c h n o l o g y Programme (STP) Mpumalanga Department of Economic Development and Tourism Steve Tshwete Local Municipality Columbus Stainless (Pty) Ltd.

MPUMALANGA BUSINESS 2018/19

ADVERTORIAL

Making it easier to do business with Nedbank Whole-view Business Banking™ Loderick Lubisi, Nedbank Provincial General Manager for Retail and Business Banking for Mpumalanga, explains how Nedbank can help business owners in the region.

on what’s most important to you – running your business,’ says Lubisi. In line with our new brand proposition encouraging clients to see money differently, our Mpumalanga agriteams are committed to providing key support, as well as advisory and business services to all roleplayers involved in the agrispace in both provinces. We will share our financial expertise and play a role in advancing profitable, sustainable practices throughout the agricultural production and consumption value chain. We recognise that farmers today face many challenges and that to remain competitive they continually have to improve and adopt best practices and new technologies.

There is good news for Mpumalanga business owners and entrepreneurs seeking a unique banking experience: Nedbank Business Banking has business managers, ‘We encourage you to see money differently with located across both provinces, specialising Whole-view Business Banking™’, says Lubisi. in commercial industries as well as the agricultural sector. ‘We are also involved in a number of initiatives with Lubisi says his team is ready to assist clients with professional advice, industry-specific solutions and a comprehensive range of financial products and services. ‘At Nedbank Business Banking we believe that you need a financial partner who not only understands your circumstances and aspirations, but also provides you with relevant solutions and a banking experience that is hassle-free. This allows you to concentrate

the public sector, ensuring that such partnerships support provincial government goals in respect of job creation and growing the economy,’ Lubisi concludes. Should you be interested in taking your business to the next level, please call Loderick Lubisi on +27 (0)13 759 4910, send an email to loderickl@nedbank.co.za or visit www.nedbank.co.za.

ADVERTORIAL

Nedbank Business Bundle is a game changer with savings and personalised services for small enterprises The new Business Bundle from Nedbank is a game changer for small enterprises in Mpumalanga, offering the best value for money when compared to rival offerings.

With the country’s challenging economic environment, the Business Bundle not only offers you personalised banking services, but also critical tools to save – with up to 40% savings on monthly banking fees – contributing directly to the bottomline at a time when every cent counts. In line with Nedbank’s new brand proposition to see money differently, the Business Bundle resonates with the bank’s commitment to do good by promoting small enterprises. ‘As a bank for small businesses we are committed to partnering with entrepreneurs to help grow their businesses. As such, Nedbank is always looking at ways in which we can help unlock the value of our clients’ businesses. We support their business growth journeys by providing practical tools to help them run their businesses,’ says Loderick Lubisi, Nedbank Provincial General Manager, Retail and Business Banking for Mpumalanga. ‘Small businesses are the lifeblood of our economy. Nedbank has, over the years, instituted various interventions aimed at giving support to the smallbusiness sector.’

Trust us to protect your business against everyday risk

Stella Tedeschi, Regional Manager of Broker Channels for Mpumalanga, says Nedbank Insurance is not a one-size-fits-all business. Nedbank Insurance has evolved into a business that provides integrated insurance to individual and business clients. Our offering comprises comprehensive short-term insurance solutions, life insurance solutions and investments. Nedbank Insurance provides a comprehensive offering of short-term products on behalf of blue-chip insurers. Should you be interested in expert advice on the type of cover that is exactly right for your business needs, look no further. Nedbank has a team of specialists ready to provide you with information necessary to allow you to make an informed decision. For more information call Stella Tedeschi on +27 (0)12 436 7659, send an email to stellat@nedbankinsurance.co.za, or visit www.nedbank.co.za.

To see how Nedbank can help your small business reach its goals call Loderick Lubisi on +27 (0)13 759 4910, send an email to loderickl@nedbank.co.za or visit www.nedbank.co.za/business.

Nedbank Ltd Reg No 1951/000009/06 Nedbank Ltd Reg No 1951/000009/06. Authorised financial Authorised financial and registered credit provider (NCRCP16). servicesservices and registered credit provider (NCRCP16).

KEY SECTORS Overviews of the main economic sectors of Mpumalanga

Agriculture

Mining 33 Forestry and paper

Oil and gas

Water

Manufacturing

Transport and logistics

Tourism 52 Banking and financial services Development finance and SMME support Education and training

54 56 58

OVERVIEW

Agriculture and agri-processing Macadamia nut production is expanding every year.

griculture is responsible for about 3.4% of Mpumalanga’s Gross Domestic Product (GDP). Fruits, nuts and vegetables are a major contributor to the provincial and national export basket and there is still scope for expansion in this sector, both in terms of lands planted and downstream beneficiation. Big companies cultivate maize, sugar, timber, vegetables, fruit and tea on a large scale and are active in the raising of poultry and cattle. Large commercial farmers account for the bulk of crop and livestock production. The Provincial Government of Mpumalanga is building an International Fresh Produce Market as a means of stimulating agricultural production. The intention is that this will lead to increased volumes supplying domestic and international markets. Each of the province’s districts will have Agri-parks and the Department of Rural Development has set up Farmer Production Support Units in two municipalities so far, Bushbuckridge and Nkomazi. A feedlot has been built at Mzinti and a R20-million packhouse in Bushbuckridge is almost ready for use. Other interventions include the re-commissioning of the Bushbuckridge poultry abattoir and farmer support to soya and maize farmers to supply the Lekwa Oilseed Crushing Plant in Standerton. The Nooitgedacht Research Farm is being upgraded and the possibility of reopening an agricultural college is being considered. Marapyane Agricultural College, which is situated in the Dr JS Moroka Municipality in Nkangala, would allow for a formal setting for the transfer of skills. MPUMALANGA BUSINESS 2018/19

SECTOR INSIGHT Halls and Westfalia are two of South Africa’s biggest agri-businesses.

Crops Macadamia nuts have grown in popularity exponentially in recent years. About 4 000 hectares of new trees is added each year across South Africa, with most of that in Mpumalanga and neighbouring Limpopo. The vast majority of the nuts are exported, with about 40% going to China. There are about 450 farmers growing the nuts and there are 14 cracking factories in South Africa. The sector employs about 4 500 people, of which 1 500 are permanent employees. Barberton and Hazyview are two prime areas for the nut.

OVERVIEW

The Mpumalanga Economic Growth Agency, MEGA, has equity in Hi-Veld Fruit Packers and Tekwane Citrus.

Mpumalanga produces one-million tons of maize from 291 788ha. About 53 000 tons of wheat and 33 000 tons of sorghum are produced annually. Soya bean is another major crop: more than half of South Africa’s soya bean crop is produced in Mpumalanga’s Highveld areas. Mpumalanga accounts for about 21% of South Africa’s citrus production and a third of its export volumes, with Valencias being the province’s most popular varietal and Nelspruit being the centre of the sector. Avocados, litchis, mangoes and bananas thrive in the province. Hazyview is an important source of bananas, with 20% of South Africa’s production originating in this district. Deciduous fruits are cultivated in smaller quantities. The village of Tonteldoos north of Dullstroom hosts an annual peach festival that includes liquid marvels such as peach mampoer. About 15 000 tons of table grapes are produced in the province annually and Mpumalanga produces its own wine. A specialist fruit that does well in the province is the marula. The marula fruit makes a popular beer and is used in the production of a liqueur that has done well on the international market. Potatoes and potato seed thrive in Mpumalanga’s fertile soil, with one operation in the higher reaches of the Drakensberg range producing more than 2 000 tons of seed every year. Tomatoes, onions and cabbage are also farmed profitably. Cotton is grown mostly under dryland conditions in Marble Hall. The province has 1 500ha of dryland under cotton. Much of South Africa’s total annual production of about 34-million kilograms of tobacco, especially Virginia tobacco, takes place in the north-western parts of Mpumalanga, and in neighbouring Limpopo. Other crops produced for export in Mpumalanga include cut flowers, pot plants and nursery plants.

Livestock About 14% of the province’s land area is natural grazing land. Products include beef, mutton, poultry, dairy and wool. Poultry-production

companies have large facilities in the StandertonVolksrust area. The town of Ermelo is the centre of one of the country’s most important sheep-farming districts. The province is home to one of South Africa’s largest pig farms, Kanhym, near Middelburg. Karan Beef has recently built a large abattoir in Balfour to service its massive feedlot in neighbouring Gauteng. Up to 1 800 head of cattle can be processed every day at the facility.

Sugar Mpumalanga has the secondbiggest sugar industry in South Africa, after KwaZuluNatal. TSB Sugar runs three mills in the Lowveld region, two of which have refining capacity, and employs about 4 700 people. More than 1 400 farmers (commercial and small-scale) deliver sugar cane to the company. TSB brands are Selati (sugar) and Molatek (animal feed). TSB’s

MPUMALANGA BUSINESS 2018/19

OVERVIEW

three mills (including Pongola in northern KwaZulu-Natal) have been able to maintain volumes because of extensive irrigation schemes. The company was bought by RCL Foods in 2014. TSB Sugar has been increasing the amount of cane it takes from community trusts and small-scale growers. The proportion of land used to harvest cane from small-scale growers on community land has grown to 15%, with 64% coming from commercial farmers and community trusts and 21% from TSB’s own land. About 44 000ha in the province is under sugar cane. Commercial farmers account for 27 000ha, emerging farmers for 9 500ha and TSB Sugar has 7 800ha of its own.

Companies Fresh fruit and nut supplier Halls has developed a countrywide reputation since it was incorporated as a company in 1921. Halls’ Mpumalanga operation (Mataffin) produces an avocado crop of about 1 300 tons, 37% of the company’s output. Europe buys most of Halls’ 1.6-million cartons of exports (4kg equivalents) and this represents about 60% of production. The company is one of South Africa’s biggest exporters of litchis and total production is about 850 tons in a good year. Halls cultivates 375ha of its own land and has another 1 400ha under management. The Matsafeni Trust is the company’s biggest outgrower and exports in the region of 300 000 cartons every year. Westfalia is a diversified agricultural group which runs extensive

ONLINE RESOURCES ARC-Institute for Tropical and Subtropical Crops: www.arc.agric.co.za Citrus Growers Association: www.cga.co.za Fresh Produce Exporters’ Forum: www.fpef.co.za Perishable Products Export Control Board: www.ppecb.com

MPUMALANGA BUSINESS 2018/19

operations in the province. The group’s South African operations regularly sell more than five-million cartons of avocados (50% of the country’s export volume) and seven-million cartons of mangoes. Westfalia is a subsidiary of the Hans Merensky Group and most of its holdings are in the neighbouring province of Limpopo. Umbhaba Estates is one of the biggest banana growers in the province. The drier Highveld region with its cold winters supports crops such as cereals, legumes and nuts. There is extensive irrigation in the Loskop Dam area. Ermelo in the centre of the province is one of South Africa’s main centres of sheepfarming and wool-production. Standerton in the south-west is a dairy centre and Piet Retief in the south-east concentrates on sugar and tropical fruit. Subtropical fruit flourishes in the Lowveld with the town of Nelspruit being a major citrus producer. Mangoes, avocados, pecan and macadamia nuts, bananas and papayas also thrive. The Subtropical Fruit Growers’ Association represents about 400 avocado growers. Subtropical fruit altogether has a combined turnover of R950-million and employs about 13 000 people. Mixed farming and potatoes, sweet potatoes and beans are mostly found in the southern and western parts of the province. Between them, the highlying areas of Mpumalanga and the Free State account for 40% of South Africa’s potatoes.

OVERVIEW

Mining The provincial government may start a mining company.

Mafube coal mine is a JV between Anglo American Coal and Exxaro 30km west of Middelburg.

pumalanga’s coal-fired power stations have provided South Africa with electricity for decades and continuing investment in new projects will prolong that tradition for many years yet to come, despite increased interest in renewable resources. Nkomati Anthracite has been revived and is up and running after an investment from Unicorn Capital Partners, formerly Sentula Mining. The mine, which is in the south-eastern corner of the province, has proven resources of 8.7-million tons and upwards of 400 jobs were created over the last two years. The high-grade anthracite that the mine will produce is suitable for use by the ferro-metals industry because it has low phosphorus and sulphur levels and high fixed carbon percentages. The communities of Kwalugedlane, Matsamo and Mawewe have a 16.1% stake in the relaunched mine and the Mpumalanga Economic Growth Agency (MEGA) holds 34%. Coal giant Exxaro has committed R3.8-billion to its Belfast project, an investment that will create 1 160 jobs and have an impact on the GDP (over the life of the mine) of R39-billion, according to the Premier’s office. Exxaro will establish an 80ha agri-village and spend R50-million to accommodate the 32 households who are affected by this new mine. Exxaro is also extending the life of its Leeuwpan Mine by another 10 years. The mine has 1 200 permanent employees. In his 2018 State of the Province speech, then Premier David Mabuza noted that mining contributes 25.9% of GDP and employs 53 000 people. He further noted the sad closing of the Lily Mine (because of fatalities)

SECTOR INSIGHT New safety measures include Wi-Fi for underground miners. • Unicorn Capital Partners has restar ted Nkomati Anthracite Mine. and Glencore’s Optimum Colliery and raised the possibility of developing a diversified, state-owned mining company. MEGA has been tasked with investigating whether it might be possible, looking at the resources which the state already holds (as seen in MEGA’s stake in Nkomati Anthracite). Said Mabuza, “We cannot have mining assets in this province that are lying idle and unproductive when unemployment is this high. We have to find innovative ways to revive such mines.” MPUMALANGA BUSINESS 2018/19

OVERVIEW

Isibonelo Mine is located near Kriel.

News Two hundred employees at Anglo American Coal’s Zibulo Colliery are walking around with devices that look like smartphones but might save their lives. Instead of returning to the surface to report problems, Wi-Fi is connecting miners and managers from underground to the surface, from above to below and between workers underground at different locations. Pan African Resources increased its gold production by more than a quarter in 2017 with the development of the Elikhulu Tailings Project at Evander. At a cost of R1.8-billion, the project reduces the average cost of the miner’s gold production and consolidates three tailings dumps into one centralised location. Increasingly sophisticated technology allows for more efficient extraction of remnants of gold from old dumps and the new processing plant will deal with more than a million tons of tailings. Anglo American has announced it intends narrowing its focus to diamonds, platinum and copper. The first big move came in April 2017 with the sale of Anglo’s thermal coal operations to Seriti, a black-owned company lead by Mike Teke, the outgoing president of the Chamber of Mines, recently rebranded as the Minerals Council South Africa.

Assets Coal, platinum, gold and nickel are the province’s major mineral resources and all are still in demand, even if coal and platinum have experienced roller-coaster price fluctuations in recent times. South Africa produces 75% of the world’s platinum, 80% of its manganese, 73% of its chrome and 45% of its vanadium. Mpumalanga has significant resources of each of these minerals, and several others. Deposits of chromite, magnetite and vanadium are the basis of the MPUMALANGA BUSINESS 2018/19

ferro-alloy complex in WitbankMiddelburg (in Nkangala District Municipality) and Lydenburg (Mashishing). Nkomati Mine is South Africa’s only pure-nickel operation. The province’s coalfields are in the south and west of the province. In terms of new mining legislation, mining licences now include a provision whereby some of the resources mined must be made available to local manufacturers. The idea behind the Mineral and Petroleum Resources Development Act is to boost the minerals beneficiation sector, which, it is believed, will increase employment levels and stimulate economic growth. Uncertainty in the steel sector has meant that the plans of the Mpumalanga Provincial Government to develop a Mining and Metals Technology Park have been put on hold.

Coal Mpumalanga accounts for 83% of South Africa’s coal production and is the third-largest coal exporting region in the world. The coalfields of the province feed nearby power stations. The town of eMalahleni (Witbank), in Nkangala District Municipality, is at the centre of the coal industry. In 2015 nearly 30% of national power utility Eskom’s coal (33.3-million tons) was supplied by Exxaro. Exxaro’s purchase of Total Coal South Africa (TCSA) has significantly increased the diversified miner’s capacity and took to six the number of mines the company has in Mpumalanga.

OVERVIEW Seriti comprises Masimong Group Holdings (Teke’s company), Community Investment Holdings Projects, Zungu Investments Company and Thebe Investment Corporation. Seriti paid R2.3-billion for the New Vaal, New Denmark and Kriel collieries (all of which are tied to Eskom delivery contracts), as well as four closed collieries. Seriti thus became the second-largest provider of thermal coal to Eskom, supplying almost a quarter of the utility’s annual coal requirements. State coal company AEMFC (African Exploration Mining & Finance Corporation) runs a colliery at Vlakfontein near Ogies and is planning to develop other projects. South32 (formerly BHP Billiton) has four collieries and three processing plants in the province. The company has 4 860 full-time employees and 4 400 contractors. Wescoal owns and manages the Khanyisa colliery which supplies the Eskom power station at Kendall with coal and it has acquired Keaton Energy. ArmCoal is a black-owned coal company that arose out of a deal between Xstrata Coal SA and African Rainbow Minerals Limited (51%). ArmCoal was the vehicle used in the creation of the large open-cut thermal coal mine at Goedgevonden.

has purchased the Everest mine from Aquarius Platinum. Everest is adjacent to Northam’s existing Booysendal mine. Northam expects to produce 460 000 ounces of platinum group metals (PGM). A concentrator and a chrome extraction plant were included in the sale price of R450-million. Jubilee Platinum has sold its Smelting and Refining business in Middelburg to Siyanda Resources for R110.5-million. Sylvania Platinum now has seven PGM recovery plants that extract chrome from tailings on both sides of the Bushveld Igneous Complex. The company also has some shallow mining projects.

Gold and platinum

Ferrous metals

Sibanye Gold’s list of acquisitions continues to grow. Formed as a gold-mining company with one mine in the Free State, Sibanye has rapidly been buying up platinum assets in South Africa and the US. In Mpumalanga it has purchased the Burnstone gold mine near Balfour, which it reports has a maiden gold reserve of 1.8-million ounces. Stonewall Resources runs the TGME Project, near the towns of Pilgrim’s Rest and Sabie. Stonewall has ambitious targets of going beyond production of 40 000 ounces from this and other historic mines in the area. Having taken full control of its Barberton mines, Pan African improved its BEE position (Shanduka Gold is a 23.8% shareholder) and set about increasing its annual gold output to 100 000 ounces. Northam Platinum, which has assets on both limbs of the Bushveld Igneous Complex,

Lydenburg is home to the Lion ferrochrome smelter that is a joint venture between Glencore and Merafe Resources. Feedstock is primarily provided by mines run by the same two companies, namely Magareng, Helena and Thorncliffe. Assmang, the joint venture between ARM Ferrous and the JSE-listed Assore, operates a chrome mine (Dwarsrivier) and a ferrochrome plant where chrome alloys are made. Reduced demand for stainless steel has meant that some of the furnaces at Machadodorp have shut down. The Manganese Metal Company (MMC) in Nelspruit is the largest producer of pure electrolytic manganese in the world. MMC is owned by Samancor (51%) and Bilston Investments owns the balance.

ONLINE RESOURCES Geological Society of South Africa: www.gssa.org.za Minerals Council South Africa: www.mineralscouncil.org.za Mining Qualifications Authority (MQA): www.mqa.org.za National Department of Mineral Resources: www.dmr.gov.za South African Institute of Mining and Metallurgy: www.saimm.co.za

MPUMALANGA BUSINESS 2018/19

PROFILE

Superfecta Trading Electro-mechanical specialists.

uperfectca Trading is an electro-mechanical engineering company with a national footprint and a record of successful delivery of projects in all nine provinces. The company was founded in 2002 and has extensive experience in medium- and high-voltage products and related services. Superfecta manufactures high-tension products under the TMA brand and related services. TMA products include transformers, mini-substations and switchgear. Superfecta also employs a team of mechanical experts. The company prides itself on the supply, installation and maintenance of mechanical work and boasts over 14 years of experience in the mechanical field. Superfecta has strategically partnered with three internationally recognised companies: Thomas C. Wilson (New York), Schneider Electric (South Africa) and Jinshanmen Electrical Co. (China). The partnerships have enhanced our performance and enabled us to be the providers of the latest technology.

Ownership Status 100% black-owned registered company, with 55% of the shares owned by women.

strong partnerships and joint ventures with local and international entities that share our values and objectives. We have a full complement of highly skilled engineers, technical and administrative staff. All efforts are geared towards compliance with health and safety standards.

Sectors Superfecta works in a variety of sectors, including but not limited to: • mining • provincial and local government • utilities • transport • oil and gas.

Professional Services

Superfecta is a one-stop shop for all transformer and transformer-related To be the leading electro-mechanical specialist in energy solutions across work and we pride ourselves on delivSouthern Africa. Superfecta aspires to excellence, innovation and trans- ering a comprehensive and complete parency; three prominent features that distinguish us in the marketplace service, including the supply of transand uphold our vision. formers for: • The mining industry • Dry-type mining • Distribution transformers To enable our clients to ensure reliable energy supply through cost-effective • Power transformers. and quality manufacturing, supply, installation and maintenance of infrastruc- • All our transformers are SABS and IEC compliant and operate at ture. Superfecta strives to deliver the best solutions which are achieved with

Our Vision

Our Mission

NORTHERN CAPE BUSINESS 2018/19 MPUMALANGA BUSINESS 2018/19

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PROFILE higher efficiencies than any other on the market. Our turnaround time is less than 60 days, which is a market-beater. What gives Superfecta a competitive edge in the industry is investment in the latest systems and technologies. The company invested millions of rands in an integrated maintenance software called Archibus. Our maintenance system goes above and beyond the management of the maintenance process and asset control by recognising that these processes are just a small part of a full life cycle. The intellectual capability of the system enables us to ensure that our customers are well taken care of by indicating when the following maintenance schedules should take place. We also provide our clients with 24/7/365 support. Transformer oils undergo electrical stresses while the transformer is in operation. This, combined with the contamination caused by the chemical interactions with windings and other solid insulations, gradually render it ineffective. Regular purification is paramount. We periodically test for electrical and chemical properties to make sure that the oil is suitable for further use and provide the purification services needed to extend the life of your transformer oil. This can be done online or offline. Superfecta has played a significant role in the economic development of South Africa, not only through employment, but also through infrastructure development both in rural and urban areas. We pride ourselves on having installed electricity in over 500 households in rural parts of South Africa. The company has not only done an outstanding job but raised the bar in successfully electrifying villages in the geographically challenging landscape of KwaZulu-Natal. With a professional team of mechanical technologists, Superfecta prides itself on the supply, installation and maintenance of mechanical work. Our services include, but are not limited to: • Supply and installation of heat exchangers tubes, boiler tubes, steam pipes and primary air heater • Supply and replacement of pipe works (ash, sluice lines, etc)

CONTACT INFO Physical address: 23 Catalunya Raceway Industrial Park, Gosforth Park, Germiston, Johannesburg 1419 Telephone: +27 11 8693607 Fax: +27 11 825 0086 Email: info@superfectatrading.co.za Website: www.superfectatrading.co.za

37 49

• Replacement and new installation of steel pipe works

• Supply and installation of pumps

• Supply and hire of tube-

testing machine, tube cleaners, vacuum leak dictator, tube cutters, expanding machine • Mechanical engineering (pipe fitting and rigging) • Steel pipe jacking and fitting, supply and install concrete jacks, jacks under roads and gas lines.

All industrial concerns require a complex system of electrical networks to function efficiently and successfully. Superfecta both installs and conducts repairs to high tension electrical circuits. We also oversee electrical reticulation (urban and rural), electricity meters (prepaid and smart meters) and electricity works.

Clients Superfecta is an ISO 9001:2008 certified company that fully embraces a Total Quality Management philosophy in streamlining all its business processes. Clients include Rand Water, FNB, MTN, Airports Company South Africa, Total, Transnet, Passenger Rail Agency of South Africa and Eskom. Superfecta has done work for the public works departments of three provinces, the City of Johannesburg and several other municipalities. MPUMALANGA BUSINESS 2018/19 2018/19 NORTHERN CAPE BUSINESS

OVERVIEW

Forestry and paper Sustainable resource management is a priority for timber companies.

pumalanga has 40% of South Africa’s forestry resources. This fact presents an opportunity to exploit the sector’s by-products in the biomass-to-energy field. The Zebra Pellets plant in Sabie is to be converted by national utility Eskom into a torrefied pellet plant. The wood will be provided to the plant (owned by the Industrial Development Corporation) and then heated without the use of oxygen (torrefied) which creates a coal-like product without the carbon. Plans to develop an Agriculture and Forestry Technology Park are being drawn up by the Provincial Government of Mpumalanga. The Mpumalanga Economic Growth and Development Path (MEGDP) intends to expand the industrial base of the provincial economy, with a focus on beneficiation, agri-processing and value chain development. When forestry managers, contractor and forestry equipment suppliers gather at the biannual Focus on Forestry conference in White River in 2019, the theme will be “Bridging the digital divide in the African forestry sector”. Sustainability is a key area for companies in the forestry sector and advances in the Internet of Things and AI are being keenly monitored for ways to enhance margins in an environmentally sound way. The conference, which also looks at topics such as silviculture, fire management and forest engineering, alternates between Mpumalanga and KwaZulu-Natal and will be jointly organised MPUMALANGA BUSINESS 2018/19

SECTOR INSIGHT The Focus on Forestry conference will target digital solutions. in 2019 by the Centre for the Modernisation of Forestr y Operations (CMO), the Institute for Commercial Forestry Research (KZN University) and the Nelson Mandela University. Forestry accounts for about 8% of Mpumalanga’s gross domestic product. The sector comprises logging, saw-milling, wood product and pulp and paper manufacture. Pulp and paper are the main exports, along with sawn lumber, wood chips and wattle extract. Most sawn timber in South Africa is used in the construction sector. Mpumalanga has the ideal climate and topography for

OVERVIEW forests. Sabie and Graskop represent the hub of the industry, but commercial forests are also found to the east and south along the Swaziland border. About 11% of the land mass is forested, with 4% of that being natural forest. The province is the national leader in total hectares under forest (514 000ha) and in export earnings. York Timbers owns and operates five processing plants, including the largest sawmill and plywood plants in South Africa, and it has 60 470 planted hectares. The company is considering investing in biomass energy generation. The Industrial Development Corporation (IDC) has a stake in York Timbers and a 42.6% share in Hans Merensky Holdings, a company with timber and processing interests in three provinces. Merensky is responsible for 20% of South Africa’s sawn pine lumber. The Mondi Group has extensive forestry holdings in the province and has been working on introducing a higher degree of mechanisation in its operations. Mondi has also instituted an ecosystem management plan throughout its forestry operations with the intention of better managing the impact its work has on the environment. Although local demand is dwindling, the export market for pulp and paper is strong. Pulp production figures have been on the rise for several years and companies like Mondi are increasingly focusing on pulp export because of better margins.

Big investment Ongoing investment at Sappi’s giant Ngodwana Mill will contribute R13-billion to the provincial economy over 20 years (Premier’s State of the Province Address). Sappi has two large facilities in the province. Ngodwana which produces its own energy, makes dissolving wood pulp. About 70% of the mill’s product is exported. It produces paper grade pulp together with newsprint, containerboard and dissolving wood pulp. It is located near Sappi’s commercial forestry operations and produces 210 000 tons of dissolving wood pulp and 380 000 tons of paper (including kraft linerboard). Sappi’s Lomati Sawmill in Barberton produces

ONLINE RESOURCES Centre for the Modernisation of Forestry Operations: www.cmogroup.net Forestry South Africa: www.forestry.co.za Institute for Commercial Forestry Research: www.icfr.ukzn.ac.za National Department of Agriculture, Forestry and Fisheries: www.daff.gov.za South African Institute of Forestry: www.saif.org.za Technical Association of the Pulp and Paper Industry of South Africa: www.tappsa.co.za

kiln-dried Southern African pine lumber from sawlogs supplied by Sappi Forests. In 2017 Sappi built a sugar extraction demonstration plant at Ngodwana. Findings from the experiment will help to improve the process of extracting biorenewable chemicals. Sappi is partnering with Valmet, a Finnish company. PG Bison has a board plant in Piet Retief. Sonae Rauco runs large plants at White River and Panbult. Komatiland Forests, a 100%-owned subsidiary of state company SAFCOL, has big plantations in several districts. TWK is a R6-billion agricultural company with its headquarters in Mkhondo (Piet Retief). Asset management company Global Environment Fund created Imvelo Forests and in 2015 the company investigated using thermal imaging to detect fires. Among the other private timber growers in the province are Pull Scar Timber Co, and United Forest Products. The Community Conservation Resilience Initiative (CCRI) has been introduced to Mpumalanga, on the basis that local communities can play a big role in biodiversity conservation and restoration. The first two communities to be part of CCRI are Mariepskop and Houtbosloop Valley. The Low veld Botanical Gardens in Nelspruit has more than 650 of the 1 000 trees indigenous to South Africa. The Council for Scientific and Industrial Research’s (CSIR) forestry-research unit aims to improve tree breeds. MPUMALANGA BUSINESS 2018/19

OVERVIEW

Oil and gas A natural gas pipeline runs through Mpumalanga’s Special Economic Zone.

bout 60-million litres of liquid fuel is produced each day at the coal-to-liquid plant run by Sasol at Secunda. A major mine replacement programme is now complete and Sasol has secured feedstock until the year 2050. There is increased interest in gas as a source of energy although the country currently only has one gas-to-liquids plant (in the southern Cape). A national Gas Utilisation Master Plan (GUMP) is being developed. In 2016 the Department of Trade and Industry (dti) established a Gas Industrialisation Unit (GIU) which will make plans to exploit the huge fields of natural gas off the coasts of Mozambique and Angola and boost industrialisation in South Africa. Much of the Mozambique resource is already piped to the industrial heartland of South Africa and the promoters of the Nkomazi Special Economic Zone believe that the fact that a natural gas pipeline passes through the SEZ is a big selling point. The Liquefied Natural Gas Independent Power Producer Procurement Programme (LNG IPPPP) is part of the broader programme of the Department of Energy which encourages private investment in renewable energy, namely the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The total allocated to gas-to-power in the national power plan is 3 726MW, of which 3 000MW is for LNG. MPUMALANGA BUSINESS 2018/19

SECTOR INSIGHT National government is setting new gas policies. The major economic sectors using gas are the metals sector and the chemicals, pulp and paper sector. Brick and glass manufacturers are also big consumers. Transnet Pipelines runs a 3 800km network of underground, high-pressure petroleum and gas pipelines throughout the eastern parts of South Africa. The company’s sophisticated new multi-product pipeline (NMPP) between the coast and Gauteng brings a range of products to the manufacturing heartland of South Africa.

OVERVIEW International chemicals and energy company Sasol has several large plants in Mpumalanga and plays a major role in the economy of Mpumalanga. In Mpumalanga Sasol’s assets are Sasol Mining, Secunda Synfuels Operations, Secunda Chemicals Operations and Sasol Energy. Products manufactured at the Secunda complex (pictured) include petroleum, paraffin, jet fuel, creosote, bitumen, diesel and lubricants. Gas by-products include oxygen and acetylene, liquefied petroleum gas (LPG), and hydrogen and nitrogen. The primary feedstock for synthetic-fuel production is coal, and the plant is in the heart of Mpumalanga’s coalfield region. Sasol is spending about R12-billion on expanding the capacity of the synfuels plant and on installing an oxygen plant and more Sasol Advanced Synfuel (SAS) reactors to convert gas feedstock to liquid fuel. Sasol Gas is one of the four Sasol operations at Secunda, supplying natural gas to Sasol Synfuels and buying Sasol Synfuels’ methane-rich pipeline gas to sell to customers in Mpumalanga and KwaZulu-Natal. Natural gas is an inexpensive alternative to coal. Although the coal industry still has life in it (old fields are being rehabilitated and new ones created – Sasol is itself spending R15-billion on opening three) it is a finite resource. Sasol will also likely be a key player when national government delivers its new policy on the biofuel ethanol industry. Statutory minimums for biodiesel in diesel and bioethanol in ethanol will give certainty to producers and boost production levels across the country. Sasol is already making 285 000kl of absolute alcohol in ethanol from sugar fermentation annually at Secunda. The company’s sophisticated technology for deriving liquids and gasses from coal can easily be converted to biomass sources such as sugar.

Exploration Sasol and the provincial government have commissioned an in-depth technical feasibility study for a Petrochemical Technology Park to be located in the province.

ONLINE RESOURCES Central Energy Fund: www.cef.org.za Independent Power Producers Programme: www.ipp-projects.co.za Petroleum Agency SA: www.petroleumagency.co.za PetroSA: www.petrosa.co.za South African National Energy Association: www.sanea.org.za South African Oil & Gas Alliance: www.saoga.org.za South African Petroleum Industry Association: www.sapia.co.za

Three natural gas exploration permits were awarded to Tosaco Energy in 2017 for the area between Amersfoort and Balfour in the western part of the province. Tosaco Holdings has a 25% stake in Total SA. Testing in the sandstone-rich area should be complete by 2019. Two methane-gas exploration rights have been granted to Highland Exploration in the Evander area. Petroleum Agency SA is the state agency responsible for promoting and regulating exploration and production of oil and gas in the country. Many of the big mining and manufacturing concerns in Mpumalanga have long-term contracts for the supply of gas with big gas companies. Afrox and Air Liquide are two of the biggest, with the latter having 3 500 national customers, which include Sappi and Sasol. When it comes to liquid petroleum gas, mostly used in households (and normally delivered by canisters), some changes are coming for consumers. The Competition Commission wants to make the sector more competitive and aims to do this by reducing the duration of contracts between bulk sellers and refineries. (Mail & Guardian). South Africa’s LPG market is worth R1.5-billion per annum and the country produces 300 000 tons of product. One of the aims of the commission is to make LPG cheaper and more easily available to private consumers, who currently make up just 3% of the market. MPUMALANGA BUSINESS 2018/19

OVERVIEW

Water Nearly R2-billion is to be spent on bulk water and sanitation.

he Provincial Government of Mpumalanga is prioritising the provision of water infrastructure projects. The Premier reported in 2018 that the bulk of the R1.8-billion Municipal Infrastructure Grant (MIG) will be spent on 149 water supply and sanitation projects. A joint project with Eskom related to rain water harvesting will also create jobs. The Siyasebenza Job Creation Initiative is intended to create 900 jobs in the Nkangala District Municipality. A total of 327 water infrastructure projects benefiting 350 259 households have been completed, with a further 165 sanitation projects (benefiting 285 065 households) also finalised. To assist municipal water provision, 582 boreholes have been drilled by the provincial authorities. A bulk water supply system connecting villages within the Bushbuckridge area such as Hluvukani, Zoeknog and Tsakani has been completed. The Blyde River Poort Dam (pictured above) supplies water for irrigation and industry at Phalaborwa. Many municipalities in Mpumalanga have struggled to provide water for their citizens. Rand Water was asked to step in and supply clean water in the Bushbuckridge area. This was followed by the national government disbanding the Bushbuckridge Water Board and Rand MPUMALANGA BUSINESS 2018/19

SECTOR INSIGHT Rain harvesting is at the centre of a job-creation initiative. Water taking over its operations. The area of supply covers Bushbuckridge and Mbombela (Ehlanzeni District Municipality) which has 15 water treatment works, with a capacity of 245mℓ/day. Water is supplied to 1.5-million people in the areas. The water treatment works include three large works (Inyaka, Hoxani and Kanyamazane) and several smaller treatment works (Thulamahashe, Acornhoek and Edinburgh) supply local communities with drinking water.

OVERVIEW Expenditure in Bushbuckridge and Mbombela over the period 20152020 is expected to be R600-million. This is part of a broader national strategy whereby bigger boards such as Rand Water are growing their footprint, replacing the smaller local boards which lack the skills or resources to carry out their mandate. Rand Water, which historically served greater Johannesburg, now serves an area which includes Gauteng, Limpopo (Greater Groblersdal and Great Mable Hall), North West (Rustenburg and Madibeng areas), Mpumalanga and the Northern Free State (boundary of the Upper Vaal Water Management Area). The national Minister of Water and Sanitation is the shareholder, representing the government of South Africa. The Komati Basin Water Authority (KOBWA) is an important agency in controlling water resources in the region. Formed out of a cooperation agreement between South African and Swaziland, the agency has built two large dams and is responsible for their upkeep. In terms of the National Water Resource Strategy, catchment area management agencies have been established to oversee water resource management on a regional basis. The National Water Act stipulates that water resource management functions, excluding those that have national and strategic implications, will be carried out by CMAs. The Imkomati-Usuthu Catchment Management Agency covers Mpumalanga, parts of Limpopo and part of the Kingdom of Swaziland and is responsible for water usage issues relating to the following river catchment areas: Sabie-Sand, Crocodile, Komati, Nwaswitsontso and Nwanedzi. Among the responsibilities of a CMA are checking that water is being used lawfully, allocating resources to parties along a river (farmers, municipalities or businesses), long-term planning, dam safety and checking on the quality of water. The small town of Wilge on the western edge of Mpumalanga near the border with Gauteng will soon be receiving water from Eskom’s Kendal Power Station. The utility’s scientists aim to use chlorine dioxide rather than chlorine gas to produce potable water. Tests have shown that the treated water has a better colour and the water meets the standards set down by the South African Bureau of Standards (SABS).

ONLINE RESOURCES De Hoop Dam: www.dwa.gov.za/ORWRDP/DeHoop/index.asp Inkomati-Usuthu Catchment Management Agency: www.iucma.co.za Komati Basin Water Authority: www.kobwa.co.za National Department of Water and Sanitation: www.dwa.gov.za Rand Water: www.randwater.co.za Trans Caledon Tunnel Authority: www.tcta.co.za Water Institute of South Africa: www.wisa.org.za

The completion of the De Hoop Dam means that people living in municipalities can now expect bulk water delivery. The Trans Caldeon Tunnel Authority (TCTA) is responsible for seeing that bulk water supplies are laid on but making the local connections and physically delivering the water is up to municipalities and water boards. The De Hoop Dam is the centrepiece in the large Olifants River Water Resource Development Project (ORWRDP) which is transforming the water environment for industrial, commercial and private users. As the catchment area for this huge scheme is to the north of Mpumalanga, the spinoff effect on the province is significant. The Olifants River System (and associated systems such as the Blyde Irrigation Scheme) feeds the region that is South Africa’s greatest producer of citrus and subtropical fruits. The TCTA has also delivered the Komati Water Supply Augmentation Project: an extra 57-million m³ of water every year is now available for the the Duvha and Matla power stations in the Witbank area, and other water users. To make sure that its big Saiccor Mill receives enough of a steady supply of water, Sappi has raised the wall level of the Comrie Dam. Across its global operations, Sappi claims to return 93% of the water it uses back into the environment once it has been cleaned. MPUMALANGA BUSINESS 2018/19

PROFILE

Komati Basin Water Authority Celebrating over 25 years of excellence in trans-boundary water management.

Driekoppies Dam.

he Komati Basin Water Authority (KOBWA) is a bi-national organisation formed through the Treaty on the Development and Utilisation of Water Resources of the Komati River Basin. The Agreement was signed by the Kingdom of eSwatini (Swaziland) and the Republic of South Africa in 1992. As an implementing agent of the joint project of both countries, the organisation was tasked with designing, constructing, operating and maintaining two dams and associated infrastructure. This resulted in the construction of the Driekoppies Dam (pictured above) in Schoemansdal, South Africa (1993 to 1998), and the Maguga Dam in eSwatini (1998 to 2001). MPUMALANGA BUSINESS 2018/19

Over the last 25 years, KOBWA has fostered sound transboundary relations between the Republic of South Africa and Swaziland and achieved many successes which include: • completing the construction of the Driekoppies Dam and Maguga Dam, which included community empowerment in terms of skills and employment opportunities • efficient water infrastructure management • efficient water resource management • sharing technical information with stakeholders such as the Komati Joint Operations Forum (KJOF) on a monthly basis • engaging communities in water and environment management awareness campaigns through social engagements such as football • successful management of drought cycles, including the recent severe El Nino spell experienced in 2014-2016. KOBWA also completed the access road to the Driekoppies Dam (shown, right) and constructed houses such as the Fish Eagle Bend in Malalane

PROFILE to accommodate professionals and technicians working at the dam site during the construction of the Driekoppies Dam. When these dams were built, households were successfully relocated and resettled.

involvement of stakeholders of both countries to enhance and strengthen stakeholder relationship between the two countries. In future, KOBWA is looking forward to sustainable trans-boundary water resources development and management for water security for the two countries and the entire region, as water is life.

Building communities With the expertise of KOBWA personnel, three portable water purification plants were installed at Buffelspruit, Block-C and Gomora. These water plants augment water supply to these areas, reducing the frequency of water outages. As part of its Corporate Social Responsibility programme, KOBWA has seen schools, nongovernmental organisations and community-based organisations benefitting through the provision of water and sanitation-related amenities to improve the lives and social status of the communities. KOBWA, as an organisation rooted in communities, involved communities in both countries as part of the 25th anniversary celebrations through Corporate Social Initiative projects. At sports tournaments, community members were also educated about KOBWA’s role in trans-boundary water management. Communities that border the Driekoppies Dam (Schulzendal, Buffelspruit, Jeepes Reef, Middelplas, Schoemansdal and Driekoppies) were engaged in a soccer tournament at the Driekoppies Stadium. A one-day stakeholder soccer and netball tournament was held in Piggs Peak in eSwatini with the

Driekoppies access road.

CONTACT DETAILS: Head office Maguga Dam, PO Box 678, Piggs Peak, H108, eSwatini Tel: +268 437 1463/4 Fax: +268 437 1460 Email: maguga.office@kobwa.co.za Water management office Driekoppies Dam, PO Box 518, Malalane, 1320, South Africa Tel: +27 (0)13 781 0317 Fax: +27 (0)13 781 0320 Email: driekoppies.office@kobwa.co.za Website: www.kobwa.co.za

MPUMALANGA BUSINESS 2018/19

OVERVIEW

Manufacturing Highveld steel works lives again as an industrial park.

reative thinking kicked in when Highveld Steel’s troubles reached the tipping point in 2015. Aside from the business rescue process, which has allowed some production to restart, there is some irony in the that fact that the 1 000ha property has been re-purposed as a multi-purpose site for industry and commerce. Called the Highveld Industrial Park, this project has had the effect of promoting a diversity of manufacturing enterprises, something which has been a priority for economic planners for many years. Stockpiles of coal and vanadium are being sold off, but two iron plants and a steel plant offer fully-equipped metallurgical and steelmaking facilities, supported by environmental monitoring services and metallurgical and chemical laboratories. The private rail siding gives the park good connections and the fact that Sasol can supply methane-rich natural gas and that two gas producers (Air Liquide and African Oxygen) have plants in the park makes for an advantageous setting for industrial enterprise. The Eskom grid supplies 350mVA power supply directly. The park is near eMalahleni, next to the N4 highway and close to the N12 highway. In early 2018, the park had 21 tenants and many enquiries. Tenants include a training centre funded by the Construction Sector Education and Training Authority (CETA) and a mining equipment refurbishment company. An agricultural college is planned. The structural mill of Evraz Highveld Steel in Witbank was officially relaunched in June 2017 after ArcelorMittal South Africa signed a contract to supply blooms and slabs for the mill to make into heavy MPUMALANGA BUSINESS 2018/19

SECTOR INSIGHT Most jobs in manufacturing are in food and timber. structural steel. Evraz Highveld went into business rescue in 2015. The contract is for two years with an option to renew for another year. Alternately, ArcelorMittal may buy the mill after the two years. The presence of Ferrometals means that Mpumalanga is still an important place for metals and machinery manufacturing, but the turbulence in the steel sector has reminded everyone of the need to diversify. The chemicals and liquid fluids complex of Sasol at Secunda is a vital component of the province of Mpumalanga’s manufacturing sector. The

OVERVIEW company has two propylene manufacturing plants and recently completed two major investments aimed at improving flows and expanding production. This was done in two phases from 2012. Propylene is an input for polypropylene which is used in packaging, automotive components and textiles. The market is growing in South Africa at 4% per annum, roughly the same rate as the global market.

of pure electrolytic manganese metal in the world. Delta EMD, in the same town, is one of the biggest producers of electrolytic manganese dioxide, a material used in the manufacture of alkaline batteries.

Plans Agri-processing The provincial government has declared that it is determined “to turn Mpumalanga into a manufacturing hub for South Africa and the rest of the continent”. To that end, partnerships with Russia, China and Italy have been established to improve local knowledge of technology and to become globally competitive. This strategy could be said to have paid off when it was announced that Minsk Tractor Works is to establish an assembly plant in the province. Belarus and Oman are two of the other countries that Mpumalanga is engaged with. A key objective of the provincial government’s Mpumalanga Economic Growth and Development Path (MEGDP) is to expand the industrial base of the provincial economy. To do this, policy-makers are focusing on beneficiation, agri-processing and value chain development. Samancor Chrome (which runs Ferrometals) is the second-largest ferrochrome producer in the world with three plants, two of which are in Mpumalanga: eMalahleni (Witbank) and Middelburg. Most manufacturing in the province takes place in the Highveld where there is access to chrome, steel and coal. In Middelburg, Thos Begbie makes a variety of products at its heavy engineering works. Graphite Freezeline Solutions opened a new graphite facility within the Begbie property in 2018. Middelburg-based Columbus Stainless is a major supplier of stainless-steel products to the domestic and international market. About 25% of the company’s production is sold domestically. The Manganese Metal Company in Nelspruit is the largest producer

ONLINE RESOURCES Highveld Industrial Park: www.highveldindustrialpark.co.za Middelburg Chamber of Commerce and Industry: www.middelburg info.com Mpumalanga Economic Growth Agency: www.mega.gov.za National Department of Trade and Industry: www.thedti.gov.za South African Iron and Steel Institute: www.saisi.co.za Southern Africa Stainless Steel Development Association: www.sassda.co.za

The Lowveld area supports food and beverage enterprises and timber processing. Approximately 70% of jobs in the manufacturing sector are in food and forestry. A large agri-processing fruit hub is planned for the province. Located in the Nkomazi Special Economic Zone, the proposed hub, with an estimated value of R10-billion, would deal with the whole value chain from growing fruit through to processing, marketing and logistics. Having manufacturing facilities at the core of the hub will enable a variety of businesses to be established, both upstream (to supply the plant) and downstream (to deal with the products of the plant). Stander ton has textilemanufacturing capacity in the form of Standerton Mills. It is also home to several plants that use local raw materials: Nestlé has an infant-cereal manufacturing plant, RCL runs farms in the Carolina district and Early Bird is prominent. McCain and PepsiCo (Simba) have plants that use the province’s plentiful potato crop. TSB Sugar runs two large mills and produces fruit juices through a subsidiary company. Nelspruit is the centre of the province’s foodprocessing cluster. MPUMALANGA BUSINESS 2018/19

OVERVIEW

Transport and logistics The Moloto Corridor is a key regional route.

SECTOR INSIGHT The Mpumalanga International Fresh Produce Market offers many logistics opportunities.

Roadworks underway between Ogies and Kriel. (Photo: Raubex)

n June 2018, the National Department of Transport held an information session in Mpumalanga to explain to SMMEs how they can take advantage of opportunities in the infrastructure sector. Deputy Minister of Transport Sindisiwe Chikunga made presentations together with representatives from the South African National Roads Agency Limited (Sanral), Air Traffic Navigation Services (ATNS) and Airports Company South Africa (ACSA). Sanral has presented its long-term vision, Horizon 2030, as part of its contribution to the National Development Plan 2030. Road improvements which have boosted the transport infrastructure of Mpumalanga recently include the upgrades to the R570 (linking Malelane on the N4 to Swaziland), the N11 (Hendrina–Middelburg) and part of the vital R573 Moloto Road, which carries huge volumes of traffic to Gauteng and Limpopo. Sanral’s three-year plan for the R573 allocates R1-billion to the project. A clause in Sanral’s contract with big companies to work on the R573 ensured that small companies were involved. Raubex Construction consequently formed a joint venture with Biz Afrika, Khuluphala Tradings and Themolo Business Enterprise. The R573 forms part of the Moloto Corridor. In the long term the aim is to create a coordinated road and rail corridor including rapid rail facilities. With about 50 000 motor vehicles currently using the route every day, it represents one of the busiest parts of South MPUMALANGA BUSINESS 2018/19

Africa’s road network. The plan to upgrade the corridor is one of 18 national Strategic Infrastructure Projects (SIPs). Not only will the corridor provide better linkages between the provinces and boost development along the route but improve access to the mineral reserves of the Waterberg region. The Maputo Development Corridor is Africa’s most advanced spatial development initiative (SDI) comprising road and rail infrastructure, border posts, and port and terminal facilities. Run by the Maputo Development Corridor Logistics Initiative (MCLI), the corridor runs from just outside Pretoria in Gauteng, through Witbank, Middelburg and Nelspruit in Mpumalanga, and on to Maputo in Mozambique. The already successful Maputo Development Corridor will soon receive a further boost with the upgrading of the Komatiepoort Dry Port into a Special Economic Zone. The National Department of Trade and Industry (dti) has designated the Mpumalanga Economic Growth Agency (MEGA) as the lead agent to develop the SEZ.

OVERVIEW Another infrastructural development that will boost trade is Transnet’s Swaziland Rail Link (SwaziLink) project. A 146km railway line between Lothair in Mpumalanga and Sidvokodvo in Swaziland will allow for better movement of freight between the countries and provide a possible alternative route for freight through to Richards Bay.

Fresh produce The road and rail networks of the province carry large volumes of coal and delicate fruits and vegetables for export. This is set to grow exponentially as the Mpumalanga International Fresh Produce Market (MIFPM) within the SEZ expands capacity. The groundwork has been done for the market and services are being installed. Private partners are being consulted to provide cold storage, packaging and warehouse facilities and agri-processing plants to convert the province’s many fruits and vegetable products into juices, jams and soups. Logistics will form a major part of the MIFPM offering, especially given the strategic location of the SEZ. The Mpumalanga rail system generates more freight traffic than any other province in South Africa and is of great strategic value. Transnet Freight Rail is the main operator and the chief freight movements are coal, fuel, chemicals, timber, iron and chrome ore, fruit, maize, animal feed, wholesale and retail goods, steel, building supplies, fertiliser and consumer goods. The port of Maputo in Mozambique is an attractive option for freight. The coal terminal at Richards Bay in KwaZulu-Natal receives the majority of the coal that is mined in the province. A new rail siding is being built to service the Majuba Power Station. The 68km single heavy-haul track will be a private line that is projected to cost in the region of R5-billion and create between 3 500 and 5 000 jobs. Private rail operators Sheltam service the coal-mining and ferrochrome-metal industries from regional headquarters in Witbank. The company runs systems, hauls raw materials and rebuilds and refurbishes locomotives.

ONLINE RESOURCES Kruger Mpumalanga International Airport: www.kmiairport.co.za Maputo Corridor Logistics Initiative: www.mcli.co.za Middelburg Airfield: http://middelburgaeroclub.com Mpumalanga Department of Public Works, Roads and Transport: http://dpwrt.mpg.gov.za Railroad Association of South Africa: www.rra.co.za South African National Roads Agency Ltd: www.sanral.co.za

A grader in action at Komatipoort.

Air Nelspruit Kruger Mpumalanga International Airport (KMIA) is the province’s main airport, serving both the capital and being a convenient entry point to the southern part of Kruger National Park. Airlink has direct flights to and from Johannesburg, Cape Town, Durban and Livingstone in Zimbabwe. Hoedspruit Eastgate Airport is a popular destination for travellers on their way to private game lodges and is also near the Orpen Gate of Kruger Park. SA Express and Cemair fly to Hoedspruit from Johannesburg and Cape Town. Middelburg Airfield is one of the larger alternate airports in the province, boasting a 1.9km runway that can accommodate a 737. The annual Middelburg Air Show is held in June. Many game lodges have airstrips and helipads. SA Red Cross Air Mercy Service operates out of the old Nelspruit airport just south of the city. MPUMALANGA BUSINESS 2018/19

OVERVIEW

Tourism A famous old bridge is the setting for the Kruger National Park’s newest luxury accommodation.

hotel on a train on a bridge in a game reserve – it sounds like the beginning of an exciting children’s story. The Kruger Shalati Development is the Thebe Tourism Group’s latest accommodation offering in the Kruger National Park, Mpumalanga’s prime tourism asset. Guests will stay in a stationery train on the Selati Bridge which will give them great views over the Sabie River, famous for its buffalo and hippo sightings. Thebe Tourism has two other current projects in the province, the Blyde Canyon Community Project and proposed developments for Lisbon Estate which is adjacent to the Kruger National Park. The Lisbon development (not far from Skukuza Camp) is projected to comprise two hotels, retail, hospitality and dining facilities and staff housing associated with the Lisbon Estate. At Blyde Canyon, Thebe has signed an agreement with local communities with land claims in the Blyde River Canyon Nature Reserve which will involve them as shareholders in the new developments. God’s Window is to receive a Skywalk, the facilities at Bourke’s Luck Potholes will be rejuvenated, a cable car project is planned for Three Rondavels and another hotel is planned to boost accommodation options in the area. MPUMALANGA BUSINESS 2018/19

SECTOR INSIGHT The Makhonjwa Mountains are the world’s newest World Heritage Site. • A glass lift into Graskop Gorge offers unparalleled views. All of these projects have been registered with National Treasury as public-private partnerships. They are regarded as priority projects by the provincial government. The Provincial Government of Mpumalanga is looking for more private partners to invest in a range of ambitious projects to boost an already active sector that has several

OVERVIEW superb tourism assets, ranging from the iconic Kruger National Park (one of about 70 parks and reserves) to bird-watching, music festivals, car rallies and casinos. The provincial investment agency, MEGA, has packaged many tourism investment opportunities. The underlying principle in each case is a form of public-private partnership where the agency would assist in getting land-use and other legal requirements, and perhaps in seeing that basic infrastructure was laid on, then the developer would build and manage a tourism facility. A transaction adviser has been appointed to flesh out these proposals for investable tourism products. An example of infrastructure investment from the government’s side is the upgrading of the Manyeleti Resort, which is ongoing. Other provincial plans regarding tourism involve promoting the province as a convention venue (a Convention Bureau has been established and the City of Mbombela is being encouraged to build a large centre), adopting a strategy to attract international air links and promoting links with foreign tourism authorities. On the final point, Mpumalanga has started a partnership with the Ural Association of Tourism in Russia whereby 10 tour operators from Mpumalanga visited Yekaterinburg and a delegation from the Sverdlovsk region visited the province.

New niches in old rocks A three-billion-year-old micro-fossil found in the Makhonjwa Mountains near Barberton and the border with Swaziland is thought to be the oldest sign of life on the planet. Now the Makhonjwa Mountains, themselves somewhere between 3.2-billion and 3.6-billion years old, have been declared a World Heritage Site by the United Nations Educational‚ Scientific and Cultural Organisation (UNESCO). The tourist offering near Barberton has been branded the Genesis Route. This brings to 10 the number of World Heritage Sites in South Africa and opens up the possibility of a new type of niche tourism for

ONLINE RESOURCES Graskop Gorge Lift Company: http://graskopgorgeliftcompany.co.za Lilizela Tourism Awards: www.lilizela.co.za Mpumalanga Gaming Board: www.mgb.org.za Mpumalanga Tourism & Parks Agency: www.mtpa.co.za South African National Parks: www.sanparks.co.za South African Tourism: www.southafrica.net South African Tourism Services Association: www.satsa.com

Mpumalanga. In addition, funds for conservation of the area will be made available from the World Heritage Fund. Visitors to Graskop Gorge can now drop 50m into the gorge via a glass elevator which was completed by Enza Construction towards the end of 2017. Once the R25-million Graskop Gorge Tourism Attraction Centre is complete (in the course of 2018), there will be a 200-seater restaurant, an overhanging veranda, a ticket office, space for three curio shops and an area for informal traders to sell their wares. Although the province already caters for motor-rally enthusiasts, cyclists, runners, walkers, fishers, horse-riders, tree-gliders, abseilers, white-water rafters and rock climbers, there is still tremendous potential for more investment in the ecotourism and adventure tourism subsectors. Tsogo Sun has six hotels in the province, ranging from two StayEasys to Southern Sun The Ridge, which is attached to the Ridge Casino in Witbank (Emalahleni). The Graceland Hotel Casino and Country Club in Secunda is a Peermont resort. Protea Hotels by Marriott also has six properties in Mpumalanga, including Protea Hotel Kruger Gate and Hazyview. At White River, Premier Hotel The Winkler is just 20 minutes’ drive from the Numbi Gate of the Kruger National Park. Forever Resorts has a big presence in the province, catering to many caravans and campers and holiday-makers wanting to stay in chalets. There is also a four-star Forever Resorts Mount Sheba. MPUMALANGA BUSINESS 2018/19

OVERVIEW

Banking and financial services All the major banks have agricultural divisions.

Agricultural financing is a growing sector.

griculture is a vital part of the Mpumalanga economy and so it is logical that each of the big retails banks has specialists in the province and dedicated units. TWK Agri, a modern agricultural company which grew out of a wattle growers and timber association, offers financing and insurance together with the usual suite of agricultural services. Afgri, one of the country’s biggest agricultural companies, offers financial services (financing and insurance) under the brand Unigro. It has another service called Gro Capital Financial Services which offers more complicated products such as trade finance, foreign exchange and currency and interest rate hedging All of the big retail banks (Nedbank, Absa, Standard Bank, Capitec and First National Bank) have a solid presence in the major towns in the province. Agriculture is an important focus area for banks and most have specialised divisions such as Nedbank Agribusiness. Focus areas for this unit are agronomy (grain, oil seeds, sugar and cotton), livestock (including game farming), horticulture (fruit and vegetables, for example), and secondary agriculture which covers agricultural processing and storage. Another source of funding for farmers is the Land and Agricultural MPUMALANGA BUSINESS 2018/19

SECTOR INSIGHT Several new banking licences are in the pipeline. Development Bank of South Africa (Land Bank), a developmentfinance institution that falls under the Ministry of Finance. Standard Bank has a new black economic empowerment agricultural fund designed to support emerging farmers. The R500-million fund is designed to connect farmers who have received farms in land reform projects to agri-businesses that will buy their produce. The Masisizane Fund makes loan financing available in sectors such

OVERVIEW

as agriculture and agri-processing), commercial, supply chain and manufacturing. It also offers training and technical support and funding to help businesses to comply with legislation.

Changes The first new banking licence in nearly two decades was issued in 2017, to TymeDigital by Commonwealth Bank SA. The bank will have no physical branches although Tyme’s Money Transfer product, which it launched in 2016, is available at Boxer and Pick n Pay. African Rainbow Capital is the venture’s BEE partner. The banking licence is the first to be issued since Capitec was granted a licence by the South African Reserve Bank in 1999. Life insurer MMI Holdings is also entering a partnership with African Bank to enable it to start taking deposits and loaning money. It intends to establish a R10-billion loan book. In a province with a high proportion of rural citizens such as Mpumalanga, the prospect of Postbank being upgraded to a fullservice bank is positive news. The current Postbank focusses on taking deposits and savings accounts. Postbank has secured a R3.7-billion loan to enable it to open its own loan book. The large geographical footprint of the Post Office will make the bank easily accessible to even remote parts of the country. Two other state-owned enterprises are looking to create banks, The Ithala Development Finance Corporation is an enterprise funder in KwaZulu-Natal that has applied for a banking licence. At national level, there is a plan to create a Human Settlements Development Bank. This would entail merging three entities: the National Housing Finance Corporation, the Housing Loan Fund and the National Urban Reconstruction and Housing Agency. The focus will be on financing housing for poorer households and for large state-funded housing projects. Part of the drive is to integrate cities better and to combat the legacy of the spatial divide

ONLINE RESOURCES Auditor-General of South Africa: www.agsa.co.za Banking Association South Africa: www.banking.org.za Financial Services Board: www.fsb.co.za Post Bank: www.postbank.co.za Public Investment Corporation: www.pic.gov.za The Land and Agricultural Development Bank of South Africa: www.landbank.co.za

that apartheid left behind. Privatesector investment will be sought. For many decades, South Africa had a retail banking Big Four – Standard Bank, Nedbank, Absa/Barclays and First National Bank. All of them have continue to have a strong presence in the province, but Capitec Bank has now also become a major player in the retail market. Banks are working hard to offer products to the previously unb anke d. N e db ank has partnerships with shops such as Boxer Stores and Pick n Pay where customers can have access to financial services in previously unserviced areas and also on all days of the week such as public holidays and Sundays. Nedbank also has Approve-it™, which allows customers to accept or reject an Internet transaction by cellphone. Standard Bank’s communitybanking initiative offers a lowcost cellphone-banking service. Retailers can act as agents for the bank, even in very remote rural areas. Shops such as Shoprite, Pep and Spar are connected, as are certain spazas. The insurance market has become more varied over time, with a greater variety of products now available to more market segments, including middleincome earners. A typical example of a specific product that is responding to new realities is Old Mutual’s iWYZE medical gap cover, designed to pay the difference between what a medical aid scheme is willing to pay and what the hospital or doctor is charging. MPUMALANGA BUSINESS 2018/19

OVERVIEW

Development finance and SMME support A small loan can make a big difference.

SECTOR INSIGHT Several new banking licences are in the pipeline.

esearch done by the Small Enterprise Development Agency (Seda) shows that a high percentage of SMMEs in Mpumalanga are in the trade and accommodation sector. Whereas the national figure is about 43%, in Mpumalanga it is closer to 50%. In the third quarter of 2017, Seda calculated that the growth year-on-year of SMMEs being created reached 21% in the province. Seda has a number of incubators which it supports in the province: • Furntech, furniture manufacturing, White River • Mobile Agri-Skills Development & Training (MASDT), agricultural training, Nelspruit • Mpumalanga Stainless Initiative (MSI), stainless steel processing, Middelburg (with Columbus Stainless) • Timbali floriculture, Nelspruit • Ehlanzeni TVET College Rapid Incubator Renewable Technologies, Nelspruit. MPUMALANGA BUSINESS 2018/19

Seda is a subsidiary of the national Department of Small Business Development (DSBD) and is one of the most active agencies in supporting entrepreneurs. Seda is not a financial agency, focussing rather on training and administrative support, although the agency will help SMMEs get in touch with financial bodies. When a small Witbank company approached Seda to help it become more competitive in the field of ventilation structures, air crossing tunnel structures and explosion barriers, it became clear that the pressing need was for Peneul Nathi Trading (pictured) to purchase its own corrugated iron manufacturing machine. Seda helped the entrepreneurs draw up a business plan for a loan which was presented to the Sasol Siyakha Enterprise and Suppliers Development Trust. A loan of R4.9-million was granted, and the machine was bought. Turnover increased by 48% and an additional 25 employees were added to the staff. Sappi’s long-term Ngodwana mill project will spend more than

OVERVIEW R600-million on procuring goods and supplies from broad-basedblack-economic-empowered companies, of which R51-million will go to SMMEs. Other companies supporting SMMEs through their buying chain include Woolworths and Anglo American. Woolworths is funding TechnoServe to ensure that small tomato growers can grow produce that will meet the demanding standards of the retailer, and to help them expand production. A regular supplier to Woolworths, Qutom, assists with the project.

Provincial government The Mpumalanga Economic Growth Agency (MEGA) is the implementing agent of the provincial government’s SMME support policy. An agreement has been signed by Standard Bank and MEGA to launch an SME Fund with a capitalisation of R500-million. In addition to a general commitment from the provincial government to purchase from SMMEs, township enterprises or co-operatives where possible, MEGA has received loan applications for R72.7-million. Rural enterprises feature strongly in the loan book profile, and there is significant support for women and youth-owned businesses. MEGA has also overseen the rehabilitation of industrial premises in former homelands and formed partnerships with financial institutions for funding. A Social Enterprise Model is being introduced to try to link small enterprises with infrastructure projects. Planners want to see local businesses building the roads and public buildings in the areas where those facilities are sited. MEGA has been allocated R10-million to assist SMMEs and co-operatives to make the most of opportunities that this model will create. The construction sector has huge potential for SMMEs, with products such as bricks, doors, tiles, trusses, concrete pipes and similar products providing opportunities for growth. Research is being conducted on the agricultural or manufacturing sectors across the province to guide future interventions to support SMMEs and co-operatives.

ONLINE RESOURCES Gazelles: www.nationalgazelles.org.za Mpumalanga Economic Growth Agency: www.mega.gov.za Mpumalanga Stainless Initiative: www.mpstainless.co.za National Department of Small Business Development: www.dsbd.gov.za Small Enterprise Development Agency: www.seda.org.za

The provincial government plans to use state buying power to buy goods and services produced and supplied by township and rural SMMEs and co-operatives. The plan includes buying food from co-operatives to supply the school nutrition programme and the provincial traffic college. E xamples of township businesses supported by the Depar tment of Economic Development and Tourism (DEDET) are an agreement with Sumitomo Rubber SA (Dunlop) to promote local tyre enterprises and financial support for the commissioning of a sanitary towel plant by the Ntirhisano Sanitary Worker Co-operative in Bushbuckridge (and support for business development and access to market). The National Gazelles is a national SMME accelerator jointly funded by Seda and the DSBD. The aim is to identify and support SMMEs with growth potential across priority sectors aligned with the National Development Plan and Seda’s strategy. Businesses can receive up to R1-million for training, productivity advice, business skills development and the purchase of equipment. The Industrial Development Corporation (IDC) is a strong supporter of SMMEs either by disbursing loans or by taking minority shares in enterprises and giving advice. T he Development Bank of Southern Africa (DBSA) is another major funder of public projects. MPUMALANGA BUSINESS 2018/19

OVERVIEW

Education and training The University of Mpumalanga is expanding.

SECTOR INSIGHT The Colliery Training College has won a national award. • T h e U ni v er si t y o f Mpumalanga will spend R600-million per year on new buildings.

In 2017 the University of Mpumalanga built a library, a residence, executive offices, a hall and an administration building. (Photo: Federale Stene.)

he University of Mpumalanga began in 2014 with 167 students and no facilities to speak of. It intends enrolling 3 220 students in 2019 and has already expanded its academic courses beyond education, agriculture and a diploma in hospitality to include bachelor’s degrees in arts and commerce. Geology will soon be offered as part of a BSc. This is in response to the decision by UNESCO to declare the Barberton Makhonjwa Mountains a World Heritage Site. Students from the university punched above their weight in a 2017 national competition organised by Enactus, an NGO that encourages students to develop entrepreneurial ideas that will help the world. The UMP team secured seven prizes in total, including first prizes in Local Economic Development and in the MTN SA Foundation ICT Challenge Award. The latter award was for the development of an online ICT system to assist the City of Mbombela to monitor and regulate informal trading. The main campus is at Mbombela (the former College of Agriculture) with satellites at Siyabuswa (a former education college) and KaNyamazane, which will host hospitality studies. Another Mpumalanga educational institution in the awards is the Colliery Training College, which was named by the National Skills Authority as the best artisan development programme in South Africa, 2014-2016. Although the college is funded by the major coal companies such as Exxaro, South32 and Anglo American Thermal Coal, the college is not limited to the coal industry. MPUMALANGA BUSINESS 2018/19

Many of the biggest investors in the province support education initiatives. These include Sappi’s donation of several classrooms to Khanyisile Primary School near Barberton and programmes for pupils and teachers at Entabamhlophe Combined School in Elandshoek near the company’s mill at Ngodwana. More than 800 000 pupils in primary and secondary schools are beneficiaries of the provincial department of education’s school nutrition programme and 1 604 schools in the province are in the ‘‘no-fee school’’ category.

Bursaries Several big employers in Mpumalanga support further education through bursaries. Sasol offers an all-inclusive bursary for students in engineering, science and accounting. The bursary also has performance-based awards and allowances for things like laptops and calculators. Top performers are often asked to join Sasol.

OVERVIEW Sasol has also committed to taking on qualified apprentices from the Hydra Arc academy in Secunda, another reputable training centre. Four-year bursaries at 10 institutions of higher learning have been provided to 60 Mpumalanga students by Eskom and GE Steam Power. The R30-million scheme is focussed on technicians, scientists and engineers. The provincial government intends increasing from R200-million that it currently spends on tertiary bursaries. In 2018 there were 1 017 recipients studying across South Africa with a further 100 studying medicine, veterinary science, education (maths and science) and engineering in Russia. An inter-departmental Bursary Committee, with input from private companies, will be formed to ensure that the best candidates are selected and properly supported.

Training The signing of a treaty with the Belarus region of Mogilev means that Mpumalanga students will study at the Belarussian State Agricultural Academy in agri-industry fields such as agronomy, biotechnology and aquaculture. An agreement between MEGA and Minsk Tractor Works to build an assembly plant in Mpumalanga will not only mean work and income, but it will also create opportunities for training. Mpumalanga has three Technical and Vocational Education and Training (TVET) Colleges, with an enrolment of over 36 000. UNISA, the Tshwane University of Technology and the Vaal University of Technology also have satellite campuses in the province. The three TVET colleges are: Gert Sibande (four campuses and a skills academy), Nkangala and Ehlanzeni, which has six campuses, a skills centre and a satellite campus. Ehlanzeni TVET College offers 10 National Certificate (Vocational) programmes including ICT, Finance, Economics and Accounting, Engineering and Related Design, and Tourism. Several shorter skills courses are offered: automotive repairs and maintenance, computer practice, entrepreneurship, municipal administration and communications management.

ONLINE RESOURCES Mpumalanga Department of Education: www.mpumalanga.gov.za/education Sasol bursaries: www.sasolbursaries.com Southern African Wildlife College: www.wildlifecollege.org.za University of Mpumalanga: www.ump.ac.za

Nkangala T VET College has Civil Engineering and Building Construction at its CN Mahlangu campus and Electrical Infrastructure Construction at three of its five campus, among its seven NCV academic programmes. The Mpumalanga Regional Training Trust (MRTT) is a Section 21 company very active in skills training. It has several sites in the province, including a Hospitality and Tourism Academy at Karino just outside Nelspruit. The MRT T’s constructiontraining facility is accredited as a Construction Centre of Excellence and offers courses in brick-laying, plumbing, carpentry and other constructionrelated skills. The Southern African Wildlife College, offering diploma and short courses in conservation, is a joint World Wide Fund for Nature South Africa (WWF-SA) and Peace Parks Foundation initiative. The college is located near the Orpen Gate on the edge of the Kruger National Park. Eskom’s Generation Learnership programme has absorbed 644 graduates into permanent employment with a further 88 undergoing training. Provincial government’s other skills initiatives include the New Venture Creation programme (youth start-up skills), the Graduate Placement Programme and the Artisan Development Programme with the Mining Qualifications Authority. There is a plan to develop a Skills Development Hub in Emalahleni, in partnership with the private sector. MPUMALANGA BUSINESS 2018/19

LISTING

Mpumalanga Provincial Government A guide to Mpumalanga Province’s government departments. Visit www.mpumalanga.gov.za

Office of the Premier Premier: Refilwe Mtsweni

Department of Culture, Sport and Recreation MEC: Thandi Shongwe

Physical address: 2nd Floor, Building 2, 7 Government Boulevard, Riverside Park Extension 2, Mbombela 1200 Postal address: Private Bag X11291, Mbombela 1200 Tel: +27 13 766 0000 | Fax: +27 13 766 2494 Email: premier@prem.mpu.gov.za Website: www.mpumalanga.gov.za/otp1/

Physical address: 2nd Floor, Building 5, 7 Government Boulevard, Riverside Park Extension 2, Mbombela 1200 Postal address: Private Bag X11316, Mbombela 1200 Tel: +27 13 766 5032 Fax: +27 13 766 5591 Department of Economic Development and Tourism MEC: Eric Kholwane

Department of Agriculture, Rural Development, Land and Environmental Affairs MEC: Vusumuzi Shongwe

Physical address: 1st Floor, Building 4, 7 Government Boulevard, Riverside Park Extension 2, Mbombela 1200 Postal address: Private Bag X11215, Mbombela 1200 Tel: +27 13 766 4004 Fax: +27 13 766 4613 Website: www.dedtmpumalanga.gov.za

Physical address: 2nd Floor, Building 6, 7 Government Boulevard, Riverside Park Extension 2, Mbombela 1200 Postal address: Private Bag X11219, Mbombela 1200 Tel: +27 13 766 6067/8 | Fax: +27 13 766 8429 Department of Community Safety, Security and Liaison MEC: Petrus Ngomana

Department of Education MEC: Sibusiso Malaz

Physical address: Building 5, 7 Government Boulevard, Riverside Park Extension 2, Mbombela 1200 Postal address: Private Bag X11341, Mbombela 1200 Tel: +27 13 755 5000 Fax: +27 13 766 5577 Website: www.mpumalanga.gov.za/education/

Physical address: 2nd Floor, Building 4, 7 Government Boulevard, Riverside Park Extension 2, Mbombela 1200 Postal address: Private Bag X11269, Mbombela 1200 Tel: +27 13 766 4082 | Fax: +27 13 766 4616 / 4600 Department of Cooperative Governance and Traditional Affairs MEC: Speedy Mashilo

Department of Health MEC: Gillion Mashego

Physical address: Upper Ground Floor, Building 6, 7 Government Boulevard, Riverside Park Extension 2, Mbombela 1200 Postal address: Private Bag X11304, Mbombela 1200 Tel: +27 13 766 6087 | Fax: +27 13 766 8441/2 Website: http://cgta.mpg.gov.za

MPUMALANGA BUSINESS 2018/19

Physical address: 2nd Floor, Building 3, 7 Government Boulevard, Riverside Park Extension 2, Mbombela 1200 Postal address: Private Bag X11285, Mbombela 1200 Tel: +27 13 766 3754 Fax: +27 13 766 3475 Website: www.mpuhealth.gov.za

LISTING Department of Human Settlements MEC: Speedy Mashilo

MEC: Busi Shiba Physical address: Son Joy Building, Boulevard Street, Riverside Park, Mbombela 1200 Postal address: Private Bag X11285, Mbombela 1200 Tel: +27 13 766 3428 Fax: +27 13 766 3456/7 Website: www.dsdmpu.gov.za

Physical address: Building 7, 7 Government Boulevard, Riverside Park, Mbombela 1200 Postal address: Private Bag X11328, Mbombela 1200 Tel: +27 13 766 6088 Fax: +27 13 766 8441 Website: http://dhs.mpg.gov.za/

Provincial Treasury MEC: Sikhumbuzo Kholwane

Department of Public Works, Roads and Transport MEC: Sasekani Manzini

Physical address: Upper Ground Floor, Building 4, 7 Government Boulevard, Riverside Park Extension 2, Mbombela 1200 Postal address: Private Bag X11205, Mbombela 1200 Tel: +27 13 766 3250 Fax: +27 13 766 3459 Website: http://treasury.mpg.gov.za

Physical address: 7 Government Boulevard, Riverside Government Complex Building, Mbombela 1200 Postal address: Private Bag X 1302, Mbombela 1200 Tel: +27 13 766 6696 / 6979 Fax: +27 13 766 8453 / 8471 Website: http://dpwrt.mpg.gov.za Department of Social Development

Mpumalanga Local Government A guide to district and local municipalities in Mpumalanga. EHLANZENI DISTRICT MUNICIPALITY Physical address: 8 Van Niekerk Street, Nelspruit 1201 Postal address: PO Box 3333, Nelspruit 1200 Tel: +27 13 759 8500 Fax: +27 13 759 8539 Website: www.ehlanzeni.gov.za

Thaba Chweu Local Municipality Tel: +27 13 235 7300 Fax: +27 13 235 1108 Website: www.tclm.co.za

Bushbuckridge Local Municipality Tel: +27 13 799 1851 Fax: +27 13 799 1865 Website: www.bushbuckridge.gov.za

GERT SIBANDE DISTRICT MUNICIPALITY Physical address: Cnr Joubert and Oosthuise streets, Ermelo 2350 Postal address: PO Box 1748, Ermelo 2350 Tel: +27 17 801 7000 Fax: +27 17 811 1207 Website: www.gsibande.gov.za

City of Mbombela Local Municipality Tel: +27 13 759 9111 Fax: +27 13 759 2070 Website: www.mbombela.gov.za

Chief Albert Luthuli Local Municipality Tel: +27 17 843 4000 Fax: +27 17 843 4001 Website: www.albertluthuli.gov.za

Nkomazi Local Municipality Tel: +27 13 790 0245 | Fax: +27 13 790 0886 Website: www.nkomazi.gov.za

Dipaleseng Local Municipality Tel: +27 17 773 0055 | Fax: +27 17 773 0169 Website: www.dipaleseng.gov.za

MPMALANGA BUSINESS 2018/19

LISTING Govan Mbeki Local Municipality Tel: +27 17 620 6000 | Fax: +27 17 634 8019 Website: www.govanmbeki.gov.za

Dr JS Moroka Local Municipality Tel: +27 13 973 1101 | Fax: +27 13 973 0974 Website: www.moroka.gov.za

Lekwa Local Municipality Tel: +27 17 712 9600 | Fax: +27 17 712 6808 Website: www.lekwalm.gov.za

Emakhazeni Local Municipality Tel: +27 13 253 7600 Fax: +27 13 253 2440 Website: www.emakhazeni.gov.za

Mkhondo Local Municipality Tel: +27 17 826 8100 | Fax: +27 17 826 3129 Website: www.mkhondo.gov.za

eMalahleni Local Municipality Tel: +27 13 690 6911 | Fax: +27 13 690 6207 Website: www.emalahleni.gov.za

Msukaligwa Local Municipality Tel: 086 116 7852 | Fax: +27 17 801 3851 Website: www.msukaligwa.gov.za

Steve Tshwete Local Municipality Tel: +27 13 249 7000 Fax: +27 13 243 2550 Website: www.stlm.gov.za

Pixley Ka Isaka Seme Local Municipality Tel: +27 17 734 6100 | Fax: 086 630 2209 Website: www.pixleykaseme.gov.za

Thembisile Hani Local Municipality Tel: +27 13 986 9100 | Fax: +27 13 986 0995 Website: www.thembisilehanilm.gov.za

NKANGALA DISTRICT MUNICIPALITY Physical address: 2A Walter Sisulu Street, Middleburg 1055 Postal address: PO Box 437, Middleburg 1050 Tel: +27 13 249 2000 | Fax: +27 13 249 2056 Website: www.nkangaladm.org.za

Victor Khanye Local Municipality Tel: +27 13 665 6000 | Fax: +27 13 665 2913 Website: www.victorkhanyelm.gov.za

MUNICIPALITIES IN MPUMALANGA Limpopo

Mozambique

Bushbuckridge

Dr JS Moroka

North West

Thaba Chweu

Ehlanzeni

Thembisile

Nkangala

Gauteng

eMalahleni

Emakhazeni

Mbombela

Nkomazi

Steve Tshwete

Victor Khanye

Chief Albert Luthuli

Govan Mbeki

Msukaligwa

Swaziland

Gert Sibande

Dipaleseng

Lekwa Mkhondo

Free State

Pixley Ka Seme

Metropolitan/District Municipality Boundary

Local Municipality Boundary

District Municipality Local Municipality

MPUMALANGA BUSINESS 2018/19

Amajuba uMlalazi

INTERVIEW

Advocating for a just economic society The Provincial Secretary of the Black Management Forum Mpumalanga, Mawela Ndlamlenze, explains how a transformation master plan has been created.

Mawela Ndlamlenze

Please outline the main objectives of the Black Management Forum. The forum is committed to advocate for a just economic society for the collective advancement of primarily black people in the social and economic mainstream including: • to train and develop primarily black professionals to be effective business and management leaders • to ensure appropriate recruitment and advancement of black people into business organisations to achieve an equitable dispensation • to link public, private and academic institutions into an effective network to support interdisciplinary communications, management innovation and professional development among black people • to encourage professionals to play an active role in the broader South African community by participating in community outreach. What is your current focus? BMF Mpumalanga is focusing on corporate social investment by companies in local communities; business skills development through relationships with private organisations and state organs; mentorship; creating dialogue platforms through events that cover pertinent social issues; and canvassing for employment for our members, especially in senior positions within the private sector.

BIOGRAPHY Mawela Ndlamlenze is from Ermelo and has a qualification within the Internal Audit profession. He works in the Risk Management Section of the Govan Mbeki Municipality where he also serves on the Audit Committee and the Risk Management Committee. Having served various non-profit organisations, Mawela has various business initiatives under his company Wishful Dreams Investment.

What are some of the challenges facing business in Mpumalanga? The challenges our members face are access to market, access to funding, government legislation not being favourable to SMMEs and private policy that is structured in a way to disempower SMMEs. What are some of your most recent achievements? The recent achievement for BMF Mpumalanga is the facilitation between the BMF, civil society, labour unions and government in the development of the transformation master plan which seeks to outline key deliverables for transformation. How is the relationship between the BMF and civil society, labour unions and government? We are reviving and strengthening all these relationships, including the alignment with other black professional bodies.

MPUMALANGA BUSINESS 2018/19

INDEX

INDEX Black Management Forum (BMF) �� 63 Columbus Stainless �� 7, 24 Komati Basin Water Authority (KOBWA)...................................................................................... 46 Mpumalanga Economic Growth Agency (MEGA)............................................12, 14, OBC MTN ��3 Nedbank ��5, 26, IBC Sasol ��IFC Superfecta Trading �� 36 Transnet Pipelines �� 42

MPUMALANGA BUSINESS 2018/19

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