North West Business 2013
The 2013 edition of North West Business is the fifth edition of this highly successful publication that since its launch in 2008 has established itself as the premier business and investment guide to North West Province.
2013 EDITION NORTH WEST BUSINESS THE GUIDE TO BUSINESS AND INVESTMENT IN NORTH WEST PROVINCE www.northwestbusiness.co.za | www.frontiermarketnetwork.com Transnet Engineering New name builds on established track record Transnet Rail Engineering has changed its name to Transnet Engineering to better reflect the increased scope of its activities. Previously a division that focused on engineering and maintenance work relating to rail transport, the organisation is now equipped to also handle the assembly and maintenance of ports equipment following the expansion of the divisionâ€™s businesses. Transnet Engineering currently has nine businesses. The future of Transnet Engineering is built on its proud history of servicing the engineering needs of the transport industry both within and beyond the borders of South Africa. www.transnet.net Coach Business Locomotive Business Wheels Business Ports Business Rotating Machines Business Foundry Business Wagons Business Rolling Stock Business Auxiliary Business contents contents North West business 2013 edition Published by Global Africa Network (Pty) Ltd 9 10 16 18 42 50 Introduction Foreword9 North West Business is a unique guide to business, investment and tourism in North West Province. Special features Regional overview of North West Province 10 North West Province has rich mineral and agricultural resources. The most important economic sectors in the province are mining, agriculture, manufacturing and tourism. North West cities and towns 16 The towns of the North West play important roles in the regional economy. Smart logistics get freight moving faster 18 Getting the North Westâ€™s agricultural and mining products to other places is big business. Overview of the South African economy 30 Key facts and figures on South Africaâ€™s demographics, economy, trade and investment. Destination North West Tourism42 Hunting and golf tourism are growth sectors. Big events in big sky country A wide variety of festivals and sporting events is making the North West a hotspot of activity and excitement. north west business 2013 2 50 PLATINUM NO MATTER HOW VALUABLE A RESOURCE, OUR PEOPLE WILL ALWAYS BE WORTH MORE. SO TO ADDRESS A NEED FOR SUSTAINABLE HOUSING, OUR PLATINUM BUSINESS PARTNERED WITH THE DEPARTMENT OF HUMAN SETTLEMENTS TO PROVIDE 20 000 HOUSES FOR OUR EMPLOYEES IN LIMPOPO AND NORTH WEST. WITH OUR INVESTMENT OF MORE THAN R1.4 BILLION, OUR PLATINUM EMPLOYEES WILL BE ABLE TO ENJOY THE COMFORTS OF HOME – LIKE PORTIA MONEBI, A MINER AND NOW A PROUD HOMEOWNER. WE ARE IMPROVING OUR PEOPLE’S LIVING CONDITIONS AND SUPPORTING THE NATIONAL HOUSING POLICY. IT IS ANOTHER PARTNERSHIP TURNING RAW MATERIALS INTO BUILDING MATERIALS. PORTIA MONEBI Homeowner, North West Province PRODUCING SOMETHING MORE PRECIOUS THAN PLATINUM: HOMES FIND OUT MORE AT GETTHEFULLSTORY.CO.ZA Real Mining. Real People. Real Difference. contents 54 59 75 78 80 82 92 Economic sectors Agriculture54 Big grain companies in the North West deal in huge volumes. Mining59 The platinum sector is facing several challenges. Mineral beneficiation 65 There is great potential for the use of platinum in the energy sector. Manufacturing70 The automotive-supply sector is growing in North West Province. Food and beverages 72 Big companies have large manufacturing plants in North West Province. Engineering75 Mining is the main concern of North Westâ€™s engineers. Transport78 North West Province hosts key national routes. Construction and property 80 Cement companies are prominent in the North West. Water82 Hartbeespoort Dam is the focus of a massive regeneration project. Energy 86 Biofuels and the energy potential of platinum are exciting researchers. Banking and financial services 88 Microlending is under the spotlight. Development finance and SMME support Support for North West entrepreneurs is available. north west business 2013 4 92 contents 104 116 118 15 Education104 Mathematics and science teaching is under the spotlight. Government South African National Government North West Provincial Government 116 A guide to the North Westâ€™s provincial government departments. North West Local Government 118 A guide to the district and local municipalities in the North West. Vaalwater Thabazimbi Limpopo reference Bela-Bela R49 ANA 110 An overview of South Africaâ€™s national government departments. Sun City/Lost City N4 Zeerust Swartruggens Groot-Marico Mmabatho Rustenburg Koster Mahikeng Lichtenburg R49 R30 Westonaria Ventersdorp N14 Sannieshof Coligny Potchefstroom Ottosdal Klerksdorp Wolmaransstad N12 Kroonstad Welkom Ventersburg Bultfontein N3 Sasolburg N1 R82 Maps R57 Heilbron North West locator map Free State Wesselsbron Christiana Carletonville Parys R59 R30 g Bloemhof N1 Vereeniging N12 Orkney R34 SchweizerReneke Sector contents 53 Index132 Gauteng JOHANNESBURG R52 Delareyville PRETORIA Brits Hartbeespoort Mooinooi Magaliesburg 12 North West regional map 15 North West municipalities 119 Motorway Reitz Main Road Railway north west business 2013 6 credits North west business 2013 www.northwestbusiness.co.za North West Business is published by Global Africa Network (Pty) Ltd ISSN 1996-1022 Editorial & production Publisher Editor Research and writing Creative director DTP operator Assistant editor Production assistant Chris Whales Karen Kühlcke John Young Ian Jamieson Colin Carter Katie Reynolds Anjé Robberts Advertising Sales director Mark Leven-Marcon North West regional sales manager Veronica Dean-Boschoff Key accounts manager Loudon Cito Advertising representatives Christoff Scholtz, Jeremy Petersen, Nathalie Horswell and Shiko Diala Sales support manager Nadia Dicks Administration Managing director Clive During Financial controller Brett Watson Administration and accounts Charlene Steynberg, Natalie Koopman Distribution Lizé Fourie Printing CTP Distribution North West Business is distributed internationally on outgoing and incoming trade missions, through Invest North West; to 115 foreign offices in South Africa’s main trading partners around the world; at top international trade fairs; 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, provincial government departments, municipalities, companies, major stores and business-class lounges. Member of the Audit Bureau of Circulations Published by Global Africa Network (Pty) Ltd Company Registration No: 2004/004982/07 Directors: Clive During, Chris Whales, Richard Pembroke Physical address: 3rd Floor, Sunclare Building, 21 Dreyer Street, Claremont 7700, Cape Town, South Africa Postal address: PO Box 44573, Claremont 7735, South Africa Tel: +27 21 657 6200 • Fax: +27 21 674 6943 Email: email@example.com • Website: www.gan.co.za Copyright Disclaimer Photo credits North West Business is an independent publication published by Global Africa Network (Pty) Ltd. Full copyright to the publication vests with Global Africa Network (Pty) Ltd. No part of the publication may be reproduced in any form without the written permission of Global Africa Network (Pty) Ltd. While the publisher, Global Africa Network (Pty) Ltd, has used all reasonable efforts to ensure that the information contained in North West 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. Photographs: Imperial Logistics, NWU, OutDoorPhotographers, Pasdec Automotive Technologies, Wesvaal Chamber of Commerce, Dept. of Water Affairs, Activate High Performance Architecture, Anglo American, More Hotels and Lodges, Sun Images, Old Mutual, Mooirivier Mall, and Madikwe Safari Lodge. Cover photographs: (welder, lion, sunflower, wheat, molten metal) Dreamstime, (harvester) Veer, (Witkop mine) Philip Mostert. north west business 2013 8 foreword North West Business A unique guide to business, investment and tourism in North West Province. T NORTH WEST BUSINESS 2013 EDITION he 2013 edition of economic overview of the province (see p30) and detailed North West Business is overviews of the region’s major the sixth edition of this sectors (see sector index on highly successful publicaTHE GUIDE TO BUSINESS AND INVESTMENT IN NORTH WEST PROVINCE p53). Special features in this tion that since its launch in issue focus on the wide range 2008 has established itself of major events that are hosted as the premier business and in the province (p50) and the investment guide to the key role the province’s logisNorth West Province. North tics infrastructure plays in the West Business is unique as a regional and national economy business journal that focuses (p18). exclusively on the North West and that also carries full Global Africa Network (www. Audit Bureau of Circulations gan.co.za), the publisher of North West Business, specialises (ABC) certification, meaning its print run and circulation of in business-to-business print 15 000 copies is indepenand electronic publications, dently audited and verified. producing a series of officially endorsed, regionNorth West Business was launched as a specific, annual print journals. Every province print journal to meet the need for a compre- in South Africa is now covered by this unique hensive and well-researched business guide range of journals: Northern Cape Business, Free to the province. A number of complementary State Business, Western Cape Business, KwaZuluelectronic features have subsequently been Natal Business, Gauteng Companies, Eastern Cape introduced to give participants in and readers Business, Mpumalanga Business and Limpopo of the journal a wider range of communication Business. A national business guidebook, South options. These include the website, www.north- African Business, was added to the stable in 2011. westbusiness.co.za, which includes an online (See www.gan.co.za to order complimentary record of all of the content from the print copies of these journals.) journal and an e-book version available through Global Africa Network thanks the dedicated a hyperlink on the website’s home page. sales team and the professional and committed New in 2012 was the online platform writers, editors and designers who worked Frontier Market Network (www.frontiermar- so hard to produce this edition of North West ketnetwork.com), a business network for fast- Business. We thank Invest North West, the municgrowing ‘frontier’ markets, which builds on the ipalities, companies and other organisations that offering of our popular TradeInvest websites. provided us with information and supported this The community comprises companies, govern- undertaking. ment organisations and individuals involved in doing business, investing, promoting or sup- Chris Whales porting deal transactions in rapidly developing Publisher, Global Africa Network economies. Email: firstname.lastname@example.org The 2013 edition of North West Business www.northwestbusiness.co.za includes a well-researched and up-to-date www.gan.co.za www.northwestbusiness.co.za | www.frontiermarketnetwork.com 9 north west business 2013 a regional overview of north west province North West Province has rich mineral and services contributes 10.8%, and finance and agricultural resources. Educational excel- business services 12%. Trade accounts for lence is promoted by outstanding research 10% and manufacturing 5.8%. done by North-West University, which has The North West is a major producer of three campuses. The most important eco- maize and sunflower seeds and many other nomic sectors in the province are mining, agricultural products. About one-third of South agriculture, manufacturing and tourism. Africaâ€™s maize comes from the province, as does 15% of its wheat. by John Young The dry western part of the province is home to beef cattle, game ranching and nown as the Platinum Province for the hunting, with Vryburg being a major centre large concentration of platinum mines for cattle auctions. The well-watered eastern in the greater Rustenburg area, other and north-eastern regions can carry many productive mining sectors include gold, dia- kinds of crops, many of which find themselves monds, dimension stone, granite and cement. on the tables of the citizens of the nearby North West Province is bordered on the urban centres of Johannesburg and Pretoria. west by Botswana and the province of Gauteng Manufacturing capacity is concentrated in to the east. The Vaal River runs along the the larger towns in the north-east and eastern provinceâ€™s south-eastern border with the Free regions of the province. The economy of the State, and the province also shares borders town of Rustenburg is closely linked to the with the Northern Cape to the south and fortunes of platinum mining, with the sector Limpopo in the north. contributing 77% of the cityâ€™s gross geographic The contribution of the mining sector to product. The Rustenburg Local Municipality the gross regional domestic product (GRDP) of announced in 2010 that the city was the the province amounts to 30.4%, government fastest-growing city in Africa. K special feature The Rustenburg Rapid Transport (RRT) project will cost R3-billion and transform the city’s economy. About 200 000 passengers are expected to use the system. The Platinum Spatial Development Initiative aims to develop all areas on the N4 highway that links South Africa’s most densely populated areas with the town of Lobatse in Botswana. By developing nodes along the logistical corridor, the aim is to stimulate economic development. Rustenburg stands to benefit from increased traffic along this route, which is ultimately intended to link Namibia and Mozambique. The major manufactured products of the province are fabricated metals, food and beverages and non-metallic metals. Mining-related engineering works are prevalent near mining operations, while companies in the automotive and automotive-supply industry are active in Brits. The agricultural sector also generates largescale storage and logistics operations, particularly in Klerksdorp, Vryburg and Brits. Strong efforts are being made to attract investment into the manufacturing sector of the North West by a variety of groups, with provincial investment agency Invest North West in the forefront. The priority is to add value to the province’s raw materials. The mining industry lends itself to various forms of spinoffs and beneficiation projects, like catalytic converters for motor vehicles, but there is also tremendous scope for the development of agri-processing, as the province is so rich in agricultural produce. Leather for car seats is an obvious example. North West’s tourism offering is varied and comprehensive. The emphasis is on the bushveld experience, with major assets being the Pilanesberg National Park (a provincial facility) and the Madikwe Game Reserve, which contains many luxury private lodges. The North West Parks and Tourism Board runs a further 12 smaller parks and reserves. Two UNESCO World Heritage Sites are located at Vredefort Dome (where a meteorite hit the BOTSWANA Limpopo NAMIBIA Mpumalanga North West Gauteng Free State LESOTHO Northern Cape Eastern Cape Western Cape north west business 2013 12 SWAZILAND KwaZuluNatal MOZAMBIQUE ZIMBABWE special feature The North West has become popular with local and foreign visitors. earth about two million years ago) and Taung, where the discovery by an archaeologist of a skull in 1924 is regarded as one of the most significant of all time. The complex of hotels at Sun City in the Pilanesberg offers a range of accommodation, from the last word in luxury to family accommodation. There are two very good golf courses at Sun City. The annual Nedbank Golf Challenge, hosted at the Gary Player Country Club, helps to put North West Province in the international spotlight There are campuses of North-West University in Potchefstroom, Mahikeng and the Vaal Triangle. Geography The province falls in a summer rainfall area and the vegetation mostly comprises bushveld. The Magaliesberg is the only significant mountain range in the province. It runs for about 130km between Rustenburg and Pretoria in the northeast part of the province. Three of South Africa’s major watercatchment areas run through the North West Province: Limpopo, Orange and Vaal. The rivers and irrigation schemes (particularly centred on the Crocodile, Harts and Vaal rivers) support extensive commercial agricultural enterprises, small-scale farming and game ranching. North West Province’s landmass of 116 320km² comprises just less than 8.7% of South Africa’s, while a population of 3.5-million makes up 6.8% of the national population. About 2.2-million live in urban areas, with the main towns being Mahikeng (the provincial capital), Potchefstroom, Rustenburg, Brits and Klerksdorp. Klerksdorp, which has gold mining and manufacturing capacity, is the largest city in terms of population, with about 423 000 people living there. More than 60% of the North West’s population have Setswana as a home language, with isiXhosa, Sesotho and Afrikaans as the other languages used by significant numbers of people. English is widely used in business. Traditions A number of traditional communities in North West Province are active participants in the modern economy. The best known among these is the Royal Bafokeng Nation, with diverse holdings in 18 companies ranging from telecommunications to short-term insurance, and assets worth more than R30-billion, 13 north west business 2013 special feature The Royal Bafokeng Sports Palace hosted five matches during the 2010 Soccer World Cup. but there are several other Setswana-speaking communities that have shares in mining companies active in North West Province. Many of the complex share-ownership and blackempowerment deals have led to tension and court disputes between companies and communities – and indeed between groups within communities – but the great mineral wealth of the area presents a great opportunity for the upliftment of poor rural people. The Bafokeng number around 300 000, of whom about half live to the north-west of Rustenburg, with the capital city of Phokeng being the administrative centre. The source of the community’s wealth is the mineral-rich land they own. Remarkably in the South African context, this black tribe has held title to this land since the time of British rule. The great, great, great, great grandfather of the current kgosi (king) of the Bafokeng, Kgosi Mokgatle, encouraged young men to work for cash on the mines of Kimberley so that title deeds for the group’s traditional lands could be bought and registered. Now Kgosi Leruo Tshekedi Molotlegi presides over a community that is a significant player in the platinum sector and has a large and diverse investment portfolio. north west business 2013 14 Royal Bafokeng Holdings has a 13.4% stake in Implats, a company that produced 2.3-million ounces of platinum in the 2012 financial year. The Bakgatla-Ba-Kgafela Traditional Administration (BBKTA) is responsible for the governance of the 350 000-strong community of the same name in the Moruleng district. The Bakgatla are the single biggest shareholder (32.98%) of Platmin, a JSE-listed company. Kgosi Nyalala Pilane, the leader of Bakgatla, has ensured that the mine employs people from local communities, and has been instrumental in the establishment of the Pilanesberg Tannery and other investments in tourism projects. Construction of the mine created 2 500 jobs, with a further 3 000 permanent jobs on the mine itself. 15 Sishen N14 Reivilo Lykso north west business 2013 Postmasburg Ulco Northern Cape Kuruman Kathu R31 Hotazel Vorstershoop North West Province Warrenton Taung N18 Vryburg R 49 Stella R34 BOTSWANA Moloporivier N Christiana N12 R52 Bultfontein Wesselsbron Welkom R30 R82 N1 Ventersburg Motorway Main Road Railway N3 Reitz Heilbron R57 Sasolburg Vereeniging Free State Parys R59 Kroonstad Orkney N12 Carletonville JOHANNESBURG Magaliesburg N1 PRETORIA Gauteng Brits Bela-Bela Limpopo Hartbeespoort Mooinooi Westonaria Ventersdorp R30 Potchefstroom Klerksdorp Coligny N14 Lichtenburg Koster Rustenburg Swartruggens Sun City/Lost City Groot-Marico Zeerust Wolmaransstad Ottosdal Sannieshof Bloemhof SchweizerReneke Delareyville R49 Mahikeng Mmabatho N4 R49 Thabazimbi Vaalwater special feature special feature North West cities and towns The towns of the North West play important roles in the regional economy. MooiRivier Mall in Potchefstroom boasts more than 100 shops and a Road Lodge Hotel. Mahikeng lies on the banks of the Molopo River and is the capital city of North West Province. Situated in the north-west sector of the province near the Botswana border, the city has a strong services sector and a population of approximately 300 000. Since 2002, the cityâ€™s main growth sectors have been financial services, services, transport and trade. The Garona District houses the North West Potchefstroom (City of Tlokwe) parliament and government buildings. The administrative headquarters of the BaRolong tribe are The city of Potchefstroom is administered by located in the city. The arts are promoted by the Tlokwe Local Municipality. A large campus the Mmabana Cultural Centre, while the North of North-West University and its business West Institute of Hotel and Tourism Manage- school is located in the city, as is the Vuselela ment is one of three tertiary institutions in the FET College and the Potchefstroom College of city. North-West Universityâ€™s Graduate School of Agriculture. More than 120 000 people attend Business and Government Leadership is located the Aardklop Festival every year. north west business 2013 16 photo: MooiRivier Mall, Potchefstroom in Mahikeng, and Unisa has a presence. Other institutions are the Taletso FET College and the International School of South Africa. The town is well served by hotels such as the four-star Premier Protea Hotel Mahikeng, and gambling aficionados are catered for by the Tusk Mmabatho Casino Resort. Mahikeng Game Reserve has white rhino and giraffe among its fauna. www.mafikeng.gov.za Mahikeng special feature Soccer World Cup winner Spain chose the sports facilities of North-West University as its base for the 2010 World Cup event. Tlokwe is a hub for the strong commercial agriculture of the region and has several food and beverage manufacturers. Nestlé has recently invested. Some of the bigger enterprises include fertiliser companies such as Kynoch, munitions manufacturers, and food processors like King Korn. An army base contributes to the economy, and the airfield formerly used by the military is now run by the municipality. The N12 Treasure Route passes through the city and holds potential for further development of tourist highlights such as Boskop Dam and the Mooi River on which the town is located. www.potch.co.za past pupils include Sir Seretse Khama and Dr Ruth Mompati. The Leon Taljaardt Nature Reserve has white rhino, buffalo and zebra. www.vryburg.com Klerksdorp (City of Matlosana) This town’s first boom came as a result of gold, and mining still plays a big role in the local economy. Engineering enterprises service the mining industry. Senwes, the agricultural company through whose silos a large proportion of South Africa’s grain and oil seed move every year, has a giant silo in the town. Matlosana is situated on the N12 Treasure Route and is marketing itself as a potential logistics hub. An intermodal facility based in the town’s airport has been developed. The city council Bloemhof has set aside land for the development of indusBloemhof is a centre of maize growing and trial and commercial enterprises. Break-bulk cattle raising on the southern boundary of facilities, storage space and distribution centres the province, and DairyBelle has a large milk- are needed, offering concrete opportunities for production facility in the town. The Bloemhof investors in those fields. Dam is one of the three large dams on the Vaal www.matlosana.local.gov.za River that supply bulk water to surrounding areas. The Bloemhof Bonanza is the biggest Rustenburg and most lucrative inland-angling event in South Africa, with more than 2 000 anglers Rustenburg is close to platinum mines and trying to win R1.5-million in prize money. The Sun City, two of the economic jewels in the nearby SA Lombard Nature Reserve has a fine crown of North West Province. The town is also near beautiful parts of the bushveld, the herd of black wildebeest. Magaliesberg Mountains and the Pilanesberg www.lekwateemane.co.za National Park. Rustenburg has a varied manufacturing sector, Vryburg although most of it is mine-related. Large-scale Vryburg is the principal town of the Dr Ruth platinum smelters operate in Rustenburg. Segomotsi Mompati District Municipality. Cattle One of Orbit FET College’s campuses is in auctions held several times a year are among Rustenburg, Unisa has a regional office, and the biggest and best supported in the country. the Agricultural Research Institute’s industrial The Theiler Agricultural Museum and Cattle crops unit and the Seda Platinum Incubator are Centre is an important research centre for the located in the city. Health facilities are good in the city, with Netcare and Life Healthcare having livestock sector. Tigerkloof school, situated south of Vryburg, a presence, in addition to the provincial hospital. is a Dinaledi school, whereby extra interven- www.rustenburg.gov.za tions are made to improve mathematics and science teaching. It is also one of a handful of schools identified for upgrading by the national Historical Schools’ Restoration Project. Notable 17 north west business 2013 special feature Smart logistics get freight moving faster Getting the North West’s agricultural and mining products to other places is big business. R ail is responsible for only 14% of the containers that are delivered to destinations around South Africa, with the balance being carried on roads. This puts a lot of pressure on the road network and is also very expensive. An article in Business Day claimed that 37% of the consumer price of maize meal is derived from transport and logistics costs (December 2012). Many of the private agricultural companies that operate in the North West have logistics divisions. Most road-freight journeys to Botswana and Namibia pass through the North West. The Mahikeng campus of North-West University offers a BCom in Logistics Management and will have post-graduate courses from 2014. Several divisions of Transnet, the state transport company, are active in the province. The pipeline run by Transnet Pipelines from Durban delivers refined fuels to the industrial hub of Rustenburg. north west business 2013 18 Transnet is trying to get South Africa’s freight to shift from road to rail. At a grain symposium in 2012, Transnet’s agricultural-freight executive claimed that turnaround times had changed from 40 days in May 2010 to 20 days in November 2011. Where 8 000 tons of agricultural freight had been carried by rail in 1992, the 2010 figure was just 3 000 tons. Logistics planners are hoping that the former statistic can help change the latter. Albert Swart told the symposium that grain tonnages carried by Transnet Freight Rail will almost double in the years to 2019. A first step in this strategy was unveiled in December 2012, when the Orkney-Vierfontein rail line was reopened. This important branch line connects the North West to the Free State and thus to Durban’s port. The reopened line will mean that more than 150 000 tons of cargo per year (more than double the current amount) will be freighted from Klerksdorp to Durban. photo: imperial logistics The North West Province is home to major players in the South African logistics sector. special feature Transnet’s expansion plan is based on a Market Demand Strategy: the grain from the North West that markets are demanding is an example of how the process works. A branch-line concessioning process offers opportunities for private operators, such as large agricultural companies. In 2010, 115 bids were received for branch lines around the country, and in 2012 the bid process was concluded. The main line from Zimbabwe to Cape Town runs through the North West capital city of Mahikeng. About 30-million tons of cargo is transported annually by rail in the province. Approximately a quarter of rail traffic is cargo generated in the province (including cement, lime products, chrome and ferrochrome, maize and wheat), and transported out. development of industrial and commercial enterprises. Break-bulk facilities, storage space and distribution centres are needed, offering concrete opportunities for investors in those fields. Logistics companies such as Grainovation, a joint venture between Imperial Logistics and Senwes, operate out of Klerksdorp. Senwes is a major company in the grainlogistics sector. With an operating area that stretches over the whole central region of South Africa, Senwes has 69 silos that can store 4.5-million tons of grain. This is more than 25% of South Africa’s storage capacity, and the company handles about 30% of the nation’s grain and oil-seeds in an average year. Value Logistics and Barloworld Logistics have a presence in Klerksdorp. Barloworld has been working with Anglo American Platinum since 2010, and the company’s achievement in moving more Logistics than 80 000 tons of platinum per month earned a The City of Matlosana has developed an inter- gold award at the 2012 Logistics Achiever Awards. modal facility based on the town’s airport. Barloworld Logistics also has the contract to deliver The city council has set aside land for the bagged cement from PPC’s Batsweledi (Dwaalboom) factory in the North West to customers in Mpumalanga North West rail line Main commodity and Limpopo. The headquarters of agriFourteen Streams to Grain cultural company Suidwes are Botswana border in Leeudoringstad, which is on Fourteen Streams to Iron ore, grain the major railway line. Suidwes Welverdiend via Klerksdorp operates 16 grain silos and its and Potchefstroom grain marketing division also Krugersdrop to Mahikeng Cement oversees transport. Brits-based MGK (Magaliesburg Graan KooPlatinum, chrome, iron ore, coal Pretoria North (Gauteng) perasie) has the capacity to store via Rustenburg to 175 000 tons of grain. Lephalale (Limpopo) NWK, which is based in Madibeng to Atlanta Cement Lichtenburg, has a transport division among its subsidiaries. Coligny to Pudumong Grain, sunflower seeds, It is currently expanding its fleet dry beans from 36 trucks to 42. Among the Klerksdorp to Ottosdal Grain, cement things it transports is feedstock Vermaas to Makwassie Grain, cereals for its liquid fertiliser plant. GWK is a Northern Cape Welverdiend to Cement, lime. Cement company, but its logistics Lichtenburg companies also operate their division, Flotank, operates in own railways that connect to a wider area. The company the branch line. has offices in Christiana and Rail lines and commodities SOURCE: North West Provincial Land Transport Framework. Potchefstroom. 19 north west business 2013 interview A master plan unfolding Kgosi Nyalala Pilane explains the huge regeneration projects unfolding in the Bakgatla-Ba-Kgafela region, and what these will mean for the Bakgatla people in the various communities. Kgosi Nyalala Pilane Since his installation as Kgosi (traditional leader) of the BBK in 1996, Kgosi Pilane’s drive, determination and manifest business acumen has attracted several key development opportunities to the Moruleng region of the North West Province. He totally revamped the BBKTA along business principles, thereby revealing a clear mandate to promote socioeconomic development projects for the upliftment of the 350 000 citizens within the administration. north west business 2013 Please give us a brief background of the Bakgatla-Ba-Kgafela community, and explain your role as leader. Bakgatla-Ba-Kgafela is a community situated in the Pilanesberg area and it is spread over a vast land within that region of the North West Province. I became Kgosi – the traditional head of the community – officially in 1996. Upon assuming my position, I realised that that there was a challenge that faced us regarding the upliftment of the lives of Bakgatla people and this was the biggest challenge that needed serious attention. I developed an understanding that land could be used as a resource if properly used. The traditional leadership in itself was never explored as a resource nor as a catalyst for development, as well as for social cohesion. We also saw our people – our community as a resource. What was left for us was to see how these three institutions, the leadership, the land and the community, could be turned into integrated assets. Once properly used, these assets could create economic activity, eventually translating into wealth creation. These would then address our socioeconomic problems especially unemployment, poverty, lack of infrastructure and service delivery in our community. Fortunately, these plans enjoy the community support. We have so far managed to harness the potential of these three resources, explored all the available opportunities, and discovered that there is potential for four main economic pillars in our land: mining, tourism, manufacturing and agriculture. The first pillar is mining due to the presence of mineral deposits. The second is tourism because the region is already an established tourist destination. The third is agriculture, although our communities have not explored agriculture properly because they were only doing subsistence farming. There is a need that they be developed into commercial farmers in order to be competitive and productive without compromising quality. The fourth pillar is the possibility of manufacturing, because there are existing factories in our industrial areas. Unfortunately, the buildings have not been maintained, and have been vandalised. With our commitment of reducing unemployment in our area, we have managed to resuscitate about eight factories. 20 interview How are the developments underpinned by the four pillars? We spoke to our mining partners and came up with a sustainable plan that will reflect the four pillars. We eventually started with our mining, and brought in some investors from Canada in 2003 to assist with our exploration, which culminated in a bankable feasibility study. We then had an asset that we could use to leverage the other plans. We started with our mining, and used it as a catalyst. With that, we came up with our master plan with the decision that we were not going to allow the issues of greed and isolated mining power, because minerals get exploited, and eventually depleted. We identified areas within the community where we could begin development. We know that mining executives would prefer to stay in an area where there are bulk infrastructure services, and we thought that this would then assist to improve our community. We started with roads, bulk water provision, sewerage, electricity, built a soccer stadium and phase 1 of administration offices to culminate in what we call a post-apartheid city â€“ the first of its kind within the community. As a pilot project, we have tried to centre these in one area so that we could create a CBD; with the intention of replicating this model in other areas within the various communities. We have started building a huge shopping mall that will host about 76 retail outlets, with major anchor tenants like Pick n Pay, Shoprite and the Edgars Group. The mall will create around 1 500 permanent jobs as well as temporary jobs that will be created during the construction phase. With this concept, we have addressed a number of our problems, such as lack of infrastructure, provision of services, creation of jobs as well as business opportunities for small businesses. Our area is also attractive because of tourism. One of these housing developments will be in the Big Five area within the Pilanesberg Park and this is good for investors. The Pilanesberg Nature Reserve is the main attraction of tourism in the area. It has attracted the likes of Sun International Group, Legacy Hotels and Lodges, Ivory Tree, Golden Leopards Resorts, etc. All Construction on a large mall is underway. these tourist destinations bring hundreds of visitors who bring vibrancy to the economy of the region. This will translate into our people seeing the value in their land, which has not always been the case. The land must come to be seen as a resource that can change peopleâ€™s lives. As indicated earlier, by combining all the economic pillars, we came up with a concept of building a city. We started with the Moruleng CBD, which is made up of: two estates: a golf estate and eco-estate, a fivestar hotel, the management academy, a hotel school, upmarket residential area, administration offices, commercial office park, cultural museum precinct, library, shopping mall, medium density residential flats, private-public hospital, and multi-purpose sports complex. With the closure of George Stegman hospital and the subsequent relocation of the newly built Moses Kotane Hospital to about 40km away, there is a need to bring health services closer to the BBK communities. Therefore, there is a need for a public-private hospital, which we are awaiting the licence thereof. We also need some private schools so that we attract these upmarket business people, and retain them in our area. In order to kick-start with the above, we needed to have bulk infrastructure in place. We therefore had to do roads, water, electricity, sewerage, and telecommunications (ICT) in order to attract investors while providing to our people as well. We did all these in one area to understand the dynamics before spreading into all other villages. We are now ready to spread into the outlying villages. We shall also be embarking on improving our education 21 north west business 2013 interview system so that we would be able to capture the level of management in our entities. Are you actively looking for investors? Yes, part of delivering on our mandate of socioeconomic development involves partnering with investors. For instance, in the mining project, we have international governments such as the Dutch government and Singapore investing their pension funds in our projects. Our government followed and invested through the Industrial Development Corporation (IDC), which bought about 16% shareholding to the value of R3.24-billion to facilitate the expansion. This is unprecedented, especially in the platinum sector. Anglo American Platinum recently announced that it would lay off 14 000 workers, but based on our partnership, it is possible that our mining project which will create 8 000 to 9 000 jobs which will go a long way towards saving some of these jobs. to create a demand for more electricity and we therefore had to come up with a solution. The new substation is flexible in that capacity can be increased as and when our projects come on stream. We have not been able to spread this kind of development over all our areas as this was treated as a pilot. This will provide a good case study as we start to roll it out to other areas. Plans are at an advanced stage to complete a modernised 24-hour health facility that will have a trauma unit, an x-ray unit and an ambulance service. It will be like a mini hospital. Over and above this facility, we will still build the hospital mentioned earlier. This will service both the community and the operations because the Mineral Resources Act states that each mining operation must have its own health facility. There are many more projects that we are working on in the master plan. There will always be problems in terms of funding, but we will overcome these challenges. What is the population size of the Bakgatla Ba What is your long-term vision for the region? Kgafela community? The longer-term vision is to have our own instiWe estimate the number to be between tutions that can serve the needs of our people. 300 000 and 350 000. Our people have, in the We always want to do things that are sustainpast, migrated to the bigger cities in search of able within the area. Institutions must be susbetter job opportunities and that makes quanti- tained by our demand, our consumption and our fying our population size difficult. However, the ability to fund them. We have had discussions current trends suggest that since we embarked with further education and training (FET) instituon our development projects, our people are tions, resulting in the Mogwase Campus estabreturning home. If we underestimate our popu- lishing a presence in the area. We are now at lation size, we will be faced with problems such the stage where we can design programmes that as lack of infrastructure, so we would rather will make people more employable. We have overestimate. already produced about 80 mining-academy students there. We also offered jewellery design Please tell us about the completed projects? and manufacturing training to about 27 students. We have built roads, bulk-water pipes, sewerage, Some of these students are employed and some administration offices, a cultural museum, soccer went on to study further. stadium, a 15-megalitre water in partnership As said earlier, we have developed a master with Bojanala Platinum District Municipality), plan that provides a long term basis for the renovated a portion of factories for manu- development of our Bakgatla people. This facturing and we are currently busy with the master plan has outlined all the economic secconstruction of a regional mall as mentioned tors that BBK will focus on in our socioecoearlier. Eskom has constructed a substation for nomic development journey. Holding hands us to support t the master plan. The new substa- with our 32 villages, partners and investors will tion is flexible in that capacity can be increased ensure that the development agenda envisas and when our projects come on stream. We aged in the master plan will touch the lives of all knew that our vision, once completed, was going our communities. north west business 2013 22 PROFILE Bakgatla-Ba-Kgafela Traditional Authority The Bakgatla-Ba-Kgafela is a community of about 350 000 people, in the North West Province of South Africa. Background The Bakgatla-Ba-Kgafela Traditional Authority (BBKTA) represents the interests of the community and acts in support of the Chief, Kgosi Nyalala MJ Pilane. The primary objective of the BBKTA is to develop strategies and implement projects aimed at the economic and social development of the region and its people. Education, healthcare, infrastructure, job creation and poverty alleviation have been identified as among the major priorities for the region. Traditional customs are vitally important to the community. The BBK region is well known for its rich mining, agricultural and tourism resources. The BBKTA seeks to mobilise partnerships with the community and the private sector to develop these resources in the best interests of the community. The BBKTA has already formed joint ventures with major mining groups to participate in mining activities, especially in platinum group metals. These projects are expected to stimulate the revitalisation of the regionâ€™s economy. The BBKTA places a high premium on skills development and education. It has already instigated bold interventions to address the skills shortage in the area, including the granting of scholarships to deserving students who wish to further their studies. The BBKTA is committed to projects aimed at the empowerment of women, the youth and people living with disabilitie, as well as to social development projects in the region The Bakgatla-Ba-Kgafela Tribal Authorityâ€™s administration offices. which address issues related to poverty and unemployment. The Bakgatla-Ba-Kgafela is a reliable development partner with government in the national, provincial and local spheres and an enthusiastic supporter of projects that will lead to the accelerated economic and social development of the region. 23 north west business 2013 PROFILE The waste-water treatment facility is up and running. Moruleng Boulevard. Completed projects • Waste-water treatment works • Moruleng Boulevard • Moruleng Stadium • Bulk-water and sewerage system • Administration office - phase one • Extended Public Works Programme • 15-million-litre water reservoir Ongoing projects • Community health centre • Extension of museum • Moruleng Shopping Mall Moruleng Stadium is a multi-purpose facility that has hosted many key matches. Future projects An economic hub for each settlement cluster: • Mokgalwaneng • Sefikile • Moruleng • Mogwase • Motlhabe • Dwarsberg Function of the economic hubs: Togo national team during their training session at Moruleng Stadium during the recent AFCON 2013. • Administrative centres • Service hubs • Centre of economic growth Cluster 1 – Mokgalwaneng/ Matlametlong/Disake farming, especially through the revitalisation of BBKTA farms and the capacitation of local co-operatives. This cluster is located in the northern-most part of the Bakgatla region near the Limpopo border. The area is relatively isolated and characterised by large private cattle farms, of which several are owned by the BBKTA. There exists real potential in this cluster for enhanced • Cattle farming • Leather goods manufacturing • Sheep and goat farming • Heritage Park development north west business 2013 24 Economic opportunities: PROFILE Cluster 2 – Sefikile and Mononono The second cluster is located in the eastern part of the Bakgatla region, to the west of the R510. This cluster includes the villages of Sefikile and Mononono. The two villages are relatively close to both Moruleng and Northam; however, the poor quality of roads in this area significantly increases their level of isolation. The economy in these two towns is based on platinum mining, especially in Sefikile, and to a lesser degree cattle farming. The BBKTA has identified the potential for establishing a dairy industry in this cluster. This industry would benefit from existing farming infrastructure, access to key transport routes, relatively large regional markets, and reliable service delivery. The development of a dairy industry is also important in terms of food security and the creation of a self-sufficient Bakgatla economy. Economic opportunities: • • • • Dairy industry Cattle farming Poultry farming Farming inputs Cluster 3 – Moruleng/Lerome/ Sandfontein The administrative and financial centre of the Bakgatla region is located in the third settlement cluster, located north-east of the Pilanesberg National Park and consisting of Moruleng, Lerome, Sandfontein and other neighbouring settlements. These settlements are characterised by their close proximity to one another, where one village flows into the next, as well as their relatively low population densities. Economic activity in this area includes mining, tourism, public services and retail trade. Poultry farming is another potential growth area. the Bakgatla region. Thus far investment in the town includes the new BBKTA administrative buildings, Moruleng Soccer Stadium, water and sewage infrastructure, and Moruleng Boulevard. In addition, other planned and ongoing projects include expansion of the administration buildings and the development of a cultural district, shopping centre, residential flats, golf estate, eco-estate, hospital and schools. The BBKTA has also identified development opportunities in neighbouring villages, including construction of a 96-hectare residential area in Lesetlheng. The purpose of these investments is to revive the Bakgatla economy by increasing tourism and production, providing employment opportunities, and attracting and retaining business and skilled professionals. Economic opportunities: • Significant investment • Banking and finance • Eco-tourism • Construction • Administrative services • Retail and trade • Cultural tourism The third cluster is designated as the future • Health services urban hub of the Bakgatla community and has been coined as the ‘first post-apartheid city’. It is envisioned that Moruleng will serve as the CBD, with development to be replicated, albeit on a smaller scale, in other hubs throughout Cluster 4 – Mogwase/Mabelapodi The fourth settlement cluster in the Bakgatla region consists of Mogwase and the adjacent village of Mabelapodi. 25 north west business 2013 PROFILE The town of Mogwase is currently the largest urban centre in the Bakgatla region, with an economy based on tourism, public services and manufacturing. The town is divided into eight distinct units, which cater to a range of income groups. Although Mogwase is currently not under BBKTA jurisdiction, land claims have been filed for the township as well as the Bodirelo Industrial Park. Despite its remoteness, the village is located near Sun City and thus is an important node in terms of tourism potential. The village is also envisioned as a potential hub for basic administrative and retail services. This area is also in relatively close proximity to the town of Ledig, a portion of which is under land claim by the BBKTA. Economic opportunities: • Service centre The BBKTA has designated Mogwase as a • Tourism potential industrial hub and, as such, plans to • Cattle farming eventually purchase and revive the Bodirelo • Vegetable farming Industrial Area. The BBKTA is also investigating the re-establishment of a rail line that Cluster 6 – Motlhabe/Ngweding/ will connect Mogwase to the Rustenburg- Mopyane/Kraalhoek Northam railway. It is envisioned that this The sixth settlement cluster in the Bakgatlawill increase the area’s manufacturing capa- Ba-Kgafela region is located north-west of the bilities and enable the transport and storage of Pilanesberg and consists of two distinct areas, mining materials. each of which represents a mining hub. The further development of this cluster will require consideration of the impact Moruleng’s expansion will have on the economy in Mogwase. For instance, there is a real possibility that the Mogwase Shopping Centre, which serves the southern half of the Bakgatla area, will experience decreased traffic following completion of the Moruleng Shopping Complex. The southern area includes Motlhabe, Ngweding and Ntswanalemetsing and is fuelled by the Pilanesberg Platinum Mine with production expected to increase in light of the recent mining consolidation. The northern area includes Kraalhoek, Mopyane, Ramoshibitswana and Magong, and is also driven by Anglo Platinum’s Union Section Mine as well as limited agricultural activity. Economic opportunities The villages in the southern part of this cluster are relatively remote; however they will benefit from the development of Moruleng as a commercial and administrative hub. The villages further north are also remote, although Kraalhoek and Mopyane have access to commercial areas in Northam. • Accelerated manufacturing • Investment attraction • Mining supplies • Construction • Transport and storage Cluster 5 – Maologane/Dwarsberg The BBKTA jurisdiction includes two villages The further integration of these villages into that are relatively remote and located a signifi- the greater Bakgatla-Ba-Kgafela economy will cant distance from the rest of the community. have a significant impact in terms of generating The first village, Maologane, is located on the overall demand and improving the livelihoods western border of the Pilanesberg National of town residents. Park and is included in the fifth settlement cluster (Moses Kotane SDF, 2011). north west business 2013 26 interview A partnership of equals Pallinghurst Resources Limited CEO Arne Frandsen describes how the mining partnership with the Bakgatla-Ba-Kgafela community is a win-win for both parties. Arne Frandsen In addition to Arne Frandsen’s many qualifications (BA, LLB, Master in Law from University of Copenhagen, postgraduate research and studies in Japan and South Africa), he has over 10 years of investment banking experience with Goldman Sachs and JPMorgan Chase. From 2004, Arne acted as client executive for JPMorgan Chase in South Africa, followed by a year as chief executive officer of Incwala Resources (Proprietary) Limited. Arne joined Pallinghurst Advisors LLP in 2006 and is a partner of the limited-liability partnership and the investment manager. Please give a brief overview of the relationship between Pallinghurst Resources and the Bakgatla-Ba-Kgafela Tribal Administration. The partnership goes back almost seven years and is founded on the premise of equal partnership, where each partner is contributing valuable elements such as mining experience, capital, assets and skills. It is a true partnership of equals, and is based around the intention of creating a new major platinum mining company that is sustainable and has a long life, and will unlock a lot of wealth for all stakeholders. What do you believe the potential of the Bakgatla-Ba-Kgafela area to be, in terms of its platinum group metals? It has the potential to create a large and sustainable mining operation. We are currently employing about 700 people from the Bakgatla tribal community, which is more than 50% of the workforce. In our future operations, we are looking at employing around 4 000 members of the Bakgatla community in skilled, permanent jobs. In the region, one formal earner can support around 10 people. So, including the Bakgatla people already employed by us as well as the thousands we intend to employ, around 50 000 people will be supported indirectly by our operation. Have you projected PGM volumes and the life of the mine? We have a body of around 60-million ounces of platinum group metals (PGMs) that we hope to be able to mine over the next 40 years. The advantage of our operation is that we are on the surface of a shallow deposit. Our workers have the benefits of being what I call ‘sky miners’, which is when the miners can still see the sky! It is much safer, and has cross-advantages such as being a more sustainable operation. What effects will the mining operation have on the community? The partnership that we have with the Bakgatla community is a mutually beneficial one. We are currently working on a big water project, where we have fresh water coming in on a pipeline from the Magalies Water Board. This will greatly benefit the community, and will create jobs, not just directly, but for many subcontractors in the fields of catering, cleaning, etc. Our operation will support small businesses in the area, and will lead to improved infrastructure, such as roads. 27 north west business 2013 interview Showcasing the best and brightest Sibongile Shongwe, Seda Platinum Incubator centre manager, talks to us about the organisation’s exciting new show, and explains how the organisation is supporting platinum beneficiation. Sibongile Shongwe Tell us what kind of support and mentorship Seda Platinum Incubator (SPI) is able to offer aspirant jewellers. SPI offers business start-up and development support within the platinum-beneficiation sector. We offer the relevant skills that enhance our clients’ businesses, thereby establishing sustainable businesses. SPI also offers links and networks to the various funding options for the entrepreneurs or tenants. Our highly skilled and talented technical team ensures that quality and product improvement is constantly applied by our clients. This enables them to compete in a very demanding and dynamic environment. How does SPI assist its tenants in marketing their products? The active presence of the Platinum Trust of South Africa, Seda and Anglo American provides a platform for the relevant access to markets and a form of back-up, thereby assisting tenants to deliver against national and international trends and demands. SPI participates in events that showcase the incumbents’ talents and ensure that their unique products are seen by the world at international and national business exhibitions and lifestyle jewellery events. SPI also gives tenants access to online markets through the SPI website, Twitter and Facebook. Sibongile Purity Shongwe has a diploma in project management from the Durban University of Technology Business Studies Unit as well as diplomas in labour law and human resource management and a certificate in public relations. She is currently the centre manager for Seda Platinum Incubator. north west business 2013 Please give us a brief overview of the Seda Platinum Incubator Jewellers Fashion Show. Who is attending, and what is the aim of the show? This is the first time that we have done our own jewellery fashion show. South Africa has many fashion events, such as Fashion Week, but jewellery and fashion have never been combined like this before. We really want to highlight the craftsmanship. SPI aims to prioritise jewellery, and showcase garments that complement the pieces. People should know that jewellery is part of fashion, and can be part of something bigger than fashion. Jewellery can be used to symbolise marriage and a lifetime commitment, for instance ‘tying the knot’. We decided to host a jewellery fashion show with the hope of educating people about the meaning of 28 interview jewellery, and about the different types of metal that are used in jewellery and what they mean. Jewellery can be used to communicate long-term messages and statements. as 80% of the incubated SMMEs are selling pieces through that store. What are the challenges associated with this type of mineral beneficiation? Are you hoping to attract major clients and The jewellery sector is a cut-throat industry. investors to the SPI through this fashion show? The economic depression has a highly negaYes, we are hoping to attract investors. This tive impact on this sector as the markets view is the first time we have done a show like jewellery as a luxury and therefore there is a this, and we regard it as a pilot project. The less demand during a depression. Market penmajor goal of the pilot is to enhance market etration is also a challenge as the established, access for the different segments of our SMME reputable retailers make it hard for the newsector. We want to make the statement that comers to enter the market, apart from those the SMMEs that we incubate are able to ser- who provide opportunities for newcomers to vice different types of markets. The targeted ‘shadow’ unique designers market can then come to the Incubator and find what they are looking for. The aim is market access for the SMMEs and also allow Our pieces are distinctly and uniquely African. potential investors to come on board. We have a wide variety of talent within Tell us about some of the incubator’s success stories. Since inception, SPI has had seven successful businesses nationally. These are Jewel Odyssey, Forever Bright, Phase of Platinum, Tlhago Ya Africa, Amahlubi Art, Xciting Designs and Africo Craft. Readers are welcome to follow these companies on the Internet. This year, we are celebrating being able to create positive competition within the SMME sector. We have collaborated with the Seda Provincial Office, some local stakeholders like Invest North West, and a private entity, Anglo American. We have combined the efforts of all our SMMEs in establishing a commercial entity that is going to be a trade wing for our SMMEs, and also offering an exit strategy to incubation. What we celebrated in 2012 was the graduation of SMMEs who then went and stood alone as successful, performing businesses. This year, we are doing a collaborated effort, a stronger bargaining power and a stronger trading power for all SMMEs that have been incubated. We have an entity called Sediba that opened its shop at the Rosebank Craft Market in December 2012. This was the first base in the process of reaching out to tourist markets. This commercial entity is a major success story for the SPI, incubation, and service different market segments. – Sibongile Shongwe Where do you see the SPI over the next five to 10 years? Our aim is to be a global player in SMME development, specifically within mineral beneficiation. We will not just be fostering talent within the jewellery sector, but we hope to use the manipulation of metal in many other sectors. What makes the jewellery produced by the SMMEs within the SPI attractive to local and international buyers? Our pieces are distinctly and uniquely African. We have a wide variety of talent within incubation, and service different market segments. Therefore, the uniqueness of our dynamic will definitely cater for the global village, as well as local African markets. We have many pieces that celebrate the diverse cultures of Africa. 29 north west business 2013 special feature Overview of the South African economy Key facts and figures on South Africa’s demographics, economy, trade and investment. South Africa fact file Capital: Pretoria Population: 51.8 million Area: 1 220 813km2 GDP: R2 964-billion (2011) GDP growth: 3.1% (2011) Income per capita: R58 549 (2011) CPI: 6.1% y/y (April 2012) PPI: 6.6% y/y (April 2012) Unemployment: 25.5% (Q3 2012) Gini Index: 57.8 (2009 UN Report) Gross domestic product South Africa’s real gross domestic product (GDP) growth slowed to a 2.7% increase on a quarteron-quarter seasonally adjusted annualised (q/q saa) basis – 2.1% year-on-year (y/y) in the first quarter of 2012 from 3.2% q/q saa (2.9% y/y) – in the fourth quarter of 2011 (Table 1). The largest industries, as measured by their nominal value added in the first quarter 2012, were finance, real estate and business services, making up 19.3% of the economy, and general government services making up 14.6%. The q/q saa changes in value added by the primary, secondary and tertiary sectors were -11.2%, 6.4%, and 3.0% respectively, during the first quarter of 2012. What is noteworthy, however, is that the mining sector – the number-one export industry in the country – declined by 16.8% q/q saa in the first quarter, due in part to a six-week illegal strike at Impala Platinum, the world’s secondlargest platinum miner. Year Q1 Q2 Q3 Q4 Annual 2004 6.2 5.7 6.7 4.3 4.6 2005 4.1 7.4 5.6 2.7 5.3 2006 6.2 6.7 4.8 6.4 5.6 2007 6.5 3.1 5.0 6.0 5.5 2008 2.9 4.5 1.8 -1.7 3.6 2009 -6.3 -2.8 1.8 3.5 -1.5 2010 4.0 2.8 3.1 4.5 2.9 2011 4.6 1.0 1.7 3.2 3.1 2012 2.7 3.2 Table 1: GDP growth per quarter, 2003–2012 Q1, constant prices, q/q seasonally adjusted annualised. Source: Statistics South Africa GDP (R-m) GDP per capita (R) 2001 1 020 007 22 899 2002 1 168 699 25 831 2003 1 260 693 27 631 2004 1 415 273 30 297 2005 1 571 082 33 176 Year 2006 1 767 422 36 844 2007 2 016 185 41 525 2008 2 262 502 46 072 2009 2 398 155 48 318 2010 2 661 434 53 088 2011 2 964 261 58 549 Table 2: GDP and GDP per capita at current prices. Sources: www.thedti.gov.za, www.reservebank.co.za, World Bank, Statistics SA north west business 2013 30 special feature Sector Agriculture, forestry and fishing Mining and quarrying Manufacturing Electricity and water Value in millions (R) % Real change from 2010 % of GDP 63 984 -.04 2.2 2 260 381 0.2 8.8 357 756 2.4 12.1 78 532 1.3 2.6 Construction (contractors) 120 420 0.8 4.1 Wholesale and retail trade, catering and accommodation 386 430 4.4 13.0 Transport, storage and communications 220 060 3.3 7.4 Finance and insurance, real estate and business services 565 224 3.5 19.1 Personal services 183 493 2.4 6.2 General government services Total value added at basic prices Taxes less subsidies on products GDP at market prices 434 224 3.9 14.6 2 670 504 3.0 90.1 293 757 4.4 9.9 2 964 261 3.1 100 Table 3: Breakdown of South Africa’s GDP at current prices, per sector, 2011. Source: Statistics South Africa partners in April 2012, after a deficit of R5.5-billion in March, taking the cumulative trade South Africa’s international trade has risen deficit in April 2011 to R36.5-billion, compared sharply over the last 10 years (Table 4). In with R7.5-billion in the first four months of 2011. 2004, the value of imports rose above that of A record R17.4-billion deficit was set in exports. Tables 5 and 6 show the largest import January 2009, but as exports began to improve, and export sectors respectively, for April 2012. so the deficits narrowed in 2009 to become Important import sectors in April 2012 were surpluses in 2010. South Africa recorded its first machinery (R15.9-billion), mineral products – annual trade surplus in seven years in 2010 of chiefly crude oil (R13-billion), transport equip- R4.8-billion, following a few stronger than ment (R10.9-billion) and chemicals (R5.4-billion). expected surpluses on the trade account during On the export side, the most important sectors the year. In 2012, however, the rise in the oil were mineral products, chiefly coal and iron ore price in the first few months, coupled with a (R14.8-billion), precious metals and diamonds sharp reduction in platinum exports, saw the (R10.2-billion), base metals (R7-billion) and non-SACU foreign trade balance firmly in the red. transport equipment (R4.6-billion). The old myth that a weaker rand leads to more Most of South Africa’s foreign trade takes place exports is once again disproved by the facts, as with Asia, the United States and Germany (Tables import growth was 23.5% in 2011, while export 7 and 8). In 2011, China, the United States and growth was 19.9% when the rand was weaker Japan were, in descending order, the country’s due to a R15-billion deficit. Prior to November top export markets, while top import-source 2011, when the rand had been stronger, export countries were China, Germany and the US. growth had exceeded import growth. In 2010, South Africa recorded a trade deficit of when the rand was strong because export growth R9.9-billion for its trade with non-Southern of 14.9% exceeded import growth of 8.1%, there African Customs Union (non-SACU) trading was a R4.8-billion surplus, the first annual surplus Trade: imports and exports 31 north west business 2013 special feature Year Imports in R-m Exports in R-m 1999 147 356 165 555 2000 187 608 210 373 2001 216 033 251 330 2002 275 427 314 102 2003 258 839 275 581 2004 306 927 296 246 2005 351 665 331 405 2006 465 040 396 529 2007 561 194 491 253 2008 727 632 663 099 2009 541 173 513 864 2010 585 219 590 207 2011 722 637 707 511 Sector Value in R-m 1. Machinery, mechanical and electrical 15 903 2. Mineral products 12 991 3. Transport equipment 10 880 4. Chemical products 5 420 5. Base metals 3 190 6. Plastics, rubber 2 591 7. Textiles 1 726 8. Optical, medical, photographic 1 579 9. Foodstuffs, beverages 1 433 10. Vegetable products Total 1 045 62 028 Table 5: South Africa’s top 10 import sectors, April 2012. Table 4: Annual value of South African non-SACU imports and exports, 1998–2011. Source: Source: www.sars.gov.za Source: www.sars.gov.za. since 2003. In the first four months of 2012, when the rand was substantially weaker than in the same period in 2011, exports only grew by 7.4% y/y, while imports surged by 20.6% y/y. In mid-2009, South Africa ranked 61 out of 121 countries, from 59th out of 118 in 2008 in the World Economic Forum’s Global Enabling Trade Report. But in 2010, it slipped to 72 out of 126 countries. It ranks above Zimbabwe (122), Ivory Coast (123), Kenya (105), Tanzania (97), Argentina (95) and India (84). Foreign direct investment and public investment South Africa’s privately held business (PHB) owners’ intentions to grow through acquisition seem to align with expectations of BRIC (Brazil, Russia, India and China) countries in the upcoming 12 months, according to Grant Thornton’s 2011 International Business Report (IBR) on M&A activity. SA was invited to join the BRIC grouping in 2011. South Africa also fared well in a number of other indices. It was ranked 45th out of 133 on the World Economic Forum’s Global Competitiveness north west business 2013 32 Sector Value in R-m 1. Mineral products 14 841 2. Precious metals and diamonds 10 239 3. Base metals 6 968 4. Transport equipment 4 613 5. Machinery, mechanical, electrical 4 460 6. Chemicals 3 350 7. Vegetable products 1 738 8. Foodstuffs, beverages 1 497 9. Plastics, rubber products 1 126 10. Pulp and paper 779 11. Animals, animal products 378 Total 52 154 Table 6: South Africa’s top export sectors, April 2012. Source: www.sars.gov.za special feature Index for 2009/10, and improved to 54 out of 139 countries in 2010/11. It was 32nd out of 181 countries in the World Bank and International Finance Corporation’s Doing Business 2009 report, and 34 out of 183 in 2010. This study measures the time, cost and hassle for businesses to comply with legal and administrative requirements. South Africa was at number 35 in 2008. Public-sector infrastructure investment, the expansion of electricity generation and distribution capacity by electricity supplier Eskom, upgrades to ports and railways by state-owned enterprise Transnet, and major road-construction projects remain the major challenges for the economy, but government continues to invest strongly in all areas. The ratio of fixed capital investment to GDP rose consistently over the five years to the end of 2008, to reach 24.6%, just below the government’s target of 25%. A cut-back in both government and private-sector fixed investment saw the ratio drop to 18.9% in the fourth quarter of 2010, before starting a slow recovery. General government fixed investment had the first quarterly increase in the second quarter of 2011 after nine quarters of decline. Total fixed investment has now increased for eight consecutive quarters and should continue to support growth going forward. Consumer spending has been robust, even as households repaired their balance sheets. Country 1. China The last time household expenditure growth exceeded income growth on a q/q saa basis was back in the fourth quarter of 2007. The result of this, as well as a marked reduction in interest rates, was that the household debt to income ratio fell to 74.6% in the fourth quarter of 2011 from 75.6% in the third quarter of 2011 and a peak of 82.7% in the first quarter of 2008. The debt service ratio eased to 6.7% in the fourth quarter from 6.8% in the third quarter, and is now at levels last reached in 2005. Value in R-m Year Q1 Q2 Q3 Q4 2003 15.70 16.00 15.90 16.00 2004 16.00 16.20 16.20 16.20 2005 16.50 16.00 17.00 17.10 2006 17.70 18.60 18.90 19.70 2007 19.70 21.20 20.40 20.20 2008 21.05 22.44 24.02 24.64 2009 23.20 22.40 21.20 20.30 2010 20.30 19.88 19.40 18.90 2011 18.80 19.00 18.90 18.90 Table 9: Ratio of gross fixed-capital formation to GDP. Source: www.reservebank.co.za Country 103 174 1. China Value in R-m 90 210 2. Germany 77 396 2. United States 61 044 3. USA 56 944 3. Japan 55 635 4. Japan 34 377 4. Germany 42 684 5. Saudi Arabia 32 294 5. UK 29 001 6. India 29 220 6. India 22 224 7. UK 28 965 7. Switzerland 22 902 8. Iran 27 121 8. Netherlands 22 902 9. Nigeria 22 655 9. Zimbabwe 17 776 10. Italy 19 574 10. Mozambique 17 680 Table 7: South Africa’s top 10 import source countries in 2011. Table 8: South Africa’s top 10 export markets, in 2011. Source: www.sars.gov.za Source: www.sars.gov.za 33 north west business 2013 PROFILE Invest North West Invest North West is the heartbeat of trade and investment in North West Province. Invest North West, the official trade and investment promotion agency for the North West Province, invites individuals and companies to invest in one of South Africa’s fastestgrowing provinces. Join major international and local corporations by choosing North West Province as the preferred destination for a new business venture or to invest in many of the rewarding investment opportunities available in various sectors of the economy. The passionate and dedicated staff at Invest North West provide vision and direction to key growth sectors within the North West by focusing on trade and investment facilitation, and the provision of proactive business retention and expansion services to established local and international businesses. land or factory space • Assisting existing firms to expand and reinvest • Assisting companies to find export markets for their products • Promoting products from North West Province to increase exports Services Invest North West is committed to providing the highest standard of service, and the following services are provided to new and existing investors in the province: • Identifying and packaging viable investment opportunities • Facilitating joint-venture and equity partnerships • Providing information on financing options and investment incentives • Providing advice on feasibility studies and business plans • Assisting investors to obtain work and business permits north west business 2013 • Providing assistance in obtaining suitable • Advocating investment conditions and 34 environment conducive to growth Location Location is one of North West Province’s greatest natural advantages. North West Province is bordered by Botswana to the west and nestled against Gauteng to the east, South Africa’s economic powerhouse and Africa’s largest commercial market. The North West accounts for 8.7% of South Africa’s landmass and has a population of 3.5-million people, 6.8% of South Africa’s entire population. (Census 2011). PROFILE District municipalities capital, Mahikeng, is situated in this district. Mahikeng’s municipal economy is dominated by the services sector. The aim is to change this, however, and transform Mahikeng into a regional trading hub. The province consists of four regions, each administered by a district municipality. These municipalities (with their largest towns) are: • Bojanala District Municipality, Rustenburg and Brits • Ngaka Modiri-Molema District Municipality, Mahikeng • Dr Ruth Segomotsi Mompati District Municipality, Vryburg • Dr Kenneth Kaunda District Municipality, Matlosana (formerly Klerksdorp) and Tlokwe (formerly Potchefstroom) Within these four district municipalities are 19 local authorities, the six largest of which administer the most developed business centres of the province. Dr Ruth Segomotsi Mompati District Municipality The western region of the province is the largest of the municipal districts, yet has the smallest population. The district houses six municipalities – Naledi, Molopo, Mamusa, Lekwa-Teemane, Kagisano and Greater Taung. Vryburg is the district capital and it forms the focus of the Naledi Municipality. Farming provides much of the employment. This region is known as the Texas of South Africa due to extensive cattle farming in the area. Dr Kenneth Kaunda (Southern) District Municipality Bojanala Platinum District Located in the north-east corner of the province, the Bojanala Platinum District is situated within a short drive of the Maputo Corridor as well as the industrial/financial centre of Gauteng. It comprises the five local municipalities of Rustenburg, Madibeng (Brits/ Hartbeespoort), Moretele, Kgetlengrivier and Moses Kotane. The smallest of the four districts, it comprises the local municipalities of Ventersdorp, Tlokwe (Potchefstroom), Matlosana (Klerksdorp), Maquassi Hills and Merafong City. The district head office is in Orkney, which is part of the Matlosana Municipality. Mining is the dominant economic activity in the district. Additional sectors of importance in terms of employment are social services, trade and farming. Potchefstroom is home to several tertiary institutions and training centres, while the economic base for Ventersdorp is agriculture. The majority of the district falls under the Platinum spatial development initiative, and mining, primarily platinum, is the mainstay of the economy. The Madibeng Local Municipality (Brits, Hartbeespoort and Skeerpoort) hosts a successful manufacturing sector with repre- North West economy sentation from many international companies, As the province is currently reliant on comespecially in the automotive sector. modity exports, it plans to move towards higher-value-added manufacturing and Ngaka Modiri-Molema (Central) District manufactured exports in order to broaden its Municipality economic base. To achieve this, it has identiThe second-largest of the four districts in both fied 16 products from minerals and fertilisers population and size, the Ngaka Modiri-Molema to machinery and horticulture, and the top(Central) District comprises the local municipal- five markets to which these products will be ities of Ratlou, Tswaing, Mahikeng, Ditsobotla exported. (Lichtenburg) and Ramotshere (Zeerust). It lies in the north-central part of the province and The current commodities boom, fuelled by shares a border with Botswana. The provincial demand from China in particular, should 35 north west business 2013 PROFILE give a steady boost to South African exports. The North West boasts a sophisticated manNineteen years of sound economic manage- ufacturing base that includes a number of ment of the South African economy has built international corporations. There are many investor confidence and is an incentive for investment opportunities in manufacturing increased fixed direct investment. available in the North West. Because of its strong mining and agricultural base and the potential for even further growth in the manufacturing sector, North West Province should benefit at least in proportion to the country as a whole as fixed direct investment flows increase. Another area with huge investment potential is agriculture. The region is one of South Africa’s major maize-farming areas, producing one third of the country’s total maize crop. This sector contributes 2% to the regional GDPR and accounts for over 7.9% of total employment. The North West’s average annual gross regional product (GRP) growth rate currently stands at 2.6%. It contributed 5.45% to the national GDP in 2011. The province also has a robust tourism industry, with key events like the Nedbank Golf Challenge at the Sun City Resort attracting many tourists. Known as the Platinum Province, mining is the mainstay of the North West’s economy and it is one of the largest producers of platinum and related metals worldwide. The province is actually the largest contributor to South Africa’s mining sector, with vast reserves of platinum group metals, granite, gold, fluorspar, cement, chromium, etc. Mining accounts for 39% of the province’s GRP, which translates to over 61 000 jobs. The economy, with the exception of the mines, is characterised by small, medium and micro enterprises (SMMEs). Given the sensitivity of the province’s economy to world mineral prices, the North West plans to reduce its dependence on the mining sector, with an increased diversification to tourism, mineral beneficiation and non-mining related manufacturing industries, evident in the recent year-onyear growth in this sector. Community services, including government, is the second-largest sector, contributing 20% to GDPR and accounting for 21.7% of employment. Finance and business services ranks third with 13% of GRP and nearly 5% of employment, followed by trade at 11% of GRP and 18.3% of employment. Another strong growth sector is manufacturing, which currently contributes 5% of the GDPR and employs 7% of the province’s workforce. Visit the Invest North West website to learn of available investment opportunities in North West Province and to subscribe to the quarterly e-newsletter. Municipal district Population Dr Ruth Mompati 463 100 Dr Kenneth Kaunda 696 500 Ngaka Modiri Molema Bojanala 834 900 1 515 453 North West population per district 2011 Source: Census 2011 north west business 2013 36 Contact details Key contact person Sam Mudramuthoo, Marketing Specialist Tel: +27 14 594 2570 Physical address: 171 Beyers Naudé Drive, Rustenburg 0300 Website: www.inw.org.za focus Opportunities abound Invest North West is promoting investment opportunities in mining and mineral beneficiation projects in the mineral-rich North West Province. I nvest North West is excited to announce that two investment projects have become available in the mining and mineral beneficiation sector in North West Province – also known as the Platinum Province due to its abundant mineral riches of platinum, chrome and the platinum group metals. North West Province is also home to a strong dimension-stone sector, due to the riches of its slate, marble and granite deposits. • Diversifying the local economic sector from mining in North West Province Mokwatla Mining Solutions Mokwatla Mining Solutions is a 100%-blackowned-and-managed industrial company specialising in the manufacture of high-quality conveyor-belt rollers for mining, manufacturing, power generation and other industries. An investment opportunity exists for the funding of R11 581 300 to equip and capitalise the business and to sustain it for six months to break even. Conveyor-belt rollers are cylindrical rollers with a steel shaft turning through the centre. The company will initially produce three types of rollers in different sizes to suit customer requirements: troughing rollers, return rollers and impact rollers. The company will, however, expand within its first year of operation to produce and provide additional products and services for both local and global markets. As outlined in the business plan and supported by Invest North West, the social and economic contributions anticipated are, among others: • The creation of 30 job opportunities in Tlhabane, Rustenburg • Employment of at least 15 women and youths, most of whom will be employed as skilled technical resources, such as welders and operators • Enhancing local beneficiation of the mining industry in North West Province • Stimulating further investment and enhancing black participation in the manufacturing sector in North West Province. • Participating in export programmes through developing markets for the company’s products and services A comprehensive business plan has been prepared, inclusive of a marketing strategy and forecasts, and can be obtained from Invest North West. Slate Beneficiation Project A 100%-black-owned-and-managed slate beneficiation project outside the town of Koster in North West Province is embarking upon an expansion project. R4.4-million is required to buy into and benefit from this investment opportunity. Rich slate deposits outside of Koster in the North West have resulted in this lucrative slatemining project. For more information about these opportunities, contact Sarah Manone, Investment Facilitation Manager: Mining and Mineral Beneficiation. Email: email@example.com Tel: +27 14 594 2570 Website: www.inw.org.za 37 north west business 2013 PROFILE North West Development Corporation The vision of the North West Development Corporation is to be an efficient and effective economic-development agency of the North West Provincial Government. The North West Development Corporation (NWDC) came into effect when the North West Development Corporation Limited Act (Act No 6 of 1995) was approved by the Provincial Legislature and published in the North West Provincial Gazette in 1995. The North West Provincial Government has recognised the need for the continuance of the organisation as a development corporation for North The newly commissioned Taung Light Industrial Park. West Province. The corporation was identified as being instrumental in the success of the reconstruc- Facing challenges such as the fight against povtion and development programme in North erty, unemployment and the continual quest to West Province. improve SMME development, has guided the NWDC in developing its vision and mission The NWDC has aligned its business fully statements. with the strategic objectives of the North West Provincial Government, as outlined Mission in the Provincial Growth and Development To stimulate economic growth and sustainable Strategy and informed by the terms of the development that will result in job creation shareholdersâ€™ contract and service-level and wealth. agreement. One of the main drives is to give impetus to the development initiatives of Projects the Department of Economic Development, The NWDC has signed various Memoranda Environment, Conservation and Tourism by of Understanding with, among others, providing project-management services for the Companies and Intellectual Property key projects. The NWDC also manages a social Commission (CIPC), the Automotive Industry responsibility programme, which disburses Development Centre (AIDC) and is also once-off donations to various communities, involved in a variety of projects such as: the including the physically challenged, senior Wild Silk Projects in Ganyesa, Madikwe sisal, citizensâ€™ homes, schools, sports and youth- Mokgalwaneng factories, Naledi youth car-wash development initiatives. project and its many light industrial parks. north west business 2013 38 PROFILE By joining forces with its stakeholders, the NWDC is able to boost its development drive for SMMEs in the North West. The CIPC project allows for easy business registration at NWDC branches across the province. Other CIPC services offered at the NWDC include amendments, registration of co-operatives as well as annual returns. An additional project, the North West Province Business Directory (NWPBD), is a web-based business directory. The directory allows businesses to showcase their products and services, encourages information sharing as well as providing the opportunity to attract local and foreign investment. This is made possible by profiling each business with all its necessary information and listing it accordingly. The core focus of the directory is to promote business activities across the North West Province. Furthermore, the NWDC adopts a ‘zero tolerance to fraud’ approach and consistently raises awareness among employees and stakeholders in an effort to stop and prevent most fraudulent activities within the corporation. One of the foremost anti-corruption defences is the company’s Fraud Hotline. Total anonymity is guaranteed when calls are placed reporting fraudulent activities. The corporation is also a member of the provincial anti-corruption forum. The NWDC has over the years proved a functional and dedicated organisation with a proven record of accomplishment for facilitating economic growth and job creation. The agency has recently won the provincial PMR Diamond Arrow Award and Productivity SA Gold Award within its sector. The newly commissioned Taung Light Industrial Moving forward, the NWDC intends to further Park has recently been completed. This ini- its development objectives and stop at nothing tiative was part of the NWDC’s drive to erect in attaining them. Economic empowerment of more industrial parks across the province, the North West Province is, and always will be, which would serve in aiding small businesses the organisation’s motivating force. by providing low-rental options within industrial areas. The project consisted of the develContact details opment of a piece of land within the Taung industrial area. Initial planning began in late Key contact person: 2011 and the vacant piece of land is now a Karen Landsberg, Marketing and fully functional light industrial park, comprising Communication Officer six workshops. Tel: +27 18 381 3663 The corporation also aims to expand its devel- Fax: +27 18 381 2041 opmental impact across parts of the province Email: firstname.lastname@example.org where it is yet to have a footprint, by erecting Website: www.nwdc.co.za more light industries. The entity has com- Fraud Hotline Number: 0861 32 3469 menced with its plans to build new light industrial parks in the Matlosana, Tlokwe, Naledi and Moses Kotane municipalities to provide reliable and viable infrastructure that will form the basis of future development and upliftment. These industrial parks provide SMMEs with lower rental options in business or industrial districts across the province. There are currently light industrial parks situated within the Ngaka Modiri Molema, Bojanala and Dr Ruth Segomotsi Mompati districts. 39 north west business 2013 focus A shining example Lomanyaneng Community Aids project is a beacon of success. Advocate Mpho Mogatusi, Mike Mthimunye, Nathaniel Moiloanyane and Peggy Qwelane (Secretary of the Board for Lomanyaneng). T he North West Department of Economic Development, Environment, Conservation and Tourism, through its development agency the NWDC, recently assisted the Lomanyaneng Community Aids project by donating R50 000 to the care-giving centre and its successful HIV and Aids initiatives. Handing over the cheque on behalf of the MEC, Ms Rosho, was Mr Moiloanyane who congratulated the centre and its staff and commended them for their noble efforts. The previous acting CEO of the NWDC, Mike Mthimunye, echoed Mr Moiloanyane’s sentiments by offering words of encouragement and acknowledgement to the centre’s staff and its directors for the excellent work they are doing for their community. ‘The NWDC is aware of the exceptional work you are doing and we will do our best to assist you, as we have now, and as we intend to in future,’ explained Mike. north west business 2013 40 The care-giving centre is based within Lomanyaneng Village in Mahikeng and was established on 21 March 2000 by the late Cecilia Nkosi, with assistance from her partners and volunteers from local villages. The centre offers a variety of services, including home-based care, counselling at community centres, patient units for 24-hour assistance and care services for immobile patients. The centre, through its volunteer caregivers, seeks to provide practical help to the community at large. The caregivers attend to patients’ wellbeing by providing them with medication, food and companionship. In addition, they train others to care for patients, provide care for orphans, counsel traumatised families and engage the youth on preventative measures in order to combat HIV and Aids by drastically lowering infection rates. www.nwdc.co.za A guide to business and leisure travel services, conferencing and accommoDation in the north west special feature Destination North west destination overview Tourism Hunting and golf tourism are growth sectors. Sector Highlights The first national Hunting Indaba was held at Sun City in 2012. • The Nedbank Golf Challenge employs about 400 local people. • The Vredefort Dome is a UNESCO World Heritage Site. • Royal Madikwe was the world’s best luxury game lodge in 2010 and 2011. N orth West Province’s tourism assets range from some of the biggest and wildest game reserves to manicured golf courses and luxury hotels. The hunting industry is an important contributor to the economy, but concerns about conservation ensure that there is always a debate about the role that hunting should play in the tourist offering. The first national Hunting Indaba was held at The Palace, Sun City, in October 2012. This brought together leading figures in national and provincial government, wildlife ranchers and representatives of the hunting sector. Heritage is one of the main components of the province’s tourism strategy, and a priority is the development of the Taung Skull Fossil Site. Mining company Anglo American Platinum has pledged to support the project to bring to life one of South Africa’s key archaeological heritage sites. The Cradle of Humankind World Heritage Site comprises the Sterkfontein caves, Swartkrans, Kromdraai and Environs. The Treasure Route runs along the N12 highway and includes wildlife, cultural, scenic, industrial and environmental tourist attractions. The ‘treasure’ relates to the gold mines scattered along the route. A highlight is the Vredefort Dome, an enormous 300km crater left when a meteorite struck the earth about two billion years ago. It is a UNESCO World Heritage Site. Other major attractions include some of the country’s most exclusive game lodges, and a range of lodges and camping destination north west 2013 42 major companies • Sun International • Tsogo Sun • Protea Hotels • Cradle Hotels and Resorts • Peermont Resorts sites catering to all pockets in any one of the North West’s 12 smaller game and nature reserves. Adventure sports is a growing section of the tourism sector. Hot-air ballooning over the Pilanesberg mountains is a popular pursuit, as is quadbiking among the foothills. Canopy tours in the Magaliesberg are on offer, with many opportunities for water sports of every kind on the province’s many water bodies. Hartbeespoort Dam is the biggest of these, but there are ample opportunities for water lovers at Bloemhof Dam, Boskop photo: more hotels and lodges The Palace of the Lost City is renowned for its opulence. destination overview Dam (north of Potchefstroom) and Vaalkop Dam (north of Brits). Each of these dams has great birdlife, with up to 250 species living at or visiting the dams. photo: sun images Hotels and casinos North West has casinos at Sun City and the Morula Casino and Hotel at Mabopane (both run by Sun International), and another two managed by Peermont Resorts, at Klerksdorp (Rio Hotel Casino and Convention Resort) and in Mahikeng (the Mmabatho Palms Hotel Casino Convention Resort). The provincial government is keen to have a fifth licence granted in the province. The North West is conveniently located within easy driving distance of the great urban conurbations of Gauteng Province. Cradle Hotels and Resorts operates the five-star hotel in the Bafokeng Sports Complex near Rustenburg, the Royal Marang Hotel, and two lodges in the Madikwe Game Reserve, the Shepherd’s Tree Game Lodge and the Ivory Tree Game Lodge. Another Rustenburg option is the StayEasy, a Tsogo Sun hotel. Protea Hotels has three North West properties: in Klerksdorp (three-star, 92 rooms) Christiana (three-star, 50 rooms), and Mahikeng (four-star, 99 rooms). The 2010 Soccer World Cup revealed that the province has the following bed numbers: Madikwe Safari Lodge is the epitome of African hospitality. • Bojanala District (including Sun City): 15 300 beds • Kenneth Kaunda District: 7 700 beds • Ngaka Modiri Molema District: 4 700 beds Sun City, the casino and resort on the edge of the Pilanesberg National Park, has become a national asset with an international reputation. Established in 1979, it now offers a choice of four hotels, two golf courses and recreational features such as the water park at Lost City and the Valley of Waves. The resort also offers a range of conference, meeting and banqueting facilities that see several of South Africa’s top awards ceremonies being held there. Golf North West Province has excellent facilities for golf, and this part of the tourism market is set for growth. Soon after South Africa won an international award as a golf destination in 2011, the South African Golf Tourism Association (SAGTA) was founded. South Africa was named as Golf Destination of the Year (Africa, Indian Ocean and Gulf States) by the International Association of Golf Tour Operators. Spurred by this recognition, a number of golf operators got together to formally represent the golf-tourism sector in South Africa, the worth of which has been estimated at R60-billion per year. The Africa Golfing Indaba to be held in Cape Town in 2013 will include a segment on golf tourism. Apart from the iconic Gary Player Country Club which hosts the annual international tournament, the Nedbank Golf Challenge, Sun City is also home to the Lost City golf course. This is an easier course than the championship venue, but its bushveld setting ensures that it still presents some stiff golfing challenges. 43 destination north west 2013 destination overview Smaller parks Terrain and activities Boskop Dam Nature Reserve Water sports, angling, game and bird viewing. Botsalano Game Reserve Near Mafikeng, tented camps, rhino viewing. Borakalalo National Park Near Brits, diverse terrain, more than 350 bird species. Bloemhof Dam Nature Reserve Dam covers 25 000 hectares. Bloemhof Bonanza is SA's biggest inland-angling tournament. Game viewing. Barberspan Bird Sanctuary RAMSAR wetland. Waterfowl sanctuary. Kgaswane Mountain Reserve Hiking trails in Magaliesberg mountains. held directly after the Nedbank Golf Challenge. The golf day regularly raises R1-million for the trust. Other well-known golf courses in the North West are Pecanwood Golf and Country Club at Hartbeespoort Dam and Leopard Park Golf Club in Mahikeng. Pecanwood was designed by Jack Nicklaus and regularly receives good rankings in national surveys. Hunting Speaking at the Hunting Indaba, National Minister of Mafikeng Game Game viewing along Molopo River. Water and Environmental Reserve Affairs Edna Molewa said that Molopo Game Reserve Kalahari grassland and thornveld the hunting and game-farming vegetation. Raptors: bateleurs, sectors were important parteagles and vultures. Fossiled ners in ‘conservation, tourism Phepane river bed. and economic development’. The Professional Hunters’ Vaalkop Dam Nature Bushveld terrain. Angling and Association of South Africa Reserve birding. has put the overall value SA Lombard Nature Research and breeding centre, near of the wildlife industry to Reserve Bloemhof. the national economy at Molemane Eye Spring and mining museum. Angling, R7.7-billion. The industry tented camp, caravan park. is said to employ 140 000 people. The Confederation of Wolvespruit Dam Riverine angling and small game Hunting Associations of South Nature Reserve viewing. Africa says that the sector is Tourist offerings in the North West’s smaller nature parks. now bigger than the sugar and Source dairy sectors. Minister Molewa The hosting of the Nedbank Golf Challenge boosts the mentioned a confirmed figure regional economy significantly. During the tournament, about for the 2010 season of 400 local people are brought in by the company responsible R1.1-billion, but pointed out for providing staff to the tournament, InnStaff. They receive that this referred only to in-house training and help to provide for the needs of the accommodation and hunting approximately 20 000 guests who visit Sun City during the tour- fees: much more money was nament. The resort itself says that about 90% of its total staff generated down the value chain. The North West Department complement is drawn from local communities. Sun City allocates 4% of post-tax profit to social devel- of Economic Development, opment. Over the years, the resort has spent more than Environment, Conservation R32-million on community projects. and Tourism has declared Nedbank and Sun International are founding trustees of The the Dr Ruth Segomotsi Sports Trust, and the main fundraiser for this organisation is Mompati region a hunting destination north west 2013 44 destination profile Protea Hotel Mafikeng Protea Hotel Mafikeng in North West Province is ideally located in an area rich in culture, history and wildlife. It is close to a nature reserve, bird sanctuary and the Mmabatho Stadium. Facilities • The surrounding area boasts superb golf The hotel offers 99 luxuriously comfortable ensuite bedrooms. The rooms are air-conditioned and this can be individually controlled to ensure optimum convenience for the guest. Room facilities include a satellite TV, electronic safe, teaand coffee-making facilities, telephone and an executive desk for business travellers. Wireless Internet hotspots are available in all public areas. courses, soccer and rugby fields, and an off-road motor club. • Paintball and go-karting are available. • Credo Mutwa Cultural Village at Lotlamoreng is a living museum showcasing traditional African villages and cultures. • The Mafikeng Game Reserve is considered the home of white rhino and buffalo. • Disaneng Dam is popular for fishing and watersports. • Wondergat is an inland diving venue, situated approximately 40km from Mahikeng. The Protea Hotel Mafikeng has an in-house restaurant seating 70 people and offers a buffet breakfast and à la carte lunch and dinner, to the discerning diners’ delight. CONTACT DETAILS Key contact people: Keletso Nxumalo, General Manager Neo Moremi, Reservations Manager The conference facilities offered by Protea Hotel Mafikeng accommodate 100 delegates in seminar style and give access to state-of-the-art conferencing equipment. Tel: +27 18 381 0400 Fax: +27 18 381 4206 Email: email@example.com Physical address: 80 Nelson Mandela Drive, Mahikeng 2745 Postal address: PO Box 891, Mahikeng 2745 Website: www.proteahotels.com/mafikeng Activities in the area • The Mafikeng Museum has a comprehen- sive collection of Anglo-Boer War exhibits. • Casino Resort is located 3km from the hotel. 45 destination north west 2013 destination overview destination. This is the dry south-western region of the province. Training in guiding for the hunting industry is to be offered at the province’s hotel schools. Coenraad Vermaak Safaris recently announced the opening of nearly a quarterof-a-million acres of land – claimed to be the largest privately owned conservation area in South Africa – along the Botswana border. The Khamab Kalahari Reserve has more than 16 000 head of game, including lion, leopard, white rhino, buffalo and black wildebeest. Poaching of rhino has become a huge problem in South Africa and the 40-year sentence handed out to an illegal rhino-horn trader in 2012 was welcomed by conservationists. Almost 700 rhino were poached in South Africa in 2012. Nature and game reserves The strategy of the North West Parks and Tourism Board (NWPTB) includes ramping up investment in the province’s 12 smaller parks with a view to creating jobs in the second economy. This presents an opportunity for private investors to become involved. Another major project is in the form of an ambitious plan to create a mega-park in the north-western sector of the North West, the Heritage Park. The idea is to link the existing parks of Madikwe (on the Botswana border) and the destination north west 2013 Pilanesberg National Park (a provincial park). Nearly 20 000 hectares of land is being prepared for incorporation, which is intended in a later phase to become a transnational park. With much of the targeted land being currently used for marginal cattle farming, it is expected that the transference of this to the potentially more lucrative game-reserve option will bring considerable benefits. Pilanesberg National Park nestles in a giant extinct volcano complex, said to be the most perfect example of an alkaline ring complex. There are several Stone and Iron Age sites in the park. Because the park is situated in a transition zone between the semi-desert Kalahari and wetter Lowveld (or Bushveld) vegetation regions, many types of flora and fauna occur. As the fourth-largest park in South Africa, Pilansberg covers an area of 55 000 hectares. Madikwe Game Reserve is even bigger, covering 75 000 hectares in the area north of Zeerust. In the Marico River Valley and near the Botswana border, the reserve is home to the Big Five. Experienced tour guides say that Madikwe is an excellent place to see white rhinos. There are 18 luxury game lodges in Madikwe. Royal Madikwe Luxury Safari Residence has won the World Luxury Hotel Awards category for Luxury Game Lodge two years in a row – 2010 and 2011. Online resources Aardklop Festival: www.aardklop.co.za Bosman Weekend: www.marico.co.za Business Tourism Guide: www.tourismnorthwest.co.za Confederation of Hunting Associations of SA: www.chasa.co.za Institute for Tourism and Leisure Studies, North-West University: www.tourisminstitute.co.za Madikwe Game Reserve: http://madikwegamereserve.net North West Parks and Tourism Board: www.tourismnorthwest.co.za Pilanesberg Game Reserve: http://pilanesberggamereserve.com Potchefstroom Tourism: www.potchefstroom.co.za Professional Hunters’ Association of South Africa: www.phasa.co.za South African Golf Tourism Association: www.sagta.co.za South African National Parks: www.sanparks.co.za South African Tourism: www.southafrica.net South Africa Tourism Services Association: www.satsa.com Tourism Business Council of South Africa: www.tbcsa.travel Tourism Grading Council: www.tourismgrading.co.za Wildlife Ranching South Africa: www.wrsa.co.za 46 radio Motsweding FM Motsweding FM reaches 3 319 000 listeners every week, and is the biggest Setswana radio station in South Africa. Motsweding FM’s language of broadcast is music and IKB. It regularly conducts outside Setswana, as listeners are Setswana speaking broadcasts that allow the station to be taken and understanding. The station has a spring to the communities that it serves, while also in its step, and acts locally but thinks globally. showcasing its icons who are the power behind Loyalty to brand Motsweding FM is demon- the on-air delivery of brand Motsweding FM. strated through the number of weekly exclusive listenerships. Motsweding FM hosts events such as Mosadi wa Letlapa (Women’s Day in August), Ikitse Broadcasting out of Mmabatho, most of Motswana (Heritage Day in September) and Motsweding FM’s listeners are based within popular birthday celebrations (in June) that the North West Province, where it has the clients can sponsor or partner with for brand highest listenership at 1 654 000 (53%) association and growing the reach or sales on a weekly basis, followed by Gauteng at of their products and brands. It also has CSI 817 000 (26%). A sprinkling of listeners are projects such as Back-2-School, raising funds found in the other provinces. There is a high for hospices, orphanages and old-age homes number of spillover listenership in Botswana, within brand Motsweding FM’s footprint. where the Batswana people originate. The station’s strength lies in its highly talented Motsweding FM is one of the most contem- presenters and DJs. They are the pulse of brand porary brands. The listeners have one foot Motsweding FM. Not only do they provide entrenched in modernity while embracing content, they also provide well-seasoned Eurocentric culture at the same time. It is avail- entertainment to the listeners. able in all nine provinces of South Africa. Why advertise with Motsweding FM? Motsweding FM can be listened to on air, liked on Facebook and followed on Twitter. The target market is predominantly aged 25-49. There is a vast array of people that are reached, from the very young to the elderly, poor to the middle class, rural communities plus those who reside in urban areas. The programming is mandate driven – Educate, Empower and Entertain. The programmes ignite and engender nation building. It delivers cutting-edge content that is distinctive, compelling, creates excitement and connects emotionally. It celebrates, embraces and unites South Africans. The station provides its listeners with news and current affairs, sports, education, drama, religion, kids programmes, Clients will be associated with a strong brand that has been in existence for 50 years. Messages are delivered in Setswana, the language easily understood by the listeners. Clients will also deliver their messages to a highly loyal audience and listeners will be able to respond to the client’s messages quickly. Contact details Key contact people Agnes Litheko, Government Sales Tel: +27 18 389 7444 Thabo Mathebula, Business Development Tel: +27 11 412 5479 Website: www.groupsalesandmarketing.co.za Website: www.motswedingfm.co.za. 47 destination north west 2013 destination profile North West Gambling Board The North West Gambling Board aims to be a leading and socially conscious authority in the regulation of gambling in the world. The North West Gambling Board (NWGB) is a • Eradication of any form of illegal gambling statutory body established in terms of section operation and promotion of responsible 3 of the North West Gambling Act, 2001 (Act gambling. No. 2 of 2001), as amended and classified as a • Monitoring and enforcing compliance with Schedule 3C Public Entity in terms of the Public the BBBEE Act and Codes of Good Practice. Finance Management Act (PFMA) to regulate • Collecting and administering gambling levies the gambling industry in North West Province. and revenue under the North West Gambling Act, 2001 (Act No. 2 of 2001), as amended. The NWGB has five programmes with 43 staff members, and an operational budget of over Combating illegal gambling and promoting responsible gambling R29-million. The strategy and public awareness programmes Mission to combat illegal gambling are yielding results To provide effective and efficient regulatory in that 67 illegal gambling operators were services and maintain a gambling industry investigated in collaboration with SAPS and that contributes to socioeconomic growth SARS. 1 257 machines were confiscated and and development. 1 336 were destroyed. Currently 12 illegal gambling operators are being prosecuted. To Main services and activities report illegal gambling, contact the hotline Gambling is undertaken in the province with number on 0860 545 545. a view to enhancing economic growth and development, and to satisfy the entertainment People with problem gambling are excluded needs of the people of the province. The main from gambling sites and those suffering from services include: gambling addiction are referred to the National Responsible Gambling Programme. The toll • Registration and licensing of all establish- free helpline number is 0800 006 008. ments where gambling games are conducted or operated, so as to better the Contact details public engagement in gambling, promote safe entertainment, good morals and order. Key contact people: • Registration and licensing of all employees Fortune Sekgaphane, Chief Executive Officer and third parties participating in the Ndiambani Beauty Mutheiwana, Chief gambling industry. Financial Officer • Monitoring and enforcing compliance with Mothunye Mothiba, Chief Operations Officer legislation and licensing conditions, thereby Tel: +27 18 384 3215 Fax: +27 18 384 2290 ensuring that gambling is conducted in a fair Email: firstname.lastname@example.org and honest manner. Website: www.nwgb.co.za destination north west 2013 48 interview Gambling pays off Chief executive officer of the North West Gambling Board Fortune Sekgaphane explains how gambling contributes to socioeconomic growth and development in the province. Please provide an overview of the main functions of the North West Gambling Board. The Board carries the responsibility of ensuring that the gambling industry in the province is regulated in a manner conducive for optimal operation of our licensed gambling enterprises. Also, we ensure that the province receives maximum revenue and other benefits such as investment, job opportunities and opportunities for SMMEs and the advancement of previously disadvantaged individuals (PDIs) and groups in the gambling industry. Gambling bears great potential for socioeconomic growth and development in the province. How does the Board contribute to these objectives? Fortune Sekgaphane The North West is home to four casinos with 1 774 gambling Mr Sekgaphane was machines and 71 tables, and employing 844 people directly and appointed CEO of the NWGB, 77 people indirectly through security companies. The casinos raised effective from January a total gross gambling revenue of R3.7-billion and have contributed 2008. Fortune studied R269-million in levies to the Provincial Revenue Fund since 2009. The horse-racing and betting sector has three bookmakers and law at the University of Bophuthatswana. He began one totalisator operating 11 branches, four agencies and one Telebet, working at the Mpumalanga employing over 65 people with a total gross gambling revenue Gambling Board in 1997, of R262-million. It has contributed R16.9-million in levies to the where he served at various Provincial Revenue Fund since 2009. levels over a period of 10 Three bingo operators and three route operators were granted years. He was appointed licences, whereby 60% of the ownership is vested in local previacting CEO in 2003, and ously disadvantaged individuals in the province, one of each of the was given the position per- bingo and route operators is 100% black owned. The route operators partnered 42 licensed site operators and manently in 2004. He was appointed the Chairperson rolled out 187 limited payout machines (LPMs) against a target of of the Illegal Gambling and 1 500 LPMs, and employing 96 people; 40% of the site operators Technology Committee of are local previously disadvantaged individuals. the Gaming Regulators of The LPM sector raised R26.2-million in gross gambling revenue Africa Forum in 2007 and and contributed R1.6-million in levies to the Provincial Revenue 2008. He has presented Fund to date. papers and participated Our licensees contributed R26.6-million to social or community in panel discussions at development projects from 2009 to date. various international www.nwgb.co.za conferences. National Responsible Gambling Helpline: 0800 006 008 49 destination north west 2013 special feature Big events in big sky country A wide variety of festivals and sporting events is making the North West a hotspot of activity and excitement. T hirty-two years ago, the Nedbank Million Dollar golf tournament at Sun City attracted global headlines when US golfer Johnny Miller pocketed a first prize of $500 000. The renamed Nedbank Golf Challenge paid out total prize money of 10 times that in 2012 â€“ and $1.25-million to winner Martin Kaymer â€“ but there is another Sun City competition that has the magic number in its title, the Sun City Million Dollar Pigeon Challenge. In 2012, more than 3 000 racing pigeons were driven to the Northern Cape before being released in the hope that they would fly back to the Pilanesberg. Sports Illustrated estimated the total value of the feathery field to be about R40-million. The first pigeon back in its pen won its owner $200 000. From golf to pigeon-racing, the North West is increasingly being seen as the home of big events, especially in the sporting field. destination north west 2013 50 The Nedbank Golf Challenge is still the biggest and most widely publicised. It regularly attracts some of the best golfers in the world, with famous names such as Lee Westwood, Sergio Garcia, Bernhard Langer and Ernie Els on the winnersâ€™ list. It is one of the longest golf courses in the world and is a tough challenge, especially if the bushveld rough receives rain before the competition. The 2010 Soccer World Cup showed the potential of sports tourism in the province. The Royal Bafokeng Sports Palace hosted several World Cup matches, and the England football team were impressed with their accommodation in the Royal Bafokeng Sports Campus. Cup-winners Spain stayed in the upgraded facilities of the North-West University in Potchefstroom. With Australia having stayed in the town in 2003 on their way to winning the Cricket World Cup, Potchefstroom clearly has the winning formula. photo: sun images The prestigious Nedbank Golf Challenge attracts the stars of the golfing world. special feature More than 20 000 visitors descend on this small Free State town, including thousands of North Westers, to experience the Nampo Harvest Festival held every year in May. Klerksdorp is nearby to Bothaville, also known as the mielie (maize) capital of South Africa. The Vryburg agricultural show is said to be the third-biggest show of its kind in South Africa. Large numbers of cattle get auctioned off at the show (and throughout the year in other auctions). Leeudoringstad, unsurprisingly, hosts a Lion Festival in May. Stilfontein, just north of Klerksdorp along the N12, hosts a Rose Festival in September every year, and Rustenburg is the venue of the South African Orchid Show. Arts and culture photo: old mutual The Om Die Dam ultra-marathon is run around the Hartbeespoort Dam. The North West Institute of Sport in Potchefstroom has a sports-science laboratory, a lecture theatre, a gymnasium, a rehabilitation centre and ice baths. The Bafokeng facility is similarly equipped with every modern device. There is also an Institute of Tourism and Leisure Studies at the university. In the angling world, there is no bigger event than the Spar Bloemhof Bonanza. Held at the Bloemhof Dam every year, the overall value of prizes in 2012 exceeded R1.7-million. The threeday festival is organised by the Eco-Care Trust. Running around the Hartbeespoort Dam is the objective in the popular ultra-marathon, Om Die Dam. Various other running and cycling events (such as the Cradle Quest) are held in the Hartbeespoort vicinity, some of which take participants up to 1 450m above sea-level. The 24-hour mountain-bike event is a tough race. The Marico District also holds popular mountain-bike races. The second biggest agricultural show of its type in the world is held every year in Bothaville. The best-known of the North Westâ€™s festivals is the annual Aardklop Festival, which is held in Potchefstroom. The 2010 arts, music and visual-arts festival sold 182 000 tickets over five days and created an economic impact in the province of about R82-million. The festivalâ€™s website reported 2012 total ticket sales of 132 247. Dairy-goods manufacturer Clover announced in 2011 a sponsorship that will amount to about R30-million over five years. The Oppikoppi Bushveld Festival in nearby Northam (Limpopo) is another festival that has gained a formidable reputation, although anyone who has been to Aardklop, and experienced the charming, oak-lined avenues of Potchefstroom must realise that this has a reputation for something quite different! The drinking of mampoer (a hard-hitting local spirit) is regarded as a cultural pursuit by some. The settlement of Schoemansdrift outside Potchefstroom combines Anglo-Boer War history and mampoer tasting, as does Syfergat near Klerksdorp. Marico Valley Mampoer was made famous by Herman Charles Bosman in his short stories about the people and myths of the valley; it can still be tasted on the RustenburgMmabatho Road. There is a Mampoer Festival in June and a Bosman Weekend in October: both are celebrated in the Marico District, up in the far north-west of the province near Zeerust. 51 destination north west 2013 42 54 59 65 75 80 82 key sectors Overview of the main economic sectors of North West Province Tourism����������������������������������������������������������������������������42 Agriculture����������������������������������������������������������������������54 Mining�������������������������������������������������������������������������������59 Mineral beneficiation�����������������������������������������������65 Manufacturing��������������������������������������������������������������70 Food and beverages�������������������������������������������������72 Engineering�������������������������������������������������������������������75 Transport�������������������������������������������������������������������������78 Construction and property������������������������������������80 Water��������������������������������������������������������������������������������82 Energy�������������������������������������������������������������������������������86 Banking and financial services����������������������������88 Development finance and SMME support�����92 Education���������������������������������������������������������������������104 Business organisations�����������������������������������������107 South African National Government�������������110 North West Provincial Government���������������116 North West Local Government�������������������������118 north west business 2013 OVERVIEW Agriculture Big grain companies in the North West deal in huge volumes. Sector Highlights An aquaculture programme is underway at Disaneng Dam. • Senwes’ first-half profits in 2012 were up 65%. • NWK can make 10 tons of fertiliser per month. • Kgora Farmers Training Centre was launched in 2012. • State vets are trained in Mahikeng. • The Kalahari is a good place for seed potatoes. T north west business 2013 54 photo:flickr/edmund garman major companies he North West Province has a strong agricultural sector with • Senwes several very large companies involved in grain. Cattle and crops such as sunflower seeds are among the other subsec- • Suidwes • MGK tors that generate significant income and feed large numbers • NWK of South Africans. The North West produces about one third of • National Department the country’s maize. of Agriculture, Forestry Despite this, food security is still a concern for many of the and Fisheries province’s citizens. North West Premier Thandi Modise says that ‘the problem of access to food affects about 32.9% of the population’. She went on to tell the audience at the launch of a new Fish farming is a DAFF proagricultural college outside Mahikeng that ‘only 23.6% of the posal that has been enthusiashouseholds in the province are involved in agricultural activities’. tically embraced by the North The premier’s comments are in line with food-security initia- West Department of Economic tives of the National Department of Agriculture, Forestry and Development, Environment, Fisheries (DAFF). Conservation and Tourism Rural development strategies are bringing the entire value (DEDECT). Fish will be cultichain of agriculture under scrutiny. Small-scale farmers will vated at six dam sites. Rhodes be helped by improving infrastructure, creating new mar- University’s Rural Fisheries kets and assisting them to gain access to the big buyers such Unit is the programme’s technology partner. as supermarkets. DAFF aims to increase the number of smallholder producers The Moses Kotane Local in the country by 50 000, to bring the total to 250 000 by the Municipality wants its agriyear 2020. As the DAFF strategic plan says, ‘There is a need to cultural master plan to lead coordinate and integrate all the support provided to smallholder to greater self-sufficiency for and subsistence producers.’ its mostly rural citizens. The OVERVIEW municipality has more than 50 000 hectares suitable for sunflower, grain and sorghum cultivation, and large areas that can carry cattle and goats. The plan envisages subsistence farmers moving into the commercial sector and the establishment of agri-processing plants. The location of the municipality near large game and nature reserves (Madikwe and Pilanesberg) means that creative ways of sustaining agriculture in harmony with conservation efforts will have to be found. North West’s distinct climatic regions are home to three very different types of agriculture. The dry western region is home to large beefcattle herds, and this is where the growing game-ranching and hunting industry has its base. An Absa Agribusiness study shows that a R5-million investment in cattle over six years makes a 4.8% return, against 27.7% for buffalo and 45.2% for sable. The eastern and northeastern parts of the province receive relatively good rainfall and are suitable for the cultivation of crops. The central and southern sections of the province are dominated by maize and wheat farming. Companies One of South Africa’s biggest agricultural companies is Senwes. The company specialises in the storage and handling of grains and oilseeds. Its extensive silo infrastructure extends across the interior. In the first six months of 2012, Senwes reported turnover of R7.3-billion, which was almost unchanged from the previous year. Profits, however, saw a massive rise because of big increases in grain prices. After-tax profit rose 65.5% to R187-million over the same six-month period in 2011. Senwes’ headquarters are in Klerksdorp. In 2012, the loan book of the partnership between Absa Vehicle and Commercial Asset Finance and John Deere SA topped R1-billion (Business Day). John Deere has 45% of the national market in agricultural equipment. Senwes sells John Deere tractors. Suidwes is based south of Klerksdorp in Leeudoringstad. More than 90% of the shares in the company are held by farmers. Grain handling is the main business and there are divisions for retail (17 outlets and one animal-feed depot), mechanisation, finance and research and agricultural economics (Terratek). The company’s revenue in 2011 was R3.2-billion, with an after-tax profit of R65-million. Brits is the location of the headquarters of the MGK Group, formerly Magaliesberg Graan Kooperasie. Revenue in 2012 reached R2.4-billion across the company’s five divisions. MGK also runs a plant that makes fullfat soy, a component in animal feed. NWK is another company with manufacturing capacity. The Lichtenburg-based enterprise makes liquid fertiliser (up to 10 tons per month), animal feed (Opti Feeds), processes sunflower seeds (Epko), and runs three grain mills. Another subsidiary, Opti Chicks, has a capacity of 600 000 chicks per week. NWK also deals in grain, runs several retail outlets and has a financial arm, Univision Financial Services. The company has 37 silos with a capacity of 2.5-million tons. NWK’s revenue in 2011/12 was R2.8-billion. There are several milling operations in North West Province. Masilo Mills is located in Hanneman (where Papa Super Maize is ground) and Tau Roller Mills is in Wolmeransstad. Crops Nearly two million hectares is planted with summer cereals, with about 50 000 hectares given over to winter cereals. The North West produces one third of South Africa’s maize and about 15% of its wheat. Over-production of grain crops is a big concern for commercial farmers. The other major crop is sunflower seeds, with the province providing about 40% of the nation’s crop. The North West supplies 5.4% of South Africa’s potatoes, but parts of the Kalahari, where farmer Frans Engelbrecht has a very successful operation, are ideally suited to the cultivation of seed potatoes. The North West produces about 11% of South Africa’s cotton harvest, which has been getting smaller for many years. There 55 north west business 2013 OVERVIEW are plans to grow the sector again, particularly in small-scale farming sector. There are cotton operations near Sun City in the north of the province and in the Taung district in the far south. The Taung Irrigation Scheme covers about 36 000 hectares, and companies like McCain (potatoes), South African Breweries (barley) and Cotton South Africa (cotton) have standing orders with small-scale farmers. This water supply will also allow for the cultivation of high-yield crops such as pecan nuts, paprika and olives. Livestock The western reaches of the province are sometimes called ‘South Africa’s Texas’ with extensive cattle herds roaming on big farms. The North West has approximately 1.7-million beef cattle, representing 13% of South Africa’s herd. Major breeds include Simmental, Brahman, Bonsmara and Simbra, a cross between the Brahman and Simmental breeds. Proveld Bonsmara held two auctions in 2012 and sold 66 bulls: the average price at one auction was R27 952, and R37 000 at the other. A national initiative is promoting Nguni cattle. Vryburg is the centre of the beef-cattle breeding industry. Kalahari Red and Boerbok goats are found in large numbers in the dry west. Training and research The Kgora Farmers Training Centre at Ramatlabama, near Mahikeng, was launched in 2012. The focus of training will be on food security, primary production and agri-processing. Taung Agricultural College has added an irrigation course to its syllabus. The college offers three-year diplomas in agriculture. Online resources Agricultural Research Council: www.arc.agric