EASTERN CAPE BUSINESS THE GUIDE TO BUSINESS AND INVESTMENT IN THE EASTERN CAPE PROVINCE
JOIN US ONLINE
Managing the region’s water resources How badly has the Eastern Cape been affected by drought and what is Amatola Water doing to mitigate these effects? Although the water sector has had a difficult time due to the prolonged drought, fortunately Amatola Water’s area of supply has been blessed with sufficient rain and dam levels remained full at between 95-100%. The water crisis has affected some areas in the Eastern Cape and those municipalities are being guided by the Drought Disaster Plan in order to cope with the conditions.
Please describe the main highlights that Amatola Water achieved in the past financial year.
Lefadi Makibinyane Lefadi Makibinyane is the Chief Executive Officer of Amatola Water. He joined Amatola Water in February 2015 from the Consulting Engineers South Africa (CESA), where he also served as CEO. Makibinyane is an accomplished engineer and executive, having worked in various leadership positions in both public and corporate institutions, including the City of Tshwane Metropolitan Municipality, Fieldstone Africa, the Industrial Development Corporation of South Africa (IDC), South African Breweries (SAB) and SASOL, among others. He holds an Honours Degree in Chemical Engineering from the University of Teesside, Middlesbrough, in the United Kingdom, a PostGraduate Certificate in Project Management as well as Masters in Business Leadership from the University of South Africa’s School of Business Leadership, in Pretoria. He also serves as a non-executive director on the Boards of Rand Water, the Construction Industry Development Board (CIDB), the Gauteng Partnership Fund and also as a member of the Presidential BBBEE Advisory Council.
We were very proud to be appointed as implementing agent for the Nooitgedacht/Coega lowlevel project in the Nelson Mandela Bay Metropolitan Municipality as well as the Amathole dry sanitation project. Ongoing projects where we effectively implemented strategic water and sanitation schemes include the King Sabata Dalindyebo Presidential Intervention (water and waste-water infrastructure upgrade), the Makana Right of Use (RoU) project, the Ndlambe Regional Bulk Water Supply, the Nahoon-East Coast Bulk Supply Pipeline and the upgrades of Amatola Water plants. In addition, we achieved: • 98% compliance to SANS Class 1 potable water standards • 100% assurance of supply to our customers • 11.98% against a target of 12% with regard to production and network losses. This minimised environmental, financial and social impacts of losses and unaccounted for water. In recording an 18% increase in revenue, we were also pleased to say that we supported qualifying small enterprises, emerging micro-enterprises and black-owned businesses. A clean audit was achieved.
What are some of the key challenges facing the utility’s successful operation in the next few years? Being geographically limited in terms of the Government Gazette of 1997 means it is difficult to grow the business. However, when water crises happen we step in as per ministerial directives as an implementing agent to develop infrastructure or to operate or maintain water treatment works. This pushes up our operational costs, which are well above the national norm. We support the long-term strategy of the Department of Water and Sanitation, namely the Institutional Reform and Realignment (IRR) which includes the transfer of strategic and specific assets to regional water boards such as Amatola Water.
Could you expand on the competition issues between water utilities and municipalities as bulk water suppliers? The competition that exists poses a long-term challenge to the implementation of the IRR strategy, which seeks to establish regional water utilities to improve the scale and effectiveness of water service delivery. As the only water board in the Eastern Cape, Amatola Water could best serve by providing a bulk water service to the entire province. Municipalities would then be able to focus on the water reticulation network and, in so doing, improve the quality of service delivery to residential, industrial and commercial users.
t:HhAAU:(d wde,,1,, k '-'1 /...Lv - ��v7· v
LEADING SUSTAINABLE BULK WATER SERVICES IN THE As an essential services utility, Amatala Water is committed ta contributing to the soclo·economic development of the Eastern Cape Province through the provision of sustainable bulk potable water and sanitation services. Ta ensure universal access ta basic water supply, Amatala Water is upgracing the design standards al its water supply schemes and related bulk intraslructure to 750 lltres per household per day, in line with the Intent al the Nattonal Development Plan, al aimed at improving the qualHy al lffe of aver 76 000 households in the region. Amalola Hause 6 Lancaster Road, Vincent, East Landon Tel: (043) 707 3700 email@example.com www.amatolawater.co.za
CONTENTS Eastern Cape Business 2017 Edition
Introduction Foreword5 A unique guide to business and investment in the Eastern Cape. The Eastern Cape Development Corporation A province offering exciting investment opportunities.
Special features Regional overview of the Eastern Cape 8 With massive new investments in the automotive sector, renewable energy and agri-processing, the Eastern Cape is set to expand on its strengths and create new opportunities in the Oceans Economy. The maritime economy is building momentum Port Elizabeth hosted the “Investing in Blue Economy” conference in 2016.
Special Economic Zones New sectors such as renewable energy and aquaculture are attracting investors to the Eastern Cape’s industrial development zones.
Skills training is a top priority for Eastern Cape manufacturers and colleges.
Economic sectors Agriculture 32 Agriculture underpins several sectors of the economy of the Eastern Cape. Forestry 36 The private sector is working with community land owners to boost timber production. Aquaculture Fish from the Karoo will soon be a popular dish.
EASTERN CAPE BUSINESS 2017
UIF SAVING JOBS
THROUGH SOCIALLY RESPONSIBLE INVESTMENTS
The National Development Plan is a blueprint serving as a guideline to government departments and state entities on how they can play a role in government wide efforts of creating decent work, reducing unemployment and poverty. The Unemployment Insurance Fund is among the leading state entities in the implementation of the provisions of the NDP to address the slow economic growth, unemployment and poverty in South Africa. The UIF social investment mandate ensures that, additional to earning good financial returns, investments must be supportive of long term economic, social and adhere to sustainable environmental outcomes. The investments must also yield a good social return for the country. These investments have sustained 6 860 jobs of which 3 024 are permanent, 3 836 are temporary/seasonal and 195 are new jobs created during the financial year ending in March 2016.
UIF INVESTMENTS IN RENEWABLE ENERGY The UIF investments are contributing to the energy requirements of South Africa and the investments in the renewable energy sector provides a total capacity of 192 megawatt of electricity of which 117 megawatt is solar energy and 27 megawatt is wind generated electricity. The De Aar project is a shining example of the UIF energy investments and this project produces 90 megawatt of electricity and was completed in April 2016. The solar plant in the area generates enough electricity to power 15 000 houses. Another mainstay project is the Phakwe Group ran projects undertaken in the Northern and Eastern Cape.
INVESTMENT IN FOOD SECURITY The UIF investments in this regard are undertaken under the banner of the UIF Agri-Fund in partnership with Futuregrowth and Day Breaker Poultry Project. The UIF Agri-Fund has invested in 4 farms situated in Mable Hall in Limpopo. One of the farms is a cash crop farm spanning 450 hectares. The farm in the last financial year produced 235 hectares of white maize, and cotton was planted in an area covering 28 hectares. A further three farms are located in the Saron area in the Western Cape. In this project a total of 178 hectares has been used to plant grapes, 37 hectares has been used to pant citrus fruit. Furthermore, there is potential to plant an additional 92 hectares of grapes. The Daybreaker Poultry project operates in Gauteng, Limpopo and Mpumalanga and the combined projects have facilities to grow 1.6 million broiler chickens.
INVESTMENTS IN HEALTH CARE FACILITIES The UIF concluded two investments in this regard that include a BEE hospital manager, Busamed to build a private hospital in Modderfontein and Fund Manager Razorite Heatlhcare that focus on the provision of affordable heathcare facilities that include rehabilitation and sub-acute centres. The Modderfontein hospital is a 220 hospital bed with subacute facilities. This hospital is under construction. While the RH Fund Manager has concluded seven investments that include: • Busamed with four hospital facilities • HealthMed with two facilities
INVESTMENTS IN EDUCATION UIF has invested in three investments that play a role to unlock access to education. The investments were concluded with Eduloan – an organisation that provides financial support to tertiary students and South Point and Educor organisations that provide student accommodation. By March 2016, Eduloan had disbursed about R446 986.64 benefiting 34 047 students, whiles South Point provided about 10 000 student with accommodation.
UIF INVESTMENTS IN ENTERPRISE DEVELOPMENT The UIF has concluded two investments with the aim of supporting small and medium enterprises. In this regard the PIC on behalf of UIF has concluded investment deals with Musa Capital and TOSACO. The investments will support more than 250 SMMEs across various sectors inclusive of agriculture and affordable housing. Musa Capital for example has a supply chain of over 250 SMME’s that have facilitated the creation of 2 500 jobs. TOSACO investments is planning to advance capital to young black entrepreneurs who aspire to own and manage Total Filling stations around the country.
For more information: Call: 0800 843 843 or visit: www.labour.gov.za
CONTENTS Agri-processing Manufacturers are harvesting the Eastern Cape’s excellent produce.
Manufacturing From eye drops to dog food, the Eastern Cape has diverse manufacturing opportunities.
Automotive Vehicles and components anchor manufacturing in the Eastern Cape.
Energy Gas and renewable energy are creating a new energy landscape.
Water The Eastern Cape is tackling water shortages through new dams and improved controls.
Information and communication technology Incubators and laboratories are boosting innovation.
Banking and finance Formal banking is expanding its reach into rural areas.
Development finance and SMME support 54 Seed money is available for forestry ventures and much more. Tourism Events and adventures are drawing more visitors to the Eastern Cape.
Government Eastern Cape Provincial Government Eastern Cape Local Government
References Sector contents
EASTERN CAPE PROVINCE Britstown N12
Maps Eastern Cape Regional map
Eastern Cape Municipal map
Kareedouw Plettenberg Bay
Uitenhage Humansdorp Jeﬀreys Bay
EASTERN CAPE BUSINESS 2017
Komga Bhisho N2
King William's Town Grahamstown
EAST LONDON Hamburg
Port St Johns
Cathcart Fort Beaufort
Port Edward R61 Maclear Mount Frere
Hofmeyr Three Sisters
Hanover Victoria West
INDIAN OCEAN Motorway Main Road Railway
Eastern Cape Business
Publisher: Chris Whales
A unique guide to business and investment in the Eastern Cape.
Publishing director: Robert Arendse Editor: John Young Online editor: Christoff Scholtz Art director: Brent Meder Design: Colin Carter Production: Lizel Olivier Ad sales: Sydwell Adonis, Nigel Williams, Gavin van der Merwe, Sam Oliver, Gabriel Venter, Siyawamkela Sthundawho and Jeremy Petersen Managing director: Clive During Administration & accounts: Charlene Steynberg and Natalie Koopman Distribution & circulation manager: Edward MacDonald Printing: FA Print
he 2017 edition of Eastern Cape Business is the 10th issue of this highly successful publication that, since its launch in 2006, has established itself as the premier business and investment guide to the Eastern Cape province. The Eastern Cape enjoys an abundance of natural and human resources, as well as established industrial infrastructure that drives the economy of the province. This includes three ports and two industrial development zones which are home to a wide range of manufacturers and exporters. The 2017 edition includes an in-depth look at the province’s two Industrial Development Zones, a focus on skills development and investment climate information from the Nelson Mandela Business Chamber and the Border-Kei Chamber of Business. To complement the extensive distribution of the print edition of the magazine, the e-book can also be viewed online at www.easterncapebusiness.co.za. Updated information on the Eastern Cape is also available through our monthly e-newsletter, which you can subscribe to online at www.gan.co.za, in addition to our complementary business-to-business titles that cover all nine provinces as well as our flagship South African Business title. Chris Whales Publisher, Global Africa Network Media Email: firstname.lastname@example.org
DISTRIBUTION Eastern Cape Business is distributed internationally on outgoing and incoming trade missions, through The Eastern Cape Development Corporation (ECDC); to foreign offices in South Africa’s main trading partners around the world; at top national and international events; through the offices of foreign representatives in South Africa; as well as nationally and regionally via chambers of commerce, tourism offices, trade and investment agencies, provincial government departments, municipalities and companies, as well as major airport lounges. COPYRIGHT | Eastern Cape Business is an independent publication published by Global Africa Network Media (Pty) Ltd. Full copyright to the publication vests with Global Africa Network Media (Pty) Ltd. No part of the publication may be reproduced in any form without the written permission of Global Africa Network Media (Pty) Ltd. CREDITS | Cover: Transnet National Port Authority’s tugboats Qunu and Mvezo at work in Port Elizabeth harbour. The tugboats are part of a new fleet of nine built in Durban and are named after Nelson Mandela’s birthplace (Mvezo) and village in the Eastern Cape (Qunu). Pictures supplied by flickr.com, Public Domain Images, Tsogo Sun, Wikimedia Commons, Afrox, Merceedes Benz, VW South Africa, Elektawind, Getnews, SA Tourism, Nelson Mandela Bay Tourism, Pixabay, FAW, Sovereign Foods, Siemens, Transnet National Ports Authority, and Eastern Cape Technology Initiative.
PUBLISHED BY Global Africa Network Media (Pty) Ltd Company Registration No: 2004/004982/07 Directors: Clive During, Chris Whales Physical address: 28 Main Road, Rondebosch 7700 Postal address: PO Box 292, Newlands 7701 Tel: +27 21 657 6200 | Fax: +27 21 674 6943 Email: email@example.com | Website: www.gan.co.za
ISSN 1995-1310 DISCLAIMER | While the publisher, Global Africa Network Media (Pty) Ltd, has used all reasonable efforts to ensure that the information contained in Eastern Cape 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.
EASTERN CAPE BUSINESS 2017
The Eastern Cape Development Corporation A province offering exciting investment opportunities.
• The Eastern Cape boasts some of the best quality
Discover the Eastern Cape economy, spanning an exciting spectrum of sectors ranging from agriculture to information, communication and technology. The Eastern Cape is a province which prides itself on a rich cultural history, first world financial system, robust infrastructure and a wide array of business opportunities for investors and entrepreneurs.
of living standards in South Africa.
Key growth sectors Automotive
The Eastern Cape auto industry manufactures half of South Africa’s new passenger vehicles and provides more than 50% of the country’s vehicle exports. The province accounts for five original equipment manufacturers and nearly 200 automotive component suppliers.
The Eastern Cape Development Corporation has a dual role as provincial development financier: to enable local business through innovative financial and non-financial services, and to promote the province, locally and abroad. The ECDC’s Investment Promotion unit is the first point of entry for local and foreign investment into the Eastern Cape.
The Eastern Cape hosts a range of cultural, sports, adventure and heritage tourism events including the National Arts Festival in Grahamstown, the Half Ironman in East London, the Iron Man in Port Elizabeth. The Eastern Cape is the Home of Legends – birthplace of world icon, Nelson Mandela. Geographic tourist attractions include 800km of scenic coastline, national parks, and the Baviaanskloof Mega Reserve, which is the only location in South Africa where seven of South Africa’s biomes can be found. Investment opportunities exist in the development of golf courses, hotels and resorts where inherent tourism potential requires development. The sector value chain presents opportunities for local enterprises, including travel agencies, shuttle operators and arts and craft producers.
• The Eastern Cape boasts four universities offering high-quality tertiary education. Eastern Cape university graduates are in demand • Through an integrated database system developed by the province’s two industrial development zones, potential investors have ready access to skilled, semi-skilled and unskilled labour resources • Two purpose-built industrial development zones – the East London and Coega Industrial Development Zones, which are strategically situated on major transport and shipping routes, provide purpose-built infrastructure for investors • The Eastern Cape Provincial Government is committed to economic diversification • Set-up costs for new business in the Eastern Cape are extremely competitive • Access to domestic, SADC and global markets is guaranteed through three ports and three airports EASTERN CAPE BUSINESS 2017
Business process outsourcing
The primary BPO and Offshoring focus is on inbound and outbound contact centres. The province offers world-class infrastructure at the East London and Coega IDZs. Investors can take advantage of the availability of a large English-speaking workforce,
competitive labour costs and an established ICT infrastructure.
through identifying and accessing business opportunities within key sectors. • Identifying and packaging investment and business opportunities. • Identifying opportunities for joint ventures with local partners. • Advice on, and assistance with location decisions • Providing a professional and relevant after-care service to all investors. • Assisting investors to access investment incentive schemes. These range from manufacturing rebates to preferential production factor costs. • Assistance to companies with export readiness assessment analysis. • Access to national export incentive programmes • Assist companies to be part of local and international trade missions. • Provide market sector intelligence on specific regions.
Agriculture, agro-processing and aquaculture
The Eastern Cape is a producer of high-quality dairy, wool and mohair, game, mutton, beef, ostrich and goat meat, chicory, pineapple, citrus and deciduous fruit and several horticultural products. The province is also making its mark in areas of new production such as berries, essential oils, macadamia and pecan nuts, sweet sorghum and soya beans for bio-fuel and animal feed, as well as cassava and pineapple. Niche opportunities exist in the freshwater and marine environments. Energy
The Eastern Cape is rich in primary energy resources such as wind, solar, hydro and bio-energy. It is a province that boasts 300 days of sunshine. Unsurprisingly, the province has captured the majority of the successful wind farm applications under the first rounds of the National Energy Regulator of South Africa (NERSA) assessments. Areas of opportunity include the manufacturing of renewable technologies and components, the supply of raw materials, and the harvesting of solar, wind, hydro, biogas and biomass resources.
CONTACT INFO Head office: East London | Tel: +27 43 704 5600 Port Elizabeth | Tel: +27 41 373 8260 Queenstown | Tel: +27 45 838 1910 Mthatha | Tel: +27 47 501 2200 Satellite offices: King William’s Town | Tel: +27 43 604 8800 Mount Ayliff | Tel: +27 39 254 0584 Butterworth| Tel: +27 47 401 2700 Aliwal North | Tel: +27 51 633 3007
• The Investment and Trade Promotion unit of the
Email: firstname.lastname@example.org Website: www.ecdc.co.za
ECDC assists investors in taking advantage of the Eastern Cape’s compelling investment prospects
EASTERN CAPE BUSINESS 2017
A REGIONAL OVERVIEW OF THE
EASTERN CAPE PROVINCE With massive new investments in the automotive sector, renewable energy and agriprocessing, the Eastern Cape is set to expand on its strengths and create new opportunities in the Oceans Economy.
he largest mall to be constructed in South Africa since 2004 has opened in Port Elizabeth. The Bay West Mall is a sign of confidence in the Eastern Cape economy. Other major investments in the automotive sector (by established players such as Volkswagen SA and Mercedes-Benz SA and by two large Chinese concerns) and in energy (wind and gas generation) are the cause of this optimism. The agri-processing sector continues to attract new investments, such as Famous Brands’ new tomato paste factory at the Coega Industrial Development Zone. With 250 shops, an ice rink and cinemas, the R2-billion Bay West Mall is the first part of what will become the 320ha Baywest City Precinct on the western edge of Port Elizabeth. It is a regional facility that is attracting shoppers from towns such as Jeffrey’s Bay and Humansdorp, but the long-term plan envisages an entire city being developed on the site. Abacus Asset Management and the Billion Group are the joint developers. The Billion Group is led by Sisa Ngebulana who made his start in property in East London. Billion’s other Eastern Cape asset is the BT Ngebs Mall in Mthatha.
EASTERN CAPE BUSINESS 2017
The Oceans Economy at this stage is an idea, but it is an idea with massive potential. National government has several programmes to promote ship-building and repair, aquaculture, offshore oil and gas, marine protection and governance, and marine transport and manufacturing. The Nelson Mandela Metropolitan University (NMMU) is building an Oceans Campus and already has several research chairs studying this potentially very lucrative field. The province’s coastlines stretches along 800km and it has three ports and two associated industrial development zones geared to attracting investments in new sectors. The Port of Port Elizabeth took delivery of two new tugs in 2016, part of a R1.4-billion plan by Transnet National Ports Authority to increase efficiency at South Africa’s harbours. Two major airports at Port Elizabeth and East London provide good air links and smaller towns such as Mthatha and Bhisho have airports. Mthatha has recently received upgrades and SA Express announced in 2016 five direct flights per week to and from Cape Town.
SPECIAL FEATURE facturer Beijing Automobile Corporation (BAIC) and South Africa’s Industrial Development Corporation. This follows the R600-million investment of First Automotive Works (FAW), also a Chinese enterprise. Famous Brands has made its second investment into CIDZ, adding a tomato paste factory to its dairy. The Dedisa gas-fired power plant started operating at CIDZ in 2016, and national government announced that Coega would be one of the sites for a 1 000MW Liquefied Natural Gas (LNG) plant. The value to the regional economy of the latter project is estimated at R25-billion. The Eastern Cape has been the destination of choice for renewable energy investors. A quarter of the projects so far approved in the national private producers’ programme have been allocated to the Eastern Cape, mostly in wind energy. One of the greatest strengths of Eastern Cape manufacturing is in automotive and automotive parts. With Mercedes-Benz SA in East London, Port Elizabeth is home to Volkswagen SA, General Motors, Ford (engines) and component manufacturers like Goodyear, Continental Tyre SA, SJM Flex SA, Bridgestone, Halberg Guss and Shatterprufe. Port Elizabeth is a leader in the manufacture of catalytic converters where Corning, BASF, Formex, Umicore Catalyst, Eberspacher and Tenneco South Africa are some of the companies in the field.
The Umzimvubu Multipurpose Development Project is an impressive development that incorporates a multi-purpose dam to supply water for new irrigation, hydropower generation and domestic water supply. The Eastern Cape Development Corporation is a development financier and it is supporting enterprises in the growing ICT and film sectors through the Eastern Cape Information Technology Initiative (ECITI).
Economy Both the of the province’s metropolitan municipalities are centres of manufacturing and have their own industrial development zones. The East London Industrial Development Zone (ELIDZ) is very strong in the automotive components sector, with several companies providing services to Mercedes-Benz SA. Mercedes-Benz exports its cars out of the Port of East London and the factory, which regularly wins quality accolades, manufactured its one-millionth vehicle in 2015. East London also has manufacturing capacity in food and beverages (Nestlé, Cadburys), pharmaceuticals (Aspen), packaging (MPact) and batteries (First National Batteries). Summerpride Foods make pineapple juice, a speciality of the province. The Coega IDZ (CIDZ) is served by the Port of Ngqura and is close to Port Elizabeth. The biggest news for CIDZ in 2016 was the announcement of an R11-billion investment by Chinese state auto manu-
Geography The Eastern Cape extends over 169 580 square kilometres, representing 13.9% of South Africa’s land mass. The dry western interior is one of the country’s premier sheep-rearing destinations. The mountainous regions of the north and east of the province support timber plantations while the coastal belt in the south-west is well-watered and is good for dairy farming. The province has spectacular beaches stretching from the surfer’s paradise at Jeffrey’s Bay all the way to the famed Wild Coast. The province has a strong agricultural base. Aside from being one of the world’s major sources of mohair, the province offers perfect farming conditions for a wide range of produce. The fertile Langkloof
EASTERN CAPE BUSINESS 2017
SPECIAL FEATURE Valley in the southwest has enormous deciduous fruit orchards, the Alexandria and Grahamstown area produces pineapples, chicory and dairy products. It is the leading livestock province in terms of numbers and supplies a quarter of South Africa’s milk. Tourism is a major growth industry with a growing number of national and international events taking place in the province. Events such as the Ironman World Championship, to be held in Port Elizabeth in 2018, make a big economic impact. The Addo Elephant National Park is the largest of the province’s four national parks and there are more than a dozen provincial parks and a large number of upmarket private game farms, lodges and reserves. The province’s beaches and waves are very popular, with adventure tourism attracting tourists wanting to go on 4x4 trails, jump off bridges or fly micro-light aircraft. The National Arts Festival, held annually in Grahamstown, attracts huge crowds for 11 days, even in the midst of winter.
dumps on the edge of King’s Beach. When those are moved to the Port of Ngqura, as is planned, then the marina development can go ahead. A cruise liner terminal could also form part of this development. The Baakens River Valley is one of Port Elizabeth’s hidden gems and the MBDA has commissioned studies on how the valley might best be utilised for leisure and new housing without compromising its unique natural features. Alfred Nzo District Municipality Towns: Matatiele, Mount Frere, Mount Ayliff The smallest district is located in the mountainous north-east, with hiking trails for tourists. There is tremendous scope for expansion of tourist activities, and a transfrontier park between South Africa and Lesotho could boost the area’s economy. Subsistence agriculture and forestry are the major economic activities.
PE plans The big new retail development in Port Elizabeth’s western suburbs has spurred a R300-million upgrade at Greenacres, the city’s first big mall development which attracted shoppers away from the central business district (CBD) in 1981. Even the CBD itself has received an overhaul. The old Main Street, renamed Govan Mbeki Avenue, was turned by the Mandela Bay Development Agency (MBDA) into a useful and pedestrian-friendly precinct. The MBDA is also behind the most recent change to the city’s landscape. There has been a total transformation of the Old Tramway building at the entrance to the Baakens Valley, near the yacht basin of the Port of Port Elizabeth. The MBDA has not only moved into new offices in the renovated building, but is letting it out as an events venue. Other retail property developments have happened in the valley (including a popular brewery), drawing attention to the potential of Port Elizabeth’s green lung to be even more useful in future. A scheme to restructure the yacht basin in the harbour has been on the books for some time. A key blockage is the location of manganese storage EASTERN CAPE BUSINESS 2017
Amathole District Municipality Towns: Cathcart, Stutterheim, Morgan’s Bay, Willowvale, Butterworth, Mazeppa Bay, Alice, Bedford The rural Amathole District surrounds the metropolitan area of Buffalo City. Pineapple and forestry are two of the most important agricultural activities. Popular resorts on the Wild Coast attract many tourists to the area. Hogsback and other towns near the Amatole Mountains offer beautiful scenery and popular beaches. The main campus of the University of Fort Hare is located at Alice. Sarah Baartman District Municipality Towns: Graaff-Reinet, Humansdorp, Jeffreys Bay, Grahamstown The western part of the province contains the biggest municipality and is one of the biggest contributors to provincial GDP. Large commercial farms in the Karoo produce high-quality meat, wool and mohair, while the coastal belt has dairy farming and some forestry. The Kouga Valley is a big deciduous fruit producer, while the Kirkwood/Addo area is known for its citrus. Sarah Baartman has three of the region’s national parks and several private game farms. Grahamstown hosts the National Arts Festival, Rhodes University and a number of fine schools.
SPECIAL FEATURE one of South Africa’s most important ecological areas, the Pondoland Centre of Plant Endemism. Mining is already pursued in some areas, but plans for titanium mining on seaside dunes are being contested. A Wild Coast Spatial Development Initiative exists to plot further development. Forestry is a big employer.
Chris Hani District Municipality Towns: Middelburg, Molteno, Dordrecht, Cradock, Queenstown, Lady Frere, Elliot Sheep farming is an important part of the economy. Some coal is found in the north and tourist activities include fly-fishing. The Foodcorp factory in Molteno manufactures Ouma rusks. Queenstown is a centre for cattle farming and has some manufacturing activities. The Mountain Zebra National Park is near Cradock. The Grootfontein Agricultural College and Research Station is in Middelburg, and the Marlow Agricultural College is near Cradock.
Joe Gqabi District Municipality Towns: Aliwal North, Burgersdorp, Lady Grey, Rhodes, Barkly East, Ugie Cattle and sheep farming make up 80% of land use, while commercial forestry is a big contributor to employment. There are large forestry plantations at Ugie and Mount Fletcher. Maize is grown along the Orange River and wheat in the foothills of the Drakensberg mountains. Tiffindell has been revived as a ski resort.
OR Tambo District Municipality Towns: Mthatha, Coffee Bay, Port St Johns, Qumbu, Bizana, Flagstaff OR Tambo District Municipality encompasses some of the province’s least-developed areas, and contains
EASTERN CAPE PROVINCE Britstown N12
De Aar Colesburg
Somerset Pearston East
Willowmore Steytlerville Uniondale
Kareedouw Plettenberg Bay
Komga Bhisho N2
King William's Town Grahamstown
EAST LONDON Hamburg
Port St Johns
Cathcart Fort Beaufort
Port Edward R61 Maclear Mount Frere
Hofmeyr Three Sisters
Hanover Victoria West
INDIAN OCEAN Motorway Main Road Railway
EASTERN CAPE BUSINESS 2017
The maritime economy is building momentum Port Elizabeth hosted the “Investing in Blue Economy” conference in 2016.
he Eastern Cape is perfectly positioned to take advantage of the new interest in developing a maritime economy. The province has 800km of coastline, three ports, two industrial development zones geared to attracting investments in new sectors and an academic community geared to maritime research. A national plan called the Oceans Economy has recently been launched and the ports of East London, Port Elizabeth and Ngqura naturally feature prominently in these strategies for exploiting the coastline and the opportunities offered by busy shipping lines along the eastern seaboard. The first manifestation of national commitment to the strategy came late in 2016 with the allocation by the Department of Energy of two Liquefied Natural Gas (LNG) plants. One option for private investors to build and operate such a plant is at the Port of Richards Bay in KwaZulu-Natal. The other option (to which 1 000MW has been allocated) is the Port of Ngqura, at the Coega Industrial Development Zone (CIDZ). This signifies that port IDZs are a key plank in national energy policy, and that ties in with the Oceans Economy plan. Both IDZs have aquaculture sections and are keen to attract investors in this sector. The East London IDZ EASTERN CAPE BUSINESS 2017
already has investors such as Pure Ocean Aquaculture and Ocean Wise. Zone 10 has been set aside within the Coega IDZ for marine farming. Fish such as Dusky Kob and abalone and seaweed are all attractive options for enterprises. The Oceans Economy forms part of the broader Operation Phakisa, a plan that targets sectors that can best achieve quick returns in terms of growth and job creation. Phakisa falls under the Department of Planning, Monitoring and Evaluation. The four target areas within the maritime strategy are: aquaculture; offshore oil and gas; marine protection and governance; marine transport and manufacturing. The untapped potential that passes South Africa’s coast is immense. This includes the fact that South Africa does maintenance on only 5% of the 13 000 vessels that use SA ports and services 4-5% of the approximately 130 rigs that pass along the coast each year. Oil and gas appear to hold the most potential, and the gas plant plans for Coega and the prospect of a manganese smelting facility being established in the same IDZ suggest that this kind of energy-hungry industrial activity could hold good prospects for the Eastern Cape. Ngqura and East London are well positioned to act as container transit points: ships
SPECIAL FEATURE Norwegian diplomats, experts and business leaders were on hand to share their expertise in the maritime economy, a central part of the Norwegian experience. Sectors represented included cargo, shipping, marine manufacturing, finance institutions, academia, government and potential investors. In September 2016 the university hosted the inaugural South African Oceans Economy Symposium. The conference was called “Investing in blue growth and sustainable solutions for Southern Oceans: Lessons from Nordic countries”. A direct spin-off from this conference was the visit later in the year of a delegation of Finnish and Estonian diplomats and business leaders, eager to find out more about investment opportunities in the Nelson Mandela Bay metro and in the Eastern Cape. NMMU is creating a campus for Ocean Sciences and already has several institutions and research chairs in place. These include a unit aimed at combating sea fisheries crime (FishFORCE, with support from Norway) and the South African International Maritime Institute. The university has four marine sector chairs funded by the South African Research Chair Initiative (SARChI) and the National Research Foundation (NRF): • Marine Spatial Planning (ocean zoning) • Shallow Water Ecosystems (including rare coastal rock pools) • Ocean Sciences and Food Security (with Southampton University) • Law of the Sea (including oil resource management, port law and marine tourism law). Transnet’s Maritime School of Excellence offers specialised training at four campuses across South Africa, one of which is in Port Elizabeth. In 2016, 81 students graduated from the Eastern Cape facility and can now be deployed to Transnet Port Terminals or Transnet National Ports Authority facilities. Transnet has been intensifying its training programmes in recent years. Training is offered in port engineering, terminal operations, marine operations, port management and other specialised training specific to the marine environment, including: marine pilots, tug masters, engineers and crane and straddle-gantry operators.
from the east offloading their containers destined for destinations in the Americas rather than taking them all the way there, for the containers to be picked up by other ships. The capabilities of the region’s workforce, particularly in the automotive and automotive parts sector, could be attractive to repairers and manufacturers in marine sub-sectors.
Coastal research capabilities The Phakisa strategy envisages that Technical Vocational Education and Training (TVET) colleges will largely be responsible for developing skills in the maritime sector but the Nelson Mandela Metropolitan University (NMMU) in Port Elizabeth is positioning itself to play a critical role. In June 2016 a seminar was arranged by the Oceans Economy Secretariat, under the Department of Environmental Affairs. With the aim of creating a “national maritime cluster”, the event was co-hosted by NMMU, the South Africa Maritime Safety Authority (SAMSA), the South African International Maritime Institute (SAIMI) and the Norwegian Embassy in Pretoria.
EASTERN CAPE BUSINESS 2017
Special Economic Zones New sectors such as renewable energy and aquaculture are attracting investors to the Eastern Cape’s Industrial Development Zones.
outh Africa is investing in SEZs as a major plank of its industrial development policy. The aim is to attract new skills and develop new industries. The Eastern Cape has two such zones, the East London Industrial Development Zone (supported by the Port of East London) and the Coega Industrial Development Zone (at the Port of Ngqura in the Nelson Mandela Metropolitan Municipality). Key goals behind the establishment of SEZs are: • to encourage industries to develop in clusters, leading to economies of scale, skills-sharing and easier access for suppliers • to create industrial infrastructure to promote investment • to promote cooperation between the public and private sectors • to use the zones as a launching pad for other developments. Special Economic Zones are created in terms of the Special Economic Zones Act of 2014 (Act 16 EASTERN CAPE BUSINESS 2017
of 2014). The act defines an SEZ as “geographically designated areas of the country that are set aside for specifically targeted economic activities, and supported through special arrangements and systems that are often different from those that apply to the rest of the country”. As of 2015/16, the regulatory framework began to change for existing Industrial Development Zones such as those that at East London (ELIDZ) and Coega (CIDZ). There will be a three-year transition period to SEZ status that will include SEZspecific tax incentives and the introduction of one-stop-shops for state services. The cumulative effect should be to boost the attractiveness of SEZs to foreign investors. Apart from attracting foreign direct investment (FDI) and boosting employment, SEZs can play a role in helping to add new sectors or sub-sectors to an economy. For the Eastern Cape’s two industrial parks, this has already started to happen with investors in
SPECIAL FEATURE renewable energy and aquaculture having built their infrastructure and started trading. The skills relevant to the automotive sector and the automotive parts sector – huge elements of the Eastern Cape economy – are transferable to renewable energy manufacturing, or to ship-building. Incentives include tax breaks from the South African Revenue Service, subsidised interest rates from the Industrial Development Corporation, subsidies for employees earning below a certain level and for training, incentives and grants from the Department of Trade and Industry (dti) and from national electricity utility Eskom. The SEZ is also a Customs Controlled Area. Within the dti’s Manufacturing Competitiveness Enhancement Programme, there is a Green Energy Efficiency Fund. The national independent power suppliers’ programme, whereby private companies or consortiums bid to build renewable energy plants, has won international praise for its efficiency. The Eastern Cape has been particularly attractive to wind power producers. The Port of Ngqura’s ability to receive the massive components of wind turbines has been a boon to the project developers. Coega IDZ hosts several solar and wind component manufacturing facilities. Investors include DCD Wind Towers and Electrawinds. ILB Helios produces solar panels units at the ELIDZ.
Ports Authority (TNPA) and Oiltanking Grindrod Calulo have signed an agreement in this regard. This will create a new tank farm for the Eastern Cape when the lease for petroleum storage facilities at the Port of Port Elizabeth expires. In the 2015/16 period, the Coega Development Corporation (which runs the IDZ) created 18 366 jobs through projects in the IDZ and its infrastructure development programme elsewhere in the province. Seventeen additional investors signed up, valued at R26.9-billion. More than 96 000 jobs have been created since the IDZ was launched. The latest investment into the Coega IDZ is from Beijing Automobile International Corporation (BAIC), who will take a 65% stake in an R11-billion joint venture with the Industrial Development Corporation with the intention of producing 100 000 vehicles. First Automotive Works (FAW) has already established a R600-million assembly plant in Zone 2.
East London IDZ The East London IDZ has a major dairy in Sundale, a diamond cutting and polishing works in Matla Diamond Works, and investors in steel, aquaculture and solar panel manufacturing. It also has a strong suite in logistics, with DHL Freight, UTi Logistics, Milltrans and Bigfoot Express Freight all present in the zone. But it is the presence of specialist logistics company, Vehicle Delivery Service, which reveals the IDZ’s strongest sector, automotive and automotive parts. Within the IDZ is the Automotive Supplier Park (ASP) which in turn is located in the Customs Controlled Area within a 10km radius of MercedesBenz South Africa, the East London Airport, the highway and the Port of East London. Feltex is represented by no fewer than six operations, including Feltex Automotive Trim, Feltex Fehrer (Mercedes-Benz seat pads and head rests) and Feltex Trim and Caravelle Carpets. Other automotive companies include RG BROSE (doors), Boysen (exhaust systems), Automould, TI Automotive Fuel Systems, Molan Pino (polypropylene foam) and Yanfeng Automotive Interiors.
Coega IDZ The Coega IDZ is home to the gas-fired Dedisa Peaking Power Plant and was named in 2016 as the preferred site for a 1 000MW concession for a Liquefied Natural Gas (LNG) plant. When a private investor is found, Coega IDZ will have significant new energy infrastructure. Another potential game-changer is the possibility that a manganese smelter could be built at the IDZ. The Port of Port Elizabeth has for many years exported manganese. The recent announcement that the Port of Ngqura will soon host a new liquid bulk handling facility expands the perception that energy is becoming a speciality for Coega. Transnet National
EASTERN CAPE BUSINESS 2017
East London Industrial Development Zone The Chief Executive Officer of the ELIDZ, Mr Simphiwe Kondlo, outlines the advantages available to investors.
How far advanced is the ELIDZ in converting to a Special Economic Zone?
We are currently going through the last phase of the process, which involves gazetting by National Treasury. When this is finalised, existing investors will be eligible to apply for new, SEZ specific incentives which include: • VAT and customs relief within a Customs-Controlled Area • Employment tax incentive • Reduced corporate income tax rate. Do you welcome interest from any sector?
BIOGRAPHY Mr Simphiwe Nicholas Kondlo, the Chief Executive Officer of the ELIDZ, holds a Masters in Engineering Management and has more than 23 years’ experience spanning various fields including civil and agricultural engineering. With him at the forefront, the ELIDZ is a frontrunner in the field and continues to flourish as a multi-sector Industrial Development Zone. EASTERN CAPE BUSINESS 2017
Our successful value proposition is based on a cluster approach with customised sector-specific solutions. The ELIDZ is currently active in the Automotive, Renewable Energy, Aquaculture and Agro-processing sectors. The Special Economic Zones Programme offers incentives for value-adding manufacturing sectors as well as tradable services. The ELIDZ also has a research and development platform to help industries through innovation and technology. The ELIDZ Science and Technology Park (STP) tests and prototypes different technologies and new inventions. Start-ups in the ELIDZ have access to various innovation funders as well as the incubation process and facilities. What are some of the most recent investments?
Since inception the ELIDZ has attracted more than R7.3-billion worth of private sector investment from 45 investors. This is against a total investment of R2-billion into the ELIDZ infrastructure by government. Foreign Direct Investors account for 75% of the total investment attracted (by value): 32% of the total investment (by value) is by companies in the automotive sector. In 2016/17, the ELIDZ achieved the following investment highlights: • Six investors valued at R2.4-billion approved by the ELIDZ board during 2016/17. • Four investors valued at R1.059-billion, with a job potential of 1 567 signed agreements during 2016/17. (Pharmaceuticals, ICT & Electronics, Energy, Waste-processing).
The Nelson Mandela Bay Business Chamber The heartbeat of business success in the region.
The Nelson Mandela Bay Business Chamber received a Diamond Arrow Award in 2016 for the fourth year in a row.
The Nelson Mandela Bay Business Chamber is a Not for Profit Company representative of a broad spectrum of businesses in Nelson Mandela Bay. It is one of the largest business associations in the Eastern Cape, with a membership of approximately 700 businesses in a diverse array of sectors.
Vision To be a leading catalyst for economic development in Nelson Mandela Bay.
Mission By influencing the factors and key stakeholders that create a competitive enabling business environment.
“The Nelson Mandela Bay Business Chamber is a leading catalyst for economic development. It has been the heartbeat of business success in the region for over 150 years. The Business Chamber is driven by a team of dedicated staff and volunteers, lobbying on issues affecting the ease of doing business and companies’ sustainability. We offer networking opportunities and value-added services,” said Nelson Mandela Bay Business Chamber CEO Kevin Hustler. EASTERN CAPE BUSINESS 2017
Task Teams The Nelson Mandela Bay Business Chamber has established a structure of six task teams to facilitate the ease of doing business. The task teams consist of business member volunteers who are passionate about the sustainability of business in the city of Nelson Mandela Bay.
PROFILE Known as the Action Arm of the Business Chamber, the task teams have traditionally been the enablers of creating an environment for business to grow in and addressing factors which might inhibit business. The six task teams of the Nelson Mandela Bay Business Chamber are: • Water Task Team • Roads and Storm Water Task Team • Electricity and Energy Task Team • Transport and Logistics Task Team • SME Task Team • Metro Collaboration Task Team
print and elect ro n i c p l atforms, including our quarterly printed member magazine, Infocom, and the printed annual Business Guide. Both of these publications are ABC-accredited, glossy publications.
Enterprise Development If small businesses are the “engines” of our local economy, then the Business Chamber’s Enterprise Development Programme is the fuel that accelerates the optimal performance of small businesses based in Nelson Mandela Bay. The Nelson Mandela Bay Business Chamber Enterprise Development Programme was launched in 2014, to develop the skills that enhance and grow small businesses. The programme has been so successful that by 2017, over 100 SMEs (small to medium-sized enterprises) had benefited from taking part in the four different phases of the programme.
Nelson Mandela Business Chamber CEO Kevin Hustler.
The electronic monthly newsletter The Good News provides links to good news on the local business front. The Business Chamber regularly updates its website, and can be found on popular social media platforms including Facebook, Twitter, LinkedIn and Instagram.
Certificates of Origin and International Relations A Certificate of Origin is a document which states the origin of goods being exported and this “origin” is a key requirement for applying tariffs and other important criteria. As an accredited provider of this service, the Nelson Mandela Bay Business Chamber signs Certificates of Origin for member and nonmember businesses requiring the services in Nelson Mandela Bay. The Business Chamber also builds in international relations to form a vital link between business owners and international markets.
Events Events at the Nelson Mandela Bay Business Chamber keep business owners up to date and informed on a wide variety of topics affecting business in Nelson Mandela Bay. The Business Chamber hosts many high-profile speakers who are experts in their fields, ensuring that our events are relevant and valuable. Regular networking functions offer business owners the chance to make new professional contacts. Our flagship events – the Annual Business Chamber Golf Day, the Annual Ladies’ Breakfast and the Annual Business Chamber Banquet – are highlights on the Bay’s business and social calendar.
Publications and marketing platforms
Address: KPMG House, Norvic Drive, Greenacres 6045 Tel: +27 (0)41 373 1122 Fax: +27 (0)41 373 1142 Email: email@example.com Website: www.nmbbusinesschamber.co.za
As another value-added service to members, the Nelson Mandela Bay Business Chamber provides members with a variety of publications across
EASTERN CAPE BUSINESS 2017
Border-Kei Chamber of Business Border-Kei Chamber of Business provides key services to over 700 member organisations, and aims to be the “voice of business” in the area. Value proposition To be the “voice of business” promoting an environment for growth and sustainability through maintaining strong, proactive relations with both internal and external stakeholders, including provincial and local government, member companies, other business organisations and organised labour. Geographic areas of operation Border-Kei Chamber of Business (BKCOB) has offices in East London and Queenstown which serve the greater Border-Kei region.
• Trade & Information desk – Assists members with all their exporting and importing needs.
• Investbuffalocity.com – A collaborative initiative
Services and benefits to members BKCOB offers the following key services to member companies: • Member listing – After joining, members receive the member listing as part of their package. • Border-Kei Chamber of Business Membership Certificate – Members receive a personalised membership certificate at a new members’ induction and networking event. • New members’ induction and networking functions – The chamber holds six new members’ induction and networking functions annually, and these provide a valuable informal but structured opportunity to meet a broad range of businesspeople. • Letters of support – The chamber gladly provides letters of support to members trying to access government tenders, and letters of introduction to chambers in other centres for members attempting to expand their business footprint, whether provincially, nationally or globally. • Business Hi-Lite Magazine – This glossy B2B magazine is distributed monthly free-of-charge to all members, and keeps them in touch with chamber activities and developments in the area. EASTERN CAPE BUSINESS 2017
where members can find various economic information on Buffalo City. It provides a platform to attract international investors, as well as provide exposure for local companies. Committees – The chamber has a robust and effective committee system to facilitate members’ participation, and to enable the chamber to fulfil its role as the “voice of business”.
Turnover BKCOB represents over 700 member organisations that generate an estimated annual turnover of R69-billion, and that employ some 52 000 people who earn an estimated annual income of R18-billion in total.
KEY CONTACTS Executive Director: Les Holbrook Head of Communications: Drayton Brown Tel: +27 43 743 8438 | Fax: +27 43 748 1507 Email: firstname.lastname@example.org or email@example.com Physical address: Chamber House, The Hub, Beacon Bay, Bonza Bay Road, East London 5241 Postal address: Postnet Suite 36, Private Bag X3, Beacon Bay 5205 Website: www.bkcob.co.za Please contact: Alana Velida at firstname.lastname@example.org or call 043 743 8438 to join.
Promoting business in the region Les Holbrook, Executive Director of the Border-Kei Chamber of Business (BKCOB), highlights the reasons that investors should look no further than the Eastern Cape.
What are some of the Chamber Highlights for the past year? The Chamber tackles many and varied projects and focusses primarily on areas where the focus is on the cost and ease of doing business. Last year we handed back to Provincial Treasury a pilot project titled Buy Eastern Cape. This has been escalated to a priority initiative of the Provincial Premier. Strategic steps will now be taken to increase the procurement for enterprises located within the province. Our lobbying in favour of renewable energy saw the Chamber focus on “Greening our Office.” After eight months of intense capacity building, our office in East London is now the only Chamber of Commerce and Industry in South Africa that qualifies to be listed as Green. INVEST BUFFALO CITY, our flagship project, signed MOUs with four stakeholders in our region, committing to initiatives that focus on inward investment and on retaining existing investment – on the principle of Invest, Work, Live & Play. An associated project to the IBC project is A Call-2-Action, an initiative where business partners with the municipality toward a Clean & Green City, underpinned by waste recycling. Also of significance was the very first Maritime Summit held in the Metro – with emphasis on Operation Phakisa and the Blue Economy. Outcomes included the establishment of a Maritime Cluster, a multistakeholder forum to promote opportunities in the Blue Economy. Why should investors consider the Eastern Cape? We are equidistant between Gauteng and the Western Cape, with good logistics and competitive costs, offering air, road and sea connectivity, all reasons for a successful and vibrant East London Industrial Development Zone. This is supported by the most moderate climate all year round, a productive coastline, and a lifestyle supported by the 15-minute city. With the first automotive tertiary training academy and artisan development, skills in the manufacturing sector are adequately supported.
What is the biggest challenge for regional business? Leadership stability and good governance. These can only be achieved through high-level and robust multi-lateral engagement. We are moving towards this, but more urgency is needed. Our success in the automotive sector particularly says that we are on the right track.
BIOGRAPHY Les Holbrook has a National Technical Certificate as well as a Certificate in Management from Rhodes University. Prior to his appointment as the Executive Director of the Border-Kei Chamber of Business, he was the Deputy General Manager of Beier Industries of Transkei and Executive Director of the Transkei Chamber of Industries. EASTERN CAPE BUSINESS 2017
Skills development Skills training is a top priority for Eastern Cape manufacturers and colleges.
or the Eastern Cape economy to grow, a skilled workforce is a necessity. Raising the skill levels of enough South Africans to push the economy forward has become a priority at national, regional and local level. A number of interventions have been launched in the public and private sphere including: • six of South Africa’s biggest construction companies have established a R1.25-billion skills fund • the national Department of Higher Education and Training (DHET) declared the period starting in 2014 as “The Decade of the Artisan” with the ultimate goal of producing 30 000 per year (the current figure is about 13 000) • the National Skills Authority (NSA) is implementing the National Skills Development Strategy (NSDS). The Human Resource Development Council of South Africa (HRDCSA) gives guidance to the many institutions working on skills development and training • Technical and Vocational Education and Training (TVET) colleges have been tasked with producing skilled artisans in 13 trade areas, including bricklayers, millwrights, boilermakers and EASTERN CAPE BUSINESS 2017
riggers. R16.5 billion has been allocated by national government. Sector Education and Training Authorities (SETAs) form an important part of South Africa’s master plan to tackle skills development – sourcing funds to support placement of Technical Vocational Education and Training (TVET) students to gain workplace experience. Each SETA is responsible for a Sector Skills Plan. The Manufacturing, Engineering and Related Services Authority (MerSETA) plays an important role in the Eastern Cape, home to so many of South Africa’s automotive and automotive parts companies. The authority is involved in the National Tooling Initiative and artisan training, especially with regard to creating a skilled workforce for the Coega Industrial Development Zone. MerSETA helped establish the Centre of Excellence for Welding at the Eastcape Midlands TVET College in Uitenhage. A national programme of the Local Government SETA (LGSETA) offers learnerships in auditing to municipal employees. Among other SETAs active in the province are the Services SETA and the CathsSETA (Culture, Tourism, Hospitality and Sport).
SPECIAL FEATURE TVET •
The Eastern Cape has eight Technical and Vocational Education Training (TVET) colleges, most of which have more than one campus: Buffalo City, Port Elizabeth, Lovedale, King Hintsa, Ingwe, King Sabata Dalinyebo, Ikhala and Eastcape Midlands College. King Sabata Dalinyebo offers business and engineering studies among its formal programmes, and short courses in bricklaying and computer studies. Over 20 000 students are enrolled at this level in the province. The Eastcape Midlands TVET College has five sites: in Graaff-Reinet and Grahamstown and three in Uitenhage, where students can study Business Studies, Electrical Engineering, ICT and Computer Science and Mechanical Engineering. The other campuses specialise in Business Studies. Lovedale Public TVET College serves the community through three campuses at King William’s Town, Alice and Zwelitsha, near King William’s Town. The programmes of each campus reflect the economic priorities of that region. In Alice, the focus is on agriculture, King William’s Town offers business diplomas, while engineering is available to students at the Zwelitsha facility. Buffalo City TVET College, with two large campuses in East London and Mdantsane, specialises in Business and Engineering for full-time studies, but offers a wide range of part-time courses as well. The college’s School of Occupational Training is located at St Marks Road. The provincial government has committed a sum of R1.5-billion over five years to aligning TVET colleges more closely with the needs of the local economy through learnerships.
Other developments The South African National Roads Agency Limited (SANRAL) has opened an engineering materials laboratory to test materials for use on roads in the Eastern Cape, which will also be used to give graduate engineers experience. This will form part of SANRAL’s experiential learning programme. Meroe Skills Development was the service provider used by SANRAL when it put 20 contractors through a programme to train them to make dolosse (concrete blocks to mitigate wave action on the coast). The venue for the training was the Heartlight Community Learning Centre in Walmer, Port Elizabeth. Premier Hotels trains chefs and hotel managers through its Academic College SA. Professional Cookery and Beverage Management are among the diplomas. The South African Maritime Safety Authority (SAMSA) is investigating the feasibility of establishing specialist maritime schools in South Africa’s coastal provinces, including the Eastern Cape.
Auto skills •
nership with the Automotive Industry Development Centre Eastern Cape (AIDC EC) and its members. Tyre manufacturer Goodyear has an engineering training facility in Uitenhage, with a focus on the training of instrument technicians. The Uitenhage Despatch Development Initiative (UDDI) is working with Filpro in offering township mechanics a two-year Informal Automotive Service Centres Development Programme. The first group of 106 trainees include generalist mechanics, tyre repairers and panel beaters from KwaNobuhle, Khayamnandi and KwaLanga. Filpro is largely funded by GUD Filters and promotes entrepreneurship in the automotive industry. Volkswagen’s Commercial Trainee programme has been running for 15 years. Students with a nontechnical qualification are exposed to practical experience in departments such as Finance, Logistics, Purchasing and Human Resources. Volkswagen has five learning academies in Uitenhage. Open to employees and to suppliers, the academies’ programmes are SETA-accredited. and offer a range of courses available through workshops, exercises, e-learning or on-the-job-training.
The Mercedes-Benz Learning Academy in East London has MerSETA accreditation. A R130-million agreement between Mercedes-Benz and the Jobs Fund (run by National Treasury) has set high goals for the academy in tackling skills shortages, and not just for the auto-manufacturer. Another Jobs Fund initiative is putting 135 unemployed engineers to work over three years, in part-
EASTERN CAPE BUSINESS 2017
Nedbank’s new brand promise focuses on client engagement that creates a better understanding Mawande Shugu, Nedbank Regional General Manager, Branch Networks, explains how Nedbank works with communities to deliver banking solutions. through community development, skills development, education and job creation, as well as environmental conservation. These play a vital role in building a sustainable economy and vibrant society. We believe our fast-growing presence in communities goes a long way in enabling greater financial inclusion while contributing towards economic growth,’ concludes Shugu.
Nedbank continues to build on its clientcentred strategy aimed at delivering distinctive experiences and channels of choice for businesses and clients in the Eastern Cape. This has seen the bank simplify and enhance its product offering in line with its value-banking philosophy based on simplicity, transparency and affordability. Innovation and technological advancements, as well as training and development of staff, have been key pillars in achieving the bank’s objectives. Since 2012 Nedbank has launched several firstto-market innovations, such as the awardwinning Nedbank App Suite™, the home loans online digital channel and Market Edge™, as well as the ‘Branch of the Future’ concept in communities locally and nationally. ‘Working with communities is entrenched in our values
This is a unique service for clients, with financial fitness training a key aspect of the offering. Our wide range of products and services include the Nedbank Ke Yona Plus transactional account, which comprises funeral cover, a personal loan facility, the JustSave Account and the Send-iMali money transfer solution, enabling clients to transact, borrow, save and take out cover. To encourage the youth to save and build their financial fitness from an early age the Nedbank 4me offering enables the youth to transact and save with the benefit of earning preferential interest. Nedbank 4me comprises a full transactional banking account with no monthly fees, free initial transactions and thereafter reduced pay-as-you-use pricing, free eNotes and self-service banking. Should you be interested in learning more about how Nedbank can assist you to grow your wealth and see money differently, for more information call +27 (0)41 393 5800 or visit www.nedbank.co.za.
Making it easier to do business with Nedbank Whole-view Business Banking™ Lonwabo Daniels, Nedbank Regional Business Head, Eastern Cape, explains how Nedbank can help business owners in the Eastern Cape. At the core of Nedbank’s offering in the Eastern Cape is a relationship-based model with a business manager dedicated to your business as the key entry point into the bank. ‘We encourage you to see money differently with Whole-view Business Banking™, explains Daniels. What does this mean to the client? It is an additional benefit of banking with Nedbank Business Banking and means that your business and your personal financial needs are managed in one place.
There is good news for Eastern Cape business owners and entrepreneurs seeking a unique banking experience: Nedbank Business Banking has 27 business managers located across the province specialising in commercial industries as well as the agricultural sector. They are ready to assist you with professional advice, industry-specific solutions and a comprehensive range of financial products and services. ‘At Nedbank Business Banking we believe that you need a financial partner who not only understands your circumstances and aspirations, but also provides you with relevant solutions and a banking experience that is hassle-free. This allows you to concentrate on what’s most important to you – running your business,’ says Daniels.
‘Because business owners and their businesses are very often financially dependent on each other, our client service teams now also offer individual banking solutions to you and your staff because we already know and understand your needs,’ says Daniels. With this in mind, Nedbank has seamless offerings for you, your employees and your household. Nedbank provides several communities, including individual and business clients, with access to products and services through Nedbank’s workplace banking offering through a dedicated banker. Should you be interested in taking your business to its next level and improving staff engagement, and for more information about Nedbank’s specialised service offering please call the Business Banking team on +27 (0)41 393 5969 or visit www.nedbank.co.za.
Expertise in small business aimed at stimulating growth Nedbank’s Regional Manager of Small Business Services, Andisa Sikwebu, explains how Nedbank is committed to partnering with businesses for growth. National Small Business Chamber, seeks to encourage everyone in South Africa to rally behind and support small businesses. The initiative calls on everyone to make a conscious decision to vote for small businesses through their hearts, feet and wallets; not only on Small Business Friday, but every day. SimplyBiz.co.za is a free-to-join value networking portal designed especially for small businesses. The online portal helps small businesses improve their business administration skills, keep up with the latest trends, network with other small businesses and share ideas. Should you wish to tap into our small business expertise to help your business goals, why not 'Small businesses are the mainstay of the get in touch with Nedbank’s Small Business Services, call Andisa Sikwebu on economy. Nedbank has, over the years, instituted various interventions aimed at +27 (0)41 398 8188 or send an email to email@example.com.
giving support to the small-business sector. Over and above our small-business services solutions, we provide smallbusiness owners with support that goes beyond banking, freeing up their time to truly focus on running their businesses,’ says Sikwebu. Nedbank has built a solid reputation as a bank for small businesses through initiatives such as Small Business Friday, free small-business seminars and the SimplyBiz.co.za platform – all geared to support the small- and medium-sized enterprises sector. For example, the Small Business Friday initiative, in association with the
New brand proposition encourages clients to ‘see money differently’ Venai Naidoo, Nedbank Eastern Cape Business Manager, Business Banking, explains how the new brand values build on the expertise of the bank to benefit clients. almost two years of research and client engagement that revealed that people want to work with purpose-driven institutions they can trust. They want a professional financial partner that balances expertise with a genuine commitment to do good. The public will see a number of changes in the next few months as the bank evolves its corporate identity, advertising and communication campaigns, as well as its products, services and channels. All these changes are designed to inspire clients and society to see money differently and partner with the bank to achieve their goals.
One of the solutions from Nedbank is Whole-view Business Banking™, which provides a bird’s-eye view of clients’ businesses. It is aimed at business owners who believe that they need the best-of-breed of financial institutions. The new brand positioning is built on Nedbank’s purpose: to use financial expertise to enable individuals, families, businesses and society to do good. Our new brand proposition was born after
Our new brand proposition is not just a marketing initiative but a reflection of the continuing business evolution at Nedbank. As a bank we want to ensure that our clients experience our brand in a way that is aligned with our brand promise. It is common knowledge that we live in a volatile socioeconomic environment, so it is even more important for us to intensify our commitment to improve on our skill in enabling clients to navigate challenges and meet their goals. If you would like to explore further how Business Banking can help take your firm to the next level, and for more information about Nedbank Business Banking Services call Venai Naidoo on +27 (0)41 398 8032 or send an email to firstname.lastname@example.org.
see money differently Nedbank Ltd Reg No 1951/000009/06. Authorised financial services and registered credit provider (NCRCP16).
Nedbank officially launched its new brand repositioning during the first day of the world’s largest design festival – the 2017 Design Indaba on March 1. The bank’s new tagline challenges clients and society to ‘see money differently’.
The Masisizane Fund was established in 2007 as an initiative of the Old Mutual Group and with a mandate to contribute measurably to job creation that in turn helps eradicate poverty in South Africa. The Fund focuses on creating clusters of partnerships that work together toward the common goal of establishing sustainable farming ventures operating the formal value chains. In 2013, the Masisizane Fund adopted a Cluster Development approach in order to address the agricultural challenges faced in the rural Eastern Cape and to ensure socio-economic transformation. Clustering small scale farmers to ensure that they benefit from economies of scale has its own challenges and nuances. Some of these challenges, particularly in remote rural areas, include deficient infrastructure, long distances from markets, skills deficiencies and social dynamics among others. It is only when one is immersed in the work in these areas that the challenges that lie ahead become visible and they can be daunting. It is for these reasons that the Masisizane Fund has based their work on the following principles: • Building a foundation and establishing trust among the cluster of farmers and partners. • Creating the necessary infrastructure by building capacity, providing financial assistance and networking opportunities. • Putting systems in place starting with steering committees and ongoing support, mentoring and training. • Developing partnerships and incorporating the
WE WERE FACED WITH THE FOLLOWING AGRICULTURAL CHALLENGES IN THE RURAL EASTERN CAPE: • How do we develop rural communities where there is no infrastructure or capacity? • How do we assist the local farmers to establish sustainable farms/businesses, creating work opportunities and improving food security? • How do we bring disconnected and small farming ventures operating in the informal markets into the formal value chains, local and even global? • How do we ensure that small farmers gain economies of scale, which is one of the critical success factors in modern farming?
In an attempt to provide answers to these questions, the Masisizane Fund established a flagship pilot project in the Alfred Nzo and Harry Gwala districts. These areas are characterised by high levels of unemployment, low economic activities and investments, dependency on social grants and a high number of unskilled labourers. With the aim of bringing about economic transformation with a legacy effect in these areas through agricultural investment, a total of 1600 hectares were planted with soya and dry beans in the Matatiele, uMzimkhulu and Nkwazini areas during the 2014/15 season. The severe drought that affected South Africa and Southern Africa had an impact on the production of this pilot project, which as a result technical support provided by government in produced yields significantly below expectations, the form of extension services. • Working with government and other financial generating revenue of R2.86 million with 20% partners to leverage the available financial distributed to funded entities as dividend and land use fees. resources.
MASISIZANE FUND It is however during difficult times like these that continued assistance is needed. This is why the Masisizane Fund committed to further support farmers by planting 1180 hectares in Matatiele, 1 500 hectares in uMzimkhulu and 50 hectares in Nkwazini. The main crops for this season are maize and soya beans with maize introduced for crop rotational reasons and as weather patterns have changed from dry spells during the last season to the return of normal seasons in the area. BEFORE
Nkhangweni (Robert) Matsila, Sector Head (Agri-Business) says, â€œThe target lands have been mapped, soil preparation proceeded well and planting is close to completion and on time. We are working with farmers to fix some problems here and there and are positive to see good results this season.â€?
Robert Matsila Sector Head Agri-Business
Kokstad Flagship Office
039 727 3100
043 704 0116
Gauteng (incl North West & Free State)
011 217 1746
Western Cape (inc Northern Cape)
021 509 5074
031 335 0402
Limpopo (incl Mpumalanga)
015 287 4279
An initiative of the
Old Mutual is a Licensed Financial Services Provider
OMBDS 12.2016 L10069
A flagship office has been established in Kokstad to oversee all activities of the Eastern Cape flagship programme with other regional offices as follows:
KEY SECTORS Overview of the main economic sectors of the Eastern Cape
Aquaculture 37 Agri-processing
Energy 44 Water
Information and communication technology
Banking and finances
Development financ and SMME support
Agriculture Agriculture underpins several sectors of the economy of the Eastern Cape.
he Eastern Cape is well located for the cultivation of crops and animal husbandry. The province encompasses all seven of South Africa’s biomes, which means that practically every kind of crop or animal or crop can be cultivated or raised on the province’s 169 580 square kilometres of land. These include the wool-producing merino sheep and the mohair-producing Angora goat which thrive in the dry interior and have been a vital part of the national economy since 1789 and 1838 respectively. The Eastern Cape has more livestock than any other South African province, and produces a quarter of the nation’s milk with producers tending to favour coastal areas such as the Eastern Cape. Deciduous fruit (Langkloof), citrus fruit (Addo/Kirkwood) and chicory (Alexandria) are important parts of the province’s agricultural mix, but a feature of recent years has been towards diversification. Land-usage patterns have changed. Parts of the Amathole and Sarah Baartman districts that used to be sheep or pineapple farms are now stocked with game and are geared towards the hunting and tourist markets. EASTERN CAPE BUSINESS 2017
SECTOR INSIGHT Wool sales earned a total of R3.7-billion in 2015/16. • The business rescue of Magwa Tea Estate could be an investment opportunity. • Communal farmers have won a top wool award.
There are about 70 000 people employed on commercial farms across the Eastern Cape, with a further 436 000 dependent on smaller farms, mostly in
OVERVIEW the east. Improving the agricultural yield of the eastern part of the province is vital for improving food security and lifting many thousands of people out of poverty. The recent national drought has put extra pressure on rural communities. Infrastructure plays an important role in the agricultural sector, and the repair of the road between Port Elizabeth and Addo has been welcomed by all the citrus farmers in the Addo/Kirkwood district. Big infrastructure projects have been undertaken in the eastern parts of the province by the Eastern Cape Rural Development Agency. Three training centres focus on agriculture in the province: Fort Cox College of Agriculture and Forestry, Mpofu Training Centre (teaching mostly smallstock management) and the Tsolo Agricultural and Rural Development Institute, which is developing ties with Walter Sisulu University. The Dohne Agricultural Research Institute, near Stutterheim, developed a new breed of sheep, the Dohne merino. The large Magwa Tea Estate went into business rescue in 2016. At its peak, Magwa produced about 2 700 tons of tea but more investment is now needed to make it (and its neighbouring estate Majola) a profitable business.
Crops The Eastern Cape is South Africaâ€™s second-largest producer of citrus fruit. Oranges make up the vast
majority of citrus products (80%), but the province is also well-known for its clementine and satsuma tangerines, as well as navel oranges. Deciduous fruits such as apples, pears and apricots are grown primarily in the Langkloof Valley. Another crop in which the Eastern Cape leads national production is chicory. The roots are used for beverages such as instant coffee, the leaves go into pet food and stock feed and unopened leaf pods become chicory endives, a sought-after salad ingredient. The province produces between 18 000 and 20 000 tons of wet root every year, mostly near the coast at Alexandria and inland from Port Alfred. The entire crop is consumed in South Africa. The provinceâ€™s pineapple crop, grown in the same part of the Sunshine Coast that produces chicory, is similarly largely for domestic consumption. Approximately 80 000 tons are produced every year and processed in East London. One of the fastest-growing sectors in agriculture is macadamia nuts. The ECRDA has partnered with a community to plant the popular nut at Ncera in the Tyume Valley north of Alice. The original planting of 150ha is being expanded by a further 30ha. The harvest of 49 tons in 2015 is expected to grow to 80 tons as the trees mature.
Sheep and goats The long-term drought which has afflicted all regions in South Africa is having an effect on all sectors, but wool-producing sheep farmers and mohair-producing Angora goat producers perhaps less so, partly because they are so well adapted to dry conditions but also because farmers can reduce their flocks.
EASTERN CAPE BUSINESS 2017
OVERVIEW The dorper breed (which are mainly used for meat production) is found in the dry Karoo, while the higher-lying areas are more conducive to the wool-producing sheep. South Africa produces about 50 000 tons of wool annually. In 2014/15, the value of wool sold at auctions reached R3.5-billion; in 2015/16 it was R3.7-billion, of which R815-million was generated in the Eastern Cape. The National Woolgrowers Association (NWGA) has helped 24 000 Eastern Cape communal wool farmers get organised into 1 224 wool growers associations. Now they have access to sheds with good equipment for shearing and classification. (www.heatherdugmore.co.za) One of the support programmes aims to improve the genetic stock. This is funded by the national Department of Rural Development and Land Reform and involves communal farmers swopping an inferior ram for a good ram. So far, 42 000 good merino rams have been added to the communal flocks. Dugmore’s report highlights the achievements of a group of communal farmers from the Sterkspruit district, near the Lesotho border. The 66 farmers of the Upper Telle shearing shed were the 2015/16 season NWGA Grand Champions. Their 5 600 sheep produced an average of R92.03/kg against the national average for commercial wool farmers of R77.40/kg. The average for communal wool farmers is R52.35. The South African Mohair Growers Association is based in the heart of Angora goat country at Jansenville while the industry association, Mohair South Africa, has recently built smart new headquarters in Port Elizabeth, encompassing a shop and conference facilities. South Africa produces about half of the world’s mohair. Processing of mohair takes place in Uitenhage, Port Elizabeth and Berlin outside East London. The mohair value chain includes
EASTERN CAPE BUSINESS 2017
brokers, buyers, processors, spinners, manufacturers and retailers. The Stucken group controls Mohair Spinners South Africa, Hinterveld (a mill) and a processing company called Gubb & Inggs in Uitenhage. Several agricultural companies have mohair divisions: OVK (based in Ladybrand) has a 34% shareholding the Cape Mohair Wool (CMW), a mohair brokerage; BKB (Port Elizabeth headquarters) has a mohair division that includes auctions and brokering.
Other livestock Livestock farming is the largest agricultural sub-sector in South Africa. The Eastern Cape holds 21% of the country’s cattle (about 3.2-million), 28% of its sheep (seven-million) and 46% of its goats, making it the largest livestock province by a large margin. The rich natural grasslands of the Eastern Cape have the potential to produce high-value organic meat, a product that is proving increasingly popular in health-conscious international markets. The Eastern Cape can offer a range that stretches from Karoo lamb to CAB-certified freerange beef. These niche meat products are leaner, healthier and often tastier than mass-produced alternatives. High-value meat cuts such as these will increase the value of exports from the Eastern Cape. The Border region is very strong in beef production. Stats confirm that South Africa has a large meat-eating
OVERVIEW population, as South Africans consume on average 13.7kg of beef every year, of which lamb or mutton makes up around 3.4kg per annum.
Dairy About a quarter of South Africa’s milk comes from the Eastern Cape. Although conditions vary greatly from the luscious green grasses of the Lower Tsitsikamma to the drier conditions of the Karoo, they all seem to suit milk-producing cows. The bigger dairies include Dawson Dairy (just outside Port Elizabeth), Crickley Dairy (Queenstown), Clover Dairy (Port Elizabeth; packaging and fresh pasteurised milk processing, long-life UHT milk), Parmalat (Port Elizabeth; wide range of flavoured milks, cheeses, custards, butter, fruit drinks and ice cream under many brand labels), Dairybelle (Cookhouse near Somerset East; cheeses), Woodlands Dairy (Humansdorp; UHT milk, First Choice Brand), and Sundale Free Range Dairy (East London Industrial Development Zone). A young farmer who turned a very small operation into a sizable dairy herd has earned himself a top prize along the way. Tshilidze “Chilli” Matshidzula turned a failing land redistribution project with a herd of fewer than 50 cows into a successful dairy operation with 549 cows that produces 11 000 litres of milk per day. For this achievement
he received the Mangold Cup from the Bathurst Conservation Committee in 2016, the first time the award has been won by a black farmer. Walter Biggs, an established farmer in the Alexandria District, mentored Matshidzula over a period of nine years.
ONLINE RESOURCES Arid Areas Research Programme: www.aridareas.co.za Agri Eastern Cape: www.agriec.co.za Eastern Cape Department of Rural Development and Agrarian Reform: www.drdar.gov.za Eastern Cape Development Corporation: www.ecdc.co.za Eastern Cape Rural Development Agency: www.ecrda.co.za Chicory Producers Association: www.chicory.co.za Milk Producers Organisation: www.mpo.co.za Mohair South Africa: www.mohair.co.za National Department of Agriculture, Forestry and Fisheries: www.daff.gov.za National Woolgrowers’ Association of South Africa: www.nwga.co.za South African Mohair Growers Association: www.angoras.co.za
EASTERN CAPE BUSINESS 2017
Forestry The private sector is working with community land owners to boost timber production.
he Eastern Cape has large swathes of land that have been identified as suitable for forestry, to add to the already sizable industry in the province. According to the Eastern Cape Rural Development Agency (ECRDA), government plantations have more than 15 000ha of unplanted areas which would be easy to develop: they do not require high initiation costs (environmental impact assessments) because no licence is required. The Eastern Cape’s forestry sector comprises 130 000ha of plantations, 46 sawmills, two chipboard operations, 10 pole treatment plants, a veneer plant and six charcoal plants, which collectively process about 770 500 cubic metres of timber annually. The region is well-served by wood-processing facilities such as the R1.3-billion board plant outside Ugie that is owned by JSE-listed Steinhoff’s subsidiary company, PG Bison. Another of the province’s major forestry stakeholders is Amathola Forestry, along with their sister company Rance Timber’s Kubusi and Sandile Sawmill near Stutterheim, producing 45 000 cubic metres of sawn board annually. About 75% of the province’s plantations are controlled by the private sector. Forestry South Africa has set up a Business Development Unit to empower small-scale timber growers. The ECRDA aims to transform unproductive communal land assets through commercial forestry development. The ECRDA’s Sinawo project in Mbizana has started selling timber to Sappi and is fast approaching commercialisation of all its operations. In 2015/16 the project earned about R7-million from the sale of timber and the total
ONLINE RESOURCES Eastern Cape Department of Rural Development and Agrarian Reform: www.drdar.gov.za Eastern Cape Rural Development Agency: www.ecrda.co.za Forestry SA: www.forestry.co.za Institute for Commercial Forestry Research: www.icfr.ukzn.ac.za Depar tment of Agriculture, Forestr y and Fisheries: www.daff.gov.za South African Institute for Forestry: www.saif.org.za
EASTERN CAPE BUSINESS 2017
SECTOR INSIGHT 40 new jobs can be created for every 25ha planted. employee count rose to 208. Sappi and PG Bison are supporting these community initiatives. Paper and packaging group Sappi is working with the ECRDA and with several communities in the Eastern Cape to establish forestation programmes. At Mkambathi a total of 668ha has been planted and Sappi has agreed to buy 65% of the timber produced and to give technical support where it can. As much as 100 000 hectares of land is suitable for forestry in the Eastern Cape, much of it on communal land. Government is keen to find private investors who will partner with local communities. If all of the projects come to fruition, there is potential for an additional 1.8-million cubic metres of new timber to be processed and for 40 new jobs to be created for every 25ha planted. Downstream opportunities created by new plantations include a planned treated-pole plant in Butterworth and a paper and pulp mill in Mthatha, which has also been selected as a future furniture-sector incubator.
Aquaculture Fish from the Karoo will soon be a popular dish.
atch of the day” is about to take on a new meaning, with the fish coming from the semi-desert Karoo region. “Karoo Catch” is the brand name for freshwater fish produced by Blue Karoo Trust, a project taking shape near the town of Graaff-Reinet. A central farm will be supported by 39 outgrowers and the aim is to produce about 14 000 tons of fish on an annual basis. The intended market is organisations that need protein in bulk such as hospitals, schools and government institutions. South African love to eat pilchards but the catch has been decreasing every year. An alternative canned fish in tomato sauce will use tilapia, carp or catfish. The risk capital unit of the Eastern Cape Development Corporation (ECDC) is supporting the venture and there have been contributions from local government, national institutions and a foreign donor. Fish farming was high on the agenda in September 2016 at the inaugural South African Oceans Economy Symposium hosted by the Nelson Mandela Metropolitan University (NMMU) and Strategic Partners, South Africa. The conference was called “Investing in blue growth and sustainable solutions for Southern Oceans: Lessons from Nordic countries”. Aquaculture forms a big part of the South African government’s fasttrack Operation Phakisa strategy. One initiative is tackling 24 projects across South Africa by 2019 so there should be great opportunities for private investors. The intention is to increase the aquaculture sector’s revenue from about half a billion rand today, to R1.4-billion in 2019. Another initiative aims to reduce waiting times for processing of applications
ONLINE RESOURCES Aquaculture Association of South Africa: www.aasa-aqua.co.za Aquaculture Development and Enhancement Programme: www.thedti.gov.za Coega IDZ: www.coega.co.za East London Industrial Development Zone: www.elidz.co.za Operation Phakisa: www.operationphakisa.gov.za South African International Maritime Institute: www.saimi.co.za South African Institute of Aquatic Biodiversity: www.saiab.ac.za
SECTOR INSIGHT A symposium on the oceans economy was held in PE in 2016. and approvals from 890 days to 240 days. Pure Ocean Aquaculture and Ocean Wise are located within the East London IDZ. At Zone 10 in the Coega IDZ, 250ha has been set aside for fresh fish farming and 100ha for marine farming. A processing plant and research and development and training facilities are planned. The Coega Development Corporation estimates that 34 250 tons of abalone, Dusky Kob and seaweed could be harvested. The National Department of Science and Technology (DST) is working with Irvin & Johnson in running a marine finfish grow-out pilot in the waters of Algoa Bay. The Aquaculture Development and Enhancement Programme (ADEP), a programme of the Department of Trade and Industry (dti), offers a reimbursable grant up to R40-million for new projects, or to expand or upgrade existing projects.
EASTERN CAPE BUSINESS 2017
Agri-processing Manufacturers are harvesting the Eastern Cape’s excellent produce.
SECTOR INSIGHT Famous Brands has made a second big investment in the Coega IDZ. • Cerebos salt company earned a top international food safety certification.
ool, mohair, citrus and pineapples, dairy products and salt—these are just a few of the abundant products of the fields of the Eastern Cape that manufacturers are turning into jerseys, scarves, jams, juices, cheeses, yoghurts and cakes of salt. The Eastern Cape has more livestock than any other South African province, produces close to a quarter of South Africa’s milk dairy farming and is the second-largest producer of citrus fruits. Famous Brands has 2 600 restaurants throughout South Africa, including the brand that made its debut in Port Elizabeth, Vovo Telo. Famous Brands has increased its manufacturing footprint in the Coega Industrial Development Zone (CIDZ). Zone Three of the Coega IDZ is devoted to agriprocessing. Thousands of tons of tomato paste is imported into South Africa every year so this acquisition will free up a lot of capital for Famous Brands. It also presents a great opportunity for Eastern Cape farmers to become suppliers to the plant. The Eastern Province Herald reports that the paste factory will be modelled on the successful Famous Brands Fine Cheese Company (formerly Coega Cheese) which has increased milk production from 16.5-million litres per year to 38-million litres. EASTERN CAPE BUSINESS 2017
In addition, the Herald said that McCain Food SA has decided to source 60 000 tons of potatoes from the Eastern Cape, opening up another market for producers. Other tenants of the Coega IDZ include logistics companies like PE Cold Storage, River Edge Trading (which trades in sugar and syrup across Southern Africa) and Cerebos. Cerebos’s 30 000ton per annum plant at Coega was awarded a top food safety standard certification on its 70th birthday in 2015, the FSSC 22000. The East London IDZ has two aquaculture tenants and the large Sundale Dairy, as well as a regional depot of the Mediterranean Shipping Company. The Eastern Cape Rural Development Agency (ECRDA) is active in helping small-scale farmers get access to markets and to become part of the agriprocessing chain. The implementation of Rural Enterprise Development (RED) hubs is a key plank of this
OVERVIEW strategy. RED hubs will supply tractors, harvesters and offer storage facilities and milling plants. There will also be opportunities for farmers to sell direct to members of their own community instead of shipping produce off to a distant location to be processed there. The first four hubs will be sited in the district municipalities of OR Tambo, Chris Hani and Alfred Nzo. The concept of agri-parks is also intended to support the addition of value to primary products: these have been developed at Lambasi, Ncorha, Sundays River Valley, Butterworth, Matatiele and Sterkspruit-Senqu. The Eastern Cape Development Corporation (ECDC) also has a role in supporting agriprocessing through loans and equity arrangements: projects that have received financial support include aquaculture, the production of dietary fibre from pineapples and bamboo products. The Eastern Cape provides approximately a quarter of South Africa’s milk, and the industry is further expanding as producers
tend to favour high-rainfall coastal areas such as the Eastern Cape. With Clover recently acquiring Dairybelle’s milk assets, the province’s farmers mostly sell raw milk to two major processors: Parmalat and Clover. With the growth of the dairy sub-sector in recent years, a few independent processors have emerged. Small-scale dairy farming presents an opportunity to develop the industry in the former homeland areas, especially in a range of previously untapped products such as milk powder, speciality cheeses and long-life milk. Clover makes UHT/fresh milk in Port Elizabeth and Dairybelle manufactures natural cheese, processed cheese and speciality cheeses at its factory in Cookhouse near Somerset East. Ouma Rusks are still made in the small rural town where they were invented, Molteno, and current owner of the brand, Foodcorp, has increased production volumes. Cabdbury Chocolates operate a big site across the lake from the football stadium in Port Elizabeth and Nestlé makes 11 kinds of chocolate at its factory in East London. The Sasko mill in Port Elizabeth is the province’s only big milling plant. Coca-Cola Sabco and SAB Limited’s Ibhayi brewery are the major beverage manufacturers in Port Elizabeth and Distell has a bottling plant in the city. Sovereign Foods in Uitenhage is the country’s fourth-biggest producer of poultry and has been the target of a take-over by Country Birds for some time, but the process has been dragged out because Sovereign management do not want to sell. South Africa is the second-largest producer of chicory in the world. Chicory is grown primarily in the coastal areas around Alexandria between Port Elizabeth and Port Alfred. A drying plant has been established there and the dried chicory produced is sold to coffee manufacturers nationwide for local consumption. Sugar is grown on the northern border of the province, in North Pondoland. An opportunity for diversification in crop production exists with the aloe ferox plant, which is indigenous to the Eastern Cape. Like aloe vera, which is in demand worldwide in cosmetic and health products, aloe ferox is used for a wide range of skin conditions and various medical ailments.
ONLINE RESOURCES Coega IDZ: www.coega.co.za Eastern Cape Rural Development Agency: www.ecrda.co.za East London Industrial Development Zone: www.elidz.co.za Nelson Mandela Business Chamber: www.nmbbusinesschamber.co.za Organic Agricultural Association of South Africa: www.organicsouthafrica.co.za Perishable Products Export Control Board: www.ppecb.com
EASTERN CAPE BUSINESS 2017
Manufacturing From eye drops to dog food, the Eastern Cape has diverse manufacturing opportunities.
SECTOR INSIGHT The Fagerhult Group from Sweden is a new investor. • BBF Safety Group is expanding production of shoes. • Aspen’s PE plant makes 25-million eye drops annually.
iversification has been the name of the manufacturing game in the Eastern Cape in recent years. The massive role played by the automotive industry and food and beverages as part of agri-processing (both covered in separate overviews) has not diminished, but with attractive incentives on offer in both of the province’s industrial development zones, the range of manufacturing capabilities is growing. Coega IDZ is home to Agni Steels SA and DCD Wind Towers and Electrawinds. East London’s IDZ has another company in the renewable energy sector, ILB Helios, who make solar panels. The provincial government is keen to support diversification, anxious that with the automotive sector supplying 30% of manufacturing employment and 32% of manufacturing gross value-added, the province’s economy might be vulnerable to fluctuations in demand for vehicles. The strategy is targeting sectors where the province already has a competitive advantage (as with wool and mohair), is labour intensive, will have a broad impact and has low barriers for SMME entry. Sectors targeted include: agri-processing and food; timber; tourism; construction; chemicals; energy and mariculture. One of South Africa’s most successful manufacturers is Port Elizabeth-based Aspen. The judges of the 2016 All Africa Business EASTERN CAPE BUSINESS 2017
Leaders Awards agreed with this assessment when they named Aspen Group Chief Executive Stephen Saad as Entrepreneur of the Year. The company has 60 businesses in 50 countries and the Port Elizabeth and East London factories play an important role in producing excellent products in bulk. The Port Elizabeth site makes more than 12-billion oral solid dosage forms every year, in addition to more than 25-million units of Murine and Clear Eye eye drops being made for export to the US. The PE complex has four components, covering oral solid, liquid, steriles and niche high potency pharmaceutical products. Bodene, a subsidiary of Fresenius Kabi, makes intravenous medicine in Port Elizabeth. East London hosts Johnson & Johnson’s finance, operations and research and development divisions.
OVERVIEW Swedish concern Fagerhult Group has entered the South African market via an acquisition of the factory of Port Elizabeth’s Lighting Innovations, and the two subsidiary companies Arrow Lighting and Beacon Lighting. Ab erdare Cables and Everyready Batteries are examples of companies in the medium-toheavy sector. East London has two First National Battery manufacturing sites. Montego Pet Nutrition is Graaff-Reinet’s biggest private employer, with more than 200 staff members working in the Karoo town’s factory. Established in 2000, the company now makes about 200 tons of product daily and supplies more than 1 000 retail outlets across South Africa. Considerable potential exists to create more value from the excellent wool, leather and mohair that the province’s livestock produce. The production and working with merino wool and mohair fibres are skills that have been handed down from generation to generation. A fibre processing plant to spin wool and mohair fibre into yarn is planned, as is a textile mill to focus on cotton, poly-cotton and acrylic fabric. The latter is planned for the IDZ in East London, which is already home to Da Gama Textiles, whose factory has the capacity to produce 45-million square metres of fabric per annum. Da Gama makes the popular and distinctive shweshwe fabric, using its own unique printing process which makes it very difficult for fakers to copy. The BBF Safety Group invested R16-million in a new machine at
its Port Elizabeth plant in 2016 which will take shoe production up to 5 000 pairs per day. The injection moulding machine can inject a moulded sole to the shoe upper every 15 seconds. The BBF Group was formed from a merger of several South African companies, to allow them to specialise and to compete with cheap foreign imports. The companies were Bagshaw Footwear, Beier Safety Footwear, Bronx Safety, United Frams and Wayne. The plastics industry is a key supporter of the automotive industry but it is not limited to vehicle applications: moulding, packaging and the construction industries are other important sub-sectors. GenTech, which operates out of Neave township, specialises in polyurethane elastomer components and sells to the automotive, tyre, textile and food industries and Maizey Plastics are suppliers of semi-finished thermoplastic materials.
Incentives The Department of Trade and Industry (dti) offers a Competitiveness Enhancement Programme aimed at medium-sized manufacturers. It includes a cost-sharing grant of between 30% and 50% for investments up to R50-million and up to 80% if a group of smaller companies want to collaborate on matters such as advertising. The dti also oversees: • Critical Infrastructure Programme. • Research and Development Tax Incentive Programme. • Cash for new or upgraded production facilities. • The Foreign Investment Grant repays foreign investors for the cost of transporting new machinery and equipment to South Africa. • Companies are assisted in creating prototypes arising from their own research. • Clothing and Textile Competitiveness Programme is a cost-sharing grant.
ONLINE RESOURCES Border-Kei Chamber of Business: www.bkcob.co.za Coega Development Corporation: www.coega.co.za Department of Economic Development, Environmental Affairs and Tourism: www.dedea.gov.za East London Industrial Development Zone: www.elidz.co.za Manufacturing Circle: wwww.manufacturingcircle.co.za National Agricultural Marketing Council: www.namc.co.za National Association of Pharmaceutical Manufacturers: www.napm.co.za South African Bureau of Standards: www.sabs.ca.za
EASTERN CAPE BUSINESS 2017
Automotive Vehicles and components anchor manufacturing in the Eastern Cape.
SECTOR INSIGHT A Chinese OEM is part of an R11-billion investment. • 10 000 C-Class MercedesBenzes left East London Port in the month of August 2016.
ecent investments by Chinese state-owned enterprises have boosted the Eastern Cape’s automotive sector. Already home to some of the biggest brands in original equipment manufacturing (OEM) and automotive components in Volkswagen, Mercedes-Benz, General Motors, Ford, Goodyear, Continental Tyre SA, Bridgestone and Shatterprufe, the addition of First Automotive Works (FAW) and Beijing Automobile International Corporation (BAIC) confirms the province’s premier standing in this sector. FAW’s R600-million assembly plant can now be seen as having tested the waters because BAIC followed in 2016 with one of the biggest foreign investments in recent years. BAIC is taking a 65% stake in an R11-billion joint venture with the Industrial Development Corporation at the Coega Industrial Development Zone. BAIC is a Chinese state-owned enterprise with several brands. The intention is to start production on the 85 000m² site in 2018 and the target is annual production of 100 000 cars, bakkies and sports utility vehicles. About 2 500 jobs are expected to be created. The Coega IDZ is run by the Coega Development Corporation. Companies like BAIC and FAW may well be positioning themselves to push into Africa, not only for selling vehicles but for sending automotive parts and partly assembled kits further north. A new pan-African organisation has been established to promote EASTERN CAPE BUSINESS 2017
the auto industry on the continent, the African Association of Automotive Manufacturers (AAAM). The Eastern Cape manufactures half of the country’s passenger vehicles and provides 51% of South Africa’s vehicle exports. The sector accounts for over 40 000 formal sector jobs in the Eastern Cape. The South Africa automotive sector makes up about 7% of South Africa’s gross domestic product and is responsible for approximately 12% of the country’s manufacturing exports. In 2014 South Africa exported 276 404 vehicles and in 2015 a new record was achieved, 338 802. The total value of this (together with automotive parts exported) amounted to R151-billion. Total production in South Africa in 2016 was expected to reach 640 000 units. In 2015, Mercedes-Benz South Africa built its millionth vehicle
OVERVIEW in East London. Mercedes-Benz set new exporting standards in April 2016 when it moved more than 10 000 vehicles out of East London Port in the month. Transnet Port Terminals (TPT) and Transnet National Ports Authority (TNPA) shared the accolades for the logistical achievement, which was part of a three-month total of 25 860 new Mercedes-Benz W205 C-Class vehicles shipped. In the same month, the Eastern Cape Exporters’ Club named Volk swagen Group South Africa as “Best Exporter OEM” with Ford receiving a merit award for increased turnover and job creation. VWSA exported 20% more Polos in 2015 than the year before, and kept up the momentum into 2016. Coming off investments totalling R5.9billion between 2007 and 2014, VWSA will put up another R4.5billion for new models to be produced in Uitenhage from 2017. The “Best providers of services to exporters” award gives an interesting insight into the support industry that something as complex as the automotive industry requires: the 2016 winner was logistics company Morgan Cargo and a merit award was won by Motor Industry Customs Brokers, a company that specialises in helping OEMs deal with red tape and customs. An Automotive Production and Development Programme (APDP) is in place to support the automotive industry and to encourage investment. It is run by the Department of Trade and Industry (dti).
Components Only 35% of the components and parts used to make vehicles in South Africa are produced locally. The large number of vehicle models produced in South Africa is a complicating factor for the components sector: low volumes often mean high prices. Two Port Elizabeth companies export significant portions of their production to overcome this: Schaeffler SA exports to its international parent so that it can achieve higher volumes. Shatterprufe supplies the majority of windscreens to the South African market but there are 12 model ranges to serve. About 150 automotive suppliers of various types operate in the Eastern Cape. Sectors include leather works, batteries, automotive tooling, catalytic converters, glass, lamps, radiators and alloy wheels. Foundries, such as those run by Murray & Roberts, supply the industry with cast iron and aluminium. The catalytic converter sector experienced incredible growth for a number of years but some volatility in the platinum mining sector, together with increased interest in electric vehicles and hybrids, means that exporters (largely based in Port Elizabeth) have had to work harder. SJM Flex SA, manufacturer of flexible, stainless-steel couplings, was named overall exporter of the year by the Exporters’ Club in 2016. Catalytic converter Eberspächer SA won a merit award in the corporate category for what the judges called its “entrepreneurial flair and major accomplishments”. Testing company Jendamark Automation also won a merit award. Firestone was the first tyre company to be established in Port Elizabeth. It was soon followed by Goodyear (in Uitenhage) and General Tyre (now Continental Tyre SA). Continental has about 1 600 employees and sells tyres domestically and internationally. Bridgestone has production facilities in Port Elizabeth and Brits. Both the Coega IDZ and the East London IDZ are trying to attract companies in the components manufacturing sector.
ONLINE RESOURCES Automotive Industry Export Council: www.aiec.co.za Automotive Industry Development Centre: www.aidc.co.za Automotive Production and Development Programme: www.thedti.co.za Catalytic Converter Interest Group: www.sassda.co.za Coega IDZ: www.coega.co.za East London IDZ: www.elidz.co.za National Association of Automotive Component and Allied Manufacturers: www.naacam.co.za National Association of Automobile Manufacturers of South Africa: www.naamsa.co.za
EASTERN CAPE BUSINESS 2017
Energy Gas and renewable energy are creating a new energy landscape.
SECTOR INSIGHT A large LNG plant has been allocated to the Coega IDZ. • Wind power projects have mushroomed in the Eastern Cape.
number of major projects are transforming the energy sector in the Eastern Cape. Between October 2015, when the 335MW Dedidsa peak power plant started operating within the Coega Industrial Development Zone outside Port Elizabeth, and October 2016, when the national Department of Energy announced that the same site had been chosen to be location of a 1 000MW Liquefied Natural Gas (LNG) plant, hundreds of megawatts were connected to the national grid as the province’s many new wind farms kicked into operational mode. The Liquefied Natural Gas Independent Power Producer Procurement Programme is part of the broader programme of the Department of Energy which encourages private investment in renewable energy, namely the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). Fully a quarter of the projects so far approved in this national programme have been allocated to the Eastern Cape with 91% of these being wind projects and the balance solar photo-voltaic. A vast new industry has been created in a very short space of time, and it is clear that investors still have appetite for more.
Gas The Dedisa power plant is one the first gas-fired plants in the country to be run by a private consortium. Engie (formerly French firm GDF-Suez), Legend Power Solutions, Mitsui (Japan) and the Peaker Trust which EASTERN CAPE BUSINESS 2017
represents local residents, have jointly signed a 15-year power purchase agreement with Eskom. The new LNG facility will not only inject some R25-billion into the regional economy, but confirm a shift to gas as a power source which is one of national government’s recently announced objectives. Large commercial gas companies such as Afrox and Air Products have plants within the Coega IDZ. First Automobile Works has established its motor assembly plant next door to Air Products’ air separation unit, allowing it ready access to the industrial gas that it needs. Liquid oxygen and nitrogen play important roles in the metals processing sector for cutting and laser applications. The company believes that having these gases readily available plays strategically into the provincial government’s industrial development strategy.
OVERVIEW Renewable energy If the power produced through the REIPPPP were to be consumed where it is made, the Eastern Cape would soon be producing 60% of its own needs (the power is in fact sent to the national grid for redistribution). The province consumed 8 358GWh of electricity in 2015 or 3.7% of the national total. The average lead time in the 11 projects that have so far been approved in the province is two years, with local content averaging out at about 47%. When the projects are complete, R142.9-billion will have been spent on procurement, R65.7billion of which will be local. Wind projects in the province include Globeleq’s 138MW Jeffrey’s Bay facility, the 140MW Cookhouse project (African Clean Energy Developments) and two run by Cennergi at Tsitsikamma (94MW) and Bedford (134MW). Cennergi is a joint venture between South African resources company Exxaro and Indian company Tata Power. There are a number of other projects with capacities ranging from 20MW to 97MW. Scatec Solar has commissioned a plant in Burgersdorp. The 75MW plant has panels mounted on single axes, enabling them to track the sun and optimise electricity generation by a further 20%. The Coega IDZ is working on positioning itself as a renewable energy hub. The Department of Trade and Industry (dti) offers various green technology incentives.
Electrawinds, Universal Wind and DCD Wind Towers are three RE companies with a presence in the Coega IDZ. The energy sector is also creating potential for manufacturers. In the East London Industrial Development Zone (ELIDZ), for example, Spanish firm ILB Helios is producing solar panels units for use in the South African market.
Other Eskom is pursuing plans for more nuclear power to be added to the national grid. One of the possible sites is Thyspunt near Cape St Francis. There is strong opposition from archaeologists and environmentalists. The discovery of shale gas reserves in the Karoo Basin may offer another opportunity but the topic is almost as controversial as the nuclear option, as opponents of “fracking”, as the recovery process is called, argue that underground water supplies might be contaminated. Small-scale hydropower projects have some potential in deep rural areas. The largest of the province’s four hydropower stations, Colley Wobbles in the Mbashe catchment area (maximum capacity 42MW), has been ineffective due to rising silt levels. The Umzimvubu Dam project is expected to add power to the grid. Two bio-digesters have been commissioned in the Keiskammahoek area. A community training centre runs the project which supplies fertiliser and gas for cooking. A bio-ethanol project intended for Cradock has been delayed for some time by uncertainty about what feedstock to use. The Eastern Cape Rural Development Agency, supported by the Industrial Development Corporation, is working on a plan to incentivise producers without affecting food security.
ONLINE RESOURCES Coega IDZ: www.coega.co.za Department of Trade and Industry: www.thedti.gov.za East London IDZ. www.elidz.co.za IPP Projects: www.ipp-projects.co.za National Department of Energy: www.dme.gov.za Southern African Biofuels Association: www.saba.za.org South African Photovoltaic Industr y Association: www.sapvia.co.za South African Renewable Energy Association: www.sarec.org.za Southern Africa Solar Thermal and Electricity Association (CSP): www.sastela.org South African Wind Energy Association: www.sawea.org.za
EASTERN CAPE BUSINESS 2017
Water The Eastern Cape is tackling water shortages through new dams and improved controls.
SECTOR INSIGHT The Umzimvubu Dam project will provide water and hydropower. • R hodes Uni v er sit y ’s Institute for Water Research tests water quality.
ater services are provided to the citizens of the Eastern Cape by 17 water service authorities which oversee 163 drinking water supply systems. Muncipalities and Amatola Water are the primary providers of services. Purification, desalination, water-leakage management and wastewater treatment are some of the problems facing the sector as a whole, and solutions are urgently needed. This is an important issue that entrepreneurs with good ideas would do well to tackle. According to Water Wheel magazine, 37% of water delivered to the nation’s municipalities is lost. This challenge presents an opportunity for companies who can find a solution, for example by providing better pipes and connections and smart metering. A water supply and hydropower project is underway on the Umzimvubu River. The R12-billion mega-project entails the construction of two multipurpose dams, Ntabelanga and Laleni Dams, on the Tsitsa River, which is a tributary of the Umzimvubu, to supply irrigated agriculture, domestic and industrial water requirements, and hydropower generation in the catchment area. The smaller dam at Tsitsa EASTERN CAPE BUSINESS 2017
Falls will supply the hydropower element of the project. The Umzimvubu catchment and river system stretches for over 200km from its source in the Maloti-Drakensberg watershed on the Lesotho escarpment to Port St Johns. A large number of organisations and municipalities are in partnership to preserve the river system and surrounding catchment area. The river and adjacent forests, grasslands, thickets and dune vegetation are amazingly diverse but are threatened in various ways. The Umzimvubu Catchment Partnership Programme wants to find ways protect the environment while helping with poverty alleviation through the provision of water, erosion control and fodder for livestock and food security. Inter-basin water transfers are the norm in South Africa. In the 1950s, the Orange River Project
OVERVIEW delivered water from the Orange River to citrus farmers in the faraway Eastern Cape. This project made the citrus industry possible in places like Addo. Amatola Water manages bulk water infrastructure across 50 000km², encompassing the district municipalities of Chris Hani and Amathole, together with portions of other municipal areas. Backlogs in rural areas and smaller municipalities are still prevalent, and this water authority is playing a key role in reducing and eradicating these inequalities. Among the projects that Amatola Water is involved in are Nooitgedacht/Coega low-level project in the (Nelson Mandela Bay Metropolitan Municipality), the water and waste water infrastructure upgrade (King Sabata Dalindyebo), the Makana Right of Use project, the Ndlambe Regional Bulk Water Supply, the Nahoon-East Coast Bulk Supply Pipeline and the upgrades of several Amatola Water plants. The long-term drought that afflicted South Africa brought several responses from the Department of Water and Sanitation (DWS). These included siphoning water 530km away from Katse Dam in Lesotho to Aliwal North, obtaining a total of 10 giant water tanks (18 000L capacity) and refurbishing 25 boreholes in Mbashe, as well as the stockpiling of water in Mdantsane in Buffalo City. These water shortages have led to the development of the Eastern Cape Water Master Plan in an effort to alleviate the drought situation in the province.
In the 2016 new financial year, DWS approved a budget of R6.09million, which includes the Hyacinth project. The invasion of the aquatic weed needs to be controlled and, if unchecked, will disrupt water systems throughout the province. Importantly, clearing water hyacinth can provide significant volumes of biomass for the creation of alternative bioenergy.
Municipal water The Eastern Cape Development Corporation is helping the Makana Municipality in terms of the Integrated Social Infrastructure Delivery Programme (ISIDP). With the city of Grahamstown housing many schools and a university (and the National Arts Festival), the Makana Water Crisis Intervention Project was seen as strategically important. The Nelson Mandela Bay metropole currently gets its water from 10 dams, six of which are owned by the municipality. The Churchill and Impofu Dams supply half the total supply, with the latter dam having a full storage capacity of 105-million cubic metres. The municipality maintains about 3 000km of reticulation water mains and about 650km of bulk-water pipelines. Nelson Mandela Bay Municipality operates six waste-water treatment works. The Municipal Green Drop Certification Programme was introduced in 2008 as an incentive-based regulation of waste-water quality and waste-water management systems in South Africa. The Buffalo City Metropolitan Municipality and Nelson Mandela Bay Metropolitan Municipality have both been recipients of the Green Drop accolade. The Rhodes University Institute for Water Research is one of several institutions in the country that conducts research into water quality. A lot of the institute’s funding comes with project-related grants from the national Water Research Commission, some students receive funding from the Carnegie Foundation and Unilever sponsors the Unilever Centre for Environmental Water Quality, a unit within the institute. The Water Institute of South Africa has 1 800 members. It does research, keeps its members up-to-date and runs conferences. As in most areas of life in South Africa, environmental standards are set and maintained by the South African Bureau of Standards (SABS).
ONLINE RESOURCES Amatola Water: www.amatolawater.co.za Department of Water and Sanitation: www.dwa.gov.za Umzimvubu Catchment Partnership Programme: www.umzimvubu.org Water Institute of South Africa: www.wisa.org.za Water Research Commission: www.wrc.org.za
EASTERN CAPE BUSINESS 2017
Amatola Water projects The Amatola Bulk Water Infrastructure Upgrade Project is set to eliminate supply backlogs.
he Amatola Water Bulk Infrastructure Upgrade Project is one of the utility’s largest projects to date. Amatola Water is upgrading the infrastructure of its water supply schemes at Peddie, Sandile, Debe Nek, Masincedane, Binfield and Nahoon. These upgrades will allow the utility to provide bulk potable water capacity, promote the drive towards the elimination of backlogs, and also achieve the organisation’s objective of increasing water supply to 750 litres per household per day. The project will also provide reticulation infrastructure to eliminate water supply backlogs in 4 057 households within the supply boundaries of the schemes, and extend supply to over 47 142 households. The project has been allocated R500-million over three financial years under the Department of Water and Sanitation’s Regional Bulk Infrastructure Grant (RBIG) programme.
Amathole District Municipality’s (ADM) Dry Sanitation programme. The project will be implemented in three phases and comprises the construction of 36 291 Ventilated Improved Pit (VIP) units in six local municipalities within ADM. Phase 1 entails the construction of 15 000 VIP units, while Phases 2 and 3 respectively entail the completion of 10 259 new units for the Mnquma, Amahlathi and the Great Kei regions, as well as the completion of 11 032 new units for the Nkonkobe and Ngqushwa regions. The construction of the VIP units will help restore dignity to the communities and contribute to the respective area’s socioeconomic development through the utilisation of local labour and SMMEs during the construction phases. The project is estimated to cost around R508-million and is anticipated to be complete in December 2017.
Increased water supply Amatola Water appointed to complete Amathole’s capacity for Nelson Mandela Bay Dry Sanitation project Amatola Water has been appointed by the Department of Water and Sanitation as Project Implementing Agent for the completion of the EASTERN CAPE BUSINESS 2017
Amatola Water has been appointed by the Minister of Water and
FOCUS Sanitation to fast-track the augmentation of the Nooitgedacht/ Coega Low-Level Scheme to increase capacity of water supply from the Orange River System to Nelson Mandela Bay from 70Mℓ/d to 160Mℓ/d. The project includes the construction of a 45Mℓ balancing reservoir at the Olifantskop reservoir site; rehabilitation of the Missionvale Pipeline; and civil works for a 70Mℓ/d extension to the Nooitgedacht water treatment works, including a 6Mℓ clear water well, six gravity filters, a sedimentation tank and inlet structure, pipeline extensions and control valves and a filter backwash recycle facility. The total project cost is estimated between R318-million and R510-million, with a budget of R128-million approved for the 2016/17 financial year. The construction phase is currently underway and the project is expected to be complete by October 2018.
Thousands in Ndlambe communities to benefit from major bulk water supply project Communities within the Ndlambe Local Municipality are set to benefit from a R370-million bulk water supply project aimed at providing long-term sustainable bulk water supply in the area. The Ndlambe Regional Bulk Water Supply project entails the construction of: • A new Reverse Osmosis (RO) plant at Port Alfred.
Supply of groundwater from Central Bolt. Brine discharge line to the sea outfall. • New potable storage reservoir and internal pipelines at Port Alfred. • New reservoir, pump station and pipeline at Cannon Rocks. • New reservoir and pipeline at Alexandria. The project will augment water supply to the coastal towns of Port Alfred, Alexandria and Cannon Rocks. This will ensure an increase in the quantity and quality of water supplied to the area. Water supply to Alexandria will also be augmented through the construction of a new rising main from the coastal well fields at Fishkraals and Cape Padrone. Bathurst, Boknes, Kenton-on-Sea, Seafield/Kleinemonde, and Bushman’s River are also earmarked to benefit from this project. The project commenced in September 2011 and will be complete in February 2017. • •
EASTERN CAPE BUSINESS 2017
Information and communication technology Incubators and laboratories are boosting innovation.
number of public and private initiatives are under way to boost the information and communication technology (ICT) sector in the Eastern Cape. Development agency Eastern Cape Development Corporation (ECDC) has a specific emphasis on the ICT sector in terms of the loans that it disburses. The ECDC works through the Eastern Cape Information Technology Initiative (ECITI), which also promotes the film sector. The ECITI is designed to stimulate the creation of small, micro and medium enterprises. Among recent topics dealt with at the annual ICT Summit organised by ECITI are ICT infrastructure, innovation, social transformation in ICT, digital skills, ICT codes and how to avoid vendor mistakes in government. The East London, Queenstown and Umthatha based branches of ECITI offer office space to start-up enterprises as well as capacity building initiatives. This virtual support can be given to similar companies throughout the Eastern Cape province focussing and ensuring inclusivity for rural communities. The director of one of these companies is very positive about the support received from the ECITI. Khanyisa Ngewu of On the Record, a communications and media management company says, “I believe the most notable value-add has been the training I received in Value Added Tax, project management and financial management; as well as access to legal advice relating to handling contracts.” The Small Enterprise Development Agency (Seda) runs an ICT incubator in the Nelson Mandela Bay Metropolitan Municipality. Known as the Seda Nelson Mandela Bay ICT Incubator (SNII), support is given in a wide range of sub-sectors such as graphics, systems analysis, hardware and software. A new research and development laboratory was established by SNII in 2016, focussing on apps, mechanical and technical prototypes and software solutions. EASTERN CAPE BUSINESS 2017
A community telecoms network has been established in a rural area. • ICT start-ups can get office space and support from the ECITI. SNII also hosted a national conference on “Universal Affordable Access to Communications in South Africa” in 2016. An example of what can be done to reduce telecommunication costs in rural areas was presented by the University of the Western Cape, who have teamed up with the Mankosi community in a rural part of the Eastern Cape and created the Zenzeleni Network. This is essentially a community telecoms company where local calls are free, data is considerably cheaper and calls to other networks half the normal cost. T h e Small Enter p r is e Development Agency (Seda) is an agency of the National Department of Trade and Industry, and gives non-financial support to entrepreneurs. The National Electronic Media Institute of South Africa (NEMISA) was originally created to create skills for the broadcasting
OVERVIEW environment, but it is now being integrated with two other entities, eSkills Network and the Institute for Satellite and Software Applications (ISSA) to form Ikamva National e-Skills Institute (iNeSI). The focus of the new entity is on developing e-skills capacity in South Africa by creating partnerships that guide e-skills initiatives. The head office is in Johannesburg and the Eastern Cape Colab is based at the Walter Sisulu University and its focus is “ICT for Rural Development”. The Universal Service and Access Agency of South Africa (USAASA) has concentrated on providing connectivity for schools in five provinces, including the Eastern Cape, and smart devices have been distributed to schools. Teachers are being
trained on how to use the smart devices, in order to improve the learning experience of the students. A number of incentives relevant to companies and educational bodies in the ICT sector are available from the Department of Trade and Industry. These include: • The Technology and Human Resources for Industry Programme (THRIP): companies and educational institutions working to improve technology; 50/50 cost sharing grant to a maximum of R8-million • Technology Development Fund: the Technology Innovation Agency makes up to R50-million available for up to 10 years • Technology Venture Capital: managed by the Industrial Development Corporation; commercialisation of innovative products, processes and technologies.
ONLINE RESOURCES Department of Trade and Industry: www.dti.gov.za Eastern Cape Development Corporation: www.ecdc.co.za Eastern Cape Information Technology Initiative: www.eciti.co.za Technology Innovation Agency: www.tia.org.za Ikamva National eSkills Institute: www.enesi.org.za South African State Information Technology Agency: www.sita.co.za
A champion for a connected, empowered and informed Eastern Cape The Eastern Cape Information Technology Initiative supports small, micro and medium enterprises (SMMEs) in the ICT, film and media sectors in the Eastern Cape. ECITI has strategic partnerships with colleges and universities, state agencies and with companies in the private sector. Join our Incubation Programme We offer shared services and infrastructure to in-house companies, and a range of business support services, from business mentorship and coaching, advisory support and skills development to seminars in financial management, networking forums and linkages to local and international markets, funders, potential investors, industry experts and academia. Strategic Partnership ECITI constantly strives to establish strategic partners with government, funders, corporates, academia and local entrepreneurs in order to carry out the vision. The incubator extends an invite for partners in capacity building, access to markets and networks building that would directly benefit the enterprises that are incubated within ECITI and thus contribute to the economic viability of the Eastern Cape province. Contact details: Telephone: +27 87 373 0970 | Email: email@example.com | Website: www.eciti.co.za Block B, ELIDZ Science & Technology Park, Lower Chester Road, Sunny Ridge, East London EC 5201
Banking and finance Formal banking is expanding its reach into rural areas.
SECTOR INSIGHT The renewable energy sector is taking loans to finance new developments. • N e d b a n k Business Banking has a new headquarters in East London..
ews that Postbank (run by the South African Post Office) received a first-level licence in 2016 was well received in the Eastern Cape, a province with a high proportion of people living in rural areas. The Post Office has an unmatched reach, even in remote parts of the country. By taking these services to rural areas, it is hoped that small businesses can be more easily created and given better support where they already exist. National government wants the bank to serve a developmental agenda. Once a board has been appointed and a company formed, the Reserve Bank is likely to grant the full licence. The current Postbank focusses on taking deposits and savings accounts. Postbank has secured a R3.7-billion loan to enable it to open its own loan book. A somewhat informal form of banking (which is popular in rural and urban settings) has the potential for tremendous growth. The stokvel (savings clubs) market is estimated at R44-billion in South Africa and developing products for this market is seen as a possibly lucrative outlet for South African financial services companies. The Eastern Cape will be no exception. With the renewable energy sector being actively pursued in South Africa, a whole new sector in need of funding has opened up for banks, and the Eastern Cape has attracted about a quarter of all new projects in the bidding process by independent power producers. For many decades South Africa had a retail banking Big Four – Standard Bank, Nedbank, Absa/Barclays and First National Bank. All of them have a strong presence in the Eastern Cape, but the big news in EASTERN CAPE BUSINESS 2017
the sector since 2001 has been the emergence of Capitec Bank. Based on Capitec’s results for 2015/16, BusinessTech published a chart giving Capitec the fourth most customers, at 7.3-million, just less than Nedbank and slightly more than FNB. Standard Bank (about 11-million) and Absa (about ninemillion) are top of the list. Investment company PSG Group is one of the biggest investors in Capitec and is a majority shareholder in PSG Konsult, a financial services company. Like other companies of its type, PSG Konsult is present in the big Eastern Cape towns, but it also has a presence in regional centres such as Middelburg and Aliwal North. From the Karoo Midlands towns of Graaff-Reinet, Cradock, Adelaide and Somerset East, the firm of Gerber, Botha & Gowar dispenses financial advice across large parts of central South Africa. Standard Bank, which was founded in Port Elizabeth in 1862,
OVERVIEW now operates in 32 countries (20 in Africa), has nearly 69 000 employees and assets in the region of $16-billion. Together with the other banks, consulting companies and other firms in the financial and business services sector, it is responsible of 19.2% of the Eastern Cape’s Gross Domestic Product (GDP, StatsSA). The sector provides employment for 141 000 people. In Port Elizabeth there is a geographic concentration of financial services: the city’s own financial district stretches along a section of Cape Road from Mill Park to Newton Park and includes the Greenacres shop and office complex. Here can be found the offices of PSG Konsult, Liberty Life, Alexander Forbes, Hollard and Momentum. Nedbank Business Banking has its headquarters just one block away from the Greenacres complex. Only AON appear to buck the trend, with offices in Central. Also on Cape Road and in the Greenacres complex is FNB’s regional office, FNB Newton Place. This building houses all of the FirstRand group’s offices, such as Rand Merchant Bank, FNB Private Clients and FNB Online. The agreement that Absa Business Bank (ABB) signed with agricultural company BKB allows farmers to borrow money against their produce. The bank flagged the event as the precursor to a possible future agricultural bank. With ABB’s experience in the agricultural field, and BKB’s access to 19 000 primary producers, the agreement can unlock a considerable amount of investment in the
agricultural and agri-processing sector. BKB has a national presence, but its headquarters are in Port Elizabeth. It is active in many spheres and has a strong wool and mohair profile. Absa Business Banking has developed a database where potential service or good suppliers can be identified and verified. The Procurement Portal will include details about black empowerment status and tax clearance. Absa also supplies short-term financing to SMME vendors. Nedbank Business Banking has a new focus on agriculture, with business managers in Port Elizabeth, Humansdorp and East London all supported by agricultural specialists. Nedbank sponsors the Komga Show and the bank has paid out loans to the Humansdorp Co-op which specialises in citrus and dairy products. Nedbank’s new building in East London won the “Development of the Year” award from the Buffalo City chapter of the SA Property Owners’ Association. The offices of Nedbank Business Banking in Bonza Bay Road won praise for the courtyard concept incorporated into the design.
ONLINE RESOURCES Alternative Exchange (AltX): www.altx.co.za Auditor-General South Africa: www.agsa.co.za Banking Association South Africa: www.banking.org.za Eastern Cape Development Corporation: www.ecdc.co.za Financial Services Board: www.fsb.co.za Insurance Institute of South Africa: www.iisa.co.za Insurance South Africa: www.insurance.za.org JSE Limited: www.jse.co.za Post Bank: www.postbank.co.za South African Institute for Chartered Accountants: www.saica.co.za South African Reserve Bank: www.resbank.co.za
EASTERN CAPE BUSINESS 2017
Development finance and SMME support Seed money is available for forestry ventures and much more.
SECTOR INSIGHT Recycled pineapple waste is living again as outdoor furniture. • SEDA opened a new technology research and development centre in 2016.
here are a wide range of options available for the financing of small business ventures in the Eastern Cape. The big retail banks have desks dedicated to promoting small enterprise and several agencies have a specific focus, for example the Eastern Cape Rural Development Agency (ECRDA). In promoting forestry enterprise, the ECRDA reported in 2015/16 having made R15-million available, while the Eastern Cape Development Corporation (ECDC) had contributed R8.3-million and the Development Bank of Southern Africa (DBSA) R64-million. This is a good example of the variety of funding mechanisms available. The Industrial Development Corporation (IDC) is another financing institution that is very active in the Eastern Cape. Several development agencies receive support from the IDC: Nelson Mandela Bay Development Agency; Blue Crane Development Agency; and Nkonkobe Development Agency. Two of the ECDC’s seven business units are devoted to small business: Development Finance and Enterprise Development. The ECDC has several financial products tailored to meet the various needs of business, entrepreneurs and investors, ranging from short-term to long-term finance and small- and micro-loans. The ECDC and the Technology Innovation Agency (TIA) jointly run the TIA-ECD Innovation Seed Fund Programme, which aims to identify and co-fund earlier stage technology innovation projects in the Eastern Cape. EASTERN CAPE BUSINESS 2017
In the first three quarters of 2015/16, the ECDC disbursed R72.1-million to 198 small businesses, creating about 1 415 jobs. Most of the money went to rural areas, including the OR Tambo (28%) and Alfred Nzo (14%) and Amathole (4%) districts. Sixtyone youth-owned businesses received R20.7-million and R15.5-million went to 58 womenowned businesses. In its role as a provider of advice, the ECDC assisted a delegation from the Amahlubi Traditional Council when it attended the World Forestry Congress. This is part of the DBSA Jobs Funds Forestry projects. Help Desks have been established to support small business in Port Elizabeth and East London. One of the companies supported by the ECDC, outdoor furniture manufacturer PolyFibre Pty (Ltd), has received SABS approval for its products, which
OVERVIEW means the company can move to commercialisation. PolyFibre uses recycled plastic and pineapple waste. T h e Sm a ll Ente r p r is e Development Agency (Seda) is an agency of the national Department of Trade and Industry, and gives non-financial support to entrepreneurs through training, assistance with filling in forms, marketing and creating business plans. It often helps small businesses draft applications for loan finance. Seda’s main provincial office is East London, with nine other offices located throughout the province. Several of Seda’s technology incubators are in the Eastern Cape. Port Elizabeth is the head office of the Chemin incubator which supports SMMEs in the downstream chemical sector. Furntech (a furniture incubator) has a branch in Mthatha and there are also construction incubators in Mthatha and Port Elizabeth. The Seda Nelson Mandela Bay ICT Incubator (SNII) promotes entrepreneurship in the ICT sector. It also supports several small companies in sub-sectors ranging from hardware and software to graphics and web and systems analysis. In 2016, a new technology research and development centre (R&D Lab) was launched at its Newton Park technology office in Port Elizabeth. The facility offers assistance and support to design and develop apps, software solutions, as well as electronic and mechanical device prototypes. The Masisizane Fund offers loan financing at good rates and
training through its Business Accelerator programme. As a non-profit initiative of the Old Mutual Group, the fund focusses on the cash flow of potential businesses rather than insisting on security in the form of property or something similar. In 2016, Absa Bank launched a new Enterprise Development Centre, the eighth of its kind in South Africa. The centre aims to give small businesses access to finance and to help entrepreneurs find markets. As part of its Small Contractor Development, Training and Community Participation programme, the South African National Roads Agency (SANRAL) offered training in 2016 to 20 people from four SMME sub-contractors in the making of dolosse. Dolosse are the large inter-locking blocks of concrete used to protect the N2 and railway line from the sea. Eight of the 2.5-ton dolosse are manufactured every day. The project’s main concrete subcontractor is Dynaform. The National Empowerment Fund (NEF) provides financial support from R250 000 up to R75-million for start-ups, the expansion of existing business, as well as the acquisition of equity. In the Eastern Cape, the NEF is supporting companies working in the fields of solar energy, restaurant franchises and transport. The Nelson Mandela Bay Business Chamber has a section devoted to SME support on its website and offers mentorship to start-ups and entrepreneurs. The Border-Kei Chamber of Business is similarly supportive. The Eastern Cape Exporters’ Club honoured two SMEs in 2016: Mend-A-Bath International (whose headquarters are in Port Elizabeth) won a merit award for entrepreneurial flair and Hansens Engineering won for increasing turnover and profitability in the medium enterprise category. All businesses are expected to register with the Department of Labour and contribute towards the Unemployment Insurance Fund.
ONLINE RESOURCES Business Partners: www.businesspartners.co.za Department of Trade and Industry: www.dti.co.za Development Bank of Southern Africa: www.dbsa.org Eastern Cape Rural Development Agency: www.ecrda.co.za Eastern Cape Development Corporation: www.ecdc.co.za Industrial Development Corporation: www.idc.co.za Unemployment Insurance Fund: www.labour.gov.za National Empowerment Fund: www.nefcorp.co.za South African Institute of Entrepreneurship: www.entrepreneurship.co.za Small Enterprise Development Agency: www.seda.co.za Small Enterprise Finance Agency: www.sefa.org.za
EASTERN CAPE BUSINESS 2017
Tourism Events and adventures are drawing more visitors to the Eastern Cape.
SECTOR INSIGHT Nelson Mandela Bay has won the bid to host the IRONMAN World Championships in 2018. • Dolphin tourism could be a new trend. • Nelson Mandela Bay metro earned R7.3-billion from tourism in 2016.
outh Africa has hosted the world’s best in cricket, rugby and football. Now some of world’s fittest athletes will battle it out in and near the sea in Port Elizabeth in the 2018 IRONMAN 70.3 World Championship. Scheduled for the first two days in September, this is a first for Africa, but not entirely surprising because the Nelson Mandela Bay Metropolitan Municipality has been hosting the Standard Bank IRONMAN African Championship since 2015 and held its first IRONMAN event as far back as 2004. Enthusiastic crowds of up to 80 000 have been known to line the route and the event will undoubtedly be a fillip for the local economy. More than 6 000 athletes are expected to participate from more than 100 global qualifying events. Buffalo City has its own IRONMAN 70.3 triathlon. In 2017, the 10th running of the event was held in the last week of January, and East London is home to several other popular cycling and running events. Nelson Mandela Bay Tourism lists a series of events hosted in 2016 to prove the metropole’s credentials as an Event City: the Commonwealth Judo Championships, IRONMAN Africa, the Ocean Racing Series (a world championship), the Herald Cycle Tour, and matches in the international Super Rugby series. The tourism body gave the public relations value of the rugby hosting as R18-million with an “economic spin-off in excess of R150-million”. The tourism industry generated R7.3-billion in 2016 in Nelson Mandela Bay according to Nelson Mandela Bay Tourism. Bed nights rose to 870 596 from just over 644 000 the year before. Eastern Cape Tourism has hit on the brand for the province as “Adventure Province Eastern Cape”. But such is the variety on offer for tourists in the Eastern Cape that any number of sub-brands could be EASTERN CAPE BUSINESS 2017
offered to cater to tourists with particular interests. In the last days of June every year, the Eastern Cape hosts thousands of art aficionados because of the National Arts Festival. Held since 1974 in Grahamstown, the festival now attracts huge crowds (more than 240 000 in 2015) to watch more than 1 000 performances in every conceivable venue in the small university town. Nearby Port Elizabeth has several identities: Event City is one, Water Sports Capital of South Africa is another. In 2016 another title was claimed – Bottlenose Capital of the World. There are apparently 30 000 dolphins in Algoa Bay, making it the biggest such concentration in the world. Nelson Mandela Bay Tourism is considering launching a Dolphin Festival to run during Marine Month in October. The province’s regions each have distinctive features and they are aptly branded on the provin-
OVERVIEW cial tourism body’s informative website: Kouga has superb golf at St Francis Links and matchless surfing at Jeffrey’s Bay; spectacular routes traverse the wilderness of Baviaanskloof; Frontier Country offers the history of a fractured past and peerless game reserves; the Greater Addo Route encompasses the huge park devoted to elephants; the Friendly N6 takes visitors high into the snowy mountains near Lesotho; and the Wild Coast offers nature at its pristine best.
New developments The decision by the South African National Roads Agency (SANRAL) to go ahead with plans to build bridges over the Mtentu and Msikaba rivers which will open up the quite remote eastern parts of the province (to mining and tourism). SA Express airline announced in 2016 a new direct flight from Cape Town to Mthatha. Port Elizabeth and East London have large airports and regular flights to all of South Africa’s other major destinations. The move by the Mandela Bay Development Agency (MBDA) into the renovated Old Tramways building near the mouth of the Baakens River has created a new meeting space in a characterful building and more than 1 000m² of new exhibition space. Within its first year of operation, the Tramways building hosted a visual arts exhibition (Tramways Memory Project) and a fashion show and it hosts a food market on the first Saturday of every month.
The building is also close to the section of the Port of Port Elizabeth that is designated to become a waterfront which will include a marina and cruise-liner terminal. These plans depend on Transnet moving its manganese storage to the Port of Ngqura. Another MBDA initiative is boosting the city’s tourist offering: Route 67 consists of 67 public art works symbolising the years spent by Nelson Mandela in the service of his fellow man. It starts at the Campanile (a tribute to the 1820 Settlers) and forms part the greater Nelson Mandela Bay Arts Journey.
Hotels and casinos South Africa’s large branded hotel groups have a strong presence in the Eastern Cape but there are also groups whose focus is more concentrated on the province (like the Kat Leisure Group) together with independent hotels and resorts such as East London’s Blue Lagoon Hotel and Conference Centre, located in a prime spot at the mouth of the Nahoon River. Kat Leisure Group’s offering extends from the well-known Kennaway Hotel, which has been a feature on East London’s beachfront for many years, to the Queens Casino and Hotel in Queenstown and accommodation options in the mountainous interior of Katberg and Hogsback. Premier Hotels has two hotels in East London and the Mpanga Private Game Reserve just beyond the city limits. Premier Hotels also manages the East London International Convention Centre which offers 17 conferences room in various configurations, boardrooms and an exhibition hall. Many resorts take advantage of the beautiful bays and inlets of the Eastern Cape, both along the Wild Coast, and nearer to cities, such as the Mpekweni Beach Resort which is located between Port Alfred and East London. The Eastern Cape Gambling and Betting Board issues gaming licences and regulates the industry in the province. Sun International’s three properties extend along the coast from the Wild Coast Sun Resort and Casino in the far east, to Port Alfred’s Fish River Sun and Country Club Resort and the five-star Boardwalk Casino and Entertainment World in Summerstrand, Port Elizabeth. Located close to the blue-flag Hobie Beach, the Boardwalk Hotel, Convention Centre and Spa won a 2016 Lilizela Tourism Award for excellence in the five-star meetings, exhibitions and special events category. Tsogo Sun has five Eastern Cape properties. In East London the four-star Southern Sun Hemingways is next to the Hemingways Casino complex and the city has one Garden Court, as does Mthatha. Port Elizabeth has a Garden Court and a SUN1, both near Humewood Beach. City Lodge has one property in East London and five in Port Elizabeth, across four brands.
EASTERN CAPE BUSINESS 2017
OVERVIEW Along the beachfront at Summerstand can be found the Protea Marine, a 173-room Radisson Blu and the Beach Hotel. The last-named hotel is run by the Port Elizabeth Hotel Group which also has in its portfolio Hacklewood Hill Country House, The Sands @ St Francis and Pumba Private Game Reserve.
Curious in Buffalo City The dodo, a flightless bird from Mauritius, famously became extinct and was last spotted in the 1660s. Museums around Europe had various parts of the animal as specimens but no-one realised that they were holding anything valuable, until just about all of them were either lost or thrown away. But the East London Museum has something truly unique – a dodo egg! Another creature that was thought extinct until one was found again in 1938, the fascinating coelacanth, is one of the museum’s most popular displays. The discovery of “Old Four Legs” as the creature came to be known, caused a stir at the time. The museum’s shipwreck and palaeontological sections are also very good. The nearby East London Aquarium is South Africa’s oldest, having opened in December 1931.
Wildlife The Eastern Cape Parks and Tourism Agency is in charge of 34 provincial nature reserves within the Eastern Cape. The Addo Elephant National Park (Addo) is arguably the province’s greatest attraction, and is under the control of South African National Parks. Addo extends over 180 000 hectares on land (with thousands more square
ONLINE RESOURCES Buffalo City Tourism: www.bctourism.co.za Calabash Trust: www.calabashtrust.co.za Eastern Cape Gambling and Betting Board: www.ecgbb.co.za Eastern Cape Parks and Tourism Agency: www.visiteasterncape.co.za Feather Market Convention Centre: wwwfeathermarket.co.za Karoo tourism research: www.ufs.ac.za./cds Kirkwood Wildlife Festival: www.wildsfees.co.za Mandela Bay Development Agency: www.mbda.co.za National Arts Festival: www.nafest.co.za Nelson Mandela Bay Tourism: www.nmbt.co.za South African Tourism: www.southafrica.net Tourism Enterprise Partnership: www.tep.co.za South African National Parks: www.sanparks.org
EASTERN CAPE BUSINESS 2017
meterage in the marine reserve) and attracts more visitors than East Africa’s Serengeti National Park. Addo uniquely offers visitors the opportunity to view the Big Seven, as it has more than 650 elephants, along with the rest of the Big Five. The park includes a marine section where great white sharks and whales can be sighted. The Camdeboo, Mountain Zebra and Garden Route national parks offer very different experiences for the visitor, covering as they do terrain ranging from karoo veld and mountain plateau to coastal forests. In addition to the provincial and national parks, the Eastern Cape has a large number of high-end, luxury game reserves and lodges. These include the Kwantu Private Game Reserve between Port Elizabeth and Grahamstown. In 2016, the reserve won Best Luxury Wildlife Resort presented at the World Luxury Hotel Awards. Some luxury game lodges are located within national parks, such as the Gorah Elephant Camp, which is run by Hunter Hotels and forms part of the Addo Park. Luxury brands sometimes create a chain for their customers so visitors might stay at the boutique Summerstand hotel in Port Elizabeth, No5 By Mantis, on their way to another Mantis property, the Oceana Beach and Wildlife Reserve.
Eastern Cape Provincial Government A guide to the Eastern Capeâ€™s provincial government departments. Visit www.ecprov.gov.za
Office of the Premier Premier: Phumulo Masualle
Department of Human Settlements MEC: Helen Sauls-August
State House, Independent Avenue, Bhisho 5605 Tel: +27 40 609 6626 Fax: +27 40 639 1419 Website: www.ecprov.gov.za
31-33 Phillip Frame Road, Waverly Park, Chiselhurst, East London Tel: +27 43 711 9777 Fax: +27 43 711 9785 Website: www.ecdhs.gov.za Department of Roads and Public Works MEC: Thandiswa Marawu
Department of Cooperative Governance and Traditional Affairs MEC: Fikile Xasa
5 Qasana Building, Independence Avenue, Bhisho 5605 Tel: +27 40 609 4648 Fax: 086 298 5598 (SA) Website: www.ecdpw.gov.za
Tyamzashe Building, Room 2124, 2nd Floor, Bhisho 5605 Tel: +27 40 609 5788/5789 Fax: +27 40 639 2135 Website: www.eclgta.ecprov.gov.za
Department of Rural Development and Agrarian Reform MEC: Mlibo Qoboshiyane
Department of Economic Development, Environmental Affairs and Tourism MEC: Sakhumzi Somyo
Dukumbane Building , Independence Avenue, Bhisho 5606 Tel: +27 40 609 3472 Fax: +27 40 636 3462 Website: www.drdar.gov.za
2nd Floor, Beacon Hill, Hockley Close, King Williams Town 5600 Tel: +27 43 605 7006/7216 Fax: +27 43 605 7306 Website: www.dedea.gov.za
Department of Safety and Liaison MEC: Weziwe Tikana
Department of Education MEC: Mandla Makupula
Stellenbosch Park, Flemming St, Schornville, King Williams Town 5601 Tel: +27 43 604 7414 Fax: 086 298 5598 Website: www.ecprov.gov.za
Steve Tshwete Education Building, Zwelitsha Zone 6, Zwelitsha Tel: +27 40 608 4202 Fax: +27 40 608 4247 Website: www.ecdoe.gov.za
Department of Social Development MEC: Mrs Nancy Sihlwayi Cnr Hockley and Hargreaves Streets, Beacon Hill, King Williams Town 5600 Tel: +27 43 605 5210 Fax: +27 43 605 5472 Website: www.ecdsd.gov.za
Department of Health MEC: Dr Pumza Dyantyi
Dukumbane Building, Independence Avenue, Bhisho 5605 Tel: +27 40 608 1114 Fax: +27 40 608 1118 Website: www.echealth.gov.za EASTERN CAPE BUSINESS 2017
LISTING Department of Sports, Recreation, Arts and Culture MEC: Dr Pemmy Majodina
Provincial Treasury MEC: Sakhumzi Somyo
Provincial Treasury , Tyamzashe Building, Bhisho 5605 Tel: +27 40 609 5755/5014 Fax: +27 40 639 1030 Website: www.ectreasury.gov.za
Wilton Zimasile Mkwayi Building, 5 Eales Street, King Williams Town 5600 Tel: +27 43 604 4101 | Fax: +27 43 642 6759 Website: www.ecsrac.gov.za Department of Transport MEC: Weziwe Tikana
Stellenbosch Park, Flemming St, Schornville, King Williams Town 5601 Tel: +27 43 604 7414 | Fax: 086 298 5598 Website: www.ectransport.gov.za
Eastern Cape Local Government ALFRED NZO DISTRICT MUNICIPALITY Erf 1400, Ntsizwa Street, Mount Ayliff Tel: +27 39 254 5000 | Fax: +27 39 254 0343 Email: firstname.lastname@example.org Website: www.andm.gov.za
AMATHOLE DISTRICT MUNICIPALITY 40 Cambridge Street, East London Tel: +27 43 701 4000 | Fax: +27 43 742 0337 Email: email@example.com Website: www.amathole.gov.za
Matatiele Local Municipality
Amahlathi Local Municipality
Tel: +27 39 737 8100 Fax: +27 39 737 3611 Website: www.matatiele.gov.za
Tel: +27 43 683 5000 | Fax:+27 43 683 2970 Website: www.amahlathi.gov.za
Mbizana Local Municipality
Tel: +27 43 831 1028 | Fax: +27 43 831 1483 Website: www.greatkeilm.gov.za
Great Kei Local Municipality
Tel: +27 39 251 0230 Fax: +27 39 251 0917 Website: www.mbizana.gov.za
Mbashe Local Municipality
Ntabankulu Local Municipality
Tel: +27 47 489 5800 | Fax: +27 47 489 5800 Website: www.mbhashemun.gov.za
Tel: +27 39 258 0056 Fax: +27 39 258 0173 Website: www.ntabankulu.gov.za
Mnquma Local Municipality
Tel: +7 47 401 2400 | Fax: +27 47 491 0195 Website: www.mnquma.gov.za
Umzimvubu Local Municipality
Ngqushwa Local Municipality
Tel: +27 39 255 8500 Fax: +27 39 255 0167 Website: www.umzimvubu.gov.za
Tel: +27 40 673 3095 | Fax: +27 40 673 3771 Website: www.ngqushwamun.gov.za
EASTERN CAPE BUSINESS 2017
Raymond Mhlaba Local Municipality
Elundini Local Municipality
Tel: + 27 46 7400 Fax: +27 46 645 2562
Tel: +27 45 932 8100 | Fax: +27 45 932 1094 Website: www.elundini.org.za
BUFFALO CITY METROPOLITAN MUNICIPALITY 117 Oxford Street, Cnr North & Oxford Streets, Trust Centre, East London Tel:+27 43 705 2000 | Fax:+27 43 743 1688 Website: www.buffalocity.gov.za
Walter Sisulu Local Municipality
Tel: + 27 51 653 1777 Fax: + 27 51 653 0056 Senqu Local Municipality
Tel: +27 51 603 1300 | Fax: +27 51 603 0445 Website: www.senqumunicipality.co.za
CHRIS HANI DISTRICT MUNICIPALITY 15 Bells Road, Queenstown Tel: +27 45 808 4600 | Fax: +27 45 838 1556 Website: www.chrishanidm.gov.za
NELSON MANDELA BAY METROPOLITAN MUNICIPALITY City Hall, Vuyisile Mini Square, Govan Mbeki Avenue, Nelson Mandela Bay Tel: +27 41 506 3208/9 Fax: +27 41 506 2422 Website: www.nelsonmandelabay.gov.za
Emalahleni Local Municipality
Tel: +27 47 878 0020 | Fax: 049 878 0112 Website: www.emalahleni.gov.za Engcobo Local Municipality
OR TAMBO DISTRICT MUNICIPALITY OR Tambo House, Nelson Mandela Drive, Myezo Park, Mthatha Tel: +27 47 501 6400 Fax: +27 47 532 6518 Website: www.ortambodm.gov.za
Tel: +27 47 548 5600 | Fax: +27 47 548 1078 Website: www.engcobolm.gov.za Enoch Mgijima Local Municipality
Tel: + 27 45 807 2606 Fax: +27 45 807 2637 Website: www.lukhanji.co.za
Ingquza Hill Local Municipality
Tel: +27 39 252 0131 Fax: +27 39 252 0699 Website: www.ihlm.gov.za
Intsika Yethu Local Municipality
Tel: +27 47 874 8700 | Fax: +27 47 874 0010 Website: www.intsikayethu.gov.za
King Sabata Dalindyebo Local Municipality
Inxuba Yethemba Local Municipality
Tel: +27 47 501 4000 | Fax: +27 47 531 3128 Website: www.ksd.gov.za
Tel: +27 48 801 5000 Fax: +27 48 881 1421 Website: www.iym.co.za
Mhlontlo Local Municipality
Sakhisizwe Local Municipality
Tel: +27 47 553 7000 | Fax: +27 47 553 0189 Website: www.mhlontlolm.gov.za
Tel: +27 47 877 5200 Fax: +27 47 877 0000 Website: www.sakhisizwe.gov.za
Nyandeni Local Municipality
Tel: +27 47 555 5000 | Fax: +27 47 555 0202 Website: www.nyandenilm.gov.za
JOE GQABI DISTRICT MUNICIPALITY Cnr Cole and Graham Streets, Barkly East Tel: +27 45 979 3000 Fax: +27 45 971 0251 Website: www.jgdm.gov.za EASTERN CAPE BUSINESS 2017
Port St Johns Local Municipality
Tel: +27 47 564 1207 Fax: +27 47 564 1206 Website: www.psjmunicipality.gov.za
SARAH BAARTMAN DISTRICT MUNICIPALITY 32 Govan Mbeki Avenue, Port Elizabeth Tel: +27 41 508 7111 Fax: +27 41 508 7000 Website: www.sarahbaartman.co.za
Kou-Kamma Local Municipality
Tel: +27 42 288 7200 | Fax: +27 42 288 0797 Website: www.koukammamun.co.za Makana Local Municipality
Dr Beyers Naude Local Municipality
Tel: +27 46 603 6131 Fax: +27 46 622 9700 Website: www.makana.gov.za
Tel: +27 49 807 5700 | Fax: +27 49 892 4319 Website: www.camdeboo.gov.za
Ndlambe Local Municipality
Blue Crane Route Local Municipality
Tel: +27 46 624 1140 Fax: +27 46 624 2669 Website: www.ndlambe.gov.za
Tel: +27 49 807 5700 | Fax: + 27 49 892 4319 Website: www.bcrm.gov.za
Sundays River Valley Local Municipality
Kouga Local Municipality
Tel: +27 42 230 7700/0077 Fax: +27 42 230 1799 Website: www.srvm.gov.za
Tel: +27 42 200 2200 | Fax: +27 42 200 8606 Website: www.kouga.gov.za
Municipalities in the Eastern Cape
LESOTHO Free State
Alfred Nzo Matatiele
Engcobo Intsika Yethu
OR Tambo Ingquza Hill
Port Nyandeni St Johns King Sabata Dalindyebo Mbhashe
Nxuba Blue Crane Route Dr Beyers Naude
Sarah Baartman Ngqushwa
Makana Sundays River Valley
Nelson Mandela Bay
INDIAN OCEAN Metropolitan/District Municipality Boundary Local Municipality Boundary District Municipality Local Municipality
Chris Hani Nxuba
EASTERN CAPE BUSINESS 2017
INDEX Amatola Water ................................................................................................................................................. 1, 48 Blue Lagoon Hotel & Conference Centre ................................................................................................... 59 Border Kei Chamber of Business ................................................................................................................... 20 Eastern Cape Development Corporation (ECDC) ........................................................................... 6, OBC Eastern Cape Information Technology Initiative (ECITI) ...................................................................... 51 East London Industrial Development Zone (ELIDZ) .............................................................................. 16 Masisizane Fund ................................................................................................................................................. 28 Nedbank ....................................................................................................................................................... 24 - 27 Nelson Mandela Bay Business Chamber .................................................................................................... 18 Unemployment Insurance Fund (UIF) ........................................................................................................... 3
EASTERN CAPE BUSINESS 2017
FREE STATE BUSINESS
LIMPOPO BUSINESS THE GUIDE TO BUSINESS AND INVESTMENT IN LIMPOPO PROVINCE
THE GUIDE TO BUSINESS AND INVESTMENT
DEVELOPMENT IN SOUTH AFRICA
Mangaung Metropolitan Municipality Annual Performance Report
THE GUIDE TO BUSINESS AND INVESTMENT IN THE EASTERN CAPE PROVINCE
WESTERN CAPE BUSINESS
JOIN US ONLINE
THE GUIDE TO BUSINESS AND INVESTMENT IN THE WESTERN CAPE PROVINCE
THE GUIDE TO BUSINESS AND INVESTMENT IN THE WESTERN CAPE
AL DEVELOPM DU S TRI ENT
EASTERN CAPE BUSINESS OF IN
WESTERN CAPE BUSINESS
THE GUIDE TO BUSINESS AND INVESTMENT IN SOUTH AFRICA
For 75 years, the IDC has been committed to leading industrial development in South Africa. It is this commitment that has enabled us to grow key industries and facilitate job creation, ensuring a positive contribution to the growth of our economy. If you’re an entrepreneur and have a business plan that is JOIN USrelevant ONLINEto an industry that the IDC supports and require funding WWW.FREESTATEBUSINESS.CO.ZA of R1 million or more, take the lead and make history. Call the Polokwane office on 015 299 4080 or visit idc.co.za to learn more about the funding criteria for the sectors that the IDC supports.
THE GUIDE TO BUSINESS AND INVESTMENT IN LIMPOPO
SOUTH AFRICAN BUSINESS
SOUTH AFRICAN BUSINESS 75 YEARS OF INDUSTRIAL
THE GUIDE TO BUSINESS AND INVESTMENT IN THE FREE STATE PROVINCE
Global Africa Network JOIN US ONLINE
Promoting business, trade and investment in SA’s nine provinces 2017
JOIN US ONLINE
REUBEN MABUTHO ZWANE BUSINESSMAN OF THE YEAR 2016
JOIN US ONLINE
Tel Email Web
021 657 6200 firstname.lastname@example.org www.gan.co.za
Published on Oct 17, 2012
The 2017 edition of Eastern Cape Business is the ninth issue of this highly successful publication that, since its launch in 2006, has estab...