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FREE STATE BUSINESS THE GUIDE TO BUSINESS AND INVESTMENT IN THE FREE STATE PROVINCE

Property Property management management

Investment Investment facilitation facilitation

Export Export promotion promotion JOIN US ONLINE Tel:Tel: 051051 400400 0800 0800 Email: Email: lesley@fdc.co.za info@fdc.co.za Web: Web: www.fdc.co.za www.fdc.co.za

WWW.FDC.CO.ZA | WWW.FREESTATEBUSINESS.CO.ZA

2016 EDITION

Driving Driving Economic EconomicDevelopment Development ininthe theFree FreeState StateProvince Province


Reasons to invest in the Free State

FINANCE READINESS

The Free State offers an abundance of opportunities for ACCOUNTING & ADVICE NEED FINANCE? local and international investors and traders, through the Free State Development Corporation. Addresses the common challenges the country to provide you with business assistance. to accessing finance LEARN ABOUT FINANCE

What is finfind?

finfind is an online one-stop solution that brings together both the providers of small business finance and the seekers of small business finance, with a focus on finance readiness. There are 4 parts to finfind: LEARN - Learn about access to finance LEARN ABOUT FINANCE

NEED FINANCE - Check to see if your business is ready to apply for finance

NEED FINANCE?

GET ADVICE - Link to expert small business advisors ACCOUNTING & ADVICE

GET READINESS TOOLS - Access tools to help you with your financial management READINESS TOOLS

How to use finfind

• You can use a mobile phone or any device connected to the internet • Type www.finfindeasy.co.za to access finfind

Helps you check if you are ready to access finance finfind helps you find out how ready you are to access finance. That way, you don’t waste hours of your time completing applications only to find that they are rejected. If you are ready for finance, finfind will link you to lenders that match your requirements. If you are not yet ready, finfind will give you handy tips to help you prepare.

Provides simple finance readiness tools

How will finfind help you?

AdminEasy is a training tool that helps you setup and maintain a manual admin and finance recordkeeping system in your business. www.AdminEasy.co.za

The Finance Readiness Quiz tells you upfront if your business is ready to apply for finance and if you’re not, finfind identifies your problem areas and gives you handy tips to solve the problems.

SMEasy is an online business management and accounting tool for small businesses specifically designed for entrepreneurs who don’t understand accounting. It will help you to easily produce financial statements. www.SMEasy.co.za

finfind helps you learn about the different types of finance, how they work and what lenders expect of you.

Seda National Information Centre • 0860 103 703 • www.seda.org.za

READINESS TOOLS

About the Free State

Factors that favour investment in the Free State

ince has excellent infrastructure

• Most developed telecommunications network in Africa.

finfind addresses the common challenges that positioning the province as a favourable business Situated in the heart of South Africa, Factors Helps you understand the most For example: theentrepreneurs Free State isdeal thewith. country’s and investment destination: different types of finance What if you don’t have collateral? with easy access to markets within third-largest province and bor- • Centrally located What if you have a bad record? South Africa and ders Lesotho as well as sixcredit of the Africa.provides information about the different finfind Understanding the credit record system eight other provinces, including • Availability of atypes largeof and affordable labour pool. businesses. finance available to small What are lenders lookingcentre, for? the country’s economic • Excellent infrastructure (roads, rail, airports, offices, For example: Different types of finance Gauteng. education, banking and medical facilities). The Free State is anSurety ideal • Competitive land and costs. to start a business? Understanding Personal • Do youbuilding need finance trading partner both within South • Low factory rentals. • Do you need finance to expand your business? Africa, and with Africa and other • Abundance of •natural Do youresources. need finance to buy a building? Provides small businesses with international markets. The prov- • Recreational and lifestyle facilities. • Do you need finance to buy equipment? access to advice Do and you transport need helplinks, with and yourprovides financial statements, • Open to business, trade and investment. Whatever yourforeign need, finfind has a module you budgets, cash flow projections, tax of advice BEE of required skills pool. • and Availability easy access to the main ports can read that tells you what finance options are certificates Durban,etc.? East London and Port • Attractive investment regime. available and how they work! Elizabeth.

Visit: www.fdc.co.za

We have partnered with a number of accredited Helps you understand the institutions to help with accountingECONOMIC and business ACTIVITY IN THE FREE STATE different types of lenders advice. finfind can link you to professional accountants and consultants who can help you This graph reflects the Banks, private lenders andNote: government Lejweleputswa become finance ready. funders all lend money toregions of the Free State and the percentage population 23.2small businesses but each lender in each, in addition to the Seda has 44 branches has their own unique focus areas dominant economic Mining (primarily Fezile Dabi sectors. and their own qualifying criteria. Wholesale, retail across the country with gold), agriculture finfind will help17.3 you find out how and trade finance, business advisors who can (primarilythey choose which businesses to real estate and help you. maize) fund and Mining, agriculture what they expect from you. business services, and manufacturing SAIPA has over 10 000 transport and communication, professional accountants Motheo community and across the country who 27.4 social services, can assist you with your Xhariep mining, Thabo finance readiness. 5.2 agriculture Mofutsanyana IBASA has accredited 26.8 Agriculture and business advisors across Agriculture, tourism mining (especially (Drakensberg and Maluti mountains, Golden Gate Highlands National Park)

diamonds), tourism (Gariep Dam)


a

LEARN ABOUT FINANCE

NEED FINANCE?

Addresses the common challenges to accessing finance finfind addresses the common challenges that most entrepreneurs deal with. For example: What if you don’t have collateral? What if you have a bad credit record? Understanding the credit record system What are lenders looking for? Different types of finance Understanding Personal Surety

Provides small businesses with access to advice Do you need help with your financial statements, budgets, cash flow projections, tax advice and BEE certificates etc.? We have partnered with a number of accredited institutions to help with accounting and business advice. finfind can link you to professional accountants and consultants who can help you become finance ready. Seda has 44 branches across the country with business advisors who can help you. SAIPA has over 10 000 professional accountants across the country who can assist you with your finance readiness. IBASA has accredited business advisors across

ACCOUNTING & ADVICE

READINESS TOOLS

the country to provide you with business assistance.

Helps you understand the different types of finance finfind provides information about the different types of finance available to small businesses. For example: • Do you need finance to start a business? • Do you need finance to expand your business? • Do you need finance to buy a building? • Do you need finance to buy equipment? Whatever your need, finfind has a module you can read that tells you what finance options are available and how they work!

Helps you understand the different types of lenders Banks, private lenders and government funders all lend money to small businesses but each lender has their own unique focus areas and their own qualifying criteria. finfind will help you find out how they choose which businesses to fund and what they expect from you.


S/0

MESSAGE

The The business business of of the Free State

CONTENTS CONTENTS South Africa in brief South Africa in brief

I

n n this this publication publication we we will will attempt attempt to to paint paint aa comprehensive comprehensive canvas canvas on this golden province, the Free State, and how on this golden province, the Free State, and how it it fifits ts into into the the bigger bigger picture that that is is South South Africa. Africa. We We will will strive strive to to tell tell the the reader reader about about the the picture resources resources and and the the endless endless possibilities possibilities in in the the Free Free State. State. This This book book is is intended to to be be an an essential, essential, region-specifi region-specificc reference reference guide guide for for entreentreintended preneurs preneurs and and investors investors eyeing eyeing the the Free Free State State as as aa business business destination. destination. We have outlined in greater detail in this publication We have outlined in greater detail in this publication an an overview overview of of the the Free State State as as an an investment investment destination. destination. We We take take the the reader reader through through the the Free province’s natural, agricultural and mineral resources and opportunities arising out of its unique advantages as South Africa’s most central province. We will also inform our readers about the enterprise development, export promotion and investment facilitation efforts of the Free State Development Corporation, the province’s economic development arm which has been tasked with fast-tracking the Free State’s economic development agenda. The Free State is evolving into one of the country’s fastest-developing regions in the country, thanks to a number of game-changing projects unfolding in the province’s districts. One of the pillars of our development strategy as the Free State Province is is to to attract attract investment investment and and also also position position the the industrial industrial sector sector as as aa key key contributor contributor to to economic economic growth growth and and development development in in the the province. province. We We also also wanted wanted to to come come up up with with development development models models that that would would grow grow the the economy economy in in aa sustainable sustainable manner manner so so that that this this province province does does not not lose lose its its precious precious human human and and natural natural resources resources to to other other provinces provinces and and so so that that itit actually actually creates creates wealth wealth for for its its people people where where they they live. live. We place these initiatives in the public We place these initiatives in the public domain domain so so that that local local entrepreneurs entrepreneurs and and international international investors investors will will embrace embrace this this province as their business destination of choice. province as their business destination of choice.

IKHRAAM OSMAN IKHRAAM OSMAN Chief Executive Officer, FDC Chief Executive Officer, FDC

FREE STATE BUSINESS 2016

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5 5

Regional Regional overview overview of of the the Free Free State State Province Province 9 9 Free Free State State Development Development Corporation: Profi Profile le Corporation:

15 15

South African African South investment investment incentives incentives

16 16

Establishing Establishing aa business business in South Africa

18

Free State investment opportunities

20

Mangaung Metropolitan Municipality 30 Interview with the provincial manager of SEDA Free State, Jackie Jackie Ntshingila Ntshingila

32 32

Agriculture Agriculture

36 36

Mining Mining

38 38

Manufacturing Manufacturing

40 40

Oil Oil & & Gas Gas

42 42

Logistics & Transport Logistics & Transport

46 46

Tourism Tourism

47 47

Mangaung Chamber of Mangaung and Chamber of Commerce Industry Commerce and Industry

48 48

Reasons to invest Reasons toState invest in the Free in the Free State

IBC IBC


DURA-BUMP THE WORLDS MOST ADVANCED TRAFFIC CALMING SOLUTION DURA-BUMP is an innovative, new, effectively designed traffic calming speed bump devised to address the current shortfalls in road safety. Due to the many benefits of the unique design of our polyurethane Dura-Bump speed bumps they are successfully already in use as well as approved by a growing number of municipalities, shopping centres, business parks, gated communities and many other sectors in South Africa. This new technology has zero slippage, minimal impact on vehicle wheel alignment, is safe enough to drive over with low profile vehicles.

Dura-Bumps are high quality yet remain costeffective, with the price of installing one tar hump Dura-Bump’s unique quick installation process equal to three complete Dura–Bump site requires minimal labour resources; reducing installations. Dura-Bump’s patented design costs. Each Dura-Bump is securely bonded to improves the effectiveness as well as minimising the road surface (paving, cobblestone and tar the destructive effects of current speed cautioning surfaces) with a high tech epoxy. This allows the devices. Dura-Bumps have increased ability to Dura-Bump installation team to open a absorb impact, reduced noise levels and they are municipal road just 30 minutes after durable while remaining maintenance free. Both installation. The speed bumps are placed in a municipalities – to the level of HOD of Traffic – staggered formation and to enhance night and the private sector testify to the overwhelming visibility, cat eyes are positioned on both sides impact that the Dura-Bump solution has in of the bumps. reducing the number of accidents in areas where it has been installed. After the installation of Dura-Bumps the speed of drivers on a residential road is reduced to As part of our Community Service Initiatives, we 30km/h. However, due to the skid resistance of run a successful job creation and training the polyurethane blend it is still safe enough to programme. As part of our drive towards a greener drive over the bumps at a maximum speed limit product, the company makes use of recycled of 60km/h. rubber in the Dura-Bump manufacturing process.

CONTACT US 0861 292965 info@durabump.com www.durabump.com


FOREWORD

A A province province of of vast vast potential potential A unique guide to business and investment in the Free State. A unique guide to business and investment in the Free State.

W

elcome to the 2016 edition of Free State Business, which profiles and pays elcometo toathe 2016province edition ofwithin Free State Business, lesas and pays tribute unique South Africawhich whichprofi serves a logistribute to a unique province within South Africa which serves as a logistical hub between the other provinces, as well as providing abundant tical hub between natural and human resources.the other provinces, as well as providing abundant natural and human The Free State is aresources. province that pulls its weight in terms of the country’s economy, FreeaState is a province weight in terms the country’s economy, butThe it is also shining example that of fairpulls playitsand ingenuity. TheofPremier, Ace Magashule, but it is also awith shining example of fairState playof and Premier, announced pride in his 2015 theingenuity. ProvinceThe Address thatAce theMagashule, Provincial announced pride in State of the Province Address that also the Provincial Treasury hadwith brought in his its fi2015 fth consecutive clean audit. He was proud to Treasury had brought in State its fifth consecutive audit. He proud to to announce that the Free had secured anclean allocation of 1was 500also plumbers announce that the Free State had secured an allocation of 1 500 plumbers to play its part in the national government’s innovative jobs creation programme play itsatpart in leaks the national government’s innovative creation programme aimed fixing around the country to conserve ourjobs precious water resources. aimed at fi xing leaks around the country to conserve our precious water resources. “In addition,” said Magashule, “unemployed graduates with relevant skills in areas “Inasaddition,” Magashule, with relevant skills in areas such financialsaid accounting and“unemployed engineeringgraduates will be deployed to municipalities such as financial and engineering will be deployed municipalities to address criticalaccounting skills challenges. This will also strengthen ourto commitment to to address critical skills challenges. This will also strengthen our commitment to advance youth empowerment.” advance youth empowerment.” The Free State has abundant investment and business opportunities, and in State hasBusiness abundant investment and business opportunities, and in thisThe issueFree of Free State we provide an indepth profile for more than 20 such this issue The of Free State Business we provide an indepth forState moreDevelopment than 20 such projects. projects in question are all promoted byprofi the le Free projects. The the projects in agency questionresponsible are all promoted by the Free State Development Corporation, official for driving economic development in Corporation, the offi cial agency responsible for driving economic development in the Free State. For more information, visit their website (www.fdc.co.za). theFree FreeState State. For more visiton their website (www.fdc.co.za). which Business caninformation, also be viewed www.freestatebusiness.co.za, Free State Business also benewsletter. viewed on www.freestatebusiness.co.za, which is complemented by can a regional is complemented by a regional newsletter. Chris Whales Chris Whales Publisher, Global Africa Network Media Publisher, Global Africa Network Media

Email: chris@gan.co.za Email: chris@gan.co.za

DISTRIBUTION DISTRIBUTION Free State Business is distributed

internationally on outgoing and Free State trade Business is distributed on outgoing and incoming missions, through internationally trade and investment agencies; to incoming through and investment agencies; to foreign offitrade ces inmissions, South Africa’s maintrade trading partners around the world; foreign offices inand South Africa’s main trading partners world; at top national international events; through thearound offices the of foreign at top national and international theand offices of foreign representatives in South Africa; asevents; well asthrough nationally regionally via representatives in Southtourism Africa; as nationally and regionally via chambers of commerce, offiwell ces,as trade and investment agencies, chambers commerce,departments, tourism offices, trade and investment agencies, provincial of government municipalities and companies. provincial government departments, municipalities and companies. Member of the Audit Bureau Member of the Audit Bureau of Circulations of Circulations

COPYRIGHT | Free State Business is an independent publication published COPYRIGHT | Free State Business is anLtd. independent publication published by Global Africa Network Media (Pty) Full copyright to the publication by Global Media (Pty) Ltd. FullLtd. copyright vests with Africa GlobalNetwork Africa Network Media (Pty) No part to of the publication vestsbe with Global Africa Network (Pty) No part of the publication may reproduced in any form Media without theLtd. written permission of Global may be reproduced any Ltd. form without the written permission of Global Africa Network Mediain(Pty) Africa Network Media (Pty) Ltd. PHOTO CREDITS | Pictures supplied by Free State Development CorporPHOTO CREDITS | Pictures supplied by Free State Corporation, Transnet, Pixabay, iStock, SA Tourism, Sasol andDevelopment Media Club SA. ation, Transnet, Pixabay, iStock, SA Tourism, Sasol and Media Club SA.

FREE STATE BUSINESS 2016

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Publisher Publisher Chris Whales Chris Whales Publishing director Publishing director Robert Arendse Robert Arendse Editor Editor Simon Lewis Simon Lewis Writing Writing John Young John Young Art director Art director Brent Meder Brent Meder Production Production Linda Tom Linda Tom Account representatives Account representatives Gabriel Venter Gabriel Venter Sam Oliver Sam Oliver Managing director Managing director Clive During Clive During Administration Administration & accounts & accounts Charlene Steynberg Charlene Steynberg Natalie Koopman Natalie Koopman Distribution Distribution Edward MacDonald Edward MacDonald Printing Printing FA Print FA Print

PUBLISHED BY PUBLISHED BY Media (Pty) Ltd Global Africa Network

Global Africa NetworkNo: Media (Pty) Ltd Company Registration 2004/004982/07 Company Clive Registration 2004/004982/07 Directors: During,No: Chris Whales Directors:address: Clive During, Chris Whales Physical 28 Main Road, Rondebosch 7700 Physical address: Main Road, Rondebosch Postal address: PO28Box 292, Newlands 7701 7700 Postal PO Box 292, Newlands 7701 Tel: +27address: 21 657 6200 | Fax: +27 21 674 6943 Tel: +27info@gan.co.za 21 657 6200 | Fax: +27 21www.gan.co.za 674 6943 Email: | Website: Email: info@gan.co.za | Website: www.gan.co.za

DISCLAIMER | While the publisher, Global Africa Network Media DISCLAIMER | While the publisher, Africa Media (Pty) Ltd, has used all reasonable effortsGlobal to ensure thatNetwork the information (Pty) Ltd, has all reasonable orts to ensure that the information contained inused Free State Business iseffaccurate and up-to-date, the pubcontained Free State Business isasaccurate and up-to-date, the publishers makeinno representations to the accuracy, quality, timeliness, lishers make no representations as to the accuracy, timeliness, or completeness of the information. Global Africaquality, Network will not or completeness of the information. Globalsuff Africa will accept responsibility for any loss or damage eredNetwork as a result of not the accept responsibility any loss or damage suffered as a result of the use of or any reliancefor placed on such information. use of or any reliance placed on such information.


SPECIAL FEATURE

South Africa in brief South Africa is a stable, multi-racial democracy with a vibrant civil society.

es es

South Africa’s rich natural and mineral resources are enhanced by astonishing natural beauty.

S

and municipal. The nine provinces each have a premier and a legislature and they have certain limited powers. Municipalities provide services such as water, electricity and waste removal. South Africa has 278 municipalities, comprising eight metropolitan, 44 district and 226 local municipalities. They are focused on growing local economies and providing ZIMBABWE BOTSWANA Limpopo NAMIBIA North West

Mpumalanga Gauteng SWAZILAND

Free State FREE STATE Northern Cape

MOZAMBIQUE

outh Africa’s peaceful political transition was one of the most remarkable political feats of the past century. The magnitude of the constitutional and institutional re-design had a deep transformative impact on the entire system of government as well as the region. Today, South Africa is a stable, multi-racial democracy with a vibrant civil society. The African National Congress (ANC) has been driving the policy agenda since 1994. In 2015 South Africa celebrated 21 years of democracy. Sound financial management has seen South Africa’s macroeconomic fundamentals become strong off the shaky base the apartheid regime created. In particular, prudent controls meant that South Africa was able to withstand the shockwaves sent around the world by the international financial sector meltdown. South Africa has the 24th-largest economy in the world and contributes 30% of Sub-Saharan GDP despite having only 6.5% of the population. There are three levels of government: national, provincial

KwaZuluNatal

LESOTHO

Eastern Cape Western Cape

5

FREE STATE BUSINESS 2016


SPECIAL FEATURE

infrastructure and service. Municipalities prepare, implement and review integrated development plans (IDPs) that are blue prints for programme planning, budgeting, performance monitoring, reporting and implementation.

Geography and climate South Africa’s location between the Atlantic and Indian oceans ensures a generally temperate climate. The 2 954km coastline stretches from the border with Namibia on the Atlantic to the border with Mozambique in the east. The cold Benguela current sweeps along the western coast while the warm Indian Ocean ensures that the and west mark the distinction between the fertile coastal strip and the dry interior known as the Karoo. The Mozambique/ Agulhas current is temperate. Most of the country has summer rainfall, but the Western Cape receives its rain in winter. Droughts are not uncommon and although the national average is 464mm, most of the country receives less than 500mm of rain every year. The Orange and Vaal rivers play important roles in water schemes and irrigation and the Limpopo River defines the country’s northern boundary. South Africa’s coastal plain is separated from the interior by several mountain ranges, mostly notably the Drakensberg, which runs down the country’s eastern flank. A number of rivers run strongly from the Drakensberg to the sea, but South Africa has no navigable rivers. Smaller ranges in the south and

west mark the distinction between the fertile coastal strip and the dry interior known as the Karoo. Maize is produced in large quantities in the interior, with the Free State province prominent. The dry interior mostly supports livestock in the form of sheep and cattle. South Africa is the world leader in mohair production. Wines and fruit are specialities of the Western Cape while KwaZulu-Natal and the low-lying areas of Mpumalanga are known for sugar cane and tropical and subtropical fruits, Limpopo is a major vegetable producer.

South African economy The economy of South Africa is the second largest in Africa, behind Nigeria. It accounts for 24% of Africa’s gross domestic product in terms of purchasing power parity. The World Bank ranks South Africa, as an upper-middle income economy. This makes the country one of only four countries in Africa in this category (the others being Botswana, Gabon and Mauritius (World Bank Report on South Africa, 2014). South Africa has a comparative advantage in the production of agriculture, mining and manufacturing products relating to these sectors. South Africa has shifted from a primary and secondary economy in the mid-twentieth century to an economy driven primarily by the tertiary sector in the present day which accounts for an estimated 65% of GDP or $230 billion in nominal GDP terms. The country’s economy is reasonably diversified with key economic sectors

SOUTH AFRICA’S GDP, Quarter 3, 2015 Source: Statistics SA 2015 (figures in %)

Construction 3.8

Agriculture, forestry & fishing 2.3

FREE STATE BUSINESS 2016

Wholesale, retail, motor trade & accommodation 15.1

6

Electricity, gas & water 2.4 Mining & quarrying 8.3 Manufacturing 13.8


SPECIAL FEATURE

including mining, agriculture and fisheries, vehicle manufacturing and assembly, food processing, clothing and textiles, telecommunication, energy, financial and business services, real estate, tourism, transportation, and wholesale and retail trade South Africa recorded a significantly weaker rate of economic growth in the first quarter of 2015, mainly affected by developments in the manufacturing and agricultural sectors. Adverse climatic conditions underpinned the sharply lower agricultural output, but the domestic economy is facing serious challenges both on the demand and supply fronts. Slowing household spending, generally weak investment activity and fiscal constraints are affecting domestic demand, while trading conditions in key external markets remain challenging. On the supply side, insufficient and unstable electricity supply, rising input costs, difficult industrial relations and regulatory or policy related factors are affecting the performance of business enterprises and their investment plans. Although South Africa’s export sector is taking strain due to subdued demand in the Eurozone and Chinese markets, trade with the rest of the African continent is growing rapidly. Motor vehicle exports increased strongly in the first quarter of 2015 on a year-on-year basis, but depressed commodity prices affected export proceeds despite the rebound in mining sector output. Other African markets accounted for 29% of South Africa’s overall merchandise exports and for 41% of the country’s manufactured exports in the opening quarter of the year.

Finance, real estate & business services 22.1

The South African economy created 140 000 new employment opportunities in its formal and informal sectors in the first quarter of 2015, compared to the preceding quarter. Most of these jobs were created in the financial and business services sector as well as in agriculture. The broader trade sector shed a substantial number of jobs, followed by the transport and the community and social services sectors. The unemployment rate rose to 26.4%, the highest level since 2002. Products featuring prominently in the export basket to the Eurozone include motor vehicles and components, platinum, basic iron and steel, nonferrous metal ores (e.g. chrome, manganese), iron ore, processed food and beverages. Hence, domestic enterprises in these sectors are likely to continue facing difficult demand conditions in the short-term. South Africa seeks to promote regional integration at three levels: the South African Customs Union (SACU), the South African Development Community (SADC) and the Tripartite Free Trade Area (T-FTA) between SADC, the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC) covering 26 countries with a population of 626-million and a GDP of US$1-trillion. South Africa is championing a developmental integration model that combines market integration, co-ordinated cross-border infrastructure development, and policy co-ordination to develop and diversify industrial capacity. With regard to the USA, the fact that South Africa secured the extension of AGOA (although detrimental concessions had to be made with respect to poultry imports) is likely to translate into future

General government services 17.0

7

Transport, storage & communication 9.3 Personal services 5.9

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The African continent has become an increasingly important market for South African exports, having accounted for 29% of overall merchandise exports in the first quarter of 2015. Furthermore, approximately 41% (or R57-billion) of South Africa’s total manSource: StatsSA 3rd Quarter GDP Report 2014 ufactured exports were sold in other African markets in the first quarter of benefits for the export sector. The automotive 2015, thus exceeding — by a substantial margin — industry should be the principal beneficiary, con- the R31-billion that had been earned in manufacsidering that 75% of US imports from South Africa tured exports to the European Union. under AGOA consist of passenger vehicles, with The diverse structure of the South African the corresponding figure for automotive products economy is a critical aspect of its historical and cur(including components, parts and accessories) rent growth performance. The structure of the South exceeding 80%. African economy is dominated by services which Trading opportunities on the African continent contributed an average of 68% to the economy should be explored with more vigour so as to take between 2011 and 2013. The manufacturing sector advantage of the robust growth momentum fore- continues to play a significant role in the South cast for many African economies. Furthermore, dip- African economy due to its multiplier effects. lomatic efforts towards the creation of a Tripartite South Africa is considered a low-risk investment Free Trade Area encompassing 26 African countries destination for investors looking for a foothold into are gaining momentum, with the eventual trade Africa. As the continent’s largest African investor, and investment related opportunities likely to South Africa sends more than 25% of its manufacemerge in the years ahead. tured products into the continent. Through investment incentives and industrial South Africa should pursue regional integration opportunities through enhanced intra-regional financing interventions, the government actively trade and investment, with positive implications for seeks to encourage commercial activity and attract domestic manufacturing capacity and employment. foreign capital. SECTORAL % GDP CONTRIBUTIONS IN YEARS Primary Manufacturing Tertiary Total Industries Industries 2011 12% 20% 68% 100% 2012 12% 21% 68% 100% 2013 11% 21% 68% 100%

Real GDP growth by industry, Quarter 1, 2015 Source: Statistics SA 2015 (figures in %)

–16.6

10.2 Mining Finance & business services 3.8 Transport & Communications 1.2 1.2 Trade & Accommodation Personal Services 0.9 Construction 0.8 Electricity 0.7 –0.8 Government –2.4 Manufacturing Agriculture, Forestry & Fishing Table reflects the % change (quarter on quarter)

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SPECIAL FEATURE

Free State in brief South Africa’s most central province, the Free State shares its borders with six other provinces, in addition to the Mountain Kingdom of Lesotho.

T

here are five major national highways that intersect the province, and its status as an logistics hub is complemented by the fact that it is well served by rail and air links. The newly renamed Bram Fischer International Airport in the provincial capital city of Bloemfontein is the site of a multi-phase industrial and commercial development.

Free State Economy The total GDP of Free State Province amounted to R190-billon in 2014. Mangaung metropolitan municipality is the economic powerhouse, with a share of 32.20% (R61.2-billion), followed by Fezile Dabi (R54billion), Thabo Mofutsanyana and Lejweleputswa (each on R34-billion, or 18%), followed by the Xhariep District with R7.81-billion.

Bloemfontein is the capital city of the province and Mangaung Metro, has excellent schools for boys and Highlight of the province girls (Grey College and St Andrews for boys, Eunice The province’s capital city, Bloemfontein, hosts and St Michael for Girls), as well as two leading uni- sites of architectural and historical importance as versities (the University of Free State and the Central well as South Africa’s Supreme Court of Appeal, University of Technology). Good medical facilities are the University of the Free State and the Central also in abundance, notably the Universitas Private University of Technology. Hospital, MediClinic, Bloemcare, Life Rose Park and The current state and shape of the Free State’s a host of private practitioners in the health sector. economy clearly presents huge opportunities for The Free State has several major assets in the crea- investors in the manufacturing sector. The Free State tive sector, so business investors and their families Development Corporation (FDC) is actively prowill be well catered for in many fields: moting Free State business opportunities to attract • Pacofs presents musical and theatrical shows and foreign and domestic investors to locate their busiadministers the huge Sand du Plessis Theatre ness in the Free State. Developments within the Complex. The Free State Symphony Orchestra N8 Corridor indicate that growth and recovery is and dance and opera compaPotchefstroom Balfour VereenigingGauteng nies perform regularly. Ottosdal Klerksdorp Lethabo Mpumalanga Parys Sasolburg FREE STATE PROVINCE Vredefort Standerton • The Macufe Festival has Villiers Wolmaransstad Viljoenskroon Heilbron become a national event. Held North West Volksrust Fr a nkfort Bothaville Vrede Bloemhof in Bloemfontein every year, it Kroonstad Odendaalsrus Hoopstad attracts up to 100 000 festivalReitz Newcastle Christiana Wesselsbron Warden Welkom Ventersburg goers to a range of dance, theVirginia Warrenton Harrismith Theunissen Bultfontein Bethlehem Ulco Van Reenen atre, music, poetry and fine art Senekal Clarens Phuthaditjhaba KIMBERLEY Dealesville Winburg Ladysmith Golden Gate Fouriesburg events. National Park Northern Marquard Ficksburg Colenso • OFM is central South Africa’s Cape Winteron BLOEMFONTEIN Clocolan Jacobsdal Estcourt Thaba Nchu Petrusburg biggest independent radio staLadybrand Botshabelo Hobhouse tion. It has a wide audience that Koffiefontein MASERU Dewetsdorp KwaZuluEdenburg LESOTHO listens to English and Afrikaans N Wepener Underberg Natal programmes across the Free Trompsburg State and other neighbouring Zastron Motorway Smithfield Main Road Bethulie Rouxville provinces. Railway N12

N1

R30

R34

R57

N3

R76

R26

R70

N5

R74

R64

N3

N8

N12

R26

N1

N6

Eastern Cape

De Aar

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underway. About 2 000 hectares of land are been competitive pharmaceuticals products, services made available for the multi-billion rand infrastrucand technologies. ture investment programme within the N8 Corridor covering Bloemfontein, Botshabelo and Thaba A number of new malls are under developNchu. In the Airport precinct, 700 hectares of land ment in Mangaung (Botshabelo Shopping Mall, had been made available as small land parcels for Langenhoven Park Mall), while two new malls in the private sector development. Some of projects are Townships are under construction. These are just well underway while others have been completed: some of the exciting new investment opportunities • Airport Node – Airport City ( logistics and supply in Bloemfontein. chain, warehouses, residential apartments, hosTourism (and, in particular, eco-tourism) is another pitals, schools, hotels and new shopping malls) sector that is thriving as the province seeks to diver• ICC Precinct – Opportunity to invest in a brand sify its economy. The Free State has several large new hotel and international convention centre in dams, including the Gariep and Vaal dams. These are major sources of water (as well as popular venues the City Centre • Naval Hill Development – Bloemfontein is the 2nd for recreation), as are the Free State’s smaller dams, City in the World with a natural nature reserve such as Sterkfontein, Allemanskraal and Kalkfontein. in the City Centre, while the Planetarium, Giant Tourism and aquaculture are just two potential Madiba Statue, Water Reservoir and numerous rest- income generators related to these water bodies. aurants are some of the existing developments. Another emerging sector is solar energy, and the There is also an opportunity to develop a unique Xhariep, Lejweleputswa and Mangaung regions have some of the best direct solar radiation kWh/m² in the new boutique hotel. • Expansion of the existing 30-hectare Hamilton country. A policy transition to a cleaner energy mix, Business Park. strong local content from government (glass, mir• Revitalisation of exciting Thaba Nchu Airport. rors), availability of reputable and established local • Bio-Medical Park Development – To develop a construction companies, experience in building world-class bio-medical facility designed to power stations and mines, current steel and pipes host research laboratories, export-oriented phar- production meeting CSP (Concentrated Solar Power) maceutical companies, as well as bio-technology requirements and a national target to generate 45% and medical research companies to develop of all new electricity from renewable sources by 2030,

Sectoral contribution of the Free State Economy

Source: StatsSA 2013, 3rd Quarter Report 2014

Taxes & Subsidies 10.5%

Agriculture 4% Mining 12% Manufacturing 9.6%

Community, Social & Personal 22%

Electricity & Water 3.3% Construction 2.5%

Finance & Business Services 13%

Wholesale & Retail Trade 13% Transport & Communication 9% FREE STATE BUSINESS 2016

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SPECIAL FEATURE

all presents a significant opportunity to build and Gross Domestic Product (GDP) operate solar generation plants in the Free State. Free State Province, 2015 There are a number of solar generation plants that Source: Statistics SA 2015 (figures in %) are under different stages of development in Free State, with two of them are operational and currently Mangaung feeding into the national grid. 32% The Free State government is in line with the Xhariep national government’s policy priority to industrialise 4% through value-added manufacturing. This is supported by the National Infrastructure Plan adopted in 2012. The South African government aim to transFezile Dabi form our economic landscape while simultaneLejweleputswa 28% ously creating significant numbers of new jobs, and 18% strengthening the delivery of basic services. Thabo Infrastructure development plays a key role in Mofutsanyana directly promoting job creation, as well as stimulating 18% the economy in a number of ways: • Unlocking economic opportunities. • Addressing socio-economic needs. The Free State Project to unlock industrial devel• Promoting balanced economic development. opment and improve logistics platforms includes • Promoting mineral extraction and beneficiation. the newly designated Maluti-A-Phofung Industrial • Integrate human settlements and economic Development Zone (commonly known as MAP IDZ development. – see page 24) and supporting Harrismith Gateway Development, which is a logistics platform. This The South African government conducted a needs presents an opportunity for the Eastern Free State analysis based on current and projected economic (which is known for its eco-tourism opportunities) growth and spatial imbalances (lack of certain infra- to industrialise. MAP IDZ had been designated by the structure in poorer areas), 18 so-called Strategic Minister of Trade and Industry as a mix-use industrial Integrated Projects (SIPs) were identified, each development zone focusing on manufacturing, logiscontaining specific infrastructure components and tics and agro-processing. A number of private sector programmes. companies have already expressed interest to locate Of the 18 SIPs identified, the key strategic sips in the MAP IDZ. covering Free State are the Durban–Free State– The MAP IDZ project pipeline under development Gauteng industrial and logistic corridor linking the includes medical devices manufacturing, electronic port of Durban with the market in Gauteng. SIP 2 is components manufacturing and pharmaceuticals. Benefits that will be derived from locating within intended to improve access to Durban’s export and import facilities, integrate the Free State Industrial MAP IDZ includes: Strategy activities into the corridor, integrate the • 15% Corporate Tax, national is 28%. currently disconnected industrial and logistics activi- • Building Allowance. ties, and integrate marginalised rural production • Employment Incentive, centres surrounding the corridor that are currently • Customs Controlled Area. isolated from the national logistics system. This • 12i Tax Allowance. presents an opportunity for building cargo nodes in Harrismith, Cato Ridge, Tambo Springs and the Municipalities in the Free State Dube Trade Port, and it will further upgrade existing The Free State has one metropolitan municipality cargo nodes such as City Deep, Pyramid, West Rand (Mangaung) and four district municipalities, comas well as Sentrarand. prised of 19 local municipalities.

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The Provincial Treasury and the South African Revenue Service have developed a programme to assist local municipalities to improve their tax compliance and, in so doing, help to build capacity and assist in phasing out the need for municipalities to employ consultants to deal with tax-related matters.

to create employment and tackle food security. Fauresmith hosts an annual horse endurance race and Smithfield is the venue for a ‘Chill’ festival every winter, the ‘Bibber Fees’. In the Naledi Local Municipality, tourists are catered for on the Highlands of the Maluti Route. The steel bridge over the Caledon River at Wepener is a national monument.

Mangaung Metropolitan Municipality

Towns: Trompsberg, Koffiefontein, Zastron, Philipollis, Edenburg, Fauresmith, Smithfield, Wepner, Naledi.

The Mangaung Metropolitan Municipality is a Category A municipality which governs Bloemfontein, Botshabelo and Thaba Nchu. The municipality was formed after the local government elections in May 2011, and had been a local municipality since 2000 by amalgamating the Transitional Local Councils of Bloemfontein, Botshabelo, Thaba Nchu and two Rural Councils. Being the sixth largest city in the country, the Mangaung municipal area covers more than 6 263km2 and hosts a population of about 850 000 people. The languages spoken in the area are mainly Sesotho, Afrikaans, English and Setswana (South African LED Network, 2010).

Xhariep District Municipality The southernmost region of the Free State is a largely dry area with open grasslands predominating, although it is also home to the Gariep Dam, South Africa’s largest. Crops are produced in the northern parts of the district whereas sheep farming predominates in the south. Trompsberg has the second-biggest sheep-shearing barn in the country. Diamonds, gravel and clay are mined at Koffiefontein. Jagersfontein is one of the first places where diamonds were found, and it has its own version of the Big Hole to prove it. The town of Bethulie is a good stopping-over place for tourists wanting to experience the water sports available on the Gariep Dam. The dam is also the site of aquaculture projects which are intended Lejweleputswa R33.40

Fezile Dabi R54.00

Lejweleputswa District Municipality Mining is the most important economic activity in this area, also known as the Free State Goldfields, but it is also the most important maize-growing area in South Africa. Bothaville is the self-proclaimed Mielie Capital of South Africa and hosts an annual maize industry festival and conferences, and it is where Grain SA has its headquarters. Mining town Welkom is the major urban centre in the district. The town of Virginia is the site of a jewellery school and it is intended that this will form the nucleus of a jewellery beneficiation hub and an IT hub. The area has tourist assets such as a holiday resort on the Allemanskraal Dam, the Goldfields Wine Cellar in Theunissen and the Willem Pretorius Game Reserve but there is potential for growth in the heritage sector. The Lejweleputswa district (a mining powerhouse in the province due to its gold mining activities), may also be in need of the same diversification as the Mangaung Metro since its economic outlook has seen it stagnate as commodity markets behave more erratically, both under falling commodity prices and the social unrest around the mining sector in South Africa. Towns: Welkom, Virginia, Boshof, Christiana, Bult fontein, Bothaville.

Xhariep R7.81

Mangaung R61.20

FREE STATE — R190. 11 Free State GDP (R’billion) in 2014) Source: HIS Global Insight Rex 2015 FREE STATE BUSINESS 2016

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Thabo Mofutsanyana R33.70


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Gauteng

MUNICIPALITIES IN THE FREE STATE

Mpumalanga

Metsimaholo

North West Fezile Dabi Mafube Ngwathe Moqhaka

Nala

Nketoana

Northern Cape

Thabo Mofutsanyana

Matjhabeng

Tswelopele

Phumelela

Lejweleputswa

Dihlabeng

Tokologo

Maluti-a-Phofung

Setsoto Masilonyana

KwaZuluNatal Mangaung

Mantsopa

Letsemeng

Xhariep

LESOTHO

Naledi

Mohokare

N

Metropolitan/District Municipality boundary

Kopanong

Local Municipality Boundary District Municipality

Xhariep

Local Municipality

Naledi

Eastern Cape

Fezile Dabi District Municipality of the province revealed that Fezile Dabi’s contribuThe chemical complex at Sasolburg is the eco- tion towards employment in the province is far lower nomic driver in the district, which shares a border than its share towards provincial output (Fezile Dabi with Gauteng province along the Vaal River. The District Municipality Integrated Development Plan town of Heilbron is another important industrial 2012-2017), and this could mean that Fezile Dabi is centre and Frankfort does important agricul- performing well below its potential. The Fezile Dabi tural processing work. Kroonstad is the district’s area is mostly dominated by the industrial prowess second-largest town and has a number of harnessed by Sasol, with the manufacturing of engineering works and a railway junction. refined petroleum, coke and chemical products A good proportion of South Africa���s grain crop is adding largely to its GDP. sourced from this district and when the vast fields The establishment of ChemCity, a wholly owned of sunflowers and cosmos flowers are in bloom, a subsidiary of Sasol, has also added a business incumarvellous vista is created. The Vaal River presents bator that allows SMMEs to feed off and diversify opportunities for yachting, rafting and resort-based from the opportunities that prevail due to the energy enterprises. Parys is a charming town and Vredefort is consortium operating in the area. home to a World Heritage site – the Vredefort Dome Towns: Sasolburg, Parys, Kroonstad, Frankfort, where a meteor crashed to earth. Heilbron, Viljoenskroon. Fezile Dabi District Municipality is the biggest contributor towards the provincial GDP, contributing Thabo Mofutsanyana District Municipality approximately 35% (Global Insight, 2013). Curiously, The final stop-off point in South Africa for any travit should be highlighted that the situational analysis eller going to Lesotho is the busy town of Ladybrand 13

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in the Mantsopa Local Municipality. Tweespruit is a major sunflower seed production centre. Tourism and fruit farming are the two principal economic activities of this area which is characterised by beautiful landscapes: the Maluti and the Drakensberg mountain ranges, wetlands in the north, well-watered river valleys and the plains of the north and west. The most famous asset is the Golden Gate National Park. Industrial activity is undertaken at Harrismith and Phuthaditjhaba, where the Free State Development Corporation is promoting investment. Harrismith is the focus of efforts to create a multimodal transport and logistics hub. The commercial centre of the district is Bethlehem, while Clarens and Ficksburg have become famous for their artists and cherries respectively. Marquard produces 90% of South Africa’s cherries. The north of the district has many sunflower seed farms. The Basuto cultural village in QwaQwa offers beautifully made crafts, and rock paintings can be seen as illustrations of the artistic skills of much earlier inhabitants of the area. Towns: Phuthaditjhaba, Bethlehem, Tweespruit, Ladybrand, Clarens, Harrismith, Vrede, Ficksburg.

FREE STATE OFFICE OF THE PREMIER

Premier: Mr Sekgobelo Elias Ace Magashule T: 051 405 5799 | www.premier.fs.gov.za FREE STATE DEPARTMENTS: AGRICULTURE AND RURAL DEVELOPMENT

MEC: Mr Oupa Khoabane T: 051 861 8510 | www.ard.fs.gov.za COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS

MEC: Ms Sarah Matawana Mlamleli T: 051 405 5719 | www.fscogtahs.gov.za ECONOMIC, SMALL BUSINESS DEVELOPMENT, TOURISM AND ENVIRONMENTAL AFFAIRS

MEC: Mr Sam Mashinini T: 086 110 2185 | www.edtea.fs.gov.za EDUCATION

MEC: Mr Pule Herbert Isak Makgoe T: 051 404 8430 | www.education.fs.gov.za HEALTH

MEC: Dr Benny Malakoane T: 051 408 1108 | www.fshealth.gov.za HUMAN SETTLEMENTS

THE FREE STATE’S BACK TO BASICS INITIATIVE

MEC: Ms Sarah Matawana Mlamleli

The Back to Basics Strategy in the Free State was launched in October 2014. The implementation of this strategy is aimed at ensuring that local government and municipalities get the basics right and breathe new life into the municipalities and, in so doing, help to improve service delivery. The Back to Basics strategy focuses on fi ve pillars:

T: 051 405 3883 | humansettlements.fs.gov.za POLICE, ROADS AND TRANSPORT

MEC: Mr Butana Komphela T: 051 409 8849 | policeroadstransport.fs.gov.za PUBLIC WORKS AND INFRASTRUCTURE

MEC: Ms Dora Kotzee T: 051 405 4037 | www.publicworks.fs.gov.za

• • • • •

Putting people and their concerns first. Creating conditions for decent living. Demonstrating good governance. Ensuring sound financial management. Building and maintaining sound institutional and administrative capabilities. In addition, the Free State provincial government’s commitment to ensuring they improve their financial management is illustrated by the fact that the Provincial Treasury has obtained a clean audit for the past fi ve years.

FREE STATE BUSINESS 2016

SOCIAL DEVELOPMENT

MEC: Ms Sefora Sisi Ntombela T: 051 409 0619 | www.socdev.fs.gov.za SPORT, ARTS, CULTURE AND RECREATION

MEC: Mrs NS Leeto T: 051 407 3520/22 | www.fssacr.gov.za DEPARTMENT OF TREASURY

MEC: Ms Elzabe Rockman T: 051 403 3456 | www.treasury.fs.gov.za

14


FOCUS

Free State Development Corporation (FDC) Driving enterprise development and investment in South Africa’s most central province, the Free State. The FDC contributes to the Free State’s economic development through four service delivery pillars.

• Project appraisal and packaging. • Promotion and facilitation of investment projects

SMME/co-operative funding & support The FDC provides products and services to SMMEs and co-operatives in the form of financial support (business loans) as well as business development support (facilitating training and mentoring service providers). The principal loan products offered to Free State entrepreneurs by the FDC are: • Start-up loans for recently established businesses that are mainly at formative stages. • Expansion loans offering viable and existing businesses the capital needed to expand. • Business take-over finance to assist potential clients to acquire a business as a going concern. • Bridging finance for SMMEs with short-term cashflow problems with contracts or tenders.

• Providing access to business and government net-

Investor services The FDC offers a range of services to investors and businesses looking to trade in the Free State. These include the following:

Tel: 051 400 0800 Email: info@fdc.co.za Address: 33 Kellner Street, Bloemfontein 9301 Website: www.fdc.co.za

and facilitation of access to finance.

• •

works and assistance with business retention and expansion. Information on statutory requirements, investment advice and assistance with investment incentive applications and business permits. Assisting with the development of local and international markets and facilitating joint ventures/ equity partnerships through identification of local partners.

Property management The FDC administers a diverse property portfolio and can offer small to medium enterprises suitable premises at affordable rates. The corporation has some 253 commercial properties, 290 industrial properties and a large number of residential and Export-related services vacant land for development. FDC services to exporters include the Export The corporation aims to use them to facilitate Promotion Programme, which aims to grow demand commercial and industrial activity, while assisting for Free State products in global markets through new investors looking for suitable premises. the following programmes: The FDC offers advice and guidance in terms of Capacity-building workshops, the dissemina- the following incentives: tion of trade leads, networking opportunities • Subsidised rental rates. with inbound trade missions, product promotion • Rental holidays of up to three months. through participation in outbound group mis- • Special incentives and discounts for BEE companies or individuals. sions and on national and international exhibitions, access to national export-incentive programmes, market access information and techCONTACT INFO nical advice on exporting procedures.

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South African investment incentives The Department of Trade and Industry (dti) has a range of incentives that are available to investors, existing companies, entrepreneurs and co-operatives across many sectors.

J

ust as South Africa wishes to diversify its economy sweets and confectionary (Sunkist) and concrete prodaway from an over-reliance on mining and agri- ucts (Stabilan). culture (while retaining these sectors as important Within the IPAP there are many programmes components of the economic mix), so the Free State and schemes that are sector-specific such as the is looking to build new capacity. Incentives are an Aquaculture Development and Enhancement important part of the strategy to attract investors Programme (ADEP), Clothing and Textile Competitiveness Improvement Programme (CTCIP) and the to South Africa’s most centrally located province. Tourism Support Programme (TSP). The dti is the lead agency in the incentives proIn a province like the Free State, where sectors gramme that is designed to encourage local and such as tourism, business process outsourcing and foreign investment into targeted economic sectors, textile manufacturing have been identified as key but the Industrial Development Corporation (IDC) is drivers of the diversification programme, incentives the most influential funder of projects across South such as those listed above, and Business Process Africa. National government is the sole shareholder Services are also very relevant. of the IDC. In the 2012/13 financial year, the IDC committed Manufacturing R311-million to the Free State in projects as diverse Key planks of the incentive programme are the as chicken processing (Grandfield Chickens), mining Manufacturing Incentive Programme (MIP) and (Lace diamond mine), walnuts (Rotondo in Rouxville), the Manufacturing Competitiveness Enhancement

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SPECIAL FEATURE

Programme (MCEP). The MCEP was last updated in Because research has shown that a lot of jobs are early 2014, making it easier for smaller enterprises to created in the small medium and micro-enterprise gain access to funding. (SMME) sector, a number of investment incenOther aspects of the successful progamme tives are designed to promote the growth of small that have been adjusted relate to funding for businesses. In addition to the BBSDP and the CIS green technology and resource efficiency. Since it mentioned above, these include: was introduced in 2012, the MCEP has disbursed • Small Medium Enterprise Development Progamme R4-billion to support more than 500 manufacturers, (SMEDP). resulting in more than 100 000 jobs being retained • Isivande Women’s Fund. in the sector. • Seda Technology Programme (STP). The Free State is very focussed on enhancing its manufacturing sector and is keen to attract Seda is the Small Enterprise Development Agency investors in this sector. Incentives such as the which falls under the dti and exists to promote Technology and Human Resources for Industry SMMEs. Examples of successful Seda interventions Programme (THRIP) would be as useful to gen- in the Free State include helping a dairy distribueral manufacturers as they would to businesses tion business (Siba’s Dairy) increase its geographical in the chemical sector, one of the Free State’s reach through the acquisition of new vehicles, and strongest suites. assisting a furniture manufacturer get access to Another incentive that is available to investors new markets. Kukama Creative Designs specialises and existing businesses in more than one sector is in leather and skin products and now exports bags, the Support Programme for Industrial Innovation purses and iPad holders to the Netherlands and (SPII). It is easy to envisage entrepreneurs and busi- Germany. nesses looking for industrial innovation in the chemThe Export Marketing and Investment Assistance icals sector, where by-products and downstream (EMIA) is a comprehensive incentive programme production manufacture has seemingly endless to stimulate the country’s export profile, and this possibilities. More general incentives also designed includes support for locals who reach out to interto attract investors and make manufacturing more national investors and to international importers of South African goods. The scheme offers financompetitive include: • Section 12i of the Income Tax Act is a tax-allow- cial assistance for South Africans travelling abroad ance programme based on investment in new to meet potential investors, as well as for invited manufacturing assets and training provided to inbound potential buyers (importers) of South employees in the project. National Treasury has African products. calculated the value of this concession at R20For a more detailed list of the available incenbillion overall. tives (and application forms), visit the dti’s website or • The Black Business Supplier Development contact the Free State Development Corporation. Programme (BBSDP) is a cost-sharing grant offered to black-owned small enterprises. Online resources • The Critical Infrastructure Programme (CIP) covers Department of Trade and Industry www.thedti.gov.za between 10% and 30% of the total development costs of the qualifying infrastructure. Free State Development Corporation • The Co-operative Incentive Scheme (CIS) is a www.fdc.co.za 90:10 matching cash grant for registered primary Industrial Development Corporation co-operatives. www.idc.co.za • The Sector Specific Assistance Scheme is a reimOffi cial South African Government bursable 80:20 cost-sharing grant that can be Incentive Schemes applied for by export councils, joint action groups www.investmentincentives.co.za and industry associations.

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

S

tarting a business in South Africa is very easy. No permits are required for foreigners and locals to begin a business (apart from business and work permits for foreigners). Normally a range of administrative procedures have to be complied with. Having obtained business and work permits (applies to foreigners only), the following steps need to be taken:

Registration of company The company must be registered with CPIC (Companies and Intellectual Properties Commission) in Pretoria within 21 days of the company being started. Bank account A business bank account must be opened in the company’s name with a bank in South Africa. Registration with the receiver of revenue

• As a Provisional Taxpayer. • As a VAT vendor. • For Pay As You Earn (PAYE) income tax payable on money earned by employees.

• For Standard Income Tax on Employees. Registration with the Department of Labour Businesses employing staff will have to contact the Department of Labour regarding mandatory contributions to the Unemployment Insurance Fund (UIF). Register with Compensation Commissioner for Compensation Fund: Files with the Compensation Fund (in the Department of Labour) for accident insurance (Workmen’s Compensation). Registration with the local authority Relevant only to businesses dealing in fresh foodstuffs or health matters. South Africa has a sophisticated legal, regulatory and banking system. Setting up a business in South Africa is a relatively straight-forward process with assistance being offered by organisations such as the Department of Trade and Industry and

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18

provincial investment agencies like the Free State Development Corporation. South African law regulates the establishment and conduct of businesses throughout the country. Tax, investment incentives, regulations governing imports, exports and visas are uniform throughout the country. The particular environment varies from province to province with regard to the availability of human and natural resources, the infrastructure and support services, business opportunities and the quality of life. In this respect, the Free State Development Corporation can offer specific advice about the business environment in the province. Business is regulated by the Companies Act and the Close Corporation Act, which cover accounting and reporting requirements. Under new legislation, no new Close Corporation can be created but CCs can convert to companies. There are a range of administrative procedures that need to be fulfilled. The Companies and Intellectual Property Commission (CIPC) has information on and regulates the formations of companies. Other procedures

• Checking exchange control procedures (note

• • • • •

that non-residents are generally not subject to exchange controls except for certain categories of investment). Obtaining approval for building plans. Applying for industry and export incentives. Applying for import permits and verifying import duties payable. Registering as an exporter and applying for an export permit. Ensuring exchange control compliance when remitting payments overseas.

Business entities There are a variety of forms which businesses can take, including private and public companies, close


SPECIAL FEATURE

corporations, partnerships, joint ventures and even Business permits branches of foreign companies (or external compa- Foreign nationals who wish to establish their own nies). Companies and close corporations are legal business or a partnership in South Africa must, apart entities separate from their members. from having sufficient funds to support themselves Close corporations can have up to 10 shareholders, and their family, be able to invest at least R2.5-million all of whom have to be natural persons. Foreign in the business. The funds must originate overseas, be transferinvestors usually use the private version of a company and the branch. Foreign individuals sometimes able to South Africa and belong to the applicant (ie use the close corporation but use is limited because emanate from the applicant’s own bank account). exchange control regulations are applied more The business must also create jobs for South African strictly to such entities. citizens. After six months to a year, proof will have to Branches of foreign companies fall under the be submitted that the business is employing South Companies Act of 1973 and are required to register African citizens or permanent residents, excluding as ‘external companies’ with the CIPC. An external family members of the employer. company is not required to appoint a local board Applications for work permits for self-employof directors but must appoint a person resident in ment can only be lodged at the South African South Africa who is authorised to accept services Consulate in the applicant’s country of origin. The of process and any notices served on the company. processing fee is US$186. The applicant would also It must also appoint a registered local auditor and have to lodge a repatriation guarantee with the establish a registered office in South Africa. Consulate equivalent to the price of a one-way flight from South Africa back to his or her country of origin. Patents, trademarks and copyrights This guarantee is refundable once the applicant Trademarks (including service marks) are valid for an has either left South Africa permanently or obtained initial period of 10 years and are renewable indefi- permanent residence. Any application for an extennitely for further 10-year periods. Patents are granted sion of a business permit may be lodged locally. The for 20 years, normally without an option to renew. The processing fee per passport holder is R425. Some holder of a patent or trademark must pay an annual countries also need to pay R108 per return visa. fee in order to preserve its validity. Patents and A list of countries to which this applies is available trademarks may be licensed but where this involves from the Department of Home Affairs. the payment of royalties to non-resident licensors, The FDC assists investors in applying for the relprior approval of the licensing agreement must be evant work permits to conduct their business. obtained from the dti. South Africa is a signatory to What would the FDC do for you? the Berne Copyright Convention. The FDC will help new businesses by assisting in Permits for foreign nationals project appraisal and packaging, putting investors Work permits in touch with relevant agencies and government In considering whether or not to grant a work permit, departments, alerting investors to investment incenthe Department of Home Affairs will first evaluate the tives and setting up joint ventures where required. validity of the offer of employment by conducting a A full description of the services offered by the FDC is reflected elsewhere in this publication. number of checks to confirm the following: • Has the Department of Labour been contacted? • Has the position been widely advertised? The Free State Development Corporation • Is the prospective employer able to prove that he Tel: 051 4000 800 or she has tried to find a suitably qualified local Fax: 051 447 0929 employee prior to hiring a foreigner? Email: info@fdc.co.za • Is the prospective employee appropriately qualified Website: www.fdc.co.za and do they have the relevant experience?

19

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Free State Development Corporation investment opportunities The Free State Development Corporation is driving a number of exciting investment opportunities in the Free State province.

BIO-MEDICAL PARK To develop a world class bio-medical facility designed to host research laboratories, export orientated pharmaceutical companies, bio-technology and medical research companies to develop competitive pharmaceuticals products, services and technologies.

Concept To develop a world-class infrastructure to support incubation of a network for newly established export oriented medical bio-technology companies and provide: • A platform for a joint research and research collaboration between universities and biotechnology companies.

MEDICAL WASTE TREATMENT

• To migrate both the University of Free State (UFS) and Central University of Technology (CUT) registered research patents into new business opportunities.

Project location Bloemfontein, within N8 Corridor. Required Investment R400-million.

ACTIVE PHARMACEUTICAL

A technology partner and investor is required to partner INGREDIENTS with a local investor to set up a medical waste treat- The private sector investor is required to estabment facility. lish an Active Pharmaceutical Ingredients (API) facility in the Free State province. Concept To design a modern medical and solid waste treatment Concept facility. The company implements Electro-Thermal Setting up a pharmaceutical ingredient (API) Deactivation process to dispose of health care risk waste. and Oral Solid Dosage (OSD) for the manufacThis is a non-burn technology that has zero emissions. ture of ARV’s for the treatment of HIV, Malaria Pathogens are treated with 50 000 V within the ETD and Insulin. (Microwave) and this renders the waste clean and harmless. Project Requirements Project location A leading pharmaceutical technology partner Virginia in Matjhabeng. and investor with a synthesis process is required to partner with local investors that have Investment Required expressed an interest to set-up and operate an Estimated project cost R30-million. API and OSD manufacturing facility in Sasolburg. To discuss the opportunities on this page, contact Mr. Peter Mabote, Acting Head: Trade & Investment, Free State Development Corporation T: 051 4000 800 | W: www.fdc.co.za E: mabotepm@fdc.co.za | info@fdc.co.za

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Investment Required Investment estimated at R720-million. Project Location Sasolburg – Metsimaholo.


SPECIAL FEATURE

FRANKFORT PAPER MILLS The establishment of a Kraft paper factory that will predominantly use waste container board paper and virgin pulp to produce Kraft liner, linerboard, fluting and semi-extensible sack Kraft. Production capacity is about 180 000 tonnes per annum.

Location Frankfort, Free State. Milestones

• Feasibility phase. Concept • Project designs completed. The mill will use both virgin (20%) and recycled pulp (80%) as • Funding subject to finding a technolraw material in its production process with the aim of capturing small and medium corrugators. Pulp to be used is unbleached and manufactured by suppliers using the Kraft process. The Kraft process produces strong unbleached papers that can be used for bags and boxes. To discuss this opportunity, contact Lizeka Matshekga, Head: Forestry & Wood Products Business Unit, Industrial Development Corporation, T: 011 269 3779, E: lizekam@idc.co.za | E: info@fdc.co.za Frank Tlhomelang, Head: Research & Development, Free State Development Corporation, T: 051 4000 800 E: frank@fdc.co.za E: info@fdc.co.za

ogy partner and investor that is player in the wood and paper value chain.

Project Requirements

• A technology partner and investor that

is player in the wood and paper value chain is required to partner with IDC and local paper convertors to establish and operate Frankfort Paper Mill SA. Project partners will be responsible for bulk take-off.

Investment Required Investment estimated at R1.4-billion.

DPE & PVC PIPES MANUFACTURING The private sector investor is required to establish and operate a plastic extrusion facility at Parys in the Ngwathe Local Municipality.

Concept Plastics extrusion is a high-volume manufacturing process in which raw plastic is melted and formed into a continuous profile. Extrusion produces items such as pipe/tubing, weather stripping, fencing, deck railings, window frames, plastic films and sheeting, thermoplastic coatings and wire insulation. Project Requirements A technology partner is required for individual investors that have expressed interest may proceed on their own. Investment Required Investment required is estimated at R10-million. Manufactured products and manufacturing process must be SABS-certified.

To discuss this opportunity, contact Mr. Peter Mabote, Acting Head: Trade & Investment, Free State Development Corporation T: 051 4000 800 W: www.fdc.co.za E: mabotepm@fdc.co.za | info@fdc.co.za

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FREE STATE BUSINESS 2016


SPECIAL FEATURE

SOLAR GENERATION PARKS

Conversion Technologies Both photovoltaic modules and concentrated Solar (CSP) Plants conversion technologies can be implemented.

The project aim is to recruit a private investor to set-up a solar park in the Xhariep, Lejweleputswa and Mangaung regions, as these offer some of the best direct solar radiation kWh/m².

Process Investor may participate in both off-grid and on-grid supply solutions. Off-grid is where there solar generation plant is directly supplying an independent user or seller for example, a mine or an industrial estate. On-grid is where investors participate in South Africa’s successful Independent Power Producer Procurement (REIPPP) Programme managed by the Department of Energy (DOE) and finally supply the grid. Projects Location Xhariep District, Mangaung Metro as well as Lejweleputswa.

PROJECT SOLAR WATER HEATERS

Projects Development Some projects under development in Free State includes the following project developers hire an engineering procurement and construction company (EPC) to be solely responsible for project design, procurement of equipment and construction, and the timely completion and commercial operation of the project.

A private investor is required to set up a solar water heaters manufacturing plant in Botshabelo Industrial Area. The manufacturing process may involve the following:• Fabrication of panel storage tanks. • Assembly of tank, panel coil and other components. • Inspection and commissioning. • Required raw for the manufacturing of Solar Water Heater are Copper Aluminium MS Sheet, Pipe, Glass Fibre, GI Sheets, Thermostat, insulation material.

• Financial and technology capabilities to manu-

Why Solar Water Heaters

Project location

facture and supply locally produced systems.

• Construction Sector Education Training

Authority (CETA) & Energy Sector Education Training Authority offers accredited level 4 plumbing qualification. Availability of plumbing skills currently serving the mining, gas and petroleum industries.

• Botshabelo within the N8 Corridor. • Eskom electricity demand management programme. • Strong local content on SWH procurement by DOE • Required Investment, to be determined at and Eskom.

feasibility.

GREEN ENERGY IT Green Energy is a South African company that assembles solar home lighting systems. The idea behind this project is to contribute towards harnessing the solar energy to generate power.

To discuss the opportunities on this page, contact Mr. Peter Mabote, Acting Head: Trade & Investment, Free State Development Corporation T: 051 4000 800 | W: www.fdc.co.za E: mabotepm@fdc.co.za | info@fdc.co.za

FREE STATE BUSINESS 2016

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Location The company intend to locate its Solar Home Lighting Manufacturing plant in Maluti-A-Phofung. Milestones FDC financed Seed Fund to the tune of R210 000 for the following:• Product development to redesign its products so that they can meet international standards for export market. ▶


SPECIAL FEATURE

WHY INVEST IN SOLAR GENERATION PLANTS IN SOUTH AFRICA

POWER PLANTS PLANNED, UNDER CONSTRUCTION AND OPERATIONAL LETSATSI PV PROJECT LOCATION Bloemfontein, Tokologo LM COMMISSIONED May 2014 CAPACITY 64 MW STATUS Operational OPERATOR Solar Reserve INVESTMENT VALUE ±$293-million

• South Africa’s Solar Irradiation levels are amongst the best in the world (>2000 kWh/m²).

• Transition to a cleaner energy mix (Low carbon path).

• Strong local content from government (glass, • • • • •

PULIDA SOLAR PARK LOCATION Jacobsdale Letsemeng LM COMMISSIONED August 2016 CAPACITY 75MW STATUS Under Construction OPERATOR Enel Green Power INVESTMENT VALUE Land: 220ha

mirrors). Strong, established local construction companies . Experience in building power stations and mines. Current steel and pipes production meeting CSP requirements. A target to generate 45% of all new electricity from renewable sources by 2030. The on-going success of the renewables procurement programme and the growing interest of international developers and funders are helping South Africa to improve its rankings from nowhere to top 10 investor in the world. (Renewable Energy Country Attractiveness Index-2014). South Africa is the region’s clear leader for clean energy development with record investments of over US$10-Billion in 2012 and 2013.

BOSHOFF SOLAR PARK LOCATION Tokologo Local Municipality COMMISSIONED November 2014 CAPACITY 64MW STATUS Operational OPERATOR Sun Edison INVESTMENT VALUE TBC XHARIEP SOLAR HUB LOCATION Kopanong, Bethulie LM COMMISSIONED Planned CAPACITY 600MW Planned STATUS Concept development and project design OPERATOR Korean Solar Power Consortium INVESTMENT VALUE Land: 1200ha

Drivers for PV & CSP investments

• Environmental issues such as pollution and exploi• • •

BLACKWOOD ENERGY SOLAR PLANT LOCATION Tokologo LM COMMISSIONED Planned CAPACITY 75MW STATUS Planned OPERATOR New Development INVESTMENT VALU E TBC

tation of natural resources. Climate change due to CO² emissions from fossil fuels. Energy security through diversification of supply. Sustainable development.

EVEREST SOLAR PLANT LOCATION Matjhabeng Local Municipality COMMISSIONED Planned CAPACITY 75MW Planned STATUS New Development OPERATOR FRV Energy South Africa INVESTMENT VALUE Project occupy 180ha of the Farm Beyers 186 (393ha)

• IP Registration. • Business Case Development to solicit financial and •

GROOTKOP SOLAR FACILITY LOCATION Matjhabeng Local Municipality COMMISSIONED Planned CAPACITY 75MW STATUS New Development OPERATOR FRV Energy South Africa INVESTMENT VALUE Will occupy 180ha of Farm Beyers 186 (393ha)

possibly technology partner for future growth. A team of three are driving business development.

Investment Requirements The project requires an experienced technology partner that is a player within the Solar & LED lights value chain and an investor that will guarantee takeoff of products manufactured.

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FREE STATE BUSINESS 2016


SPECIAL FEATURE

MEA GLOBAL APPLIANCES

The project aim is to establish a household appliances manufac- Milestones turing plant in the Free State province of South Africa. The tar- • Project concept and business case geted product line includes 20 litter urns, boilers, water heaters, developed. two and four plate induction cooking stoves, fridges, steel kettle, • The project has the potential to create sandwich maker and toasters. 120 jobs when fully operational.

Location This business opportunity will be located at Botshabelo Industrial Estate within the N8 Corridor.

BETHLEHEM SAND MINING PROJECT This entails intends to promote the establishment of a sand mining business 6km outside Bethlehem – called Bethlehem Water and Sand (Pty) Ltd – to supply Bethlehem and the surrounding towns with building, plaster and brick making sand.

To discuss opportunities on this page, contact Mr. Peter Mabote, Acting Head: Trade & Investment, Free State Development Corporation T: 051 4000 800 | W: www.fdc.co.za E: mabotepm@fdc.co.za | info@fdc.co.za

Investment Requirements The project requires funding to the tune of R120million. The project has the potential to create 120 jobs when fully operational.

GALVANISED STEEL PROJECT The project aim is to establish a galvanised steel manufacturing plant in the Botshabelo Industrial Area.

Concept

• A local company is seeking a joint venture with

established industry players to set-up and operate a steel galvanizing plant in Botshabelo. This project aims to respond to South Africa’s local content requirements, expanding South Africa’s Infrastructure Investment Programme and capture Africa’s Infrastructure investment programme. The site earmarked for this project had been secured and the EIA is in progress.

FREE STATE BUSINESS 2016

Milestones Business plan completed. Geological report available. EIA completed and ROD is available. Mining permit obtained.

• • • •

Project Requirements The project sponsor requires capital injection and participation by BEE partners in this project with exposure experience in sand mining value chain, or sand distribution.

Location Dihlabeng Local Municipality in Bethlehem.

Investor Requirements The estimated project investment value is estimated at R50m.

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Project location

• Bloemfontein within the N8 Corridor. • Required Investment: USD-220-million. Project Requirements

• A local business partner is looking for international • •

players in the steel fabrication industry to invest in this business venture. The project requires an additional equity. The value of equity participation will be negotiated on proposals received.


SPECIAL FEATURE

STEEL FABRICATION PLANT To establish a steel fabrication manufacturing plant in the Botshabelo Industrial Area.

Concept • A local company is seeking a joint venture with established industry players to set-up and operate a steel fabricating plant in Botshabelo. • This project intends to respond to South Africa’s local content requirements, expanding South Africa’s Infrastructure Investment Programme and capture Africa’s Infrastructure investment programme. • The site earmarked for this project had been secured and the EIA is in progress.

To discuss opportunities on this page, contact Mr. Peter Mabote, Acting Head: Trade & Investment, Free State Development Corporation T: 051 4000 800 | W: www.fdc.co.za E: mabotepm@fdc.co.za | info@fdc.co.za

Project Requirements

• A local business partner is looking for • •

international players in the steel fabrication to invest in this business venture. The project requires an additional equity. The value of equity participation will be negotiated on proposals received.

Project location

• Botshabelo within the N8 Corridor. • Required Investment to be determined at feasibility.

OTHER PROJECTS The following additional projects have been developed and packaged bythe National Association of Manufacturers in Electronic Components, in collaboration with the FDC.

• Broadband rollout and other ICT Projects, • Build, operate and maintain solar parks. • • •

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Required investment estimated at R1-billion. The project is estimated to create 400 jobs. Electronic components manufacturing (MAP-IDZ). The required investment is estimated at R50-million and the project is estimated to create 150 jobs. Business software and applications development. Building film studios and content creation. The investment is estimated at R50-million and 100plus jobs (many temporary, which is characteristic of the industry) will be created. Agriculture development (Piggery, seeds and maize). The investment is estimated at R500-million, with at least 100 new emerging farmers and 1 000 jobs created.

FREE STATE BUSINESS 2016


SPECIAL FEATURE

MALUTI-A-PHOFUNG IDZ INVESTMENT OPPORTUNITIES Maluti-a-Phofung Industrial Development Zone (MAP-IDZ) has been established in terms of section 10 of the Manufacturing Development Act, Act No. 187 of 1993 and IDZ Regulation 3A. The programme is intended to deepen industrial development and improve manufacturing competitiveness in the Maluti-A-Phofung Municipality. Located in Harrismith and Tshiame in the Eastern Free State, MAP IDZ is strategically located on the N3 national road, half way between Johannesburg and Durban which is 283k to Joburg and 297k to Durban. M-SEZ offers in total up to 1000 hectares of land for industrial development. Since Durban port is the busiest in the southern hemisphere, this

therefore means that N3 carries majority of the traffic to different locations in South Africa and the neighbouring countries such as Lesotho and Swaziland. The MAP IDZ constitute the Free State leg of the massive Durban-Free State-Gauteng logistics and industrial corridor that is intended to strengthen the logistics and transport corridor between South Africa’s main industrial hubs to: • Improve access to Durban’s export/import facilities. • Integrate Free State Industrial Strategy activities into the corridor. • Build a new port in Durban. • Expand an Aerotropolis around OR Tambo International Airport.

IDZ Project Pipeline There are already 18 manufacturing companies (ranging from pharmaceutical to automobile companies) that have signed letters of intent to locate in the MAP IDZ. Some of the sectors targeted for establishment within the MAP IDZ are as follows:

• • • • • • •

Manufacturing. Pharmaceuticals. Medical Devices. Logistics and Distribution. Gas to electricity generation. Agro-processing. Food processing.

• Trade facilitation. • Rail based container terminal • •

Benefits Benefits that will be derived from locating within MAP IDZ includes: • 15% Corporate Tax, national is 28%. • Building Allowance. • Employment Incentive. • Customs Controlled Area. • 12i Tax Allowance.

BONDED WAREHOUSE This project is intended to facilitate ease of trade between exporters and importers for companies located in the MAP SEZ through a customs and exercise administered secure customs area.

FREE STATE BUSINESS 2016

To discuss MAP IDZ opportunities, call Mr. Vish Maharaj, Interim CEO: Maluti-A-Phofung IDZ, T: 082 888 7830. E: vish@fdc.co.za info@fdc.co.za

(Transnet Freight rail). Automotive Cross Docking Facilities. Logistics and supply chain management.

• Retail garments export • •

and import with import substitution. Information & Communication Technology & Business Processes Outsourcing. Logistics.

MAP IDZ Milestones

• PMU Office fully operational • Bulk infrastructure roll-out • Maluti-A-Phofung IDZ is in process. Operator permit granted by • Marketing and promotion •

Minister of Trade & Industry after Cabinet Approval. Perimeter fencing has been completed.

Milestones

to build a robust IDZ project pipeline is in process. Location of investment would be demand lead.

Location

• Concept developed. MAP IDZ Secure customs areas. • Area identified • Negotiations with SARS are Investment Requirements in process.

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Estimated at R410-million.


SPECIAL FEATURE

VEHICLE DISTRIBUTION CENTRE This project is intended to position Harrismith as a Vehicle Distribution Centre. (VDC).Studies by logistics integration service providers have indicated that FS has the best potential to be a warehousing and logistics centre due to its proximity to Gauteng market and links through N3 to Durban Port and Coega Port through N1 and N6.

FOOD PROCESSING PARK The building of a world-class, integrated food processing park to be an integrated food processing park for logistics service providers, warehousing, cold storage and manufacturing facilities to enhance production efficiencies.

Location MAP IDZ Food processing precinct.

Milestones • Concept developed. Location MAP IDZ Logistics Service Providers precinct. • Business plan completed. Milestones Concept developed. Business plan completed. Expression of interest to invest sourced. Marketing the opportunity to prospective investors.

• • • •

• Marketing the opportunity to prospective investors.

Investment Requirements Investment estimated at R750-million.

TYRE MANUFACTURING The establishment and operation of a 10 000-tyre-a-day automotive tyre manufacturing plant to manufacture tyres for well-known brands such as Dunlop, Kumho etc.

Location Industriqwa (Harrismith).

Investment Requirements Investment estimated at R250-million.

Milestone

• Concept developed. • Marketing opportunity to

Project Rationale prospective investors. To bring a new player into MEDICAL EQUIPMENT AND tyre manufacturing that is Project requirements DEVICES MANUFACTURING using virgin and scrap tyres Required investment estiThe FDC has signed an investment agree- to manufacture tyres. mated at R200-million. ment with two leading Chinese companies (in the medical devices and electronic equip- BPS/BPO PARK IN FREE STATE ment value chain) to establish a medical To establish a BPO Park at Maluti-A-Phofung SEZ to attract devices and medical apparatus and instru- large national and international companies and create mentation manufacturing plant in the newly world-class proactive support services to attract inward designated Maluti-A-Phofung IDZ. investments and foster tenant-networks. Location Maluti-A- Phofung IDZ.

Location Maluti-A-Phofung IDZ BPS Precinct.

Milestones

• Investment agreement signed. • South African subsidiary of the Chinese company (Medipro) had been registered.

• Negotiations to fast-track investment are in process.

• The company has CE certification. Required Investment Investment estimated at R600-million.

Key Deliverables

• Skills development. • New business development and expansion.

Current Status Concept.

• Sustainable job creation.

Key Milestones Other Stakeholders • Securing site in phase 1 • Tertiary institutions. of MAP IDZ development. • Private sector. • Market internationally. • National and international linkages. Required Investment • The dti. R600-million.

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FREE STATE BUSINESS 2016


SPECIAL FEATURE

HARRISMITH LOGISTICS GATEWAY PROJECT This logistics hub project involves a web of activities designed to ensure the efficient movement of raw materials, intermediate inputs, and finished goods between suppliers, manufacturers, and consumers. This project is intended to improve customs clearance, where varying level of inefficient procedures delay shipments and increase import and export costs. This project is intended to leverage the strategic position of Free State as the most centrally located land locked province in South Africa, bordering six other provinces and South Africa’s largest industrial and consumer market in Gauteng. Logistic services involve a range of related activities intended to ensure the efficient movement of production inputs and finished products. Logistics hubs are very well established internationally and many examples exist where they have been successfully built and implemented. This success has led to the proliferation of such hubs and in South Africa there are many decision makers that are pushing for logistics hubs to be established in their regions or areas of jurisdiction. The feasibility of a logistic hub is dependent on a number of criteria with access to ideally more than two transportation modes, preferably three modes of transport with and a whole range of other critical conditions that needs to exist to ensure the success of any endeavour to establish a logistic hub. Logistics hubs can be defined as a specific area where all activities relating to transport, logistics and goods distribution, for both national and international transit are carried out on a commercial basis by various operators. Operators may be tenants or owners of the building or facilities (warehouses, distribution centres, storage areas and trucks facilities and services).

Project Location Harrismith.

Milestones

• Feasibility study – Completed. • Technology – Will be project based as per investments approved.

• Expected contractual/commercial structure/public private partnership for infrastructure delivery for the hub. The HLH Logistics hub operator will manage facilities and place approved tenants.

Investment Requirements Estimated capital cost requirement R30-billion.

Concept Harrismith is part of the N3 Corridor which carries 65% of the country’s freight. The HGD precinct will consist of 1 000 000m² at the point where the N3 crosses the N5, a unique position available

FREE STATE BUSINESS 2016

nowhere else on the N3 corridor. The project is intended to establish a distribution centre for destuffing and break bulk packaging of inland bound cargo as well as consolidation of outbound cargo. • Warehousing and distribution, freight forwarding, customs brokerage, transportation management, supply-chain consulting. • Domestic and international transportation management, customs brokerage and freight forwarding, supply chain consulting, warehousing and distribution services. • Warehousing and distribution, air and ocean shipping, supply-chain management, dangerous goods. • Customs clearance of inbound and outbound cargo documentation, freight forwarding, break bulk distribution and consolidation, in-transit warehousing, cross docking of cargo between road and rail. The HGD will be supported by the manufacturing hub in Tshiame, 8km from the hub precinct; this facility will enable the relocation of entities in the business of manufacturing for export through the Durban harbour. A business case is being developed which will determine the ability for the province to create cargo for export in the form of automotive parts, agro-processed and other finished goods in order to ensure the independence of the Hub from N3 traffic.

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To discuss this opportunity, contact Ms. Boitumelo Majoa Project Manager: Harrismith Gateway Project, T: 082 853 9511 | E: info@fdc.co.za E: majoaj@freetrans.fs.gov.za


FOCUS

FREE STATE TRADE OPPORTUNITIES The Free State Province offers a wide range of trading opportunities The main products exported from the Free State are:

• • • • • • • • • • • • •

Mineral products. Plastics and articles thereof. Chemical products. Vehicle and transport equipment. Agricultural equipment. Semi-precious stones, metals, imitation jewellery. Base metals and articles thereof. Textile and textile articles. Vegetable and fruit products. Wood and articles of wood. Raw hides and skins, leather and articles thereof. Medical or surgical instruments and apparatus. Live animals.

Additional breakdown of products.

• Minerals (gold, coal, diamonds, clay, limestone, salt, gypsum, granite, sand stone aggregates).

• Agriculture (maize, wheat, sorghum, potatoes, • • • • •

sunflower, red meat, vegetables, dry beans, fruit, peanuts, wool, poultry, dairy, cherries). Floriculture (cut flowers). Chemicals (fuels, waxes, synthetic fuel, liquid carbons). Agricultural machinery and equipment. Vehicles (trailers). Arts and crafts.

For additional information on trading opportunities please contact the Free State Development Corporation on 051 400 0800.

THE FREE STATE DEVELOPMENT CORPORATION OFFICE DETAILS HEAD OFFICE FDC House, 33 Kellner Street, cnr of Markgraaf Street, Westdene, Bloemfontein 9300 Tel: 051 4000 800 | Fax: 051 447 0929 MOTHEO DISTRICT OFFICES Botshabelo Office 35 Orange Str, Industrial, Botshabelo 9781 Tel: 051 534 1101/02/03 | Fax: +27 51 534 1104 Thabo-Nchu/Motheo Office 102 Manyane High Way, Selosesha, Thaba Nchu 7983 Tel: 051 873 3901 2476 | Fax: +27 51 873 3402 XHARIEP DISTRICT OFFICES Xhariep Office, Cnr Van Riebeeck and Voortrekker, Khoisan Building, Trompsburg 9913 Tel: 051 713 0342/3 | Fax: +27 51 713 0342

THABO MOFUTSANYANA DISTRICT OFFICES Thabo Mofutsanyana Office 357K Clubview, Phuthditjhaba PO Box 13901, 9870 Tel: 058 714 0060/64 | Fax: 058 714 0071 Industriqwa/Harrismith Office Cnr Amanda & de Lange, Tshiame A, Harrismith 9880 Tel: 058 635 1112 | Fax: 058 973 2603 FEZILE DABI DISTRICT OFFICES Fezile Dabi Office 31 NJ Van der Merwe Crescent, Sasolburg 1942 Tel: 016 976 8944/5 Fax: 016 973 2603

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FREE STATE BUSINESS 2016


FOCUS

Mangaung Metro The Mangaung Metro became South Africa’s newest metropolitan authority on the completion of the 2011 local government elections.

T

he capital city of the Free State, Bloemfontein, has excellent infrastructure and hosts South Africa’s Supreme Court of Appeal. Collectively, the towns of Botshabelo, Thaba ’Nchu and Bloemfontein make up the Mangaung Metropolitan Municipality.

The South African Constitution makes provision for metropolitan government where centres of economic activity require a higher degree of co-ordination than would be the case in other areas. The central locality of the Mangaung area within both the regional and national context provides a strong argument for integrated planning, and therefore metropolitan status. With the north-south N1 and east-west N8 highways passing through the axis of Bloemfontein, the centrality of the area’s location is obvious. Bloemfontein is linked to all of South Africa’s major cities by rail and has a modern airport. The infrastructure of the Mangaung Metropolitan Municipality is well developed and would be able to absorb much more development. Bloemfontein contributes about 25% of the gross regional domestic product (GRDP) of the Free State. Within that, community services make up more than a third of the municipality’s economy, with finance (18%), transport (13%), retail and trade, and manufacturing being the other significant contributors. Botshabelo is about 54km from Bloemfontein and has a number of industrial and commercial business

Mangaung Metropolitan Municipality

N8 CORRIDOR DEVELOPMENT The key priority of the Mangaung Metro is to ensure that the N8 corridor development project is realised as soon as possible. The N8 project focuses on the economic development of areas along this national road as a development spine linking the three urban centres of Mangaung – Bloemfontein, Botshabelo and Thaba ’Nchu – and towns including Ladybrand and all the way to Kimberley in the Northern Cape. It also serves as an important link to the neighbouring Mantsopa Local Municipality and the city of Maseru, in neighbouring Lesotho. The new town to be built along the N8 will have an ICC and hotels, an Urban Square, a mall, mixed housing, educational and civic sites and a railway station. The entire area to be developed is 2 000 hectares, the first phase which is currently being implemented is 700 hectares. KEY ECONOMIC ACTIVITIES There are plans to attract private investors to develop a solar water-heater manufacturing plant in Botshabelo. The aim is to make up to 300 000 solar water heaters a year. The renewable energy market is growing fast in South Africa, with several international firms signing up to national government’s independent producers’ programme.

Artist’s impression of future developments.

FREE STATE BUSINESS 2016

properties located in it, several of which are textile concerns. Thaba Nchu lies still further to the east of the provincial capital and is popular with tourists. The Protea Hotel Black Mountain is located within the Maria Moroka Nature Reserve and near the Groothoek Dam. The establishment of a metropolitan authority presents a further chance to better integrate the three towns that made up the original municipality. Bloemfontein is the main economic driver while Performance Bothshabelo and Thaba NchuAnnual have economic potential Report that has not been fully realised. The metropolitan municipality has a five-year Integrated Development Plan which aims to 2011/2012 integrate human settlements within the metro.

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FOCUS

The downstream manufacturing market is similarly growing and there are several opportunities in the Free State. The Mangaung area’s importance to the economy of the neighbouring country of Lesotho cannot be over-stated. There are plans to further strengthen these ties through a rail link and the strengthening of the N8 corridor. An important component in the city’s trading environment is the Mangaung Fresh Produce Market. The new market is located along-

into the existing expertise available at the university. The park hopes to attract companies wanting to do research and development, develop and export new products. The city is positioning itself as a centre for Business Process Outsourcing (BPO). With several educational institutions as a source of skilled labour and with good infrastructure, call centres are being attracted to Bloemfontein. The city hosts a switching centre for national telephone company Telkom and is located on the national and international fibre optic routes. The capital city’s local free newspaper, Free State Business Bulletin, has listed some major new projects currently underway in Bloemfontein:

• Airport Development Node. First phase on 700ha will be mixed development, value R11-billion.

• Warehouses for Huletts Sugar in Estoire (in the east of the city), together with a shopping centre.

• Second Avenue shopping development in city centre, Georgiou Trust.

Artist’s impression of future developments.

• Expansion of Quagga Park light industry complex, new warehouses and offices at Quaggafontein.

• R87.5-million water reservoir under construction side the strategic N8 highway, with the bulk of the trading occurring in fresh produce. Bloemfontein has a petroleum depot, a marshalling yard, rail connections to all parts of South Africa and two airports. Many national logistics companies have warehouses in the city, because of its central location. Bloemfontein regularly hosts large events such as the Macufe Festival, and has successfully hosted important football matches in international tournaments such as the Africa Cup of Nations and the FIFA World Cup. The city has excellent schools and hosts the Central University of Technology, the University of the Free State, Motheo Further Education and Training College, Universitas Academic Hospital and the Mangaung Nursing College of the Free State. Motheo FET College offers pre-tertiary and tertiary courses in diverse fields such as art and design, engineering and hospitality. The Bloemfontein campus of UFS caters for 16 000 students in six faculties. Students from 16 nations attend the university which employs about 40 international academics. A key component is the academic health complex based at the UFS in Bloemfontein. A proposed Mangaung Bio-Medical Park aims to provide a world class bio-medical park and would tap

(Naval Hill) and another planned for Vista Campus. Tempe Military Base makes a sizeable contribution to the local economy, containing as it does a number of units, including 44 Parachute Battalion. Several Air Force helicopter units are located at Air Force Base Bloemspruit, at Braam Fischer International Airport. The ‘City of Roses’ has several fine museums, including those that focus on fire brigades, military armour, Afrikaans literature and toys. The National Museum in houses a superb collection of fossils and archaeological finds such as the Florisbad skull.

CONTACT INFO Address: Bram Fischer Building, Nelson Mandela Drive & Markgraaff Street, Bloemfontein Postal: PO Box 3704, Bloemfontein 9300 Tel: 051 405 8911 Fax: 051 405 8707 Email: information@bloemfontein.co.za Web: www.mangaung.co.za

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FREE STATE BUSINESS 2016


INTERVIEW

Turning local talent into economic power The Free State is blessed with natural resources and truly resourceful individuals, and Seda is playing its part to empower the local economy. Jackie Ntshingila

JACKIE NTSHINGILA Jackie Ntshingila completed her B.Comm Accounting Degree and furthered her studies in Business Consultancy with the University of Potchefstroom. She accomplished her Master’s Degree in Business Administration with the University of the Free State. She received two awards from the University of the Free State in 2009, i.e. MBA Alumni Achiever of the Year as well as the Kovsie Alumni Cum Laude award. She also received the BMF Free State’s award as Manager of the Year 2010 and was 2nd runner-up nationally. She was also nominated for the Shoprite/Checkers Women of the Year 2010. She has served on a number of Boards and is currently on the Board of Maluti Bus Service. She left Free State Development Corporation (FDC) as an Investment Manager in 2006 to join Seda. Under her leadership, Seda Free State has supported innumerable SMMEs over the years, some of which bear testimony of their successes due to Seda’s involvement.

FREE STATE BUSINESS 2016

What challenges do you face in the Free State? High mortality of SMMEs due to lack of access to markets, poor knowledge and skills to manage their businesses, lack of start-up capital, access to information and technology. What are the opportunities locally for SMMEs? Mining and agriculture were for many decades the bedrock of the Free State economy. Large percentages of South Africa’s agricultural production particularly greens originate in the Free State. More than half of the nations sorghum, sunflower and 30% of all wheat, maize, potatoes and groundnuts come from the Free State. Livestock and flowers are other important agricultural products. Through the creation of development corridors by the Free State Provincial Government, road and rail opportunities are available. The Harrismith Logistics Hub on the N3 is at the centre of these plans. The Eastern Free State being the tourist hub with Clarens, the Golden Gate National Park, Cherry Festival and the Mangaung Cultural Festival (MACUFE) in Bloemfontein present many opportunities for SMMEs. Corporates have introduced supplier development programmes to align to the new BBBEE codes to afford small enterprises the opportunity to enter the market. Seda has been playing an active role to ensure that SMMEs are aware of these opportunities and that they have been referred and assisted to participate fully. There are many farming opportunities in the Free State. Any advice or insight for cooperatives operating in the Free State? Cooperative members must make their own monthly contributions irrespective of how little it might be. Full participation and involvement of all cooperative members in the daily affairs of the cooperatives are vital. Corporative governance is another critical success factor – a cooperative is a business like any other business and must treated as such. People must also identify the right people to become part of the cooperative and their skills must be complementary. A common course and interest is critical for the success of the cooperative.

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INTERVIEW

What led Seda Free State to innovate your mobile office? Seda Free State has five district offices and two satellite offices. Many aspiring entrepreneurs in rural and far-flung areas do not have access to all our offices, therefore the idea of mobile units was conceived out of this challenge. The mobile units make it easier for the organisation to take its services to the people where office space is not available and are also used for our outreach campaigns. Two of the mobile units have been funded by Sasol Infrachem. What feedback have you had from your Exporters and Cooperative Forums? Various firms have been exposed and have participated at local and international trade fairs through these forums. In collaboration with the Free State Development Cooperation, Seda Free State afforded clients the opportunity to exhibit their products at SAITEX, SARCDA, the Bloem Show, Cherry Festival and MACUFE exhibitions. Clients have since received access to markets as a result of their attendance and involvement in the aforementioned exhibitions.

SEDA FREE STATE Provincial office Seda Free State Telkom Building, Block B, 1st Floor, Nelson Mandela Road, Bloemfontein T: 051-411-3820 | F: 051-444-4235 Website: www.seda.org.za Bloemfontein Seda Mangaung Branch Office T: 051-411-8300 Kroonstad Seda Fezile Dabi Branch Office 056-213-1809/10 Welkom Seda Lejweleputswa Branch Office 057-352-1870/45 Sasolburg Seda Metsimaholo Satellite Office 016-974-2460/2642

NATIONAL GAZELLE’S PROGRAMME Taking Small Business Support to Strategic Levels The National Gazelles is a new type of SME support and development programme aimed at accelerating the competitiveness, growth and performance of a significant group of high-potential SMEs over the next 10 years. The programme is in line with the latest international research and best practice in SME development. The programme objectives are to support 200 high-growth-oriented entrepreneurs and fast-track their business growth), to offer specialist care to 160 Gazelles and leverage partnerships private-public sector entities in order to serve the GHCP. Benefits include • An immediate grant of R1-million to upgrade equipment and software, subject to terms and conditions. • Guaranteed credit lines from funding institutions and facilitated access to growth funding, grants and business incentives. • A 24-hour help desk with specialist advisors • Detailed analysis of business to ensure sound support roadmap. • Access to key decision-makers and business networks. • Development of effective, robust growthfocused business strategy. • Access to top business, technical and marketing specialists. Qualifying conditions include • Turnover between R1-million to R30-million. • Must have been in business for two years. • Compliant with all statutory requirements. • Must employs at two people. Contact the National Gazelles through Seda Free State or call 011-028-2168.

Phuthaditjhaba Seda Thabo Mofutsanyana 058-713-1683/1689

info@nationalgazelles.org.za www.nationalgazelles.org.za

Trompsburg Seda Xhariep Branch Office 051-713-0363/0405

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/10001094SM/FS

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 relevant to an industry that the IDC supports and require funding of R1 million or more, take the lead and make history. Call the Bloemfontein office on 051 411 1450 or visit idc.co.za to learn more about the funding criteria for the sectors that the IDC supports.


75 YEARS OF INDUSTRIAL DEVELOPMENT

OF IN

AL DEVELOPM DUSTRI E NT SINCE 1940


OVERVIEW

Agriculture The Free State is South Africa’s bread basket and the primary agricultural sector has always played an important role in the Free State economy.

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he Free State agricultural sector comprises crop production, animal production, horticulture, dairy farming, game farming, aquaculture, fruit production and agro-processing. The focus of agricultural development in the Free State is agriculture diversification and agri-business.

The sector is characterised by large farms and is responsible for 15% of gross agricultural income in the country. Major crops are maize, wheat, sorghum, sunflowers, potatoes, groundnuts, soy beans and wool. The province accounts for 90% of cherry production in the country. • Cattle (beef and dairy) – 7.5-million hectares representing 58.2% of total farm land in the province is used as grazing pastures. About 24% of South African beef is produced in Free State. • Sheep (mutton and wool) – the Free State contributes 17.4% of sheep production in the country. • Pork – the Free State accounts for 8% of pork production in the country. • In 2012, per capita consumption of poultry meat was 32.96kg per year in comparison to beef at 17.65kg and pork at 5.48kg and mutton and goat at 3.16kg. The industry is currently growing at 4% per annum and consumption of broilers is complemented by 15% of exports mainly from Brazil. • Chicken production in Free State consist of broilers and layers. Broilers constitute 83.3% of the chicken industry. The agricultural sector is vital to the well-being of the province, both as a provider of foods and jobs. But it also holds the potential in its raw materials to help the Free State expand its manufacturing sector. Provincial authorities are very upbeat about the potential for agri-processing. Investors are being encouraged to look at baby vegetables, wholesale meat production and leather manufacturing. The Free State Department of Agriculture and Rural Development (DARD) has highlighted the fact

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that only 11% of the province’s primary agricultural production is processed within the province’s boundaries. Improving on this percentage is key to the strategy known as Mohoma-Mobung. A sum of R30-million has been allocated to the first phase of the project. Key to commercialising these agricultural options is access to finance and the Industrial Development Corporation (IDC) has been very active in the province in this sphere. The Free State has recently captured a major slice of the soya bean market. According to Statistics South Africa, the 2013-14 season was the first time on record that the Free State dominated the soya bean production market, accounting for 42% of South Africa’s production compared to the 40% of Mpumalanga, the historical market leader. Phase 1 of the Vrede Integrated Dairy project has been completed, with more than 400 dairy cows in lactation (the project runs with 810 dairy cattle), and Phase 2 (a milk processing plant) is nearing completion. The province has also successfully implemented the Grain Field Chicken abattoir in Reitz (together with the broiler houses in Tweeling), with the support of VKB Agriculture, with the intention of developing the Free State as the poultry hub of South Africa. A R45-million donation from the People’s Republic of China assisted with the construction of a Demonstration Fish Hatchery Centre, which is now operational and is staffed by three Chinese professors and a technician as part of a technological cooperation agreement. There are also plans to establish a mega Agri-Park in the Xhariep district comprising of fish, ostrich, sheep and vegetable production, along with packaging and marketing. The Free State’s agricultural output for the 2013-14 financial year was recorded at R6.2-billion, an increase of R309-million when compared to the R5.9-billion recorded in 2004.


OVERVIEW

Facts and figures Lejweleputswa district The Free State is responsible for 15% of South Africa’s The Vals River irrigates the region well and maize is gross agricultural income and contributes approxi- the main product, but wheat, sunflowers, nuts and mately 4% to the provincial gross domestic vegetables thrive here too. Welkom is the site of a product. Just over 90% of the province is agricul- pecan-nut project while peanuts are cultivated in tural land, with 32% of its 11.6-million hectares more than one location. Livestock and dairy farming classified as arable and 60% suitable for pasture. A complete a diverse farming portfolio. Bothaville summer-rainfall region with a mean annual rain- is the centre of maize farming and Virginia is an fall of 532mm, the Free State’s climate, soil types important railhead. and topography vary greatly within the province, with plains in the west and mountains in the east. Fezile Dabi district The western and southern areas are semi-desert, The Vaal Dam provides a plentiful water supply to with some Karoo vegetation occurring in the south. support the region’s extensive production of maize, The province supplies significant proportions of wheat and sunflowers. Around Parys, tobacco, the nation’s sorghum (53%), sunflowers (45%), pota- maize, sorghum and cattle are also farmed, while toes (33%), groundnuts (32%), dry beans (26%), wool the land around Vredefort also supports peanut (24%) and almost all of its cherries (90%). Red meat crops. Kroonstad is an important town for the agriand dairy are other important products and game cultural economy, containing large grain elevators hunting is a fast-growing industry, and several large and railway-marshalling yards. Wheat flourishes in Free State farms have been converted from stock the eastern parts of the Free State where between to game farms in recent years. Crop production 650 000 and 740 000 tons are harvested every year. represents about two thirds of the province’s gross agricultural income. The main crops are maize and Thabo Mofutsanyana district wheat. Sunflowers, sunflower seeds, sorghum and Fully 90% of South Africa’s cherries are produced soy beans are other major crops. The Mangaung near Ficksburg. Both green and white asparagus Fresh Produce Market plays a vital role in the sector, are produced in the district, which is hilly and well catering as it does to householders, bulk buyers, watered. Soya, dry beans of many sorts, sorghum, informal traders, agents and farmers. sunflowers, potatoes and wheat are other important crops. Apples in the Thabo Mofutsanyana district The Xhariep district ripen first, which gives the region a distinct advanSheep are mostly found in the dry southern areas tage in being able to reach the market earlier that and wool is an important product. Irrigation produce from other areas. The provincial governschemes, such as the one at Jacobsdal, allow for the ment has plans in place to invest massively in the production of grapes, with Landzicht and Wilreza development of the Free State apple industry. Cellars being two of the main wine producers. The potato is the other main crop to benefit from irriDEPARTMENT OF AGRICULTURE gation. Walnuts are cultivated near Rouxville and AND RURAL DEVELOPMENT peanuts, wheat and vegetables are also cultivated. MEC: Mr Oupa Khoabane Physical address: Gielie Joubert Street, Glen, Bloemfontein 9360 Postal address: Private Bag X01, Glen, Bloemfontein 9360 Tel: 051 861 8510 Fax: 051 861 8578 / 086 723 8206 Website: www.ard.fs.gov.za

Mangaung Metro and surrounding areas Open grass plains characterise this central section of the province, with mountains in the east. Commercial livestock farming, notably at Mantsopa and Naledi, is the main form of farming, and one of the country’s biggest dairies is just north of Bloemfontein. The eastern area produces potatoes and sunflowers.

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OVERVIEW

Mining Mining contributes 12.6% of the Free State provincial gross domestic product and many thousands of families are dependent on mining wages.

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he gold sector in South Africa employs 157 000 people (32% of mining sector employment) who earn about R19.9-billion (Chamber of Mines). Important minerals mined in the Free State include gold and its by-products (uranium, silver, platinumgroup metals and sulphuric acid), diamonds, coal and bentonite. South Africa has gold reserves of 6 000 tons and the Free State has 12 gold mines. The recent extension of the Manganese packaging facility at Transwerk in Bloemfontein has created opportunities for SMME truck-owners in partnership with Women in Transport and Logistics. As a result of this development, more than 100 direct and 50 indirect jobs have been created.

needed to start mining. In March 2014, a new share issue in London attracted R45-million, and was oversubscribed. In July 2015 a Placing and Open Offer raised R122,37-million to complete underground development at the Lace Mine. De Beers’ Voorspoed mine in Kroonstad is one of the largest diamond mines in the world, with estimated reserves of 10-million carats of diamonds and an annual production capacity of 800 000 carats per year (when the mine is fully operational). During the building phase, about R70-million was generated in the region, and the company intends spending R400-million per year on developing its capacity. It is anticipated that more than R1-billion will be generated during the mine’s productive lifespan, which would help to create over 1 200 jobs, with Diamonds upwards of 40% of that workforce being drawn from With the granting of a licence to Diamond Corp to the region. Petra Diamonds’ Koffiefontein mine is rated as develop the Lace Mine, the Kroonstad area is once again a centre of diamond mining, as the Voorspoed one of the world’s top diamond mines by average mine owned by De Beers is nearby. value per carat and, based on its current resources, The potential for annual diamond production at it has an estimated 20 years of productive diamond the Lace Mine could be 400 000 to 500 000 carats mining capacity available. They produced 34 800 per year. The Industrial Development Corporation carats in 2013, a drop in production compared has advanced R220-million in project finance, con- to 2012, but reached 50 375 carats in 2014, before ditional on Diamond Corp obtaining the balance dropping to 45 384 carats in 2015. The value per carat achieved in FY2013 was $471, rising to $542 in 2014, before tailing off to $386 in 2015. According to Petra Diamonds, “underground production for FY 2015 did not reach planned levels due to problems with regards to the civil groundworks of the 62 Level crusher”. The company has confirmed that these issues have been addressed and production is expected to continue at planned levels.

Gold Sibanye Gold is South Africa’s largest individual gold producer and is ranked as one of the 10 largest gold producers in the global market. At the end of the third quarter of 2015, Sibanye

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announced that their gold operations “had largely recovered from the operational challenges experienced during the March 2015 quarter”, with production from the Beatrix and Cooke Operations improving significantly, driven largely by a planned increase in volumes mined and milled. Gold production from their surface operations increased by 13% and the Group’s gold production of 12 772kg (410,600oz) for the September 2015 quarter was 3% higher than achieved in the June 2015 quarter. At the end of October 2015, Sibanye offered R4-billion cash for the entire issued share capital of Aquarius Platinum and, according to Mining Weekly, in industrial production: Vereeniging, Sasolburg and Sibanye hopes to “be able to unlock synergies of Vanderbijlpark. The mine employs more than 900 R800-million a year”. people and supplies about 15-million metric tons of AngloGold Ashanti’s Vaal River Complex opera- coal to Eskom’s Lethabo power station annually. tions are mostly near the town of Orkney in the North West Province. However, the Great Noligwa, Other minerals Kopanang and Moab Khotsong mines are all over the Among the companies running large quarries in Vaal River in the Free State. The complex includes one the Free State are Lafarge, Raumix and Corobrik. uranium plant, four gold plants and one sulphuric Sand, stone aggregate, gypsum and granite are acid plant. Anglo Gold Ashanti intends spending found at various sites throughout the province. several billion rand over the next decade to extend Limestone and calcrete occur in the western Free the life of the Maob Kotsong mine. Village Main Reef State where salt is also panned. Production is conhad good returns from its Tau Lekoa mine in 2013. centrated around the Florisbad salt pan, north-west Most of Harmony’s operations, including a tail- of Bloemfontein. The Ocean Bentonite Mine near ings treatment, are in the Free State. The mines are Koppies in the north-west Free State is one of only Tshipong and Phakisa (near Odendaalsrus), Virginia, two in South Africa. Target (near Allanridge), Masimong (Riebeeckstad), Beneficiation and other policies Joel (near Theunissen) and Bambanani at Welkom. Phakisa has mineral reserves of just over five- Lucrative opportunities exist for downstreaming million ounces of gold and Harmony has invested and mineral processing. Government has already heavily in the project. Gold mines in the Free State developed a minerals beneficiation strategy as a also supply a substantial portion of the total silver key area for potential for growth. This has a potenproduced in the country, and large concentrations of tial to transform the sector from resource based to uranium occurring in the gold-bearing conglomer- knowledge-based. ates of the goldfields are extracted as a by-product. DEPT OF ECONOMIC, SMALL BUSINESS DEVELOPMENT, TOURISM AND ENVIRONMENTAL AFFAIRS

Coal The Sigma-Mooiplas mine is run by Sasol Mining and supplies Infrachem in Sasolburg with twomillion tons of coal per year. Sasol Mining has invested in dust-suppression technologies which are remote controlled. Technologies include scrubbers and high-pressure water-spray systems. Anglo Coal runs the New Vaal Colliery in the middle of a triangle of three towns that play an important part

MEC: Mr Sam Mashinini Physical address: Bojanala Building, 34 Markgraaf Street, Bloemfontein 9300 Postal address: Private Bag X20801, Bloemfontein 9300 Tel: 086 110 2185 | Fax: 051 400 9593 Website: www.edtea.fs.gov.za

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OVERVIEW

Manufacturing South Africa has a well-established manufacturing base, which places it well ahead of many developing countries.

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Diversification is key The Free State is in the process of growing and diversifying its manufacturing sector. The existing manufacturing sector has capacity in many sectors including agri-processing, textiles, carpets, engineering, packaging, furniture and jewellery. Where before it was reliant on primary sectors such as agriculture and mining, the Free State manufacturing sector now accounts for 14% of the provincial gross domestic product (PGDP). Part of the reason for this growth has been the decline of the Downstreaming in the petrochemical industry mining sector’s contribution, but manufacturing is would seem to have potential. The ChemCity com- also being encouraged by government. plex has now been established and manufacturing Other methods of promoting small-scale manuand business services stands are available for pur- facturing include developing a ‘small town strategy’ chase or long term-lease in the ChemCity com- and linking this with local economic development plex. The country offers a competitive advantage (LED) plans. The mine mitigation project is intended in terms of raw materials and feedstock. There is to identify new economic uses for closed mining an abundance of mineral feedstock for manufac- shafts of areas that have been previously mined in turing chemicals. The rock phosphate available in Matjhabeng. This is intended to identify new develSouth Africa is benchmarked as being of the highest opment opportunities that will be accompanied by quality. The Free State Sasol complex produces: close mine rehabilitation programme. Special meas• Sasol Nitro: Produces ammonia, nitric acid, indus- ures to support refocused economy with special trial explosives and fertilisers. emphasis on those negatively affected by closure • Sasol Polymers: Produces ethylene, propylene, of mines. Local communities and entrepreneurs polypropylene and hydro-chloric acid. are being encouraged to think of ways of using • Sasol Solvents: Produces alcohols, acrylic acid, ethyl assets that will be left behind: shafts, workshops, acetate and mining chemicals. boarding houses, recreational facilities and metal• Sasol Olefins and Surfactants (SO&S): Produces par- lurgical plants. affins, olefins, zeolites and oleochemicals. Agriculture and mining can still play an impor• Sasol Technology: Manages Sasol’s research and devel- tant role in providing raw materials for manufacopment, technology, management and innovation, turing processes. The Virginia Jewellery Hub, for engineering services and project management portfolios. example, takes advantage of the availability of gold • Sasol Wax: World-leading supplier of hard and and silver in the Lejweleputswa district. medium waxes, petroleum jellies and liquid paraffins. Harrismith is the home base of Nouwens • Sasol Infrachem: Provides a services platform for Carpets, a company established in that town in 1962 reforming natural gas and providing utilities, infra- as well as Boxmore Plastics, South Africa’s biggest structure and site support at Sasol’s Sasolburg converter of PET resin to bottles and it sells its prodcomplex. It is responsible for the Sasolburg site- ucts in 26 countries. Empire Gloves makes indusgovernance and provincial reputation management. trial gloves. Kroonstad-based Octa Engineering outh Africa is among the top 25 chemical-producing countries in the world. It contributes significantly to the global chemicals industry. The chemicals sector is South Africa’s largest in terms of value-added output and is the fourth-largest employer in the manufacturing segment. The industry is dominated by basic chemicals, with major production of liquid fuels, organic solvents and industrial mineral derivatives. The domestic plastic industry caters to local demand and various export markets.

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OVERVIEW

makes specialised rail carriages for the gold and platinum mining sector. In Bloemfontein, Transnet Rail Engineering manufactures new wagons for the Transnet group, including iron ore and cement wagons and fuel tankers. Although the textile and apparel sector has been under tremendous pressure in recent times, the towns of Botshabelo, QwaQwa and Thaba Nchu have factories employing several thousand people. The Free State Clothing Manufacturers’ Association comprises mostly Chinese and Taiwanese factory owners, according to the Mail & Guardian.

Maluti-A-Phofung Special Economic Zone The Special Economic Zone Act, Act No 16 of 2014, became effective on 19 May 2014. The Free State Provincial Government (FSPG) has conceptualised the Maluti-A-Phofung Special Economic Zone and applied for designation in terms of the Act. The programme is intended to enhance industry competitiveness and attract foreign direct investment into the region. Some of the projects under consideration include industrial precincts such as food processing, container terminal, vehicle distribution centre, parts and accessories and general manufacturing. The facility will offer a prime valueadded service by it having a customs-controlled area (ie a ‘free zone’), a benefit afforded to it by its SEZ designation and operator permit. New sectors The pharmaceuticals sector is being targeted for growth. A Pharmaceutical Biomedical Park is being considered in an area close to the N8 highway and Bloemfontein, where the medical expertise of university personnel is a major asset. The Free State Development Corporation has identified investment opportunities in the renewable energy field: a solar water heater manufacturing facility is planned for Botshabelo and there are opportunities in solar panel assembly and manufacturing. The Central University of Technology, with campuses in Bloemfontein, Welkom and Kimberley, has a Product Development Technology Station which works together with manufacturers in testing products and suggesting improvements in design.

Food and beverages Free Staters drink about 1.25-million litres of beer every year, and two-million litres of soft drinks. Not surprisingly, nearly 20% of the province’s manufacturing sites are devoted to food and beverages, with soft drink giant Coca-Cola Fortune operating a large bottling plant in Mangaung. Clarens in the north-east has its own micro-brewery, Clarens Brewery, which hand crafts 8 000 litres of full-grain ales a month using with the finest malts and hops sourced both locally and internationally a month, as well as 200 000 litres of cider under our Red Stone Cider label annually. A new bottling plant has been constructed to service the Landzicht Wine Cellar, an operation that distributes2.4-million litres of wine every year from Jacobsdal. The Homsek Group is an integrated dairy products producer with one of the biggest Ayrshire herds in the world, with 2 000 head registered. Their Bloemfontein facility can produce up to 60 000 litres per day of fresh dairy products, backedup by a further 200 000 litres per day from their long-life factory. They supply all the major retailers nationwide, with their fresh milk being stocked by the upmarket Woolworths group. The main poultry and animal feed operations of Country Bird Holdings (CHB) are in the Free State, which supply between 1.2-million and 1.4-million of chickens on a weekly basis to retail and fast food clients around South Africa. One of CBH’s strategic subsidiaries is Nutri Feeds, a manufacturer of world-class animal feed which has feed mills in Bloemfontein (monthly capacity of 6 000 tons) and Viljoenskroon (32 000 tons) and Mafikeng (8 000 tons). DEPT OF ECONOMIC, SMALL BUSINESS DEVELOPMENT, TOURISM AND ENVIRONMENTAL AFFAIRS

MEC: Mr Sam Mashinini Physical address: Bojanala Building, 34 Markgraaf Street, Bloemfontein 9300 Postal address: Private Bag X20801, Bloemfontein 9300 Tel: 086 110 2185 | Fax: 051 400 9593 Website: www.edtea.fs.gov.za

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OVERVIEW

Oil and gas Petrol, diesel, jet fuel and paraffin are all produced at Sasolburg.

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he petrochemical complex at Sasolburg is a At Gold Fields’ Beatrix mine, the Beatrix Project has major national asset. The Natref fuel refinery is been registered a methane-gas-capture project with one of only four in South Africa, and the coun- the United Nations Framework Convention on Clitry’s only inland refinery. It is strategically placed near mate Change (UNFCCC). The first phase of the project to the industrial hub of southern Gauteng. entails flaring excess gas, with a plan to later convert A Sasol subsidiary, Sasol New Energy, is building some of the gas into 5MW of electricity. a new power plant to increase the amount of elecThe second phase of the project will explore ways tricity available to the integrated energy and chem- of generating electricity from the gas in order to conical group. Natural gas will be the feedstock for the vert harmful greenhouse gas into a valuable resource. 140MW facility, and it will allow Sasol to reduce its carbon emissions from the Sasolburg complex by Oil about a million tons per year. The Natref refinery is a joint venture between Sasol The Free State Department of Economic Devel- Oil (63.6%) and Total SA (36.3%). It is a technologiopment, Tourism and Environmental Affairs has cally advanced facility, which refines heavy crude announced that two new plants are to be estab- oil into petrol, diesel, commercial propane, jet fuel lished in the province, generating energy from old and bitumen. The capacity is 92 000 barrels per day. tyres, as well as processing old tyres into usable prod- Between 60% and 70% of petroleum is distributed by ucts such as diesel, gasoline, crude carbon black and pipeline, 20% to 25% by road and 5% by rail. The products sold by Sasol Oil include both lead natural gas. It is anticipated that the two factories will create 120 direct jobs. replacement and unleaded petrol, Sasol turbodiesel™, a range of lubricants, industrial fuel oils, illuminating paraffin and liquid petroleum gas, in addition to marine diesel oil and bitumen. South Africa’s national oil company is the Petroleum Oil and Gas Corporation of South Africa (PetroSA), whose main facility is a gas-to-liquids plant in the Western Cape. Petroleum Agency SA is a government agency that supports exploration for onshore and offshore oil and gas resources, and regulates exploration and production activities. The agency is the custodian of the country’s database related to all exploration and production.

Gas South Africa is slowly turning to gas as an alternative to coal as an energy source, with Sasol the major supplier. The major economic sectors using gas are the metals sector (48% of volume, with the steel industry the most prominent), and the chemical, pulp and paper sector (about 20%). Brick and glass manufacturers are also big consumers. Pipeline gas supplied from Sasolburg amounts to 27.3-million gigajoules, FREE STATE BUSINESS 2016

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OVERVIEW INFRASTRUCTURE NEWS

with customers mostly in the greater Joburg with mostly ineast the of greater Joburg area, thecustomers industrial complex Joburg, and area, the industrial complex east of Joburg, and Durban. Gas raw materials come mainly from the Durban. Gas raw materials come mainly from the by-products of Sasol’s petroleum plants at Secunda by-products of Sasol’s petroleum plants at Secunda (Mpumalanga) and Sasolburg. Products include (Mpumalanga) and Sasolburg. Products include oxygen for medical use, liquefied petroleum gas oxygen for medical use, liquefied petroleum gas for industrial, household and recreational use, and for industrial, household and recreational use, and oxygen and acetylene. Specialised gases such as oxygen and acetylene. Specialised gases such as argon, helium and nitrogen are also produced. argon, helium and nitrogen are also produced. Plans to look for shale gas using a hydraulic fracPlans to look for shale gas using a hydraulic fracturing (aka(aka ‘fracking’) method turing ‘fracking’) methodhave havecaused causedcontrocontroversy andand have been put ononhold. versy have been put hold.Although Althoughthere there areare references to to thethe gas references gaslying lyingunder underthe theKaroo, Karoo, it will probably notnot affaff ectect the it will probably thesouthern southernFree FreeState, State, as most maps indicate that the as most maps indicate that thegas gasreserves reserveslie liefurfurtherther south. south.

NEWS •INFRASTRUCTURE Free State provincial government and the Depart• ment Free State provincial government and the Departof Water and Sanitation have embarked on a

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Pipelines Pipelines With large proportions With large proportionsofofthe thecountry’s country’soil oiland and gasgas being transported bybypipelines, being transported pipelines,this thisisisaacrucrucialcial aspect of of thethe nation’s infrastructure. aspect nation’s infrastructure.Transnet Transnet Pipelines is the only operator ininthe Pipelines is the only operator thefield, field,handling handling an an average of of 1616 billion average billionlitres litresofofliquid liquidfuel, fuel,and and more than 450450 million cubic metres more than million cubic metresofofgases gasesevery every year. liquid products leadedand andunleaded unleaded year. TheThe liquid products areare leaded petrol, aviation turbine fuels,diesel dieseland andcrude crudeoil. oil. petrol, aviation turbine fuels, Transnet pipelines is structured andmanned mannedininsuch such Transnet pipelines is structured and a way it can optimally manageitsitsown ownnetwork network a way thatthat it can optimally manage grow to meet changingneeds needsofofitsitsclients clients andand grow to meet thethe changing as well as the country a whole. as well as the country asas a whole. One pipeline-intakestations stationsisisatatthe the One of of thethe pipeline-intake crude nery Coalbrook(Natref) (Natref)ininthe theFree Free crude refirefi nery at at Coalbrook State, pipeline networkstretches stretchesout outover over State, andand thethe pipeline network province into KwaZulu-Natal,Gauteng, Gauteng,North North thethe province into KwaZulu-Natal, West Mpumalanga– –and andBotswana Botswana and and West andand Mpumalanga Mozambique. Transnet Pipelinesemploys employs600 600staff staff Mozambique. Transnet Pipelines its clients include SouthAfrica’s Africa’smajor majorfuel fuel andand its clients include allall ofof South companies namely: Caltex, Engen,Exel, Exel,Sasol SasolOil, Oil, companies namely: BP,BP, Caltex, Engen, Sasol Gas, Tepco, Shell and Total. Sasol Gas, Tepco, Shell and Total.

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DEP ECONOMIC, SMALL BUSINESS DEVELOPMENT, DEP ECONOMIC, SMALL BUSINESS DEVELOPMENT, TOURISM AND ENVIRONMENTAL AFFAIRS TOURISM AND ENVIRONMENTAL AFFAIRS

MEC: Mr Sam Mashinini MEC: Mr Sam Mashinini Physical address: Bojanala Building, Physical address: Bojanala Building, 9300 34 Markgraaf Street, Bloemfontein 34 Markgraaf Street, Bloemfontein 9300 Postal address: Private Bag X20801, Postal address: Private Bloemfontein 9300 Bag X20801, Bloemfontein Tel: 086 110 9300 2185 | Fax: 051 400 9593 Tel:Website: 086 110 2185 | Fax: 051 400 9593 www.edtea.fs.gov.za Website: www.edtea.fs.gov.za

ment of Water and Sanitation have embarked on a major new project to construct a water pipeline major new project to construct a water pipeline from the Xhariep Dam. The pipeline will secure from the Xhariep Dam. The pipeline will secure and strengthen the water supply to various towns and strengthen the water supply to various towns in the Naledi local municipality, in addition to in the Naledi local municipality, in addition to towns in the Xhariep District and the Mangaung towns in the Xhariep District and the Mangaung Metro. They will cooperate on various other initiaMetro. They will cooperate on various other initiatives, including the Adopt-a-River project and the tives, including the Adopt-a-River project and the clean-up ofdams damsand andreservoirs. reservoirs. clean-up of The Gauteng-FreeState-KZN State-KZNCorridor Corridor will serve The Gauteng-Free will serve as a major national logistics hub, while the Malutias a major national logistics hub, while the Malutia-Phofung SpecialEcon Econom omicicZone Zonewill will comprise a-Phofung Special comprise of HarrismithGateway Gatewayand andTshiame Tshiame Industrial of the the Harrismith Industrial Development area. Development area. The establishmentofofaacontainer containerroll-out roll-out has The establishment has commenced in QwaQwa QwaQwaininorder ordertotoenable enable commenced in commodity storage. commodity storage. Deliberations aroundthe theN8 N8Rail RailLink Linkasas part Deliberations around part of of the broader broaderN8 N8Corridor CorridorDevelopment Development Project Project are back back on on track, track,although althoughthere thereis isnow now a delay a delay in Transnet FreightRail’s Rail’sWarden-to-Harrismith Warden-to-Harrismith Transnet Freight rail line (a (a route routethat thatwhich whichwill willcover cover52km). 52km). “Road infrastructure infrastructureconstruction constructionisisthe themainstay mainstay of economic economic development. development.ItItisisa acatalyst catalystforfor AsAs a a job creation,” creation,” said saidPremier PremierAce AceMagashula. Magashula. were result of this this commitment, commitment,9494contractors contractors were appointed on appointed on the theContractor ContractorDevelopment Development Programme of Roads Programme ofthe theDepartment DepartmentofofPolice, Police, Roads and Transport. and Transport. “Our “Ourhighways, highways,railways railwaysand and access roads rural access roads link linkpeople, people,cities, cities,towns, towns,and and rural areas. For toto areas. For us, us,this thisisisabout aboutinterconnectedness interconnectedness ourselves and Premier, ourselves andthe theworld worldatatlarge,” large,”said saidthe the Premier, who took critical who took pride prideininconfi confirming rmingsome someofofthe the critical work to work to be be undertaken undertakenduring during2016. 2016. The construction The constructionof ofthe theR74 R74(the (theHarrismith– Harrismith– Oliviershoek-pass road), Oliviershoek-pass road),aacritical criticalroad roadthat that impacts on Free State and KZN’s tourism. impacts on Free State and KZN’s tourism. Resealing the Koppies–Sasolburg road to mitiResealing the Koppies–Sasolburg road to mitigate against the increase in road accidents that gate against the increase in road accidents that have occurred on that specific road. have occurred on that specific road. Other infrastructure projects to be impleOther infrastructure projects to be implemented during the forthcoming financial year mented during the forthcoming financial year include the Vrede, Thaba Nchu, QwaQwa and include the Vrede, Thaba Nchu, QwaQwa and Botshabelo Transport Routes (these will be impleBotshabelo Transport Routes (these will be implemented within the EPWP guidelines). mented within the EPWP guidelines). Source: Free State Premier Ace Magashule’s Source: State Free State Magashule’s of thePremier ProvinceAce Address, 2015 State of the Province Address, 2015

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FREE STATE BUSINESS 2016


Our heritage – your future More than 65 years ago, our early pioneers pursued a vision to commercialise the production of oil from coal. The location for this bold venture: a remote area south of Johannesburg near the banks of the Vaal River, known as Sasolburg. That landmark decision, in later years, saw the Sasol group transform from a single petrochemical site to a global integrated energy and chemicals company, with presence spanning 37 countries and listings on both the JSE (Johannesburg Stock Exchange) and New York Stock Exchange.

technologies that saw the introduction of additional chemical products to our core product suite. Over the past 10 years, the Sasol group invested approximately R20 billion in a range of environmental programmes to ensure sustainability and effective management of safety, health and environmental risks. Sasolburg Operations has been a significant beneficiary of these programmes.

As a Regional Operating Hub, Sasolburg Operations remains one of the cornerstones of Sasol’s Southern African footprint, contributing to job creation, sustainable development and security of supply in chemicals and lowcarbon electricity.

In 2005, a R12 billion capital investment led to Sasolburg Operations converting from coal to natural gas as feedstock, realising a significant reduction in carbon footprint. The conversion resulted in a 100% reduction in hydrogen sulphide emissions, a 39% reduction in greenhouse gas emissions and a 42% and 37% reduction in sulphur dioxide and nitrogen oxide emissions, respectively.

Through continuous innovation and ongoing capital investment, Sasolburg Operations has undergone numerous enhancements over several decades to unlock further value from existing production processes, while reducing emissions and improving both energy efficiency and water usage. Chiefly, these developments led to the discovery and monetisation of new by-products from our proprietary

Through the Sasolburg Expansion Programme, initiated in 2009, we are investing R16,4 billion in capital expenditure at Sasolburg Operations. The programme has already delivered the first phase of the wax expansion project, new ethylene purification unit to meet growing polyethylene demand and gas-to-power plant which generates 175 megawatts of low-carbon electricity.

Free State Business 2016 approved.indd 1


On 1 July 2014, Sasol’s new value chain-based operating model came into effect. The implementation of the model had a powerful impact on Sasol in Sasolburg as it brought our different chemical manufacturing businesses together as one Sasolburg Operations. Today Sasolburg Operations is an integrated manufacturing facility responsible for the sustainable production of base and performance chemicals as well as low-carbon electricity to support our one Sasol bottom line. The town of Sasolburg, and indeed the Free State province, has been instrumental in enabling our continued industrial and social investment in the region, while providing a robust springboard for our growth into new markets. Through Ikusasa, our public-private sustainability initiative, we are creating an environment where talent can flourish, internal and external partnerships are strengthened and we can build and enhance capacity in local government. Our priority is to ensure that together with our partners, the region remains a conducive environment for ongoing growth and economic development.

2015/10/01 12:26:43 PM


OVERVIEW

Logistics and transport The transport and logistics sector plays a crucial role in the provincial economy, mainly due to the province’s strategic geographic location.

T

he central location of the Free State ensures a agricultural commodities, and the building of a strategic role in the logistics sector. This means railway line to link Bloemfontein with Kimberley that the Free State has greatest opportunity for and Maseru. This is part of a national drive to move investment in warehouses, logistics and distribution. freight to rail, and is expected to be followed by a Major players have already opened their logistics line expansion to Port Elizabeth to allow more of the operations in the Free State. The N8 corridor in mineral to be exported from the port at Coega. close proximity to Bloemfontein airport is a popular The Mangaung Metropolitan Municipality has a investment location for warehousing, distribution, five-year Integrated Development Plan in place, and transport is a key component. The N8 is a central part transport and logistics opportunities. The Free State is leveraging its strategic posi- of the plan, providing as it does the main link on the tion as South Africa’s most centrally located prov- east-west axis. Kroonstad is one of the country’s most imporince to boost the transport and logistics sector. Several national roads pass through the province: tant junctions, straddling as it does the main line the extremely busy N3 to the ports of Durban and between Cape Town and Johannesburg. It is also a Richards Bay, the N1 and N5 highways leading to major marshalling yard. the industrial development zones at Port Elizabeth (Coega) and East London, with the N1 ending at the Air port city of Cape Town. A plan to boost ‘corridor Bram Fischer International at Bloemfontein is the development’ along the N8 is also in place. The N8 province’s major airport and is managed by Airports connects the provincial capital with Lesotho’s capital, Company South Africa (Acsa). A project covering Maseru, and the Northern Cape city of Kimberley. 2 000ha and expected to cost in the region of R100Harrismith is also centrally located: 300km from billion over several phases has been initiated at the Johannesburg, 350km from Bloemfontein and 300km airport. Ultimately the area will have industrial land, from Durban. This has made it the ideal location for a mixed housing, a regional mall and be served by logistics hub and dry port, and the volume of cargo public transport. Tempe Airport, 15km north of the city, is privately passing through Harrismith is estimated to increase owned and is used for charter flights, recreational by 25% per annum for the next seven years. The Durban-Free State-Gauteng logistics and flying and the Bloemfontein Air Show. Airports industrial corridor is intended to promote not only are also located at Bethlehem and Welkom, and better transport of goods between the end points, there are a number of airstrips on farms and game but also boost economic development in towns reserves. and rural areas along the way. The Free State section of the corridor is divided into two zones which DEPT OF POLICE, ROADS AND TRANSPORT together constitute the Maluti-A-Phofung SEZ MEC: Mr Butana Komphela (Special Economic Zone). Physical address: 45 Charlotte Maxeke Street, Perm Building, Bloemfontein 9301 Rail Postal address: PO Box 119, Bloemfontein 9300 The Free State Rail Initiative is a three-phase project Tel: 051 409 8849 | Fax: 051 409 8864 that includes using Bloemfontein as an intermodal Website: www.policeroadstransport.fs.gov.za hub for the transportation of manganese, the commissioning of dormant branch lines to transport

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OVERVIEW

Tourism The Free State is home to a broad spectrum of tourist attractions.

• Fauresmith is the second-oldest town in the Free

• • • • • •

• • •

• •

State and hosts the International Horse Endurance Race every year in July. The race covers a distance of 205km and runs over three days. Koffiefontein is home to unique artworks and murals painted by Italian prisoners of war during the Second World War. There is an investment opportunity to offer mine tours at Virginia and Welkom to showcase some of the deepest and richest mines in the world. The Thabo Mfutsanyana region offers mystical places for ecotourism activities, and has numerous San rock art locations, fossils, Sotho remains, etc. The National Botanical Garden in Bloemfontein is home to 400 species of plants, 124 species of birds and 54 species of reptiles. The National Hot Air Ballooning Day is hosted annually at Bethlehem. The Golden Gate Highlands National Park and approximately 80 provincial, municipal and privately owned nature parks, nature reserves, game reserves, game farms, etc. Harrismith is the so-called ‘horse country’ of the Free State and hosts annual polo tournaments. Lindley is home to the Sparta Polo Club which is renowned for its excellent fields and facilities. The large water bodies of the Northern Free State are a prime destination for adventure activities from white-water rafting to canoeing and angling. Clarens is ‘the jewel of the Free State’ and an artist’s haven located at the foothills of the sandstone Red Mountains and surrounding Maluti Mountains. The Vredefort Dome (a World Heritage Site) offers hiking, rock climbing, bird-watching and horseriding and the Conservancy includes the world’s largest olive wood forest and 99 plant species. Parys is another well-visited town popular with artists, including arts and crafts, golf and river rafting. Hunting is a popular at farms such as Driehoek, Excelsior, Hanover, Hartenbos and Holfontein. Other hunting areas with packaged tours are

• • • •

located at Hertzogville, Wesselsbron, areas around Thaba ’Nchu, Frankfort and Heilbron. The Free State is home to many rock art sites, from the extraordinary 18m wall of San art at Sterk stroom (with the mystical rain animal) to the Tandjes berg site that has more than 500 paintings. The Phakisa Race Course is a highly regarded Formula Two motor racing venue, while powerboat racing is another active sector. The Mangaung Cultural Route uses experienced locals to guide visitors through areas near Bloemfontein, with an eco-park planned for Mangaung. The Mautse cultural village is being revitalised in order to encourage active trading in informal arts and crafts by the talented local artists. The Free State has a number of themed routes for tourists and local to enjoy. The Goldfield Route passes through the Lejweleputswa Region and explores the fascinating history of gold mining. Other themed routes include the Flamingo Route (gold mines, game viewing and Phakisa race track), Lion Route (everything that is typically “Free State”) Eagle Route (running through some of the most picturesque landscape in the country), Cheetah Route (through the cultural and political heart of the Free State) and the Springbok Route (through the scenic farmlands and nature reserves, battle sites, San rock engravings, game farms and diamond mines). DEPT ECONOMIC, SMALL BUSINESS DEVELOPMENT, TOURISM & ENVIRONMENTAL AFFAIRS

MEC: Mr Sam Mashinini Physical address: Bojanala Building, 34 Markgraaf Street, Bloemfontein 9300 Postal address: Private Bag X20801, Bloemfontein 9300 Tel: 086 110 2185 | Fax: 051 400 9593 Website: www.edtea.fs.gov.za

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FREE STATE BUSINESS 2016


FOCUS

Mangaung Chamber of Commerce and Industry The Chamber seeks to be the voice of business in the Free State and to assist in promoting economic development and investment in the province. The Mangaung Chamber of Commerce and Industry (MCCI) was constituted in March 2004, following unity negotiations among three former business organisations – CBI/SBI (Bloemfontein Sakekamer), the AHI and NAFCOC. In forming a new chamber of commerce and industry, the unifying bodies agreed to forego their independent identities. Since unification, the MCCI has been campaign ing for recognition from the local and provincial governments as the representative of the business community in Bloemfontein as well as the Free State.

Objectives The main objectives of the MCCI are: • To relaunch the MCCI as a Free State-oriented chamber. • To incubate small chambers of business elsewhere in the province. • To give practical credibility to the term ‘local economic development’ – and this applies not only to Mangaung, but other areas in the Free State as well. • To foster close relationships and twinning agreements with other urban chambers in SA. • To promote and support local businesses through specific interventions like the ‘Member-supportMember’ campaign. • To establish a vibrant business network that will promote entrepreneurial enterprises and small business as well as the creation of employment opportunities. • To present entrepreneurial programmes to promote business innovation and to back this up with arrangements for future coaching and mentoring. • To promote BEE by, among others, linking big and small businesses through the chamber network. • To influence and monitor relevant authorities and role-players.

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Women’s Memorial, Bloemfontein

• To promote the development of the Free State and surrounds as a prime locality for investment.

• To promote the development of the city and surrounds as a destination of choice for tourists.

• To become a strategic vehicle for the participa•

tion of member businesses in social responsibility programmes. To promote and support initiatives aimed at renewable and alternative energy sources.

Benefits for members Innovative networking events and opportunities. Member-support-Member campaign. SMME development and support centre. Import and export support centre. Seminars, workshops and mentoring. Advertising. Lobbying municipalities, local and provincial government. • Exclusive benefits for Gold members.

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CONTACT INFO The Mangaung Chamber of Commerce and Industry Tel: 051 447 3368/9 Fax: 051 447 5064 Email: info@bcci.co.za Website: www.bcci.co.za


Reasons to invest in the Free State

FINANCE READINESS

The Free State offers an abundance of opportunities for ACCOUNTING & ADVICE NEED FINANCE? local and international investors and traders, through the Free State Development Corporation. Addresses the common challenges the country to provide you with business assistance. to accessing finance LEARN ABOUT FINANCE

What is finfind?

finfind is an online one-stop solution that brings together both the providers of small business finance and the seekers of small business finance, with a focus on finance readiness. There are 4 parts to finfind: LEARN - Learn about access to finance LEARN ABOUT FINANCE

NEED FINANCE - Check to see if your business is ready to apply for finance

NEED FINANCE?

GET ADVICE - Link to expert small business advisors ACCOUNTING & ADVICE

GET READINESS TOOLS - Access tools to help you with your financial management READINESS TOOLS

How to use finfind

• You can use a mobile phone or any device connected to the internet • Type www.finfindeasy.co.za to access finfind

Helps you check if you are ready to access finance finfind helps you find out how ready you are to access finance. That way, you don’t waste hours of your time completing applications only to find that they are rejected. If you are ready for finance, finfind will link you to lenders that match your requirements. If you are not yet ready, finfind will give you handy tips to help you prepare.

Provides simple finance readiness tools

How will finfind help you?

AdminEasy is a training tool that helps you setup and maintain a manual admin and finance recordkeeping system in your business. www.AdminEasy.co.za

The Finance Readiness Quiz tells you upfront if your business is ready to apply for finance and if you’re not, finfind identifies your problem areas and gives you handy tips to solve the problems.

SMEasy is an online business management and accounting tool for small businesses specifically designed for entrepreneurs who don’t understand accounting. It will help you to easily produce financial statements. www.SMEasy.co.za

finfind helps you learn about the different types of finance, how they work and what lenders expect of you.

Seda National Information Centre • 0860 103 703 • www.seda.org.za

READINESS TOOLS

About the Free State

Factors that favour investment in the Free State

ince has excellent infrastructure

• Most developed telecommunications network in Africa.

finfind addresses the common challenges that positioning the province as a favourable business Situated in the heart of South Africa, Factors Helps you understand the most For example: theentrepreneurs Free State isdeal thewith. country’s and investment destination: different types of finance What if you don’t have collateral? with easy access to markets within third-largest province and bor- • Centrally located What if you have a bad record? South Africa and ders Lesotho as well as sixcredit of the Africa.provides information about the different finfind Understanding the credit record system eight other provinces, including • Availability of atypes largeof and affordable labour pool. businesses. finance available to small What are lenders lookingcentre, for? the country’s economic • Excellent infrastructure (roads, rail, airports, offices, For example: Different types of finance Gauteng. education, banking and medical facilities). The Free State is anSurety ideal • Competitive land and costs. to start a business? Understanding Personal • Do youbuilding need finance trading partner both within South • Low factory rentals. • Do you need finance to expand your business? Africa, and with Africa and other • Abundance of •natural Do youresources. need finance to buy a building? Provides small businesses with international markets. The prov- • Recreational and lifestyle facilities. • Do you need finance to buy equipment? access to advice Do and you transport need helplinks, with and yourprovides financial statements, • Open to business, trade and investment. Whatever yourforeign need, finfind has a module you budgets, cash flow projections, tax of advice BEE of required skills pool. • and Availability easy access to the main ports can read that tells you what finance options are certificates Durban,etc.? East London and Port • Attractive investment regime. available and how they work! Elizabeth.

Visit: www.fdc.co.za

We have partnered with a number of accredited Helps you understand the institutions to help with accountingECONOMIC and business ACTIVITY IN THE FREE STATE different types of lenders advice. finfind can link you to professional accountants and consultants who can help you This graph reflects the Banks, private lenders andNote: government Lejweleputswa become finance ready. funders all lend money toregions of the Free State and the percentage population 23.2small businesses but each lender in each, in addition to the Seda has 44 branches has their own unique focus areas dominant economic Mining (primarily Fezile Dabi sectors. and their own qualifying criteria. Wholesale, retail across the country with gold), agriculture finfind will help17.3 you find out how and trade finance, business advisors who can (primarilythey choose which businesses to real estate and help you. maize) fund and Mining, agriculture what they expect from you. business services, and manufacturing SAIPA has over 10 000 transport and communication, professional accountants Motheo community and across the country who 27.4 social services, can assist you with your Xhariep mining, Thabo finance readiness. 5.2 agriculture Mofutsanyana IBASA has accredited 26.8 Agriculture and business advisors across Agriculture, tourism mining (especially (Drakensberg and Maluti mountains, Golden Gate Highlands National Park)

diamonds), tourism (Gariep Dam)


Enterprise Enterprise development development

FREE STATE BUSINESS THE GUIDE TO BUSINESS AND INVESTMENT IN THE FREE STATE PROVINCE

Property Property management management

Investment Investment facilitation facilitation

Export Export promotion promotion JOIN US ONLINE Tel:Tel: 051051 400400 0800 0800 Email: Email: lesley@fdc.co.za info@fdc.co.za Web: Web: www.fdc.co.za www.fdc.co.za

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2016 EDITION

Driving Driving Economic EconomicDevelopment Development ininthe theFree FreeState StateProvince Province


Free State Business 2016