FREE STATE BUSINESS THE GUIDE TO BUSINESS AND INVESTMENT IN THE FREE STATE PROVINCE
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Sasolburg Operations – cornerstone of Sasol’s South African footprint
Sasol transformed from a single petrochemical site, today known as Sasolburg Operations, to an international integrated chemicals and energy company that leverages technologies and the expertise of 30 400 people working in 36 countries. Sasol develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product streams, including liquid fuels, chemicals and low-carbon electricity. 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. On our three operating sites in Sasolburg, being the Sasol One, Midland and Bunsen sites, we produce products such as wax, ammonia and ammonia nitrate, ethylene, solvents, acrylic acids, chlorine, cyanide and PVC, while also generating low-carbon electricity. A R16,4 bilion capital expenditure investment at Sasolburg Operations initiated in 2009, has substantially increased our wax production, expanded our polyethylene production and enables us to generate low-carbon electricity. We also play a constructive role as an active corporate citizen through various social investment initiatives.
Sasol Business Incubator accelerates SMME development A growing SMME sector is vital for broadening economic participation and delivering on the economic development objectives of our host communities. Sasol therefore developed the Sasol Business Incubator (SBI) in Sasolburg through a public-private partnership between Sasol and the Department of Trade and Industry (the dti) to accelerate the successful development primarily of local start-up small, medium and micro enterprises (SMMEs).
The incubator provides an array of business, technical and financial related support solutions as well as fully equipped manufacturing facilities, essential business infrastructure and a network of experts and services. Our approach is to nurture, grow and sustain SMMEs by providing technical and business development support, through mentoring and coaching. For more information, contact us on 016 960 3763 or firstname.lastname@example.org. Learn more at www.sasol.com.
CONTENTS Free State Business 2017 Edition
Introduction Foreword 4 Free State Business is a unique guide to business, investment and tourism in the province. A commitment to inclusive growth CEO of the FDC Ikhraam Osman invites business people to explore the opportunities on offer in the Free State.
Special features Regional overview of the Free State New infrastructure and incentives to manufacturers are attracting investments to the Free State Province.
Free State Development Corporation opportunities 10 The Free State Development Corporation is driving a number of exciting investment opportunities in the Free State province. South African economy at a glance Insight into the performance of the South African economy is provided through these graphical representations of key statistics.
SA investment incentives The South African government, particularly the Department of Trade and Industry, has a range of incentives available to investors, existing companies, entrepreneurs and co-operatives across many sectors.
Establishing a business in SA
The barriers to doing business in South Africa have been eased for local and international companies. FREE STATE BUSINESS 2017
Economic sectors Agriculture The grain-rich Free State is investing in poultry operations.
Diamond mines are expanding production. Oil and gas
Sasolburg is at the heart of South Africaâ€™s oil and gas industry. Manufacturing
The Free Stateâ€™s Special Economic Zone is attracting new manufacturing investment. Transport and logistics
The Free State is a logistics hub. Tourism
Cultural tourism is a new focus for the Free State. Education and training Access to education is growing fast in the Free State.
Government Free State provincial government
A guide to the provincial government departments. Free State local government
A guide to metropolitan, district and local municipalities.
MUNICIPALITIES IN THE FREE STATE
North West Fezile Dabi Mafube Ngwathe Moqhaka
Metropolitan/District Municipality boundary
Local Municipality Boundary
Regional map Municipal map
9 63 FREE STATE BUSINESS 2017
Free State Business A unique guide to business and investment in the Free State.
CREDITS Publisher: Chris Whales Publishing director: Robert Arendse Editor: Simon Lewis
ree State Business 2017 is the seventh edition of this highly successful publication that has since its launch in 2008 established itself as the premier business and investment guide to Free State Province. Supported and utilised by the Free State Development Corporation (FDC), Free State Business is unique as a business journal that focuses exclusively on the Free State. It has an independently audited and verified print run of 10 000 copies, an e-book edition hosted at www.freestatebusiness.co.za, and a monthly e-newsletter for up-to-date news and announcements. Global Africa Network Media (www.gan.co.za), the publisher of Free State Business, specialises in business-to-business print and electronic publications, producing a series of region-specific annual print journals. Every province in South Africa is covered by this unique range of journals and websites, complemented by a national title, South African Business, and the business matchmaking online platform Matchdeck.com.
Writing: John Young, Karen KĂźhlcke, and Simon Lewis Online editor: Christoff Scholtz Art director: Brent Meder Design: Colin Carter Production: Lizel Oliver Ad sales: Sam Oliver, Gabriel Venter, Jeremy Petersen, Nigel Williams, and Sydwell Adonis Managing director: Clive During Administration & accounts: Charlene Steynberg and Natalie Koopman Distribution and circulation manager: Edward MacDonald
Chris Whales Publisher, Global Africa Network Media Email: email@example.com
Printing: FA Print
Free State Business is distributed internationally on outgoing and incoming trade missions, through the Free State Development Corporation (FDC); at top national and international events; through the offices of foreign representatives in South Africa; as well as nationally and regionally via chambers of commerce, tourism offices, trade and investment agencies, airport lounges, provincial government departments, municipalities and companies.
Global Africa Network Media (Pty) Ltd Company Registration No: 2004/004982/07 Directors: Clive During, Chris Whales Physical address: 28 Main Road, Rondebosch 7700 Postal address: PO Box 292, Newlands 7701 Tel: +27 21 657 6200 | Fax: +27 21 674 6943 Email: firstname.lastname@example.org | Website: www.gan.co.za
ISSN 1999-5059 COPYRIGHT | Free State Business is an independent publication published by Global Africa Network Media (Pty) Ltd. Full copyright to the publication vests with Global Africa Network Media (Pty) Ltd. No part of the publication may be reproduced in any form without the written permission of Global Africa Network Media (Pty) Ltd. PHOTO CREDITS | COVER: Sibanye Goldâ€™s Beatrix 3 Shaft Photographer: Cindy Brown. Pictures supplied by flickr.com, Anglo American, Wikimedia Commons, Afrox, Free State Tourism, RailnetPictures, and Pixabay.
FREE STATE BUSINESS 2017
DISCLAIMER | While the publisher, Global Africa Network Media (Pty) Ltd, has used all reasonable efforts to ensure that the information contained in Free State Business is accurate and up-to-date, the publishers make no representations as to the accuracy, quality, timeliness, or completeness of the information. Global Africa Network will not accept responsibility for any loss or damage suffered as a result of the use of or any reliance placed on such information.
A commitment to inclusive growth CEO of the FDC Ikhraam Osman invites business people to explore the opportunities on offer in the Free State.
IKHRAAM OSMAN CEO, Free State Development Corporation
he period from 2010 has been characterised by a global economic slowdown, which has also affected emerging markets. Growth in the BRICS countries (Brazil, Russia, India, China and South Africa) has declined from about 9% in 2010 to 4% in 2015. Both external and domestic as well as cyclical and structural factors have contributed to the slowdown in emerging markets. Generally, external factors have been the main cause of the slowdown and these factors include weak global economic performance due to falling commodity prices. However, South Africa has made impressive social progress over the past two decades, lifting millions of people out of poverty and broadening access to essential services like water, electricity and sanitation. Now is the time to build on these successes to reduce
inequality further, create badly needed jobs and ensure stronger, sustainable and more inclusive growth for all according to the OECD Survey 2015. Economic growth in South Africa has not been inclusive enough during the first 22 years of democratic South Africa. Government is tackling infrastructure bottlenecks and improving business regulations that could boost job creation. Improving wage negotiations and job matching would also promote more inclusive growth. In line with the Free State Growth & Development Strategy (FSGDS) and the FDC Act (Act No 6 of 1995), the FDC will continue to unlock business opportunities for both local direct and foreign direct investors in an effort to broaden access to economic prosperity. This 2017 Free State Business publication presents the Free State province’s value proposition as a business and tourism destination. The province is open for business as is demonstrated annually through the hosting of the Free State Global Investors Trade Bridge. The event is complemented by “Macufe”, the Mangaung African Cultural Festival that annually brings up to 150 000 travellers into Bloemfontein or “the City of Roses” as it is commonly known. We invite visitors to explore some of the key opportunities in the Free State, which include the following: • The fact that the province is a leading agricultural commodities producer, presenting significant opportunities across the agroprocessing value chain • Mangaung Metropolitan Municipality has announced a R100-billion infrastructure investment programme to unlock business, retail, real estate and infrastructure development along the N8 Corridor • A newly gazetted Special Economic Zone attracting investments in food processing, manufacturing, logistics and beverages The FDC investment facilitation team would help you to explore business opportunities in the Free State and assist you to set up and operate a business here. For more information, please peruse this business guide. www.fdc.co.za
FREE STATE BUSINESS 2017
A REGIONAL OVERVIEW OF
FREE STATE PROVINCE Growing a diverse economy New infrastructure and incentives to manufacturers are attracting investments to the Free State Province. Two of the great pillars of the provincial economy — agriculture and mining — remain important but there are exciting growth shoots in new sectors such as solar energy, manufacturing and gas.
he third important pillar of the economy of the Free State, the chemicals and fuels hub at Sasolburg, is modernising and expanding. International fuel, gas and chemicals company, Sasol, regularly invests in new technologies and expanding production of its various products. Chief among the infrastructure that has been put in place is the Maluti-A-Phofung Special Economic Zone at Harrismith. This zone offers attractive investment incentives and leverages the site’s position on the busy N3 highway to promote enterprises in the logistics sector. Parks within the SEZ are designed to encourage companies from related sectors such as agri-processing. A new water pipeline from the Gariep Dam is being built to serve the Xhariep District and the Mangaung Metro. A steady and reliable water source is an important component in attracting investment. The first Free State Global Investor Trade Bridge in 2015 resulted in agreements that were signed between the province and delegations from Angola, China, Russia, Turkey and India. The SEZ was an FREE STATE BUSINESS 2017
important element in selling the province’s attractiveness as an investment destination. Five major, national highways intersect the centrally located province, which is also well served by rail and air links. The Bram Fischer International Airport in the provincial capital city of Bloemfontein is the site of a multi-phase industrial and commercial development. Two leading universities (the University of Free State and the Central University of Technology) have several campuses across the province. In 2016, the provincial government’s internship programme supported more than 500 graduates. There are currently 279 students placed in provincial departments and municipalities as interns. A potentially game-changing development in the local economy is the building of a R200-million helium extraction plant to exploit a natural gas and helium field, which has been identified near the towns of Virginia, Welkom and Theunissen. With proven reserves of 25-billion cubic feet, the rights to the field are owned by Renergen and they will be worked by Afrox, a subsidiary of the Linde Group of Germany.
SPECIAL FEATURE the rural economy and provide opportunities for investors. Gold is mined mainly in the north-western parts of the province, in two clusters. AngloGold Ashanti has assets on the border of the Free State and North West provinces, as well as several mines in the Welkom-Virginia belt. Sibanye Gold mines the Beatrix Gold Mine in the latter area. Coal is mined in the north to feed power stations. Mining makes up 10% of provincial GDP. The Free State shares its borders with six other provinces, in addition to the Mountain Kingdom of Lesotho. A summer-rainfall region with a mean annual rainfall of 532mm, the Free State’s climate, soil types and topography vary greatly within the province, with plains in the west and mountains in the east. The western and southern areas are semi-desert, with some Karoo vegetation occurring in the south. The Free State produces significant proportions of South Africa’s wheat (30%), sunflowers (50%) and maize (45%). As such, it is ranked third in contribution to national GDP in agriculture, despite accounting for only 5% of South Africa’s overall GDP (FNB Chartbook). Another emerging sector is solar energy. The Xhariep, Lejweleputswa and Mangaung regions have among the best direct solar radiation kWh/m² in the country. The Renewable Energy Independent Power Producer Procurement Programme, is creating opportunities for private investors to build and operate solar generation plants in the Free State. Rezoning for solar farms has already taken place in Theunissen, Bloemfontein, Fauresmith and Hoopstad. In rural areas, the provincial government intends rolling out Agri-parks. These hubs, which will include processing facilities, are intended to help small-scale farmers expand their operations, but should also provide opportunities for existing enterprises to invest in new markets. Infrastructure to support these parks has begun at Parys, Tshiame, Thaba Nchu, Springfontein and Wesselsbron. In a similar vein, the use of small towns such as Cornelia, Tweeling, Excelsior and Tweespruit as hubs under the Comprehensive Rural Development Programme (CRDP) should boost
Municipalities in Free State The Free State has one metropolitan municipality (Mangaung), four district municipalities and 19 local municipalities. Mangaung Metropolitan Municipality 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. The sixth-largest city in the country, the Mangaung municipal area covers more than 6 263km² and has a population of about 850 000 people. The languages spoken in the area are mainly Sesotho, Afrikaans, English and Setswana. Bloemfontein, which is responsible for about 25% of provincial GDP, is at the centre of a development node known as the N8 Corridor, which is intended to boost development along the road from Lesotho to Kimberley and Upington in the North West prov-
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SPECIAL FEATURE Lejweleputswa District Municipality Towns: Welkom, Virginia, Boshof, Christiana, Bultfontein, Bothaville 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. A large natural gas field has been discovered on what used to be gold turf. Bothaville is the self-proclaimed Mielie Capital of South Africa but it is a name that is well-earned. It hosts an annual maize industry festival and conferences, NAMPO, and it is where Grain SA has its headquarters. The 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.
ince. Several projects are under way in and around the provincial capital, including an Airport Node (logistics, supply chain, flats, shopping malls), Naval Hill (projected new hotel in the nature reserve) and expansion of Hamilton Business Park. The city’s Fresh Produce Market is an important cog in the distribution of agricultural produce in the region while it is connected to all other centres by good rail and road links. There is a marshalling yard, a petroleum depot and two airports (one military). The National Supreme Court of Appeal is located in Bloemfontein and the National Museum has superb rock art exhibits.
Xhariep District Municipality Towns: Trompsburg, Koffiefontein, Zastron, Philippolis, Edenburg, Fauresmith, Smithfield, Wepener 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. Trompsburg has Fezile Dabi District Municipality the second-biggest sheep-shearing barn in the Towns: Sasolburg, Parys, Kroonstad, Frankfort, country. Heilbron, Viljoenskroon Diamonds, gravel and clay are mined at The chemical complex at Sasolburg is the economKoffiefontein. Jagersfontein is one of the first places ic driver in the district, which shares a border with where diamonds were found, and it has its own ver- Gauteng province along the Vaal River. The town sion of the Big Hole to prove it. The town of Bethulie of Heilbron is another important industrial centre is a good stopping-over place for tourists wanting and Frankfort does important agricultural processto experience the water sports available on the ing work. Kroonstad is the district’s second-largest Gariep Dam. town and has a number of engineering works and The dam is also the site of small hydro-power a railway junction. A new Kraft paper factory has and aquaculture projects, which are intended to been planned for Frankfort. create employment and tackle food security. The A good proportion of South Africa’s grain crop nearby Tussen die Riviere Nature Reserve and the is sourced from this district and when the vast Mynhardt Game Reserve have a variety of wild- fields of sunflowers and cosmos flowers are in life in spectacular settings. Jacobsdal’s Landzicht bloom, a marvellous vista is created. The Vaal Winery has proved itself as a worthy producer of River presents opportunities for yachting, rafting wine. San rock paintings and Anglo-Boer War sites and resort-based enterprises. Parys is a charming are plentiful. town and Vredefort is home to a World Heritage Fauresmith hosts an annual horse endurance Site – the Vredefort Dome where a meteor crashed race and Smithfield is the venue for a “Chill” festival to earth. every winter, the “Bibber Fees”. The steel bridge Fezile Dabi District Municipality is the 2nd bigover the Caledon River at Wepener is a national gest after Mangaung, contributing approximately 28% to the GDP. The Fezile Dabi area is mostly monument. FREE STATE BUSINESS 2017
SPECIAL FEATURE Potchefstroom
Vereeniging Ottosdal Klerksdorp Lethabo Parys Sasolburg N12 Vredefort Villiers Wolmaransstad Viljoenskroon N1 R30 Heilbron
FREE STATE PROVINCE
Wesselsbron Welkom Virginia
Northern Cape N12
Harrismith Van Reenen Phuthaditjhaba Ladysmith Golden Gate National Park R74
Botshabelo R26 Hobhouse
Trompsburg Smithfield Bethulie Rouxville De Aar
Motorway Main Road Railway
dominated by the industrial power of Sasol, with the manufacturing of refined petroleum, coke and chemical products adding largely to its GDP. The establishment of ChemCity, a wholly owned subsidiary of Sasol, has also added a business incubator that allows SMMEs to feed off and diversify from the opportunities that prevail due to the energy consortium operating in the area.
Harrismith is a multi-modal 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 Africaâ€™s cherries. The north of the district has many sunflower seed farms. Tweespruit is a major sunflower seed production centre. The Basotho 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.
Thabo Mofutsanyana District Municipality Towns: Phuthaditjhaba, Bethlehem, Tweespruit, Ladybrand, Clarens, Harrismith, Vrede, Ficksburg 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 Highlands National Park. Industrial activity is undertaken at Harrismith and Phuthaditjhaba, where the Free State Development Corporation is promoting investment. The Special Economic Zone (SEZ) at
GDP IN 2015
Fezile Dabi 28% Contribution to GDP in 2015.
FREE STATE BUSINESS 2017
Free State Development Corporation investment opportunities The Free State Development Corporation is driving a number of exciting investment opportunities in the Free State province.
ACTIVE PHARMACEUTICAL INGREDIENTS
To develop a world-class bio-medical facility designed to host research laboratories, exportorientated pharmaceutical companies, biotechnology and medical research companies to develop competitive pharmaceuticals products, services and technologies. Concept To develop 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. • To migrate both the University of Free State (UFS) and Central University of Technology (CUT) registered research patents into new business opportunities. Location Bloemfontein, within N8 Corridor. Investment Required R400-million.
A private-sector investor is required to establish an Active Pharmaceutical Ingredients (API) facility in the Free State province. Concept Setting up an Active Pharmaceutical Ingredient (API) and Oral Solid Dosage (OSD) for the manufacture of ARVs for the treatment of HIV, malaria and insulin. Project Requirements A leading pharmaceutical technology partner and investor with a synthesis process is required to partner with local investors that have expressed an interest to set up and operate an API and OSD manufacturing facility in Sasolburg. Investment Required Investment estimated at R720-million. Location Sasolburg – Metsimaholo.
To discuss these opportunities, contact Frank Tlhomelang, Manager: Research & Development & Acting GM: Trade & Investment Tel: +27 51 4000 800 Email: email@example.com | Email: firstname.lastname@example.org
FREE STATE BUSINESS 2017
FRANKFORT PAPER MILLS
DPE & PVC PIPES MANUFACTURING
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. Concept The mill will use both virgin (20%) and recycled pulp (80%) as raw 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. Location Frankfort, Free State. Milestones • Feasibility phase. • Project designs completed. Project Requirements • A technology partner and investor that is a player in the wood and paper value chain is required to partner with the 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.
A 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. Investment Required Investment required is estimated at R10-million. Manufactured products and manufacturing processes must be SABS-certified.
To discuss this opportunity, contact Lizeka Matshekga, Head: Forestry & Wood Products Business Unit, Industrial Development Corporation Tel: +27 11 269 3779, Email: email@example.com Email: firstname.lastname@example.org
To discuss this opportunity, contact Frank Tlhomelang, Manager: Research & Development & Acting GM: Trade & Investment Tel: +27 51 4000 800 Email: email@example.com Email: firstname.lastname@example.org
FREE STATE BUSINESS 2017
BETHLEHEM SAND MINING PROJECT
MEDICAL WASTE TREATMENT
There is an opportunity to establish 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. Location Dihlabeng Local Municipality in Bethlehem. 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 with experience in the sand mining value chain, or sand distribution. Investment Required The project requires funding to the tune of R120-million. The project has the potential to create 120 jobs when fully operational.
A technology partner and investor is required to partner with a local investor to set up a medical waste treatment facility. Concept To design a modern medical and solid waste treatment facility. The company implements Electro-Thermal Deactivation processes to dispose of healthcare risk waste. This is a non-burn technology that has zero emissions. Pathogens are treated with 50 000V within the ETD (Microwave) and this renders the waste clean and harmless. Location Virginia in Matjhabeng. Investment Required Estimated project cost R30-million. To discuss opportunities on this page, contact Frank Tlhomelang, Manager: Research & Development & Acting GM: Trade & Investment Tel: +27 51 4000 800 | Email: email@example.com Email: firstname.lastname@example.org
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. • The site earmarked for this project had been secured and the EIA is in progress. Project Requirements • A local business partner is looking for international players in steel fabrication to invest in this business venture. • The project requires an additional equity.
FREE STATE BUSINESS 2017
The value of equity participation will be negotiated on proposals received. Location • Virginia – Lejweleputswa. • Required Investment to be determined at feasibility. •
Why invest in solar generation plants in South Africa • • • • • • • •
South Africa’s solar irradiation levels are among the best in the world (>2 000kWh/m²). Transition to a cleaner energy mix (low carbon path). Strong local content from government (glass, 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 ongoing 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.
Drivers for PV & CSP investments • • • •
Environmental issues such as pollution and exploitation of natural resources. Climate change due to CO ² emissions from fossil fuels. Energy security through diversification of supply. Sustainable development.
LETSATSI PV PROJECT
Bloemfontein, Tokologo LM
PULIDA SOLAR PARK
Jacobsdal Letsemeng LM
Enel Green Power
BOSHOFF SOLAR PARK
XHARIEP SOLAR HUB
Kopanong, Bethulie LM
Korean Concept development Solar Power Consortium and project design
BLACKWOOD ENERGY SOLAR PLANT
EVEREST SOLAR PLANT
FRV Energy South Africa
Project occupies 180ha of the Farm Beyers 186 (393ha)
GROOTKOP SOLAR FACILITY
FRV Energy South Africa
Project will occupy 180ha of the Farm Beyers 186 (393ha)
Land: 1 200ha
Power plants planned, under construction and operational
FREE STATE BUSINESS 2017
SOLAR GENERATION PARKS Projects Location Xhariep District, Mangaung Metro as well as Lejweleputswa. Conversion Technologies Both photovoltaic modules and concentrated solar power (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 Investors’ may participate in both off-grid and on-grid supply solutions. Off-grid is where the 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 Renewable Energy Independent Power Producer Procurement (REIPPP) Programme managed by the Department of Energy (DOE) and finally supply the grid.
SOLAR WATER HEATERS 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 materials for the manufacturing of solar water heaters are copper aluminium MS sheet, pipe, glass fibre, GI sheets, thermostat, insulation material. Why Solar Water Heaters • Eskom electricity demand management programme.
Strong local content on SWH procurement by DOE and Eskom. • Financial and technology capabilities to manufacture and supply locally produced systems. • Construction Sector Education Training Authority (CETA) and Energy Sector Education Training Authority offers accredited Level 4 plumbing qualification. • Availability of plumbing skills currently serving the mining, gas and petroleum industries. Location Botshabelo within the N8 Corridor. Investment Required To be determined at feasibility. •
To discuss these opportunities, contact Frank Tlhomelang, Manager: Research & Development & Acting GM: Trade & Investment Tel: +27 51 4000 800 | Cell: +27 71 674 5730 Email: email@example.com | Email: firstname.lastname@example.org
FREE STATE BUSINESS 2017
GREEN ENERGY IT and possibly technology partner for future growth. • A team of three are driving business development. Investment Required The project requires an experienced technology partner that is a player within the solar and LED lights value chain and an investor that will guarantee take-off of products manufactured.
Green Energy is a South African company that assembles solar home lighting systems. The idea behind this project is to contribute towards harnessing solar energy to generate power. Location The company intend to locate its solar home lighting manufacturing plant in Maluti-A-Phofung. Milestones FDC financed seed funding 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. • IP registration. • Business case development to solicit financial
To discuss this opportunity, contact Frank Tlhomelang, Manager: Research & Development & Acting GM: Trade & Investment Tel: +27 51 4000 800 Email: email@example.com
Maluti-A-Phofung SEZ investment opportunities
aluti-A-Phofung Special Economi c Zone (SEZ) has been established in terms of the Special Economic Zones Act, Act No. 16 of 2014. The programme is intended to deepen industrial development and improve manufacturing competitiveness in the Maluti-APhofung Municipality. Located in Harrismith and Tshiame in the Eastern Free State, MAP IDZ is strategically located on the N3 national road, halfway between Johannesburg and Durban. M-SEZ offers in total up to 1 000 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 ESZ constitutes 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.
SEZ 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 SEZ. Some of the sectors targeted for establishment within the MAP SEZ are as follows: • Pharmaceuticals. • Medical devices. • Logistics and distribution. • Agro-processing.
FREE STATE BUSINESS 2017
FOCUS • Food processing. • Trade facilitation. • Rail-based container terminal • • • •
• • • •
(Transnet Freight Rail). Automotive cross docking facilities. Logistics and supply chain management. Information & Communication Technology. Logistics.
Building Allowance. Employment Incentive. Customs Controlled Area. 12i Tax Allowance.
MAP SEZ Milestones • MAP SEZ company fully operational. • Maluti-A-Phofung SEZ operator permit granted by
Minister of Trade & Industry after cabinet approval.
• Perimeter fencing has been completed. • Bulk infrastructure roll-out is in process. • Marketing and promotion to build a robust IDZ
Benefits that will be derived from locating within MAP SEZ includes: • 15% Corporate Tax, national is 28%.
project pipeline is in process.
MEDICAL EQUIPMENT AND DEVICES MANUFACTURING Milestones Investment agreement signed. • South African subsidiary of the Chinese company (Medipro) has been registered. • Negotiations to fast-track investment are in process. • The company has CE certification. Investment Required Investment estimated at R600-million.
The FDC has signed an investment agreement with two leading Chinese companies (in the medical devices and electronic equipment value chain) to establish a medical devices and medical apparatus and instrumentation manufacturing plant in the newly designated Maluti-A-Phofung SEZ. Location Maluti-A- Phofung SEZ.
To discuss these opportunities, contact Sipho M. G. Tshabalala, Marketing & Communications Manager Tel: +27 51 4000 804 Cell: +27 78 076 8676 Email: Sipho@mapsez.co.za Website: www.mapsez.co.za
The establishment and operation of a 10 000-tyre-a-day automotive tyre manufacturing plant to manufacture tyres for wellknown brands such as Dunlop, Kumho, etc. Location Industriqwa (Harrismith). Milestone • Concept developed. • Marketing opportunity to prospective investors. Project Requirements Required investment estimated at R200-million.
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VEHICLE DISTRIBUTION CENTRE
FOOD PROCESSING PARK
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 the Gauteng market and links through N3 to Durban Port and Coega through the N1 and N6. Location MAP IDZ Logistics Service Providers precinct. Milestones • Concept developed. • Business plan completed. • Expression of interest to invest sourced. • Marketing the opportunity to prospective investors. Investment Required Investment estimated at R250-million.
The building of a world-class, integrated food processing park to include food processing, warehousing, cold storage and manufacturing facilities to enhance production efficiencies. Location MAP SEZ food processing precinct. Milestones • Concept developed. • Business plan completed. • Marketing the opportunity to prospective investors. Investment Required Investment estimated at R750-million.
To discuss these opportunities, contact Sipho M. G. Tshabalala, Marketing & Communications Manager Tel: +27 51 4000 804 | Cell: +27 78 076 8676 Email: Sipho@mapsez.co.za | Website: www.mapsez.co.za
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ROOFSHEET MANUFACTURING Concept The FDC is keen to facilitate the production of roofsheets made from corrugated iron, IRB and chromadek. Location Matjhabeng Local Municipality.
Investment Required R25-million in capital expenditure is needed.
APPLE PRODUCTION Concept Investment is required to add 2 000ha of apple orchards on agricultural land in the Eastern Free State. Location Maluti Fruit, a pack house in Bethlehem, Free State, has launched Remmoho, a BEE project that will focus on increasing apple production in the province.
One of the advantages of growing apples in the Free State is that the fruit from the region is the first to be harvested during the Southern Hemisphere growing season â€“ a full two to three weeks before fruit from the more traditional growing areas in the Western Cape. A business plan has been completed and would be available to prospective investors.
To discuss these opportunities, contact Gontse Morakile, Tel: +27 51 400 4924 Email: firstname.lastname@example.org
Concept Convert an old, unused mining shaft into a tourist attraction that will enable people to experience life below the surface. Location Virginia (Matjhabeng). Investment Required R300-million.
Concept An opportunity exists to set up a jewellery design and manufacturing operation adjacent to an existing jewellery school. Location Virginia (Matjhabeng). Investment Required R20-million.
To discuss these opportunities, contact Mpolokeng Mokalobe, Tel: +27 51 400 9585 Email: email@example.com
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Concept There are plans to establish a Cut, Make and Trim (CMT) factory in order to manufacture clothing in the Free State. Location Maluti-A-Phofung Municipality (QwaQwa). Investment Required Finance is sought for purchase of machinery and working capital for 12 months.
Concept The establishment of a plant for waste recycling and conversion into usable products as well as the generation of energy from waste. Location Mangaung Metropolitan Municipality (Bloemfontein, Botshabelo and Thaba Nchu) Investment Required R65-million A business plan has been completed and would be available to prospective investors.
LED LIGHT MANUFACTURE TOOLING AND MACHINERY MANUFACTURE
Concept The manufacture and retail of light-emitting diodes (LEDs). Location Anywhere within the Free State. Investment Required R15-million.
Concept Manufacturing of metal, steel and plastic products for automotive, rail, aviation, mining and other similar industries. Location Botshabelo. Investment Required R15.1-million in capital expenditure is needed.
TEXTILE MANUFACTURING Concept To establish a textile manufacturing facility producing spun yarn and woven cloth for supply to Cut, Make and Trim (CMT) facilities in the Free State and the rest of South Africa. Location Maluti-A-Phofung Municipality (QwaQwa). Investment Required R76-million is required.
To discuss these opportunities, contact Frank Tlhomelang, Manager: Research & Development & Acting Head: Trade & Investment Tel: +27 51 4000 800 Cell: +27 71 674 5730 Email: firstname.lastname@example.org
To discuss this opportunity, contact Gontse Morakile, Tel: +27 51 400 4924 Email: email@example.com
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POULTRY PRODUCTION AND PROCESSING
PRODUCTION OF SUNFLOWER, SOYA, BEANS AND LUCERNE
Concept The intention is build 10 x 40 000 broiler houses, 10 x 220 000 broiler hatcheries and 8 x 20 000 layer houses. Location These facilities could be located in the following municipalities: Lejweleputswa, Fezile Dabi, Thabo Mofutsanyana. Investment Required R6.5-billion is required to increase the size of the poultry production market in the Free State.
Concept The FDC is promoting an opportunity to increase the production of sunflower, soya beans, dry beans and lucerne. If investment is forthcoming 448 981ha could be put into production by 2030. Location Various agricultural areas in the Free State. Investment Required An estimated R585.8-million is needed.
To discuss these opportunities, contact Pilot Nchabeleng , Tel: +27 51 861 8509 Email: firstname.lastname@example.org
Free State trade opportunities The Free State province offers a wide range of trading opportunities
The Free State’s main exports 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. FREE STATE BUSINESS 2017
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.
Reasons to invest in the Free State The Free State offers an abundance of opportunities for local and international investors and traders, through the Free State Development Corporation. About the Free State Situated in the heart of South Africa, the Free State is the country’s third-largest province and borders Lesotho as well as six of the eight other provinces, including the country’s economic centre, Gauteng. The Free State is an ideal trading partner both within South Africa, and with Africa and other international markets. The province has excellent infrastructure and transport links, and provides easy access to the main ports of Durban, East London and Port Elizabeth.
Factors that favour investment in the Free State Factors positioning the province as a favourable business and investment destination:
• • • • • • •
Centrally located with easy access to markets within South Africa and Africa. Availability of a large and affordable labour pool. Excellent infrastructure (roads,rail, airports, offices, education, banking and medical facilities). Competitive land and building costs. Low factory rentals. Abundance of natural resources. Recreational and lifestyle facilities. Most developed telecommunications network in Africa. Open to business, trade and foreign investment. Availability of required skills pool. Attractive investment regime.
THE FREE STATE DEVELOPMENT CORPORATION OFFICE DETAILS HEAD OFFICE FDC House, 33 Kellner Street, cnr of Markgraaf Street, Westdene, Bloemfontein 9300 Tel: +27 51 4000 800 | Fax: +27 51 447 0929 MOTHEO DISTRICT OFFICES Botshabelo Office 35 Orange Str, Industrial, Botshabelo 9781 Tel: +27 51 534 1101/02/03 | Fax: +27 51 534 1104 Thabo-Nchu/Motheo Office 102 Manyane High Way, Selosesha, Thaba Nchu 7983 Tel: +27 51 873 3901 2476 | Fax: +27 51 873 3402 XHARIEP DISTRICT OFFICE Xhariep Office, Cnr Van Riebeeck and Voortrekker, Khoisan Building, Trompsburg 9913 Tel: +27 51 713 0342/3 | Fax: +27 51 713 0342
THABO MOFUTSANYANA DISTRICT OFFICES Thabo Mofutsanyana Office 357K Clubview, Phuthditjhaba Tel: +27 58 714 0060/64 Fax: +27 58 714 0071 Industriqwa/Harrismith Office Cnr Amanda & de Lange, Tshiame A, Harrismith 9880 Tel: +27 58 635 1112 Fax: +27 58 973 2603 FEZILE DABI DISTRICT OFFICES Fezile Dabi Office 31 NJ Van der Merwe Crescent, Sasolburg 1942 Tel: +27 16 976 8944/5 Fax: +27 16 973 2603
For additional information on trading opportunities please contact the Free State Development Corporation on +27 51 400 0800. www.fdc.co.za
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South African economy at a glance Insight into the performance of the South African economy is provided through these graphical representations of key statistics. ZIMBABWE
Limpopo 0.9% (7.1%)
Gauteng Mpumalanga 2.7% 2.1% (7.5%) (34.3%) SWAZI-
North West -3.6% (6.5%)
Free State 1.8% (5%) Northern Cape 2.8% (2.1%)
KwaZuluNatal 2.3% (16.1%)
Eastern Cape 1.0% (7.6%) Western Cape 2.0% (13.6%)
SA GDP: Percentage of growth per province (2014) and percentage contribution to national GDP (figures in brackets). SOURCE: STATS SA WWW.STATSSA.GOV.ZA
GRP BILLION RAND
6 916 200
2 817 900
13 200 300
Pietermaritzburg Willies Mchunu
10 919 100
Phumulo Masualle Elias Sekgobelo “Ace” Magashule
Stanley Mathabatha David Mabuza Supra Mahumapelo
5 726 800
4 283 900
3 707 000
1 185 600
6 200 100
Snapshot of South Africa’s provinces SOURCE: INSTITUTE OF RACE RELATION’S SOUTH AFRICA SURVEY 2016 AS REPORTED ON BUSINESSTECH.CO.ZA
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How South Africaâ€™s economy performed in 2015. * * PRELIMINARY RESULTS | SOURCE: GROSS DOMESTIC PRODUCT, 4TH QUARTER 2015 | WWW.STATSSA.GOV.ZA
GP NW KZN
Gross Domestic Product by province, percentage contribution. SOURCE: STATS SA WWW.STATSSA.GOV.ZA/?PAGE_ID=735&ID=1
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Mangaung’s new mayor hits the ground running The new Mayor of Mangaung Metropolitan Municipality has pledged to continue with service delivery projects initiated by the previous council.
he city of Mangaung stands on the threshold of a new era following a decision by the Municipal Demarcation Board; its area of jurisdiction is once again being extended (this happened in 2011 as well). The Metropolitan Municipality now incorporates both Soutpan and Naledi local municipalities. This presents the metro with both challenging and exciting times. The boundaries of Mangaung Metro are now made up of Bloemfontein, Botshabelo, Thaba Nchu Dewetsdorp, Wepener, Van Stadensrus and Soutpan. With Executive Mayor Councillor Matawana Olly Mlamleli at the helm, Mangaung Metro will continue to accelerate service delivery, focusing on the eight (8) developmental priorities that had been set by the previous council. These are: • Poverty eradication, rural and economic development and job creation • Financial sustainability including revenue enhancement and clean audits • Spatial development and the built environment • Eradication of the bucket system and VIP toilets • Development of sustainable and integrated human settlements • Implementation of an Integrated Public Transport Network (IPTN) • Environmental management and climate change • Social and community services “These are the key areas we will be focusing on in this fourth electoral cycle of a democratic local government. We are content that this work will advance the people’s power in every ward of our city,” said the Executive Mayor Mlamleli during her inauguration in September 2016.
Good governance The newly elected Executive Mayor has vowed to uphold the principles of good governance. “I will ensure increased public involvement in the affairs of the Council, sound political leadership and administration as well as fiscal prudence, working closely with the oversight institutions including the Office of the Auditor-General. I intend to sustain cordial working relations with labour as a basis for strategic partnerships,” she said. The incorporation of Naledi and Soutpan brings with it further challenges due to the disparity of service levels, distance and an expanded FREE STATE BUSINESS 2017
Mangaung Metropolitan Municipality Annual Performance Report 2011/2012
Executive Mayor Cllr Matawana Olly Mlamleli
rural element. All developmental plans as they apply to the regions of Bloemfontein, Botshabelo and Thaba Nchu will equally be applicable to and cater for Naledi and Soutpan in all respects. Residents of Mangaung should regard this merger as one that brings with it economic spin-offs in the realm of the agrarian economy, as the economy of these new areas is predominantly driven by agriculture. As the city prioritises, it does so from the premise of consolidated and incorporated planning as defined by the current Consolidated Integrated Developmental Plan (IDP) and beyond this, an IDP of the municipality of Mangaung as re-determined by the Municipal Demarcations Board.
The Executive Mayor Cllr Olly Mlamleli patches a pothole in Freedom Square after handing out roadworks machinery.
The IPTN – an artist’s impression of an open station in Mangaung.
Integrated Public Transport Network Subsequent to numerous consultations with the public and taxi associations in Mangaung, the city formally introduced the Integrated Public Transport Network (IPTN) to residents of the city and stakeholders in October 2016 as part of Transport Month, which is observed nationally. This initiative was formalised by the signing of a Memorandum of Agreement (MoA) with the transport industry in Bloemfontein. The IPTN will ensure the provision of an efficient, reliable, safe and affordable public transport system for residents of Mangaung. Upon completion, the IPTN is envisaged to change the face of public commuting in Mangaung, and ultimately the economic potential of the province. The firstphase corridor along the Maphisa Route has been completed and the city will move with speed to ensure that other phases of the IPT Network are implemented.
Mangaung has grown as a city, substantially in land mass – and as such, the challenges of mobility within the metropole need to be attended to as a matter of urgency. Reliable public transport is a foundation for our economy, and as this service expands, we will increasingly be able to attract potential investors, which will in turn create additional economic opportunities for our people. Among other achievements, the city of Mangaung garnered a number of PMR.Africa awards in October 2016, as a result of surveys conducted annually across the province. The ratings are based on the perceptions of 110 CEOs, company directors, senior employees and officials in the private sector, as well as the local and provincial government sector. Mangaung was the highest-rated municipality in the province in the following categories, receiving the Diamond Arrow for: • Most effective communication and marketing strategies in the Free State province • Municipalities doing the most for social upliftment • Municipalities doing the most to attract foreign/international investment • Municipalities doing the most to attract local investment • Municipalities doing the most to attract tourism • Municipalities doing the most for job creation • Municipalities doing the most to fight crime • Municipalities doing the most to clean the environment To stay up to date with news and activities around Mangaung, please see: www.mangaung.co.za or visit our Facebook pages: Mangaung Metropolitan Municipality and Mayor’s Page: Executive Mayor Olly Mlamleli. Residents can contact us via the call centre: 0800 111 300.
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South African investment incentives The South African government, particularly the Department of Trade and Industry, has a range of incentives available to investors, existing companies, entrepreneurs and co-operatives across many sectors.
• Conceptualisation of the project – including feasi-
outh Africa wishes to diversify its economy and incentives are an important part of the strategy to attract investors to the country. The Department of Trade and Industry (the dti) is the lead agency in the incentives programme, which aims to encourage local and foreign investment into targeted economic sectors, but the Industrial Development Corporation (IDC) is the most influential funder of projects across South Africa. There a variety of incentives available and these incentives can broadly be categorised according to the stage of project development: FREE STATE BUSINESS 2017
bility studies and research and development (grants for R&D and feasibility studies, THRIP, Stp, etc) • Capital expenditure – involving the creation or expansion of the productive capacity of businesses (MCEP, EIP, CIP, FIG, etc) • Competitiveness enhancement – involving the introduction of efficiencies and whetting the competitive edge of established companies and commercial or industrial sectors (BBSDP, EMIA, CTCIP, etc) Some of the incentives are sector-specific for example the Aquaculture Development and
SPECIAL FEATURE Enhancement Programme (ADEP), Clothing and Textile Competitiveness Improvement Programme (CTCIP) and the Tourism Support Programme (TSP).
Incentives for SMMEs A lot of emphasis is placed on the potential role of small, medium and micro enterprises in job creation and a number of incentives are designed to promote the growth of these businesses. These include: • Small Medium Enterprise Development Programme (SMEDP) • Isivande Women’s Fund • Seda Technology Programme (Stp) Seda is the Small Enterprise Development Agency, an agency of the Department of Small Business Development that exists to promote SMMEs.
Manufacturing Key components of the incentive programme are the Manufacturing Incentive Programme (MIP) and the Manufacturing Competitiveness Enhancement Programme (MCEP). The initial MCEP, launched in 2012, was so successful that it was oversubscribed with almost 890 businesses receiving funding. A second phase of the programme was scheduled for launch in 2016. The grants are not handouts as the funding covers a maximum of 50% of the cost of the investment, with the remainder to be sourced elsewhere. The Enterprise Investment Programme (EIP) makes targeted grants to stimulate and promote investment, BEE and employment creation in the manufacturing and tourism sectors. Aimed at smaller companies the maximum grant is R30million. Specific tax deductions are permissible for larger companies investing in the manufacturing sector under Section 12i of the Income Tax Act. Other incentives available to investors and existing businesses in more than one sector include the: • Technology and Human Resources for Industry Programme (THRIP) • Support Programme for Industrial Innovation (SPII). • Black Business Supplier Development Programme (BBSDP), which is a cost-sharing grant offered to black-owned small enterprises. • Critical Infrastructure Programme (CIP) that covers between 10% and 30% of the total development costs of qualifying infrastructure. • Co-operative Incentive Scheme, which is a 90:10 matching cash grant for registered primary co-operatives • Sector Specific Assistance Scheme, which is a reimbursable 80:20 cost-sharing grant that can be applied for by export councils, joint action groups and industry associations.
Trade-related incentives The Export Marketing and Investment Assistance (EMIA) Scheme includes support for local businesses that wish to market their businesses internationally to potential importers and investors. The scheme offers financial assistance to South Africans travelling or exhibiting abroad as well as for inbound potential buyers of South African goods.
ONLINE RESOURCES Department of Trade and Industry: www.thedti.gov.za Free State Develoment Corporation: www.fdc.co.za Industrial Development Corporation: www.idc.co.za Official South African government incentive schemes: www.investmentincentives.co.za
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Establishing a business in SA The barriers to doing business in South Africa have been eased for local and international companies.
outh Africa has a sophisticated legal, regulatory and banking system. Setting up a business in South Africa is a relatively straight-forward process with assistance being offered by organisations such as the Department of Trade and Industry and provincial investment agencies like the 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 Corporations can be created but CCs can convert to companies.
being started. There are a range of administrative procedures that need to be fulfilled. 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.
Registration of company The company must be registered with the Companies and Intellectual Properties Commission, (CPIC) in Pretoria within 21 days of the company FREE STATE BUSINESS 2017
Other procedures • Checking exchange control procedures (note that non-residents are generally not subject to
SPECIAL FEATURE • • • •
• Is the prospective employer able to prove that he
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 if relevant and applying for an export permit
or she has tried to find a suitably qualified local employee prior to hiring a foreigner? Is the prospective employee appropriately qualified and do they have the relevant experience?
Patents, trademarks and copyrights Trademarks (including service marks) are valid for an initial period of 10 years and are renewable indefinitely for further 10-year periods. Patents are granted for 20 years, normally without an option to renew. The holder of a patent or trademark must pay an annual fee in order to preserve its validity. Patents and trademarks may be licensed but where this involves the payment of royalties to non-resident licensors, prior approval of the licensing agreement must be obtained from the dti. South Africa is a signatory to the Berne Copyright Convention.
Business permits Foreign nationals who wish to establish their own business or a partnership in South Africa must, apart from having sufficient funds to support themselves and their family, be able to invest at least R2.5-million in the business. The funds must originate overseas, be transferable to South Africa and belong to the applicant (ie emanate from the applicant’s own bank account). The business must also create jobs for South African citizens. After six months to a year, proof will have to be submitted that the business is employing South African citizens or permanent residents, excluding family members of the employer. Applications for work permits for self-employment can only be lodged at the South African Consulate or Embassy in the applicant’s country of origin. The processing fee is US$186. The applicant would also have to lodge a repatriation guarantee with the consulate/embassy equivalent to the price of a one-way flight from South Africa back to his or her country of origin. This guarantee is refundable once the applicant has either left South Africa permanently or obtained permanent residence. Any application for an extension of a business permit may be lodged locally. The processing fee per passport holder is R425. Some countries also need to pay R108 per return visa. A list of countries to which this applies is available from the Department of Home Affairs. The FDC assists investors in applying for the relevant work permits to conduct their business.
Permits for foreign nationals Work permits In considering whether or not to grant a work permit, the Department of Home Affairs will first evaluate the validity of the offer of employment by conducting a number of checks to confirm the following: • Has the Department of Labour been contacted? • Has the position been widely advertised?
What would the FDC do for you? The FDC will help new businesses by assisting in project appraisal and packaging, putting investors in touch with relevant agencies and government departments, alerting investors to investment incentives and setting up joint ventures where required. A full description of the services offered by the FDC is reflected elsewhere in this publication.
Business entities There are a variety of forms which businesses can take, including private and public companies, personal liability companies , non-profit companies, state-owned companies and even branches of foreign companies (or external companies). Branches of foreign companies fall under section 23 of the Companies Act of 2008 and are required to register as “external companies” with the CIPC. An external company is not required to appoint a local board of directors but must appoint a person resident in South Africa who is authorised to accept services of process and any notices served on the company. It must also appoint a registered local auditor and establish a registered office in South Africa.
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Making the things that really matter with businesses and communities happen Kevin de Beer, Nedbank Regional General Manager, Branch Networks, explains how Nedbank works with communities to deliver banking solutions.
edbank continues to build on its client-centred strategy aimed at delivering distinctive experiences and channels of choice for business and clients in the Free State. This has seen the bank simplify and enhance its product offering in line with its great value banking philosophy, based on simplicity, transparency and affordability. Innovation and technological advancements as well as training and development of staff have been key pillars in achieving the bank’s objectives. Nedbank has also placed greater emphasis on client engagement to better understand the diverse and individual client needs across its personal and business banking base. “Innovation is an integral component of a holistic approach that encompasses our systems and processes and which is an enabler in delivering distinctive client experiences. Despite the tough economic environment, Retail and Business Banking have delivered value to our shareholders while significantly improving our client experience. Through these milestones, we are well geared to weather the persisting macroeconomic environment, and highly competitive business conditions,” says Kevin de Beer. Since 2012, Nedbank has launched several first-to-market innovations such as the award-winning Nedbank App Suite™, Home Loans Online Digital Channel and Market Edge, as well as the “Branch of the Future” concept in communities locally and nationally. “Working with communities is entrenched in our values through community development, skills development, education and job creation as well as environmental conservation. These play a vital role in building a sustainable economy and vibrant society. We believe our fast-growing presence in communities goes a long way in enabling greater financial inclusion while contributing towards economic growth,” concludes De Beer. The bank has also invested in innovative alternative distribution outlets through its strategic partnership with Pick n Pay and Boxer Stores. These partnerships, which span over 15 years, enable communities to gain access to financial services every day of the week, including Sundays and public holidays. Nedbank also leverages its strong market positioning with businesses and the public sector, encouraging them to bank their employees FREE STATE BUSINESS 2017
Kevin de Beer, Nedbank Regional General Manager, Branch Networks through its innovative Nedbank@ Work employee banking offering. This forms part of Nedbank’s Banking and Beyond™ philosophy and is aimed at supporting business owners to make informed decisions so that they can grow and take their businesses to the next level. This is another way Nedbank continues to make the things that really matter with businesses and communities happen. For more information contact Kevin de Beer, Nedbank Regional General Manager on +27 51 400 5813 or visit www.nedbank.co.za
A full range of business solutions Jordaan Roelofse, Nedbank Regional Business Head, Northern Cape and Free State, explains how they are making the bank relevant to business owners in the Free State.
here is great news for Free State business owners and entrepreneurs seeking a unique banking experience: Nedbank Business Banking has eight business managers located across the province specialising in commercial and agricultural industries. They are ready to assist you with professional advice, industry-specific solutions and a comprehensive range of financial products and services. “At Nedbank Business Banking we believe that you need a financial partner who not only understands your circumstances and aspirations, but can also provide you with relevant solutions and a banking experience that is hassle-free. This allows you to concentrate on what’s most important to you the running of your business,” says Jordaan Roelofse. At the core of the bank’s offering in the Free State is a relationshipbased model, with a business manager dedicated to your business as the key entry point into the bank. Each business manager is supported by a team – comprising a credit manager, credit analyst and services manager – which has a thorough understanding of the regional economy and business market, and a genuine interest in the success of each individual business. “When you do business with us, you are speaking to people who know the area, understand its nuances and are familiar with the various industries operating here,” explains Roelofse. An additional benefit of banking with Nedbank Business Banking is that your business and your personal financial needs can be managed in one place. “Because very often business owners and their businesses are financially dependent on each other, our client service teams now also offer individual banking solutions, better advice and a hassle-free service to you and your staff as we already know and understand your needs,” explains Roelofse. With this in mind, Nedbank has recently introduced Nedbank@ Work – a unique service to employees of companies who bank with Nedbank. The service facilitates convenient banking at the workplace through bankers or consultants on site, in the branch or via our call
Jordaan Roelofse, Nedbank Regional Business Head, Northern Cape and Free State centre and internet channels. In addition, Nedbank@Work offers non-financial support to you and your employees free of charge, including financial fitness training to employees at all levels through customised education programmes. For more information about our specialised service offering please call Jordaan Roelofse on +27 51 400 5700.
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Zooming into Nedbank’s small business interventions Regional Manager Small Business Services, Kim Lawrence, explains how Nedbank is committed to partnering with businesses for growth.
ecognising that small businesses are the mainstay of our economy and arguably the best remedy for the country’s unemployment challenges, the bank has, over the years, instituted various interventions aimed at giving support to the small business sector. Over and above our Small Business Services solutions, we provide small business owners with support that goes beyond banking, freeing up their time to truly focus on running their businesses,” says Kim Lawrence. Nedbank has built a solid reputation as a bank for small businesses through initiatives such as Small Business Friday, free Small Business Seminars and the SimplyBiz.co.za platform – all of which are geared to support the SME sector. As an example, the Small Business Friday initiative, in association with the National Small Business Chamber (NSBC), seeks to encourage all in South Africa to rally behind and show their support to small businesses. Notwithstanding its name, the initiative calls on all in South Africa to make a conscious decision to vote small business through their hearts, feet and wallets; not only on Fridays but in their everyday lives. Supporting small businesses can translate to more sustainable economic growth, social upliftment and job creation. The biannual Nedbank Small Business Seminars (in their tenth year), are free for attendants and provide practical advice and solutions for small business owners. The inspired up-and-coming and emerging entrepreneurs that attend the seminars benefit from invaluable insight shared by small business experts. The seminars are rolled out across the country and the topics include issues such as cash-flow planning that works and turning strengths and weaknesses into more sales and profits. SimplyBiz.co za is a free-to-join value networking portal especially for small businesses. It seeks to assist small business owners facing unique challenges with valuable insights from other entrepreneurs and our seminars. Moreover, the online portal is there for small businesses to improve their business administration skills, keep up with the latest trends, network with other small businesses and share FREE STATE BUSINESS 2017
Kim Lawrence, Regional Manager Small Business Services ideas or advice. Entrepreneurs can also upload their business details and logo at no cost. Nedbank remains focused on the enhancement of growth opportunities for small businesses through improved presence and distribution of much-needed expertise that will benefit the sector. It continues to offer a full range of services to this sector, including short-term, mediumterm and long-term funding as well as transactional banking. For more information about our Small Business Services call Kim Lawrence, Regional Manager Small Business Services on +27 51 400 5700 or email email@example.com
Making banking more accessible Nedbank’s partnership with government is gaining momentum according to Free State Regional Relationship Manager Liezel Herbst.
s a bank for all, Nedbank continues to support the government’s efforts to promote sustainable socioeconomic development through financial wellness in the public sector. These efforts take place at local, provincial and government level. Nedbank has signed a memorandum of understanding with the Department of Correctional Services (DCS) for the Free State and the Northern Cape, in order to create a platform through which local correctional services offices can access financial solutions and planning for employees and the community at large. “We are pleased to partner with DCS as part of our commitment to make banking more accessible to all. Nedbank provides several communities, including individual and business clients, with access to products and services through Nedbank@Work – a unique service to employees of companies who bank with Nedbank,” says Liezel Herbst. The bank offers convenient, client-centric banking by leveraging company and community relationships through a dedicated key account relationship manager. Through customised workshops Nedbank@Work ensures that employees have access to non-financial support and financial-fitness training. The workshops encompass a range of Nedbank financial solutions that can be accessed through a helpdesk, which also provides a platform for individuals and communities to submit their corporate social responsibility proposals for consideration by the Nedbank Foundation. “At Nedbank we understand that in today’s world most people are pressed for time and are not able to visit the branch, therefore delivering banking services in a seamless and convenient manner is key for us,” continues Herbst. Nedbank understands that solutions aimed at the heart of South Africa’s socioeconomic development can be found in collaboration with all key stakeholders. “While we are acutely aware that there are no quick fixes, we believe that addressing social challenges in our country is a collective responsibility and this drives our commitment to partner with government and local departments to make a tangible difference,” concludes Herbst.
Liezel Herbst, Regional Relationship Manager Our range of products and services include the Nedbank Keyona Plus transactional account, which comprises funeral cover, a personal loan facility, the Just Save Account and the Send Imali money transfer solution. To encourage the youth to save and build their financial fitness from an early age, the newly launched Nedbank4me offering is based on four key pillars: 4spending, 4saving, 4growing and 4good. Nedbank4me comprises a full transactional banking account with no monthly fees, free initial transactions and thereafter reduced pay-as-youuse pricing, free eNotes and selfservice banking. For further information contact Liezel Herbst on +27 51 400 5754 or email firstname.lastname@example.org FREE STATE BUSINESS 2017
Old Mutual: doing great things in the Free State Old Mutual has invested in housing, renewable energy, education and more in the Free State.
Kevin de Beer, Old Mutual Free State Provincial Management Board Chairperson Crystal Park – Old Mutual investing in affordable housing.
Thousands of affordable homes, roads and railways, renewable-energy projects, investment in education, support for the needy and vulnerable, and capital expenditure on projects that benefit communities are just some of the initiatives in which Old Mutual is involved in the Free State. “Enabling positive futures is what our business is all about,“ says Kevin de Beer, Old Mutual Free State Provincial Management Board Chairperson, “and we’re immensely proud of the positive long-term and beneficial impacts we’re making in this wonderful province.” To date, the Housing Impact Fund South Africa (HIFSA), managed by Old Mutual Investment Group boutique, Old Mutual Alternative Investments, has invested R9-billion in the planned development of 2 550 affordable homes for sale and rent in the province. These comprise 2 208 greenfield housing units, 105 rental units and 237 units for student accommodation. Crystal Park and Raceway Park in Bloemfontein are just two of these projects. HIFSA also provides housing loans and rental accommodation for families and students, and aims to help fill the gap in the market between government-provided housing and those who have access FREE STATE BUSINESS 2017
to bank finance to purchase their own homes. Old Mutual Investment Group has committed close to R30-billion in areas that specifically drive long-term inclusive economic growth, such as education, affordable housing, lowcarbon energy, agriculture and infrastructure in South Africa. The Infrastructural, Developmental and Environmental Assets (IDEAS) Managed Fund, managed by Old Mutual Alternative Investments, is made available to institutional investors who wish to invest in economic infrastructure such as roads and railways, social infrastructure including housing and public-private partnerships, and renewable energy like solar, wind
FOCUS and hydro-generation projects. Old Mutual Investment Group participates in the governmentâ€™s Renewable Energy Independent Power Producer Procurement Programme via a number of its investment boutiques, namely Old Mutual Alternative Investments, African Infrastructure Investment Managers (AIIM), Futuregrowth Asset Management and Old Mutual Specialised Finance. Through these boutiques Old Mutual Investment Group has invested about R14-billion in over 30 renewable-energy projects. Two of these have been recognised as being in the global top 15 largest plants measured in capacity: the Lesedi solar-power plant in the Northern Cape and the Letsatsi solar-power project in the Free State. The Letsatsi project has generated many spinoffs for the local community, including 60 permanent jobs and 700 peak seasonal jobs. The project has also enabled the provision of prefab classroom facilities at four preschools (three in Dealesville and one in Soutpan), and soup kitchens at Kgololosego School and Lapologang old-age home in Mangaung township; and assisted with renovations of the Itereleng elderly luncheon club. Both these solar-power projects will also set aside a considerable percentage of total product revenues over their lifetimes, which will be directly invested in enterprise and socioeconomic development programmes for the surrounding local communities. In 2013, the Old Mutual Education Flagship Project
The Letsatsi solar-power project in the Free State.
(OMEFP) was launched. This seven-year multi-partner nationaleducation initiative will invest R350-million in a set of under-performing government schools in 10 school circuits in key provinces. The goal is to positively influence the lives of 250 000 learners at 250 schools, with the aim to increase the number of bachelor passes (university entrance) among Grade 12 learners who have both maths and science
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FOCUS in their matric subject choice. In the Free State, 15 high and intermediate schools and 39 primary feeder schools are part of the OMEFP. One such school is Ntemoseng High School in Botshabelo, a small town in the eastern Free State plagued by unemployment and poverty. Here, five participating schools each have four specialist mentors in maths, science and accounting, and school management for principals and their management teams, to enable teachers to manage their classes and curriculum content more effectively. Ntemoseng High School is now the second best performing school in Botshabelo out of 14 schools.
The Old Mutual Foundation provides a R100 000 grant to the Bartimea School for the Blind and Deaf.
The Emfuleni feedlot in Tweeling is a Masisizane beneficiary.
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In 2015, the Foundation contributed R27 870 000 to various South African communities which funded the development of small black-owned businesses, skills development projects, support for staff volunteerism initiatives and donations towards vulnerable communities. In the Free State specifically, the Old Mutual Foundation invested R268 000 via its Old Mutual Staff Community Builder programme in which employees can receive up to R45 000 over three years to financially assist the organisations at which they volunteer. This financial investment aided in the support of 14 projects and positively impacted 6 187 beneficiaries. The Foundation has financially supported the Earthrise Trust in the eastern Free State, near the town of Ficksburg. The R1.5-million grant given to this enterprise aimed to establish a co-operative communitydriven vegetable-farming enterprise. The project to date has created 20 jobs (in the form of co-operative members) and promotes food security,
Maths teacher, Mr Moyo, at Ntemoseng High School in Botshabelo, Free State.
nutrition and sustainable rural livelihoods for trainee farmers at Naledi and the surrounding villages. Another demonstration of the Foundation’s input into the well-being of Free State communities is a R100 000 grant to the Bartimea School for the Blind and Deaf for Perkins Braille writers for blind learners. T h e M a s is i z a n e Fu n d (“Masisizane”), an Old Mutual initiative that was established in 2007 as a non-profit funding company to provide loan financing and support to small, medium and micro enterprises (SMMEs), is also a contributor to the empowerment of the Free State. Masisizane was set up to contribute to job creation, reduce inequality, promote economic growth and support, develop and promote entrepreneurship, while attracting investment to SMMEs.
The Emfuleni feedlot in Tweeling is a Masisizane beneficiary, which has grown from a small business enterprise,established in 2013, to a feedlot that now has capacity to hold 8 000 sheep and employs 28 full-time staff. Masisizane provided a loan in 2014 so that they could buy more sheep and feed in order to sustain the business. Masisizane continues to provide post-investment support. “Old Mutual’s long-term success is closely connected to being part of, and being trusted by, flourishing and sustainable local communities,” says De Beer. “We’re committed to being a responsible business with a view to the long term, and we continue to focus on areas where our businesses can make a material impact and create meaningful change for all our stakeholders. After all, we know that what’s good for South Africa is good for Old Mutual, and vice versa.” For more information contact: Julie Hutchins, Communications Manager Tel: +27 11 217 1648 Cell: 072 553 7366 Email: email@example.com
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KEY SECTORS Overview of the main economic sectors in the Free State Agriculture
Oil and gas
Transport and logistics
Education and training
Agriculture The grain-rich Free State is investing in poultry operations.
ny event that attracts 448 helicopters and light aircraft must have something worth seeing. The 50th edition of the NAMPO Harvest Day was held in 2016 – and it is now regarded as one of the biggest agricultural festivals and exhibitions of its kind in the world. Transactions worth R50 000 were recorded at the second event in 1968. With 75 116 visitors and 685 exhibitors, the 2016 Harvest Day undoubtedly did rather better than that. Apart from the trading and the festivities, there is an annual Farmer Patent Competition, sponsored by Grain SA and Omnia, the fertiliser company. Bothaville, the host town, is located in the Lejweleputswa District Municipality on the western boundary of the Free State. So far west is Bothaville, that Senwes counts it as part of its North West region. FREE STATE BUSINESS 2017
SECTOR INSIGHT Large percentages of South Africa’s agricultural produce comes from the Free State. • The NAMPO Harvest attracted 75 000 visitors. • A record maize supply deal has been signed. The giant agricultural company, with its headquarters in the North West city of Klerksdorp, has three
separate regions for the rest of the Free State (east, north and south) as the province forms a vital part of the group’s portfolio. The company deals with no less than 20% of the country’s oilseeds and grain through its 68 silos. At the NAMPO event, Senwes’ commodity trading company, TradeVantage, signed a deal with Meadow Feeds to supply the animal feed supplier with 800 000 tons per year until April 2018. This is said to be the largest single maize contract to be signed in Southern Africa. Meadow Feeds, a subsidiary of Astral, will use the maize to feed 37-million chickens on a daily basis. The national feed industry has an annual turnover of R50-billion and if this money has to be spent in dollars to buy the raw materials, it becomes a very expensive business. VKB Agriculture, another of the province’s large agricultural companies that used to
be farmers’ co-operatives, has invested heavily in the Grain Field Chicken abattoir in Reitz (together with the broiler houses in Tweeling). The Industrial Development Corporation (IDC), which has a 23% stake in the project, intends to help develop the Free State as the poultry hub of South Africa. The VKB headquarters are in the town of Reitz in the northeastern part of the province and the group has nine brands in sectors such as fuel, grains, animal feed and foods. The financial division held information sessions with emerging farmers in 2016 to explain how farmers can benefit from the partnership between VKB and the Land Bank. VKB has development programmes with 51 emerging commercial farmers (cultivated area 5000ha) in the Free State and data on 140 developing farmers on its Free State database. During the course of 2016, the IDC lent R400-million to the Land Bank to help farmers deal with the multi-year drought, which only broke in late July. Grain SA reported that more than 3.5-million tons of maize would have to be imported to South Africa for the 2016/17 season. The drought has had the effect of reducing the agricultural sector’s influence on provincial GDP (from 8% to 5%) but the province still supplies almost all the country’s cherries and about half of the country’s maize and sunflower seed. In addition, a third of South Africa’s wheat comes from the Free State. About 24% of South African beef and 17.4% of sheep (mutton and wool) is produced in the Free State. A recent development has seen the province increase its share of the soya bean market. It
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now accounts for about 40% of the nation’s soya bean production market. The provincial government has plans in place to invest in the development of the Free State apple industry in the Thabo Mofutsanyana District. The drought reached crisis proportions at times. At one point, Senwes decided to send emergency relief to farmers in the Bultfontein district, and South African Breweries chipped in to help with the transport to haul the bales.
Potential Just over 90% of the Free State province is agricultural land, with 32% of its 11.6-million hectares classified as arable and 60% suitable for pasture. The agricultural sector is vital to the well-being of the province, both as a provider of food 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 (including poultry) and leather manufacturing.
CONTACT INFO Department of Agriculture and Rural Development Physical address: Gielie Joubert Street, Glen, Bloemfontein 9360 Tel: 051 861 8510 | Fax: 051 861 8578 / 086 723 8206 Website: www.ard.fs.gov.za Agricultural Research Council: www.arc.agri.za GrainSA: wwwgrainsa.co.za National Department of Agriculture, Forestry and Fisheries: www.daff.gov.za
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The Mangaung Fresh Produce Market plays a vital role in the sector, catering as it does to householders, bulk buyers, informal traders, agents and farmers. The Free State Department of Agriculture and Rural Development (DARD) has highlighted the fact 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. The key to commercialising these agricultural options is access to finance and the Industrial Development Corporation has been very active in the province in this sphere. Clover has three factories in the Free State: Bethlehem (milk powder, whey mixtures and creamers); Frankfort (butter, the largest such factory in the country, where ghee and rollerdried milk powder is also made); Heilbron (whey, buttermilk, condensed milk and packaging). 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 AgriPark in the Xhariep district comprising fish, ostrich, sheep and vegetable production, along with packaging and marketing.
Mining Diamond mines are expanding production.
lthough the mining sector is no longer dominant, coal-, gold and diamond – mining still make up an important part of the Free State economy. Reduced global and domestic demand have affected coal and gold miners and employment is down, but diamond production is on the up. The mining sector has seen significant changes in the last three years, and further changes are in store. Two of the most significant events were the unbundling of Gold Fields and the decision by Anglo American to concentrate on three minerals – copper, platinum and diamonds. Both affect the mining sector in the Free State. Sibanye Gold came into existence as a result of Gold Fields’ decision, and it quickly became the largest producer of gold in South Africa. Sibanye Gold is responsible for Beatrix in the Free State, but most of its gold assets are in Gauteng. Sibanye has bought several platinum assets and may be a buyer of some of Anglo American’s coal mines. The Sunday Times reported in July 2016 that Sibanye had paid out about
SECTOR INSIGHT Petra Diamonds increased revenue by 44% in 2016. • N e w com er, Sib an y e Gold, has paid out nearly R3-billion in dividends. R2.8-billion in dividends since it was established in 2013. Coal is mostly found in the northern part of the Free State and the gold fields, which form part of the Witwatersrand Basin, stretch from north of Welkom to south of Virginia. FREE STATE BUSINESS 2017
OVERVIEW R220-million in project finance. In March 2014, a new share issue in London attracted R38million and was over-subscribed. Further funds were raised in July 2015 and December 2015 (when R70-million was raised). De Beers’ Voorspoed mine will have a production capacity of 800 000 carats per year when it is fully operational. During the building phase, about R70-million was generated in the region, and the company intends on spending R400-million per year on capacity development. In July 2016, De Beers, the South African government and the South African diamond cutting industry launched a project to encourage diamond beneficiators. Among the first companies involved are Thoko’s Diamonds, African Diamonds, Nungu Diamonds and Kwame Diamonds. Lucrative opportunities exist for mineral processing. A minerals beneficiation strategy has been developed because this sector is seen as a key area for potential growth.
Diamonds Petra Diamonds’ Koffiefontein mine increased revenue from $17.8-million in 2015 to $25.7-million in 2016, an increase of 44%. The total carats sold rose by 21% to 55 500. This is part of the company’s long-term expansion plan at the mine (situated in the south-western part of the province). By 2017, Petra intends on producing 100 000 carats per year from the mine, which has a resource of 5.7-million carats. Petra has seven mines in South Africa. The Star mine, in which Petra (75%) is in partnership with Sedibeng Mining, is the other Free State asset. The Lace mine is near Kroonstad, which Diamond Corp is in the process of raising money to develop more rapidly. The intention is to produce ore at a rate of 4 000 metric tons per day, and access to higher-grade kimberlite could lead to the production of 500 000 carats per year. The Industrial Development Corporation has advanced FREE STATE BUSINESS 2017
Coal The energy sector is using less coal and neither of the main sectors that use the chemicals made at Sasolburg (agriculture and mining) is growing. The mine is run by Sasol Mining and supplies Infrachem in Sasolburg with two-million 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
OVERVIEW of three towns that play an important part in industrial production: Vereeniging, Sasolburg and Vanderbijlpark. The mine employs more than 900 people and supplies about 15-million metric tons of coal to Eskom’s Lethabo Power Station annually. This mine will be among the assets on the block when Anglo American disposes of all its coal mines. To what degree the sale will be an opportunity to increase black ownership of mines remains to be seen.
Gold AngloGold Ashanti’s Vaal River Complex operations are mostly near the town of Orkney in the North West Province. However, the Great Noligwa, Kopanang and Moab Khotsong mines are all over the Vaal River in the Free State. The complex includes one uranium plant, four gold plants and one sulphuric acid plant. AngloGold Ashanti intends to spend several billion rands over the next decade to extend the life of the Moab Khotsong mine. Village Main Reef runs the Tau Lekoa mine in the same vicinity. Most of Harmony’s operations, including a tailings treatment, are in the Free State. The mines are Tshepong and Phakisa (near Odendaalsrus), Virginia, Target (near Allanridge), Masimong (Riebeeck stad), Joel (near Theunissen) and Bambanani at Welkom. Phakisa has mineral reserves of just over five-million ounces of gold and Harmony has invested heavily in the project. Bambanani
is regarded as the most profitable mine in the group: the amount of gold produced at the mine increased in 2015 to 2 908kg from 1 606kg in 2013. Target and Tshepong (the most northerly of the mines in this cluster) together produced 8 102kg in 2015. Gold mines in the Free State also supply a substantial portion of the total silver produced in the country, and large concentrations of uranium occurring in the gold-bearing conglomerates of the gold fields are extracted as a by-product. Taung Gold, a Chinese company, runs the Jeanette mine near the town of Welkom.
Other minerals By-products of gold operations (uranium, silver, platinum-group metals and sulphuric acid) and bentonite are also found in the province. Among the companies running large quarries in the Free State are Lafarge, Raumix and Corobrik. Sand, stone aggregate, gypsum and granite are found at various sites throughout the province. Limestone and calcrete occur in the western Free State where salt is also panned. Production is concentrated around the Florisbad salt pan, north-west of Bloemfontein. The Ocean Bentonite Mine near Koppies in the northwest Free State is one of only two in the country.
CONTACT INFO Chamber of Mines of South Africa: www.bullion.org.za Geological Society of South Africa: www.gssa.org.za Mining Qualifications Authority: www.mqa.org.za National Department of Mineral Resources: www.dmr.gov.za South African Mining Development Association: www.samda.co.za Southern African Institute of Mining and Metallurgy: www.saimm.co.za
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Oil and gas Sasolburg is at the heart of South Africa’s oil and gas industry.
SECTOR INSIGHT A helium plant is set to exploit a new gas field. • A gold miner is extracting power from methane gas.
n energy-from-methane power plant now running at the Beatrix Gold Mine neatly encapsulates a shift from the old economy to the new. Although the Sibanye-owned gold mine still has significant reserves of the mineral, it is the shift to this new technology that is sparking interest and showing the way to creative energy solutions. Sibanye’s predecessor, Gold Fields, was the first gold miner to sell Certified Emissions Reduction (carbon trading units) and now the mine is producing 2MW of power for the mine’s operations. The Beatrix Project was registered as a methane-gas-capture project with the United Nations Framework Convention on Climate Change (UNFCCC). Aggreko, a company that specialises in providing temporary power, is running the operation in partnership with Sibanye. During the 2010 FIFA World Cup in South Africa, Aggreko supplied FREE STATE BUSINESS 2017
253 generators to stadiums and broadcast centres. The Natref fuel refinery is one of only four in South Africa and the country’s only inland refinery. It is strategically placed at Sasolburg near to the industrial hub of southern Gauteng. The petrochemical complex at Sasolburg is a major national asset. Among the many chemical, oil and gas companies operating out of Sasolburg are several companies within the Sasol group. One of these, Sasol New Energy, has been working on moving the group away from reliance on fossil fuels. The gasto-electricity power plant in Sasolburg delivered 1 348 263 megawatt hours of electricity in 2014. This takes the total generation capacity of Sasol up to about 70% of its requirements. The resulting savings will improve Sasol’s profit margins, reduce carbon dioxide emissions and take pressure off the national electricity grid.
OVERVIEW Oil The Natref fuel refinery is a joint venture between Sasol Oil (63.6%) and Total SA (36.3%). It is a technologically advanced facility, which refines heavy crude oil into petrol, diesel, commercial propane, jet fuel and bitumen. The capacity is 92 000 barrels per day. Between 60% and 70% of petroleum is distributed by pipeline, 20% to 25% by road and 5% by rail. The products sold by Sasol Oil include both lead 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. 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 turning to gas as an alternative to coal as an energy source, with Sasol being the major supplier. Sasol is doing its own conversions at its plants. The major economic sectors using gas are the metals sector (48% of volume, although the steel sector’s downturn will affect this negatively), and the chemical, pulp and paper sector (about 20%). Brick and glass manufacturers are also big consumers.
A major investment by Afrox (a member of the Linde group) will see a R200-million plant built to extract helium near Virginia. Renewable energy company, Renergen, owns the right to the natural gas and helium field around Virginia (which has proven reserves of 25-billion cubic feet). Afrox will operate the plant and sell the helium. Bus companies are in the market to buy another product, which the plant will supply, compressed natural gas. This will be a cheaper alternative than diesel. Afrox operates a CO2 liquefier at Sasolburg, which is aimed at supplying the bottling and hospitality markets, where demand is strong.
Pipelines Pipeline gas supplied from Sasolburg amounts to 27.3-million gigajoules, with customers mostly in the greater Johannesburg area, the industrial complex east of the city, and Durban. Gas raw materials come mainly from the by-products of Sasol’s petroleum plants at Secunda (Mpumalanga) and Sasolburg. Products include oxygen for medical use, liquefied petroleum gas for industrial, household and recreational use, and oxygen and acetylene. Specialised gases such as argon, helium and nitrogen are also produced. One of Sasol’s most important pipeline travels 865km through four South African provinces, including the Free State, from Mozambique’s gas fields. Transnet Pipelines is the key national operator in this field, handling an average of 16-billion litres of liquid fuel, and more than 450-million cubic metres of gases every year. The liquid products are leaded and unleaded petrol, aviation turbine fuels, diesel and crude oil. One of the pipeline intake stations is at the crude refinery at Coalbrook (Natref) in the Free State, and the pipeline network stretches out over the province into KwaZulu-Natal, Gauteng, North West and Mpumalanga, and Botswana and Mozambique. Transnet Pipelines employs 600 staff and its clients include all of South Africa’s major fuel companies, namely: BP, Caltex, Engen, Exel, Sasol Oil, Sasol Gas, Tepco, Shell and Total.
CONTACT INFO Department of Economic, Small Business Development, Tourism and Environmental Affairs Physical address: Bojanala Building, 34 Markgraaf Street, Bloemfontein 9300 Tel: 086 110 2185 | Fax: +27 51 400 9593 Website: www.edtea.fs.gov.za Petroleum Agency SA: www.petroleumagancy.com Sasol: www.sasol.com South African National Energy Association: sanera.org.za
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Manufacturing The Free State’s Special Economic Zone is attracting new manufacturing investment.
nnovation in manufacturing is the name of the game at the Product Development Technology Station (PDTS) at the Central University of Technology (CUT). CUT has campuses in Bloemfontein and Welkom. The PDTS helps small businesses (SMMEs) with the technology to design new products, to test them or to improve existing products. The PDTS is funded by the Technology Innovation Agency (TIA) and works in partnership with another CUT unit, the Centre for Rapid Prototyping and Manufacturing (CRPM). This unit’s speciality is 3D printing (or Additive Manufacturing). With 10 AM machines, the CRPM is extremely wellequipped; there are few organisations in the southern hemisphere with such resources. This kind of innovative thinking is needed as the Free State urgently looks for ways to develop new kinds of manufacturing businesses. Reliance on mining and agriculture (purely as producers of raw materials) is becomingly increasingly precarious, as recent commodity price falls have shown. These primary sectors are now being seen as targets for beneficiation, but new manufacturing opportunities are also being sought. One of the ways of attracting new manufacturers is through tax and other incentives in the province’s Special Economic Zone (SEZ), the 1 000ha Maluti-a-Phofung SEZ at Harrismith, a vital transport and logistics node on the N3 between Johannesburg and Durban. Already there has been interest from companies in a variety of countries including China, Bulgaria and India. Among the projects in the pipeline are a factory making transformers and another manufacturing medical equipment. Gas canisters, fruit concentrate and smart meters are other things that are going to be made in the SEZ. Local communities and entrepreneurs are being encouraged to think of ways of using assets that will be left behind: shafts, workshops, boarding houses, recreational facilities and metallurgical plants. Agriculture and mining can still play an important role in providing raw materials for manufacturing processes. The Virginia Jewellery Hub, for example, takes advantage of the availability of gold and silver in the Lejweleputswa district.
Assets The existing manufacturing sector also has capacity in many sectors including chemicals, agri-processing, textiles, carpets, engineering, packaging, furniture and jewellery. FREE STATE BUSINESS 2017
SECTOR INSIGHT SMME manufacturers in the Free State can have their products tested and improved. • Nouwens Carpets has joined the Green Building Council of South Africa. • Boxmore Plastics has created a special PET beer bottle. Nouwens Carpets, based in Harrismith, was established in that town in 1962 and has now joined the Green Building Council of South Africa. Another Harrismith manufacturer, Boxmore Plastics, is South Africa’s biggest converter of PET resin to bottles and it sells its products in 26 countries. Boxmore has developed a PET bottle especially for the South African beer market. Boxmore Packaging’s new PET beer bottles are the first PET bottles specifically designed for beer on the SA market. Empire Gloves makes industrial gloves. Kroonstad-based Octa Engineering makes specialised rail carriages for the gold and platinum mining sector on a 10 000m² site that contains two factories. The company employs about 250 people. In Bloemfontein, Transnet Engineering manufactures new wagons for the Transnet group, including iron ore and cement
OVERVIEW wagons and fuel tankers. Transnet wants the group’s component companies to go beyond simply supplying other Transnet companies. To this end, it has invested about R300-million in developing its Trans-Africa Locomotive, which it intends to sell on the continent. The domestic fleet of coal and iron ore wagons comprises about 10 000 wagons. Although the textile and apparel sector has been under tremendous pressure from cheap imports, something of a recovery has more recently been achieved through specialisation and through the coming together of smaller operators. The Industrial Development Corporation has also targeted the clothing and textile industry as one that has been particularly hard hit by a high influx of inexpensive textile products. It consequently has supported (either by way of loans or equity investments) several manufacturers. (A similar scheme operates in Leather and Footwear.) 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. Nearly 20% of the Free State’s manufacturing sites are devoted to food and beverages, with softdrink giant Coca-Cola Fortune, operating a large bottling plant in Mangaung. Clarens in the northeast has its own microbrewery, Clarens Brewery, which hand-
crafts 8 000 litres of full-grain ales a month using the finest malts and hops sourced both locally and internationally, as well as 200 000 litres of cider under its Red Stone Cider label annually. Landzicht Wine Cellar, an operation that distributes 2.4-million litres of wine every year from Jacobsdal, has a new bottling plant. Nestlé makes infant nutrition products in Harrismith, and Clover has three factories in the province, which produce butter, whey and milk products. The Imbani Homsek Group is an integrated dairy products producer with one of the biggest Ayrshire herds in the world, with 2 000 head registered. Its Bloemfontein facility can produce up to 120 000 litres per day of fresh dairy products, backed up by a further 200 000 litres per day from their Long Life factory. It supplies all the major retailers nationwide, with its fresh milk being stocked by the Woolworths group. The main poultry and animal feed operations of Imbani Homsek Group (CHB) are in the Free State. They 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 animal feed with feed mills in Bloemfontein (monthly capacity of (6 000 tons) and Viljoenskroon (32 000 tons) and Mafikeng (8 000 tons). Chemicals are a major sector within the Free State manufacturing basket. Reference has already been made to Omnia. AECI is another major presence in Sasolburg (six-month revenue in speciality chemicals to June 2016 was R5-billion), but the giant is the company after which the Northern Free State town was named, Sasol. The various components of the Free State Sasol complex produce: Sasol Nitro: ammonia, nitric acid, industrial explosives and fertilisers. Sasol Polymers: ethylene, propylene, polypropylene and hydrochloric acid. Sasol Solvents: alcohols, acrylic acid, ethyl acetate and mining chemicals. Sasol Olefins and Surfactants (SO&S): paraffins, olefins, zeolites and oleochemicals. Sasol Wax: World-leading supplier of hard and medium waxes, petroleum jellies and liquid paraffins.
CONTACT INFO Dept of Economic, Small Business Development, Tourism and Environmental Affairs Physical address: Bojanala Building, 34 Markgraaf Street, Bloemfontein 9300 Tel: 086 110 2185 | Fax: 051 400 9593 Website: www.edtea.fs.gov.za
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Transport and logistics The Free State is a logistics hub.
SECTOR INSIGHT • Independent truck owners in Bloemfontein have been given new opportunities. • A reopened branch rail line is providing new connections.
hemicals, maize and gold are three of the most important commodities that rail and road logistics companies have to transport out of South Africa’s most central province. Expansion on the part of Omnia (the chemicals, explosives and fertiliser company based in Sasolburg), led to an entirely new set of rail wagons being designed and built by Transnet Engineering (TE). Omnia took delivery of 145 new wagons to take ammonia away from their new plants in Sasolburg. The specialist wagons were designed to deal with pressure up to 1930kPa and were made of high-grade steel. To give an idea of the scale of the logistics in the national gas industry, the Afrox fleet alone covers about 24-million kilometres every year. Transnet Freight Rail (TFR) delivers chemicals from Sasolburg to Durban and Richards Bay Gold miners in the Free State have contracts with independent rail contractors, such as Sheltam and Rail Road Logistics Grindrod (RRL Grindrod), for the movement and delivery of their ore from mines to plants. Sheltam operates out of Virginia. When it comes to maize, what used to be the preserve of the national rail carrier (up to 80% of the crop used to be transported by rail) is now a very competitive environment with road freight operators as strong competitors. But Transnet Freight Rail has plans to regain market share. The main grain lines that TFR operates through the Free State FREE STATE BUSINESS 2017
are Kroonstad to Durban and Klerksdorp to Polokwane. The reopening of the OrkneyVierfontein branch line is an example of how TFR plans to go about increasing its market share. The 15km offers farmers in the North West province improved connections to the rest of the rail network. Grain transport is not the only reason for revitalising the line, work on which was mostly done by Transnet teams working out of Bloemfontein, but it could also carry bulk liquids and passenger trains if there was demand. For the fast-moving consumer goods (FMCG) sector, the main train flows are from Rosslyn (Pretoria) to Bloemfontein. Kroonstad is one of the country’s most important junctions, straddling as it does the main line between Cape Town and Johannesburg. It is also a major marshalling yard. Transnet’s manganese packaging facility in Bloemfontein has recently expanded the scope of
OVERVIEW its operation, which has led to the creation of more opportunities for SMME truck owners. The provincial government’s Women in Transport and Logistics project has given opportunities for work to many operators. Several national roads pass through the province: the extremely busy N3 to the ports of Durban and Richards Bay, the N1 and N5 highways leading to the industrial development zones at Port Elizabeth (Coega) and East London, with the N1 ending at the port city of Cape Town. A plan to boost “corridor development” along the N8 is also in place. The N8 connects the provincial capital with Lesotho’s capital, Maseru, and the Northern Cape city of Kimberley. Harrismith is also centrally located: 300km from Johannesburg, 350km from Bloemfontein and 300km from Durban. This has made it the ideal location for a logistics hub and dry port, and the volume of cargo passing through Harrismith has been increasing steadily for several years. The Durban-Free StateGauteng logistics and industrial corridor is not only intended to promote better transport of goods between the end points, but also to boost economic development in towns and rural areas along the way. The MalutiA-Phofung SEZ (Special Economic Zone) will contribute to this. The Mangaung Metropolitan Municipality has a five-year Integrated Development Plan in place, and transport is a key component. The N8 is a central part of the plan, providing, as it does, the main link on the east-west axis.
The great advantage of being centrally located also brings with it the challenge of maintaining roads that are heavily used. National roads are maintained by the South African National Roads Agency (Sanral), but there are many roads that the provincial government must keep in good condition. The preservation of the network includes ensuring that communities are not isolated, that township roads are improved and bridges maintained. Various banks of data also have to be maintained to assist in management, for example, traffic counting, accident data and overloading control. Bloemfontein’s Bram Fischer International Airport is the province’s major airport and is managed by Airports Company South Africa (ACSA). A project covering 2 000ha and expected to cost in the region of R100-billion over several phases has been initiated at the airport. Ultimately, the area will have industrial land, mixed housing, a regional mall and be served by public transport. New Tempe Airport, 15km north of the city, is privately owned and is used for charter flights, recreational flying and the Bloemfontein Air Show. Airports are also located at Bethlehem and Welkom, and there are a number of airstrips on farms and game reserves.
CONTACT INFO Dept of Police, Roads and Transport Physical address: 45 Charlotte Maxeke Street, Perm Building, Bloemfontein 9301 Tel: +27 51 409 8849 | Fax: +27 51 409 8864 Website: www.policeroadstransport.fs.gov.za Railroad Association of South Africa: www.rra.co.za Roadfreight Association of South Africa: www.rfa.co.za South African National Roads Agency Limited: www.nra.co.za
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Bram Fischer International Airport
loemfontein International Airport was officially renamed Bram Fischer International Airport by President Jacob Zuma at a historic event held on 13 December 2012. Airports Company South Africa is honoured to commemorate the life of a man who stood for what was right and sacrificed his own heritage for the sake of freedom for all. At the heart of the economy in the region, Bram Fischer International Airport not only offers a world-class airport operation for passengers and cargo, but also fulfils its role as an economic hub strategically situated on the N8 Corridor, which links Bloemfontein, the industrial area of Botshabelo and Maseru in Lesotho. The airport caters for more than 400 000 passengers and 20 000 air traffic movements per annum. Historically, the economy of the Free State depended on agriculture and mining, with about half of South Africaâ€™s sorghum and sunflowers, and more than 30% of the wheat, maize, potatoes and groundnuts
being grown in the province. Livestock, flowers, cherries and asparagus are other important agricultural products. In an effort to reduce reliance on agriculture and mining, business sectors such as research and innovation, pharmaceutical manufacturing and processing of agricultural produce are being encouraged. The Free State shares boundaries with six other provinces as well as Lesotho, and is crossed by important rail links and two of the busiest national highways, the N1 and the N3, giving natural impetus to the focus on logistics as an economic driver. Bram Fischer International Airport has been designated as an economic node and focal point for development on the N8 Corridor. Consequently, the airportâ€™s capacity will require expansion in the future for it to maintain its pivotal position in expanding the tourism, logistics and light-industry sectors in the region. Bram Fischer International Airport will continue facilitating growth and development in the Free State and specifically Mangaung.
- In the Heartland of South Africa
Growth and development opportunities Boulevard Precinct Immediately adjacent to the airport, the Boulevard Precinct will include a private hospital, residential, retail, schools and commercial premises. This is an exciting and innovative, 44hectare development which will support the N8 development corridor. It will accommodate a wide range of tenants, ranging from mixeduse offices, a service station and a private hospital. Construction of the first three developments will commence in 2016, acting as a catalyst for the node.
The Grasslands Approximately 98 hectares in extent, this development property represents a diverse range of business opportunities. These include an extended general aviation area, freight, cargo, logistics and housing. www.airports.co.za For more information contact: Esmaralda Barnes: Tel: 051- 407 2215 E-mail: firstname.lastname@example.org
Poised for growth Esmaralda Barnes, Airport Manager at Bram Fischer International Airport, discusses some of the advantages of the airport in Bloemfontein.
BIOGRAPHY Esmaralda Barnes was appointed as South Africa’s first woman manager of an international airport at Pietersburg in 1996. She then moved to Matavia Airlines, where she managed their South African operations before moving to the UAE, followed by a short stay in The Gambia. In 2001, Esmaralda was approached by the South African Civil Aviation Authority to take over the management of Pietermaritzburg Airport. In 2003, Airports Company South Africa appointed Esmaralda as Airport Manager at Upington, and was transferred to Bram Fischer International Airport in 2013. FREE STATE BUSINESS 2017
Could you give an overview of the facilities and capacity of the airport?
In terms of capacity, over the previous financial year, the airport processed a total number of 34 348 Air Traffic Movements, which produced 393 471 passenger movements. This is an 8% increase on the previous financial year’s movement, and a 5% increase compared to budget. This is good considering the current slow growth in the national and provincial market. Bram Fischer International Airport has excellent facilities, which include two intersecting runways, that assist with landing and taking off from the alternate runway should it not be conducive for the main runway to be used. This almost eliminates chances of having to divert traffic due to heavy or swirling wind movements. What services do you offer to businesses?
Bram Fischer International Airport is the main aviation hub in the Free State. We carry a diversion status for the country, which means that if an aircraft cannot land at its destination due to weather or technical challenges, our airport is the next point of diversion. Bram Fischer International Airport is well positioned to offer a national distribution and collection point to exporters and importers of light cargo. The size of the infrastructure enables quick processing of imports and exports efficiently. We are well positioned to relieve pressure from OR Tambo International Airport, while ensuring growth of the Free State province. What opportunities for development are there at the airport?
There is vast undeveloped land near the airport. Airport Company South Africa’s drive is to focus on non-aeronautical revenue that can be generated through proper analysis of the business demand and availability within our region, province and national economy at large.
Tourism Cultural tourism is a new focus for the Free State.
ituated as it is in the centre of the country, the Free State’s road infrastructure comes under disproportionate pressure, but the road network plays an important part of the support system that keeps the tourism industry going. Tourist operators in the Free State’s northern section are delighted that the R74 road (Oliviershoek Pass) has been fixed and upgraded. Providing as it does an alternative to the very busy N3 highway between Johannesburg and Durban, the R74 is an important link to the tourism sites along the edge of the Drakensburg mountain range, including a route from the north to the Royal Natal National Park. The Free State is putting a focus on culture in various forms, as a way of expanding the tourist offering of the province. The province already has dramatic mountainscapes, huge bodies of water that lend themselves to recreation and the wide open spaces that travellers crave when they want to get away from the city pressures. A Heroes’ Park is to be constructed at Thaba Nchu and Tumahole and statues of Oliver Tambo and Fidel Castro are to be unveiled as part of the provincial government’s drive to promote cultural projects. Bloemfontein’s history includes the fact that both the party of apartheid (the National Party) and the party that helped defeat apartheid,
SECTOR INSIGHT The Vaal River is a popular destination for holidaymakers. • de Stijl Gariep Hotel was a provincial Lilizela award winner in 2015. the African National Congress (ANC), were founded in the city. The Mangaung African Cultural Festival (Macufe) is a Bloemfontein event that, since it began in 1997, has become a national and international event. Offerings range from music (gospel to jazz and Afrikaans liedjies) and craft stalls to poetry, film and theatre, a soccer tournament and boxing matches. FREE STATE BUSINESS 2017
Phase Two in the construction of the Thabo Mofutsanyana Arts and Culture Centre has begun, and the provincial government intends establishing sound-recording studios around the province, to enable talented musicians to record their music, and derive some income from their talent. South Africaâ€™s largest hotel groups have several brands that cater to different markets. In the Free State, Protea Hotels has five properties: Protea Hotel Bloemfontein by Marriott and Protea Hotel Willow Lake (both four-star), Protea Hotel Bloemfontein Central (three-star), Protea Hotel Montrose (Harrismith) and Protea Hotel Clarens. The four-star Southern Sun Bloemfontein, part of the Tsogo Sun group, has 147 rooms, and the Goldfields Casino in Welkom is another Tsogo Sun property. The City Lodge Bloemfontein boasts 151 rooms, and there is a Road Lodge at the airport. The Rantsoareng Group operates exclusively in the Free State and has three properties. The biggest of these is the President Hotel in Bloemfontein, a three-star hotel with 145 rooms and banqueting and conference facilities for up to 420 people. Sun International runs the Lesotho Sun and the Maseru Sun in neighbouring Lesotho. In Bloemfontein, the Windmill Casino and FREE STATE BUSINESS 2017
Entertainment Centre offers slot machines and gaming tables, plus the ability to host conferences for up to 250 delegates. The four-star Willow Lodge has 80 rooms. The Naledi Sun Hotel and Casino is about 65km from Bloemfontein. Forever Resorts has a popular resort with chalet accommodation and a caravan park on the banks of the Gariep Dam. Overlooking the dam is the 43room de Stijl Gariep Hotel. Recent expansions have increased capacity at the hotel which can now host weddings and conferences of up to 250 delegates. The hotel was the winner of the 2015 Lilizela provincial Accommodation Award.
Routes Each of the province’s district municipality has its own tourism brand or route: Cheetah Route (Mangaung M e tro an d sur ro un ds): Bloemfontein has a host of historical and cultural sites, including the Naval Hill Precinct (home to the Digital Planetarium), the AngloBoer War Museum, the National Museum (which has the Florisbad skull), the Choet Visser Rugby Museum, the SA Armour Museum and the Fire Station Museum. Nearby Thaba Nchu is where the great statesman Moshoeshoe held court in the second half of the 19th century, and created a nation against the odds. Springbok Route (Xhariep District): Travellers can start their journey at a diamond mine, visit a
wine farm and finish on the top of the Xhariep Dam. Several Anglo-Boer War battle sites and superb San rock engravings can be found dotted around the district. Flamingo Route (Lejweleputswa District): One of the biggest agricultural expos in the world takes place at Bothaville. Phakisa race track in Welkom attracts large crowds and it has so far hosted six World Motorcycle Grand Prix events, providing a big boost to the regional economy. Two small towns hold big interest: Winburg is the oldest proclaimed town in the country (and home to a museum and a monument to the Voortrekkers); Brandfort is where Winnie Mandela spent several years in internal exile. The district has several game farms, game reserves and resorts Lion Route (Fezile Dabi District): The northern part of the province is covered by this route, and includes the banks of the Vaal River which provides its own natural tourist attraction (boating, yachting, camping, etc). Parys is a popular destination and there is even a crocodile farm in Deneysville. Cape wines can be tasted on two farms in the Heilbron area near Sasolburg. The idea behind the Riemland Wine Route is to bring Cape wine tasting closer to wine-lovers in northern areas. The Vredefort Dome, site of a meteorite strike in the distant past, is a World Heritage Site. Eagle Route (Thabo Mofutsanyane District): Some of the most spectacular scenery can be found in this north-eastern part of the province, which encompasses the Golden Gate Highlands National Park and Resort. Ficksburg has claims to be the world’s Cherry Capital and nearby Clarens is very popular with weekenders looking for art in a rustic village atmosphere (and a micro-brewery). Bethlehem’s recent 150th anniversary saw the town host a Combined Inter-Faith Service, a carnival, and flea market and a Gospel Festival. Bethlehem hosts an annual Bethlehem Air Show and the Maize Fair in October. Phuthaditjhaba is a good starting point for the Basotho Cultural Village and access to the Vulture Restaurant and Witsieshoek Mountain Resort.
CONTACT INFO Dept of Economic, Small Business Development, Tourism & Environmental Affairs MEC: Mr. Benny Malakoane Physical address: Bojanala Building, 34 Markgraaf Street, Bloemfontein 9300 Postal address: Private Bag X20801, Bloemfontein 9300 Tel: 086 110 2185 | Fax: +27 51 400 9593 Website: www.edtea.fs.gov.za
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Education and training Access to education is growing fast in the Free State.
SECTOR INSIGHT The Central University of Technolog y has hosted a national engineering conference.
asic education and training statistics show that access to schooling and training has increased markedly in recent years. Enrolment in Grade R (reception year) increased in 2015 to 704 000 at 663 public schools and 263 other community sites in the Free State. A record number of 25 160 candidates registered for the 2015 National Senior Certificate exams. At the same time, high quality research is conducted at the University of the Free State (UFS) and the Central University of Technology (CUT). UFS caters for 17 500 students at two sites and a further 3 000 who study by correspondence. Six faculties offer a full range of undergraduate and postgraduate programmes such as those offered by the Centre for Financial Planning Law. Research is on the increase at UFS, with a record number of scholarly books appearing in various disciplines. The new SANRAL chair in Science, Mathematics and Technology education was launched in Bloemfontein in 2014, five research chairs were awarded to UFS by FREE STATE BUSINESS 2017
the South African Research Chairs Initiative (SARChi) and in 2016 UFS has 127 researchers rated by the National Research Foundation. A number of new buildings have gone up or are being built on the Bloemfontein campus. These include a high-performance gymnasium and new buildings for the Education and Health faculties. On the Qwaqwa campus, a new Physics and Geography complex has been constructed. CUT has a main campus in Bloemfontein and branches in Welkom and Kimberley. There are three faculties: Engineering and Information and Communication Te chnolo g y, Health and E nv i ro n m e nt a l S c i e n ce s , and Management Sciences. Researchers at units such as the Centre for Community, Environmental and Industrial Development tackle important regional issues. In September 2016, CUT cohosted an electrical engineering conference under the title â€œEngineering for a better futureâ€?,
OVERVIEW bringing together technicians, technologists, engineers and researchers in the sector. The Department of Electrical, Electronic and Computer Engineering (which is part of the CUTâ€™s Faculty of Engineering and Information Technology) partnered with the South African Institute of Electrical Engineers (SAIEE), and Eskom, the national utility, in hosting the conference, which attracted 250 delegates. A unit that supports manufacturing at CUT is the Centre for Rapid Prototyping and Manufacturing (CRPM). It specialises in Additive Manufacturing (AM), also known as 3D printing. CRPM works in the commercial field as well as doing research in Rapid Prototyping, Rapid Manufacturing, Rapid Tooling and Medical Product Development technologies. Manufacturers can make prototypes more easily (in sand, metal or plastic) with the support of the CRPM than would otherwise the case if they had to start from scratch. UFS, CUT and the Free State Provincial Government have launched AHA Bokamoso: Joining Minds for Skills Development. The main thrust of this project is to foreground skills development in information technology (IT). Key points are the establishment of a Regional Innovation Centre on the main campus in Bloemfontein (with an IT Hub on the Welkom campus), together with Saturday School (focussing on mathematics and science) and training programmes for Department of Education officials. A provincial bursary programme is a collaboration
between the Provincial Government and the educational institutions. An additional 400 students have the chance to study in Russia, Bulgaria, Belarus, Turkey, Germany and Portugal.
Skills A strong trend towards expanded practical training is being encouraged by the national department of Higher Education and Training. A national register of artisans is being mooted as well as an increase in access to all sorts of trade-related learning opportunities. South Africa currently produces about 13 000 every year; the aim is to increase this to 30 000. Provincial government departments have been awarded about R316-million in support and bursaries for more then 5 000 students across the province. There is a National Student Financial Aid Scheme, which is under pressure following a concentrated protest across South Africa against high university fees. Bursaries are also available under the National Skills Fund. What for several years were known as Further Education and Training Colleges (FET) have now been rebranded as Technical and Vocational Education and Training (TVET) Colleges. The Free State has just over 14 000 students at four TVET colleges, taught by 400 lecturers. The colleges have multiple sites. Maluti TVET College in Phuthaditjhaba, for example, offers classes at seven sites. Flavius Mareka TVET College has Kroonstad and Sasolburg venues. Motheo TVET College operates in Bloemfontein and Thaba Nchu, while Goldfields TVET College is in Welkom. Technical schools are being upgraded by the provincial government, with resources being allocated to the recapitalisation programme. Bursaries form an important part of the plan to help students attain qualifications. In addition, a provincial internship programme gives graduates a chance to work in provincial government departments and municipalities. In 2016, the plan was to place 517 graduates in the programme.
CONTACT INFO Central University of Technology: www.cut.ac.za Council of Higher Education: www.che.ac.za Education Association of South Africa: www.easa.ac.za Free State Department of Education: www.education.fs.gov.za University of the Free State: www.ufs.ac.za
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Free State Provincial Government A guide to Free State’s provincial government departments. Visit: www.freestateonline.fs.gov.za
Office of the Premier
Department of Economic, Small Business Development, Tourism and Environmental Affairs
Premier: Mr Ace Magashule Physical address: 4th Floor, OR Tambo Building, Cnr St Andrew & Markgraaf Streets, Bloemfontein 9300 Postal address: PO Box 517, Bloemfontein 9300 Tel: +27 51 405 5799 | Fax: +27 51 405 4803 Website: www.premier.fs.gov.za
MEC: Mr Benny Malakoane Physical address: Bojanala Building, 34 Markgraaf Street, Bloemfontein 9300 Postal address: Private Bag X20801, Bloemfontein 9300 Tel: +27 51 400 9593 Fax: +27 51 400 2158 Website: www.edtea.fs.gov.za
Department of Agriculture and Rural Development
Department of Education
MEC: Mr Motete Daniel Khoabane Physical address: Main Building, Gielie Joubert Street, Glen, Bloemfontein 9360 Postal address: Private Bag X01, Glen, Bloemfontein, 9360 Tel: +27 51 861 8401 Fax: +27 51 861 8578 / 086 723 8206 Website: www.ard.fs.gov.za
MEC: Mr Pule Makgoe Physical address: Free State Provincial Government Building, 55 Elizabeth Street, Bloemfontein 9300 Postal address: Private Bag X20565, Bloemfontein 9300 Tel: +27 51 404 8411 Fax: +27 51 404 8269 Website: www.education.fs.gov.za
Department of Cooperative Governance, Traditional Affairs and Human Settlements
Department of Health MEC: Mr Butana Komphela Physical address: Cnr Harvey & Charlotte Maxeke Streets, Bloemfontein 9300 Postal address: PO Box 227, Bloemfontein 9300 Tel: +27 51 408 1105 Fax: +27 51 408 1107 Website: www.fshealth.gov.za
MEC: Ms Sefora Sisi Ntombela Physical address: 7th Floor, Lebohang Building, Cnr St Andrew’s & Markgraaf Streets, Bloemfontein 9301 Postal address: PO Box 211, Bloemfontein 9300 Tel: +27 51 403 3224 Website: www.fscogtahs.gov.za FREE STATE BUSINESS 2017
LISTING Department of Police, Roads and Transport
Department of Sports, Arts, Culture and Recreation
MEC: Mr Sam Mashinini Physical address: 4th Floor Perm Building, 45 Charlotte Maxeke Street, Bloemfontein 9301 Postal address: PO Box 119, Bloemfontein 9300 Tel: +27 51 409 8849 Fax: +27 51 409 8864 Website: www.freetrans.gov.za
MEC: Mrs NS Leeto Physical address: 4th Floor, Business Partners Building, Cnr Henry and Eastburger Streets, Bloemfontein 9300 Postal address: Private Bag X20606, Bloemfontein 9300 Tel: +27 51 410 4727 Fax: +27 51 410 4758 Website: www.sacr.fs.gov.za
Department of Public Works and Infrastructure
MEC: Ms Dora Kotzee Physical address: Cnr Markgraaf and St Andrew’s Streets, Bloemfontein 9301 Postal address: PO Box 7551, Bloemfontein 9301 Tel: +27 51 405 4692 Fax: +27 51 405 4490 Website: www.publicworks.fs.gov.za
MEC: Ms Elzabe Rockman Physical address: 55 Elizabeth Street, Fidel Castro Building, Bloemfontein 9300 Postal address: Private Bag X20537, Bloemfontein 9300 Tel: +27 51 403 3456 / 405 4229 Fax: +27 51 403 3244 Website: www.treasury.fs.gov.za
Department of Social Development MEC: Ms Limakatso Particia Mahasa Physical address: Civilia Building, 14 Elizabeth Street, Bloemfontein 9300 Postal address: Private Bag X20616, Bloemfontein 9300 Tel: +27 51 409 0619 | Fax: +27 51 409 0618 Website: www.socdev.fs.gov.za
Free State coat of arms In the centre of the shield is the indigenous Orange River Lily (Crinum Bulbispernum.) The blue and green shield symbolises the green grasslands and the blue skies of the province. The sandstone formations of the Eastern Free State are represented by the top of the yellow shape. The shield is supported by two cheetahs.
The crown on top of the shield consists of diamonds, mealie (maize) cobs and ears of corn. These also bear witness to the agricultural and mining heritage of the province. The earth of the Free State is portrayed by the base of the coat of arms. Motto “Prosperity through unity”
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Free State Local Government A guide to metropolitan, district and local municipalities in the Free State Province.
Mangaung Metropolitan Municipality
Local municipalities encompassed Masilonyana Municipality Tel: +27 57 733 0106 | Fax: +27 57 733 2217 Website: www.masilonyana.fs.gov.za
Physical address: Bram Fischer Building, cnr Nelson Mandela and Markgraaff streets, Bloemfontein 9301 Postal address: PO Box 3704, Bloemfontein 9300 Tel: +27 51 405 8494 | Fax: +27 51 405 8663 Website: www.mangaung.co.za
Matjhabeng Municipality Tel: +27 57 391 3911 | Fax: +27 57 357 4393 Website: www.matjhabeng.co.za
Fezile Dabi District Municipality
Nala Municipality Tel: +27 56 514 9200 Fax: +27 56 515 3922 Website: www.nala.fs.gov.za
Physical address: John Vorster Road, Sasolburg 1947 Postal address: PO Box 10, Sasolburg 1947 Tel: +27 16 970 8615 | Fax: +27 16 970 8747 Website: www.feziledabi.gov.za
Tokologo Municipality Tel: +27 53 541 0014 | Fax: +27 53 541 0360 Website: www.tokologo.fs.gov.za
Local municipalities encompassed Mafube Municipality Tel: +27 58 813 1051 | Fax: +27 58 813 3072 Website: www.mafubemunicipality.gov.za
Tswelopele Municipality Tel: +27 51 853 1111 | Fax: +27 51 853 1332 Website: www.tswelopele.fs.gov.za
Metsimaholo Municipality Tel: +27 16 973 8301 | Fax: +27 16 973 2191 Website: www.metsimaholo.gov.za
Thabo Mofutsanyana District Municipality
Moqhaka Municipality Tel: +27 56 216 9111 | Fax: +27 56 216 9122 Website: www.moqhaka.gov.za
Physical address: Old Parliament Building, 1 Mamopi Street, Phuthaditjhaba 9870 Postal address: Private Bag X810, Witsieshoek 9870 Tel: +27 58 718 1000 | Fax: +27 58 718 4090 Website: www.thabomofutsanyana.fs.gov.za
Ngwathe Municipality Tel: +27 56 816 2700 | Fax: +27 56 817 6343 Website: www.ngwathe.fs.gov.za
Lejweleputswa District Municipality
Local municipalities encompassed Dihlabeng Municipality Tel: +27 58 303 5732 | Fax: +27 58 303 4703 Website: www.dihlabeng.gov.za
Physical address: cnr Jan Hofmeyer and Tempest streets, Welkom 9460 Postal address: PO Box 2163, Welkom 9460 Tel: +27 57 353 3094 | Fax: +27 57 353 3382 Website: www.lejweleputswa.co.za
Maluti-a-Phofung Municipality Tel: +27 58 718 3700 | Fax: +27 58 718 3777 Website: www.map.fs.gov.za
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LISTING Mantsopa Municipality Tel: +27 51 924 0654 | Fax: +27 51 924 0020 Website: www.mantsopa.fs.gov.za
Local municipalities encompassed Kopanong Municipality Tel: +27 51 713 9200 Fax: +27 51 713 0292 Website: www.kopanong.gov.za
Nketoana Municipality Tel: +27 58 863 2811 | Fax: +27 58 863 2523 Website: www.nketoana.fs.gov.za
Letsemeng Municipality Tel: +27 53 205 9206 Fax: +27 53 205 0144 Website: www.letsemeng.gov.za
Phumelela Municipality Tel: +27 58 913 8300 | Fax: +27 58 913 2317 Website: www.phumelela.psalm.co.za
Mohokare Municipality Tel: +27 51 673 9600 Fax: +27 51 673 1550 Website: www.mohokare.co.za
Setsoto Municipality Tel: +27 51 933 9300 | Fax: +27 51 933 9383 Website: www.setsoto.info
Naledi Municipality Tel: +27 51 541 0012 Fax: +27 51 541 3181 Website: www.naledi.fs.gov.za
Xhariep District Municipality Physical address: 20 Louw Street, Trompsburg 9913 Postal address: Private Bag X136, Trompsburg 9913 Tel: +27 51 713 9300 Fax: +27 51 713 0461 Website: www.xhariep.gov.za
MUNICIPALITIES IN THE FREE STATE
North West Fezile Dabi Mafube Ngwathe Moqhaka
Metropolitan/District Municipality boundary
Local Municipality Boundary District Municipality
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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 campaigning for recognition from the local and provincial governments as the representative of the business community in Bloemfontein as well as the Free State.
• To promote BEE by, among others, linking
• • • •
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. FREE STATE BUSINESS 2017
big and small businesses through the chamber network. To influence and monitor relevant authorities and role-players. 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 participation 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.
CONTACT INFO The Mangaung Chamber of Commerce and Industry Tel: +27 51 447 3368/9 Fax: +27 51 447 5064 Email: email@example.com Website: www.mcci.co.za
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:
SMME/co-operative funding and 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.
Export-related services FDC services to exporters include the Export Promotion Programme, which aims to grow demand for Free State products in global markets through capacity-building workshops, the dissemination of trade leads, networking opportunities with inbound trade missions, product promotion through participation in outbound group missions and on national and international exhibitions, access to national export-incentive programmes, market access information and technical advice on exporting procedures.
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 vacant land for development. The corporation aims to use them to facilitate commercial and industrial activity, while assisting new investors looking for suitable premises. The FDC offers advice and guidance in terms of the following incentives: • Subsidised rental rates.
Rental holidays of up to three months. Special incentives and discounts for BEE companies or individuals.
Investor services The FDC offers a range of services to investors and businesses looking to trade in the Free State. These include the following: • Project appraisal and packaging. • Promotion and facilitation of investment projects and facilitation of access to finance. • Providing access to business and government networks 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.
For additional information please contact the Free State Development Corporation on +27 51 400 0800. www.fdc.co.za
Driving Economic Development in the Free State Province
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m oti on Tel: 051 400 0800
Email: firstname.lastname@example.org | Web: www.fdc.co.za
Free State Business 2017 is the seventh edition of this highly successful publication that has since its launch in 2008 established itself a...