GAUTENG BUSINESS THE GUIDE TO BUSINESS AND INVESTMENT IN THE GAUTENG PROVINCE
WWW.GAUTENGBUSINESSGUIDE.CO.ZA SPONSORED BY
Epicentre for Growth
Home for smart opportunity development
Tel: +27 11 085 2321 Address: 124 Main Street, Marshalltown, Johannesburg Website: www.ggda.co.za
Together moving Gautengâ€™s city region forward GAUTENG BUSINESS 2016
auteng is as rich in history as it is in minerals and other natural resources and it has evolved to become the economic hub of the African continent. The provincial economy is the one of the leading economies in Africa, accounting for 10 percent of the continentâ€™s gross domestic product (GDP). Although, in area, Gauteng is the smallest province in South Africa, it remains a leader across the board. The province hosts the headquarters of South Africaâ€™s top four banks as well as the headquarters of many local and multinational commercial, industrial and mining companies; and three of South Africaâ€™s six metropolitan municipalities are located within the province. The provincial economy is open and internationally competitive, and has much to offer to companies and investors alike. The province is home to a first-class stock exchange, the Johannesburg Stock Exchange (JSE), and there is much scope to initiate or expand mutually beneficial public-private partnerships with large and small businesses, entrepreneurs and developers. In addition, Gauteng enjoys a commanding geographical location, ambitious eco-tourism and heritage-tourism programmes and vibrant lifestyle opportunities. As many investors have come to realise, as Gauteng grows, so grows the South African economy! Any entrepreneur or investor looking to do business in Gauteng has already made a good choice. As an epicentre for growth, Gauteng is leading innovation in the South African economy. A multitude of advantages and incentives are available for investors looking to do business in Gauteng. Ready to assist, the Gauteng Growth and Development Agency (GGDA) is the first port of call for any investor or entrepreneur who is seeking to capitalise on the many profitable opportunities.
CONTACT INFO Physical address: 124 Main Street, Marshalltown, Johannesburg Tel: +27 11 085 2321 Website: www.ggda.co.za
GAUTENG BUSINESS 2016
CONTENTS Gauteng Business 2016 Edition
Introduction Foreword Welcome to Gauteng – home for smart opportunity development.
Features Gauteng Growth and Development Agency A profile of the GGDA.
Regional overview of Gauteng Gauteng, the economic powerhouse of South Africa.
Metros and Districts An overview of the City of Gold’s municipalities.
Corridor talk 26 The Gauteng Provincial Government has committed itself to building a new Gauteng with a radically transformed economy. Transformation, Modernisation and Reindustrialisation Ambitious plans are afoot for Gauteng.
Township Economic Revitalisation Massive investment in the township economy.
The cost of doing business in Gauteng It’s cheaper to do business in Gauteng than in many of the province’s overseas competitor companies.
GAUTENG BUSINESS 2016
g-FleeT Management FLEET RENTAL SERVICES Industry competitive pricing are offered on vehicle rentals in three categories: VIP Self Drive: A luxury car hire service, consisting of a variety of medium to large luxury sedans and SUV’s. VIP Chauffeur Drive: Chauffeur Driving of Government Officials in luxury vehicles to any destination around the country, with the assistance of our drivers in the regions (Western and Eastern Cape, Free State and KwaZulu Natal). Our drivers are responsible, reliable, professional and courteous. Pool Service: This service is ideal for usage during short term projects up to a maximum of 3-months renewable; the fleet includes a wide range of latest models of economy and commercial vehicles. Mini busses, busses and trucks are also available within this service and can be booked for one day up to a maximum of three months with the option of renewal. Forenquiries or bookings, kindly contact your nearest office: 086 047 4358 (Call Centre) 011 372 9000 (Johannesburg) 012 310 2466/67/12 (Koedoespoort) 031 208 1510 (Kwa-Zulu Natal) 043 722 0139 (East London) 021 531 0836 (Western Cape) 051 430 1505 (Free State)
“Making your fleet our business”
CONTENTS Gautrain The Gautrain Rapid Rail Link is the first rapid rail network in Africa.
Gauteng lifestyle Gauteng is proving to be an African hub for business and leisure alike
Brics: the opportunities for Gauteng 74 An overview of why South Africaâ€™s smallest province stands to gain the most from the countryâ€™s inclusion in the BRICS group of countries.
Agencies The Innovation Hub
Automotive Industry Development Centre
Gauteng Industrial Development Zone
Gauteng Investment Centre
Gauteng ICT Park Special Economic Zone
Economic sectors Agriculture and agro-processing
Finance and business services
Information and Communication Technology
Reference Sector contents Index
Maps Locator map Regional map Municipal map
GAUTENG BUSINESS 2016
17 17 26
A unique guide to business and investment in Gauteng.
he 2016 edition of the Gauteng Business and Investment Guide is the premier business and investment guide for the Gauteng province and the Gauteng Growth and Development Agency (GGDA). In addition to detailed profiles of key provincial organisations, including the GGDA, the Automotive Industry Development Corporation Centre (AIDC), the Gauteng Investment Centre, the Gauteng IDZ, the Gauteng ICT Park SEZ and Constitution Hill, this edition includes well-researched economic and demographic data on the province, as well as insights into the province’s five development corridors and the new industries and development nodes in these corridors; a focus on Gauteng as a global city region; and key growth sectors for the province. To complement the extensive local, national and international distribution of the print edition of the magazine (15 000 copies), the full content can also be viewed online at www.gautengbusinessguide. co.za. Updated business and investment news from the province is also available through the Gauteng Business e-newsletter, reaching an additional 15 000-plus recipients every month. Subscribe to the e-newsletter online at www.gan.co.za, where you can also request complimentary copies of Global Africa Network Media’s business-tobusiness titles covering South Africa’s other eight provinces as well as the flagship South African Business title.
Publishing director: Robert Arendse Editor: Simon Lewis Writing: John Young, David Capel, Puseletso Nkopane, Shannon Manuel, Ralph Staniforth and Simon Lewis Online editor: Christoff Scholtz Art director: Brent Meder Design: Colin Carter Production: Linda Tom and Lizel Oliver Ad sales: Sam Oliver, Gabriel Venter, Jeremy Petersen, Nigel Williams, Veronica Dean-Boshoff, Debra Bender, Sydwell Adonis. Managing director: Clive During Administration & accounts: Charlene Steynberg and Natalie Koopman Distribution and circulation: Edward MacDonald Printing: FA Print
Chris Whales Publisher, Global Africa Network Media Email: firstname.lastname@example.org
DISTRIBUTION Gauteng Business is distributed internationally on outgoing and incoming trade missions, through trade and investment agencies; to foreign offices in South Africa’s main trading partners around the world; at top national and international events; through the offices of foreign representatives in South Africa; as well as nationally and regionally via chambers of commerce, tourism offices, trade and investment agencies, provincial government departments, municipalities and companies.
PUBLISHED BY Global Africa Network Media (Pty) Ltd Company Registration No: 2004/004982/07 Directors: Clive During, Chris Whales Physical address: 28 Main Road, Rondebosch 7700 Postal address: PO Box 292, Newlands 7701 Tel: +27 21 657 6200 | Fax: +27 21 674 6943 Email: email@example.com | Website: www.gan.co.za
DISCLAIMER | While the publisher, Global Africa Network Media (Pty) Ltd, has used all reasonable efforts to ensure that the information contained in Gauteng 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.
COPYRIGHT | Gauteng Business is an independent publication published by Global Africa Network Media (Pty) Ltd. Full copyright to the publication vests with Global Africa Network Media (Pty) Ltd. No part of the publication may be reproduced in any form without the written permission of Global Africa Network Media (Pty) Ltd. PHOTO CREDITS | Pictures supplied by flickr.com, Public Domain Images, Wikimedia Commons, skyscrapercity.com and Pixabay.
GAUTENG BUSINESS 2016
Publisher: Chris Whales
No more queues. UIF COMPLIANCE AT YOUR FINGER TIPS The Unemployment Insurance Contributions Act 2002, requires every employer to contribute 2% of the remuneration in respect of each employee who works for 24 hours and more. The employer contributes 1% and the employee contributes 1% and the total to UIF is 2%. The employer is expected to provide the UIF with both the declaration and the contribution amount on or before the 7th of each month in respect of each employee. It is the responsibility of the employer to ensure that all employee are registered with the UIF.
uFiling provides the following benefits to employers and agents: • Improved service delivery • A secure and convenient online service • Instant updates and access to uFiling data ; and • Reduced data error.
The fund has leveraged on technological advances to improve its operational systems to the benefit of its clients. The uFiling system is an online application that is convenient and user friendly that employers can use to declare and pay contributions. To activate as a uFiler the employer must have a UIF reference number.When opening the web page the user must logon to www.ufilling.co.za/www.ufliling.gov.za then click on Activate my ufiling account and select either domestic,commercial or agent to complete the activation process. The system will guide the user through the activation process. Once the activation process is completed, the user will immediately receive an e-mail notification confirming his or her login details. NB: The uFiling system also allows employees to submit their UIF claims online. For more information about uFiling Visit www.labour.gov.za or www.ufiling.gov.za www.ufiling.co.za Call centre number: 012 337 1680 Toll free number: 0800 843 843
The Unemployment Insurance Fund... Works for you!
Gauteng Growth and Development Agency (GGDA) Gauteng may be the smallest South African province in terms of land size, but it remains the economic engine of the country and an important economy in Africa.
In an effort to enhance the role of the Gauteng Provincial Government in driving investment, growth and innovation in the provincial economy, all of the Gauteng provincial agencies were restructured in 2012. This led to the Gauteng Growth and Development Agency (GGDA) coming into existence through a merger between the Gauteng Economic Development Agency (GEDA) and Blue IQ Holdings (Pty) Ltd.
that is more conducive for doing business for multinationals, large local companies and SMMEs. This may include engaging with national government to propose regulatory changes, as well as establishing a ‘one-stop-shop’ for doing business in Gauteng. The GGDA will target specific sectors to enable business to operate more effectively, actively addressing constraints specific to those sectors.
Key considerations for the GDED were that the merger should achieve a greater synergy and avoid duplication of services which had previously overlapped, in order to improve efficiency. The story of the GGDA is one of careful planning, targeted implementation and a tight focus on building local and regional economies for sustainable livelihoods, enhanced economic competitiveness and the creation of an enabling environment for growth.
The GGDA works with other spheres of government and the private sector to develop transformative infrastructure aimed at changing the way in which the province operates. It does not duplicate the work directly within the ambit of other departments, such as Public Works, Transport, Health and Education, but identifies projects that are catalytic, crosscutting, multi-sectoral and complex to manage. The particular expertise of the GGDA lies in designing large-scale projects, leveraging the necessary stakeholder and financial support and building the client base required to utilise the infrastructure.
The company’s mandate is to serve as the implementation arm of the Gauteng Department of Economic Development and to assist the department to lead, facilitate and manage sustainable job creation and inclusive economic growth and development in the Gauteng City Region.
Trade and Investment Promotion
In order to stimulate and maintain inward and outward trade and investment, the GGDA actively promotes Gauteng’s target sectors both locally as well as internationally. It works with industry bodies to determine appropriate strategies for identified import and export markets. In order to support emerging entrepreneurs within the selected sectors, the GGDA actively seeks market entry points for qualifying companies.
The Mandate’s Core Focus Areas: Business Enablement
The GGDA works with national government and related public entities, such as the South African Revenue Service (SARS), to create an environment GAUTENG BUSINESS 2016
PROFILE The list of sectors include: • Information and Communications Technology (ICT) • Pharmaceutical • Real Estate • Manufacturing (automotive etc.) • Tourism • Construction • Mineral benefication • Agro-processing
GGDA’s Functions In keeping with its mission statement, the GGDA was formed to provide the following key services to its diverse client base: • Facilitating the development and enhancement of strategic economic infrastructure within the Gauteng province. A number of major industrial development and infrastructure investment initiatives are currently underway in Gauteng, with several projects managed by the GGDA.
The GGDA’s main function is to grow the economy by positioning Gauteng as a globally competitive city. Key to this is support growth of the cooperative economy, facilitation of trade and investment and increased strategic economic infrastructure.
Automotive Industry Development Centre (AIDC) – 2nd Automotive Incubation Centre at Nissan SA
The project seeks to achieve the design and construction of a facility to be located between the vehicle assembly areas to accommodate between 10 to 12 incubatees at a time. The size of the facility would be in the region of 10 000 square metres. Automotive Supplier Park (ASP)
The GGDA’s vision is to be the premier catalyst of innovative and sustainable growth and socioeconomic development within the southern African region. Its mission is to create an enabling environment for growth-targeted investment facilitation, strategic infrastructure development and social transformation, thus positioning Gauteng as a leading Global City Region.
The project involves the development of mini factories to accommodate tenants that may not require huge manufacturing space for their operation. The overall objective of the Park is to deliver mini factory spaces that will accommodate small to medium suppliers to the auto sector. 8 000m2 for SME Factories design and construction 300m2 Office Space to accommodate Central Administration
Bio Park Facility
The focus of the project is to construct the Biotech Park building on Land Parcel 12 starting with bulk underground services to top structure in line with the requirements of its tenants.
GAUTENG BUSINESS 2016
Creating an enabling environment
Gauteng ICT Park Special Economic Zone (SEZ)
Enterprise Program Management Office (EPMO)
The ICT SEZ is an instrument available for the Gauteng Province to attract Foreign Direct Investment (FDI) and Direct Domestic Investment (DDI) to a dedicated industrial park (NASREC) using meaningful incentive packages from National Treasury, Department of Telecoms & Postal Services, SARS, Municipalities and other relevant institutions. It aims to provide world class economic infrastructure and facilities to investors through offering competitive incentive packages to attract and retain investments; developing and providing required ICT skills to investor businesses; shortening the processes of business registration, permitting and settling of investors.
The GGDA has strategically aligned with its EPMO to provide holistic management over multiple projects. In this regard the EPMO serves as an overarching umbrella that enables the organisation to maintain oversight and quality assurance over multiple programmes and projects. EPMO primary output is to enhance the GGDA capability to align and oversee programmes and projects to be executed as part of the organisational strategy. Purpose
Provide project management support for strategic economic infrastructure projects.
Establishment of green technology manufacturing hub
Provide transversal services in respect of centralized and coordinated management of capital infrastructure projects, i.e. project management support functions along the project cycle to: • Gauteng ICT & Media • Green Economy • Project oversight, incubation and development • Gauteng municipal infrastructure projects • Serve as registrar of Gauteng Economic Infrastructure projects
The overall project objective is to formulate a robust foundation for the establishment of a commercially viable community-based renewable energy sector for rural development. Supporting targeted projects by:
Working with development finance partners in a project appraisal capacity to assess the case for proceeding with specific projects or proposals. • Undertaking the coordination, pre-planning and evaluation of sites for clients, and conducting post-investment site visits. • Providing and disseminating market intelligence in the form of sectoral and regional economic data. • Assisting with company registrations and helping businesses to obtain work permits and visas. • Facilitating access to national and local government investment incentives. • Facilitating local and foreign business retention, expansion and after-care services. • Hosting and coordinating inbound foreign and local business delegations and undertaking outbound missions to promote Gauteng as a premier investment destination. • Providing export development and facilitation assistance. GAUTENG BUSINESS 2016
• To increase investment in economic infrastruc• • • • •
ture delivery programmes through appropriate project packaging and optimal deal structuring To develop and support Special Economic Zones in the Gauteng province To support sustainable economic development through green economy approaches To ensure sound project management processes incorporating risk management and quality standards To ensure prudential appraisal of economic infrastructure projects To ensure stakeholder engagement and management
• Administrative support for project managers 12
PROFILE • Collating and reporting project status to senior • • • • • •
Gauteng Investment Centre The GIC was set-up to support the Gauteng Provinces’ economic development initiatives as a one-stop-shop (OSS), and it is considered to the province’s key differentiator. The GIC differentiates Gauteng in terms of offering potential investors and exporter efficient services to enable them to more easily invest in Gauteng and play a role in developing the economy. The main goal of the GIC is to make Gauteng become the preferred location for investment, to provide an investment and export facilitation mechanism where relevant organs of state and state entities/agencies are brought to one location, co-ordinated and streamlined to provide prompt, efficient and transparent services to investors and exporters.
management Providing standards, methodologies and a set of PM tools Managing project documentation (including risk registers, schedules, incident logs etc) Promoting project management within the organisation Providing estimating, scheduling and risk management expertise to PMs Coordinating plans between projects and reviewing resource use Reviewing project performance
Facilitate Trade and Investment The primary output is to improve the province’s ability to attract and retain investments (Foreign Direct Investment as well as Domestic Direct Investment) and enhance export capability resulting in economic growth that will contribute to business growth, job creation and poverty reduction.
The Innovation Hub (TIH) The TIH was set up in 2001 to foster the development of smart industries (high technology sectors) in Gauteng. Newtown Situated in Johannesburg’s inner city, Newtown forms part of the city’s cultural and creative hub. The district houses theatres, art galleries, museums, restaurants, bookstores, craft markets, clubs and cafés. In the early 20th century, the area was originally used primarily for brickmaking since the land was rich in clay. Due to its easy access to Johannesburg’s railway lines, Newtown became a commercial and trading hub as banks, brick companies, breweries and fisheries were establishing themselves in the area. The district has a politically turbulent past and, due to its multiracial diversity, it was the scene of some of the first forced removals in Gauteng implemented by the apartheid government. Today, Newtown remains resolutely colour-blind with artists of all races gathering there.
Four subsidiary organisations fall under the umbrella of the GGDA. These organisations and their respective mandates are outlined below. Automotive Industry Development Centre (AIDC) The AIDC was established in 2000 as a supporting organisation to provide effective project delivery assistance in line with the province’s industrial policy and other strategic initiatives within the automotive sector in Gauteng. Constitution Hill (ConHill) ConHill was established in 2000 to provide the appropriate management arrangement to ensure the delivery of heritage, education and tourism programmes in Gauteng.
Gauteng IDZ Development Company (DEVCO) Established in 2009, DEVCO’s main objective will be the management of the Jewellery Manufacturing Precinct (JMP), once this is fully established.
Physical address: 124 Main Street, Marshalltown, Johannesburg Tel: +27 11 085 2321 Website: www.ggda.co.za
GAUTENG BUSINESS 2016
A REGIONAL OVERVIEW OF THE
Gauteng: the global city Gauteng is undoubtedly the economic powerhouse of South Africa, boasting the bulk of mining, manufacturing and financial services sectors, and is a major contributor to the countryâ€™s GDP, bringing in a third of the overall revenue.
IMAGE: ANDREW BELL | PARAGON ARCHITECTS
SPECIAL FEATURE South Africa’s currency unit is the rand (ZAR), which is divided into 100 cents (c). Rands are available as banknotes in R10, R20, R50, R100 and R200 denominations, while coins come in denominations of R1, R2 and R5, as well as 5c, 10c, 20c and 50c.
Geography The Vaal River forms a natural border with the Free State, which lies south of Gauteng, while the North West province is located to the west, Limpopo to the north and Mpumalanga to the east. The geography of Gauteng includes low parallel ridges, mountain ranges and undulating hills. Johannesburg is the capital of the Gauteng province, while Pretoria (also situated in Gauteng) is the administrative capital of South Africa. Other major urban areas include Roodepoort and Krugersdorp to the west of Johannesburg; and Germiston, Springs, Benoni and Brakpan to the east. Soweto, renowned as a focal point in the struggle against apartheid and home to more than 2-million people, is situated south of Johannesburg. Gauteng is South Africa’s smallest province, occupying just 1.4 percent of the total land area of South Africa. The province is located in the Highveld region of South Africa, approximately 1 700 metres above sea-level. It is a landlocked province, surrounded by four other provinces.
he dynamic province offers investors great opportunities through multiple locations for industrial and commercial business and well-developed infrastructure, to maximise your investment spend. The Gauteng economy is also a major player in Africa, accounting for 10 percent of the GDP of the entire African continent. With GDP valued at R811-billion (US$112-billion), the province contributes as much as 33.9% percent of South Africa’s total national economic output.
Language and people
Currency and the cost of living
The most widely spoken languages in Gauteng are isiZulu, English, Afrikaans and Sesotho, with 19.8 percent, 13.3 percent, 12.4 percent and 11.6 percent of the provincial population speaking these languages in their homes, respectively. English is the main language of commerce. In addition to the most prevalent languages, all of South Africa’s remaining official languages are spoken in Gauteng, together with a diverse range of international languages including Mandarin, Swahili, French, Portuguese and German. The Gauteng province is home to a vibrant and diverse population, reflected in a multitude
Despite the large scale of economic activity within the province, the cost of living is still relatively low in major cities like Johannesburg in comparison to first world cities such as London — with food, luxury items, services and electronics as much as 50 percent cheaper. There are no foreign currency restrictions for people entering South Africa. Exchange rates fluctuate daily, so it is best to check updated figures, although travellers from the USA, Asia and Europe enjoy favourable exchange rates. GAUTENG BUSINESS 2016
SPECIAL FEATURE of races, religions, cultures and ethnicities. More than 12-million people live within the province’s borders, accounting for almost one quarter (23.7 percent) of the total South African population.
Based at the Johannesburg City Hall, the Gauteng Provincial Legislature is made up of between 30 and 80 members who are elected for a five-year term, with the number of seats awarded to each political party being proportional to the outcome of the provincial election. The Members of Provincial Legislature are divided into 14 committees according to the distribution of political parties. The committees assemble regularly to debate and pass Bills (proposed legislation), and to interact with Provincial Government Departments.
Admin The South African Constitution provides for three levels of local government: metropolitan, district and local. Gauteng is divided into three metropolitan municipalities: City of Johannesburg, City of Tshwane and Ekurhuleni. In turn, there are two district municipalities within the boundaries of the province, which are divided further into a number of local municipalities as follows: • Sedibend District Municipality (Emfuleni, Lesedi, Midvaal) • West Rand District Municipality (Mogale City, Merafong City, Randfontein, Westonaria, District Management Area).
Strategic priorities The provincial government’s policy agenda is complemented by a number of strategic priorities: • Stimulating rural development and food security. • Intensifying the fight against crime and corruption. • Promoting quality education and skills development. • Creating decent work and building a growing, inclusive economy. • Improving healthcare for all.
Provincial powers In accordance with the South African Constitution, each province has its own government, with parliamentary power vested in a provincial legislature and executive power entrenched in the Premier and exercised in collaboration with the other members of a Provincial Executive Council.
North West Mpumalanga
Muldersdrift Sandton Krugersdorp Randburg
Tembisa Alexandra Kempton Park Isando Benoni Edenvale
JOHANNESBURG Kagiso Soweto
Daveyton Boksburg Germiston Wattville Brakpan Reiger Park KwaThema Katlehong Springs Vosloorus Tokoza Tsakane Duduza Nigel
Lenasia N1 R59
Meyerton Sebokeng Vereeneging Boipatong Bophelong Sharpeville Vanderbijlpark
Free State N3
GAUTENG BUSINESS 2016
SPECIAL FEATURE • Building cohesive and sustainable communities. • Strengthening the developmental state and
the winter months, from June to September, are typically cold and frosty. The toll-free Weather Line (082 162) can be contacted for a three-day weather forecast.
Water and infrastructure
Around 88 percent of the province’s water is sourced from the Vaal River, with the balance supplemented by transfers from the Thukela River and the Lesotho Highlands Water Project. City Improvement Districts within the Johannesburg CBD and the Braamfontein area have been set up by the Central Johannesburg Partnership in collaboration with the Johannesburg Development Agency (JDA). These districts have been established as part of a campaign to upgrade the Johannesburg city centre. As part of the upgrade programme, property owners agreed to pay for enhanced services to supplement those provided by the local municipality. Moreover, there are multiple sites for commercial and industrial development widely available in and around commercial hubs such as Sandton, Randburg, Fourways, Midrand, the West Rand and Pretoria.
Gauteng has over 80 venues suitable for hosting conferences of varying sizes, expos, concerts, weddings and other events. The following venues, among others, can be used for large exhibitions, concerts or conferences: • Johannesburg Expo Centre (Nasrec) with a capacity of 15 000. • Ticketpro Dome (Randburg) with a capacity of 14 000. • Gallagher Convention Centre (Midrand) with a capacity of 12.000. • Standard Bank Arena (New Doornfontein) with a capacity of 6 300. • Sandton Convention Centre (Sandton) with a capacity of 4 000.
Transport Public transport systems in Gauteng are well established. The public transport network includes the Gautrain (rapid rail link), Gautrain bus services, trains, and meter cabs, as well as Metrobus services and minibus taxis (which are less regulated). In addition, the City of Johannesburg and Tshwane now benefit from a newly introduced Bus Rapid Transport (BRT) system (phase 1 of the BRT system has been rolled out successfully). There are a number of airports located within Gauteng. The largest, OR Tambo International Airport (formerly known as Johannesburg International), is South Africa’s main international and domestic airport. Smaller airports within the province include Lanseria, Rand, and Grand Central, all of which are equipped for both international and domestic flights. Gauteng is the epicentre of African Business, and good business starts here, so be sure to make use of all the opportunities to grow your future in this dynamic province.
Climate Gauteng is a summer rainfall area, and thunderstorms are common in the summer months. Nevertheless, summers in the province are hot and the ultraviolet radiation sunburn index can be very high during the summer months. In turn,
The average summer and winter maximum and minimum temperatures (in degrees Celsius) SOURCE: GAUTENG INVESTMENT HANDBOOK 2013
GAUTENG BUSINESS 2016
Entrepreneurship... Entrepreneurship has been widely acknowledged as a fulfilling, yet challenging space to operate in. These challenges create a fear of failure on many aspiring entrepreneurs in South Africa, and as a result we tend to have a relatively low level of entrepreneurial activity in South Africa. The Department of Small Busines Development and its agencies, Sefa and Seda, and numerous other organisations involved in small enterprise development, play a huge role in helping entrepreneurs navigate this challenging environment. One prevailing characteristic of the South African small enterprise sector is the tendency of people that start small enterprises in sectors with high levels of activity and competition instead of pioneering and starting ancillary sectors that can benefit from the dominant sector. This tendency can be attributed to numerous factors, such as access to information on emerging trends and opportunities, innovative capabilities, etc. One opportunity that is worth exploring is how we as a country can commercialise the research and innovation that is done by individuals and research institutions throughout the country. Seda, with its network of 55 branches in areas as diverse as Pretoria in Gauteng, Bloemfontein in the Free State, Jane Furse in Limpopo, Khayelitsha in the Western Cape and Mount Ayliff in the Eastern Cape, is well positioned to provide appropriate and needs based support to small
Where to find Seda Gauteng enterprises. The organisation is also cognizant of the need for improved Office economicProvincial inclusiveness, especially when it comes to increasing the participation of blacks,Physical youth, women and people disabilities in economic Address: No 33with Hoofd Street, Forum5,activity. 2nd floor,
Most entrepreneurs cite access to funding as the biggest challenge in their Tel: 011 408 6520 efforts to grow and sustain their small enterprises. While this is true in most instances, Seda utilises an approach that does an in-depth assessment Sedaenterprise Joburg and Branch of the small the entrepreneur to ensure that the support is as holistic as possible, and not limited to access to finance. This in-depth Thabo Sibeko – Branch Manager assessment is done by Seda’s business advisors. ThroughForum5, this approach, long Physical Address: No 33 Hoofd Street, 2ndafloor, term relationship with multiple, needs-based interventions and continuous Braamfontein assessment of performance is established with the small enterprise.
Tel: +2711 408 6511 firstname.lastname@example.org The Seda interventions include the identification of new market
opportunities and exploring possible revenue new streams, addressing nationalTel: compliance +2711and 408quality 6511standards Fax: and improving competitiveness of the small enteprises. The effect of the interventions is measured every six Seda Tshwane Branch months, looking at outcome measures such as sustainability levels, increased Coetzee Manager:improved Tshwane turnover,Caren increased number-ofBranch people employed, profitability levels Physical and access to newaddress: markets. 536 Francis Baard, Arcadia
Tel: 012 400 8892 / 011 408 6520
One critical intervention around access to finance is an online platform E-mail: email@example.com called Finfind which seeks to assist small enterprises with information on possible funders, advice on how to be ready for funding support, and how to Seda Ekurhuleni prepare financial statements.Branch Another important intervention, particularly on Mpalami reducingThabang the the mortality rate -ofBranch start-up Manager enterprises is incubation support. Seda’s network of 49 incubators the Place, need toCnr helpMonument small enterprises Physical address: Thebalances Business and survive the nascent 36 months with the need to nurture businesses with Voortrekker road, Kempton Park innovative, high growth potential towards commercialisation. The network Tel: has demonstrated remarkable success, with 76% of incubated small E-mail: firstname.lastname@example.org enterprises surviving the first three years of business establishment, and out of those that graduate from the incubation programme, approximately 80% survive the firstEmfuleni two yearsBranch post incubation. These statistics are remarkable, Seda when looked at against the of the small enterprise sector. Thabo Sibeko – general Branchstatistics Manager
Physical Address: VUT Southern Technology Park, No 5 Mo-
Seda is committed towards supporting start-up enterprises and helping small shoeshoe Street, Sebokeng and medium enterprises to grow. You can call our National Information Centre Tel: 0169302700 at 0860103703 or visit www.seda.org.za to find a Seda office nearest to you.
TOGETHER ADVANCING SMALL ENTERPRISE DEVELOPMENT
Where to find Seda Gauteng
Seda contacts; Provincial Office Physical Address: No 33 Hoofd Street, Forum5, 2nd floor, Provincial Office Braamfontein 011 No 408336520 PhysicalTel: Address: Hoofd Street, Forum5, 2nd floor, Braamfontein Tel: +27 11 408 6520
Seda Joburg Branch Sibeko – Branch Manager Seda Thabo Joburg Branch Physical Address: No 33 Hoofd Street, Forum5, 2nd floor, Thabo Sibeko – Branch Manager PhysicalBraamfontein Address: No 33 Hoofd Street, Forum5, 2nd floor, Braamfontein Tel: Tel: +27 11 +2711 408 6511408 6511 email@example.com Email: firstname.lastname@example.org +2711 408 6511 Fax: Seda Tel: Tshwane Branch Seda Tshwane Branch
Caren Coetzee - Branch Manager: Tshwane Caren Coetzee - Branch Manager: Tshwane Physical address: 536 Francis Baard, Arcadia
Physical address: 536 Francis Baard, Arcadia
Tel: +27 12 400 8892 / +27 12 408 6520 Tel: 012 400 8892 / 011 408 6520 Email: email@example.com
Seda Seda Ekurhuleni EkurhuleniBranch Branch
ThabangThabang Mpalami Mpalami - Branch Manager - Branch Manager PhysicalPhysical address: The Business Place, Cnr Monument and Monument Voortrekker and address: The Business Place, Cnr road, Kempton Park road, Kempton Park Voortrekker Tel: +27Tel: 11 408 6511 Email: firstname.lastname@example.org E-mail: email@example.com
Seda Emfuleni Branch Branch Seda Emfuleni Thabo Sibeko Branch Manager Thabo– Sibeko – Branch Manager Address: VUTTechnology SouthernPark, Technology Park, No 5 MoPhysicalPhysical Address: VUT Southern No 5 Moshoeshoe
shoeshoe Street, Sebokeng Street, Sebokeng Tel: +27Tel: 16 0169302700 930 2700 E-mail:firstname.lastname@example.org Email:email@example.com
Metropolitan and District Municipalities Renamed after the first democratic election in 1994, Gauteng (the name means gold in English) is one of nine provinces in South Africa. Gauteng was formed from part of the old Transvaal Province following South Africa’s first all-race elections, blossoming into rich democracy thereafter.
City of Tshwane
auteng is governed by the Gauteng Provincial Legislature, a 73-person unicameral legislature elected by party-list proportional representation. The provincial government is responsible for the topics allocated to it in the national constitution, including such fields as basic education, health, housing, social services, agriculture and environmental protection. Gauteng contains three metropolitan municipalities (City of Johannesburg, City of Tshwane and Ekurhuleni) and two district municipalities (Sedibeng and West Rand). A further seven local municipalities – Emfuleni, Lesedi, Midvaal, Mogale City, Randfontein, Westonaria and Merafong City – fall within the jurisdiction of the two district municipalities. GAUTENG BUSINESS 2016
The metropolitan area of Tshwane boasts a total population of 2.9-million and a combined budget of R24.9-billion for the 2012/13 financial year. In 2011, the Metsweding District Municipality was added to the City of Tshwane metropolitan area. The services sector, which is dominated by government services, is the largest economic sector in the City of Tshwane, followed by the finance, manufacturing and trade sectors, respectively. One of three of South Africa’s capital cities, Pretoria, is located in the City of Tshwane. Interestingly, every foreign country is represented by an embassy in Pretoria. Tshwane contributes approximately 27 percent to provincial GDP in Gauteng, and 9 percent to national output.
City of Johannesburg The City of Johannesburg is one of the 50 largest metropolitan areas in the world. Johannesburg’s total GDP amounted to US$76billion (PPP adjusted) in 2011,
and the metropolitan area’s combined 2012/13 budget totalled R37-billion. Approximately 3.9-million individuals reside in Johannesburg, and the city’s population is growing at an annual rate of 1.3 percent. A recent drive to invigorate the inner city has resulted in major development. The City of Johannesburg is the capital of the Gauteng province, and the headquarters of the metropolitan municipality are located in Braamfontein. Johannesburg was initially established as a result of the gold rush in the 19th century, but has evolved into a city in which the financial services industry dominates business activity. Today, Johannesburg is regarded as the financial capital of South Africa due to the high number of financial institutions located within the city.
The JSE, Africa’s largest stock exchange, is situated in the heart of Johannesburg’s business district, Sandton. Aside from the financial services industry, other key sectors of the Johannesburg economy include trade, manufacturing, advertising and information technology. South Africa’s Constitutional Court is also located in Braamfontein, Johannesburg.
West Rand District Municipality The Randfontein local municipality is located adjacent to the North West province and represents a major entry point for immigration into Gauteng. Perhaps as a result, the local municipality is renowned for having high levels of unemployment and poverty, which could also be an opportunity for businesses in terms of available manpower. The population of the Randfontein local municipality is estimated at 150 000 people. The Westonaria local municipality has a total population of 112 000. Approximately 25 000 people are employed in Westonaria, with the majority of those employed in the mining sector. As a means to boost economic activity within the municipal area, the local municipality is looking at creating new industries, research centres and tourism hotspots. Randfontein is the administrative centre of the West Rand district municipality. Approximately 820 000 individuals reside in the district,
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SPECIAL FEATURE and Westonaria). Merafong City is the largest of the local municipalities in terms of land area and is home to approximately 200 000 residents. The municipality boasts rich gold deposits, especially in the Carletonville area, and the domi-
which is home to the Cradle of Humankind (a UNESCO World Heritage Site). Mining and agriculture constitute the main economic sectors in the district, with the Western Deep Gold Mine near Carletonville currently the deepest mine in the world. Lanseria International Airport is situated in the district, providing an alternative entry point for visitors to Gauteng. There are four local municipalities within the jurisdiction of the West Rand district municipality (Merafong City, Mogale City, Randfontein
MUNICIPALITIES IN GAUTENG
Metropolitan/District Municipality boundary Local Municipality Boundary
Local Municipality Gauteng
West NorthNorth West
City of Tshwane Metropolitan Bon Accord Municipality Cullinan
PRETORIA Atteridgeville Erasmia
Muldersdrift West Rand City of Sandton Magaliesburg District Municipality Oaktree N1 Johannesburg Krugersdorp Randburg N14
Kempton Park Ekurhuleni Daveyton Metropolitan Benoni Municipality N12
Randval Sedibeng District Municipality Evaton N3
Emfuleni Local Municipality R82
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Meyerton Midvaal Local Municipality
Lesedi Local Municipality
Municipality JOHANNESBURG Roodepoort Boksburg Brakpan Randfontein Mohlakeng N12 Springs Westonaria Soweto Alberton Germiston Bekkersdal
Randfontein Local Municipality
Merafong City Local Municipality
Mogale City Hekpoort Local Municipality
SPECIAL FEATURE nant economic activity in the municipality is mining. Mogale City has a population of around 360 000. While economic activity within the municipality is comparatively diversified, manufacturing and agri-business constitute the leading economic sectors.
Sedibeng District Municipality The administrative headquarters of the Sedibeng district municipality are located in Vereeniging. The municipality covers the whole eastern side of Gauteng and has a population of approximately 920 000 residents. Three local municipalities (Emfuleni, Lesedi and Midvaal) fall under the jurisdiction of the Sedibeng District Municipality. The Emfuleni local municipality is renowned for iron and steel manufacturing, which is based primarily in Vanderbjlpark and Vereeniging. The local municipality has a total population of approximately 720 000 and contains six large townships: Evaton, Sebokeng, Sharpeville, Boipatong, Bophelong and Tshepiso. The economy in Sedibeng is dominated by the manufacturing sector. Major companies such as Sasol and ArcelorMittal operate within the district, with the result that the fabricated metal and chemical industries dominate manufacturing activity in the area. The agriculture and tourism sectors, on the other hand, present opportunities to further local development within the municipality. The Midvaal local municipality is home to around
90 000 residents and is regarded as the fastest-growing municipality in Gauteng.
Ekurhuleni Metropolitan Municipality The Ekurhuleni metropolitan area includes Germiston, Boksburg, Benoni, Kempton Park, Brakpan and Springs. Ekurhuleni is home to approximately 3-million people, and the municipality had a combined budget of R21.3-billion in the 2012/13 financial year. The municipality is a focal point for manufacturing within the province, and the manufacturing enterprises located in the municipal area account for 19.7 percent of Gautengâ€™s provincial GDP. Despite the level of economic activity within the metropolitan area, unemployment remains high (the unemployment rate in the municipality was 28.8 percent in 2011). The OR Tambo International Airport, South Africaâ€™s premier airport is situated in Kempton Park, and the OR Tambo International Airport IDZ is also located within the borders of the metropolitan municipality. The most recent election of the provincial legislature was held on 7 May 2014, and the African National Congress (ANC) won 53.59% of the vote, along with a 40-seat majority in the legislature. The official opposition is the Democratic Alliance, which won 30.78% of the vote and 23 seats. Other parties represented are the Economic Freedom Fighters with eight seats, as well as the Freedom Front Plus and the Inkatha Freedom Party, each holding one seat. Premier David Makhura of the ANC was elected on 21 May 2014 at the first meeting of the legislature following that general election. The Gauteng Division of the High Court of South Africa (which has seats in Pretoria and Johannesburg) is a superior court with general jurisdiction over the province. Johannesburg is also home to the Constitutional Court, South Africaâ€™s highest court, and to a branch of the Labour Court and the Labour Appeal Court.
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Corridor talk The Gauteng Provincial Government has committed itself to building a new Gauteng with a radically transformed economy.
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he Gauteng Provincial Government’s introduction of the development of five business corridors to boost economic growth in the province could well be seen as South Africa’s biggest attempt to encourage transformative partnerships between different spheres of government and the private sector. The bold project, which was allocated a whopping R10-billion of the province’s R95.3-billion 2015/16 budget, will also, in conjunction with the municipalities involved, attempt to change the space and structure of the economy in order to address unemployment, poverty and inequality.
Gauteng’s five development corridors A macro-intervention is staged, aiming to reduce unemployment, poverty and inequality. Over the next five years the government intends mobilising R100-billion on restructuring physical assets and capital transfers in the region, in partnership with municipalities and private sector partners. Considering Gauteng contributes to 34% of the country’s gross domestic product, appropriating 10.5% of the 2015/16 budget towards the provinces regeneration is sure to ensure economic wellbeing! To achieve its ambitions, the government intends reconfiguring the City’s space along five ‘corridors.’ The success of the province’s radical transformation, modernisation and re-industrialisation programme rests largely upon the level of collaboration and dedication of all role-players involved. Joint partnerships supporting infrastructure investment will lend itself to township economy revival and planned spatial restructuring, and form the pillars of government’s planned intervention approach. Together, the focus is on building and coordinating industries into respective spaces or ‘corridors’. The five development corridors across Gauteng will have distinct industries and different comparative advantages, but still remain dependent on one another, operating as a single body of mutual co-operation. As more people each year find themselves migrating from rural areas into city nodes in search for employment, management of urban dynamics by planning experts and various stakeholders will ensure that citizens are positioned closer to economic opportunity. The outcome; economic as well as social inclusion across all corridors. This is in stark contrast to the apartheid era, where rural residents were marginalised from the economic hubs. Future policies around special planning will grapple with issues of apartheid’s legacy, effectively reversing the negative aspects of urban sprawl. In his speech, Gauteng Premier David Makhura urged on economic empowerment, insisting, “We need deliberate and conscious action by the entire city region leadership to reverse spatial injustice”
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The Gauteng City regions approach is to use land owned by government and earmark the location of specific sectors and industries in the five development corridors of our province as follows: The Central Development Corridor The Central Development Corridor, will embrace much of Johannesburg and Soweto, and will be the hub of finance, services, information and communications technology (ICT) and pharmaceutical industries. Joburgâ€™s competitive environment with global high-tech compa-
AS MORE PEOPLE MIGRATE FROM RURAL AREAS INTO CITY NODES IN SEARCH FOR EMPLOYMENT, MANAGEMENT OF URBAN DYNAMICS BY PLANNING EXPERTS AND VARIOUS STAKEHOLDERS WILL ENSURE THAT CITIZENS ARE POSITIONED CLOSER TO ECONOMIC OPPORTUNITY GAUTENG BUSINESS 2016
nies and pharmaceutical industry will continue to thrive under the continued efforts of the City, provincial government and private sector. Investment funding from these sources to the value of R10million over the next five years will see the central business district and inner city regenerated. Neglected areas that have experienced significant deindustrialisation and decline will be restored. Revitalising the CBD with better buildings, cleaner streets and greener open spaces as a liveable and sustainable city, will stimulate an appetite for future investment by banks, mining houses, state-owned enterprises and other major companies. BRICS regional development bank will be positioned in the Central corridor as a model beacon of African investment. The City of Joburg is spending R2-billion on improving public transport and is expanding the
SPECIAL FEATURE existing Reya Vaya Bus Rapid Transit System to cover more areas in the city. The passenger rail agency of south African is rolling out approximately 7 224 new rolling units with a projected investment of R123-billion over 20 years. The city’s exisiting townships are also on the provinces radar for improvements. Kliptown and Alexandra will be revitalised as a priority as they are in a particularly sorry state of disrepair. New human settlements are also on the horizon, with R979.9million set aside for provision of housing in Diepsloot, Fleurhof, Lion Park, Malibongwe Drive, Goud Rand and Lufhereng. A further R789.9-million had been allocated for new schools and refurbishment of existing classrooms, while R453.4-million and R263.4-million was set aside respectively for rehabilitating and building new roads and renovating and constructing new health facilities. Major infrastructure developments by the City of Johannesburg partnered with private sector are planned and will transform the spatial landscape of the Central Corridor. These include: ■ Masingita City, an integrated commercial and industrial hub, is a R3-billion private investment that is expected to create 15 500 jobs during its construction, which will begin in March. ■ Rietfontein. With an investment of R20-billion, this will be a complete mixed-use node with more than 8 000 proposed residential units, in-
cluding commercial property, distribution and warehousing, retail and education facilities. ■ Waterfall City, the largest city to be built in post-apartheid South Africa. The estimated investment during construction is R71-billion, with an estimated 100 000 jobs to be created by the project. ■ The Modderfontein development will inject R84-billion into the economy of the Gauteng City Region and is expected to create 150 000 jobs over the next 20 years. All these developments will have major socio-economic benefits with regard to decent employment and economic inclusion. Masinga City for instance will contribute to the township economy revitalisation by supporting township enterprises and SMMEs in Soweto, Lenasia and Bekkersdal/Randfontein. The Eastern Development Corridor The Eastern Development Corridor, which embraces much of Ekurhuleni, will undertake 29 industrial initiatives under the banner of Aerotropolis to revitalize manufacturing, aviation, logistics and transport industries linked to OR Tambo international airport. The footprint With regard to freight and logistics, Transnet’s investment in the inland ports of Tambo Springs and Sentrarand will also have a major impact in revitalising the economy of Ekurhuleni. The Tambo Springs inland port development will have an estimated R7.5-billion investment over five years. This project will create a total of 110 000 jobs over 15 years. Airports Company South Africa, Denel and major private sector companies are positioning themselves in line with the imperatives of the aerotropolis. There is huge potential for these projects to attract massive foreign direct investment into the OR Tambo IDZ and the SEZ. The Automotive Industry Development Centre (AIDC) has launched its second incubation centre in Rosslyn, Tshwane, to accelerate the development of sustainable SMMEs within the vehicle assembly industry. The establishment of a freight and logistics hub to support the industry is also on the cards. Working with the private sector, Tshwane will also continue rolling out free WiFi within the City, with R150-million invested in this initiative to date. The development of the African Gateway in the heart of Centurion in partnership with the private sector will comprise South Africa’s largest convention centre, an hotel, residential, commercial and additional office space and will create a more resilient economic node in Centurion.
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FOCUS With a private sector investment of more than R4-billion, this development will stimulate much needed economic activity in this corridor. The development is estimated to be worth between R7- and R11-billion, and will create up to 7 500 jobs in the construction phase alone. The new Vaal River City will comprise a unique residential and commercial development. The second area of focus is to unlock the agricultural potential of Sedibeng as the food basket of the Gauteng City Region and position the region as an Agropolis. In this regard, they are working with the private sector to support 32 black farmers to plant barley and maize to be supplied to the nearby Heineken Brewery. The project will create 1 000 permanent jobs per annum over three years. The Department of Agriculture would also establish an agri-park linked to township revitalisation near Sebokeng Zone 10 Industrial Area. Also in this corridor, they will continue to support the Gauteng Highlands development, a mixed-use development comprising industrial and residential space. This is a R40-billion investment aimed at creating 25 000 direct and indirect jobs,” said Makhura. For the southern corridor, R1.5-billion had been set aside for housing, services, new schools, rehabilitation and upgrade of roads, in particular R82 Phase 2 between Walkerville and Vereeniging, and maintenance and rehabilitation of health facilities.The Department of Human Settlement has set aside R892-million which will go toward building more than 120 000 houses in Sedibeng over the next five years.
of the Aerotropolis will also cover Lanseria Airport in Johannesburg and Wonderboom Airport in Tshwane. Because of the interregional nature and transformative magnitude of the Aerotropolis this project has now been elevated to being a Gauteng City Region-wide initiative. There are also a number of other unfolding initiatives by stateowned companies that will contribute to the reindustrialisation of Ekurhuleni . Worth mentioning is Tambo Springs Inland Port Development Project estimated to receive R7.5-billion investment over the next five years. Contributing further to the geographical and spatial change planned within the corridor, the provincial government will roll out the Bus Rapid Transit System and plans to build more than 100 000 housing units in Chief Albert Luthuli, John Dube Extension 2, Tsakane Extension 22, Germiston South, Leeuwpoort, Rietfontein and Claysville Extension 45. GAUTENG BUSINESS 2016
The Northern Corridor The Northern Corridor is centred both around Pretoria, as South Africa’s administrative capital and Tshwane, South Africa’s capital city. The main economic drivers are the automotive sector and its research, development and innovation capacity. Along this vein, the West Capital development project will include the development of a student village, sport incubatory centre, retail and commercial components, inner city housing and health facilities. The City of Tshwane will further invest R525-million to establish a Business Process Outsourcing Park in Hammanskraal. The Park will offer on-site training, technical support and incubators for SMMEs. The project is expected to create over 1 000 jobs during construction and over 1 000 indirect jobs. Of the R2-billion set aside for this corridor, human settlements again absorbs the lion’s share of R964.2-million, of which over R400-million has been set aside for the Soshanguve and Hammanskraal vicinity. The Southern Corridor In the Southern Corridor, which represents the Sedibeng district and the Vaal triangle, government’s goal is to shift the economy away from its overreliance on the steel industry and diversify to include tourism and entertainment, agro-processing, logistics. The development of the new Vaal River City (hydropolis) aims to unlock the potential of the waterfront developments in the Emfuleni and Midvaal areas. The second area of focus is to un-
lock the agricultural potential of Sedibeng as the food basket of the Gauteng City Region and position the region as an Agropolis. The Western Corridor In the fourth corridor, the Western Corridor, the West Rand district has experienced significant de-industrialisation due to the decline of the mining industry, which was the main employer and source of revenue for municipalities. Going forward the economy of the Western Corridor will focus on the green and blue economy initiatives, tourism, agro-processing and logistics. The Lanseria Airport and Maropeng World Heritage Site will be the main anchors of the new city and new economy of the West Rand.
Overview Both, the western and southern corridors will see the creation of new industries, new economic nodes and new cities, affirming
Makhura account, “Gone are the days when some regions and municipalities will be neglected as the Cinderella’s on the periphery of the provincial economy. We need deliberate and conscious action by the entire city region leadership to reverse spatial injustice and economic marginalisation of Sedibeng and the West Rand.” Through the above cited initiatives, Gauteng aims to invest in economic infrastructure as the key stimulator of growth, while also pursuing infrastructure partnerships with the private sector. The provincial government is working with the municipalities and private sector partners to unlock the potential of the Lanseria Airport logistics hub. Thus far the private sector is injecting at least R500-million in Capex for the development of the airport, with over R10-billion expected to be invested in Lanseria over the next 15 years. Furthermore, working with national government and Busmark, they will support the manufacturing of coaches to supply various mass transit bus fleets. The corridor will be positioned as a hub of agriculture and agroprocessing, and work is underway to leverage the corridor’s high value horticultural potential. As part of the transformation of the agricultural sector, to ensure food-security and in order to stimulate economic activity in the corridor, government has invested in the Randfontien milling facility. In addition, publicprivate partnership will see the development of aquaculture projects, such as the prawn farming facility. This initiative will create a total of 6 512 jobs in the West Rand over three years.
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Transformation, Modernisation and Reindustrialisation Transformation remains a key focus of the Gauteng Provincial Government (GPG), with an ambitious plan afoot to make Gauteng an integrated city-region characterised by social cohesion and economic inclusion over the next five-to-15 years.
remier David Makhuraâ€™s government is committed to the initiative and says it will take decisive steps to implement it. The Premier announced during his maiden State of the Province Address that his administration has adopted a multi-pillar programme of radical transformation, modernisation and reindustrialisation of Gauteng. Over the next five years GPG is determined to revitalise and mainstream the township economy by supporting the development of township enterprises, cooperatives and SMMEs that will produce goods and services that meet the needs of township residents. Key sectors with the potential to address the twin policy imperatives of creating decent employment and greater economic inclusion have been identified. These sectors include finance, automotive industry, manufacturing, ICT, tourism, pharmaceuticals, creative industries, construction and real estate.
THE GPG SAYS IT WILL INSIST ON PLANNED AND INTEGRATED URBAN DEVELOPMENT WHICH WILL ENABLE IT TO BUILD MORE INTEGRATED AND SUSTAINABLE HUMAN SETTLEMENTS SMMEs and township enterprises will by no means be overlooked, with firm undertakings having been made to bring these key sectors into the mainstream economy. The GPG says it will work with research institutions to vigorously promote innovation within the provincial economy and fast-track the development of new industries that will usher Gauteng into an innovation-driven, knowledge-based, smart and green economy. GAUTENG BUSINESS 2016
The government will also put the focus on the reindustrialisation of the Gauteng economy through strategic infrastructure development. This involves a massive rollout of public transport infrastructure across the province which will be utilised to revitalise and modernise old industries that will locally manufacture or assemble buses, trains and locomotives. In a significant boost to employment and economic inclusion, the provincial government and municipalities will procure 75% of all goods and services from South African producers, especially SMMEs.
Decisive spatial transformation In what is seen as a bold measure, the provincial government wants to radically transform the spaces people live in by connecting and integrating places of work and human settlements. The GPG has noted that even after the end of apartheid, government has continued to build houses and human settlements that reproduce the spatial legacy of apartheid â€“ far from work and the majority of
SPECIAL FEATURE economic opportunities, and away from public transport nodes. In the next five to 15 years it intends to turn the tide against the current spatial patterns of apartheid in pursuit of spatial transformation and modernisation of human settlements across the province. The GPG says it will insist on planned and integrated urban development which will enable it to build more integrated and sustainable human settlements and communities that are inclusive and diverse. In addition, radical steps will be taken to transform the spatial configuration and landscape of Gauteng province through better and coordinated land use management and spatial development. Municipalities and stateowned land will also be brought into the picture, to ensure that a new built environment and inclusive spatial landscape emerges across the Gauteng city-region. This will be done through public transport infrastructure development and the creation of new integrated and sustainable human settlements and post-apartheid cities that are more connected, livable, smart and green.
Accelerated spatial transformation Economic and spatial transformation must be underpinned by â€“ and support â€“ an accelerated programme of social transformation, at the centre of which is raising the living standards and quality of life of all the people of
Gauteng. At the centre of Gautengâ€™s social transformation is its determination to improve the quality of education and healthcare, provide social protection to the vulnerable (in particular women and children) and to eradicate poverty and build social cohesion and social solidarity.
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Modernisation of the public service The GPG says it recognises that radical socioeconomic transformation cannot occur without fundamentally changing the way state institutions relate to society. As public officials and public servants, the GPG has to radically transform its attitudes and behaviour towards the public to reassert the dictum that it is there to serve the people, and not the other way round. “I am more convinced that we have to radically change the way government works in order to place service to the people at the centre of our work. It is for this reason that we have adopted the notion of an activist government as part of building a capable and developmental state envisaged in the RDP and more recently the National Development Plan, Vision 2030,” said Makhura. Dealing with – and eradicating – corruption among public officials and public servants (including in the private sector) is vital to the success of the initiative. The GPG will introduce measures to strengthen the integrity of public institutions and public processes so that fraud and corruption are prevented and detected early in the value chain in order to prevent losses. Makhura added it was not enough to simply talk about fighting corruption. “We have to demonstrate in action that corruption will not be tolerated in this administration,” he noted.
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Reindustrialisation of Gauteng province The reindustrialisation of the Gauteng economy through strategic infrastructure development is also top of the GPG’s agenda. The massive rollout of public transport infrastructure across the province will be utilised to revitalise and modernise old industries that will locally manufacture or assemble buses, trains and locomotives. In order to boost employment and economic inclusion, the provincial government and municipalities will procure 75% of all goods and services from South African producers, especially SMMEs, township enterprises and black-owned, women and youth enterprises. The government is working closely with state-owned enterprises PRASA and TRANSNET in order to re-industrialise our province and build economic infrastructure that will boost employment creation and economic inclusion through investing more than R300-billion in post, freight, rail and pipeline capacity.
Modernisation of public transport infrastructure There can be no doubt that Gauteng will look different over the next five to 15 years to what it does today. Combined with public transport infrastructure rollout and the development of the Aerotropolis and the OR
Tambo Special Economic Zone, and driven by the provincial government and municipalities, this infrastructure investment has major potential to create more than 300 000 jobs and boost the development of new SMMEs and township enterprises that are owned and managed by black people, women and youth. Over the next six months the Gauteng government will outline detailed plans in this regard. New post-apartheid cities will be a combination of modern public transport modes, integrated and sustainable human settlements that are socially and economically inclusive, and promote urban green development. Particular attention will be paid to the West Rand and Sedibeng regions in order to revitalise their economies and connect them to the economic centres of the Gauteng city-region.
Modernisation of the economy Premier Makhura noted that township entrepreneurs were capable of producing food such as bread for school nutrition and hospitals, clothes for school and police uniforms as well as furniture for government offices. This will bring millions of township residents into the mainstream of the economy. “We shall convene a summit with township entrepreneurs and SMMEs in the next 200 hundred days – or around 6 months - to develop a detailed Programme of Action,” he confirmed. In addition, the provincial government has identified key sectors that have the potential to address the twin policy imperatives of creating decent employment and greater economic inclusion. These sectors include finance, automotive industry, manufacturing, ICT, tourism, pharmaceuticals, creative industries, construction and real estate. The promotion of new SMMEs and township enterprises will also be brought into these key sectors of the economy. In the near future, the provincial government will enter into serious dialogue with the private sector players in each of these sectors in order to hammer out consensus on how they can unlock the potential of these key sectors of the provincial economy to create more decent jobs and be more inclusive of blacks, women and youth.
CONTACT INFO Physical address: 94 Main Street, Matlotlo House, Johannesburg Postal address: Private Bag X 091, Marshalltown, 2107 Tel: 011 355 8000 Fax: 011 355 8694 www.ecodev.gpg.gov.za
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Township Economic Revitalisation Premier Makhura boosts investment in Ndlelanhle Khuzwayo.
ownship enterprises, cooperatives and SMMEs that produce goods and services that meet the needs of township residents are at the heart of the Gauteng Provincial Government’s (GPG) drive to revitalise and mainstream the township economy through supporting the development of township enterprises, cooperatives and SMMEs. The Township Economy Revitalisation (TER) project is integral to the five-year plan of the provincial government that aims to radically “Transform, Modernise and Re-Industrialise” Gauteng. The intention is to build a seamlessly integrated, socially cohesive and economically inclusive City Region. This follows the staging last year by the GPG of the Township Economy Revitalisation Summit, which was preceded by consultations with more than 50 000 township entrepreneurs from 65 townships. From these extensive consultations a strategy was created through which an enabling environment and a detailed programme of action can be established. It remains a fact that the level of entrepreneurship in South Africa is one of the lowest in the world, being ranked 27th out of 59 countries in terms of the primary measure of entrepreneurship. GAUTENG BUSINESS 2016
According to a survey by the Global Entrepreneurship Monitor (GEM) in 2012, almost 4 400 small businesses closed down in South Africa due to a lack of funding. Unfortunately, the 2012 GEM survey also indicated declining levels of local entrepreneurship, from a reported 9.1% in 2011 down to 7.3% in 2012. As accentuated in the Township Economy Revitalisation Strategy, the majority of the township enterprises operate on a small scale and would certainly have suffered as a consequence of this drop in performance. The recent emergence of shopping malls in the townships has also had a negative impact on small businesses. This is one of the
SPECIAL FEATURE reasons why the provincial government aims to partner with the corporate sector, township enterprises and local government to promote investment in the township economy and the development of township enterprises and cooperatives. The Cooperatives Banks Development Agency will work with the GPG to facilitate the establishment of cooperative banks that are owned by communities (including burial societies and stokvels) as part of promoting financial inclusion and broadening access to credit by township enterprises and communities. According to the Premier, the GPG currently spends at least 5% of its R10-billion procurement budget for goods and services that are provided by township enterprises. “We have now committed to set aside 30% of public procurement budget for township enterprises over the next five years,” he said.
Seven new township hubs The key role that township hubs play in transferring skills and creating employment in the townships has also been recognised. Seven new township hubs will be established in Ennerdale, Hammanskraal, Mabopane and Reiger Park. Additionally, Industrial Parks in Katlehong, Orlando, Residentia, Khutsong and Ennerdale will be revitalised, while there will also be a strengthening of the three existing township economic hubs in Mohlakeng, Winterveld and Diepsloot.
In another development, a R1.6-billion investment has been made in Diepsloot, from which about 160 township entrepreneurs who are involved in light manufacturing and other productive activities will benefit. Called the Riversands/Diepsloot SMME Incubation Hub, with state-of-art facilities, this is an exciting and far-reaching initiative. Township hubs allow entrepreneurs to concentrate on managing their business without being perturbed by having to plan and build infrastructure for their operations. Meanwhile, the Gauteng Department of Economic Development will embark on a comprehensive education and awareness campaign to empower townships businesses and entrepreneurs in terms of business formalisation and registration. The campaign is titled Qondisa Ishishini Lakho, and it aims to build confidence in township-based enterprises in addition to registering in the region of 10 000 Small, Medium and Macro Enterprises (SMMEs) across the five regions of the province to create a conducive environment for entrepreneurs and also to transform Gauteng townships from being reservoirs of cheap labour to being the pulse of the economy, where every rand generated from the township economy circulates within the township in order to benefit township residents.
Revitalisation of the township economy Gauteng Premier David Makhura believes firmly that the province is committed to placing the township economy at the centre of its programme for radical economic transformation. “Townships can no longer be mere sites for the reproduction of cheap labour and for trading of goods and services that township communities do not produce,” he said. He added that in the interactions his government had with townships residents through the 2015 Provincial Township Economy Revitalisation Summit that they had “agreed on the key steps needed to radically transform our townships from their historic role as reservoirs of cheap labour into centres for productive and light manufacturing activity. Our consultations have produced a strategy through which we will create an enabling and supportive environment for existing and future township enterprises to grow and flourish”. Makhura also confirmed that the township economy is now firmly part of the government’s national economic policy. During his State of the Nation Address (and subsequent response to the debate on the Address), President Zuma indicated that “economic transformation to unlock growth also means improving the support provided to small enterprises especially township and rural enterprises which will promote economic activities at local level”. The Provincial Government has already committed more than R160-million to the township economy. In the 2015/16 financial year it allocated more than R300-million to support township enterprises and cooperatives and, at the same time, municipalities have made
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substantial investments in the township economy, focusing on township enterprise hubs. Over the next five years the City of Johannesburg (a component of the township economy) has set aside R3-billion, Tshwane R22-million and Ekurhuleni R150-million to support the township economy and township entrepreneurs. Some government vehicles will be repaired by township-based enterprises at selected repair hubs that are supported by the Automotive Industry Development Centre (AIDC). Makhura also highlighted the fact that the infrastructure investment programme focuses on the following key areas: • Public Transport • Broadening the Energy Mix • ICT and Broadband • Water and Sanitation “Over the next four years, as the Gauteng Provincial Government our total investment in infrastructure development will be more than R32-billion, while Gauteng municipalities will spend R94-billion over the next five years. This investment will have a massive multiplier effect on the economy of the Gauteng City Region. We have adopted a 25-year integrated transport master plan focusing on developing a city region wide transport system and an efficient transport network to underpin spatial transformation and inclusive growth. “As part of strengthening our investment in public transport, we are conducting a feasibility study with a view to expanding the existing Gautrain Rapid Rail System. We have already outlined the work being done together with municipalities in investing in the rollout of GAUTENG BUSINESS 2016
Bus Rapid Transit systems in the metros,” said Makhura. He added that his government had also indicated the extent to which PRASA’s new rolling stock of passenger coaches will revitalise and modernise the public transport infrastructure and create a major stimulus for re-industrialisation and local production. “We wish to reiterate that only a massive increase in public transport infrastructure, including a significant expansion of the rail network, will help us drive industrialisation and spatial transformation. More innovative solutions will be required to fund public transport and infrastructure requirements. I also wish to reiterate that transformation, modernisation and re-industrialisation will not be possible without paying serious attention to the critical issue of energy security.
SPECIAL FEATURE “In order to broaden the energy mix plan in the Gauteng City Region, we adopted a plan with six interventions. We have been working with municipalities to finalise plans to bring in additional 1200 megawatts of electricity by increasing generation capacity of the current coal-fired power stations in Tshwane (Rooiwal and Pretoria West Power) and Joburg (Kelvin Station),” he said. The other interventions included installing rooftop solar panels for all government buildings (it is estimated that there is available 8 million square metres of rooftop space suitable for such installations, which could generate 300-500 megawatts of electricity), implementing a programme to retrofit coal-fired boilers with natural gas and implementing the Tri-generation programme in six hospitals (Trigeneration is a technology that enables the production of electricity for heating and cooling using gas). In addition, they are also initiating their waste-to-energy programme (aimed at converting waste from government facilities into bio-gas) and continuing their energy efficiency programme through which government aims to replace existing lights in all government facilities and government buildings with LED lights. “We have thus far replaced 45 000 lights in our health facilities alone,” confirmed the Premier. “Working together with the private sector, we will also invest in local solar technologies. In this regard, we are supporting an initiative by the University of
Johannesburg and the private sector to build a manufacturing plant and a solar plant in Gauteng,” he added. The provincial government continues to invest in ICT infrastructure and, most importantly, in e-government services. The Provincial Government’s total investment in ICT infrastructure has been budgeted as more than R300-million over the next three years. It also works with private sector network companies to discuss how it can fasttrack the realisation of its goal of achieving 100% connectivity over the next five years in order to unleash the potential of the local ICT industry and, thereby, to promote SMME development and township economy revitalisation. Makhura noted that water scarcity can serve as a major stumbling block to the achievement of the goals of the TMR. “In Gauteng, we are working with national government and municipalities to address major concerns pertaining to water security and infrastructure development. The recent water supply interruptions have brought to the fore these concerns. We have established a water and sanitation coordinating forum which will enable us to rapidly develop and implement a City Regionwide plan on water and security, including on the urgent need to find a strategic solution to the problem of Acid Mine Drainage,” concluded the Premier.
CONTACT INFO Physical address: 94 Main Street, Matlotlo House, Johannesburg Postal address: Private Bag X 091, Marshalltown, 2107 Tel: 011 355 8000 Fax: 011 355 8694 www.ecodev.gpg.gov.za
GAUTENG BUSINESS 2016
The cost of doing business in Gauteng The cost of doing business in Gauteng is of key interest to investors and business owners looking to explore opportunities within this diverse economy â€“ and the good news is that it is cheaper to do business here than in many of its overseas competition.
ably lower in Russia (ranked 10th at R8.06 per litre).
Electricity supply and tariffs
ith infrastructure spend of key importance to government, every effort is being made to create as competitive working environment as possible in the bustling greater Gauteng region, to stimulate further growth and aid job creation. This article explores some of the daily costs that companies and commuters can expect to pay.
Petrol prices and other transport costs With an average petrol price of US$5.06 per gallon (approximately R11.75 per litre), South Africa ranked 19th out of 60 countries in a 2013 study comparing petrol prices. According to the study, petrol in South Africa is more expensive in comparison to Egypt (ranked 3rd) and Nigeria (ranked 6th), the other African countries included on the list. South Africa fares somewhat more favourably when compared with her BRIC counterparts (except Russia): petrol prices are higher in Brazil (ranked 21st at R12.54 per litre), similar in India (ranked 18th at R11.61 per litre) and China (ranked 15th at R11 per litre), and considerGAUTENG BUSINESS 2016
In recent years, South Africaâ€™s electricity supply capacity has come under increasing pressure, with moribund infrastructure and capacity shortages necessitating the introduction of loadshedding around two years ago. As a result, Eskom, South Africaâ€™s state-owned power generator and transmitter, has faced growing pressure amid ever-increasing demand for electricity.
Labour, water and communication costs A 2012 report by UBS indicated that in 2009, Paris (France) had the shortest annual working hours of 1 558 hours a year. Johannesburg (South Africa) reported an average 1 887 hours a year, whereas Seoul reported 2 308 working hours a year. Comparing telephone costs for local calls globally, South Africa charged 7 US cents per threeminute call. The United Kingdom, on the other hand, charged 17 US cents for the same call.
SPECIAL FEATURE Transport options Motor vehicle: As much as R23-billion has been spent on upgrading the road network across Gauteng. South African National Roads Agency Limited’s (SANRAL) Gauteng Freeway Improvement Project (GFIP) represents a key element of this programme of upgrades, and is set to drastically reduce travel times and traffic congestion along key routes within the province’s urban centres. It will also improve accessibility into Gauteng and inject approximately R29-billion into the economy.
Rail and bus In recent years, a great deal of attention has been placed on upgrading the capacity of South Africa’s rail network and infrastructure. The Passenger Rail Agency of South Africa (PRASA) is set to spend R123-billion in the acquisition of 7 224 new trains, which will be added to its fleet at a proportional rate every year over the next two decades. General Electric is also partnering with Transnet to produce new locomotives for use within South Africa. A variety of public transport bus services are available in major urban centres within Gauteng. These include the Rea Vaya BRT System, Metrobus and Gautrain bus services. In Johannesburg, the one-way cost of a Rea Vaya bus ticket ranges from R5.50 on inner city circular routes and R8.50 on trunk routes (the main routes from one destination to another),
to R12.00 for the full trip from the feeder routes to the Central Business District (CBD).
Taxi Metered taxi cabs in Gauteng typically charge R10 per kilometre with a flag rate of up to R50, although this can vary significantly depending on the company. This is relatively expensive when compared with equivalent fares charged by taxi cabs in other large cities internationally. For instance, the standard taxi fare in New York City is around US$2.50 upon entry and an additional US$0.5 for each one-fifth of a mile, which equates to a flag rate of approximately R23 and an additional charge of R5 for every 1.6 kilometres.
Office rentals Rental rates for commercial property in South Africa are relatively affordable by most international comparisons. In 2010, the cost of rent for the average store owner in Johannesburg amounted to just 4 percent of that paid by his or her counterpart in London’s West End. In that same year, Johannesburg, together with Durban and Cape Town, were ranked as the most affordable destinations in terms of the cost of office rentals out of 55 cities worldwide, with rental rates varying between R110 per square metre and R140 per square metre.
Starting a business in Gauteng There are various types of business structures available in South Africa, namely sole proprietor, private company, public company, partnership, business trust, non-profit organisations, joint ventures and an external company (which is a branch of a foreign company).
Ease of doing business comparisons with other countries At the global level, South Africa performs relatively well along a number of cross-country measures of competitiveness and the ease of doing business. In 2010/11, the World Economic Forum’s Global Competitiveness Report ranked South Africa in 54th position out of 139 countries. In the latest Doing Business report produced by the World Bank, South Africa was ranked first out of 185 countries for the ease of acquiring credit; and also ranked relatively highly in terms of investor protection (10th).
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SPECIAL FEATURE BRICS South Africa outranks her BRIC counterparts in terms of the overall ease of doing business. China (91st), Russia (112th), Brazil (130th) and India (132nd) are all ranked well below South Africa on the World Bank’s ease of doing business index.
THE EASE OF DOING BUSINESS IN SOUTH AFRICA Overall ranking
Starting a business
Dealing with construction permits
Ease of Doing Business — BRICS Countries 2013 SOURCE: WORLD BANK 2013
THE EASE OF DOING BUSINESS IN SOUTH AFRICA Overall ranking
Trading across borders
Ease of Doing Business — BRICS Countries 2013 SOURCE: WORLD BANK 2013
GAUTENG BUSINESS 2016
Incentives As with any growing economy, business incentives are a vital component to getting new projects off the ground, especially during tough economic times. Discover which sectors are most suitable when perusing incentives in Gauteng, a province that prides itself on facilitating development.
t must be noted firstly that the South African Government is giving consideration to expanding incentives for labour-intensive projects undertaken within IDZs to stimulate job creation, making that a prime area of investment.
Urban Development Allowances For the construction of buildings, investors and firms can benefit from deductible allowances of up to 20 percent of the costs incurred in the development of new buildings or the refurbishment of existing buildings in designated urban development zones.
Infrastructure Development In the case of infrastructure investments, a tax deduction of assets owned for the erection of pipelines, transmission lines and railway lines is available to encourage investment in local infrastructure.
Public Private Partnerships Tax exemptions are provided for qualifying government grants that are utilised for the improvement of state-owned property. The objective of these exemptions is to encourage the private sector to invest in infrastructure in partnership with the public sector.
Tax Incentives Preferential Corporate Tax Rate for Small Business Corporations Small and medium enterprises (SMEs) whose gross annual income does not exceed R14-million, are eligible for income tax deductions. The tax rates applicable to qualifying enterprises vary depending on their level of income.
Research and Development Tax deductions of up to 150 percent are available for operational expenditure incurred during the discovery of new information, as well as in developing, designing and inventing programmes of a scientific or technological nature.
Depreciation Allowances In the case of commercial buildings, a depreciation of 5 percent per annum is allowed on new or unused buildings, as well as for improvements used in the production of income. To qualify for the depreciation allowance, the building must be owned by a taxpayer.
Rolling Stock Depreciation Tax deductions of 20 percent per annum are available for costs incurred in respect of rolling stock (trains, carriages and similar transportation modes) brought into use on or after 1 January 2008. The principal objective of allowable deductions on expenditure on rolling stock is to encourage GAUTENG BUSINESS 2016
SPECIAL FEATURE the development of rail transportation infrastructure.
Environmental Expenditure Deductions and Allowances Expenditures on a range of environmentally friendly equipment also qualify for tax incentives. For instance, expenditure on environmental treatment, recycling assets and environmental waste disposal assets that are supplemental to a particular manufacturing process is eligible for a tax deduction of between 5 and 40 percent per annum.
Carbon Reducing Changes A tax exemption is available for companies whose revenues are derived from primary Certified Emission Reductions. It is applicable for all revenues received in respect of disposal on or after 11 February 2009.
Research and Development Incentives The Support Programme for Industrial Innovation (SPII) provides financial assistance to all manufacturing or software development enterprises that are registered in South Africa and engage in the development of innovative, competitive products and/or processes that promote technology development in the country.
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Enterprise Development Incentives • Grants – Critical Infrastructure Programme: Through the Critical Infrastructure Programme, cash grants amounting to between 10 and 30 percent of infrastructure development costs are available for new or expanding enterprises that invest in infrastructure such as roads, railways, electricity transmission and distribution, water pipelines, telecommunication networks and sewage systems.
• Grants – Local Economic Development Programme Through the Local Economic Development Programme, grants of up to 70 percent are available for projects that create an enabling environment for investment in key areas. This is seen as critical to the development of markets that facilitate linkages between established and emerging sectors in these areas.
• Grants – Business Process Service Sector In order to attract investment into the Business Process Service sector, grants of up to R112 000 per offshore job created, and an additional bonus structure is available to local and foreign investors that create jobs in South Africa to serve offshore clients.
• Tax Exemptions – Manufacturing Investment Programme In order to stimulate local and foreign capital investment in productive qualifying assets and manufacturing, a tax-exempt reimbursable cash grant is available through the Manufacturing Investment Programme for investors in new or expansion projects in the South African manufacturing sector.
• Grants – Foreign Investment Grant The Foreign Investment Grant is designed to encourage foreign businesses to invest in manufacturing companies in South Africa by assisting in the cost of transporting productive qualifying assets to the country.
• Tax Exemptions – Local and Foreign Direct Investment in Industrial Policy Projects A tax incentive – in the form of an additional tax allowance – is available to promote local and foreign direct investment in industrial policy projects in South Africa. The additional tax allowance is provided for up to 55 percent of the cost of any manufacturing asset used in a qualifying industrial policy project and allocated preferred status (the allowance is 35 percent for other projects).
• Grants – Tourism Enterprise Support Programme (TEP) The TEP assists large operators, investors, SMMEs and historically dis-
SPECIAL FEATURE advantaged entrepreneurs and enterprises in obtaining the requisite professional services such as ISO/SABS quality certification, debt and equity finance, proper business planning, packaging, legal advice, technology needs and marketing.
• Grants – Co-operative Incentive Scheme (CIS) Cost-sharing grants are provided through the CIS to co-operative enterprises with a view to enhancing the competitiveness and viability of these enterprises. The CIS programme provides matching grants of 90 percent (up to a maximum of R300 000) for costs related to business development.
• Grants – Small Enterprise Development Agency (SEDA) Technology Programme (STP) The STP offers a range of services and financial assistance to small enterprises, particularly those operating in the informal sector.
Export Incentives • Grants – Emerging Exporters Development Programme The Emerging Exporters Development Programme offers financial support to export councils, industry associations, provincial investment promotion and economic development agencies, business chambers, and SEDA with a view to assisting these organisations to promote the development of emerging exporters.
• Grants – Capital Projects Feasibility Programme The Capital Projects Feasibility Programme provides grants to South African registered companies to undertake feasibility studies. The value of the grants range between R100 000 and R5-million; and, in the case of feasibility studies for projects outside of Africa, grants are capped at a maximum of 55 percent of the total cost of the study.
• Rebates – Imported goods, raw materials and components used
tives are provided in the form of a matching grant of 75 percent of project costs on cluster projects and 65 percent of project costs for company level projects.
Industrial Financing Finance is available through the Industrial Development Corporation (IDC) at a competitive risk-relative interest rate to promote the establishment of permanent infrastructure Equity funding amounting to between R1-million and R30-million per project (with maximum firstround funding of R15-million and the right, but not obligation, to provide follow-on funding up to maximum of R30-million).
Municipal Incentives Certain municipalities within Gauteng provide additional incentives that are specific to the municipal area. In this respect, location-specific incentives are available in both the City of Tshwane and the City of Johannesburg metropolitan municipalities.
in the manufacture or processing of goods for export Tax Exemptions – Limiting the VAT registration and administrative burden faced by non-residents VAT exemptions are available through licensed customs and excise storage warehouses in South Africa in order to limit the VAT registration and administrative burden faced by non-residents.
• Export Incentives – Industry-specific The primary objective of the Clothing and Textile Competitiveness Improvement Programme (CTCIP) is to build capacity in manufacturing and in other areas of the apparel value chain in South Africa. The incen-
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Standard Bank Group, Gauteng Province We speak to Josh Zwane, Executive Provincial Head, of the Standard Bank Group for the Gauteng Province, about how the banking group is playing a role in the province’s development.
What is Standard Bank’s purpose in South Africa? As a personal and business bank in South Africa, our purpose is to improve lives and fulfil aspirations across the African continent. We believe that we can achieve this through our vision, which is to radically redefine client experience by understanding and delivering what matters to our customers. Broadly, it’s about making sure that we contribute to the growth of South Africa Inc. and making sure that we partner with all the necessary stakeholders to achieve our shared goal which is the growth of our country. What are your strategies to maximise on economic opportunities and the infrastructure development in Gauteng?
As we partner with all the stakeholders necessary to contribute to the growth of Gauteng Province, we continue to grow our branch footprint, as well as our business banking and private banking infrastructure. There has been significant growth in our representation and footprint in the past few years. For example, we’ve established a fully-fledged branch in the Mall of the South, as well as our investment in the Mall of Africa which includes a new private banking suite in Waterfall City area (construction is due to be completed in 2016). In addition, we’ve invested in a new region and private banking suite in the Fourways area. In what way is Standard Bank getting involved in all the major infrastructure development that is changing the Gauteng landscape?
BIOGRAPHY Josh Zwane is Executive Provincial Head, of the Standard Bank Group for the Gauteng Province. GAUTENG BUSINESS 2016
We intend to form strong ongoing partnerships with provincial government in its quest to improve the provincial infrastructure. There are a few points to be made; the first is that Gauteng is the number one economic hub of the country. The second is that Gauteng is the gateway for investment, including foreign direct investment and general investment into South Africa. The third is that, country’s capital being located within the Province provides further opportunity for us to interact more frequently with stakeholders, clients, and representatives of Embassies and other foreign government entities not based in
INTERVIEW South Africa. But it’s not just about the government or the embassies; it’s also about the opportunities that they set up that links them to the South African businessmen and women, and to the economy of South Africa. The province is constituted largely of the City of Joburg, the City of Tshwane (Pretoria), Ekurhuleni in the East and Mogale City in the Westrand. In addition, Joburg is establishing connections Tshabalala and President Yi Huiman of the ICBC, headwith other bigger cities outside of the continent, one such example being our relation- ed the ICBC delegation at the Johannesburg Summit ship with New York and the New York City mayor. & The 6th Forum on China-Africa Cooperation (FOCAC) that was held in Johannesburg from the 3 to 5 December 2015. Both spoke at the ICBC/Standard Bank ChinaAfrica Investment Financing Cooperation Forum which took place on the side-lines of the Forum. It was here that our Group Chief Executive reaffirmed our bank’s commitment to deepening Sino-Africa relations through our strategic partnership with ICBC, which has long identified Africa as an important growth market. A definite highlight was the signing of a collaboration agreement between Standard Bank and ICBC to raise R10-billion to support South African power generation in the presence of China’s President Xi Jinping and South Africa’s President at the FOCAC Heads of Summit. How is Standard Bank Gauteng helping clients to do business with the rest of Africa? We’ve had a longstanding relationship with the Johannesburg Chamber of Commerce and Industry and, through our relationship with them, our clients have got interests in - and a real passion to expand CONTACT INFO into - the rest of the continent. We’ve been able to link our clients with opportunities as well as informaJosh Zwane tion around how they should go about expanding Cnr Bradford and Smith Street, themselves throughout the continent. Bedford Centre, Bedfordview Our strategic partner, the Industrial and Tel: 011 677 0402 Commercial Bank of China (ICBC) and Standard Email: Joshua.Zwane@standardbank.co.za Bank played a major role recently in terms of China Website: www.standardbank.co.za and Africa trade. Our Group Chief Executive, Sim
WE PARTNER WITH ALL THE STAKEHOLDERS NECESSARY TO CONTRIBUTE TO THE GROWTH OF GAUTENG PROVINCE
GAUTENG BUSINESS 2016
The Gautrain Rapid Rail Link The Gautrain Rapid Rail Link is the first rapid rail network in Africa, and offers an incredibly fast and convenient public transport service. The Gautrain has also presented the province with an opportunity to empower its citizens and to expand the economic activity of the province.
CONTACT INFO Call Centre: 0800 4288 7246 SMS alert line: 32693 Website: www.gautrain.co.za Twitter: @TheGautrain Facebook: www.facebook.com/gautrain
GAUTENG BUSINESS 2016
GAUTENG BUSINESS 2016
The Gautrain has already contributed R20-billion to Gauteng’s GDP.
he Gautrain rail connection comprises two all stations, excluding the OR Tambo International links, one between Tshwane and Johan- Airport station. nesburg and the other between OR Tambo Since the start of operations in June 2010, various International Airport and Sandton. The sys- objectives have been met on the Gautrain systems tem offers a fast, convenient, safe and efficient public and the overall system (trains, busses and parking) has transport service. It now takes just 15 minutes to performed extremely well. travel from Sandton to OR Tambo International AirApproximately 55 000 passenger trips utilise the port on the Gautrain, and 35 minutes from Pretoria in Gautrain train service on any given day, and on average Tshwane to Park Station in Johannesburg. As from 11 21 000 bus passenger trips are recorded on a daily basis, August 2014, the Gautrain’s airport service (Sandton to OR Tambo International Airport) was improved with earlier trains in the mornings and later trains in the evenings. Using a cash-free ticketing system and reloadable smart cards (the Gautrain Gold Card) makes travelling on the Gautrain quick and convenient. Passengers can buy their Gold Cards at any Gautrain stations as well as at approved service outlets. Buses and shuttles are availThe Gautrain’s dedicated bus service transports passengers beable to transport passengers tween the station and the eastern, northern and southern suburbs. during weekdays to and from GAUTENG BUSINESS 2016
FOCUS Gautrain’s train, bus and parking services are all fully integrated and may be used separately or jointly by transfering from one to another
and the Gautrain service has delivered at an excellence rate of 99% train availability and 98% train punctuality. A significant number of people have been employed on the project since its inception. It is estimated that, at the end of June 2012, the Gautrain Concessionaire had already created or sustained about 34 800 local direct jobs and an estimated total of 121 800 direct, indirect and induced jobs. An economic study conducted by KPMG in 2015 has shown that the Gautrain has contributed R20billion to Gauteng’s GDP and R46-billion to property development along its route since its development phase that ran from 2006 to the current day. The study also found that Gautengers are making public transport a mode of choice, with 77% of Gautrain’s current ridership making the modal shift from private cars to using the Gautrain. These Socio-Economic Development achievements are proof that the Gautrain is more than just a train but rather a sustainable project that continues to contribute to the economy and the people of Gauteng throughout. The Gautrain is not competing with other modes of public transport, such as taxis and buses, which all have an important role to play in the total transport
system. The service comprises of a fleet of modern low-entrance and low-emission buses with comfortable seating, providing feeder and distribution services to and from the Gautrain stations. The municipal Bus Rapid Transport (BRT) services are also integrated with the Gautrain at some of the Gautrain stations. Commuters, therefore, do not have to experience the same frustrations and delays as motorists experience in terms of escalating traffic congestion. The Gautrain Management Agency was recently given the approval by Gauteng MEC for Roads and Transport, Dr Ismail Vadi, to conduct a feasibility study for a possible rapid rail extension to the Gauteng rail network as part of the Gauteng Province’s Integrated Transport Master Plan 2025. The results of this study will be available in mid-2016. The purpose of the feasibility study is to inform the decision to proceed with the Gauteng rail extensions and the preferred routes that should be developed. This is based on a number of benefits such as the transformational impact on the Gauteng economy, the modernisation of public transport, passenger access and mobility, improved spatial development, environmental impact, and numerous other benefits, such as job creation and poverty alleviation.
The Gautrain provides commuters with a world-class travel experience.
GAUTENG BUSINESS 2016
Gautrain at a glance The background to the designing of the themes of the 10 stations along the Gautrain route portrays the diverse South African resources, technology, economy and culture.
Rosebank Station is an underground station located beneath Oxford Road, between Baker Street and Tyrwhitt Avenue, opposite The Zone shopping centre. It is served by the north-south train service that operates between Hatfield and Park Station, the most southern Gautrain station situated adjacent to Metrorailâ€™s Johannesburg Park Station in Braamfontein. This underground station is located diagonally beneath Smit and Wolmarans streets. Transport to and from the station. Marlboro Gautrain Station is strategically positioned adjacent to the N3/Marlboro Drive interchange, south of Marlboro Drive and to the west of the N3. OR Tambo International Airport Station is an elevated station with platforms situated on a viaduct. The Station concourse is directly linked to the departures level of the adjacent central terminal building, one level below. Rhodesfield Station is situated west of OR Tambo International Airport and is close to the R21 and Aero City. Sandton Station is an underground station situated beneath Rivonia Road, between West Street and Fifth Avenue. From Sandton Station passengers can choose between a commuter service and an airport service. The OR Tambo International Airport Station revolves around air passengers and people working at the airport and
he future lifestyle trend in Gauteng will be to live, work and seek entertainment along Gautrainâ€™s route. In anticipation of this new way of living, quiet suburbs and empty land are turning into high-density economic hubs, while inner city rejuvenation projects are mushrooming along with a multitude of infrastructure projects which will change the face of Gauteng. Centurion Station is almost in the middle of one of the longest viaducts (elevated section) on the Gautrain system stretching from the John Vorster N1 interchange in the south, and to Jean Avenue N14 interchange in the north. The station is situated near the Centurion Lake at West Avenue and the Gerard Street intersection. Passengers experience a panoramic view of Centurion entering or exiting the station.The Gautrain Hatfield Station is a terminal station where the north-south train service will commence and terminates. The station is located within the Hatfield Business Node east of the Pretoria CBD adjacent to the existing PRASA railway network north of the University of Pretoria. From Marlboro Station, the Gautrain route heads north, running to the east of Buccleuch until it reaches Midrand Station, after which the route tracks the Old Pretoria-Johannesburg Road.
The interiors of the Gautrain cabins offer comfort and sophistication to meet the needs of international travellers as well as local and international business people.
GAUTENG BUSINESS 2016
Lake. The site of Marlboro Station is south of Marlboro Drive, adjacent to the N3/Marlboro Drive interchange. There are five Gautrain stations in Johannesburg. The first is at Midrand and the second at Marlboro. From there the Gautrain Rapid Rail Link runs southward through the Sandton and Rosebank areas, continuing to the Joburg Central Business District, terminating at the Johannesburg Park Station.
is one of the three corner posts of the Gautrain rail network. The Gautrain adds a new dimension to the Sandton area by introducing a new mode of transport, namely a modern rapid rail link and a direct nonstop service to the OR Tambo International Airport. The new Gautrain Station in Pretoria is located south-east of the existing Metrorail Pretoria Station and adjacent to the existing railway lines and platforms. Rhodesfield Station is located east of Anson Street and south of Valencia Street in Rhodesfield, Kempton Park. Located within the Hatfield Business Node, the Gautrain Hatfield Station is the last station on the route between the Johannesburg Park Station and Hatfield Station, which is one of two stations in the City of Pretoria Metropolitan â€“ the other is Centurion Station, located near the intersection of West Avenue and Gerard Street east of the Centurion
CONTACT INFO Call Centre: 0800 4288 7246 SMS alert line: 32693 Website: www.gautrain.co.za Twitter: @TheGautrain Facebook: www.facebook.com/gautrain
GAUTENG BUSINESS 2016
Gauteng lifestyle Gauteng is proving to be an African hub for business and leisure alike, with the continents high flyers drawn to its fast paced lifestyle, where hard work and a dream for a better life can move mountains.
n Gauteng it’s true that, if you can dream it, you can live it. This vibrancy and spirit of the never-say-die New Yorker attitude is a driving force behind the province’s economic and technological success. South Africa’s most vibrant and exciting province offers numerous sights and places to visit. Gauteng offers the most diverse selection of arts and entertainment in the country.
Nature lovers will fall for the great outdoors, the Krugersdorp Game Reserve, the Rhino and Lion Nature Reserve and nature reserves in Randfontein and Roodepoort provide opportunities to view the Big Five in their natural habitat. Tours of the province’s famous gold and diamond mines are also available. A number of vibrant craft markets, which includes Bruma Market World, African Craft Market, Rosebank Rooftop Flea Market and Michael Mount Organic Market showcase African ingenuity through traditional art, curios, carving, colourful caftans, beadwork and leather.
The Union Buildings, the seat of the national government, is also a popular destination for locals and tourists alike. The province is home to the Cradle of Humankind, a world heritage site comprised of thirteen caves that have yielded anthropological treasures dating back millions of years. From African street markets to café society, upmarket taverns and museums, it has it all. GAUTENG BUSINESS 2016
Sports and arts Horse racing and equestrian sports are popular in Gauteng, and the province is home to three
SPECIAL FEATURE famous racecourses: Newmarket Turf Club, Turffontein Racecourse and the Vaal Racecourse. There are a number of golf courses and country clubs in Gauteng that feature facilities of an extremely high standard. Finally, tourists, visitors and residents in Gauteng can participate in an abundance of adventure sports ranging from skydiving and paragliding to hang-gliding. The moderate climate in Gauteng, characterised by fair weather all year round, is ideally suited for sporting and outdoor activities. The province is home to world-class sports stadiums (including the FNB Stadium, The Wanderers Club, Ellis Park and SuperSport Park) and exhibition venues, and has successfully hosted large-scale international events such as the 2010 FIFA World Cup. Soccer, rugby and cricket are the most popular spectator sports in South Africa, and many of the country’s most popular teams are based in Gauteng, including South Africa’s two most widely supported soccer teams — Orlando Pirates and Kaizer Chiefs.
University of Pretoria.
The arts and culture scene in Gauteng is a melting pot of talent, passion and diversity. For many seeking the ultimate arts and culture experience, Gauteng is the destination of choice, offering a diverse range of stand-up comedy, musicals, ballet, opera, contemporary art and international and local productions. Gauteng is home to the State Theatre in Pretoria, the Civic Theatre in Johannesburg and the Theatre on the Square in Sandton, with these theatres offering an array of classical music, theatre, opera, ballet, drama and contemporary political pieces. In addition, there are also a number of smaller theatres in the province, including the Market Theatre, the Sound Stages and the Barnyard.
Transvaal Museum in Pretoria.
Health and Education There is an abundance of medical facilities in Gauteng. The province is home to 30 public and 40 private hospitals that provide world-class healthcare services. The provincial department also benefits from a staff complement that includes numerous highly-qualified medical professionals and practitioners, dentists and specialists.
There are more than 60 museums and art galleries in Gauteng. The province is home to a number of South Africa’s most significant historical heritage museums and venues, including the Apartheid Museum, Museum Africa, the Transvaal Museum and the National Cultural History Museum. Through these museums, which cater to every interest from railroads to military history, visitors to the province are able to learn and experience South African history and the diversity of this Rainbow Nation.
There are several educational institutions located in Gauteng, with some 3 374 schools, colleges and universities spread across the province, including several international schools. The number of institutions is set to grow with the Gauteng Department of Education, the DBSA and the Gauteng Funding Agency (GFA – an agency of the provincial Finance Department) aiming to
GAUTENG BUSINESS 2016
SPECIAL FEATURE build 79 new schools and renovate a further 300 existing schools. Many of the numerous education institutions and research units within the province are highly rated both within South Africa and internationally. For instance, Gauteng is home to three of South Africa’s five top-ranked business schools.
Construction activity in Gauteng remains robust. General building and civil engineering are currently the largest construction sub-sectors in the province, and shopping malls and modern buildings continue to be built in every part of the province. These new buildings tend to be modern, well-built, and constructed to exacting and internationally competitive standards.
Technology Gauteng is a major hub for the ICT sector in South Africa and hosts the majority of the country’s largest media companies. A number of multinational technology companies — including Microsoft, IBM and Cisco — have a presence in Gauteng, where they operate alongside South Africa’s own technology firms. As the industrial and financial heartland of South Africa, the Gauteng province attracts a multitude of foreign and domestic ICTrelated investment and business. This is backed by a number of multi-billion rand support programmes directed towards ICT development by the Gauteng provincial government.
The high level of construction activity has been accompanied by a concerted effort to improve inner city districts in Gauteng. These efforts have been driven by a partnership between lobby groups and the Affordable Housing Company, the JDA, and the Johannesburg Social Housing Company. In addition, the provincial government’s housing policy includes a strong focus on integrating human settlements and improving property and housing allocations.
Dining out Authentic South African cuisine is available at a number of widely hailed restaurants throughout the province. Gauteng is renowned for the quality and breadth of its restaurant and fine dining options, which include Italian, Portuguese, Chinese, Japanese, Thai, Indian, Cape Malay and authentic African cuisine. The diversity of the provincial population has a positive influence on the range of food available within Gauteng.
Africa’s biggest subscription satellite television service provider, MultiChoice, and pay television channel provider, M-Net, are both based in Gauteng. Numerous radio stations are housed within the province, attracting millions of weekly listeners from many areas and language groups. There are four major cellular network operators in the province: Vodacom, MTN, Cell C and its partner Virgin Mobile, and Telkom.
With so many activities to keep you busy on the weekends after a fruitful week of work, Gauteng really does offer residents the best of both worlds for business and pleasure, all under the warm African sun.
Housing Gauteng’s property market is internationally competitive. Returns on commercial property in the province currently outperform those in international business centres such as New York and London; more generally, property returns in Gauteng are favourable by many international comparisons. There is a thriving residential property market in Gauteng, backed by strong demand for housing in golf estates, cluster houses and condominiums. As one property expert remarked: “Gauteng is leading the market in high-end properties with long-term, stable returns on real estate.” GAUTENG BUSINESS 2016
INDABA HOTEL, SPA & CONFERENCE CENTRE YOUR AFRICAN DESTINATION IN JOHANNESBURG
Just north of the fast paced business world of Sandton lies the 258 bedroom Indaba Hotel, Spa & Conference Centre. It is a compelling blend of business-like efficiency and relaxed country atmosphere within close proximity of the International Airport making the Indaba perfect for groups and leisure travellers. The hotel features 24 multi-purpose conference venues ranging from Executive Boardrooms to large Banquet Venues seating up to 500 people. Boasting 2 world class restaurants and the renowned MOWANA Spa, the Indaba Hotel is sure to meet your business and leisure requirements.
W: www.indabahotel.co.za | T:+27 11 840 6600 E: firstname.lastname@example.org
Catalyst for change Fostering socio-economic development and competitiveness in Gauteng.
GGDA Investment Project is the construction of the Enterprise Building 2 at The Innovation Hub. The project is to create about 80 construction job opportunities. Possible partners include National Treasury, the IDC, the DBSA, the Department of Science and Technology, the City of Johannesburg and the City of Tshwane. T he Biomass Gasification Project’s primary objective is to promote innovation by having locally owned Intellectual Property (IP) technology from Biomass Gasification, while boosting electricity service coverage within Gauteng contributing to clean energy generation, security and self-efficiency as outlined in the Gauteng Green Economy Strategy.
Africa’s first international standard science and technology park, The Innovation Hub (TIH), was established by the Gauteng Provincial Government in 2001 to drive the development of smart industries in Gauteng.
The plant should ideally be co-located with a sawmill, or in an area that has a lot of alien vegetation, which would need to be cleared. The clearing of alien vegetation can create between 10 to 20 jobs in an area of 100 square kilometres.
In line with the focus of the Gauteng Growth and Development Strategy (GGDS), the TIH’s role in the provincial innovation eco-system is to be a catalyst for innovation and a key knowledge economy driver. Key focus areas are ICT, biotechnology, renewable energies and low carbon economy technologies (green economy).
The operation of the plant will also result in the creation of another 14 jobs, bringing the total to over 34 jobs in an area that would otherwise not see any investment.
Current development projects The three biggest projects on the TIH’s current agenda are the Gauteng Growth Development Agency (GGDA), Investment Project, the GGDA Investment Biomass Gasification Project and the BioSciences Park (Bio-Park) Project. The aim of the GAUTENG BUSINESS 2016
The BioSciences Park (Bio-Park) project will aim to provide a nurturing environment for biotechnology start-ups to develop and thrive to become important commercial players, contributing to economic growth. About 80 construction jobs will be created.
Opportunities The TIH provides investment opportunities in an enabling environment for the stimulation and growth of technology-driven business and the development of R&D facilities, hi-tech incubators, corporate headquarters for hi-tech companies, and venture capitalists, boasting nine significant programmes:
Gap Innovation Competitions
Maxum Business Incubator
OpenIX is an Open Innovation Exchange that delivers tangible solutions to real challenges posted by solution seekers in government and the private sector, and connects leading African researchers and entrepreneurs with new opportunities to commercialise their innovations..
The competition has attracted more than 700 entries in the last four years running. Researchers and entrepreneurs have been awarded over R7 million in seed funding and incubation support. OpenIX
This incubator develops the business leaders of tomorrow by providing an enabling environment where start-ups from the knowledge intensive sectors are fast-tracked to compete in the global village. Incubation creates a synergistic environment where entrepreneurs can share learning, create working partnerships and open doors to markets and resources.
The purpose of establishing this programme was to take innovation to the people by establishing co-creation and innovation spaces in the townships where local communities are able to access the services and facilities that are offered at The Innovation Hub. Extending these services and facilities to the townships addresses problems of access and seeks to re-industrialise the community and unemployed youth.
Climate Innovation Centre
The centre is The Innovation Hub’s first strategic green economy initiative to achieve sustainable growth and sustainable job creation aligned to the overall strategic goal of the Gauteng Green Economy Strategy. It is tailored for the South African context. CoachLab® Skills & Leadership Development
This youth skills development programme is committed to the development of a diverse skills base in the ICT, engineering, green and media sectors. The aim is to instill business principles and innovative and entrepreneurial thinking among the youth through mentorship.
Fab.Lab, an abbreviation for ‘fabrication laboratory’, is a platform for high school learners from disadvantaged backgrounds to create prototypes using world-class, cutting edge machinery. Learners are able to design, 3D print and manufacture using advanced manufacturing technology and use their prototypes to create a business. This platform is intended to promote a culture of participation in the innovation co-system and entrepreneurship through skills development and weekly training.
mLab Southern Africa
This is an initiative of TIHMC, CSIR Meraka and Ungana-Frika. It is funded by the Finish Ministries of Foreign Affairs through infoDev, a programme of the Worldbank and the Department of Science and Technology of SA. mLab is a mobile applications laboratory, which incubates innovation and entrepreneurship in the mobile channel.
CONTACT INFO Physical address: 124 Main Street, Marshalltown, Johannesburg Tel: +27 11 085 2321 Email: email@example.com Website: www.theinnovationhub.com
This biosciences incubator offers opportunities for commercialisation to early stage biotech companies by providing business development support.
GAUTENG BUSINESS 2016
Automotive Industry Development Centre (AIDC) The AIDC is a project-driven organisation which focuses on excellence in technical project implementation and service delivery, while forming partnerships with the private sector to increase the level of innovation and co-operations within the Automotive Industry. AIDC was initially established in 2000 by the Gauteng Provincial Government, and its purpose is to develop the automotive manufacturing sector to globally competitive standards of excellence through a world-class value proposition which enables effective and sustainable socio-economic growth.
Automotive Incubation Centre at Silverton, Nissan expressed interest in establishing a similar facility at their plant in Rosslyn. The BEE entrepreneurs are earmarked to supply components directly to the production line for the next generation 1-ton pickup which will start production in early 2017.
The dynamic AIDC is currently involved in a number of projects aimed at technical project conceptualisation, implementation and service delivery in the automotive sector.
While the facility at Nissan is intended to replicate AIDC’s Automotive Incubation Centre at FMCSA, it will include the lessons learnt from implementation of the first incubation project at Ford.
Government Incentive Schemes
AIDC’s Government Incentive Schemes department administers government and automotive industry incentives designed to grow and develop the automotive sector. It was established in 2002 and it is one of the longest-serving departments within the organisation.
AIDC’s Operations Division is responsible for the planning, maintenance, ICT and Soft Services at its four sites, namely the Automotive Supplier Park (ASP) in Rosslyn, Winterveldt Enterprise Hub Automotive, Gauteng Automotive Learning Centre in Rosslyn, and Automotive Incubation Centre at Ford Motor Company of Southern Africa in Silverton.
Incubation Programmes Department
AIDC Incubation Programmes Department was responsible for launching South Africa’s first Automotive Incubation Centre at Ford Motor Company of Southern Africa’s Silverton plant in 2011 and the Winterveld Enterprise Hub: Automotive in 2014. A second Automotive Incubation Centre has been created at Nissan South Africa’s plant in Rosslyn.
AIDC’s Business Development Department (BDD) provides strategic input and support to all Key Focus Departments and Infrastructure Programmes of the organisation, with the aim to enhance, expand, increase and deepen its services offerings to both Government and automotive industry clients. The BDD supports the AIDC with project acquisition and assists each department to source funding for future projects.
Ford acquired the assistance of the AIDC in 2010 to develop and manage an incubation model that could prepare them for the production launch of the T6 Ranger. Following the success of AIDC’s GAUTENG BUSINESS 2016
Supplier and Enterprise Development
AIDC’s Supplier and Enterprise Development
PROFILE Special Programmes Department
A key challenge facing the automotive supply chain is the cost of logistics. Extensive lead times coupled with the domestic reality of inefficiencies, fuel costs, and poor infrastructure presents a scenario that inhibits South Africa’s ability to compete globally. The AIDC’s Special Programmes Department, therefore, focuses on supply chain development and logistics to develop state-of-the-art solutions, tailored specifically to address the needs of the South African automotive industry. Gauteng Automotive Learning Centre
As part of Gauteng Provincial Government’s commitment to skills development, the AIDC and Nissan SA (NSA) launched the Gauteng Automotive Learning Centre in June 2014. The Learning Centre is part of the Nissan SA Investment Support Programme.
Department (SEDD) was established to develop component manufacturers in the supply chain to conform to the international standards prescribed by the automotive manufacturing industry.
Winterveld Enterprise Hub: Automotive
This is the first of six Automotive Enterprise Hubs to be established by AIDC and Gauteng Provincial Government. It was officially opened in February 2014 by the Gauteng’s former Premier Nomvula Mokoyane, and it is one of the organisation’s flagship projects that addresses skills shortages and socio-economic challenges in the Province.
The department’s service offering ranges from a combination of efficiency improvement projects related to productivity, quality assurance in accordance with ISO standards, including environmental, lean and clean production (including all green projects as related to the Government and the Province’s low carbon economy projects), to manufacturing concepts, logistics, clustering and SMME development initiatives.
Automotive Supplier Park
The Automotive Supplier Park (ASP) is managed by the Facilities Department at AIDC. Based in Rosslyn, the ASP spans an area of 130 hectares, with a tenant pool comprising mainly of component manufacturers and suppliers to OEMs, who require a continuous supply of components to assembly plants.
Skills Development & Training Department
Skills shortages are widely regarded as the main factor which slows economic growth globally. As a result, AIDC established its Skills Development and Training (SD&T) Department to identify sectors with skills deficiencies, and then develop programmes to nurture individuals to drive economic growth across South Africa.
CONTACT INFO Physical Address: 30 Helium Road, Automotive Supplier Park, Rosslyn EXT 2, 0200 Postal Address: Private Bag X35, Rosslyn 0200 Tel: +27 12 564 5000 / 5300 Email: firstname.lastname@example.org Website: www.aidc.co.za
The main focus of AIDC is to become a catalyst for Government to explore solutions to overcome skills shortages in the automotive industry.
GAUTENG BUSINESS 2016
Constitution Hill Dedicated to remembering past struggles, Constitution Hill is a site of consciousness and conscience.
Located on the site of Johannesburg’s infamous Old Fort Prison Complex, where many apartheid struggle heroes were persecuted, Constitution Hill is a multi-million rand inner city regeneration project. The intention with the project, anchored by the South African Constitutional Court, is to develop the available portions as iconic infrastructure in such a way that it is sensitive to the context, the architecture as well as the overall ambition of the stakeholders. known, is also open to the public for guided tours and has become an important platform for heritage, education, and tourism related programmes. With its rich history and character, Constitution Hill boasts the ideal platforms to educate and learn about South Africa’s story.
The site houses the Women’s Gaol Museum, Number Four Museum and the Old Fort Museum. The Constitutional Court and other strategic tenants play an educational role focusing on constitutionalism, human rights, and democracy. Boasting a variety of multipurpose venues, suitable for conferencing, performance, a large array of events and for public activities and programmes, this national heritage site reflects the stories of South Africa’s turbulent past and its extraordinary transition to democracy.
The Constitution Hill Development Company (ConHill) was established in order to set up the appropriate management arrangements to ensure the delivery of heritage, education and tourism programmes, including key functions that would realise the overall vision for the site and contribute to the revitalisation of the inner-city.
Once a place of injustice and brutality, where South Africa’s leading political activists (including Nelson Mandela and Mahatma Gandhi were detained), the site has been transformed into a place of solidarity and democracy and today it boasts of a total of 21 indoor and outdoor venues spread over three buildings ranging in capacity from 20 to 1 200 guests.
Programmes Heritage, Education and Tourism Programme (HET): Through this programme, Constitution Hill promoted social entrepreneurship through the development and hosting of creative works. It also
Apart from hosting engaging and gripping exhibitions, Constitution Hill, or ConHill, as it is famously GAUTENG BUSINESS 2016
PROFILE promoted active citizenry, patriotism and civic pride while providing a platform for dialogue.
Africa and constitutional education. The site hosted 63 public programmes and 83 educational programmes last year.
Tourism Development: Constitution Hill’s offerings directly impact on the tourism sector. Last year the site accounted for footfall totalling over 1 279 million, thus directly contributing towards tourism development in the province, attracting both domestic and international tourists.
Opportunities The site is blessed with investment opportunities including heritage tourism through the proposed establishment of the Judicial College, a Struggle Hero Visitor’s Centre and a boutique hotel; the development of a Justice Precinct; and other commercial and housing developments, cultural tourism initiatives, archives and libraries and recreational facilities. An example of one such investment opportunity is the Gauteng Growth and Development Agency’s (GGDA) Investment Project Constitution Hill Redevelopment Project.
Creative Sector impact: The site facilitated and hosted 20 exhibitions. These were developed in collaboration with creative workers and thus had an impact on temporary job creation. Education Development: Public programmes enhance responsible and active citizenry through the participation of citizens, while educational programmes are closely aligned to the history of South
Aim of the GGDA project A proposal was submitted to develop the site with a Justice Precinct that will include various offices for the Chief Justice, Chapter 9 Institutions, the Judicial Institute and the Court Management Agency and other related activities. The development, which is proposed to be approximately 105 000 square metres in area, will become a national icon and is directly related to the location of the Constitutional Court. It will also ensure development in the Inner City of Johannesburg. It is estimated that the project would generate about 250 construction jobs. Possible partners for the project include National Treasury, the Independent Development Corporation (IDC), the Development Bank of Southern Africa (DBSA), the Public Investment Corporation (PIC), the National Department of Arts & Culture, the City of Johannesburg, the JDA and the Chief Justice Office.
INFORMATION Entrance fees: R55 per adult, R27.50 for pensioners and R22 for students/children for a tour of 3 sections of the prison (Women’s Jail, Old Fort and Number Four Prisons) and the Constitutional Court lasting two hours. Opening times: Monday to Friday 09:00-17:00 (last tour is at 16:00) Wednesday 09:00 – 14:00 (last tour is at 13:00) Saturday & Sunday 10:00-15:00 (last tour departs at 14:00) Tours run are every 30 minutes. Booking required for groups of 10 or more people. Venue Hire: The site boasts of a total of 21 Indoor and outdoor venues spread over three buildings ranging in capacity from 20 to 1,200 guests
CONTACT INFO Physical address: 11 Kotze Street, Braamfontein, Johannesburg Tel: +27 11 381 3100 Email: email@example.com Website: www.constitutionhill.org.za
For booking enquiries email firstname.lastname@example.org
GAUTENG BUSINESS 2016
Gauteng Industrial Development Zone (GIDZ) All aboard! The new OR Tambo Aerotropolis is now ready for take-off.
Being part of the new aerotropolis precinct, which was established to enhance developments in the Eastern Corridor of Gauteng, the OR Tambo International Airport Industrial Development Zone (ORTIA IDZ) programme is aiming to develop 725 hectares of land situated around the OR Tambo International Airport. This will indeed be a welcome financial injection – set to stimulate economic development in the region.
2009 to develop and operate the IDZ at the ORTIA. The GIDZ Devco is a subsidiary of the Gauteng Growth Development Agency (GGDA); it was incorporated as a pre-requisite for the application of an IDZ Operator permit. The IDZ Operator Permit License was issued in December 2010 to DEVCO to develop and operate the ORTIA IDZ, on recommendation by the Manufacturing Development Board to the Minister of Trade and Industry.
The ORTIA IDZ is a Gauteng Provincial Government initiative lined up to realise the objectives of implementing its economic development goals. The initiative is aligned to the priorities set out by both national and provincial government, which among others include leading, facilitating and managing sustainable job creation and inclusive economic growth and development in the Global City Region.
Focus on precious and semi-precious metals Guided by the GIDZ Devco, the new JMP programme is directed at light, high-margin, export-oriented manufacturing of South African precious and semi-precious metals. The multi-site development
With a strong focus on developing beneficiation capacity related to the precious metals and minerals sector, the first phase of the Gauteng Industrial Development Zone (GIDZ) has been identified as a catalyst to develop the broader GIDZ – an important key to unlock Gauteng’s jewellery benefit potential in the newly introduced Jewellery Manufacturing Precinct (JMP). Being part of the broader aerotropolis framework, which was defined to enhance developments in the eastern corridor of the province, the delivery of the JMP is divided into three parallel processes: infrastructure development, investor attraction and skills development. Development of the precinct is driven by the Gauteng Industrial Development Zone Development Company (GIDZ Devco), a special purpose vehicle that was created in GAUTENG BUSINESS 2016
PROFILE consists of several industry-specific areas to be developed in phases over a 10 to 15 year period. Various skills development programmes will be implemented to enhance skills in the sector. The programme contributes directly to Strategic Goal 1 (Gauteng’s economy radically transformed) and Strategic Goal 2 (Gauteng’s economy re-industrialised) and supports delivery of Strategic Goal 3 (GGDA capacitated to deliver and implement efficiently and effectively). Once completely established, the JMP will be a fully operational programme, set on 6.1 hectares of land with a mixture of facilities for storage, design, manufacturing and retail businesses, bringing with it a myriad of investment opportunities including ICT production and distribution, aerospace, electronics, avionics, and related industries. The JMP further offers investors the opportunity to get involved with the mineral beneficiation sector in South Africa, whilst receiving special export conditions and business incentives.
Partnerships Critical to the success of the precinct is infrastructure development and the creation of successful partnerships and collaboration with other roleplayers in the region, such as the Airports Company South Africa (ACSA) and the Gauteng Department of Economic Development (GDED) and a land lease agreement between ACSA and the GDED on the 6.1 hectares of land to be developed as Phase 1 of the IDZ programme was concluded last year. In addition, a funding understanding with the National Treasury for the bulk infrastructure development were also reached. In respect of infrastructure, the bulk infrastructure of the JMP will be undertaken with the support of the GDED’s infrastructure unit. In the year under review, consulting engineers were contracted through GDED to develop the detailed designs required to secure site development plans approval by the Ekurhuleni Metropolitan Municipality, as well as to provide professional engineering services.
Special Economic Zones Looking at the bigger picture, apart from enhancing the economic competitiveness, establishing Special Economic Zones (SEZs) in the region will also promote competitiveness among enterprises. Moreover, it will seek to encourage domestic and Foreign Direct Investment (FDI) for Township Industrial Hubs. It is expected that the intervention will contribute to job creation, while also reducing the cost of doing business in SEZs and industrial hubs. Once developed, the SEZs will provide significant opportunities in terms of: • Attracting domestic investment and FDI in manufacturing and tradeable services; • Providing non-core services, such as transport and distribution, to the SEZ; • Providing increased export opportunities through export incentives; and • Establishing green industries, oil and gas services investors, aquaculture projects, as well as a possible mineral sand beneficiation investment.
CONTACT INFO Physical address: Office NL 46, 3rd floor north wing, OR Tambo International Airport Tel: 010 001 9120 Email : email@example.com Website: www.gidz.co.za
GAUTENG BUSINESS 2016
Gauteng Investment Centre (GIC) The much anticipated Gauteng Investment Centre (GIC) officially launched last year, with a single task in mind; making Gauteng-based business for investors easier.
The GIC was set-up to support the Gauteng Provincesâ€™ economic development initiatives as a one-stop-shop for foreign investors and established local businesses where essential government information and services can be accessed from a single platform. The GIC is considered the Provinceâ€™s key differentiator in offering quicker investor turnaround times. It affords potential investors and exporters efficient services, which expedites investment in the province.
Main Purpose The aim of the GIC is to make it easier for investors to do business in Gauteng. The Sandton-based GIC is set to offer a central business services centre that will offer domestic and foreign investors access to all the services they need in a convenient location and from all the various tiers and agencies of government. The goal is to make Gauteng become the preferred location for investment by exposing potential and existing investors and entrepreneurs to appropriate economic information, technology for business registration and overall business support and development services. By simplifying the investment procedure the cost of doing business in Gauteng will lessen and, as a result, will improve the overall competitiveness of local industry in the world market.
GAUTENG BUSINESS 2016
The centre would also undertake inward investment promotion missions, which would include hosting and coordinating inbound foreign and local business delegations, as well as undertaking outbound missions to promote Gauteng as a premier investment destination. The centre, is managed by the Gauteng Growth and Development Agency (GGDA).
Services The GIC draws all the relevant organs of state and state entities/agencies to a single convenient location, from where it co-ordinates and streamlines investment intrests to provide prompt, efficient and transparent services to the investors and exporters by providing the following:
PROFILE • World-class facilities where investors can meet
agreements with local government will make for a smoother and more uniform process of engagement with investors”.
and discuss investment opportunities • Investment and trade information of Gauteng as well as in Africa • Project appraisal – provided through collaboration with the Gauteng Growth and Development Agency’s (GGDA) development finance partners in order to assess a case for processing a project or proposal. • Site identification and evaluation • Provide potential investors with sector-specific economic data through the stipulation and dissemination of market intelligence and would, through collaboration with the Department of Trade and Industry – a critical project partner – supply business and work permits • Co-ordinate the involvement of different entities within government on various spheres of government involved in the establishment of a business. • Facilitate investor access to national and local government incentive programmes In summary, the GIC offers all information and research services, complete administrative assistance with business registration, pre-investment support services and investment aftercare. The service delivery outcome will ensure a simplified and shortened administrative process, removing bottlenecks in establishing and running businesses in Gauteng.
The companies, organisations and departments working with the GIC are as follows: • Brand South Africa • Companies and Intellectual Property Commission (CIPC) • City of Johannesburg • Department of Trade and Industry • EY & Mercantile Bank • Gauteng Funding Agency • SARS • Westrand District Municipality • Ekurhuleni Metropolitan Municipality • DHA • City of Tshwane • Gauteng Department of Agriculture and Rural Development (AICEP) • Mercantile Bank
Reasons to invest in Gauteng There are many reasons why Gauteng has become known as a “Gateway to Africa,” an attractive place for investments on the continent. The province offers: • Access to African markets • Functional national institutions protecting the right of investors
GIC partners Gauteng Premier Nomvula Mokonyane reported that the GIC will include “services such as company registration, tax registration and investment services and information, which would be provided by [inhouse] representatives from the Companies and Intellectual Property Commission, the South African Revenue Service (Sars), State utilities, State-owned enterprises, municipalities and the Department of Home Affairs (DHA). The GGDA’s CEO Siphiwe Ngwenya added to this, saying “such partnership agreements with district and local municipalities are particularly critical, as many lack the skills and capacity necessary to effectively promote and facilitate investment within their region”. He highlighted, “Given the GGDA’s mandate as the provincial investment promotion agency, our
GAUTENG BUSINESS 2016
PROFILE • Clear and consistent economic policies in line • • • •
with national policies Good infrastructure and facilities World-class road, rail and air networks An investor-friendly environment A large pool of young, highly skilled labourers, whose skill sets match the needs of modern manufacturing, finance, and engineering industries; as well as a large pool of unskilled labour for the manufacturing, trade and transport sectors Low land and commercial building costs Supply of electricity that is among the cheapest in the world.
The City of Tshwane (CoT) aims to decommission all conventional electric geysers and replace them with solar water heaters. This will require various technological interventions and skills. Both the low pressure and high pressure solar water heaters will be installed. Ultimately only high pressure solar systems will be installed due to the inherent benefits and the low pressure systems will be fazed out. The City will require project managers, plumbers and fairly trained labour to achieve the milestones, as such local economic development will benefit the communities of the City.
However, by far the most attractive feature is the elimination of time-consuming ‘red tape’ as a result of the work done by the GIC, where special economic zones integrated with large infrastructure projects will see seamless interplay between public and private sectors.
Investment opportunities Gauteng boasts a number of attractive business ventures for investors:
The concept includes the proposed development of inter alia: a student village, sport incubatory centre, retail components, commercial components, innercity housing and health facilities.
Automotive Supplier Park
Centurion Symbio City
The intention is to establish a consolidation centre within the Automotive Supplier Park (ASP) in Rosslyn that would cater for the logistics needs of Original Equipment Manufactures (OEMs) and component suppliers to the automotive industry.
The conversion of some 10 hectares of land, sur-
Construction of a convention centre that meets international norms. This is a phased development, with future developments including international hotel(s) and further mixed use developments. West Capital
Tshwane Automotive City
The creation of a zone where the automotive chain of suppliers are located. Power Station
The City of Tshwane (CoT) owns and operates two power stations, Pretoria West and Rooiwal, with a designed capacity of 180 MW and 300 MW respectively. GAUTENG BUSINESS 2016
PROFILE arts, culture, business and sporting contributions of global significance (amongst other potential occupants). This structure has the potential to become an iconic building not only as an addition to the built environment of Johannesburg, but also within the socio-political context of the country. The facility will serve to inspire the youth by highlighting South African individual’s successes on the global stage. ORTIA-IDZ
The OR Tambo International Airport Industrial Development Zone (ORTIA–IDZ) is a Gauteng Provincial Government initiative lined up to be able to realise the objectives of implementing its economic development goals. The initiative is aligned to the priorities set out by both national and provincial government, which among others include leading, facilitating and managing sustainable job creation and inclusive economic growth and development in Global City Region.
rounding and including the man-made Centurion Lake, into a vibrant mixed-use Symbio-City, linking the Centurion Gautrain Station with the existing Centurion Mall. Legacy
The creation of a knowledge based commercial and residential environment. Menlyn Maine
Heidelberg Extension 24
The creation of a first “Green Living Precinct” in South Africa.
Industrial 1 stand, 1 municipal, 3 parks and 5,94km of roads.
The vision of Rainbow Junction encapsulates the delivery of a vibrant New Economic Node, on a premier address of 140 ha in the foyer of the Capital City, reflecting the dynamic lifestyle of the new South Africa with a mixed land use property development.
Residential development Heidelberg Extension 25: Retail Development. Ratanda Extension 5
Development of a pleasure resort.
Hammanskraal Business Process
The creation of a Business Process Outsourcing and Off-Shoring Park (BPO&O) as an employment stimulator in the Hammanskraal area.
Rensburg Extension 2
Metsweding Arts and Crafts Business
Residential Development. Portion 86 and R/5
The establishment of a business incubator that will support small- and micro enterprises in the arts and crafts sector within the Cullinan, Rayton, Refilwe region.
CONTACT INFO Physical address: The Place, 1 Sandton Drive, Sandton, Johannesburg Tel : +27 10 001 8650 Email: firstname.lastname@example.org Website: www.gautenginvest.co.za
Constitution Hill Visitors Centre
Investment is required to fund the building and operation of a unique building at Constitution Hill which is envisaged to showcase South African achievement, will celebrate Iconic Struggle Stalwarts,
GAUTENG BUSINESS 2016
Gauteng ICT Park Special Economic Zone As we seek solutions to bridge the digital divide in Africa, provincial government will play an important role in providing digital platforms to help unlock new economic opportunities for growth and development.
Gauteng ICT Park SEZ The ICT SEZ is an instrument available for the Gauteng Province to attract Foreign Direct Investment (FDI) and Direct Domestic Investment (DDI) to a dedicated industrial park (NASREC) using meaningful incentive packages from National Treasury (through agencies such as the GGDA), the Department of Telecoms & Postal Services, SARS, Municipalities and other relevant institutions. It aims to provide world class economic infrastructure and facilities to investors through: offering competitive incentive packages to attract and retain investments; developing and providing required ICT skills to investor businesses, shortening the processes of business registration, permitting and settling of investors.
ICT and Gauteng The technology explosion of the 21st century also introduced the world to the digital economy. Where just a few years ago this concept was hardly known to those outside the Information and Communication Technology (ICT) sector, we are today fully submerged in the information age—and equitable access to broadband has become a basic human freedom, which must be guaranteed to all, in an age where connectivity has become a utility that can measure the quality of life, human progress and economic development.
increasingly contributing to the country’s GDP. In Gauteng, where nearly two thirds of all South African ICT companies are located, ICT contributes more than 6% to regional GDP. A sure step in the right direction in modernising the public service and stimulating the province’s knowledge-based economy, was last year’s inaugural Gauteng ICT Summit, which highlighted the province’s goal of
As the pressure on the South African Government increases to bridge the digital divide and take technology to the people in even the most remote areas of the country, the ICT sector is blooming, and is GAUTENG BUSINESS 2016
PROFILE 100% broadband connectivity in the Gauteng City Region (GCR) by 2020.
and various service offerings such as software management, systems programming and technical support. A number of international giants, including Microsoft, Hewlett-Packard, IBM, ICL, Cisco and Unisys, have a strong presence in Gauteng, where they operate alongside South Africa’s own ICT firms.
During his keynote address at the summit, the Minister in the Presidency, Mr Jeff Radebe, commended the Gauteng province for taking the initiative to be the first province to introduce tablets in all high schools with the aim of taking public schools into the 21st century. He said ICT is considered by the National Development Plan as critical to the attainments of its goals of economic growth and improved the provision of services. “This is what I call leadership and this can only be expected from a province such as Gauteng, our economic heartland,” said Radebe.
With a view to drive growth within the ICT sector, the Gauteng Provincial Government has introduced a programme that provides mentoring support and venture capital for the commercialisation of technology firms. The provincial government has also established a science park in the form of The Innovation Hub (TIH). The City of Tshwane has an Innovation Office based at TIH. The metropolitan municipality already has a fibre optic network infrastructure that hosts two technology-related projects, TIH and ASP. Innovation in the sector will be further encouraged by the newly established mLab, a centre designed to support entrepreneurs in the mobile-technology field. The CSIR in Pretoria hosts the mLab facility together with TIH. At a national level, the National Treasury has introduced the South African Vanguard of Technology (Savant) programme in order to provide marketing support to the South African ICT and electronics sector and improve the level of awareness of the local sector.
At the same event, Gauteng Premier, David Makhura, urged the private sector to train more young people to take up jobs and other economic opportunities within the ICT space and partner with Government to achieve the province’s ICT goals. He said, aligned with this, the Gauteng Provincial Government has adopted a five-pillar strategy “to transform Gauteng into a ‘Smart Province’ and a Connected Global City Region”. Through this strategy the GCR will seek to:
• Build an enabling broad-band infrastructure for
ICT Development Strategy
a connected government.
• Create an enabling platform to deliver e-govern• • •
Showcasing its commitment to the development of the digital economy, is the impressive 45-page Gauteng ICT Development Strategy, providing a plan and platform to unlock new economic opportunities for growth and development.
ment services. Establish a Gauteng City Region structure to coordinate, standardise, regulate and prioritise the implementation of our e-government initiatives. Promote the use of e-government services across the board—by government, citizens and the private sector. Stimulate the ICT economy by encouraging public, private partnerships for the development and roll-out e-government services.
According to the strategy, the New Growth Path has identified rapidly extending access to, and use of, ICT based on a continual and rapid reduction in broadband costs, as part of the technology policy. In this light, the Gauteng ICT Development Strategy aims to foster realisation of the potential value that information and communications technology can bring to employment, growth and economic development in Gauteng. It derives its foundations from the Gauteng Employment, Growth and Development Strategy, which focuses on the need
ICT presence in Gauteng Being the digital hub in the country, a range of ICT activities is undertaken within the province, including hardware manufacturing and software design,
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PROFILE to resuscitate industrial development through appropriate policy measures, while also recognising the economic value of the services and innovation input sectors.
ICT sector in SA and Gauteng According to the strategy document, the Department of Trade and Industry has identified ICT and electronics among 11 priority sectors that have the highest growth and investment potential in South Africa. ICT is a growing industry and its market has grown to R179-billion in 2010 and it is expected to grow to R187-billion in 2011 and to R250-billion by 2020.
“One of the main objectives of ICT policies and strategies is to ensure the greatest possible diffusion of ICTs, commensurate with national needs, ambitions, specificities and concerns. Thus, information and ICT policies must take into account local, national and international issues, as well as sectoral concerns. The strategy notes the trend for the services sector, in particular the ICT services sector, to grow in tandem with development in the manufacturing and construction sectors. The strategy, therefore, is aimed at facilitating the contribution of ICT to economic participation, while also lowering the cost of such participation, with the particular focus on reducing the communications barriers for small and micro-enterprises,” as recorded in the strategy document.
“ICT is one of South Africa’s leading sectors and contributes about 7% to the country’s GDP. South Africa has nine provinces, three of which have thriving ICT industry clusters. Gauteng (which accounts for 57% of all ICT firms), the Western Cape (Cape Town: 17%) and KwaZulu-Natal (Durban and Pinetown: 8%). The three clusters have the potential to grow and make South Africa the technological hub of the African continent. Gauteng, as the largest cluster and the largest commercial centre in Africa, has the potential to lead in innovation and research in ICT,” according to the document.
The vision of the Gauteng ICT Development Strategy is interpreted through the following goals:
The Gauteng ICT’s strategic objectives are: • To provide universal access to broadband (as defined by the national broadband policy) for citizens, business as well as government institutions. • To build the Network Infrastructure and Information Super-highway to encourage the development of advanced workforce with better ICT skills. • To enhance economic productivity through ICT infrastructure development in order to lower the cost of doing business and increase connectivity for companies especially SMMEs. • To increase the ICT skills capacity within the public and the private sectors to create a pool of ICT practitioners and entrepreneurs. • To improve service delivery by providing high quality ICT services through e-government; • To build an economic and industrial sector with a focus on ICT, and in particular, software industry. • To ensure that innovation becomes part of the economic network in Gauteng Province in relation to ICT.
To create a heightened environment for ICT-enabled economic activity amongst large firms and SMEs; for electronic government services to citizens and business; and for support measures for ICT research and development (R&D). Connectivity Networks
To foster the diffusion of ICT fixed and mobile broadband infrastructure and the connectedness of SMMEs, schools and households, in ways that contribute to reducing the cost of communications and, therefore, of economic participation. ICT skills Capacity
To address the demand for skills in the broad ICT infrastructure and ICT services sectors, as well as in the society at large; and to provide for online learning in every primary and secondary school classroom; as means to increasing South Africa’s future competitiveness and laying the foundation for ICT innovation and sector development. GAUTENG BUSINESS 2016
PROFILE • To reduce the carbon footprint of the province through Green ICT.
• To create employment in the ICT sector.
ICT profile As the largest ICT cluster in SA, Gauteng has two sub-clusters: Joburg and Tshwane. Gauteng has all the elements required to create a large and successful ICT innovation cluster in South Africa. These include world class institutions of higher learning, as the largest province economically it has the capital, young talented people flocking from all parts of South Africa, incubation centres, a large market and the largest number of ICT multinationals in the whole of South Africa. According to the provincial government, all that is needed is a co-ordinated way of bringing these elements together to create an innovation ecosystem. creased. Gauteng has a low broadband penetration, therefore consolidation and new investments are required to provide universal access to broadband in the province,” according to the strategy document.
“One of the most important dynamics in developing ICT and building the Information Society in Gauteng is providing an advanced ICT network infrastructure that is characterised by a high performance broadband network and extensive penetration that covers all areas in Gauteng without exception. Infrastructure accessibility should be of a reasonable cost that corresponds to the purchasing power of individuals, in a way that enhances public accessibility in remote areas where the means of access to infrastructure and services are lacking. This can be achieved by establishing public access centres, such as community centres, post-offices, schools, libraries and archives.
Further to this, the Gauteng province is home to a number of dedicated and specialist data centres, many of which service specific companies (for instance, the 27 000 square metre. Samrand Data Centre used by Standard Bank). Specialist data centre operators such as Business Connexion are also located in Gauteng. Metrofibre Networx, a company based in Midrand, is a new entrant to the market and competes with Vodacom and Neotel in providing metro Ethernet technology. Ethernet technology is a fibre-based broadband technology that offers a cheaper alternative to connect subscribers to the Internet or to connect different offices owned by a single company.
“Expanding of ICT infrastructure in Gauteng should improve its status according to international indicators of e-readiness. The fast-evolving nature of ICT makes it important for Gauteng to take rapid changes into account to be able to keep up with the global development in the coming years. By rapidly expanding of accessibility to infrastructure in Gauteng, the ability of individuals to access, process, and exchange information on the national and international levels, for the purpose of promoting socio-economic, political, educational, cultural, scientific, academic and health activities will be in-
In conclusion, implementing the strategy with these goals in mind will ensure the stated strategic objectives are achieved. The implementation will also ensure the expansion of the Gauteng ICT cluster. In the end, the ICT strategy has to be within the context of the Gauteng Employment, Growth and Development Strategy (GEGDS) and government priorities, according to the Gauteng ICT Development Strategy.
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Brics: the opportunities for Gauteng Why South Africa’s smallest province stands most to gain from the country’s inclusion in the BRICS group of countries.
ne of the biggest advantages of South Africa’s relationship with BRIC (Brazil, Russia, India and China) is that the country can benefit through the flow of foreign direct investment and increased trade. Bearing in mind that South Africa holds the key to the door through which BRICS, especially China, wants to do business with the rest of Africa, it has become even more important for South Africa to take the lead in Africa’s new industrial revolution – even amidst undertaking the huge task of radical economic transformation. Despite mixed reactions to our inclusion in BRICS, and some critics saying that other emerging countries with faster economic growth than South Africa could have been included, South Africa joined the bloc as the ‘jeweller of the world’ and as a ‘Gateway to Africa’, offering fellow BRICS members improved access to a very large consumer base in the African continent in addition to GAUTENG BUSINESS 2016
mineral resources, including oil and platinum. Although all regions in South Africa stand to benefit from the BRICS partnership, the economic, demographic and labour statistics for Gauteng give the province quite an advantage when it comes to economic benefaction in this regard. Also counting in favour of Gauteng is South Africa’s availability of vast natural resources such as gold, diamonds and platinum, excellent infrastructure, es-
SPECIAL FEATURE tablished corporate footprints, a culture of innovation, easy access to finance for business, a stable macro- and micro-financial climate, an advanced banking system and functioning regulatory frameworks, of which most either reside in the province, or are governed from there. Opening more doors of opportunity is the fact that Gauteng is the leading economy in the country and SADC region, and a key player in Africa’s business landscape, contributing 11% to Africa’s economy. Yet, no matter how one looks at it, the facts underscore the strategic significance of Gauteng, the fourth biggest economy in the continent, in strengthening economic trade and partnerships with African and BRIC countries. In the BRICS context, Gauteng is viewed as the ‘Gateway to Africa’ – an attractive place for investments on the continent – for a number of reasons. The province offers: • Easy access to African markets. • Functional national institutions protecting the right of investors. • Clear and consistent economic policies in line with national policies. • Good infrastructure and facilities; high-quality road, rail and air networks. • An investor-friendly environ ment. • A large pool of young, highly skilled labourers, whose skill sets match the needs of modern manufacturing, finance, and engineering industries.
• A large pool of skilled labour for the manufacturing, trade and transport sectors.
• Low land and commercial building costs. • Believe it or not, Gauteng’s electricity is among the cheapest in
the world. The recent global economic crisis, which started in the United States, had a huge impact on the world economy. It especially impacted the economic recovery expectations of developed countries. As the countries with the most active economic growth in the world, BRICS countries face a great challenge. They need to adjust their development strategies when facing the new challenge in order to achieve rapid and sustainable economic development.
Economy Gauteng outflanks other provinces in a number of key economic metrics. It has continuously outperformed South Africa’s other eight provinces when measured in terms of their respective provincial contributions to national GDP and in comparisons of provincial real annual economic growth rates. In 2015, Gauteng contributed 36% to national GDP (up from 34.5% in 2011)—well above the second and third largest contributions from KwaZulu-Natal (16%) and the Western Cape (17%) respectively. The contributions of the remaining six provinces to national GDP were all below 10%. Furthermore, average growth rates in Gauteng have comfortably exceeded the national average in the past decade— the province’s annual average growth rate between 2001 and 2011 was 4.6%, above the national average of 4%. In addition, the province boasts a comparatively wealthy consumer base, with a population that has, on average, both the highest earners and biggest consumers on the continent. According to the 2011 Census, annual average household incomes in Gauteng (R156 243) far exceed the national average of R38 734. All of the above contributes to the fact that Gauteng is South Africa’s strongest economic performer, and a very favourable partner to both contribute to the BRICS relationship, and benefit form it as well. However, one cannot lose sight of the fact that the global financial crisis had a major impact on the world economy and the economic recovery prospects of the BRICS countries as well. Neither South Africa, nor the Gauteng province was immune to this blow. Leading economists have warned that BRICS, as a group of developing countries (with the most active economic growth in the world), will have to adjust their development strategies in order to achieve rapid and sustainable economic development in this new climate. In this regard, developing its economic hubs with the introduction of five new business corridors was a brilliant strategy by the Gauteng
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Provincial Government - and it was a move that will surely secure confidence among South Africa’s fellow BRICS members.
Industry Although the province boasts a well-balanced industry across all the major sectors, the most important economic sectors are financial and business services, logistics and communications, and mining, making it the financial capital of the country and the continent. With more than 70 foreign banks having their head offices in the province, and at least that number of South African banks, stockbrokers and insurance giants, the country’s economic hub is set and perfectly aligned for international trade and investment. Saying that, Gauteng’s economy has, over the last few years, been moving away from traditional heavy industry markets and low valueadded production towards sophisticated high value-added production, particularly in information technology, telecoms and other hightech industries.
Between 2010 and 2014 earnings levels increased in all industries, with the exception of community and personals services (down R1 000). The largest increase in earnings was observed in mining (R2 000), utilities (R1 000) and agriculture (R858) – all areas in which Gauteng is taking a lead role in the production arena. Earnings growth over the period was robust in skilled occupations, in particular Managers (R5 000) and Professionals (R4 400). According to Stats SA, at provincial level, median earnings in 2014 were highest in Gauteng and the Western Cape, while earnings increased the most over the period 2010–2014 in Gauteng (R833), Free State (R500) and the Western Cape (R423), making the province a popular space for young graduates to seek employment. This would also explain the influx of young professionals into the province, thus largely complementing the growing economy. Furthermore, studies revealed that while young people are less likely to transition into employment compared to adults, in 2014 these transition rates were highest in provinces such as Western Cape (6,9%), Mpumalanga (6,4%) and Gauteng (6,1%).
Government job creation programmes
Looking at the labour market in South Africa, Gauteng compares very favourably with the other provinces. Though it is a fact, the country’s unemployment rate is high and the trend is still increasing. Some consolation, if any, is the fact that amidst the rising unemployment levels, employment in the country has also increased since 2011 to more over 1.1-million.
The South African government has since the advent of apartheid, continuously been introducing new job creation programmes in the country and by 2014 awareness about the Expanded Public
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SPECIAL FEATURE Works Programme and other government job creation programmes increased from 42,8% to 52% in 2014. The Eastern Cape accounted for 22,7% of those who participated in these programmes, followed by Gauteng (17%)—thus raising the level of job creation and in the process favourably boosting the province’s readiness for direct foreign investment.
Demography While Gauteng is the country’s smallest province (with a total area of 16 548 square kilometres), it has the largest population, and
by far the highest population density—around 675 people per square kilometre. Compare that to the Northern Cape with an average of around three people per square kilometre, the province should have no shortage of citizens to participate in its lucrative economy. As at 2015, the population of Gauteng was estimated to be 13.2-million. Furthermore, the province’s cosmopolitan mix of local and foreign cultures, also forming part of the business world and adding extra diversity to the economic landscape, sets Gauteng (and the businesses within it) apart from the rest as a region of tremendous trade and investment possibilities. When it comes to education, especially on a tertiary level, the province is set-up for a reasonably established system that will serve generations to come. Prime examples are the largest residential university in South Africa (the University of Pretoria) and UNISA, the latter being the largest correspondence university in the world. Most of South Africa’s research and development takes place in Gauteng, which is home to many of the country’s core biotechnology companies. Leading research institutions such as the Council for Scientific and Industrial Research, the Agricultural Research Council and the Onderstepoort Veterinary Institute.
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KEY SECTORS Overview of the main economic sectors of Gauteng
Agriculture and agro-processing
Financial and business services
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Agriculture and Agro-processing Gauteng is experiencing a boom in agriculture-related investment.
ith mining starting to take a back seat as the main economic driver of Gauteng, we’ve seen a shift in focus to other areas to balance the books. Agriculture is one such area that has received a lot of investment in recent years, with food security being at the top of everybody’s list. While Gauteng occupies the smallest land-mass at 1.4 percent, it has a fairly big agro-processing industry, with over half of food processing companies being based in Gauteng. The food and beverage sector has experienced an 18 percent growth from 1996 to 2013 and now employs well over 120 000 people in the province. Gauteng is home to some of South Africa’s largest agricultural companies, including AFGRI, a listed agriculture services and foods company, which specialises in animal feed production. A significant share of agricultural activity within the province is concentrated on the production of vegetables. Fruit, dairy products, eggs, maize and grain are also produced in large volumes within the province. Agricultural activity is quite specialised in certain areas of Gauteng. For instance, farming activity in GAUTENG BUSINESS 2016
regions near Bronkhorstspruit (in the east) and Heidelberg (in the south) centres predominantly on cotton, groundnuts and sorghum production. Heidelberg is also a home to Africa’s largest feedlot for cattle. More exotic agricultural products are also farmed and produced in certain areas. For example, crocodiles are farmed at Izintaba farm outside Pretoria. These are used primarily for the production of crocodile skins – South Africa has three tanneries and produces about 55 000 crocodile skins every year. The Gauteng Provincial Government, together with the Sedibeng and West Rand district municipalities, are actively promoting the development of small-scale farming and agricultural co-operatives within the province with a view to addressing food security concerns and promoting sustainable development. There has also been a shift in focus in government policies towards the promotion of agro-processing activities and the production of value-added agricultural products. This is seen as a key mechanism to eradicate poverty and inequality within the province. Investment in agro- process-
OVERVIEW and Agricultural Biotechnology Institute (FABI) is located at the University of Pretoria.
Malt and Beer
ing is focused on the production of strategic value-added products such as soya beans, rooibos tea, beverages, fruit and vegetables. A number of agriculturefocused research institutions are based in the province, providing critical support to agricultural production. For instance, the Agricultural Research Council’s (ARC) national research facilities are located in Pretoria, and include the Roodeplaat Vegetable and Ornamental Plant Institute and the Onderstepoort Veterinary Institute. In addition, the Forestry
Three of the seven breweries operated by SAB in South Africa are located in Gauteng, and various complementary industries, activities and facilities (such as bottling plants and distribution hubs) have grown as a result of the company’s presence within the province. In addition, Heineken launched a new brewery in southern Gauteng in 2010, where it will brew 400-million litres of beer per annum. The alcoholic beverages industry is a significant contributor to national GDP in South Africa. An estimated R94.2-billion (or 4.4 percent of GDP) can be traced back to the industry’s manufacturing operations and capital expenditure. The industry is also a major employer within the country, employing in excess of an estimated 21 300 workers and supporting an additional 66 000 jobs directly through suppliers. Key players in the industry in South Africa include South Africa Breweries (SAB) (malt beer), United National Breweries (sorghum beer), Distell (spirits and flavoured alcoholic beverages, or FABs) and Brandhouse (malt beer, spirits and FABs). Each of these firms holds a substantial share of the respective segments of the market in which they operate. Brandhouse, the Heineken-Diageo-Namibian Breweries joint venture, is SAB’s main competitor in the malt beer market, and the third largest liquor company in South Africa by value of sales. In the case of the wine industry, Distell, KWV and DGB control a number of brands, while there are also a large number of smaller “independent” producers actively competing in the industry in South Africa. Gauteng is a key centre for the production of beer and malt within South Africa. United National Breweries produces Umqomboti, a traditional African beer, in northern Gauteng. The Amalgamated Beverage Industries, a subsidiary of SAB, has a manufacturing plant in Midrand which makes use of advanced technology. It also operates plants in Devland and Pretoria.
Investment opportunities: • Investment in the production of ground-nuts, sunflowers, cotton and sorghum;
• Investments in agro-processing products such as soya beans, rooibos, beverages, fruit, vegetables, and forestry;
• Essential oil extraction from herbs and indigenous plants; • Expanding the ‘exotic’ meat (kudu, ostrich and springbok) market, locally and globally;
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• • • •
Packaging of agro-processed goods; Development of additional agro-processing facilities, R&D in medicinal plant production; The proposed Green Hub in the West Rand District Municipality, which will aim at promoting the growth of sustainable, green industries; • Opportunities in the non-core activities of the agricultural sector, such as transport, packaging and distribution; • R&D related to organic food production, as well as health foods and natural remedies; • Small business opportunities within the brewing industry, through development training; • Food and Beverage. Close to half of the companies operating in the food and beverage sector in South Africa are located in Gauteng, including Nestlé, Tiger Brands, Pioneer Foods, AVI and Astral. There are approximately 4 000 food processing companies operating in the province, employing roughly 50 000 workers and contributing more than R10-billion to Gauteng’s GDP. Many major food and beverage processing brands have a significant presence in Gauteng. For instance, Nestlé operates four manufacturing plants in the province. The company has spent R505-million on increasing its production capacity within South Africa, with the majority of this expenditure incurred within Gauteng. The poultry business in Gauteng presents significant opportunities for future investment. Earlybird Farm, one of Astral’s operations, processes 800 tons of chicken per day at its two factories in GAUTENG BUSINESS 2016
Olifantsfontein. Rainbow, the second biggest poultry producer, operates 18 farms and two feed mills in Gauteng alone. Daybreak Farms, an AFGRI operation, is located in Springs and produces about 650 000 broilers every week. Pioneer Foods has spent R150-million on a biscuit-making facility in Clayville. Astral Foods owns two broiler production operations located just east of Johannesburg, and two of its eight feed mills are located in Randfontein (to the west) and Delmas (to the east). Tiger Brands runs six plants in Germiston that produce a range of meat products, and the establishment of a new tomato sauce plant and pasta plant rank among the company’s recent investments in the province. McCain Foods, located in Springs, produces frozen vegetables for the Gauteng market.
OVERVIEW Finally, a variety of the beverages in AVI’s portfolio (including Ciro) are produced at the group’s Kempton Park facilities.
By the numbers About 84% of South African households engaged in agriculture are headed by people with incomes of less than R38,400 a year according to a Statistics South Africa survey. However, almost 2 800 of those in the high-earning category are from Gauteng. It is the highest number in this segment among the provinces, even though Gauteng (279 000 agricultural households) ranks only a distant fourth behind KwaZulu-Natal (717 000), the Eastern Cape (597 000) and Limpopo (468 000). Women make up 48% of agricultural household heads in South Africa. In the Eastern Cape (55%), KwaZulu-Natal (54%) and Limpopo (52%) they outnumber men. Regarding rural access to water, the survey found that 20% of the households nationally had no access to piped water, and a further 28% had piped water only outside their yards. In this respect again Gauteng and the Free State seem best served. Most of the rural households use electricity for lighting and cooking, though wood is also used to a great extent for cooking in KwaZulu-Natal, Limpopo and the Eastern Cape. M e a n w h i l e, E co n o m i c Development, Agriculture and Rural Development MEC for Gauteng Lebogang Maile said
access to land was key to transforming agriculture in the province, “The decline in mining activity and the attendant consequences of deindustrialisation, the agricultural industry presents real possibilities for a shift in the orientation of these regions. More importantly, as an industry that can propel growth in other sectors placing Gauteng on different economic trajectory. “We must emerge out of this summit with a strategy that merges our agenda to promote food security, integrate black farmers, lessened our dependence on food imports, and empower poor communities to take charge of their nutritional needs by supporting community and household food gardens on a massive scale. We must emerge with a resounding commitment to use agriculture as a launching pad toward the realization of the transformation, modernization and reindustrialisation programme. I believe that agro processing, along with a clear strategy for economic diversification, can give the economies of the West Rand and Sedibeng a new lease on life,” concludes Maile.
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Transport Public transport in Gauteng has undergone a complete makeover in recent times, with the likes of being a prime example of the power of possibilities.
he notoriously busy highways of Gautengs have experienced some easing of both congestion and pollution thanks to the roll out of the Gautrain and the BRT. Plans are also afoot to have a single ticketing system that incorporates busses, rail and metered taxis, which would be a game changer for the sector. The harmonious integration of all forms of public transport will offer passenger benefits such as shorter waiting times, reduced travel time, greater flexibility and accessibility. It will also allow passengers to plan their trips accurately thereby making public transport a mode of choice.
Gautrain runaway success The high-speed rail system, Gautrain, has graduated beyond ferrying customers to and from the airport, and after two years is averaging 32 000 passengers per day, and to over 50 000 daily currently. The recent increase in the usage of the Gautrain passengers shows that commuters are making a conscious shift from private car use to public transport, and that public transport is safe, reliable, accessible and affordable. The extension of the Gautrain Station platform at the OR Tambo International Airport will, upon completion, enable passengers GAUTENG BUSINESS 2016
to embark or disembark from a full four-car train set, which at present is limited to two cars. The extension, as part of the Concession Agreement with the Bombela Concession Company, is being implemented to make provision for future capacity options. Construction work to extend the platform has commenced and the anticipated completion date is mid-2016. An assessment of the economic impact of the Gautrain has been completed and the results are better than what we could have imagined. The results have shown that the Gautrain has created 34,800 direct job opportunities during construction and 922 sustainable jobs after the start of operations. The Gautrain has also re-activated property development in many areas around its stations and thus has contributed to the goals of transit oriented development, better land use and redress apartheid special development planning. Reports estimate that R46billion in total GDP impact has been added to the provincial economy due to property development induced by the Gautrain, contributing a further 245, 000 jobs. The value of property near Gautrain Stations has also appreciated substantial with
OVERVIEW many high-end cooperates competing for space in new offi ce buildings close to the stations. However, due to the regions rapid economic and population growth, integrated solutions need to be implemented in order to ease escalating traffic congestion on Gauteng’s many new and existing highways. The revamping and modernisation of public transport and roads is aimed at creating a coordinated, integrated transport system for the entire province. It will also establish Gauteng as a Global City Region that uses international standards of service delivery with seamless mobility between municipalities provided by different modes of transport.
Transnet upgrades Meanwhile, Transnet is spending R300-billion on upgrading and expanding every aspect of its operations. Many of those improvements will come in Gauteng, where Transnet Rail Engineering (TRE) has a major presence from its workshops in Pretoria and Germiston. The Wits Metrorail system serves Johannesburg and its surrounds. Park Station, in the north of the
The new construction at OR Tambo airport.
central business district, is the largest station in Africa and acts as the metropolitan hub.
Airports OR Tambo International Airport caters for more than 17-million passengers every year, receives more than 105 000 arriving air-traffic movements and employs 18 000 people. Greater Johannesburg has several smaller airports that host mostly commercial aircraft: • Rand Airport in Germiston in the south-east • Grand Central Airport in Midrand, halfway between Johannesburg and Pretoria Wonderboom Airport in Pretoria North • Waterkloof Air Force base, south of Pretoria • Lanseria Airport, to the north-west of Johannesburg The developers of the Cradle City project, Amari Land, expect the number of departing passengers at Lanseria to grow to seven million annually by 2017, and that scheduled flights will increase from 1 100 to almost 4 000. Freight tonnage is expected to reach 20 000 tons by 2017, up from the current total of 5 000 tons. Brakpan and Springs are among several towns that have good airfields. Nigel is home to the Dunnottar Airport and an aeronautical museum.
CONTACT INFO Call Centre: 0800 4288 7246 SMS alert line: 32693 Website: www.gautrain.co.za | Twitter: @TheGautrain Facebook: www.facebook.com/gautrain
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Finance and business services Gauteng is without doubt the financial hub of Africa, boasting more than 70 foreign banks and a wide range of financial services, that are comparable to any first world country.
he quality of the financial and business service infrastructure throughout Gauteng makes it the ideal launch-pad for a variety of companies looking to do business in this vibrant region. Leading players within the sector include First National Bank, Absa, Nedbank, Standard Bank, the Johannesburg Stock Exchange (JSE), Investec and Rand Merchant Bank, while the JSE, Africa’s largest stock exchange, is also located in Gauteng. Each year, the financial services sector contributes 21 percent to the province’s GDP. GAUTENG BUSINESS 2016
Business Process Outsourcing (BPO) Gauteng is home to more than 70 percent of South Africa’s call centres. The sector’s strong presence in Gauteng is expected to continue to grow — Business Processing enabling
South Africa (BPeSA) predicts that the sector will continue to grow at between nine and 14 percent. Confident of the sector’s future growth prospects, the IT firm Wipro opened a 1 000 seat call-centre in Johannesburg in 2011. Benefiting from a range of incentive schemes offered by the national government (through agencies such as the GGDA), the BPO sector contributed R1.7billion to South Africa’s economy in 2010. Call centres catering for the United Kingdom account for more than half (54 percent) of South Africa’s overseas business within the BPO sector. Customer service is the most significant segment of the domestic call-centre industry. Billing and account-handling is the second-largest service area, followed by technical support, telemarketing and telesales, and reservations. More centres are likely to open in the future. The province has
high volumes of vacant prime office space in peri-urban areas, and Johannesburg’s Urban Development Zone (UDZ) has been earmarked for the development of ICT firms (including call centres) and subsidises rent, utilities and services.
Insurance sector Gauteng is a dominant location for the insurance industry on the African continent. French reinsurer Scor Group has established a presence in Johannesburg in order to target the English and Portuguese speaking markets on the continent, specifically Nigeria and Angola. All of the major banks are well represented in the province, and all the large insurance companies have a major presence throughout the province. Many of the major life insurance companies are also playing their part by helping to develop SMEs. In 2015 alone, the Liberty Group provided financial access to over 16 SMEs. “By investing in SMEs we are investing in the future of our business, our industry and our economy. Liberty started off as a small business and at our core we understand entrepreneurship,” said a spokesperson for the Group.
The City of Tshwane The City of Tshwane is strategically positioned to service international Business Process Outsourcing (BPO) investments. With an estimated 11 000 people employed in the BPO industry in Tshwane and its
GAUTENG BUSINESS 2016
OVERVIEW R2,5-billion contribution to Tshwane’s economy. The new Tshwane BPO Park will be the ideal investment opportunity for both local and foreign businesses. Tshwane is the third-largest city in the world in terms of land area, after New York and Tokyo/Yokohama. It contributes 27% to Gauteng’s economy and 10% to South Africa’s economy. Tshwane is also South Africa’s automotive industry hub and the main anchor for research, innovation and the knowledge-based economy in Gauteng, owing to the location of renowned research institutions in the region. As South Africa’s capital, it also hosts 132 diplomatic missions and institutions. This makes Tshwane the second-biggest home of diplomatic missions globally after Washington DC, making it an extremely viable destination for international business investment. The planned Tshwane BPO Park will provide a globally competitive facility to both the public and private sector, employ more than 3 000 people and contribute significantly to the Gauteng Province’s Township Revitalisation Programme. The recent addition of the Gautrain (a mass rapid transit railway) conveniently connects Tshwane with the OR Tambo International Airport making the province a true gateway into Africa.
Investment opportunities • The banking industry presents investors with the
opportunity to engage in world-class corporate services, as well as providing access to mortgage financing for starting a business; • The call centre industry is ever expanding, and this provides investors with the opportunity to invest in the development of the industry, particularly in areas such as infrastructure and telecommunications.
GAUTENG BUSINESS 2016
Private Banking Prudence Dlamini provides a breakdown on Standard Bank’s high-value Private Banking offering.
What is your division’s core value proposition?
In Private Banking our aim is to give our clients personalised banking, and this means that each client will have a Private Banker dedicated to you, and a private transactional banker managing your portfolio. A financial advisor who assists clients with wealth management will offer them support. What are the benefits of Private Banking?
Private Banking is an exclusive offering for wealth management solutions and it is targeted at affluent clients as well as young professionals. To quality you need to earn a minimum grossly monthly income of R58 000 or more or have net investible assets of over R3-million.
It’s convenience, time-saving and a wealth of knowledge. There is also access to your own Private Banker, special Prudence Dlamini lending rates, and a range of specialised benefits and rewards programmes. As a client I want to have a single person that I trust, who will open me up to the best solutions and services that I require.
Who is the young professional that would benefit from Private Banking?
What new developments has Private Banking recently released?
The young professional is between the ages of 22 and 32, or in their final year of study, or working in their first job, permanently employed or undergoing on the job training. We’re looking at specific qualifications, such as an actuary, a CA, medical doctor, engineer or a lawyer. A young professional doesn’t necessarily have to earn the qualifying salary, as long as they have a qualification, although such a professional would be likely to earn at that level in the future.
We’ve just re-launched the value proposition for young professionals as we want to recognise them for their future potential not just their current income. We’ve upgraded the status of our Professionals cards to black to resonate more with this customer base. We’re also offering better credit so that from a lending perspective, in terms of personal loans, credit card rates and car financing, we can offer our clients a preferential guaranteed rate. This is, of course, in line with their affordability, so everything is within
What is Private Banking and who qualifies for this service?
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INTERVIEW Our strategy has really changed as we were previously more of an emerging bank trying to grasp market share all over the world. However, now we are honing in on Africa and that is evident in adverting that highlights our African commitment. Our approach is that Africa is our home and we drive for growth. As we’re now in 19 countries throughout Africa it obviously makes it easier for us to facilitate any business transactions for our clients who have business interests in the rest of Africa, either business interests of even personal interests. What support do you offer for clients from Africa?
If a Private Banking customer from a Standard Bank branch from anywhere in Africa is visiting South Africa they can contact us and we will introduce them to a local Private Banker who can assist them with their needs during the time they’re in South Africa. Naturally the same applies for South Africans travelling in Africa. Often enough there’s not much they will need, but customers really appreciate the access to a friendly face. Sometimes a customer can get stranded or find themselves in difficulty in a foreign country, and in such situations we do all we can to help our Private Banking clients.
WE ARE BECOMING A LOT MORE FLEXIBLE AROUND INCOME, BECAUSE INCOME DOESN’T ALWAYS DETERMINE WHERE YOU’RE GOING TO BE FIVE YEARS FROM NOW. the terms of the NCA. We also offer them investment options and seed capital to start out their investment portfolio with our award winning Online Share Trading, free AlwaysOn data, and we now have 24/7 support team via the WeChat option. We’ve also got a special email address that clients can email, as well as a contact centre so that, if you want to speak to someone directly you can, but if a client wants email instead they can choose at their discretion, and all of this is available to them 24/7. Contact us: Email email@example.com 24/7 Banking Centre: 086 012 3101 Is Standard Bank doing business with the rest of Africa?
CONTACT INFO Janice Noble Gauteng Province | Marketing Coordinator Tel: 011 601 4311 | Mobile: 076 157 3019 Fax: 011 622 9858 Email: Janice.firstname.lastname@example.org Website: www.standardbank.co.za
GAUTENG BUSINESS 2016
Randburg CCI steering local business A finalist in the SADC South, 2015 Africa’s Most Influential Women in Business and Government Awards, Linda Blackbeard is the dynamic and driven CEO of the Randburg Chamber of Commerce and Industry, an organisation that doesn’t take can’t or no for an answer, when it comes to standing up for the rights and needs of local business. Please share with us some of the success stories of your Chamber?
In the last couple of years we have done a lot to unite business in the Randburg, Sandton and Midrand region and, in the process, have succeeded in creating awareness of what we as a Chamber can effectively do for the business community. We have achieved a lot for our members this year and have earned credibility a lot of out in the market place. What is the Chamber’s representation in terms of all communities?
SMME’s and black businesses form a large part of our Chamber, We have a very strong BEE component. We’ve facilitated many worthwhile introductions and given assistance to the newer businesses through training courses and are in the process of negotiating with CoJ, to set up a central business hub that will allow us to offer a one stop info and assistance location. Many of the young businesses don’t know where or who to go to for help, so we will step in here to guide and assist them. Tell me about the trade delegations you lead?
Much emphasis on cross-border business opportunities has enabled us to develop excellent relationships with our SADC countries. This is a very strong point for which Chambers is well known. It includes facilitating cross border trade and investment opportunities as well as introductions for agencies & development/ investment into Africa. We have at present excellent relations with Zambia, Namibia, Botswana, Mozambique, Malawi, Nigeria, and Taiwan. GAUTENG BUSINESS 2016
Our relationships with various Taiwanese companies have enabled us to negotiate the rights to purchase the use of their technology and machinery in RSA. They offer transfer of skills to the local businesses in RSA, to enable them to manufacture goods needed in our country. The technology and the especially their knowledge, is way ahead of us, so this is proving to be such a valuable and important relationship for businesses RSA. Strong relationships built with a number of European investors, interested in various local projects, is proving most beneficial. We focus a lot on energy and water as well as green projects. Our Rural water purification project, to supply clean healthy drinking water to the RSA rural areas; is a very difference concept, where the rural communities benefit financially from this to help them grow and develop. How else does the Chamber play a role? We do Certificates of Origin and are officially accredited officers. We work closely with the City of Jo’burg and sit on their business and tourism sub committees. We will do anything we can to help businesses. I believe its always best to establish what the needs of business is, so we offer the correct benefits to members. We face a tough year with the prospect of more interest rate hikes, along with other issues such as energy supply and water shortages, but for every problem there is a solution. We don’t like to look at the negatives, we prefer to focus the positive options. It helps to have good people beside you, to seek out the solutions to all the challenges we face on a daily basis and I am most grateful for the amazing EXCO team I have, made up of members of our Chamber. Without them, I would be lost.
The Randburg Chamber of Commerce and Industry The Randburg Chamber of Commerce and Industry was created to effectively protect and promote the interests of business in the Randburg, Sandton and Midrand regions.
The Randburg Chamber of Commerce is a non-profit organisation setup to represent the voice of local business in the Randburg, Sandton and Midrand suburbs of Johannesburg. Now in its 56th year, the Chamber is a formal institution that operates under a strong code of good business practice and operates under a constitution
“Primarily we facilitate the introduction of relevant stakeholders to one another, as well as supporting and lobbying for local business interests. Basically, we make waves where required in order to improve the ways things happen and to ensure that any bad things that happen can be turned around into a positive situation for everyone involved,” says Linda Blackbeard, CEO of the Chamber.
The Chamber also plays a role in terms of being a voice for general business issues, for instance where there are issues relating to the local municipality or even tax laws, or if there are problems that affect business such as interest rate hikes, issues around BEE implementation or relating to labour law changes. “Anything that affects business that they can’t sort out alone, they come to us and we support them by helping to give a voice to the business community and its needs,” adds Blackbeard.
The chamber is affiliated to the South African Chamber of Commerce & Industry.
market-orientated approach with equal opportunities for all while assisting businesses to adapt to realities that cannot be changed Promote member’s businesses locally and internationally and provide facilities for members to identify business opportunities through events, information services, advertising and other special business development facilities available from the Chamber. Contribute to the formulation of national and local policies on key issues that affect business – be the voice of business operating in Randburg, Sandton and Midrand and give these localities a better place on the economic map Influence constructively the environment & operating conditions nationally and in our area of responsibility Attract local and international investment to our area of responsibility and facilitate international business and contacts Act as a business information, training and facilities resource utilizing members expertise – aimed at assisting members to grow their business and fulfil a leading role in the community Promote security, the growth of business, employment skills in the region Contributing business expertise and resources to community development projects addressing social needs
Aims of the Randburg Chamber of Commerce
Address: Unit G8 Atrium Terraces, 272 Oak Avenue, Randburg, Gauteng 2194 South Africa Tel: 086 101 9218 | Fax: 086 212 4407 Email: email@example.com Website: www.rcci.co.za
• Protect the interests of business in the region,
promote the private enterprise system and
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Green economy South Africa is without doubt the premier energy innovator of Africa, with renewable energy projects streets ahead of the developing world, as South Africans explore the many sustainable options for a better, and certainly brighter future.
in Gauteng, while solar panels are already being used by many state buildings in the city centre, showing government’s commitment to the green economy.
ne of the main drivers of renewable energy development has been the Renewable Energy Independent Power Project Procurement Program (REIPPPP), which, through serious investment from the Development Bank of South Africa, together with Independent Power Producers has forged ahead with numerous wind, gas and solar project in this energy rich area. Gauteng has seen a rise in roof-top solar, with business generating their own electricity, while putting the power back in their own hands, after a debilitating spell of load-shedding in 2015, which appears to be under control in 2016 with new management at Eskom. At a residential level solar water heaters are being rolled out to municipalities and solar street and traffic lights were being introduced GAUTENG BUSINESS 2016
The Bronkhorstspruit Biogas Plant in Gauteng is the first commercially viable biogas project in South Africa, and powers directly into the national grid. An independent commercial enterprise with an initial life cycle of 20 years, it will contribute to diversifying the South African energy mix away from coal. The project has resulted in the creation of long-term direct and indirect employment in peri-urban South Africa, which currently experiences high levels of unemployment. Meanwhile, Natural gas Company, Egoli Gas launched its eight kilometre pipeline, which will initially deliver 1.5-million gigajoules of natural gas per year. The natural gas will be imported from Mozambique by Sasol and at full capacity the pipeline will be able to deliver 2.5-million gigajoules yearly. The pipeline will run from Sasol’s pressure reducing station in Robertsville to MTN’s 14th Avenue Campus, and the gas
will feed a new MTN generation plant as well as other customers in Lakeview and Constantia.
Green building Increasingly, new building developments aim to become more environmentally friendly in order to comply with new legislation, reduce costs and ensure the sustainability of buildings in a time of diminishing resources. According to the Green Building Council of South Africa (GBCSA), a green building is a building which is ‘energy efficient, resource efficient and environmentally responsible’ – it incorporates design, construction and operational practices. According to the MasterCard Insights Report on Urbanisation and Environmental Challenges, Johannesburg ranked second among countries from Asia/ Pacific, Middle East and Africa in dealing with urbanisation and environmental challenges. One example of a newly erected envi-
ronmentally friendly building in Gauteng is the Nedbank head office in Sandton. This is the first building in South Africa to win a four-star rating from the Green Building Council of South Africa. The rating encompasses key elements such as energy-efficient lighting, an excellent waste recycling system and a full- economy airconditioning system. Altogether the building is set to use 30 percent less energy than a conventional building. Another ‘green’ building is Absa’s huge new office complex in downtown Johannesburg — Absa Towers West. The building has incorporated green design elements including the largest grey-water system ever installed in South Africa with a capacity of 43 000 litres of water per day. In terms of national support, the Industrial Development Corporation has pledged to spend R25-billion on the green economy in the five years to 2016, with a major focus on solar panels, technology to extract carbon from the smoke emitted by power stations, and other technologies. Furthermore, the National Cleaner Production Centre (NCPC-SA), which is funded through the National Treasury and hosted by the CSIR, aims to boost the competitiveness and productive capacity of industry in South Africa through cleaner production methods.
Investment opportunities • Development of environmentally friendly infrastructure. • R&D into more efficient environmentally friendly practices and technology.
• Establishment of appropriate waste management and waste disposal.
• Production of fertilisers from chemical waste. • Recycling (bottles, tyres, etc). 97
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Supporting small enterprise development Friedl Claassen and Wilhelm Pienaar of Standard Bank Gauteng’s Small Enterprise Development division provide some insight into what’s happening in the world of small business.
What is your division’s target market?
We look after the Small and Medium Enterprises segment for the Gauteng Province. This market segments consist of businesses from the start-up phase up to businesses with an annual turnover of R20-million. What is the core value proposition that your division offers?
We have two value propositions, the first being for start-ups with an annual turnover of up to R5-million and the second is for businesses with an annual turnover of between R5-million and R20-million.
pro-actively managing this component for start-up businesses is generally detrimental to the future profitability and even survival of the business.
Have you seen any change in the rate of success of small businesses in the last few years, given the increasing support from government and numerous agencies to support them?
What are the main reasons that more small businesses are starting in Gauteng?
It would have to be because of the unemployment factor, coupled with a bigger emphasis on entrepreneurial thinking. Another element to remember in terms of the current financial climate is that there is a large portion of the “working class” that now operate side-line businesses.
The assistance to new businesses by government and agencies certainly makes a difference, but it is not the main contributing factor. The management of each business or small enterprise remains without doubt the single most important factor that determines the success or failure of a business.
What are the small business areas that are proving successful on a broad scale?
The key sector at this point in time is franchising, and the success of these ventures is largely due to the fact that there is serious due diligence conducted before there franchisees are able to start up their branch of the franchise. It’s important for any business that the business environment, location and the competitive advantage is analysed with great care before embarking on a financial venture, and when it comes to franchising this is done by the franchisors. Because the franchisors have the overall
From your experience of helping clients, what are the signs of a customer who is likely to succeed… and what are the signs of a customer who is more likely to face struggles to keep their business going?
Success is definitely determined by the management team’s ability to actively manage the business’ cash flow cycle. Cash flow is the key driver for business sustainability and, as a consequence, not GAUTENG BUSINESS 2016
success and reputation of their brand at stake, this ensures that the due diligence does its job. This is such an important lesson for any business person entrepreneur to learn from. Another factor which is helping franchising to offer franchisees a competitive advantage is the fact that franchisors also negotiate preferred prices in terms of raw materials and or stock.
Have there been any recent developments or innovations that your division has introduced?
THE ASSISTANCE TO NEW BUSINESSES BY GOVERNMENT AND AGENCIES CERTAINLY MAKES A DIFFERENCE, BUT IT IS NOT THE MAIN CONTRIBUTING FACTOR
Standard Bank is well represented across Africa and forex transactions are still governed by Exchange Control. It is, therefore, difficult to have a one-sizefits-all approach. We do, however, have a team of experts that can address any and every Forex requirement that could arise for our clients.
Well, weâ€™ve recently introduced industry specific solutions for, example, tradesmen and the School CVP, along with our technological innovations such as Blue MObi. How has your division helped to open doors for your clients to do business in the rest of Africa?
Any specific success stories that your division is proud to have played a part in bringing to fruition?
We have created the Innovation Hub where we assist young and upcoming entrepreneurs by providing guidance and coaching in terms of critical focus areas. We also get involved with certain college campuses in identifying and supporting up and coming young entrepreneurs.
What are the areas of opportunity you believe offer the greatest opportunities for small business success in the next two to three years?
Timing is really the key in business - itâ€™s about starting the right business at the right time. Businesses that seek to investigate and address a specific niche will also always be successful if they have done their homework right and have been guided by their head and not their heart. Management will, however, always remain a key component in the success of any business of any size.
Janice Noble Gauteng Province | Marketing Coordinator Tel: 011 601 4311 | Mobile: 076 157 3019 Fax: 011 622 9858 Email: Janice.firstname.lastname@example.org Website: www.standardbank.co.za
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Manufacturing The provincial government is placing major emphasis on the development of local manufacturing.
ecent reports suggest that South Africa’s manufacturing sector has outstripped mining in terms of overall input to the country’s GDP, with the automotive sector claiming a fair chunk, while the pharmaceutical and steel sectors are in hot pursuit. Some of the world’s largest and most famous motor vehicle brands (including BMW, Ford, Nissan and Tata) have established manufacturing facilities in Gauteng. The province is also home to a thriving automotive components industry, together with several bus and truck assembly plants. These include Scania, TFM Industries and MAN Truck and Bus South Africa, as well as the Chinese truck manufacturer FAW, which owns an assembly plant in Isando. FAW has joint venture operations GAUTENG BUSINESS 2016
with many of the world’s leading vehicle manufacturers, including Volkswagen, Toyota and Mazda. In 2010, over one million automobiles were sold through these joint venture operations.
Automotive parts and components Overall production levels at this
OVERVIEW plant were expected to double to approximately 100 000 units by 2014, creating around 800 jobs. The BMW facility at Rosslyn is a top manufacturer of the German marquee’s famous 3 Series cars and recently won a contract to make the newest model in the series. BMW’s current production is about 50 000 units per annum, approximately 80 percent of which is destined for export markets. The Ford Motor Company of South Africa has an assembly plant in Silverton, Pretoria. Ford intends to double its production volumes every year until 2016, and plans to assemble 110 000 Ford Ranger pickup trucks per year at Silverton. A number of different types of vehicles – including armoured cars and standard passenger vehicles – are produced within Gauteng. DCD Protected Mobility manufactures armoured cars in Boksburg, which are branded as Vehicle Mounted Mine Detectors. In nearby Benoni, BAE Systems OMC designs and manufactures protected vehicles. Turning to passenger vehicles, the Nissan/ Renault plant at Rosslyn, Pretoria, produces the Renault Sondero hatchback, Nissan light commercial vehicles and the Tiida and Livina models.
Tshwane automotive sector In its quest to improve economic growth, the City of Tshwane has earmarked its automotive sector as a bulwark to build the Automotive City. The Tshwane
Automotive City (TAC) concept was started in 2008 as a shared vision between Government and the automotive industry to transform the City of Tshwane into a leading automotive investment destination. In June 2014, the Automotive Industry Development Centre (AIDC), the City of Tshwane (CoT) and Tshwane Economic Development Agency (TEDA) entered into a three-year partnership that will see the completion of the TAC Development Framework, Master Plan and Precinct Plan TAC concept. The TAC programme is a strategic infrastructure programme aimed at stimulating automotive vehicle assembly and components manufacturing in the Rosslyn area by accelerating the development of key infrastructure such as logistics, residential, recreational and so on through public and private partnerships. The TAC vision is based on other well-established automotive cities such as the Shanghai Automotive City in China, ‘The Autostad’ in Germany and Toyota Automotive City in Japan. The TAC programme aims to
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transform the CoT into a more attractive region in order to create partnerships with investors interested in setting-up automotive manufacturing facilities with the view to exporting components into the Southern African market as well as to existing international trading partners. The programme aligns strongly with a number of policy drivers at national, provincial and municipal level. The expected strategic benefits of the TAC programme are as follows: • Economic growth • GDP growth • Infrastructure development • Attract Investment both foreign and domestic • Create Enterprise Development opportunities • Create thousands of jobs • Increase tax revenue • Support Government’s strategic objectives Finally, a range of incentives are available to firms and investors within the automotive industry in Gauteng. The value of incentives provided through the national Department of Trade and Industry amounts to around R5.9-million. Such incentives are a key factor in encouraging firms within the automotive industry to upgrade or expand their facilities within the province. For instance, Tata is considering converting its assembly plant in Gauteng into a full-scale production facility. This would be the company’s first big assembly plant to be developed outside India. Investment opportunities
• Export of automotive components • Joint ventures with existing manufacturing companies • Non-core activities such as distribution and transport GAUTENG BUSINESS 2016
Pharmaceuticals South Africa’s pharmaceutical sector is worth approximately R20-billion annually. Although there are more than 200 pharmaceutical firms in the country, large companies tend to dominate the field, with Aspen (34 percent) and Adcock Ingram (25 percent) the two key players, followed by Sanofi, Pharmaplan and Cipla Medpro. A number of large pharmaceutical firms have made significant investments in South Africa. Adcock Ingram, for instance, has invested heavily in its South African operation. The company is planning to spend R1-billion on new developments and upgrades in Gauteng. The private sector accounts for 80 percent of pharmaceutical industry sales by value and 20 percent by volume, while this ratio is reversed in the case of the public sector. The public sector dispenses comparatively cheap pharmaceutical products to its users in public hospitals and
OVERVIEW healthcare centres within South Africa, whereas pharmaceutical products produced by the private sector in South Africa serve a niche market. Investment opportunities:
• Joint ventures with small manufacturers
• Marketing of pharmaceuticals • R&D of new, innovative products
• Scientific services such as clinical trials.
Steel-related industries Within South Africa, most of the industry’s steel is produced and consumed in Gauteng. Metal products, machinery and equipment are produced predominantly in the Emfuleni Local Municipality, which is at the heart of South Africa’s iron and steel industry. Vanderbijlpark and Vereeniging in southern Gauteng are synonymous with steel production in South Africa. There are as many as 35 aluminium processing firms operating in Gauteng, involved in both secondary processing to produce foils, cans, bars, rods and sheets, with final fabrication in the form of die-casting and sheet metal work. Within Gauteng, the automotive and packaging industries are the chief consumers of these products. With domestic production of crude steel amounting to 7.6-million tons in 2010, South Africa was ranked the 21st largest crude steel producing country in the world
by the World Steel Association. South Africa is also the largest steel producer in Africa, producing nearly half (47 percent) of the continent’s total crude steel output in 2010. There is a relatively large domestic market for steel products within South Africa. Local sales of primary carbon steel products (as reported by SAISI members) were estimated at 4.2-million tons in 2010. Domestically, the main consumers of steel products are the mining, manufacturing, building and construction sectors, while a significant share is destined for the export market. With respect to the latter, 1.2-million tons of ferrous-scrap was exported from South Africa in 2010. The national government provides a range of incentives to support steel-related industries in South Africa. These are available through the Investment Support, Small Business Development, Empowerment Finance, Competitiveness Improvement, Techno-Industry Development Finance and Export Assistance programmes. In addition, the COSM Trust has created a privately owned fund to support exporters of value-added steel products. ArcelorMittal, based in Vanderbijlpark, produces flat iron and has been a major employer in the province since 1947. Another key industry player, AECI, is located in Modderfontein near Johannesburg. AECI is comprised of two principal divisions: AEL Mining Services (with a large factory site) and Chemical Services, which presides over 20 separate companies (including Senmin, the group’s mining Chemicals Company). Investment opportunities
• • • • •
Joint ventures with small stainless steel manufacturers Marketing and export of stainless steel products Manufacturing of final products, such as pipes and tubes Non-core activities such as distribution and transport With Gauteng’s proximity to key trading partners, ports and logistics arteries, the manufacturing sector is sure to continue to thrive in the region.
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Zig Enterprise Caiphus Mokotedi is the founder of Zig Enterprise, a 100% black-owned automotive company operating in Silverton.
Caiphus Mokotedi owns and manages Zig Enterprise and is one of the great success stories from the Automotive Industry Development Centre (AIDC), as he is the first Incubatee to graduate from the Centre. The AIDC centre is a business Incubation programme developed to support black-owned businesses during the critical start-up phase that would then perform value-added sub-assembly work for Tier 1 suppliers on the Ford Ranger assembly at the Ford Motor Company of Southern Africa (FMCSA). The training and development plan, jointly conceived by FMCSA and the AIDC, led to a five-year plan to enhance the overall skills and knowledge base of automotive workers in the Silverton Assembly Plant in Pretoria. This is to ensure that globally competitive businesses are able to enter the automotive supply chain and to be able to operate in line with its high standard of requirements and demands. Mokotedi was also one of the first BEE entrepreneurs who joined the Incubation programme in 2011. How would you describe the AIDC programme and the role it has played in your life?
The AIDC is a programme that helped me a great deal as it supported me in building and living my dream of becoming one of the few black-owned business owners in our country. The programme has been an incredible journey and milestone in my personal as well as professional life. It played a huge role during our start-up phase with the many highs, lows and challenges that we needed to overcome over the past four years however with motivation and perseverance, we prospered. GAUTENG BUSINESS 2016
Caiphus Mokotedi is a qualified Mechanical Engineer from Technikon Witwatersrand with 18 years in the automotive industry. He previously worked as a Trainee Engineer at the BMW SA Assembly plant in Rosslyn, and as Process Engineer for â€œWidney Transport Componentsâ€?.
What does Zig Enterprise do, and what success have you had in the past year?
We provide logistics services and offer a valueadding service to The Ford Motor Company of Southern Africa through our Vehicle Personalisation Centre (VPC). This services includes the fitment of the following parts: wheel lock nuts, spare wheel locks, bullbars, heavy duty seat covers, window etching and metal e-marking. We also recently ventured into providing a carwash service for fleet cars at Ford. What is the growth of competition in the auto service businesses?
The scale and importance of the automotive industry has created many opportunities for people to get involved, especially as the com-
The Zig Enterprise team.
petitive pressure is growing in the auto service market. Alongside OEMs’ owned repair shops, providers and the number of new market players offering various car-related services is increasing. Independent players operating under franchise, insurance companies, leasing firms and alternative mobility companies are all crowding onto the market. Irrespective of this highly and increasing competitive market, Zig has strategically placed itself through the operationally competitive aspects it has acquired from the past. What partnerships have proved to be an important part of your growth?
This enables a high-quality service offering to its client in order to ensure they receive ultimate satisfaction. The success we have generated through working within FMCSA’s plant over the years enables us to continue to flourish as a supplier to FMCSA and, hopefully, to meet and exceed the high expectations of our customers for years to come. We are committed to supporting the Ford Motor initiative as our service centre has identified opportunities and created 16 additional jobs in the process as we want to become a one-stop-shop so that we are able to support manufacturing businesses with various service offerings.
We partnered with Schnellecke Logistics Solutions (SA) and partnered with the FMCSA’s plant during the initiative start-up. Through our partnership with Schnellecke SA we provide sequencing and logistics of interior trim panels directly to the Ford T6 Ranger production line. We have also provided sequencing and logistics services to various Tier 1 component suppliers at the FMCSA plant. The company has quality management against the international set of requirements.
CONTACT INFO Physical Address: Office 117, Domus Building, 57 Kasteel Street, Lynnwood Glen 0081 Tel: 012 348 3953, 082 708 6275 Email: email@example.com or firstname.lastname@example.org Website: www.zigza.co.za
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Acceleration Program has been e clients receive training and suppo eligible to receive financial suppo
The growth of the Masisizane Fu inception. Although the initial foc the fund has gradually grown to b fund with the vision of being able as a sustainable entity and thereb for many years to come. The fu R1b and it plans to invest R420 SMME’s by the end of 2017.
BUILDING SUSTAINABLE Helping small business BUSINESSES THROUGH SUCCESSFUL thrive PARTNERSHIPS Nandipa Gaqa, the Provincial Manager for Masisizane Fund Gauteng, is helping to drive development of business in the City of Gold.
The development of agri-clusters Masisizane Fund’s approach in entail the clustering of small sca the farmers benefit from economi small on value chain financing, agro-p partnerships.
In 2013 the Fund initiated a p Harry Gwala municipalities co trading in grain and dairy prod focused on development of value What is the Masisizane Fund’s footprint in Gauteng? mechanization, storage and micro We have one branch in Sandton which looks after businessespartnerships across allwith Omnia, Gra Association and municipalities, th the metros in Gauteng (Johannesburg, Tshwane and Ekurhuleni). Being their planting significantly in 2014 a largely urban province, we predominantly fund urban and peri-urban channeled towards Grain Co as
businesses with a small percentage of rural business.
The Masisizane Fund (NPC), is an initiative of Old Mutual South Africa, established Masisizane opera Given the increasing residential and property developments across in 2007 following the closure of the Unclaimed Shares Trust. was done in consultationfor franchises to open nationally with it Gauteng, this hasThis created an opportunity busiwith the National Treasury of South Africa. The mandate of the Fund at inception was intoGauteng and r nesses in small to medium size shopping centres, in addition large and remains to contribute meaningfully to employment creation, poverty eradication offices malls that also offer a diverse shopping experience. This has led to ain KwaZu and reduction of inequality, economic growth and the attraction of investment. This is significant growth in new and established franchised outlets. Limpopo, Eastern done mainly through promotion of entrepreneurship, enterprise finance and support to Western Cape. small, micro and medium enterprises (SMME’s).
Nandipa Gaqa is the Provincial What franchising opportunities are you able to fund? The process to follow when apply by Manager Central Regions for The Fund’s focus is on enterprises that are 51% or more owned from the Masisizane Fund is: The target market is enterprises that are 51% or more owned The Fund provides loan finance in the following sectors: Submit the following documents fo previously disadvantaged individual(s), giving priority to rural and perithe Masisizane Fund. Nandipa by the previously disadvantaged individual(s) giving priority • Agriculture relevant provincial office: to rural and peri-urban/township areas. Masisizane • Manufacturing areas. Masisizane gives preference to businesses that urban/township joined the Masisizane Fund infunding • Comprehensive business plan is biased towards 51% plus owned women, youth and • Supply Chain owned April 2013. Prior to that she was are owned by the youth, people with disabilities, or that are projections; people with disabilities. Masisizane will target productive • Franchising • For established businesses – or more) women and which target productive and laboura Risk Analyst in as the Group and labour absorbing sectors approved by Risk the Board by of (51% • Commercial Enterprise years) and the latest man Directors from time to SMME Division oftime. Investec Bank for absorbing sectors. There are numerous benefits of funding anthree • For start-up businesses – financ Non-financial value adding services include capacity in five years, two of which were that wants to open up a franchise, notably the fact that investing • Tax clearance certificate; The Fund’s success is driven through a focused approach on development, business management and technical support, brand with a standardised business operating model spentindustry as asectors, graduate trainee in an established • Off take agreements and/or l high impact coupled with a comprehensive financial education, market development and product/ SMME finance solution that includes business serviceit quality standards compliance. A Business • Signed consent for a credit ch is fairly easy toandreplicate in any location. The franchise model Balance Sheet, Credit andsupport. Op- ensures erational Risk. also makes it simpler for the franchisee to run the business (compared After working as Credit Risk to an independent brand) as the franchisee has access to approved and Deal Structuring Special- systems and reputable suppliers from which to source supplies. ist for two years, Nandipa The franchisee also has access to a comprehensive training promoved into her current role in gramme, including on-site practical training and operating manuals December 2015. Nandipa has should they require additional information. The franchise model rea BCom Honours in Business moves (to an extent) barriers to entry, given that it allows individuals Finance (Wits University) and a with a lack of relevant experience to invest in franchised outlets, as BCom in Economics and Busi- long as they have been approved as franchisees. Another major benefit ness Finance (Wits University). is that the marketing of the brand is shared, and the existing brand GAUTENG BUSINESS 2016
INTERVIEW equity assists the franchisee in marketing the store locally as the product is already known and tested in the market. How are you able to assist your clients?
We offer short- and long-term funding solutions to our clients based on their business needs. We use either pure debt or blended finance instruments (this can include both debt and equity funding), depending on the viability of the business concept. We also offer incubation opportunities to businesses that meet the criteria but that are not at the right stage of being funded â€“ be it a lack of access to markets or the requisite technical skills or knowledge. We also offer business support services to funded businesses to ensure they grow and sustain their business performance. The level of support can also entail linking the client to a mentor to assist with areas of development or improvement.
CTU MANUFACTURING CO-OP This co-operative was founded in 2008 in Gauteng centring around manufacturing fully guaranteed products such as hospital linen, apparel/attire, uniforms as well as corporate and personal protective clothing. As professional nurses the owners saw an opportunity to supply hospitals with apparel. They resigned and went for business training to turn their idea into reality and have since created 56 employment opportunities for disadvantaged women in Gauteng. CTU received loan funding from the Fund in 2013 for the fulfilment of contracts with the Gauteng Department of Health. A second facility in 2014 ensured successful delivery of various contracts in 2015. CTU provides in-house training and experience to young graduates.
What difficulties do SMMEs face? There is a funding gap or shortfall at this level, as funding is not easy to obtain without a track record in terms of products, services and access to consistent markets. In the semi-established business category there is a drive for business owners to grow their businesses and take them to the next level, but access to markets and flexible funding solutions still pose a major challenge. The Fund sees great value in assisting these companies as they are committed to creating jobs and thus contributing to the reduction of unemployment and alleviating poverty. What makes a successful SMME? A hardworking and passionate entrepreneur who has both a clear vision in addition to the ability to implement a sound business strategy throughout the business. Someone with the ability to produce or offer a quality product or service to the market and deliver on time. Access to consistent markets and the ability to market the product to the target market. Also important to enable their business to grow is access to affordable funding opportunities, stringent cash management and budgeting, the ability to identify good investment opportunities and having a business model that is sustainable, in addition to the ability to create or maintain jobs.
CONTACT INFO Physical address: Isibaya Building, 93 Grayston Drive, Sandton Postal address: PO Box 784531, Sandton, 2146 Tel: +27 11 217 1746 Website: www.masisizane.co.za
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Information and Communication Technology Nearly two-thirds of all South African ICT companies are located in Gauteng, collectively contributing more than 6 percent to regional GDP.
range of ICT activities is undertaken within the province, including hardware manufacturing and software design, and various service offerings such as software management, systems programming and technical support. A number of international giants, including Microsoft, Hewlett-Packard, IBM, ICL, Cisco and Unisys, have a strong presence in Gauteng, where they operate alongside South Africa’s own ICT firms. The Gauteng province is home to a number of dedicated and specialist data centres, many of which service specific companies (for instance, the 27 000 square metre Samrand Data Centre is used by Standard Bank). Specialist data centre operators such as Business Connexion are also located in Gauteng. Metrofibre Networx, a company based in Midrand, is a new entrant to the market and competes with Vodacom and Neotel in providing metro Ethernet technology. Ethernet technology is a fibre-based broadband technology that offers a cheaper alternative to connect subscribers to the Internet or to connect different offices owned by a single company. With a view to driving growth within the ICT sector, the Gauteng provincial government has introduced a programme that provides mentoring support and venture capital for the commercialisation of technology firms. The provincial government has also established a science park in the form of The Innovation Hub. The City of Tshwane has an Innovation Office based at TIH. The metropolitan municipality already has a fibre optic network infrastructure that hosts two technology-related projects, TIH and ASP. Innovation in the sector will be further encouraged by the newly established mLab, a centre designed to support entrepreneurs in the mobile-technology field. The CSIR in Pretoria hosts the mLab facility together with TIH. At a national level, incentives have been introduced and the South African Vanguard of Technology (Savant) programme has been created in order to provide marketing support to the South African ICT and electronics sector and improve the level of awareness of the local sector. GAUTENG BUSINESS 2016
Opportunities for investors: • Hardware and software consultancy;
• Service support for users of ICT;
• Sales and export of ICT technology.
Outsourcing Call it business process outsourcing (BPO), call it business process management, call it what you like—the business of outsourcing is about to put the City of Tshwane on the international BPO map.
utsourcing brings with it many benefits to all the role-players involved. The biggest of them all is most likely that it’s a costsaving measure for tasks that a company requires but does not depend upon to maintain their position in the marketplace, thus such activities are non-core business. A big player in the Business Process Outsourcing (BPO) field is the contact centre (also known as captive centres, call centres or global inhouse centres) industry. Until recently, India was favourably looked upon by countries in the west, which could have their outsourced work done at a fraction of the costs than would otherwise be expected locally due to much higher labour costs in their countries of origin. According to the national agency promoting the sector in South Africa, Business Processing enabling South Africa (BPeSA), Gauteng is host to the head offices of most of South Africa’s largest companies and the province h as the largest domestic market in South Africa, with approximately 133 800 employees contributing 71% to the national domestic market share. Gauteng is also home to more than 70% of the country’s call centres, and the sector is growing all the time. Among the reason for the rapid growth of the outsourcing industry in Pretoria, is the City of Tshwane’s strategic position in the province to service international Business Process Outsourcing (BPO) investments. At present an estimated 11 000 people are employed in the BPO industry in Tshwane, while the sector annually contributes in the region of R2,5-billion to the city’s economy. The ultramodern Tshwane BPO Park (TBPO), to be created in partnership with the University of Pretoria, will secure the city’s position as BPO leader in the region. Consisting of a contact centre that can seat 3 000 people, an incubator for SMMEs and an academy offering a national tooling programme, the TBPO will benefit both the university and all those living in the metropolitan area and has been described as a milestone that will help to the realise the City of Tshwane’s Vision 2055. Referring to the development of the new project, Tshwane’s Executive Mayor, Councillor Kgosientso Ramokgopa, said over and above the benefits of job creation, infrastructure and skills development envisaged by the Tshwane BPO Park, the City of Tshwane will gain first-mover advantage above other regions, accelerate industry growth and attract new clients. “The Tshwane BPO Park will also position the city as a key role player and an ideal BPO investment opportunity,” said Ramokgopa.
Investment opportunity The new Tshwane BPO Park will be the ideal investment opportunity for both local and foreign businesses. Tshwane is the third-largest city in the world in terms of land area, after New York and Tokyo/ Yokohama. It contributes 27% to Gauteng’s economy and 10% to South Africa’s economy. It is South Africa’s automotive industry hub and the main anchor for research, innovation and the knowledgebased economy in Gauteng, owing to the location of renowned research institutions such as the Council for Scientific and Industrial Research, the National Research Foundation, the Department of Science and Technology and Onderstepoort Veterinary Institute. Once operational, the TBPO will provide a globally competitive facility to both the public and private sector and will contribute significantly to the Gauteng Province’s Township Revitalisation Programme. The park will also provide modern fully equipped plugand-play infrastructure including: high-speed fibre-optic link; VOIP; high redundancy servers; back-up power supply; on-site technical support; training; and excellent staff care and support facilities. An on-site incubator will oversee the development of SMMEs in the BPO domain and related industries. GAUTENG BUSINESS 2016
Standard Bank’s Corporate Social Investment The Standard Bank Group is putting the full weight of their CSI initiatives behind the drive for local education.
What is Standard Bank’s CSI strategy in Gauteng?
Our strategy is aligned to the strategy of Standard Bank’s Corporate Social Investment Unit. The aim of CSI in Standard Bank is to demonstrate that the bank is socially responsive and relevant. We aim to create social value that will positively impact communities within which we operate. We seek to improve the communities’ capacity to be sustainable and to enhance future business prospects. The Bank’s focus is on Education and Employee Community Involvement (ECI). As a result, our Gauteng CSI strategy is linked directly to this. We have implemented initiatives to support access to education and ensure quality education for learners in Gauteng. What have been some of the highlights for the education initiatives in Gauteng?
One of our flagship CSI projects in Gauteng is the Thandulwazi Maths and Science is a Saturday school programme that provides quality tuition in maths, science, accounting and English to learners from schools within township communities in Gauteng. The aim of this programme is to alleviate the academic challenges faced in maths and science subjects by learners by providing curriculum based extra tuition. St Stithians School uses its facilities to run extra classes for public GAUTENG BUSINESS 2016
schools and thus serves as a centre of excellence for Standard Bank in Gauteng. The Academy runs every Saturday morning of the school calendar year. The participants are learners from schools in Soweto, Dieplsoot, Soshanguve, Vosloorus, Tembisa, Ivory Park, Northriding, Randburg, Ferndale, Orange Farm and Kagiso. Annualy Thandulwazi supports about1039 learners, drawn from 160 high schools across Gauteng. Another successful CSI project was the Gauteng book drive where we collected books from across Gauteng province and then delivered them to a needy school that had the infrastructure of the library but, no books. We’ve recently unveiled our projects to provide pupils with learning materials that will be helping pupils
FOCUS This could range from teacher development and support to staff initiatives that include buying books for schools or projects that enhance the learning experience for pupils at schools. What plans does the CSI department have for future projects in Gauteng?
As a bank we continue to support the Thandulwazi Maths and Science Programme. The Gauteng Standard Bank office will continue to build a partnership with the Gauteng Office of the Premier. The Premier will assign certain people from the Department of Education to monitor the progress weâ€™ve made in our CSI projects over the next three years at the particular schools to which we have donated machinery and a mobile laboratory. There will be constant progress reports produced based on their performance. Our hope is that the progress made by these schools will illustrate that we at Standard Bank also add value to the lives of the pupils and the teachers who we have supported. In the following year we will not only be focusing on the schools we are currently supporting, but we hope that, in the years to come, we will be able to focus on other schools in the province.
with their studies. In addition, we have provided a mobile laboratory and three more laboratories to two high schools and a primary school, plus machinery for a technical school.
WE SUPPORT INTERVENTIONS THAT ENHANCE THE SUPPORT LEARNING FOR TEACHERS AND PUPILS CONTACT INFO Janice Noble Gauteng Province | Marketing Coordinator Tel: 011 601 4311 | Mobile: 076 157 3019 Fax: 011 622 9858 Email: Janice.email@example.com Website: www.standardbank.co.za
What does Standard Bank Gauteng look for when selecting CSI projects?
Our projects are selected in alignment with our focus on Education, with the aim to influence education outcomes in early childhood development, schooling and the further education environment.
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INDEX Automotive Industry Development Centre (AIDC) ...............................................................60 Constitution Hill ......................................................................................................................62 Gauteng Growth and Development Agency (GGDA) ........................................1, 2, 10, OBC Gauteng ICT Park Special Economic Zone .......................................................................... 70 Gauteng Industrial Development Zone (GIDZ) .....................................................................64 Gauteng Investment Centre (GIC) .........................................................................................66 Gautrain Management Agency ..................................................................................48, 52, 87 g-Fleet Management ................................................................................................................ 5 Indaba Hotel, Spa & Conference Centre ..............................................................................57 Liberty Holdings ................................................................................................................. 7, 91 Masisizane Fund ..................................................................................................................106 National Metrology Institute of South Africa (NMISA) .......................................................84 Randburg Chamber of Commerce and Industry (RCCI) ................................................... 94 Small Enterprise Development Agency (Seda) ...................................................................19 Standard Bank Gauteng .......................................................................... 46, 92, 98, 110, IBC The Innovation Hub.................................................................................................................58 Unemployment Insurance Fund (UIF) ................................................................................... 9 Zig Enterprise .......................................................................................................................104
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