Richards Bay Industrial Development Zone

HOW SPECIAL ECONOMIC ZONES ARE TRANSFORMING SOUTH AFRICA

2 | Africa Outlook Issue 104

RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE (SPECIAL ECONOMIC ZONE) SUPPLY CHAIN

S O U T H A F R I C A’ S

SOCIO-ECONOMIC P OW E R H O U S E Muzi Shange, COO at Richards Bay Industrial Development Zone Company (SOC) Ltd, located in close proximity to the international deep-water port of Richards Bay, reveals the impact of its megaprojects Writer: Jack Salter | Project Manager: Cameron Lawrence

Africa Outlook Issue 104 | 3

M

uzi Shange, the Chief Operations Officer of Richards Bay Industrial Development Zone Company (SOC) Ltd (RBIDZ), and former COO and Deputy Director-General responsible for Strategy, International Relations and State-owned Entity Oversight at the Department of Energy in South Africa, is buoyant about RBIDZ’s capabilities as a force for socio-economic change.

“We represent various sectors of the economy and try to be a beacon of hope for the people of the KwaZulu-Natal province and the country at large. The investments will not only revive the struggling economy, but will also contribute immensely to industrial vibrance, job creation, skills development and transfer, alongside a sea of value chain possibilities, such as procurement and supply,” he emphasises.

“There is optimism in the carnival of opportunities explored in the energy sector. Generally, I think there is an appreciation among engineers and other professionals that we need to work with government to solve the energy crisis. We prepare ourselves in anticipation to strategically engage openly with the development of gas infrastructure, pipeline reticulation, liquefied natural gas (LNG) terminals and storage, government regulations, and policies that guide the implementation of energy programmes, leaning on various policies and regulations coupled with the Gas Master Plan 2022, Integrated Energy Plan as well as other partnerships between the public and private sector,” introduces Shange.

Just two hours commute by car from Durban on South Africa’s east coast, Richards Bay sits perched on the cusp of the Indian Ocean in the KwaZulu-Natal province, acting as a gateway to sub-Saharan Africa with its population of more than 300 million people.

RBIDZ is tailored for the manufacturing of goods and production 4 | Africa Outlook Issue 104

The KwaZulu–Natal province is the host of the country’s two busiest ports, Richards Bay and Durban, which both play a vital role in national logistics and international trade.

The Port of Durban’s annual throughput of containers is approximately one million, more than 60 percent of the country’s total, whereas the Port of Richards Bay is the main coal export harbour.

SOLVING THE ENERGY CRISIS

The Port of Gladstone at night.

Source: TMR. © The State of Queensland.

of services to boost beneficiation, investment, economic growth, and the development of skills and employment.

RBIDZ is a Special Economic Zone (SEZ), a purpose-built and secure industrial estate with the purpose of facilitating the creation of an industrial complex. The SEZ offers a strategic economic advantage, and a highly attractive opportunity for fixed investment in export-orientated manufacturing and service industries, given the world-class industrial infrastructure already in place.

RBIDZ is at the forefront of driving energy-related projects with the aim of addressing the energy crisis in the country, powered by the potential of Richards Bay as an energy hub due to its existing infrastructure.

Geared to host multi-billionrand energy projects, previously conducted studies have weighed up the possibility of importing LNG into Richards Bay for use in power plants, presenting various opportunities for the region to integrate the resources of other African countries.

RBIDZ has been an integral part in the development of South Africa’s Gas Master Plan 2022. DMRE has placed the country’s natural gas market at just 2.6 percent of its total energy mix. RBIDZ stands ready to make submissions of the realistic demand, considering major surrounding industries and new investments in Richards Bay. The shareholder Department of Economic Development, Tourism

RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE (SPECIAL ECONOMIC ZONE) SUPPLY CHAIN

WHAT IS A SEZ? In terms of the Special Economic Zones Act (No. 16 of 2014), the purpose of creating SEZs, such as RBIDZ, includes: • Facilitating the creation of an industrial complex, having strategic national economic advantages for targeted investments and industries in the manufacturing sector and tradable services.

• Developing infrastructure required to support the growth of targeted industrial activities.

• Attracting foreign and domestic direct investment.

Categories of SEZs in South Africa that may be designated as such by the Minister of Trade, Industry and Competition may include free ports, Free Trade Zones (FTZs),

Wimar Tanks for the edible oils refinery

and Environmental Affairs (EDTEA) leverages on the work of its entity, the RBIDZ, to stimulate economic growth and development, industrialisation, stability, and job creation.

MULTI-SECTOR OPPORTUNITIES One project that Shange highlights is the Nyanza Light Metals, an 80,000 tonnes per annum, ZAR9 billion titanium dioxide pigment processing plant which is being implemented in

IDZs, and Sector Development

three phases. The first phase valued at ZAR210 million being the Product Testing and Development Centre (PTDC) started operations in 2022 and will feed into the commercial plant that is about to commence construction as the second phase of the roll-out plan.

“The Nyanza project will create 1,200 employment opportunities during construction and a further 550 direct operational jobs upon

Zones (SDZs).

completion,” Shange adds.

Nyanza is one of many lucrative investment projects located in RBIDZ. The zone’s strategic goals drive much of its approach, including adherence to good governance, the assurance of legislative compliance and a focus on economic and environmental sustainability to establish a Africa Outlook Issue 104 | 5

The aerial view of RBIDZ Phase 1A landscape in close proximity to the Port of Richards Bay

world-class IDZ infrastructure, which provides opportunities for the province and attracts fixed investment in export-orientated manufacturing and services.

“As part of the company’s growth and diversification, our economic sectors of focus are wide-reaching and afford investors a viable playground that is already vibrant, with a pool of multi-billion-rand projects that prioritise development, socio-economic improvement, and consider long-term sustainability, rather than one-sided profits,” Shange reveals.

Furthermore, another anchor project is that of Wilmar Processing SA – Ubuntu Project, a ZAR1.5 billion crude palm oil beneficiation plant that commenced construction in October 2020, with completion expected around November 2023.

“At full capacity, the plant is expected to create 202 operational jobs. The plant is also expected to facilitate indirect opportunities and jobs through its operations,” 6 | Africa Outlook Issue 104

“A S P A R T O F T H E C O M P A N Y ’ S G R O W T H A N D D I V E R S I F I C AT I O N , O U R E C O N O M I C S E C TO R S O F FO C U S A R E W I D E - R E AC H I N G A N D A F FO R D I N V E STO R S A S E C U R E , I N F R A S T R U C T U R E R E A DY A N D V I B R A N T P L AY G R O U N D ” – M U Z I S H A N G E , C O O , R I C H A R D S B AY I N D U S T R I A L D E V E L O P M E N T Z O N E C O M P A N Y ( S O C ) LT D

highlights Donovan Matlata, Project Director of Ubuntu (Wilmar) Edible Oil Refinery Project taking place in RBIDZ. RBIDZ also counts a ZAR141 million paint manufacturing plant – Prostar Export Paints – as part of its construction project portfolio.

A manufacturer of high-quality decorative and industrial coatings, the expansion to RBIDZ has been motivated by the need for growth and the intent to expand into Swaziland, Mozambique, Zimbabwe,

and Zambia, while also supplying the local markets of South Africa.

The construction of the plant is currently underway and expected for completion in March 2024.

A WIDE-REACHING MISSION The development of skills and employment are paramount to RBIDZ, enabling it to attract talent that possesses diverse acumen that can contribute strategically to the growth of the company.

“Motivated employees are the most

RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE (SPECIAL ECONOMIC ZONE) SUPPLY CHAIN

INVESTOR INCENTIVES

Nyanza Light Metals’ 3D artist impression of the Titanium manufacturing plant to be constructed

RBIDZ has a dedicated team responsible for investor support services that assist the ‘investor’ from the first call throughout the required processes, to project implementation and beyond.

The services provided are coupled with a one-stop shop that aims to fast-track services from one integrated centre.

Core investor incentives provided by the South African government include: • Reduction in corporate income tax from 28 percent to 15 percent • VAT exemption for supplies procured in South Africa • Duty-free imports for production-related raw materials including machinery and assets used in production • Location in a secured and Customs Controlled Area (CCA) • World–class industrial infrastructure

productive; as such, it is in the heart of the organisation that the welfare of the employees is prioritised. This is done mainly by focusing on their personal development and growth through formal training, coaching, skills development and advanced learning in formal institutions of higher learning,” Shange explains.

The company endeavours to offer opportunities and establish a culture of fairness, high performance, transparency and recognition for performance.

“We are committed to maintaining a supportive management culture and encouraging open communication in all operations, whilst enforcing initiatives aimed at positioning the company as the employer of choice,” continues Shange.

These initiatives include an employee wellness programme and provision of bursaries aimed at advancing employees’ capabilities, training and development.

“RBIDZ also puts emphasis on organisational culture, that is

historically an enhancer of healthy working environments and concerted team efforts when it comes to the vision of the company. It is a fact that happy employees tend to be the engines of any company and strong brand ambassadors,” Shange adds.

AN IMPACT BEYOND PROFIT Through various programmes, RBIDZ continues its notable commitment to socio-economic development, with a focus on youth and women from disadvantaged backgrounds.

The various initiatives from the organisation’s corporate social investment include academic support through the Study Assistance Programme, bursaries for tertiary students, a back-to-school support programme and STEM programmes for disadvantaged schools.

In addition, the company offers sustainable agricultural projects for rural development and focused training programmes and support for rural cooperatives that aim to harness self-sustenance and food security.

Africa Outlook Issue 104 | 7

Muzi Shange, COO, displaying the company’s BEE Contributor awards

“ O U R M I S S I O N I S T O AT T R A C T S U S TA I N A B L E I N V E S T M E N T S T H AT S T I M U L AT E E C O N O M I C G R O W T H , J O B C R E AT I O N , B E N E F I C I AT I O N OF RESOURCES AND THE EMPOWERMENT OF PEOPLE” – M U Z I S H A N G E , C O O , R I C H A R D S B AY I N D U S T R I A L D E V E L O P M E N T Z O N E C O M P A N Y ( S O C ) LT D

RBIDZ is a broad-based black economic empowerment (B-BBEE) Level 3 contributor, boasting a Most Improved B-BBEE Compliant Award (conferred by the Department of Economic Development, Tourism and Environmental Affairs), with Shange insisting, “this recognition is testimony to the company’s intent and commitment towards socioeconomic development and inclusive participation”.

In its belt towards empowerment, the RBIDZ also has an on-going capacity-building programme in areas such as project management, health and safety, quality management, financial management, the application of information technology, marketing and advertising, and the provision of working implements, to name a few.

POWERING DEVELOPMENT ACROSS SUPPLY CHAIN In the past financial year (2022–2023), RBIDZ recorded a cumulative of almost ZAR48 million for the cumulative procurement expenditure of small, medium and micro enterprises (SMMEs), inclusive of contract participation goals.

Further supporting strategic efforts of inclusive participation and driving development of SMMEs, RBIDZ’s Nal’ithemba Enterprise Development Programme focuses on specific sectors of the economy, with the aim of creating direct opportunity linkages between suppliers and RBIDZ investors. To date, identified programme beneficiaries operate in sectors such as metals beneficiation, technology and innovation, agro-processing,

Front seated: RBIDZ Board Directors (3rd from the left - Board Chairperson Adv. B. Mbili) and Executive Management. Back: SMME Beneficiaries mentored under the Nal’ithemba ED Programme.

8 | Africa Outlook Issue 104

logistic and chemicals, and more. The programme includes masterclass training, workshops with financing, and sector-specific partners.

“Apart from the expected impact of this incubation programme, further advantages are the creation of a streamlined platform for SMMEs to compete and increase opportunities for B-BBEE, as well as preparedness to supply big investor operations,” adds Shange.

Nal’ithemba further aims to see SMMEs grow into exporting enterprises and sub-contracting partners with investors or bigger industries.

“Our mission is to provide a conducive environment that attracts appropriate investment for sustainable economic development and inclusivity,” concludes Shange.

SEZs have been tasked with transforming the South African economy, and in the example of Richards Bay IDZ, the impact of their work is being felt in the local communities, across provincial borders into neighbouring states, and in the enhanced status of the rainbow nation as a major player in the continent’s economic growth.

Tel: 035 797 2600 info@rbidz.co.za / invest@rbidz.co.za www.rbidz.co.za

RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE (SPECIAL ECONOMIC ZONE) SUPPLY CHAIN

world-class supporting infrastructure,

products that have historically been

enables it to maintain a competitive total

manufactured outside the continent’s

cost of production for its products.

shores, such as titanium dioxide

TRANSFORMING SOUTH AFRICA’S TITANIUM INDUSTRY

NYANZA LIGHT METALS

available on the continent. A strong collaborative approach will therefore

its second phase, which comprises

be required between the African-based

the main plant and some ancillary

manufacturers and companies abroad

infrastructure such as a sulphuric acid

that have these skills and equipment.

etc. This plant will transform South

Government’s mineral beneficiation

Africa’s titanium industry, as it will be

strategy, as promulgated by the

the only plant on the African continent

Industrial Policy Action Plan (IPAP),

producing titanium dioxide pigment and

privately-owned Nyanza Light Metals

related products.

titanium minerals value addition

and equipment that are generally not

the next 36 months is to construct

In response to the South African

an initiative to create South Africa’s

amongst others. This will require skills

The company’s main objective over

plant, steam boiler plant, gas plant,

(Nyanza) was established in 2011 as

pigment and various lithium products,

Nyanza has partnered with a Chinese company to develop its world-class plant and transfer the requisite skills to local employees and service providers.

Nyanza also expects its employee base of 30 people (55 percent female)

The manufacturing industry in Africa

to increase to 800 over the next 48

is poised to grow and develop new

months.

industries.

Nyanza is currently constructing an 80,000 tonnes per annum titanium dioxide pigment and chemicals manufacturing plant in the RBIDZ. Rob Mhishi, Chief Operations Officer for Nyanza, gives us an insight into their Richards Bay project…

SERVING THREE CONTINENTS Nyanza produces titanium dioxide pigment using the sulphate process, servicing clients all over the African continent, Asia, and Europe. The first phase of its operations was

Titanium dioxide product testing undertaken at the laboratory

commissioned in June 2023, with the production of samples for customer trials and acceptance. Most of these customers have now placed orders and are switching some of their product lines to Nyanza’s pigment. A second phase of operations will be commissioned in 2026.

Nyanza will have one of the most modern pigment plants in the rest of the world outside of China, deploying the latest production technologies and equipment. Its proximity to most of its inputs and raw materials, coupled with

Nyanza Light Metals Product Testing and Development Centre (PTDC)

Africa Outlook Issue 104 | 9

RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE (SPECIAL ECONOMIC ZONE) SUPPLY CHAIN

A BRIEF LOOK AT WILMAR INTERNATIONAL Wilmar International, founded in 1991, started as a palm oil trading company in Singapore. In the same year, the company built its first oil palm plantation and palm oil refinery in Indonesia, and in 1993, it ventured into China and constructed the first large-scale, integrated oils and grains manufacturing complex in the country at the time.

In 2000, Wilmar established its inaugural footprint in Africa, investing in an oil trading firm selling mainly to South Africa and Tanzania. Today, Wilmar is in 16 countries across Africa

THE WILMAR APPROACH

in the plant. The plant provides an

Wilmar’s strategy is to build

opportunity to service customers in

an integrated business model,

KwaZulu - Natal and Eastern Cape. More

encompassing the entire value chain of

than 1,000 temporary jobs and business

the agricultural commodity business,

opportunities for the local community

from origination to processing, trading,

were created during the construction

merchandising branded products

phase and about 200 permanent jobs

and distribution. With over 500

will be created during the operation

manufacturing plants and an extensive

phase.

distribution network, it can extract margins at every step of the value chain through scale and integration, thereby reaping operational synergies and cost efficiencies.

Randfontein Plant Wilmar also invested over ZAR1 billion in a crush plant in Randfontein, Gauteng in 2019 and a fractionation plant in 2018. Since 2019, it has procured over

Supported by a multinational

700,000 tonnes of local soybeans to

workforce of about 100,000 people,

support the local agricultural industry.

Wilmar embraces sustainability in its global operations, supply chain and

DRIVING FUTURE ECONOMIC GROWTH

communities.

IN SOUTH AFRICA

KEY PROJECTS

approximately 1.1 billion people is a

Ubuntu Edible Oil Refinery project in

key driver of the next phase of global

Richards Bay

economic growth. The young and

A USD$86 million investment in

rapidly growing demographical profile

In 2006, Wilmar’s oil palm business was

Richards Bay, South Africa, the

is set to drive consumption and hasten

listed on the Singapore Stock Exchange

manufacturing complex is situated

urbanisation. The United Nations

and in the following year, Wilmar merged

next to the Richards Bay port, from

projects Africa’s population to double

with the Kuok Group’s oils and grains,

where imported oils will be received

by 2050, making up 20 percent of

and oil palm plantation business. This

through a pipeline to the tank farm.

world population. More than 70 percent

transformational merger created the

The manufacturing complex consists

of Africans are currently employed

largest integrated agribusiness group

of a 500 tonnes per day (TPD) refinery,

in the agricultural sector and this is

in Asia with complementary products

500 TPD dry fractionation plant, a tank

where Africa’s transformation will likely

and businesses such as sugar, rice, flour,

farm, utilities, water treatment plant,

be seen. Wilmar is investing more in

condiments, biodiesel and more recently,

packaging plant and a warehouse. Both

processing plants and optimising its

Central Kitchen Food Parks.

palm and soft oils will be processed

distribution channels in Africa.

and is one of the largest oil palm plantation owners, edible oils refiners and producers of consumer pack oils, soaps and detergents, as well as the third largest sugar producer.

Wilmar Edible Oil Refinery under construction at RBIDZ

10 | Africa Outlook Issue 104

Africa’s youthful population of

RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE (SPECIAL ECONOMIC ZONE) 4 Harbour Arterial , Richards Bay, KwaZulu- Natal, South Africa Tel: 035 7900 2600 info@rbidz.co.za // invest@rbidz.co.za www.rbidz.co.za

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