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Discussion Starter · #1 ·
Cabinet approves 4th IDZ
Sep 18 2002

Cape Town - The cabinet has approved South Africa's fourth industrial zone near the Johannesburg International Airport, government spokesperson Joel Netshitenzhe said on Wednesday.
"The JIA-IDZ forms part of the policy to develop South Africa's manufacturing sector, unlock economic potential, leverage strategic investments and create employment," he told reporters at a post-cabinet briefing on Wednesday.

According to news reports earlier this year, Blue IQ in conjunction with the Airports Company of SA, armaments manufacturer Denel and the Ekurhuleni Metropolitan Council initiated the development at a cost of R213m.

Of the total cost, R193m would be set aside for the construction of three infrastructure projects in the vicinity of the airport.

Blue IQ is a multi-billion rand initiative of the Gauteng government to invest in economic infrastructure development.

The IDZ will be developed on land held by Acsa and Denel.

Other IDZs include Coega, East London and Richard's Bay.

4,125 Posts
Discussion Starter · #2 ·
New Cape IDZ mooted
Aug 03 2010

Cape Town - Tenders are out for overview studies on the Western Cape government’s proposed new industrial development zone (IDZ) at Saldanha Bay.

A provisional study earlier this year identified a dry dock for shipbuilding, a hub for the oil and gas industry and a mineral processing plant as viable projects. The establishment of a container wharf might also be considered.

Western Cape trade promotion agency Wesgro is handling the tender process. The department of trade and industry and the Western Cape government are paying about R4.5m each for the complete viability study.

Western Cape Minister of Finance, Economic Development and Tourism Alan Winde said long-term opportunities must be investigated as comprehensively as possible and a balance needs to be maintained between an IDZ and environmental conservation, particularly in the nearby Langebaan area.

Saldanha Steel, which is expected to form an important component of an IDZ, was recently in the news when ArcelorMittal South Africa, to which it belongs, threatened to shut it down because of a dispute with Kumba Iron Ore.

Spokesperson for the ministry of the environment, planning and development Nils Flaatten and Winde said the sustainability or otherwise of the steel plant, although an important player, will not prevent the establishment of an IDZ.

They did not, however, believe Saldanha Steel would shut down.

Saldanha Bay as a site for an IDZ has a number of plus points, including its proximity to Cape Town and a major railway line.

4,125 Posts
Discussion Starter · #3 ·
Industrial zones may kick start SA growth
Nov 07 2010

Johannesburg - South Africa’s burgeoning industrial development zones (IDZs) could add weight to the government’s new strategy of generating five?million jobs over the next decade by growing the economy at a phenomenal 7% a year during this period.

This is the view of Ike Nxedlana, the chief executive of the Richards Bay IDZ, and industry analyst Laura Peinke. They both argue that IDZs have the potential to be growth engines if the government moves quickly to develop a clear IDZ policy, which then could be aligned with the country’s industrial strategy.

Nxedlana says four of the six industries earmarked by the state for greater attention – infrastructure, mining and mineral beneficiation, green economy and manufacturing – could be driven by the IDZs.

But he says the absence of an IDZ policy linked to an industrial policy makes it difficult for South African IDZs to compete internationally and creates the impression with foreign investors that local IDZs do not enjoy government support.

“We are nowhere near what are internationally known as export processing zones (EPZs), special economic or free trade zones found in Singapore, India, China or Nigeria,” Nxedlana says.

“For instance, these countries offer very lucrative fiscal incentives such as tax holidays and non-fiscal incentives such as ‘one-stop-shops’ aimed specifically at eliminating red tape and administrative costs.

“Also, the unpredictability of IDZ funding could have easily been addressed had we had an IDZ policy in place. We have a hit-and-miss type of approach to investors, which is not informed or driven at national level.”

South Africa has four IDZs, of which three are operational in the port cities of Richards Bay, East London and Coega near Port Elizabeth. The inland Johannesburg IDZ has yet to take off. They compete for investors with more than 600 IDZs or EPZs across the globe.

New incentives

Peinke, an analyst for consulting firm Frost & Sullivan, says if the National Treasury, the trade and industry department and the economic development department could co-ordinate their efforts and craft better incentives for the IDZs, South Africa could go a long way towards making a dent in the five?million jobs creation target.

“The target is not impossible but it is going to be difficult to meet,” says Peinke.

“I think over the next five years our IDZ programme is going to be better as new incentives are implemented and the IDZ programme is aligned with the industrial policy.

“Right now the industrial policy action plan released in February does not even mention the IDZs although they were created in the first place to promote industrial development and generate export revenues.”

She adds that South Africa can only achieve the 7% growth target through an export-led industrial strategy in which the sub-Saharan African countries and emerging economies are primary targets for its exports.

Neren Rau, chief executive of the SA Chamber of Commerce and Industry, said last week the government should consider introducing different and more flexible labour laws in the IDZs to make them more attractive to investors. Rau also suggested that foreign investors setting up operations in South African IDZs must be exempted from complying with transformation and BEE policies as they do not understand these policies.

However, local IDZ operators are not sure if a dual labour law regime would work.

“Our neighbours, Zimbabwe and Namibia, have tried to adopt a dual labour system in order to accommodate investors’ demands in their EPZs but they have all failed,” says Nxedlana.

“The International Labour Organisation has warned on numerous occasions that while collective bargaining is uncommon in most EPZs, high labour turnover, absenteeism, stress, low productivity and fatigue are common characteristics of most EPZs.”

Special incentives

Ayanda Ramncwana, spokesperson for the East London IDZ, says their industrial zone does not compel its tenants to comply with BEE legislation.

“We do not impose any BEE policies on our investors. However, we assist them in implementing these policies as a competitive advantage in accessing certain markets and benefits,” she says.

Senzeni Ndebele, spokesperson for the Coega IDZ, says the government must consider introducing special incentives for high-impact investments, especially labour-intensive projects that boost rural economies. She says the government must also prioritise establishing transport linkages between the IDZs and the markets that supply them with raw materials and labour.

South Straddie QLD
10,893 Posts
works in dubai, labour laws in teh free zones are different to normal labour laws, we have airport, media, internet, Tecom, harbour, medical etc all free zones and all based on teh same principle of attracting foreign investment under preferable investor conditions

4,125 Posts
Discussion Starter · #5 ·
R8.1bn in new Coega investments being negotiated

The Coega Development Corporation (CDC) expects 2012 to yield increased investment in its industrial development zone (IDZ), near Port Elizabeth in the Eastern Cape, despite the global economy still reeling from recessionary factors.

The corporation said on Wednesday that it was negotiating new projects worth R8.1-billion for Coega, which is South Africa’s largest IDZ.

The investment account currently reflected a total of R140-billion in investment value, which comprised R7.5-billion in investments being implemented, R5.8-billion in delayed projects, R1.239-billion operational projects, R8.1-billion being negotiated and those still in feasibility stage worth R116.3-billion.

To date, 3 276 direct jobs have been created and a further 25 963 indirect and induced jobs have been created. The agro-processing sector in particular was a large contributor to indirect and induced employment in rural areas

CDC marketing and communications manager Ayanda Vilakazi said some of the highlights expected in 2012 include vehicle manufacturer First Automotive Works Group’s (FAW’s) confirmed plans to expand into the Coega IDZ with an investment totaling R677-million, starting with 5 000 medium-heavy commercial vehicles and 30 000 passenger and light commercial vehicles in subsequent phases. The official signing and sod-turning ceremony was planned for the first quarter of 2012.

Further, the IDZ’s dairy unit Coega Dairy was set to start production in the first quarter of 2012 and ramp up to reach the installed capacity, while the tomato processing facility Cape Concentrate was also expected to commence with its commercial activities in the first quarter of this year, following a setback owing to crop failure.

The Discovery Health Service Centre located in the Coega business process outsourcing park employed 165 agents in November 2012 and projects the number to increase to 400 by 2013 if the current growth rate is sustained. The current growth rate is 30 new agents employed every month.

German-based EAB Astrum Energy signed an agreement with the CDC in the third quarter of 2011 for the development of a 13 MW photovoltaic solar farm and has already commenced with the environmental permitting process. EAB will bid in the second round of the Department of Energy’s renewable energy procurement programme in March.

Another development was the issuing of Electrawinds with a record of decision for the entire project and a generating licence for a pilot turbine, which has been connected to the Nelson Mandela Bay grid since June 10, 2010.

Moreover, GDF Suez from France has signed an agreement to construct a 330 MW power peaking plant in the IDZ. Vilakazi said they were awaiting a generating licence and power purchasing agreement before construction can start. A total of 1 000 construction jobs would be created.

Steel company AGNI Steel commenced construction in April 2011 and is on track to commission its mild steel billet plant in June 2012.

One of Coega’s largest employers in the IDZ, Dynamic Commodities, which has created over 1 095 jobs at the last audit, was expanding and would create an additional 200 direct jobs. Indirect and induced employment would also be created on farms near the towns of Kirkwood, Addo and Patensie. The commissioning of the new line would be during January and February 2012.

National oil company PetroSA’s Mthombo crude oil refinery continued to be promoted as an investor in the Coega IDZ and catalyst for regional economic development and diversification of the local industry.

6,052 Posts
This is good.

FAW breaks ground on 5 000 unit-a-year truck plant

By: Irma Venter
28th February 2012

Updated 6 hours agoTEXT SIZE Fortune-500 company First Automobile Works (FAW) on Tuesday broke ground on its new truck assembly plant in the Coega industrial development zone (IDZ), just outside Port Elizabeth, with production scheduled to start at the end of 2013.

Production capacity would be 5 000 medium- and heavy-commercial vehicles a year.

The FAW investment was valued at R600-million, with R200-million earmarked for plant construction and equipment, and R400-million to start up and run the facility over the next few years, said FAW group VP Jin Yi.

The trucks were destined for the local market as well as a number of African countries, with FAW sales in Africa currently at roughly 20 000 units a year, said FAW South Africa MD Richard Leiter.

No specific sales data was available for FAW in South Africa.

The Coega plant would not serve as a production base for all of Africa, but only for a number of key markets, such as Angola, Leiter added.

The plant investment would flow from the China-African Development Fund and the Chinese FAW group, through FAW South Africa, which was a joint venture between the Chinese manufacturer and a local company.

FAW South Africa had been selling trucks in South Africa since 1993, and currently had 18 local dealerships.

Yi estimated that the Coega facility would create around 500 permanent plant jobs, with the aim to establish completely knock-down assembly.

“We already have a team here to investigate which parts can be supplied locally.”

Truck production was to be followed by light commercial vehicle and passenger car assembly to follow in a second phase, with the potential here for 30 000 units a year.

Yi said he would prefer to start with construction of the second phase sooner rather than later.

He also noted that the plant was “critical” in FAW’s global strategy. He regarded South Africa, with its good infrastructure network, as “the gate” to the African continent.

The $70-billion FAW sold 2.6-million vehicles worldwide last year, and currently employed 134 000 people.

Yi said FAW would use local companies for the construction of the factory, with “some Chinese engineers” arriving at a later stage to provide training and support to plant employees, who would largely be sourced from the Eastern Cape.

Coega Development Corporation (CDC) chairperson Dr Paul Jourdan said the corporation would have to work with government at all tiers to ensure it created a more competitive environment for FAW in South Africa, as Chinese steel was, for example, the cheapest in the world, versus South African steel, which was some of the most expensive in the world.

CDC CEO Pepi Silinga added that the corporation was in talks with a number of Chinese companies, such as a durable household goods manufacturer, regarding possible investment in the Coega IDZ.

“We are also talking to manufacturers of components in the renewable energy sectors, such as wind and solar power.

“We focus on State-lead foreign direct investment, where companies have been given the okay by the Chinese Ministry of Commerce to go offshore.”

6,052 Posts
Well, look, I mean Coega is hanging in there, and I think we will need it in the more in the next 3,5,10 years in that all our existing ports will be getting rather busy, and the Durban expansion will take some time.
So this is good - also because it looks like we are becoming something of a powerhouse in the vehicle manufacturing and export area.
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