25.11.2016 Views

South African Business 2017 edition

South African Business is a unique guide to business and investment in South Africa. In addition to an up-to-date economic overview of the country, analyses of the main industrial sectors, plus profiles of the nine provincial economies, the 2017 edition of South African Business includes special features on key topical issues such as skills development and education, renewable energy and the REIPPPP programme, and trade with Africa.

South African Business is a unique guide to business and investment in South Africa. In addition to an up-to-date economic overview of the country, analyses of the main industrial sectors, plus profiles of the nine provincial economies, the 2017 edition of South African Business includes special features on key topical issues such as skills development and education, renewable energy and the REIPPPP programme, and trade with Africa.

SHOW MORE
SHOW LESS

Create successful ePaper yourself

Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.

SOUTH AFRICAN

2017 EDITION

BUSINESS

THE GUIDE TO BUSINESS AND INVESTMENT

IN SOUTH AFRICA

JOIN US ONLINE

WWW.SOUTHAFRICANBUSINESS.CO.ZA


WHAT HAPPENS

TO YOUR WASTE?

108

MILLION TONNES

Waste SA Generates

Per Year

50%

of this is general waste

(domestic, building and demolition

waste, business waste)

10%

only 10% of this total waste is

recycled

90%

is sent to landfill

44%

is unclassified waste (electronic

waste, sewage sludge, brine,

bottom ash, dust) and 0.93%

is hazardous (batteries, toxic

chemical waste).

BUT TYRES ARE DIFFERENT - NOW 70% ARE BEING DEALT WITH,

UP FROM ONLY 4% TWO YEARS AGO.

WHICH HAS RESULTED IN

3219 JOBS AND 227 SMMES


ENTREPRENEURSHIP

COMES TO LIFE

THROUGH CIRCULAR

ECONOMIES

Hermann Erdmann, CEO at REDISA (Recycling and Economic Development Initiative of South Africa)

Small businesses are critical in that they form the building blocks of any society. According to a 2010 research report, 91 percent

of formal business entities in South Africa are small medium and micro enterprises (SMMEs), contributing between 52 and

57 percent to the country’s GDP, and about 61 percent to employment. These form the bread and butter of our country, as job

providers, poverty reducers, service delivery agents and economy boosters.

South Africa’s role on the global stage as a hub for economic growth and empowerment opportunities continues to gather pace.

There are, however, critical challenges, in particular the need to create a significant number of jobs for the growing population

and to develop home-grown business leaders who are able to access global markets and drive growth in a sustainable and

inclusive manner.

Transforming ideas into economic opportunities is the crux of entrepreneurship and at REDISA we recognise the possibilities

which lie in circular economies, specifically for all those who are willing to look at waste not as waste but as a commodity.

The current levels of production and consumption are no longer sustainable. It is anticipated that, by 2030, the world’s population

could sit at 9 billion, with an additional 3 billion new middle-class consumers over and above today’s 1.8 billion.

Expanding the supply of consumer goods and services to meet this future demand presents a great challenge, but one that a

circular economy model is capable of meeting – particularly if it is implemented within every country, region and community.

The World Economic Forum estimates that the circular economy could be worth $1 trillion worldwide by 2025. This means that

doing more with less would result in additional wealth and jobs, fewer landfill sites, and less resource depletion and environmental

damage. Currently, there are only a few countries who are experimenting with more circular thinking – these include the

United Kingdom, the Netherlands, France, China, Japan and South Africa. The promise of circular economy initiatives is that

they will provide brand new business needs which will simultaneously address resource and environmental challenges, and

generate economic activity to fund those needs.

Entrepreneurship is acknowledged as one of the drivers of sustainable economic growth because entrepreneurs create new

businesses, drive and shape innovation and, ultimately, contribute to productivity.

The circular economy focuses on creating and promoting new business opportunities that entail entrepreneurship and eco-innovation

with the aim of waste being fed back into the production process as a raw material.

I believe that entrepreneurs will be the key custodians responsible for leading the transition to a circular economy business

model and closing the loop on dwindling resources. Essentially this is what we need to be focusing on, pairing both entrepreneurial

spirit and the concerted effort to finding solutions to the many challenges and problems that we face as a country and a

continent.

JOIN THE JOURNEY | www.redisa.org.za | /wasteintoworth | @wasteintoworth


CONTENTS

CONTENTS

South African Business 2017 Edition

Introduction

Foreword 11

A unique guide to business and investment in South Africa.

Special features

South African economy at a glance 12

Insight into the performance of the South African economy is

provided through graphical representations of key statistics.

Special Economic Zones 16

Transforming the way business is done.

Renewable energy programme powers ahead 22

A private energy producers’ programme has already attracted

R200-billion in private investment – and more is in the pipeline.

Looking north 34

South African companies are looking to intra-African trade to

expand their businesses and improved infrastructure is key.

SOUTH AFRICAN BUSINESS 2017

6


CONTENTS

Skills development 38

Detailed national plans are in place to promote skills training.

Economic sectors

Agriculture 48

Agri-processing is a key focus of future investment.

Mining 54

South Africa has vast mineral reserves and excellent

infrastructure.

Mineral beneficiation 57

Industrialisation is to be boosted by adding value to minerals.

Oil and gas 58

South Africa is turning to gas.

Energy 60

Energy efficiency is a win-win.

Water 64

Innovative solutions to water scarcity are being pursued.

Engineering 71

Transnet Engineering is targeting international orders.

Manufacturing 72

Several state programmes are promoting manufacturing.

Chemicals and pharmaceuticals 74

Both sectors are attracting internal and foreign investment.

Food and beverages 75

Food and drink account for a quarter of all manufacturing.

Automotive 76

Car makers exported a record number of cars in 2015.

SOUTH AFRICAN BUSINESS 2017

8


Endorsed Brand Lockup

Transition Lockup Option 1

Transition Lockup Option 2

6 009647 070012

WE HELP KEEP THE LOGIC

IN LOGISTICS.

With logistics companies so sensitive to supply and demand, it’s logical to demand streamlined

responsiveness from their bar coding partners. Through our network of highly-qualified resellers, we at

Kemtek Bar Coding Solutions supply the world’s leading bar coding products and systems to maximise

responsiveness, traceability, operating efficiency and more. We also provide dedicated service and

support from efficient industry specialists at the top of their field. If you’re in transport and logistics,

or indeed just about any field, visit our website or call us direct at the number below to find out more.

NATIONAL: 0861 KEMTEK • JHB: +27 (0)11 624 8000 • PTA: +27 (0)12 804 1410

DBN: +27 (0)31 700 9363 • CPT: +27 (0)21 521 9600 • PE: +27 (0)41 364 3690

WWW.KEMTEK.CO.ZA


CONTENTS

Transport 78

South Africa's port and rail infrastructure is being upgraded.

Information and communications technology 85

Fibre optic networks are growing quickly.

Education and training 91

New universities are improving access to higher

education but funding is under the microscope.

Tourism 98

Tourism is a growth industry that quickly creates jobs.

Banking 102

Despite general economic concerns, South African banks

have increased operating income.

Development finance and SMME support 104

Studies are showing that township markets are much

bigger than previously thought.

Regions

Eastern Cape 110

Free State 116

Gauteng 118

KwaZulu-Natal 126

Limpopo 128

Mpumalanga 134

Northern Cape 136

North West 140

Western Cape 142

SOUTH AFRICAN BUSINESS 2017

10


Secur provides risk management

services and solutions, including

technical consulting to organisations

in South Africa.

Our service and solutions offerings

are designed to strengthen an

organisation's security and

compliance.

Not only do we offer services, but also distribute and resell best of breed security solutions.

Our vendors include:

BR

(_X-J

RAP/DD

CHECKMARX


•: DATALDCKER 0

SIMPLY SECURE

11\acunetix

OT0PsP1n

S E C U RITY una@s

Check Poinf

SOFTWARE TECHNOLOGIES LTD.

Jrivelock


CFLIR

CJMORPHISEC

Moving Target Defense

[np] HEWLETT ®

PACKARD

Q Regus Business Center, Southdowns

Ridge Office Park, c/o John Vorster &

Nellmapius Drive Irene, Centurion, 0157

\. +27(0)12-003-3233

t!t +27(0)86-638-9959

!I info@secur.co.za

G www.secur.co.za I distribution.secur.co.za I shop.secur.co.za


CONTENTS

Government

South African National Government 106

Reference

Sector contents 46

Index 144

Mbombela

Mahikeng

eMalahleni

12

SOUTH AFRICAN BUSINESS 2017

SOUTH AFRICAN BUSINESS 2017

12


CREDITS

Publisher: Chris Whales

Publishing director:

Robert Arendse

Editor: Simon Lewis

Writing: John Young and

Karen Kühlcke

Online editor: Christoff Scholtz

Art director: Brent Meder

Design: Colin Carter

Production: Lizel Olivier

Ad sales: Sam Oliver, Gabriel

Venter, Jeremy Petersen, Nigel

Williams and Sydwell Adonis

Managing director: Clive During

Administration & accounts:

Charlene Steynberg and

Natalie Koopman

Distribution and circulation:

Edward MacDonald

Printing: FA Print

South African

Business

A unique guide to business and investment

in South Africa.

FOREWORD

Welcome to the fifth edition of the South African Business

journal. First published in 2011, the publication has established

itself as the premier business and investment

guide to South Africa, supported by an e-book edition

at www.southafricanbusiness.co.za.

In addition to an up-to-date economic overview of the country,

analyses of the main industrial sectors, plus profiles of the nine provincial

economies, this edition of South African Business includes

special features on key topical issues such as skills development

and education, renewable energy and the REIPPPP programme,

and trade with Africa.

South African Business is complemented by nine regional

publications. The e-book editions can also be viewed online:

Western Cape Business | www.westerncapebusiness.co.za

Gauteng Business | www.gautengbusinessguide.co.za

Limpopo Business | www.limpopobusiness.co.za

KwaZulu-Natal Business | www.kwazulunatalbusiness.co.za

Eastern Cape Business | www.easterncapebusiness.co.za

North West Business | www.northwestbusiness.co.za

Mpumalanga Business | www.mpumalangabusiness.co.za

Free State Business | www.freestatebusiness.co.za

Northern Cape Business | www.northerncapebusiness.co.za

These unique titles are supported by a monthly business e-newsletter

with a circulation of over 35 000.

Chris Whales

Publisher, Global Africa Network Media

Email: chris@gan.co.za

DISTRIBUTION

South African 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, airport lounges, provincial government

departments, municipalities and companies.

COPYRIGHT | South African 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, Mainstream Power,

Wikimedia Commons, MAN.co.za, icc.co.za, Boogertman + Partners,

Mapio.net, Anglo American, SA Tourism, Bloomberg, Coega Dairy, and

Eugene Armer RailPictures.

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: info@gan.co.za | Website: www.gan.co.za

ISSN 2221-4194

DISCLAIMER | While the publisher, Global Africa Network Media (Pty)

Ltd, has used all reasonable efforts to ensure that the information contained

in South African Business is accurate and up-to-date, the publishers

make no representations as to the accuracy, quality, time-liness,

or completeness of the information. Global Africa Network Media will

not accept responsibility for any loss or damage suffered as a result of

the use of or any reliance placed on such information.

13

SOUTH AFRICAN BUSINESS 2017


SPECIAL FEATURE

South African economy at a glance

Insight into the performance of the South African economy is provided through these

graphical representations of key statistics.

ZIMBABWE

NAMIBIA

BOTSWANA

Limpopo

0.9% (7.1%)

MOZAMBIQUE

North West

-3.6% (6.5%)

Gauteng

2.1%

(34.3%)

Mpumalanga

2.7%

(7.5%)

SWAZI-

LAND

Northern Cape

2.8% (2.1%)

Free State

1.8%

(5%)

LESOTHO

KwaZulu-

Natal

2.3%

(16.1%)

Western Cape

2.0% (13.6%)

Eastern Cape

1.0% (7.6%)

SA GDP: Percentage of growth per province (2014) and percentage

contribution to national GDP (figures in brackets).

SOURCE: STATS SA WWW.STATSSA.GOV.ZA

PROVINCE CAPITAL PREMIER POPULATION (2015) AREA GRP BILLION RAND

Eastern Cape Bhisho

Phumulo

Masualle

6 916 200 168 966km 2 R289.9

Free State Bloemfontein

Elias Sekgobelo

"Ace" Magashule

2 817 900 129 825km 2 R189.1

Gauteng Johannesburg David Makhura 13 200 300 18 178km 2 R1 305.6

KwaZulu-

Natal

Pietermaritzburg Willies Mchunu 10 919 100 94 361km 2 R610.1

Limpopo Polokwane

Stanley

Mathabatha

5 726 800 125 754km 2 R271.5

Mpumalanga Mbombela David Mabuza 4 283 900 76 495km 2 R284.2

North West Mahikeng

Supra

Mahumapelo

3 707 000 104 882km 2 R249.5

Northern Cape Kimberley Sylvia Lucas 1 185 600 372 889km 2 R79.9

Western Cape Cape Town Helen Zille 6 200 100 129 462km ² R518.1

Snapshot of South Africa’s provinces

SOURCE: INSTITUTE OF RACE RELATION’S SOUTH AFRICA SURVEY 2016 AS REPORTED ON BUSINESSTECH.CO.ZA

SOUTH AFRICAN BUSINESS 2017 14


SPECIAL FEATURE

How South Africa’s economy performed in 2015. *

* PRELIMINARY RESULTS | SOURCE: GROSS DOMESTIC PRODUCT, 4TH QUARTER 2015 | WWW.STATSSA.GOV.ZA

SECTOR LP MP GP NW KZN FS NC EC WC

Agriculture 2.5 2.8 0.4 2.1 3.8 4.3 6.0 7.5 3.5

Mining 29.4 24.9 3.3 33.6 1.9 13.3 26.7 0.2 0.3

Manufacturing 2.5 11.5 13.5 4.4 15.8 8.5 2.1 12.2 11.8

Electricity 2.8 5.4 2.4 1.4 2.5 3.1 3.0 1.4 2.0

Construction 2.5 3.3 4.3 2.6 3.0 2.0 1.6 2.1 4.3

Wholesale 10.8 10.3 14.2 9.3 15.5 12.3 9.9 14.7 17.0

Transport 5.4 5.8 8.3 6.1 11.9 7.1 7.8 7.9 9.1

Finances 14.0 10.9 22.8 11.1 16.5 14.2 11.6 18.6 26.6

Personal

Services

Government

Services

3.8 4.3 3.6 7.0 5.8 10.2 8.1 9.1 5.1

16.0 10.5 17.0 12.1 13.3 14.7 12.8 22.0 10.2

Taxes 10.3 10.3 10.1 10.3 10.0 10.3 10.2 10.2 10.0

Gross Domestic Product by province, percentage contribution.

SOURCE: STATS SA WWW.STATSSA.GOV.ZA/?PAGE_ID=735&ID=1

15

SOUTH AFRICAN BUSINESS 2017


SPECIAL FEATURE

7%

6%

5%

4%

3%

2%

1%

0

2011 2012 2013 2014 2015 2016

CPI (percentages in order from 2011 to 2016)

PPI (percentages in order from 2011 to 2016)

denotes data for September 2016 rather than the average for the full year.

**

Inflation rate 2011 to 2016

SOURCE: WWW.STATSSA.GOV.ZA

Mineral products 20.41%

Precious metals 18.24%

Vehicles, aircraft and vessels 12.57%

Products iron and steel 12.02%

Machinery 9.69%

Chemicals 6.47%

Vegetables (including fruit, nuts and cereals) 4.96%

Prepared foodstuff (including beverages) 4.29%

Plastic and rubber 2.11%

Wood pulp and paper 1.92%

South Africa’s top 10 export commodity categories: 2015

SOURCE: SOUTH AFRICAN REVENUE SERVICE WWW.SARS.GOV.ZA

Machinery 25.02%

Mineral products 16.12%

Vehicles, aircraft and vessels 10.4%

Chemicals 10.37%

Equipment components 7.3%

Products iron and steel 5.54%

Plastic and rubber 4.13%

Textiles 3.72%

Prepared foodstuff (including beverages) 2.93%

Photographic, medical equipment 2.71%

South Africa’s top 10 import commodity categories: 2015

SOURCE: SOUTH AFRICAN REVENUE SERVICE WWW.SARS.GOV.ZA

SOUTH AFRICAN BUSINESS 2017 16


SPECIAL FEATURE

Million Rand

R600 000

R400 000

R200 000

R0

Africa

Europe

America

Asia

Oceania

Other

unclassified

2010 2011 2012 2013 2014 2015 2016

Exports year on year world zone comparison (Including BLNS) 2010 to 2016

PRELIMINARY RESULTS | SOURCE: GROSS DOMESTIC PRODUCT, 4TH QUARTER 2015 | WWW.STATSSA.GOV.ZA

Million Rand

R600 000

R400 000

R200 000

R0

Africa

Europe

America

Asia

Oceania

Other

unclassified

2010 2011 2012 2013 2014 2015 2016

Imports year on year world zone comparison (Including BLNS) 2010 to 2016

PRELIMINARY RESULTS | SOURCE: GROSS DOMESTIC PRODUCT, 4TH QUARTER 2015 | WWW.STATSSA.GOV.ZA

17

SOUTH AFRICAN BUSINESS 2017


SPECIAL FEATURE

Special Economic Zones

Transforming the way business is done.

In 1750 the king and queen of Sweden invited

skilled craftsmen from all over Europe to take up

residence on their royal estate on the outskirts

of Stockholm. The little cottages that were given

to the experts still stand today, although they are

no longer home to lace-makers, silk-weavers and

cutlery creators.

Today the idea of creating specialised areas in

which new kinds of economic activity can thrive

is popular, and various forms fall under the heading

of Special Economic Zones (SEZs). Like King

Adolf Fredrik and Queen Lovisa Ulrika, modern

South African industrial planners want to create a

model for manufacturing goods locally that will

replace imports.

South Africa is investing in SEZs as a major plank of

its industrial development policy that seeks to attract

new skills and develop new industries.

SOUTH AFRICAN BUSINESS 2017 18


SPECIAL FEATURE

Key goals behind the establishment of SEZs are:

• to encourage industries to develop in clusters,

leading to economies of scale, skills-sharing and

easier access by suppliers

• to create industrial infrastructure to promote

investment

• to promote cooperation between the public and

private sectors

• to use the zones as a launching pad for other plans

to further development

Apart from attracting foreign direct investment (FDI)

and boosting employment, SEZs can also play a role

in helping to add new sectors or sub-sectors to

an economy.

There is a cautionary aspect to the Swedish tale

in that the scheme only worked as long as subsidies

were available – but if SEZs are properly implemented

there is no reason why they should not become selfsupporting

in time.

South Africa is targeting a variety of sectors in

SEZs around the country, but there is a decided emphasis

on beneficiation, mainly of minerals but also

of agricultural products. There is a strong feeling that

South Africa can do much more with the product

of its soils – whether that be using manganese to

convert iron into steel or creating fruit juices out of

apples and pears.

Special Economic Zones are created in terms of the

Special Economic Zones Act of 2014 (Act 16 of 2014).

The act defines an SEZ as "geographically designated

areas of the country that are set aside for specifically

targeted economic activities, and supported through

special arrangements and systems that are often different

from those that apply to the rest of the country".

Lower corporate tax rates and duty-free imports are

among the advantages that accrue to investors.

SEZs come in different forms: South Africa has

several existing Industrial Development Zones (IDZs)

and a Free Trade Port (FTP). The Coega IDZ (Nelson

Mandela Bay Metropole) and the Dube TradePort at

the King Shaka International Airport outside Durban

are two well-known examples. Other licensed IDZs are

at Saldanha Bay, East London and Richards Bay. The

Dube TradePort aims to leverage its proximity to an

airport. In the same way, "aerotropolis" developments

are mooted for Ekurhuleni (OR Tambo airport) and

Cape Town International Airport.

Coega IDZ has recently attracted huge investments

from a variety of Chinese firms in the engineering,

solar manufacturing and automotive sectors.

The latest investment is from BAIC, who will

take a 65% stake in a multi-billion-rand joint venture

with the Industrial Development Corporation with

the intention of producing 100 000 vehicles. First

Automotive Works (FAW) has already established

a R600-million assembly plant in Zone 2 at Coega.

Richards Bay, apart from being the country's

main site for the export of coal, is also a registered

Industrial Development Zone and consequently is

in a position to attract investors in a range of sectors.

Recent developments at RBIDZ have seen an

investment in an oil and gas facility and it is hoped

that the ocean will yield finds of gas to provide

cheap feedstock.

Another type of SEZ is an Export Processing Zone

(EPZ). All of these interventions are intended to form

part of broader trade and investment plans such

as the National Development Plan (NDP) and the

Industrial Policy Action Plan (IPAP). The NDP is a

broad-strokes plan that seeks to coordinate development

in a range of sectors, and promotes ambitious

infrastructural projects.

South Africa's most recent IPAP has a manufacturing

focus, so beneficiation fits well into the idea of

diversifying and strengthening the country's ability

to make things.

In the context of the new and burgeoning

renewable energy sector, the state, through the

Department of Trade and Industry (dti), can pass

legislation that requires developers to increase the

level of local content on the solar panels or wind

turbines that are used. In this way, a totally new local

industry can be created; and an SEZ would be the

place to do it. Skills transfer is another stated aim

behind the SEZ programme.

Various incentives are available to investors in

an SEZ. These include tax breaks from the South

African Revenue Service (SARS), subsidised interest

rates from the Industrial Development Corporation

(IDC), subsidies for employees earning below a

certain level and subsidies for the training of the

workforce, incentives and grants from the dti, and

incentives available from national electricity utility

Eskom. Other benefits might include a building

19

SOUTH AFRICAN BUSINESS 2017


SPECIAL FEATURE

R150-billion, will generate

1 000MW in its first phase.

Forty renewable projects

have already been

approved in the Northern

Cape with the majority of

projects (27) using the solar

photovoltaic method with

just seven using the concentrated

solar power (CSP)

technology. The Northern

Cape is also home to five

approved wind farms and

one small (10MW) hydroelectric

project on the

Orange River.

allowance, employment incentives and the fact

that an SEZ is a customs-controlled area.

Specific incentives relating to energy savings

and reductions in environmental impact are available,

both from Eskom and the dti. Within the dti's

Manufacturing Competitiveness Enhancement

Programme, there is a Green Energy Efficiency

Fund, all of which are designed to make (the right

kind of) investment more attractive.

New zones

Upington, Northern Cape

The 400ha site of the Upington SEZ in the Northern

Cape Province is close to the regional airport and

is well served by access roads. One of the goals

is to capitalise on the already existing (and fastgrowing)

solar power industry by promoting special

investment packages to investors in that field,

and encouraging the development of skills and

services to support that sector within the SEZ.

Feasibility plans are being done by Eskom on

building a massive solar park that will generate an

eighth of the county's electricity needs – 5 000MW

– near Upington. Sixteen square kilometres of land

have been identified and Eskom is looking for private

partners. The park, which will cost more than

Maluti-A-Phofung, Free

State

The Maluti-A-Phofung Special Economic Zone takes

advantage of the strategic position Harrismith holds

in the Free State's north-eastern corner. The N3

highway carries huge volumes of cargo between

Gauteng and the ports of KwaZulu-Natal so it is

logical that the first focus of this SEZ is logistics.

Over and above the Gauteng-KwaZulu-Natal route,

another logistics axis extends between Harrismith

and Bloemfontein for the delivery of products by

rail and road.

Within the Maluti-A-Phofung SEZ, the Tshiame

Food Processing Park has 60 000m² available for

investors in food production, storage and distribution.

To entice investors, services such as logistics

will be provided as will warehousing, cold storage

and manufacturing facilities. A strong focus is to try

to get more local produce turned into products that

can be exported.

Musina-Makhado, Limpopo

In July 2016 the national cabinet approved the Musina-

Makhado Special Economic Zone (SEZ). Located in the

far north of Limpopo in the Vhembe district, Musina

is strategically located near the border of Zimbabwe

and on the Great North Road, which links South Africa

to the broader Southern African region.

The location of the Musina SEZ, with links to

Zimbabwe, Botswana and Mozambique, promotes

SOUTH AFRICAN BUSINESS 2017 20


SPECIAL FEATURE

the Trans-Limpopo Spatial Development Initiative.

Logistics will be one of the key focus areas of the SEZ.

Other sectors that will be concentrated on include

agri-processing, energy and mineral beneficiation.

De Beers' giant Venetia diamond mine is

nearby. The company's most recent life-of-mine

expansion project, worth about R30-billion, will

result in the mine producing until 2046.

Soon after the announcement of the designation

of the SEZ, the dti announced that a consortium

of Chinese investors, Sino, has agreed to

put R40-billion into the Musina SEZ where they

will operate the mineral beneficiation operations.

The first phase of this is to build a power plant.

The dti estimates that the completed SEZ could

create more than 20 000 jobs.

Tubatse, Limpopo

An application for an SEZ at Tubatse is pending.

Tubatse is in the Sekhukhune District Municipality

and hosts a number of mining operations. The SEZ

in Tubatse will focus on the beneficiation of platinum

group metals and mining-related manufacturing.

The province of Bashkortostan in Russia has

also expressed an interest in the SEZs of Limpopo.

Nkomazi, Mpumalanga

The Nkomazi Local Municipality has already earmarked

land for the SEZ that will be established in

terms of the Special Economic Zones Act.

The location of the SEZ near the Mozambique

border and along the Mozambique Corridor gives

investors in the SEZ logistical advantages and opportunities.

There are tax advantages for investors

in the SEZ and proximity to the Mozambican port of

Matola would be a large benefit to anyone wanting

to create a dry port or logistics base.

The provincial government has a broader plan

to create what Premier David Mabuza has called

"industrial centres of competence". The idea is to

cluster in a particular geographical area centres

that will provide economies of scale for manufacturers

and traders but also training and research

facilities that will benefit the relevant sector. These

could also be described as sector hubs. Plans are

in place for the creation of several such hubs,

including:

• Mining and Metals Technology Park, Steve

Tshwete Local Municipality

• Petro Chemical Industrial Technology Park,

Secunda

• Agriculture and Forestry Industrial Centre of

Competence, Mbombela area

The planned SEZ falls within this quite large

geographical area and the two other focus

points are an International Fresh Produce Market

(Mbombela) and a Forestry Technology Park in

the town of Sabie.

Bojanala, North West

The SEZ in the platinum-rich Bojanala district will

be known as Platinum Valley SEZ and will focus

on mineral beneficiation. The SEZ will centre on

Bodirelo Industrial Park, near the town of Mogwase.

Atlantis,Western Cape

The Atlantis Greentech SEZ should encourage industrial

development and employment opportunities

in the Green economy. Specific incentives are

available to investors in this SEZ.

Agri-parks

Five agri-parks are planned in each of the Free State's

district municipalities. Within these parks, support

for rural smallholders will be available in terms of

equipment hire from a central source, storage facilities,

packaging of produce and getting products to

market. The agri-park intends to provide a network

for farmers and manufacturers. Training will also

be available.

21

SOUTH AFRICAN BUSINESS 2017


3 600 people.

26 months

turnaround time.

8 million man-hours

worked. The biggest

platinum plant

in the world.

Impossible?

Not for DRA.

With an output of 600 000 tpm, Anglo Platinum’s Mogalakwena Platinum Mine remains the biggest

producer of platinum in the world. From project management to detailed design work, construction

and associated infrastructure, it marks one of the biggest project undertakings for DRA to date.

A first in terms of its size but not experience, DRA has delivered 80% of the world’s platinum plants

over the past 20 years, Mogalakwena not only required us to work around an extremely tight time

frame, its scope demanded our utmost attention to detail, uncompromising quality control and

dedicated, passionate team work. From 2 817 drawings to 27 000 m³ of poured concrete, it’s our

desire to pioneer uncharted challenges that continue to ensure we deliver every time, even when

it’s the first time.

DRAglobal.com

22


23 Extraordinary Possibilities


SPECIAL FEATURE

Renewable energy programme

powers ahead

A private energy producers' programme has already attracted R200-billion in private

investment – and more is in the pipeline.

Fast, efficient and adaptable – these are not

always the first words that spring to mind

when businessmen and investors get together

to talk about government. But in the

case of South Africa's programme to allow private

investors to build renewable energy plants and sell

power to the national grid, efficiency and speed

have been the watchwords.

The Renewable Energy Independent Power

Producer Procurement Programme (REIPPPP) had by

May 2016 delivered the promise of 6 377 megawatts

(MW) with an investment value of R250-billion and

many of the projects are already delivering electricity

to South Africa's grid.

The REIPPPP has so far seen four phases of bidding

(known as bidding windows), and competition

among investors is fierce. The most recent, fourth,

window attracted 77 bids from which just 13 were

chosen, but a further 13 bids were accepted later.

Collectively the 26 projects will add 2 205MW of

power and inject R23-billion into the economy.

The generation mix accepted by the Department

of Energy in the fourth window gives a good indication

of the preferred types of energy that have

characterised the whole REIPPPP:

• 12 wind projects (1 368MW)

• 12 solar photo-voltaic (solar PV) projects (813MW)

• one hydro-power project (5MW)

• one bio-mass project (25MW)

Solar and wind have been the most popular projects

over the life of the REIPPPP (which started accepting

the first bids in November 2011), with solar PV

generating more interest than the concentrated

solar power (CSP) method.

According to the South African Wind Energy

Association (SAWEA), shareholding for local com-

SOUTH AFRICAN BUSINESS 2017 24


SPECIAL FEATURE

munities has reached an estimated net income of

R29.2-billion over the lifespan of the projects, in most

cases estimated to be about 20 years. Some 14 000

new jobs are expected to be created, mostly in rural

areas, and more than R30-billion has already been

spent on black economic empowerment (BEE) in

the construction phase.

Johan van den Berg, the CEO of the South African

Wind Energy Association draws on a recent report

by Moody's Corporation that South Africa has the

world's fastest-growing green economy when he

says, "We’ve built a R7-billion infrastructure sector

in four years, all with private money, creating many

jobs and significant new manufacturing capability,

while quickly increasing local content beyond 45%."

Moody's reported that in 2015 South Africa attracted

R63-billion in asset financing for renewable energy

projects – a year-on-year growth of 300%.

Van den Berg points out that the figure represented

30% of all foreign direct investment in South

Africa, a remarkable percentage for a very young sector.

"Additionally," he adds, "the cost of wind power

has steadily lowered to approximately 40% below

the cost of new coal power at Medupi.”

Other research, by GlobalData, estimates that

a further three GW of wind energy will be added

to South Africa's grid by 2020, taking the total up

to 5.6GW.

The growth of the solar energy sector has been

quite spectacular, particularly in the Northern Cape

Province. The railway junction town of De Aar is no

longer famous only for being in the middle of everywhere

– it now boasts significant energy-generating

power. Not least because of the 175MW Solar Capital

project outside the town, the largest solar plant of

its type on the continent. The multi-phase project

will eventually attract investment to the tune of

R4.8-billion.

The Department of Energy has another programme

intended to complement the REIPPPP,

the Small Projects Renewable Energy Independent

Power Producer Programme. This is intended to encourage

smaller investors to get involved in pitching

for projects in the 5-10MW range.

The Department of Trade and Industry (dti) believes

there is great scope for local manufacturing

in some of the downstream sectors, for example in

building infrastructure for renewable energy plants

and in the commercial and industrial solar rooftop

market. PV panels of public entities will soon have to

be made in South Africa and the glass industry could

get involved in coating glass for CSP heliostats. The

dti has also put forward the idea that there might

be some cross-over in capabilities between the automotive

sector and the manufacturing sector for

renewable energy plants.

Partnerships and prices

Many partnerships between local and international

companies have already been established, with various

consortiums winning several of the bigger bids

in the REIPPPP. Even where a foreign company is

carrying the bulk of the investment, they are obliged

25

SOUTH AFRICAN BUSINESS 2017


SPECIAL FEATURE

to have South African partners. These are often local

energy companies and representatives of residents.

Typically, a community trust is established to represent

the interest of the local community.

Among the international investors active in

the REIPPPP process are Enel Green Power (Italy),

Scatec Solar (Norway), Globeleq (UK), Mainstream

Renewable Power (Ireland), Gestamp Renewable

Energies and Abengoa (Spain), Solar Capital (subsidiary

of Phelan Energy Group Ireland), SunEdison

(USA), ACWA Power (Saudi Arabia), China Longyuan

Power Group (China), Engie (France), juwi Group

(Germany) and Tata Power of India. The lastnamed

company has teamed up with the energy

unit of Exxaro Resources to form a company

called Cennergi.

Partnerships with foreign utilities or power companies

are becoming more common as the REIPPPP

progresses, in part because the competition is bringing

down the price at which bidders are offering to

sell power. This makes it difficult for South African

firms to compete on their own.

Johannes Horstmann of Arup wrote in Engineering

News in April 2016 that prices have dropped significantly

in the course of the REIPPPP: he cites a 29%

cheaper tariff for solar PV in round three than the

round before (R786/MWh); and a 25% drop in wind

prices (to R619/MWh). This obviously sounds nice

for the consumer, but is it sustainable for investors?

Horstmann notes that the trend suggests that solar

PV prices could further decrease by 19% and wind

by 8% but these are likely to correct to rates closer

to 6% and 3%.

The other factor favouring foreign investors is the

fact that many of them have strong reserves of cash

and don't need to borrow money. The high price of

borrowing makes it difficult for South African firms

to compete independently.

The national utility, Eskom, is the only buyer of the

energy that private companies produce. Central to

the business plan of every private producer's bid is

the agreement with Eskom that it can sell what it produces,

at an agreed price. So there was understandable

consternation when senior Eskom executives

started questioning whether they would indeed

continue to buy power from independent producers.

Eskom's single shareholder, the South African

government, quickly assured the markets (through

SOUTH AFRICAN BUSINESS 2017 26


Future Home Energy Services (Pty) Ltd is a leading manufacturer,

distributor and installer of solar power solutions in South Africa. As

a manufacturer and direct importer of solar power products and

high-efficiency LED lights, we aim to supply cost-effective solutions

– making it more affordable to own solar power at home and business. We

continually search the market to find solar power products that produce

electricity at a cost which is lower than that supplied from the grid. As

a result we provide a number of solutions from day-time supplement

systems to full off-grid systems.

In support of our solar power solutions we also supply LED lights,

which reduce the overall power requirements for the home or

business and therefore reduce the solar power system cost.

Our products and services include:

• Tshukudu Solar Mounting Systems, which are locally designed and manufactured

in our own production facility.

• Authorised distribution of a range of international products including solar

panels, solar batteries, inverters, solar charge controllers, mounting systems

and solar electrical cables.

• Installation of solar systems through an established network of accredited

installers in over 30 designated areas across South Africa.

Let us know how we can help you obtain affordable solar power or get in touch with us

if you are interested in becoming one of our accredited installers.

Tel: + 27 18 468 4317 | Cell: +27 83 530 0595

Email: info@future-home.co.za | Website: www.future-home.co.za


SPECIAL FEATURE

the Minister of Energy and an announcement from

the Office of the President) that the REIPPPP was still

central to government policy. President Zuma put

out a statement to the effect that, "The Presidency

wishes to clarify that all the Independent Power

Producer Programmes, namely renewable energy,

coal and gas and any other determinations made by

the Minister of Energy are and remain government

policy and are supported by the Presidency."

There are some energy planners (including senior

Eskom personnel) who think that South Africa

needs a new fleet of nuclear power stations. At the

moment South Africa has one, at Koeberg in Cape

Town, whose two reactors supply about 5% of South

Africa's electricity.

However, the amount of power produced by

the renewable energy programme is growing so

rapidly – and prices are coming down so fast – that

some researchers are questioning whether coal

and nuclear are the only kinds of energy that can

supply the so-called "base load" for the national

grid. The base load is the permanent minimum

amount of power that the grid must be able to

deliver at all times.

Conventional wisdom says that only coal and

nuclear can provide that base load. But a study done

by the Energy Centre of the Centre for Scientific

and Industrial Research (CSIR) suggests that wind

and solar power (supported by natural gas, biogas

and hydro-electric power) might be up to the task.

There is particular interest in natural gas as a source

of a very versatile and mobile back-up for the main

types of renewable energy: if the sun goes behind

a cloud or the wind does not blow, it is very easy to

turn on the gas.

As it happens, the Department of Energy is

very keen to promote gas-to-power. It is targeting

the procurement of 3 126MW through its

programme and intends spending R64-billion

on port, pipeline, generation and transmission

infrastructure at three key ports, Richards Bay,

Coega and Saldanha Bay.

South Africa's long-term energy plan is underpinned

by the Integrated Resource Plan (IRP) but

many industry watchers feel that a new one is due:

the latest (published) version of the IRP is dated 2010,

and the economic situation has changed quite a bit

since then.

SOUTH AFRICAN BUSINESS 2017

28


LESEDI NUCLEAR SERVICES

Leaders in the South African Power Industry

Home grown Lesedi Nuclear Services is a leading EPC

(Engineering, Procurement and Construction) company with

extensive experience in the execution of turnkey engineering

projects. It has operational footprints throughout the South

African power industry.

LESEDI NUCLEAR SERVICES

Lesedi’s Competencies Include:

Having completed numerous projects in both nuclear and conventional

environments,

Leaders

primarily

in

at Eskom’s

the

Koeberg

South

Power

African

Plant, construction

Power Industry

• Project Management

of the Open Cycle Gas Turbine Power Plans in the Western Cape, and

• Construction Management

executing EPC contracts for the balance of plants to Eskom’s Medupi

• Design Engineering

and Home Kusile Coal grown Power Lesedi Plants - still Nuclear under construction Services - is Lesedi a leading is wellplaced

Construction) to play a leading company role in offering with competitive extensive EPC services experience to the in the • Engineering execution Procurement of turnkey and engineering

EPC (Engineering, Procurement and

country’s projects. power It infrastructure has operational industry. footprints throughout the South Construction African (EPC) power industry.

• Specialised Shutdown Maintenance

Lesedi is now a level Four B-BBEE (Value Added) company and has

activities (Globally)

registered 9ME, 7EP, 7SF, 1GB, 1ISI and 1CE certification levels with

• Provision of Technical Personnel

the Having Construction completed Industry numerous Development projects Board. in The both company’s nuclear main a wide range of services to Koeberg Nuclear Pow

and conventional environments, primarily at Eskom’s Station. • Our Heating, major Ventilation involvement and

shareholder is global nuclear company, AREVA, with the remaining shares

has been in

split Koeberg between Group Power Five, Plant, the construction J&J Group and of local the Lesedi Open management. Cycle supply of Air technical – Conditioning personnel for plant upgrad

Gas Turbine Power Plans in the Western Cape, and engineering, project management, procurement a

Since 2001, Lesedi Nuclear Services has provided a wide range of services • Power Plant Construction

executing EPC contracts for the balance of plants to maintenance.

to Koeberg Nuclear Power Station. Our major involvement has been in • Nuclear, Gas Turbine, Coal Power

Eskom’s Medupi and Kusile Coal Power Plants - still

the

under

supply of

construction

technical personnel

- Lesedi

for plant

is well-placed

upgrades, engineering,

to play a

project

To date, over Stations, 150 Wind different Turbines, modifications Solar have be

management, leading role procurement in offering and maintenance. competitive EPC services to completed • Biomass, by Lesedi BioEnergy, at Koeberg. Hydrogen, Our Outa

the country’s power infrastructure industry.

services division also provides key nuclear skil

To date, over 150 different modifications have been completed by

Hydro, Waste-to-Energy

personnel to various nuclear facilities internationa

Lesedi Lesedi at Koeberg. is now Our a level Outage Four services B-BBEE division (Value also Added) provides key notably in Europe, North America and South Ameri

nuclear company skilled personnel and has to registered various nuclear 7EP, facilities 9ME, internationally,

7SF, 1SI

LESEDI NUCLEAR SERVICES (PTY) Ltd

notably certification in Europe, levels North America with the and Construction South America. Industry Lesedi also Lesedi provides Nuclear continuous Services, 12 Edison operational Way, supp

Development Board. The company’s main to both Eskom Century and City, AREVA 7441, Cape with Town, up South to 300 Africatechni

Lesedi shareholder also provides is continuous global nuclear operational company, support to AREVA, both Eskom personnel working on-site during outage perio

and with AREVA the with remaining up to 300 technical shares personnel split between working on-site Group during Other services Tel: +27 include 21 525 1300 Steam or 0861 Generator 551 1049(SG) Wa

outage Five, periods. the J&J Other Group services and include local Lesedi Steam Generator management. (SG) Water Lancing, Fax: Pumps +27 21 and 525 Valve 1333 Maintenance, Prim

Lancing, Since Pumps 2001, and Lesedi Valve Nuclear Maintenance, Services Primary has Pump provided Maintenance Pump Maintenance Email: lesedi@lesedins.co.za

and Reactor Refuelling.

and Reactor Refuelling.

www.lesedins.co.za • www.areva.com

GET IN TOUCH


INTERVIEW

REDISA: putting

waste to work

Hermann Erdmann, the dynamic CEO of REDISA, is driving

awareness of the value of circular economies and the

massive potential for job creation.

Hermann Erdmann

BIOGRAPHY

An entrepreneur and businessman,

Hermann Erdmann has

extensive experience in the

manufacturing and retail sectors

having served on a number

of industry-related boards.

Erdmann's interest in environmental

sustainability, transformation

and empowerment of

the previously disadvantaged

resulted in the establishment of

REDISA, and the development

of the first approved Industry

Waste Management Plan.

Please give a brief overview of the history and activities

of REDISA.

The REDISA Plan was gazetted in terms of the National Environmental

Management: Waste Act, 2008, and Regulation 11(4) of the Waste Tyre

Regulations, 2009.

REDISA collects a waste management fee of R2.30 per kilogram

of tyres manufactured or imported, paid directly to the organisation.

These funds are applied according to the mandates set out in the Plan.

The REDISA Plan provides government with an environmental solution

at no cost to the fiscus, with its core mandates being both environmental

and socio-economic upliftment through the development of both

entrepreneurial and job opportunities, ultimately contributing to the

economic growth of the country.

The REDISA model uses the fees collected to directly fund the development

of recycling industries, establishes reverse logistics networks,

carries out R&D and promotes secondary interests. It will also

provide producers the opportunity to reduce their costs by designing

in circularity.

Can you update us on progress with the Integrated Industry

Waste Tyre Management Plan and new developments

at REDISA over the past 12 months?

A number of achievements have been made since inception, including

having created over 3 000 jobs, and supporting more than 200 SMMEs.

In addition to the milestones reached in the last 12 months, the

REDISA Plan has also been lauded on the international stage as a

particularly successful model in terms of circular economy development.

At the 2015 Global Economic Symposium (GES), the REDISA Plan

was presented to an international panel and was adopted by the GES

as an official solutions proposal to address critical challenges being

faced internationally.

In addition, in January 2016, REDISA was announced as runner-up

in the Circular Economy Government, Cities & Regions category of

the Circular Awards. The awards were presented at a ceremony at the

World Economic Forum annual meeting in Davos.

SOUTH AFRICAN BUSINESS 2017

30


INTERVIEW

The Circulars are the world’s premier circular

economy award programme, and offer recognition

to all individuals and organisations from commerce

and civil society across the globe that have made

a notable contribution to driving circular economy

principles.

R&D is a critical element of the REDISA Plan, and

in 2013, REDISA signed an MOU with Nelson Mandela

Metropolitan University (NMMU), which was in turn

the foundation for an agreement finalised in 2014,

which addressed two areas:

• REDISA funds students undertaking research

projects related to tyre recycling, which both

contributes to knowledge in this area, and trains

up people who can work in the industry.

• REDISA is also using NMMU expertise to support

the creation of the Product Testing Institute (PTI)

which will carry out tyre testing according to

SA homologation standards and international

standards, and will be developing a new set of

standards which will define an environmental

rating for tyres.

The completion of the construction of the PTI is

expected within the next 18 to 24 months, with full

operational capacity as a tyre homologation facility

scheduled for within the next 36 months. REDISA is

facilitating the establishment of the PTI that has as

its main objective to test tyres and environmentally

rate and certify each model of tyre.

Currently, the waste management fee paid to

REDISA is standardised at R2.30 per kilogram. Once

an environmental rating system has been developed

and linked to tyre homologation standards, REDISA

will be in a position to set a new pricing structure.

This will allow those tyres manufactured using better

environmental standards to have a lower fee, while

those tyres that are manufactured with more adverse

effects on the environment will have a higher fee.

Broadly, the PTI establishment process will be

construction; accreditation for SA homologation; accreditation

for EU/US homologation; development

of the environmental rating system.

What is the vision for the future of REDISA?

Since beginning operations mid-2013, REDISA’s

Waste into Worth concept has been successfully

implemented to further the circular economy within

the tyre industry and we have achieved a number

of noteworthy milestones.

Our strategy for this year is to continue to meet

the requirements as outlined in the REDISA Plan,

particularly in line with supporting the development

of SMMEs and recyclers which will further

drive development of the tyre recycling industry

in South Africa. This development will be achieved

predominantly through investment in infrastructure,

business support and research into new applications

for waste.

31

SOUTH AFRICAN BUSINESS 2017


INTERVIEW

and developing small businesses by turning waste

into worth. From 1 December 2013 to the end of

February 2016, REDISA created over 3 000 jobs. REDISA

is currently collecting tyres from 1 385 dealers, and as

the Plan continues in its five-year rollout, more dealers

and collection points will be collected nationwide.

Driving awareness around the value of circular

economies and the opportunities created by the

concept remains key to REDISA.

It is important for us as a nation to explore the

notion of a circular economy, which is an exciting

approach that will not only eliminate threats to environmental

quality and resources, but will also positively

contribute to the growth and development

of the economy. The Product Testing Institute is an

important enabler of circularity in the tyre industry.

The circular economy approach could successfully

be used to recover and recycle plastic waste,

waste from agriculture, organic chemical processes

and mining operations, to name a few. This would

generate major socio-economic and environmental

benefits, going far beyond what has already been

achieved in the waste tyre sphere.

How have REDISA's activities and operations

improved people's lives?

Developing the entrepreneurial spirit is an important

economic driver and poverty eradicator for South

Africa, and as such the REDISA Plan seeks to support

small business owners (both new and existing),

entrepreneurs and secondary businesses within the

informal sector that will, in turn, create even more

job opportunities.

REDISA has made significant progress towards

building a viable and sustainable circular economy

focusing on tyre recycling, and what we are most

proud of is the impact the initiative has made to

the many people both employed by REDISA, and

supported in terms of secondary industry.

In a little under three years REDISA has made remarkable

progress in South Africa in creating jobs

"THE CIRCULAR ECONOMY

APPROACH COULD

SUCCESSFULLY BE USED

TO RECOVER AND RECYCLE

PLASTIC WASTE, WASTE

FROM AGRICULTURE,

ORGANIC CHEMICAL

PROCESSES AND MINING

OPERATIONS."

In addition, over 200 SMME business operations are

working with REDISA as per the Plan and rollout.

Furthermore, REDISA has put 80% of revenue

collected from the waste management fee back

into local communities by creating a market for the

handling of waste.

How has REDISA contributed to small

business development in South Africa,

and what opportunities are there for

business?

REDISA is committed to small business development

and job creation that is essential to help combat the

escalating unemployment rate in the country. A key

challenge (and one that is common for many small

businesses and start-ups) is that access to funding

has not been addressed adequately. The solution to

SOUTH AFRICAN BUSINESS 2017

32


INTERVIEW

derived from the OTR tyres can

be used in asphalt, roofing tiles,

rubber bricks and playground

matting, to name but a few.

this challenge is our approach to entrepreneurship,

business development and empowerment.

REDISA’s business incubation programme addresses

these funding challenges. We support the

development of businesses with advisory and administrative

support services. Where the business

proves to be viable, the ownership is passed to candidates,

at market value, who meet with specific

performance requirements in terms of compliance,

operational management, financial management,

and product and market development.

Waste Beneficiation is one such example of what

is possible through REDISA’s business incubation

programme. The business brings a unique solution

to downsize and remove large Off the Road Tyres

(OTR) from stockpiles, allowing for abatement plans

to be developed and implemented at the mines. The

company has the capacity to downsize between

50-60 tons of OTR tyres per day with state-of-theart

machinery situated to service identified mines.

The project addresses the environmental challenge

posed by the vast volumes of discarded OTR tyres.

In addition, Waste Beneficiation adds to the

value chain of the country as the crumbed product

How can businesses in the

private sector take up opportunities

with REDISA?

There is a growing demand for

more and more waste tyres that

can be used for end products

made from the rubber, steel and

textile derived from processing

waste tyres. Crumb rubber is the

result of processing automotive

and truck scrap tyres in particular.

During this process the steel and

tyre cord (fluff) is removed, leaving

tyre rubber with a granular

consistency. This rubber crumb is

often used in astro-turf as cushioning,

where it is sometimes

referred to as astro-dirt, asphalt

for tarring the roads, floor mats, carpet padding,

vehicle mudguards and adhesives.

Due to this growing demand, we see this as

an opportunity for new recycling businesses to

get involved in the value chain. REDISA welcomes

and encourages all compliant small businesses interested

in recycling to submit an application to

get involved in the REDISA Plan and to assist us to

develop the economy of the country.

We have always believed that with waste comes

opportunity, and that by looking at waste differently

from a circular economy perspective we can only

grow as an economy. With South Africans generating

more than 108-million tons of waste per year

and only 10% of this being recycled, there is an

opportunity to turn the burden of waste around.

CONTACT INFO

Tel: 087-35-73873

Email: customersupport@redisa.org.za

Website: www.redisa.org.za.

33

SOUTH AFRICAN BUSINESS 2017


INTERVIEW

Turning waste into

wealth

REDISA is helping to clean up the environment and, as

the same time, empower and create jobs for thousands of

South Africans. REDISA director Stacey Davidson plays a

crucial role in the organisation’s community development

initiatives.

Stacey Davidson

What message would you like to share with the business

community about the work of community-based

organisations?

It’s essential to develop some kind of social impact, and it’s best if this is

community based or with organisations that are home-grown. After all,

when you actually understand the situation then you understand the

context in which the stakeholders operate. When you understand the

extent of the problem you are in a position to provide basic solutions.

I always say that you can’t bring a Japanese model and apply it to Africa.

The same applies when we’re looking at ways to deal with community

problems. You need to have community players participate and

I think that’s where REDISA has been successful because, as a public

benefit organisation, we’ve really focused on understanding the South

African challenge within the global context. We looked at waste and,

where others saw rubbish, we saw potential, we saw opportunity…

and we actually saw commodity.

BIOGRAPHY

Stacey Davidson joined REDISA

in 2010 as a director, after working

in various industries including

finance. Davidson's interest

in the economic empowerment

of previously disadvantaged

communities resulted in her

volunteering for communitybased

organisations such as

NICRO, CAFDA and Triple Trust

Organisation. It was Davidson's

passion for community development

which prompted her to

join REDISA.

"WE LOOKED AT WASTE AND WHERE

OTHERS SAW RUBBISH WE SAW

POTENTIAL, WE SAW OPPORTUNITY

AND WE ACTUALLY SAW COMMODITY."

What are the challenges in commoditising waste?

We developed REDISA’s Waste into Worth concept, and this highlights

the legal concept of extended fiduciary responsibility. This

effectively means that if you’re manufacturing a product then you

are responsible to deal with that product when it no longer has a

SOUTH AFRICAN BUSINESS 2017

34


INTERVIEW

useful life. The challenge with extended fiduciary

responsibility is that we’re looking to industries in

the manufacturing sector to solve this problem,

and that’s why we say that it's wrong to make the

boss the gardener.

I’m always astonished by the level of innovation

that I am privileged to see among low-skilled

workers. They are so capable and bursting with

potential, but the problem is that we’re not yet

taking the opportunity to these people, and that’s

why it’s important to get them into the system.

Once these people have been brought into the

supply chain we ensure they have access to accredited

courses and skills development to ensure

that they have the opportunity to improve

their own skill levels so they can migrate up the

value chain.

"I ALWAYS SAY THAT YOU

CAN’T BRING A JAPANESE

MODEL AND APPLY IT TO

AFRICA."

Why is the circular economy so important?

When we deplete all of our virgin resources, recycling

will be the only place that we will be able to

get these resources from, so it makes sense from a

strategic perspective. Building a circular economy

requires a strong plan for recycling waste, which

requires that you ensure that recyclable material

is always picked up and put back into the system.

Please give us some background to data

sanitisation and a community-based

marketing strategy.

Data is a problem in South Africa, specifically for

us because most of the communities that REDISA’s

initiative aims to empower are informal, so they

don’t have a formal address and so on. How we look

to overcome the problem is through the mobile

technology that we use, a lot of which is GPS-based.

For instance, our registration process is done via

mobile technology so we’re able to utilise where

the person lives and works based on where they’re

registered and, from that, we can factor their details

into a system.

One of the challenges for a community-based

organisation is that, when it comes to driving out

social impact, I believe that the perception of these

organisations needs to change. The challenge is so

big that you need to attract the right kinds of minds

because, if you are dealing with public and social

issues, you need to be the best of the best driving

your initiatives. However, if you want to attract foreign

investment, for example, then you need to be

able to demonstrate the return on that investment.

In other words, you need to demonstrate the impact

that you are making.

CONTACT INFO

Tel: 087-35-73873

Email: customersupport@redisa.org.za

Website: www.redisa.org.za

35

SOUTH AFRICAN BUSINESS 2017


Looking north

South African companies are looking to intra-African trade to expand their businesses and

improved infrastructure is key.

Africa has a population of 1.2-billion, but less

than 10% of the trade that happens on the

continent is between African countries.

Fully 30% of South Africa's exports are

to other countries in Africa, but a massive 83% of this

volume is into Southern Africa. This means that the

potential for South Africa to grow its exports into other

parts of Africa is enormous, if the infrastructural obstacles

can be overcome.

According to Taku Dundira, writing for tralac.org,

South African exports into Africa in 2014 amounted

to 16% of the total from other countries within Africa,

putting SA in second place in the league table (Nigeria

was ranked first, Angola third). The value exported

by SA into Africa was $28-billion and just over half of

the exports coming from the manufacturing sector.

The four biggest manufacturing sub-sectors were

machinery (33%), transport equipment (including light

vehicles, 22%), base metals (20%) and textiles and

clothing (5%). A number of South African companies

have been looking north to expand their operations.

Shoprite has been spectacularly successful in rolling

out is supermarkets across the continent, Procter &

Gamble has manufacturing facilities in Nigeria and

Sanlam has 20% of the insurance market in Sub-

Saharan Africa. Old Mutual has purchased Oceanic

Life, a Nigerian life insurance company.

There are plans to create a Tripartite Free Trade

Area covering three regional groupings across 26

countries. Extending from South Africa in the south

and to Uganda and Kenya in the north, the proposed

free trade area would encompass more than 620-million

consumers in these three regional organisations:

Southern African Development Community (SADC),

the Common Market for East and Southern Africa

(Comesa) and the East African Community (EAC).

The buzz-words in promoting intra-African trade

are "bureaucracy", "corridors" and "infrastructure".

South African retailer Shoprite has noted that

it spends about R20 000 per week in permits, and

long waits at border posts are routine. But the

Chirundu one-stop border post in Zambia has reduced

transit times by a third. Passenger transport

delays have been reduced from three hours to

30 minutes and freight is now cleared in one day

instead of three.

A number of corridor projects are in the pipeline

or have already been implemented. The Maputo

Development Corridor has successfully linked the

thriving industrial and business centre of Gauteng

Province in South Africa with the Mozambican port

city of Maputo. The idea of corridors has been

adopted by the Infrastructure Consortium for Africa

(ICA), and several corridors have been conceptualised

since that decision, for example the Northern

Corridor of Central and East Africa.

A corridor strategy relies on infrastructure, with

inter-related plans being developed involving the

SOUTH AFRICAN BUSINESS 2017 36


SPECIAL FEATURE

upgrading and standardisation of facilities at ports,

railway lines, customs posts and energy projects.

South African rail, ports and pipeline operator

Transnet is already active in African countries north

of the South African border, and is intending to offer

its services more widely.

This is part of Transnet's Market Demand Strategy

(MDS), which seeks to grow the business by responding

to the market. Instead of simply making rail wagons

for Transnet Freight Rail, the broader strategy

looks for new customers (elsewhere in Africa, or in

India, China or Australia) where rail wagons can be

sold.

Transnet Engineering's own Trans-

Africa Locomotive (for branch lines and shunting

yards) is being marketed to other African countries

and mining companies.

Another strand of the MDS is evident in

Transnet Engineering planning to set up Maintenance

Repair and Operations (MRO) centres in four African

countries. Transnet Ports Authority might similarly

offer its expertise in running harbours and logistics

to countries in the corridor.

The Sustainable Development Investment

Partnership (SDIP) comprises 30 institutions that

aim to see 16 African infrastructure projects (valued

at more than $20-billion) carried out. The founders

of the SDIP were the World Economic Forum (WEF)

and the Organisation for Economic Co-operation

and Development (OECD) and other members

now include the Bill and Melinda Gates Foundation,

the Senegal Strategic Investment Fund (FONSIS),

US Agency for International Development (USAID),

the Industrial Development Corporation of South

Africa (IDC) and the Development Bank of Southern

Africa (DBSA).

The DBSA is concentrating on energy, transport

and bulk water projects in its area and has plans to

increase its investments to about R20-billion in the

short term. The focus of organisations such as the

DBSA is on infrastructure, and this will have a positive

spin-off for trade of all kinds, through improved

ports and roads, and healthier populations in rural

and urban areas.

China has pledged to support the rehabilitation

of the railway line between Zambia and Tanzania

while the Industrial and Commercial Bank of China

is to invest R20-billion in renewable energy in Africa.

Lack of reliable power supply is a constraint to trade

so this and other ventures in the power sector will

help to foster trade.

The South African Department of Trade and

Industry (dti) plays a key role in terms of promoting

trade between South Africa and the rest of Africa, but

also supports regional bodies such as SADC and promotes

the kind of integration contained in the plans

of the New Partnership for Africa’s Development

(NEPAD) and the African Union’s Agenda 2063.

During 2016 the dti launched the Trade Invest

Africa initiative to coordinate and implement South

Africa's economic strategy for Africa. By working

with the private sector, government hopes to take

advantage of export and investment opportunities

on the continent.

The Export Credit Insurance Corporation of South

Africa (ECIC) exists to help trade and investment

across borders. The ECIC can provide insurance for

bank loans that are taken by investors and South

Africans can get insurance for investments and for

small and medium enterprises there is a product

available (performance bonds) to anyone exporting

capital goods and services.

37

SOUTH AFRICAN BUSINESS 2017


FOCUS

ECIC: 15 years of export

project excellence

The Export Credit Insurance Corporation of South Africa has a unique

understanding of Africa’s export dynamics.

The creation of the ECIC began 15 years ago in July 2001 when

the Export Credit Insurance Corporation of South Africa Ltd

(ECIC) was given a mandate of filling a market gap through

provision of medium to long-term export credit and investment

insurance by underwriting bank loans against political and

commercial risk, on behalf of the South African government. The

short-term transaction market was amply catered for, but medium to

long-term export transactions still had a need for a dedicated export

credit agency, hence the establishment of the ECIC.

Although regarded as the "insurer of last resort", the ECIC is as much

of an enabling development organisation as it is an export credit

agency (ECA), explains its chief executive officer, Kutoane Kutoane.

Acting as a catalyst for private investment, the ECIC steps in where

commercial lenders are either unwilling or unable to accept long-term

risks. While the ECIC is part of a broader government policy, it remains

an autonomous limited liability company, but with the government

as its sole shareholder. The institution is enabled under the amended

Export Credit and Foreign Investments Insurance Act of 1957.

"ACTING AS A CATALYST FOR PRIVATE

INVESTMENT, THE ECIC STEPS IN WHERE

COMMERCIAL LENDERS ARE EITHER

UNWILLING OR UNABLE TO ACCEPT

LONG-TERM RISKS."

Along with the major shareholder, the Department of Trade

and Industry, the ECIC makes use of market research tools and

specialised business development units to develop new insurance

products that support government’s export promotion objectives.

ECIC CEO, Kutoane

Kutoane

Performance Bond insurance

cover, which was launched in

2015, is one such example.

Currently, the ECIC is working on

covering credit lines and return

of plant and equipment, but it

also continues to motivate for

the release of increased lending

capacity by financial institutions

by entering into agreements

with other ECAs. In this way it

creates a framework for both

re-insurance and co-insurance

and, to this end the ECIC has

adopted a comprehensive plan

of action aimed at actualising

cooperation programmes for

mutual benefit in conjunction

with, among others, BRICS, ECAs,

Afreximbank and Africa Trade

Insurance.

SOUTH AFRICAN BUSINESS 2017

38


FOCUS

The ECIC is strategically

positioned as a key player in

facilitating the availability and

affordability of long-term finance

to aid in unlocking the

development potential of such

operations, particularly in economically

frustrated regions that

experience fiscal constraints. It

is well known that Africans are

extremely proud of their heritage

and that the strategies that

foreign investors might apply

elsewhere in the world need to

be revised for the continent. The

dynamics of the problems that

African leaders and financiers

face need comprehensive understanding

and this is where the

ECIC excels. The ECIC addresses

obstacles through facilitation and by aiding in the

release of funding required for infrastructure, and

this is of particular concern to global organisations

seeking an African presence.

Export credit is imperative for the specific reason

that capital exports are long-dated assets and it is

customary for firms to finance such exports with bank

debt for cash-flow management purposes. Export

credit financing is, therefore, an important and key

aspect of international trade. Access to competitively

priced export credit creates the ability for our local

contractors to bulk up and compete more effectively

in foreign markets. With the ECIC in support of

such transactions, the South African export market

is enabled and contractors become more credible.

This has a far-reaching impact on fostering a stronger

economy and drives domestic job creation, contributes

to fixed-capital formation and the GDP, as well

as the generation of fiscal revenue.

"The ECIC is able to price African risk more effectively

given its indigenous status even though

demands might be universally similar. Ideally, what

we ensure is the provision of cost-competitive

cover and the honouring of claims when they arise,"

says Kutoane.

The ECIC's vision and mission is a commitment

to sustainable business growth through innovative

products, operational excellence, business development and strategic

partnerships and, in enabling frontier markets to optimise production,

it is motivating a positive socio-economic impact.

"We also play a role by offering aid in narrowing the skills gap with

a number of initiatives related to education, skills development and

volunteerism. Beneficiaries of these projects have included Penreach

in Mpumalanga, the Rehoboth Trust in KwaZulu-Natal, the Maths and

Science Leadership Academy in the Northern Cape, and DeafSA in

Limpopo," says Kutoane.

The ECIC is a registered financial services provider: FSB No. 30656

CONTACT INFO

Physical address: Block C7 & C8, Eco Origins Office Park,

349 Witch Hazel Avenue, Highveld Ext 79, Centurion, 0157

Postal address: PO Box 7075, Centurion, 0046

Tel: +27 12 471 3800 | Fax: +27 12 471 3850

Email: info@ecic.co.za | Website: www.ecic.co.za

39

SOUTH AFRICAN BUSINESS 2017


SPECIAL FEATURE

Skills development

Detailed national plans are in place to promote skills training.

South Africa has a skills deficit. Strenuous

efforts are being made by government

and the private sector to develop the skills

base of the country's workforce.

The national Department of Higher Education

and Training (DHET) has designated 2014-2024 as

"The Decade of the Artisan". As things stand, about

13 000 artisans qualify every year: the goal (as defined

by the National Development Plan) is to extend

that figure to 30 000 by the year 2026.

The state has also noted a number of skilled

occupations that it has put on a "Occupations in

Demand" list in order to be in a position to roll out

ambitious infrastructure projects. These include

civil engineers, construction project managers and

quantity surveyors.

The creation of the Labour Market Intelligence

Partnership (LMIP) Project in 2012 was a collaboration

between the DHET, the Human Sciences

Research Council (HSRC) and Wits University. The aim

was to develop a forecasting model to find out what

skills would be needed by the country in the future.

The National Skills Authority (NSA) works with

Sector Education and Training Authorities (SETAs)

in carrying out the National Skills Development

Strategy (NSDS). The Human Resource Development

Council of South Africa (HRDCSA) is an over-arching

body that aims to give guidance to the many institutions

working on skills development and training. It

is managed by the DHET.

The HRDCSA has identified five key areas where

the skills pipeline must be improved:

• Access to TVET colleges

• Intermediate skills (artisans in particular) and

professionals

• Production of academics; collaboration between

industry and educational institutions in research

and development

• Worker education

• Foundational learning

The HRDC's work readiness programme helps graduates

learn the skills they need in order to find employment.

Absa Bank also runs a "ReadytoWork"

campaign that aims to close the gap between

education and the world of work. The programme

has previously been presented in six other African

countries.

The strategic goal of the DHET can be summed

up as the creation of "a capable and skilled

workforce for inclusive growth". There are many

SOUTH AFRICAN BUSINESS 2017 40


SPECIAL FEATURE

institutions supporting this goal, including 29 universities

(some of which are universities of technology),

50 Technical and Vocational Education and

Training colleges (TVET) and 21 Sector Education

and Training Authorities (SETAs).

Particular skills have been identified and universities

and TVET colleges have been asked to

concentrate on 13 trade areas, including bricklayers,

millwrights, boilermakers and riggers. R16.5-

billion has been allocated by national government

to skills development and infrastructure over the

medium term.

SETAs collect dues from companies in a particular

industry (wholesale and retail, banking, construction,

chemical industries, for example) in order

to promote training in that industry. A percentage

of this money is returned to the company if that

company can show that they have a workplace

training plan. The rest of the money is used to offer

skills training.

TVET colleges exist to impart skills that are relevant

to the workplace. Every province has several of these

colleges, many of which are the successors to "technical

colleges" and they offer many of the courses

that were associated with those institutions. Although

many bursaries exist for students and enrolment at

colleges has risen steeply in recent years, the high

cost of some courses means that these colleges are

not accessible for unemployed people.

The College of Cape Town (CCT) has eight campuses

and its selection of courses gives a good illustration

of the range of studies available to students at

TVET colleges. Courses at CCT range from engineering

(electrical, civil and mechanical), through travel and

tourism, hospitality, hair care, beauty therapy and art

and design, to business studies, information technology

and education and training. The college has three

residences in different parts of the city. Career guidance

is offered and the college has a work placement

programme for graduates.

Private colleges such as MANCOSA (Management

College of Southern Africa) often specialise in particular

fields. In this case, a range of certificates, diplomas

and degrees in business, commerce and

administration is presented at five sites around South

Africa, including East London and Polokwane. The

MANCOSA Graduate School of Business in Durban

offers executive education and postgraduate management

programmes, including the Master of Business

Administration (MBA) degree.

The Southern African Wildlife College offers even

more specialised training. With facilities adjacent to the

Kruger National Park and the Timbavati Game Reserve,

students studying to be field staff or managers of

protected areas have the best possible environment

in which to learn. Among the certificates offered are

Nature Conservation Implementation and Leadership

and Trans-frontier Conservation Management.

The new university in Mpumalanga is incorporating

existing training institutions in the province

to enable it to give theoretical and practical courses

in agriculture and biodiversity, food security, resource

and wildlife management, nature conservation,

plant and animal sciences, and forestry and

wood sciences. Mpumalanga is one of the country's

most important provinces when it comes to flora

and fauna, game tourism and forestry so students

will be learning skills relevant to the job market.

Skills development is being promoted on a

broad front. Some examples include:

• The Sasol Inzalo Foundation (Saif), which supports

students in science and engineering:

105 black, mostly female students graduated

in 2015.

• The Square Kilometre Array (SKA) radio telescope

project has so far supported 800 people

in training from artisan level to post-graduate

academic study.

• Transnet National Ports Authority (TNPA) is building

a marine training centre in Cape Town to

supplement the Transnet Academy. Transnet will

spend more than R1-billion on bursaries to 2023.

• A South African Renewable Technology

Centre (SARTEC) has been established by the

Department of Higher Education with the support

of the German government.

• AgriSETA is offering skills programmes and

mentorships to unemployed people together

with the Department of Rural Development

and Land Reform, the SA Sugar Association and

Grain SA.

• The Association for Skills Development in South

Africa (ASDSA) is a body that confers professional

"designations" on skills developers.

41

SOUTH AFRICAN BUSINESS 2017


FOCUS

Building South Africa’s

human resources through

industry-education

partnerships

The Human Resource Development Council is assisting in bridging the gap between

higher education and the needs of business.

The HRDC is partnering to innovatively develop South Africa's

human potential.

Industry-education partnerships are collaborative efforts that bring

higher education institutions, businesses and community together

to address their mutual interest in higher and further education.

While helping to advance the educational development in higher

and further education institutions, the partnerships also address

skills scarcity needs. They provide stakeholders outside the education

and training system, like the private sector, with an opportunity

to contribute in the development of educational programmes and

related decision-making.

The industry and education partnership initiative of the Human

Resource Development Council (HRDC) encourages partnerships

between education institutions and other stakeholders, primarily,

the private sector, SETAs and communities, to enhance the performance

of the education sector. The point of departure for the

initiative is an acknowledgement that there are generally low levels

of human resource development among the majority of the formerly

disadvantaged population

and high unemployment rates,

especially among the youth.

The Post School Education and

Training (PSET) system holds a

key to unlocking the human resource

development challenges.

This includes unemployment,

and ultimately contributes to

the broader objective of socioeconomic

transformation and a

more equal society.

There is good reason to believe

that education institutions should

work proactively with industry to

deliver appropriately skilled and

capacitated graduates to meet

societal and economic needs.

One of the main objectives of

the White Paper is a stronger and

more cooperative relationship

between education and training

institutions and workplaces.

There are currently a number of

partnerships that the HRDC is actively

driving and working on, to

ensure they succeed.

Key among these is the

recent partnership between

the community colleges and

Harambee to ensure that learners

from these colleges are

SOUTH AFRICAN BUSINESS 2017

42


FOCUS

trained and successfully placed

in jobs after completion. A number

of private-sector companies

and SETAs have responded to

this call positively and declared

themselves available to partner

to ensure that youth unemployment

is addressed.

Standard Bank South Africa

has also embraced the HRDC

initiative of fostering partnerships

and has developed a

partnership initiative called

SBSA Value Add Offering. This

partnership offers a number

of programmes to colleges

depending on their needs.

The overall purpose is to offer

services ranging from expertise

and standards to funding, workplace

training, networks with

other colleges and between

lecturers and industry experts

and employment opportunities

for learners. This initiative was

endorsed by the HRDC on 13

September 2016. SBSA Value

Add Offering provides TVET

colleges with programmes

aimed at management, lecturers,

students and the entire

institution.

The HRDC has a programme

called “Adopt a TVET college”

where industry is encouraged

to adopt a TVET college so that

the industry is able to make

contributions towards what

learners are taught practically

in order to make the transition

from college to the workplace

a smooth one. “It is essential

therefore that we work together

with government, business and

other stakeholders to improve

the scale, quality and relevance

of our TVET college system,” said

the Deputy President of South Africa during the launch of “Adopt

a TVET college”.

Some of the colleges that have embraced this initiative include the

Flavius Mareka College, which states that its partnership with Sasol is

a key partnership born out of the HRDC initiative, and the Ekurhuleni

West College, which has many partnerships including one with Ford

South Africa. The partnership with Ford provides practical experience

both at college and workplace to learners who are studying towards

a qualification in motor mechanics. The Ekurhuleni East College has,

among others, partnered with Samsung Electronics to ensure quality

training and placements for Work Integrated Learning for learners who

are studying electronics.

The complex challenges of poverty, inequality, high levels of unemployment,

illiteracy, crime and disease require collective efforts to

respond appropriately and effectively. Neither government nor the

market can develop the necessary capabilities required to address these

challenges on their own. The collaboration between education institutions

and industry will enhance capabilities to address South Africa’s

complex challenges. The education and training system requires close

cooperation with industry, especially in the programmes providing vocational

training. This will reduce the mismatch of educational outcomes

and workplace requirements.

There is increasing need for universities and colleges to contribute

towards the economic development of the country through the development

of a knowledge economy that is competitive and open to

innovation, adding value to the technological capabilities in industry.

At the same time, higher education institutions can also benefit from

collaboration and partnership agreements with industry, as in the above

examples.

When industry and higher education institutions work hand in hand

to reach new heights of knowledge, they become a powerful engine

for innovation and economic growth. The HRDC has prioritized these

partnerships.

The perceived disconnect between higher education and industry is

partly due to the lack of adequately trained graduates for industry, mainly

those with measurable skills in science, technology, engineering and

mathematics (STEM) subjects. This remains a key concern for business.

Business and post-school education have found common cause in

recent decades in preparing a skilled workforce to preserve the nation’s

competitiveness and economic opportunities in response to rapid technological

change and increasing global competition.

Where meaningful partnerships exist between business and higher

education, the gaps between the supply of graduates and the demand

for skills are significantly reduced, and the needs of businesses are more

closely associated to the academic curricula.

www.hrdc.org.za

43 SOUTH AFRICAN BUSINESS 2017


FOCUS

Positive change

through enterprise

development

The Masisizane Fund’s new CEO, appointed in mid-2016, has pledged to continue

the work of the Fund in contributing to positive change in South Africa.

Zizipho Nyanga, the new CEO of the Masisizane

Fund, has 10 years’ experience in business support,

entrepreneurship, deal making, financial management,

auditing, risk advisory and internal control

improvements in fast-paced organisations.

Promoted to the position of CEO in October

2016, she initially joined the Masisizane Fund in

2014 as the Head of Post Investment Monitoring

and Business Support.

During this time she also served as the Alternate

Chairperson of the Executive Committee Credit

Review and a Member of the Enterprise and

Supplier Development Committee (Mutual & Federal).

“Institutions like ours have a very important role to

play in creating access to funding for small businesses,

therefore we need to work closely with those that

have a similar mandate to us in order to make meaningful

impact. Maintaining strong and effective partnerships

with institutions like SEFA, Productivity SA,

SEDA, SAICA and Department of Rural Development

is very important in ensuring this," Zizipho says.

Zizipho holds a BCom Accounting from the (former)

University of Transkei and a Higher Diploma in

Accounting from Wits University. After graduating

she joined Ernst & Young (EY) as a Trainee and later

qualified as CA (SA).

EY’s global footprint provided her with an international

opportunity while she was seconded to

the San Jose office in California. During her time

there she was exposed to the entrepreneurial culture

in small businesses and her passion for rural

development and economic transformation was

born. “I learnt that the only way to truly bring about

economic transformation is to walk a journey with

the business and assist them to grow into a thriving

enterprise rather than to just give them money,

waiting for them to pay back and hoping for the

best. Growing and assisting a business successfully

can only be done through establishing good and

trustworthy partnerships,” Zizipho says.

It is evident from her career history that

Zizipho has the skills and experience necessary to

continue building on the good work of the Masisizane

Fund. The Fund is an Old Mutual initiative set up as

a non-profit funding company to provide financial

and non-financial support to small, medium and

micro enterprises.

Zizipho Nyanga

SOUTH AFRICAN BUSINESS 2017

44


MASISIZANE FUND

The Masisizane Fund (NPC) is an initiative of Old Mutual South Africa,

established in 2007 following the closure of the Unclaimed Shares Trust.

The mandate of the Fund is to contribute meaningfully to employment

creation, poverty eradication and reduction of inequality, economic growth

and the attraction of investment. This is achieved through the promotion of

entrepreneurship, enterprise finance and support to small, micro and medium

enterprises.

The fund’s focus is on enterprises that are 51% or more owned by previously

disadvantaged individual(s) giving priority to rural and peri-urban/township

areas. Masisizane gives preference to businesses that are owned by youths,

people with disabilities or are owned by (51% or more) women and targets

productive and labour absorbing sectors.

The Fund’s success is driven by a focused approach on high impact industry

sectors, coupled with a comprehensive SMME finance solution that includes

business support. The Fund provides loan finance in the following sectors:

Agribusiness

Franchising

Supply Chain

The Fund supplies non-financial value adding post investment services

including capacity development, business management and technical

support, financial education, market development and product/service

quality standards and compliance. A Business Accelerator Program has

been established where potential clients receive targeted skills training and

support to grow into a business eligible to receive financial support.

Masisizane operates nationally with its head office in Gauteng and regional

offices in KwaZulu-Natal, Limpopo, Eastern Cape and Western Cape.

Submit the following documents for an initial screening by the relevant

provincial office:

• Comprehensive business plan with market analysis and projections;

• For established businesses – past financials (preferably 3 years) and

latest management accounts;

• For start-up businesses – financial projections;

• Tax clearance certificate;

• Off take agreements and/or letters of intent;

• Signed consent for a credit check.

Contact details:

• Gauteng, North West and Free State – 011 217 1746

• Western and Northern Cape – 021 509 5074

• KwaZulu-Natal – 031 335 0400

• Eastern Cape – 043 704 0116

• Limpopo and Mpumalanga – 015 287 4279

For more information and where to find us visit

www.masisizane.co.za

An initiative of the

Group

Old Mutual is a Licensed Financial Services Provider


PROFILE

Novus Holdings

Leading innovation and progress in printing

and manufacturing.

Through operational expansion, diversification and

investment in cutting-edge technology, Novus

Holdings has become the most comprehensive

commercial printing and manufacturing operation

in South Africa.

Previously known as the Paarl Media Group, Novus

Holdings operates a nationwide network of specialised

plants with its headquarters based in Cape

Town. With a rich heritage built on 100 years of combined

experience, the Group services the African

continent with print production of short- to long-run

magazines, retail inserts, catalogues, books, newspapers,

commercial work, wet glue labels, self-adhesive

labels, educational materials, as well as digital and

securitised printing (ballot papers, examination

papers, census forms) and tissue products.

Novus Holdings is committed to making a sustainable

difference in the communities in which

it operates, as well as driving skills development

and transformation within the industry. The Group

continuously invests in and implements environmentally

responsible practices to reduce, re-use

and recycle, while still delivering superior products.

The resilience of Novus Holdings’ business can be

attritbuted to its long-standing customer base, diversified

product offerings, outstanding service and

ability to innovate and offer unique propositions to

the market as the landscape changes.

Capital expenditure in excess of R3-billion has been

spent since 2000 to ensure that the Group’s facilities

are equipped with modern global technology,

perfectly positioning Novus Holdings as a single

source for all printing requirements.

Continued extension and

diversification of product offerings

Novus Holdings is always committed to pursuing

opportunities that are synergistic to its inherent core

strengths and has growth potential in line with its

diversification strategy and the expanding needs

of its customers.

The Group’s diversification process includes a firstclass

print-on-packaging and labelling division, as

well as a tissue division that produces domestic tissue

paper through the effective use of waste paper

from the printing operations.

CONTACT INFO

Tel: +27 21 550 2500

Physical address: 10 Freedom Way,

Milnerton, 7441

Postal address: PO Box 37014, Chempet, 7442

Email: info@novus.holdings

Website: www.novus.holdings

SOUTH AFRICAN BUSINESS 2017

46


PRINT

LABELS

TISSUE

novusholdings

www.novus.holdings


KEY SECTORS

Overviews of the main economic

sectors in South Africa

Agriculture 48

Mining 54

Mineral beneficiation 57

Oil and gas 58

Energy 60

Water 64

Engineering 71

Manufacturing 72

Chemicals and pharmaceuticals 74

Food and beverages 75

Automotive 76

Transport 78

Information and

communications technology 85

Education and training 91

Tourism 98

Banking 102

Development finance and

SMME support 104


OVERVIEW

Agriculture

Agri-processing is a key focus of future investment.

South Africa's varied climate and wide range of soils ensure

that it is able to produce a very diverse range of agricultural

products. The country's agricultural exports earn the country

valuable foreign exchange.

Fruit, sugar and wine make up about 7% of the country’s total export

basket. Avocados and tomatoes are among other important export

crops, while the macadamia nut industry is growing exponentially.

More than 50% of agricultural export is made up of processed

agricultural products, a promising development for the future of agriprocessing.

National trade policy strategies are intended to enhance

this trend.

Several of the Special Economic Zones around South Africa either

have or will in the future have agri-processing facilities. Examples

include existing tomato paste and dairy facilities at Coega IDZ, as well

as plans to develop the Harrismith SEZ into a hub for agri-processing.

The National Empowerment Fund (NEF) currently spends six percent

of its allocation on agri-processing but intends to increase that.

The focus for the spending of R288-million to date has been on small,

medium and micro enterprises (SMMEs) and the NEF is just one state

entity that has this focus. Several others are similarly engaged, for example,

the Free State provincial government is rolling out a plan to create

agri-parks to provide trading facilities, access to markets and training.

The Free State Department of Agriculture and Rural Development

(DARD) has highlighted the fact that only 11% of the province’s

SECTOR INSIGHT

The NEF intends to increase

the proportion of its budget

spend on agri-processing

projects.

primary agricultural production

is processed within the province.

A severe long-term drought

had a big impact on South African

agriculture. Good rains only came

in July 2016, by which time the

country had to import yellow and

white maize (8.3-million tons in

total) for the first time in more

than a decade. The potato price

doubled in 2016. The average

10kg pocket cost R28.45 in 2015,

R63.30 in March 2016.

The Industrial Development

Corporation (IDC) put up R400-

million to allow the Land Bank to

SOUTH AFRICAN BUSINESS 2017 50


OVERVIEW

advance loans to farmers in five

provinces in areas that were declared

disaster areas.

About 850 000 people are employed

in the agricultural sector

(StatsSA) but many sub-sectors

have been laying off workers in

recent, dry, times. The exceptions

were forestry and aquaculture,

both of which increased their

labour force. Primary agriculture

provides 5% of formal employment

in South Africa.

A number of former farmers'

co-operatives are now substantial

agri-businesses. Most have a

specific geographic and farming

sector focus (BKB is strong in the

eastern Free State and Eastern

Cape and concentrates on wool

and mohair, for example) while

some, like the giant grain concern

Afgri, have a national presence.

Afgri, which is headquartered

in Centurion, Gauteng, recently

signed a joint venture (GeoAgro

Africa) to give its farmers access

to satellite technology.

Senwes is another company

that focusses on grain, and it

controls 68 silos. Its operations

are run from Klerksdorp in North

West Province. Other companies

include NTKLA (Limpopo), GWK

(Northern Cape), Klein Karoo

Agri, VKB (eastern Free State and

Limpopo), Kaap Agri (from the

Boland to the Eastern Cape and

up to Namibia), SSK (Overberg)

and TWK (KZN and Mpumalanga).

Crops

Global demand for macadamia

nuts continues to outstrip production,

but South African farmers in

KwaZulu-Natal, Mpumalanga and Limpopo are doing their best to keep

up. About one thousand new hectares are being planted every year,

according to the Southern African Macadamia Growers' Association

(SAMAC), adding to the existing 19 000 hectares already under macadamias.

South Africa is currently the number one supplier in the world,

with 27% of the market, followed by Australia.

Production of nut-in-shell improved by almost 5% in 2015, to 46 950

tons. About 45% of the previous year's crop was exported, mostly to

the USA and Europe. About 3 000 new jobs have been created in the

last decade, plus another 1 000 in cracking facilities.

A total of 70% of South Africa’s grain production is maize, which covers

60% of the cropping area of the country. The North West Province

produces one-third of South Africa’s maize and about 15% of its wheat.

The Free State is the country’s largest supplier of wheat (37%) and maize

(34%). The Western Cape has 350 000 hectares of wheat-producing land.

The South African feed industry has an annual turnover of about

R50-billion with most of the raw material being soya and maize.

Two of the country's big three sugar producers (Illovo Sugar and

Tongaat Hulett) each shut down one of their mills temporarily because

of the drought but South Africa still crushed 17.7-million tons of sugar

cane in the 2014/15 season. Saleable sugar production figures have

returned to two-million tons plus since 2013/14, after dropping to

1.8-million tons in 2011/12.

The other big sugar company, TSB Sugar, has been acquired by RCL

Foods. TSB milled a record 702 000 tons of raw sugar in 2014/15.

The Free State Province supplies significant proportions of the nation’s

sorghum, sunflower, potatoes, groundnuts, dry beans, and almost

all of its cherries. Barley and canola are produced in the Western Cape.

Products distinctive to South Africa, such as rooibos tea (Western

Cape) and marula berries (Limpopo) hold great potential to capture

niche markets internationally.

Fruit

South Africa is famous for its fruit. Export volumes, particularly in tropical

fruits such as mangoes and avocados, have been growing rapidly

in recent years. The sector is highly sophisticated and is skilled at the

refrigeration and packing required for European Union standards.

Large volumes of exports are achieved in deciduous fruits such as apples,

table grapes, pears, peaches, plums and apricots. Avocados thrive

in Mpumalanga and Limpopo and production volumes above 110 000

tons per year have been achieved. About 45% of production is exported.

Most of South Africa’s citrus and subtropical fruit comes from the

eastern part of Limpopo. Some of the world’s biggest farming enterprises

operate in Limpopo Province. Westfalia (which is part of the

Hans Merensky Group) is an avocado grower of note, while ZZ2 is a

51

SOUTH AFRICAN BUSINESS 2017


OVERVIEW

huge fresh tomato enterprise. Halls has an international reputation for

avocados and litchis.

Companies such as Capespan and Dole SA move huge quantities

of fruit around the world. South Africa exports about 650 000 metric

tons to the EU (about 40% of the total). This brings in total earnings of

R9-billion, of which R4-billion is from the EU. A new development in

the citrus sector is the establishment for small growers of the Growers'

Development Corporation.

The ban on black spot, which the EU introduced in 2013, was lifted

in January 2014. The South African producers always claimed that the

spot was not harmful in any way, but just a cosmetic blemish.

The Orange River supports the cultivation of citrus and grapes of

many kinds. The region is particularly well suited for the cultivation of

Valencia oranges, lemons and grapefruit and the dry, hot conditions

mean that it is easy to control pests.

Wine

Export volumes have been steadily rising for South African wines. There

are about 3 500 wine producers in South Africa, with the large majority

located in the Western Cape. There are 54 producer cellars.

The industry is located, for the most part, in the Western Cape,

but Orange River Cellars in the Northern Cape is growing production

volumes. Europe remains the main export market but India and the Far

East are growing in importance as destinations.

The Distell group produces about a third of the country’s natural

and sparkling wine and is ranked 12th in the world in global wine

volumes sold.

Livestock

Livestock farming is the largest agricultural sub-sector in South Africa.

The Eastern Cape is the largest livestock province. South Africa has a

beef herd of 14-million.

Clover, Africa’s largest milk processor, has a turnover of R6-billion and

a staff of more than 6 500. The Eastern Cape provides approximately a

quarter of South Africa’s milk. Parmalat has two plants in Port Elizabeth.

ONLINE RESOURCES

Agricultural Research Council: www.arc.agric.za

Forestry South Africa: www.forestry.co.za

National Department of Agriculture, Forestry and Fisheries:

www.daff.gov.za

There are 6.4-million goats

in South Africa. The Kalahari Kid

Corporation (KKC) intends to raise

the standard of goat meat and

expand the export market.

South Africa produces about

55% of the world’s mohair, the

high-quality speciality fibre taken

from Angora goats. Almost

all mohair farming is done in the

Eastern Cape.

Forestry and paper

The forest product export sector

in South Africa is made up

of paper (45.2%), solid wood

(23.3%) and pulp (28.9%). Imports,

weighted towards paper products,

cost the country R9.8-billion

annually, clearly indicating scope

for increased domestic production.

The sector employs approximately

462 000 people with some

two-million dependants. Mondi

and Sappi are both large international

companies. The pulp

and paper sector makes a direct

contribution to South Africa’s balance

of payments of R4.5-billion,

largely due to Sappi’s dissolving

wood pulp operations.

Mpumalanga has South

Africa’s biggest sawmill and its

largest panel and board plant,

together with the biggest integrated

pulp and paper mill in

Africa. There are sophisticated

plants at several locations around

the country: the country’s largest

hardboard plant is at Estcourt.

SOUTH AFRICAN BUSINESS 2017 52


With so many training companies to choose from, here are a few compelling reasons

why ICT should be your training provider of choice:

We provide:

• Quality training material;

• Competitive pricing;

• Globally trained facilitators with understanding of

your company’s local needs;

• Extensive training & assessment expertise;

• A consultative and bespoke approach to every

engagement;

• A partnership approach in working with our

clients;

• Training delivered in a fun and engaging way;

Innovation and creativity in our training programmes

and a broad range of related services. These are just

a few reasons why International Corporate Training

would be the best training company for your needs.

Let us show you how we can maximise your B-BBEE

score and your staff morale and productivity.

Our courses cover modules in the following areas:

• Administrative skills

• Career Development

• Human Resources

• Personal Development

• Sales and Marketing

• Enhancing Supervisory and Managerial Skills

• Workplace Essentials

• Entrepreneurial Skills

• Train-the-Trainer

With over 250 modules to choose from, your staff is guaranteed to enhance their non-cognitive skills.

Allow us an opportunity to discuss your training requirements...we guarantee you won’t regret it!

CONTACT US

0861 753 233

info@ictraining.co.za

PO Box 806 | Melrose Arch | 2076


FOCUS

Mondi Rotatrim –

celebrating more than

30 years of excellence

The leading office-paper brand is produced at the Durban mill.

Mondi Rotatrim, produced by the

Mondi Group at our Merebank mill

in Durban, is celebrating more than

30 years in the South African market.

Mondi Rotatrim is a leader among office

paper brands that offers superior multi-functional

office paper that runs smoothly through

photocopiers, laser and inkjet printers.

The brand carries the Forest Stewardship

Council Chain-of-Custody certification, an

independent international accreditation providing

assurance to customers that Mondi

Rotatrim is produced from responsibly managed

forests.

Made from Elemental Chlorine Free (ECF) pulp, Mondi Rotatrim

is the only locally manufactured paper with a 160CIE rating for

superior whiteness.

At the heart of the production process is our 6m-wide Voith

Paper Machine – one of the most technologically advanced in the

Southern Hemisphere.

Equipped with state-of-the-art technology, Paper Machine 31

produces high-quality, uncoated wood-free grades with copy paper

forming the bulk of production. This production line is supported

by modern converting equipment.

To support our high-quality operations, the right skills are essential.

We maintain a consistently high level of training in our

operations and in 2015 four of our papermakers successfully completed

their international Pulp and Paper Craftsman qualifications

in Europe, becoming the first on the African continent to hold

this qualification.

Our unrelenting drive to deliver the highest quality in everything we

do has enabled us to make a product that is a household name today

and is supplied countrywide and to the rest of Africa.

Mondi Group’s consistent and

focused long-term strategy has

positioned us as a leading international

packaging and paper group,

with a strong platform for growth.

With this backing, it is little

wonder Mondi Rotatrim has become

a market leader among

office paper brands over the past

30 years.

www.mondigroup.com

SOUTH AFRICAN BUSINESS 2017

54


25 years of wetlands

conservation

FOCUS

Mondi supports water stewardship in South Africa.

Wetland, Mondi Gilboa.

The WWF-Mondi Wetlands Programme (MWP) celebrated its 25th

anniversary in 2016. Started in 1991 as a collaboration between

WWF-SA and WESSA, it is one of the country’s longest-running

privately funded ecological conservation programmes and the

first wetland initiative to focus on the protection of wetlands outside

of protected areas.

Wetlands play a vital role in the environment and society, and in

the sustainable provision of water for both. They support people and

their economic activities including farming, fishing, tourism and water

provision. Healthy wetland ecosystems are the most biologically

diverse of all ecosystems, and they also protect coastlines, prevent

flooding, filter pollutants and act as giant sponges – soaking up

rainwater and releasing it slowly over time.

The WWF-Mondi Wetlands Programme initially focused on the

rehabilitation of key wetlands in South Africa. It has worked in major

water-stressed catchments with industries that have traditionally

impacted wetlands and water resources and demonstrated how

water stewardship and good

business practices go handin-hand.

In 2014, the WWF-MWP

broadened its focus from wetlands

to water stewardship using

a new landscape approach.

The focus is on the entire landscape

rather than individual

landowners or land-use sectors

and an effort is made to create a

deeper understanding of shared

responsibilities and shared risks

with everyone involved in a

product’s value chain.

www.mondigroup.com

55 SOUTH AFRICAN BUSINESS 2017


OVERVIEW

Mining

South Africa has vast mineral reserves and excellent infrastructure.

South Africa has huge reserves of platinum and chrome and

produces about 40% of the world’s vanadium and vermiculite.

The country has large reserves of ilmenite, palladium,

rutile and zirconium and 80% of the world’s known manganese

reserves are located in the Northern Cape Province. South Africa

no longer enjoys world dominance in gold production – both China

and the US produce more ounces – but it does produce 75% of the

world’s platinum and 73% of its chrome.

Coal and platinum group metals (PGMs) have overtaken gold as

the minerals generating the biggest sales volumes. Coal, iron ore,

gold and platinum group metals (PGMs) collectively make up 80% of

South Africa's mineral sales.

South Africa is the second-largest exporter of steam coal in the

world and is the number-one producer of andalusite. The Witbank

coal fields of Mpumalanga are the most productive in Africa and the

province lies at the southern end of the eastern limb of the Bushveld

Igneous Complex. With mines in Mpumalanga reaching the end of

SECTOR INSIGHT

The iconic Anglo American

has announced that it will, in

future, only focus on three

minerals.

their lives, the coal reserves of the

Waterberg region in Limpopo are

attracting attention. The ferroalloy

industry is centred on the

town of Middelburg. Nkomati

Mine is South Africa's only purenickel

operation.

After a very tough period for

gold producers, the recovery of

SOUTH AFRICAN BUSINESS 2017 56


OVERVIEW

the gold price to above $1 300

per ounce in late 2016 came as a

great relief. Various international

crises, including Britain's vote to

leave the European Union, saw a

return to gold by investors seeking

a safe haven. Although the

general trend in production volumes

of gold in South Africa is

downwards, there are some very

profitable mines and newcomer

Sibanye Gold (spun off from Gold

Fields Ltd in 2012) has been buying

up gold and platinum mines.

Mines in Aggeneys in

Namaqualand are responsible

for approximately 93% of South

Africa’s lead production and 12%

of all world lead exports.

There are 20 chromite mines

in North West Province located

along a reef running from Brits

to Rustenburg and serviced by

several ferrochrome smelters.

With the Chinese economy

slowing down, the demand for

the main component of steel

has dropped to the point where

iron-ore projects in the Northern

Cape have had to lay off significant

numbers of workers. A new ironore

sampling plant at Saldanha in

the Western Cape, a joint venture

between Kumba and Transnet, allows

exporters to certify the quality

of their product before the ore

is loaded onto ships for export. The

Northern Cape produces more

than 84% of South Africa’s iron ore.

The Kalahari Basin contains

80% of the world’s manganese

reserve, but only 15% of global

production comes from this area

so there is enormous scope for

development. Several new blackowned

manganese projects are

underway.

Zinc seldom features in reports, but when Vedanta started work in

2015 on its R9.4-billion Gamsberg Zinc project, it was very big news

indeed for a sector in need of good news. The new mine is near to

Vedanta's existing Black Mountain mine in the Northern Cape Province.

Every year Cape Town hosts the Investing in African Mining Indaba,

the world’s largest gathering of the most influential stakeholders in the

African mining industry. More than 7 000 leading financers, investors,

mining professionals and government officials meet at the Indaba to

network and broker deals.

Trends

One of the most significant changes in the South African mining

landscape was announced in early 2016, when the global resources

giant Anglo American, whose history is irrevocably linked with the rise

of South Africa as an industrial nation, announced that it will focus on

only three minerals: copper, platinum and diamonds.

This means that a large number of coal, manganese and platinum

assets, which for many decades resided in the Anglo American stable,

are now on the market. Anglo's 69.7% share of Kumba Iron Ore may be

sold as one asset or portioned off to different buyers. The company

has announced that it wants to sell all its coal mines.

Anglo's selling strategy dovetails nicely with the ambitions of relative

newcomer Sibanye Gold. Sibanye Gold was created when four

mines in the Free State and West Rand and some service companies

were hived off from Gold Fields Ltd. Gold Fields retained the South

Deep mine as its only South African asset: it also has mines in South

America, West Africa and Australasia.

57

SOUTH AFRICAN BUSINESS 2017


OVERVIEW

Sibanye has been actively acquiring gold and platinum assets

since its creation. Among the most significant was the agreement to

buy Rustenburg Platinum Mines Limited (including two concentrating

plants and on-site chrome recovery plant from Anglo American

Platinum). When the deal is concluded, Sibanye will be the world's

eighth-largest gold producer, the largest gold producer from South

African mines and the fifth-largest global PGM producer.

The purchase of Wits Gold in 2013 gave Sibanye access to assets

in the Free State and Mpumalanga provinces and the acquisition

process continued in 2016 with the purchase of Aquarius Platinum in

April. With 800 000 ounces of platinum, uranium as a by-product of

its gold production and the possibility that it will also buy coal mines,

Sibanye Gold is no longer just a gold company.

An issue that mining houses want resolved is the question

of empowerment. A figure of 26% has been set for shareholding

by black South Africans in terms of the Broad Based Black-

Economic Empowerment (BBBEE) [Mining] Charter. The area where

the government and the mining industry are yet to find agreement

relates to what happens when black shareholders want to sell. If they

sell to white investors, does the company have to sell new shares or

does the status quo remain, in other words, is it "once-empowered,

always empowered"? The Chamber of Mines says that the value of

BBBEE deals since the year 2000 is R205-billion.

Although the first two decades of democracy in South Africa

saw some fairly robust exchanges in industrial relations, the labour

ONLINE RESOURCES

Chamber of Mines of South Africa: www.chamberofmines.org.za

Mining Qualifications Authority: www.mqa.org.za

National Department of Mineral Resources: www.dmr.gov.za

union movement itself was very

stable. Most unions were allied

under the banner of COSATU

(the Congress of South African

Trade Unions), which in turn was

a key member of the tripartite alliance

with the African National

Congress (ANC) and the much

smaller South African Communist

Party.

This no longer applies. One

of the catalysts for change was

the Platinum Belt strike of 2012

in which a rival to the National

Union of Mineworkers (NUM) rose

to prominence. The Association

of Mineworkers and Construction

Union (AMCU) led the strikes that

culminated in the tragic shootings

at Marikana.

There is also some movement

in the diamond sector, with one

of South Africa's richest men,

Christo Wiese, increasing his

holdings in Trans Hex and intending

to de-list the company.

Trans Hex has shares in the

Namaqualand concession that

De Beers sold in 2014.

De Beers' biggest diamond

mine in South Africa is in northern

Limpopo where an investment

of R280-million will expand

production near the town

of Musina. Venetia Mine is by far

the most important part of De

Beers' South African operation,

accounting for 3.1-million of the

5.4-million carats recovered by

the company from its six operations.

In the Free State, De Beers’

Voorspoed mine will have a

production capacity of 800 000

carats per year when it is fully

operational.

SOUTH AFRICAN BUSINESS 2017 58


Mineral beneficiation

Industrialisation is to be boosted by adding value to minerals.

OVERVIEW

South Africa's mineral reserves need to work harder to create

a wider circle of prosperity. That is the fundamental idea

behind the drive to increase the number of beneficiation

projects in the country.

The national departments of Trade and Industry (dti) and Science

and Technology (DST) are developing policies and programmes to

encourage private investors to do more with the nation's metals.

One hi-tech example is the development of hydrogen fuel cells

using platinum by Impala Platinum at its Springs refinery. The Nuclear

Energy Corporation of SA is investigating turning fluorspar into Xenon

Diflouride, a massively valuable product, and the Council for Scientific

and Industrial Research (CSIR) has built a plant to convert titanium to a

powder, that can be reformed into various applications.

The state has indicated that it wants to build a new steel plant

(through the Industrial Development Corporation and in partnership

with a Chinese steel group), but the decline in iron-ore prices has put

pressure on the existing steel producers of South Africa. Steel production

is under severe threat as a result of cheap imports and tariffs are

now in place. Steelmaking contributes more than 1.1% directly to South

Africa’s gross domestic product (GDP), and a further 0.4% indirectly.

South Africa’s biggest steel producer is Arcelor Mittal, which has

four large plants located at Newcastle in KwaZulu-Natal, Vereeniging

in Gauteng (long steel production), Vanderbijlpark in Gauteng (liquid

steel) and Saldanha in the Western Cape (flat steel). There is also a coke

and chemicals facility in Pretoria.

Deposits of chromite, magnetite and vanadium in Mpumalanga are

the basis of the ferro-alloy complex in Witbank-Middelburg.

The Mineral and Petroleum Resources Development Act has introduced

a "pilot commodity value chain" (developed by the National

Department of Mineral Resources), which applies to the iron and

steel industry. Future value chain strategies will be developed for

ONLINE RESOURCES

Aluminium Federation of South Africa: www.afsa.org.za

South African Iron and Steel Institute: www.saisi.co.za

Southern Africa Stainless Steel Development Association:

www.sassda.co.za

SECTOR INSIGHT

A commodity value chain is

being piloted for iron and

steel.

energy (coal, uranium), catalytic

converters, jewellery and pigment

production.

South Africa plans to exploit

its rare metals and intends to develop

a beneficiation complex at

the West Coast port of Saldanha.

Titanium sands are currently exported

at a value of about R2 690

per ton but with beneficiation this

could rise to R6 000.

On the east coast, Richards

Bay Minerals (RBM) mines the

minerals sands of the northern

KwaZulu-Natal coast for zircon, rutile,

titania slag, titanium dioxide

feedstock and high-purity iron.

Titanium dioxide adds opacity to

paints, fibres and plastics and it is

also vital to the pigment industry.

Hulamin is a leader in the sophisticated

aluminium finishedproduct

sector.

In July 2016, De Beers, the

South African government and

the South African diamond

cutting industry launched a

project to encourage diamond

beneficiators. Among the first

companies involved are Thoko’s

Diamonds, African Diamonds,

Nungu Diamonds and Kwame

Diamonds.

59

SOUTH AFRICAN BUSINESS 2017


OVERVIEW

Oil and gas

South Africa is turning to gas.

SECTOR INSIGHT

The Gas Industrialisation unit

will position South Africa as a

hub for the oil and gas sector

in Southern Africa.

New sources of energy are always welcome. South Africa still

burns a lot of coal to create power, but gas is increasingly

being seen as a viable alternative.

In 2016, the Department of Trade and Industry (dti) established

a Gas Industrialisation Unit (GIU), which is tasked with creating

a strategy to exploit the huge fields of natural gas off the coasts

of Mozambique and Angola. The idea is to create a regional hub that

will promote industrialisation. The Trade and Industry Minister, Rob

Davies, says that Mozambique resource alone is estimated at between

5.7-trillion m³ and 7.1-billion tm³. South Africa's own potential in

hydrocarbons will form part of the strategic planning.

The idea of exploiting the shale gas reserves of the Karoo has

already attracted controversy, but it seems that "fracking" is to go

ahead. Companies that have shown an interest in looking for shale gas

in the Karoo using hydraulic fracturing or "fracking" include Falcon Oil

& Gas, Shell and a consortium comprising Sasol, Statoil ASA (Norway)

and Chesapeake Energy (the US).

Transnet ports are going to be important parts of the strategy for

the GIU: one project already underway shows how this cooperation will

operate. Construction has started

in Saldanha on the West Coast of

an Off-Shore Supply Base (OSSB)

to give specialist support to

boats and rigs involved in oil and

gas operations.

In another development, the

ports of Saldanha, Ngqura (next

to Port Elizabeth) and Richards

Bay (on the KwaZulu-Natal north

coast) will all receive additional

power-generating facilities (powered

by gas) in an investment that

will total R64-billion.

During the course of 2016,

a private power producer joint

venture delivered its second

gas-fired power plant in South

Africa. The Avon Peaking Power

gas turbine open-cycle power

plant near Durban went online

in July. The joint venture (Peaker

Trust, Japan’s Mitsui & Co, Engie

and Legend Power Solutions) is

also responsible for the 342MW

gas-fired Dedisa Peaking Power

Plant in the Coega IDZ.

Natural gas plants can be

planned and constructed inside

SOUTH AFRICAN BUSINESS 2017 60


OVERVIEW

four years, much faster than coal

or nuclear plants. Because gas is

easy to switch on and off, it also

makes it a good companion for

the national renewable energy

programme (which is encouraging

private investors to build solar,

wind and small-hydro facilities).

A new addition to South

Africa's pipeline network is a

pipe to get natural gas from

Mozambique to Gauteng. SacOil's

R90-billion project aims to deliver

gas to Johannesburg and the

nearby towns in 2020.

Oil

Most of the oil that feeds the

country’s four crude-oil refineries

is imported, but a good deal

of South Africa’s fuel is generated

by a natural gas conversion

plant on the coast and a coalto-fuel

facility near the country’s

industrial heartland.

In addition to South Africa’s

crude-oil refineries, natural gas

conversion plant, coal-to-fuel

and gas-to-liquid crude-oil refineries,

Sasol produces fuel from

coal at its Secunda facility and

PetroSA has the country’s only

gas-to-liquid (GTL) facility at

Mossel Bay.

Unfortunately, PetroSA suffered

a loss in the 2014/15 year

of R14.6-billion and feedstock for

the Mossel Bay facility has dried

up. Alternatives are being explored

to supply the plant from

other gas fields.

The Petroleum Agency

South Africa (PASA) supports

exploration for onshore

and offshore oil and

gas resources and regulates exploration and production

activities. Companies wanting to exploit resources have to get permits

from PASA.

The Sasol Group is a diversified resources and energy company.

Sasol Oil, Sasol Gas and Sasol Synfuels provide a good proportion of

South Africa’s fuel.

Sasol converts coal to usable fuel (coal to liquids) and gas to liquids.

The group has two major complexes in South Africa: at Secunda in

Mpumalanga, nine reactors create solvents, ethylene, propylene and

olefins; at Sasolburg in the Free State, natural gas is converted to

syngas, which is then made into hydrocarbons and paraffin.

Sasol is listed on the JSE in South Africa and on the New York Stock

Exchange, operates in 30 countries, and has over 30 000 employees.

Sasol New Energy has built a 140MW natural gas power plant to

increase the amount of electricity available to the integrated energy

and chemical group, allowing Sasol to reduce its carbon emissions

by about a million tons per year.

Utilising gas for power could allow South Africa to achieve the

scale that would enable gas-based industries to emerge.

Sapref has started a "clean-fuels" project, aiming to reduce sulphur

and benzene levels, among other things, in fuel products. The

modifications to the refinery will bring it in line with the tougher

legislation about fuel production.

The Western Cape region is marketing itself as a support and

services hub to Nigeria and the newer oilfields of Angola.

Saldanha on the West Coast is the site of the country’s largest

oil-storage facility. PetroSA maintains six tanks, each of which has a

capacity of 1.19-million cubic metres.

A new fuel storage facility is being built in Cape Town with the

support of the dti. The R650-million Burgan Cape Terminals falls under

Operation Phakisa, an Oceans Economy initiative, which is intended

to stimulate the maritime sector.

BP has announced it will spend R4.7-billion in the short term in

South Africa, with about half of that going into refinery upgrades.

Both the Coega IDZ and the Port of Saldanha are to become

centres for the recycling and refining of used oil. The investment of

R650-million should create between 100 and 150 jobs.

ONLINE RESOURCES

National Energy Regulator of South Africa: www.nersa.org.za

Petroleum Agency South Africa: www.petroleumagencysa.com

Sasol: www.sasol.com

61

SOUTH AFRICAN BUSINESS 2017


OVERVIEW

Energy

Energy efficiency is a win-win.

SECTOR INSIGHT

A national strategy for

energy efficiency in South

Africa is being developed.

Energy costs are on the rise, both in real terms and in terms

of pollution and climate change. One solution is to look for

cheaper forms of fuel, including gas, biogas and renewable

energy in the form of solar, wind or even wave power. But

there is a growing trend towards energy efficiency, which saves on

both sides of the equation by reducing energy demand, a genuine

win-win solution.

South Africa is one of the world's biggest emitters of carbon dioxide,

with a fleet of ageing coal-fired power stations. The Department

of Energy (DoE) has established its own unit to tackle this challenge,

the Energy Efficiency Directorate. With the support of Danish Energy

Management, an updated national strategy for energy efficiency

is being developed for South Africa. Denmark is a world leader in

energy efficiency and has found ways to reduce its energy usage

despite the country's GDP growing ever stronger. The International

Energy Agency’s (IEA) programme for support of emerging economies

is also behind the project.

One of the best known fields of energy efficiency is Green

Buildings, but the energy sector itself is a rich field for savings, as

are public services and industries

of every sort. A particular

target in many countries is the

transport sector, where quick

and very beneficial savings can

be made very quickly.

The Green Building move

has developed so quickly that

a star-rating system for buildings

is now in place, run by

the Green Building Council of

SA (GBCSA). The Department

of Environmental Affairs' new

head office in Pretoria is fittingly

a leader in the field when

it comes to public buildings,

having achieved a six-star rating

with a design conceived

by Boogertman & Partners

Architects.

Some of the features of DEA's

building are solar car charging

stations for electric cars, solar

panels on the roof, making sure

(through alignment) that the

building takes full advantage

of natural light for lighting and

heating (and the creation of

shaded areas) and rain-water

harvesting. Other noteworthy

buildings in South Africa include

SOUTH AFRICAN BUSINESS 2017 62


gasprimepower

Cummins Power Generation design and build the solutions

that meet prime power needs by providing economical and

clean prime power for various applications such as

industrial or municipal installations.

Our energy working for you.

Contact Cummins South Africa (Pty) Ltd

Tel: +27 11 321 8700

www.africa.cummins.com

© 2009 Cummins Power Generation Inc. All rights reserved. Cummins Power Generation and Cummins

are registered trademarks of Cummins Inc. “Our energy working for you.” is a trademark of Cummins Power Generation.


OVERVIEW

The new Department of Environmental Affairs' head office in Pretoria has received a 6-Star Green Star

SA Office Design v1 certification from the Green Building Council South Africa (GBCSA).

the Vodafone Site Innovation

Centre (Gauteng) and the

No.1 Silo at V&A Waterfront in

Cape Town.

Simple ideas such as having

a heat pump instead of

a geyser can yield enormous

savings. Keeping track of the

amount of energy being used

is another important (and

underutilised) tool. Keeping track

of energy use in a household or

a company or factory is a vital

part of energy efficiency. In this

field, it is indisputably true that

"If you can't measure it, you can't

manage it" and good meters (including

"smart" meters) must become

part of the solution.

South African Industrial

Energy Efficiency Project

The South African Industrial

Energy Efficiency Project (IEE) has

been running for six years and has

achieved substantial successes.

The National Cleaner Production

Centre (NCPC-SA) and the United

Nations Industrial Development

Organisation (UNIDO) are the joint

implementers of the IEE, with the

NCPC acting on behalf of South Africa's Department of Trade and

Industry (dti).

The first five-year phase of the project came to an end in 2015. In that

time R1.97-billion in energy costs were saved (equal to 2019 gigawatt

hours and 1.9 tons of CO 2

emissions). In addition, 435 tons of industrial

waste was diverted from landfill sites; this number will rise to 234 000

tons in 2016/17. The sectors focussed on by the IEE were:

• agri-processing

• automotive

• metals and mining

• chemicals

Since its inception in 2012, the Recycling and Economic Development

Initiative of South Africa’s (REDISA) government-backed national Waste

Tyre Management Plan has diverted more than 125 000 tons of used

tyres from landfill into new supply chains by subsidising the collection

and recycling process. The initiative is supporting 190 SMMEs and says it

has created 2 505 new jobs across South Africa – mainly for individuals

and small entrepreneurs.

The e-Waste Association of South Africa (eWASA) was established

in 2008 to manage the establishment of a sustainable environmentally

sound e-waste management system for the country.

E-waste (electronic and electrical waste) includes computers, entertainment

electronics, mobile phones, household appliances and less

obvious items such as spent fluorescent tubes, batteries and batteryoperated

toys that have been discarded by their original users. E-waste

makes up to 5% to 8% of municipal solid waste in South Africa.

ONLINE RESOURCES

Energy blog: www.energy.org.za

Eskom: www.eskom.co.za

National Department of Energy: www.energy.gov.za

SOUTH AFRICAN BUSINESS 2017 64


Environmental

sustainability in the workplace

Environmental sustainability in the business world

involves making decisions that are in the interests of

protecting the natural world. It is a prominent topic

at the moment as many people are taking notice of

the important impact that businesses and individuals

can have on the environment.

There are a number of benefits that accompany

environmental sustainability for businesses. It has

become an increasingly effective way for establishments

to differentiate themselves in a competitive

market. Marketing your business as environmentally

friendly and selling environmentally sustainable

services can really help you to expand your

customer base and capitalise on new opportunities.

Additional benefits include a reduction in operational

expenses and increased efficiency and fluidity

within a balanced business.

A company implementing this balance, Brother

Earth meets the needs of its customers for quality,

innovative print, while being equally committed to

protecting the environment.

Embodied in the Brother Earth programme, the

company’s environmental philosophy is to reduce

environmental impact and increase efficiency.

Focus areas include reducing CO 2

emissions to prevent

global warming, helping to build a recyclingorientated

society, managing and reducing the use

of chemical substances, and working with organisations

to conserve and restore forests.

Brother focuses on all stages of in the product

lifecycle to reduce environmental impact, including

design and development; procurement; production;

packaging and distribution; use; collection and

recycling.

There are a number of activities that businesses

can do to increase environmental sustainability.

These include enhancing eco-conscious design

processes and green procurement, maintaining a

continuous reduction in environmental impact at

manufacturing facilities (such as CO 2

emissions and

water consumption), and enhancing the reusability,

recyclability and collection system.

The beauty of many environmentally friendly features

is that they also help to deliver a real cost saving

to businesses, whether through lower energy bills,

reduced paper usage or increased toner longevity.

Implementing energy-saving features during

production is also key. A standby power consumption

of approximately 0.04W is Brother's new lowenergy

standby technology that has fundamentally

eclipsed the conventional standard of about 0.2W.

This achievement, which will change the future development

of power-saving technology, was the

product of our engineers changing their way of

thinking. With this technology, we limitlessly approach

zero watts, the state of being unplugged.

In terms of "green" certification there are a

number of quality management standards that

companies can implement, such as the TCO99

Accreditation, ISO Certification and the International

Energy Star Approval. Using Energy Star products

can make a huge difference in energy usage, as they

are capable of conserving energy through power

management and sleep mode, they run cooler and

last longer and, on average, are 25% more efficient.

For over two decades, Energy Star has been a driving

force behind the more widespread use of such

technological innovations as efficient fluorescent

lighting, power management systems for office

equipment, and low standby energy use.

At Brother, consumables are manufactured to

exacting, environmentally friendly specifications

and the company is committed to ISO 9001 and

ISO 14001 Standards. Only four Japanese and six

international manufacturing facilities have been

accredited with the strict environmental ISO 14001

conservation standards. Brother is the only printer

manufacturer with the globally recognised benchmark,

TCO99 Accreditation for excellence in ecology,

energy, emissions and ergonomics.

The potential for businesses that are integrating

environmental sustainability into the planning and

production systems of their enterprises is immense.

Good business depends not only on physical and

financial capital, but on natural resources. Through

the adoption of key strategies, reaching a balance

between a financially secure and environmentally

sustainable business can be achieved.


OVERVIEW

Water

Innovative solutions to water scarcity are being pursued.

South Africa is a water-scarce country and the recent drought

has served to concentrate the minds of government, the

private sector and farmers about the need to preserve and

protect the country's water sources.

Purification, desalination, water-leakage management and wastewater

treatment are some of the issues facing South Africans, and

experienced international companies are showing an interest in

the country.

The governments of South Africa and Denmark have a Strategic

Sector Co-operation, which was signed at the annual Water Institute

of South Africa (WISA) conference in Durban in May 2016. Denmark is

a world leader in water management and the themes underpinning

the agreement are groundwater management, urban water services

and water efficiency in industries.

The national Department of Water and Sanitation (DWAS) has said

that demand for water will outstrip supply in 2018. It has also put a

figure to what needs to be spent on water infrastructure and demand

management in the years to 2022 – R573-billion.

Water boards are responsible for provision of water services to

urban areas. One of the biggest, Rand Water, will have spent more than

R17-billion by 2010 in upgrading its infrastructure. The utility reports

that demand has been growing at nearly 5% every year.

According to Water Wheel magazine, 37% of water delivered to the

nation's municipalities is lost.

Government plans to arrest this trend (which costs the country

R7-billion every year) include a training programme for plumbers and

artisans to fix taps in communities. The first group of 3 000 trainees

was recruited in 2015.

Among the methods used by the firm WSP to improve water usage

are water audits and measurers. These strategies have been successfully

implemented at a reservoir controlled by the City of Cape Town,

a borehole scheme in the Northern Cape and for private clients like

Illovo, the large sugar producer in KwaZulu-Natal.

Innovative thinking has been required to tackle the problem of acid

mine drainage (AMD). Old mines (whose owners have long gone) pollute

the water supply, further reducing the amount of available clean

water. National government has committed to spend R600-million on

an annual basis on a system that will treat this water.

In the 1950s, the Orange River Project delivered water from the

SECTOR INSIGHT

International companies

are investigating business

opportunities related to

South Africa's water-related

problems.

Orange River to citrus farmers in

the far-away Eastern Cape. In a

mostly dry country such as South

Africa, this kind of transfer scheme

is the norm.

The country has several

good river systems but they are

not all ideally situated. So 80%

of Gauteng Province’s water is

imported, mostly from the Vaal

River, which is supplemented

by complex transfers from the

Thukela River and the Lesotho

Highlands Water Project.

The Vaal basin, which serves

the most populated and industrialised

part of the country including

Johannesburg, receives

water from seven inter-basin

transfer schemes.

Usage has to be reduced

in all sectors. The mining and

energy sectors are very thirsty,

and individual South Africans

themselves are apparently

thirstier than the average global

citizen (consuming 235 litres

per day per person, compared

with the global average of

177 l/d per person).

SOUTH AFRICAN BUSINESS 2017 66


Existing systems

South Africa’s most central province,

the Free State, is bound on

all sides by water, the Vaal River to

the north and west, the Orange

River to the south and the mountainous,

river-rich kingdom of

Lesotho to the east. The Gariep

Dam on the southern edge of

the province is South Africa’s

biggest dam.

The agricultural sector benefits

through irrigation from the

flow of the Vaal River. The Vaal-

Harts irrigation system is one

of the most productive in the

country, covering about 44 000

hectares with a variety of crops.

The Vaal Dam and the

Bloemhof Dam are important

sources of controlled water from

the Vaal River. The Vanderkloof

Dam controls water flow and allows

for better farming along the

banks of the river, and the Gariep

Dam has hydroelectric capacity.

An inter-basin transfer scheme

takes 40-million cubic metres per

annum from the Caledon River

basin and sends it to the Modder

River basin for industrial and

domestic use.

New schemes

The Lower Tugela Bulk Water

Infrastructure Project in Mandini,

KwaZulu-Natal, involves a 29km

pipeline that will bring water to

more than 300 000 people.

Other recent transfer projects

include the Western Aqueduct

project (valued at R864-million) and

the associated Northern Aqueduct

Augmentation Project (Durban,

OVERVIEW

Umgeni Water), and the Mokolo Crocodile Augmentation Project, which

is designed to supply water to Medupi, the new power station at Lephalale

in Limpopo Province. A pump station and a 45km pipeline between the

site of the power station and the Mokolo Dam is being built by the Trans-

Caledon Tunnel Authority (TCTA).

The TCTA has also overseen progress on the Komati Water

Supply Augmentation Project, the raising of the wall of the

Clanwilliam Dam and the Groot Letaba River Water Development

Project. The Mooi-Mgeni Transfer Scheme has increased water

supply to communities in KwaZulu-Natal. The Eastern Cape’s

R20-billion Umzimvubu Dam project will provide much-needed water

and hydroelectric power.

The latest mega-project is the Olifants River Water Resources

Development Project (ORWRDP). This includes the recently completed

De Hoop Dam.

Improving quality

The introduction by the National Department of Water and Sanitation

and the Water Institute of South Africa (WISA) of the Blue and Green Drop

Awards has been very successful. The nation’s municipalities receive scores

reflecting how well they are doing in terms of providing clean water.

Many municipalities use water boards such as Umgeni

Water, Rand Water or Sedibeng Water. The DWAS has allocated

R4.3-billion to helping municipalities deliver water. The Interim Water

Supply Programme will concentrate on 23 district municipalities.

The Rhodes University Institute for Water Research is one of several

institutions in the country that conducts research into water quality.

The Water Institute of South Africa has 1 800 members. It does

research, keeps its members up-to-date and runs conferences. As in

most areas of life in South Africa, environmental standards are set and

maintained by the South African Bureau of Standards (SABS).

The Water Chemistry Laboratory of the Council for Scientific and

Industrial Research (CSIR) tests water samples according to the relevant

SANS. Water storage is becoming an increasingly important issue in

South Africa, with many private homes and businesses investing in

water tanks. The Nedbank Group is investing R9-million in the Water

Balance Programme, designed to upgrade the functioning of watercatchment

areas.

ONLINE RESOURCES

National Department of Water and Sanitation: www.dwa.gov.za

South Africa Water Research Commission: www.wrc.org.za

Water Institute of Southern Africa: www.wisa.org.za

67

SOUTH AFRICAN BUSINESS 2017


INTERVIEW

Ambitious growth

underpinned by a

positive outlook

Premium water reservoir supplier, SBS Tanks,

is strategic about its intentions to grow its local

and international business.

Martin Barnard, Sales and

Marketing Manager, SBS

Tanks.

BIOGRAPHY

SBS Tanks Sales and Marketing

Manager, Martin Barnard,

describes himself as a “homegrown

Free State boy” who has

enjoyed the privilege of a global

career. Martin has an MBA

from Oxford Brooks University

in the UK and prior to joining

SBS Tanks he was, for many

years, employed by Shell – most

notably as a Marketing Manager

for Shell in Africa.

Please provide an overview of the company and your

main products.

Founded in 1998, SBS Tanks is a manufacturer and supplier of premium

water tanks. The company, which operates from a 2 500m 2 facility in

Pinetown, Durban, supplies both the local and export markets.

We introduced Zincalume® tanks to the South African market and

manufacture SBS Tanks® – a premium range of liquid storage solutions

for multiple applications.

Where do you see the company in the next five to

seven years?

As the premium water reservoir supplier, we will continue to entrench

ourselves in the South African market in the medium term. Ideally, we

would like to expand our product offering through collaborating with

other companies in a similar space and through the already strong

partnerships we have with service providers. We are open to turnkey

solutions or amalgamated offers.

While the broader African market is definitely on the radar, we are

being intentional about transforming the company into an international

player. In support of this, we have opened a branch in the US

and our products, as well as our specialist knowledge, is already being

shipped there.

In recognition of our growth in international trade we have recently

been awarded the KwaZulu-Natal Exporter of the Year award in the medium

category. We are particularly proud of the achievement considering

that two years ago, we won the award in the small business category

and previously, we were finalists in the emerging business category.

We were deliberate in obtaining ISO 9001 accreditation because it

enables our commitment to quality. We want to build on the fact that,

in addition to fully complying with national standards, we also meet

a number of international standards, which improves our chances of

becoming a competitive international player.

SOUTH AFRICAN BUSINESS 2017

68


INTERVIEW

Have you introduced any new technology

or innovations recently?

We have improved the liner in our tanks, as this

is a very important component of our products.

The liner now conforms to the highest relevant

standards and is comparable to the best available

internationally. The fact that we own our liner manufacturing

facility means that we are able to monitor

quality closely.

Another important innovation means that our

premium tanks are now able to withstand cyclonic

wind conditions, which is particularly relevant in our

export market.

What are the key markets for your

products?

In South Africa, we target five key markets: the mining

sector; tanks for fire protection (these are tanks

required for insurance purposes and positioned

outside commercial buildings and as we meet ASIB

specifications, we are very competitive in this market);

municipal (this will be a very important sector

for us going forward as access to clean drinking

water is a basic human right and constituents are

demanding this from government); water conservation

(for example, rainwater harvesting) and the food

and beverage processing sector.

Internationally, our ambition is to identify local

distributors in the countries in which we operate

and to develop local expertise when it comes to the

installation of our tanks. We have started a distributor

development programme in specific markets. In

terms of the target markets or market segments, these

vary from country to country, depending on the key

industries in each.

What are some of the challenges you

anticipate in meeting your goals?

It can be difficult to find civil contractors who

have the skills required to undertake our work. We

prefer to identify up-and-coming contractors and

train them to partner with us in tank installation. A

number of skilled people have left the employ of

municipalities and so we offer project management

services to our municipal clients. Instead of just selling

them tanks, we manage the entire process and

this gives us an opportunity to identify local contractors

to assist in tank installation, but they need to be

willing to undergo training to ensure they are able

to meet our exacting standards.

Do you have a message for readers

regarding water scarcity in South Africa?

The looming water crisis is not the same as the electricity

crisis that South Africans experienced a few

years ago. In the case of power interruptions, people

have the option of purchasing a generator, but water

cannot be generated. As South Africans we need to

understand that even if it does rain more, the crisis

won’t disappear.

Large commercial operations need to prepare

for water shortages and should make contingency

plans. This is particularly important for clients in the

food and beverage industry – as an example, it is

69

SOUTH AFRICAN BUSINESS 2017


INTERVIEW

impossible to make beer without

water! Customers who had purchased

our storage tanks didn’t

experience any loss in production

during the water shortages that

have affected some areas of the

country recently.

We are very mindful of the

problems relating to water scarcity

and in early 2016, SBS Tanks

donated water tanks valued at

R700 000 to two Free State

communities badly affected by

drought. This demonstrates the

company’s overall commitment

to drought relief efforts.

And a more general sentiment

that you would like

to convey?

SBS Tanks is a proudly South

African company, and by that I

mean that we choose not to believe

the “naysayers”, preferring

to retain faith in the country and

its people.

I too used to be fairly negative

about the prospects for

South Africa. In 2000 I emigrated

to the UK and, at the time, I was

convinced that would be a permanent

move. However, after

being seconded back to Africa, I

realised that I needed to make a

difference by contributing to positive

change and that is one of the

factors that affected my decision

to join SBS Tanks. We encourage

other small and medium South

African companies to remain committed

to operating here and to

contribute to the economic future

of the country.

SOUTH AFRICAN BUSINESS 2017

70


Businesses benefit from

backup process water

FOCUS

SBS Tanks has some timely advice for businesses that require large

quantities of water for operational efficiency.

Almost every industry benefits from backup process water

for business – whether that business lies in manufacturing,

healthcare, education, tourism or retail. Water is used

throughout various stages of business, in product use, the

supply chain and manufacturing. A lack of access to water can be a

major challenge for any business’ growth.

Consistent access to water is therefore essential to ensure that operations

can continue to run smoothly, but in countries such as South

Africa, which frequently face periods of drought, water shortages

and other related issues, this is not always as easy as it sounds. Water

infrastructure may be damaged or neglected within local municipalities.

Water supply in certain areas may be rationed and industries that

require large volumes of water at all times may pay the price.

As serious as water interruptions are for businesses, the good news

is that a contingency plan can go a long way in ensuring that your

premises always have access to water – even in the event of a countrywide

drought.

How to prepare your business for a water emergency

The first step in preparing for a water emergency is to ask the

following questions:

• How long could your business effectively operate with restricted

water, or a complete water shortage?

• Do you currently have any plan to reduce disruption to your

business if your regular water supply was interrupted?

• Is there an emergency shut-down process that applies to water

supply emergencies, and are employees trained to act accordingly?

• Is there any crisis management team or process in place to deal

with stakeholders and make critical decisions in the event of a

water disaster?

SBS Tanks has compiled a comprehensive guide – “Backup Process

Water Supply Planning for Business & Industry”. This guide includes

step-by-step recommendations on how to create a backup water

plan, and shows you how to put together a water-usage assessment

that will help you prepare for

water outages.

One of the best ways to ensure

that your company will always be

prepared for any water interruption

is to consider a backup water

system for your premises.

Backup water tanks for commercial

use are designed to provide

access to water at all times,

even in the event of a water outage.

If the municipal water supply

is cut off, the backup tank will

continue to provide water with no

noticeable impact on water flow.

Once the water supply resumes,

the tank will refill again.

In this way, you will have peace

of mind in knowing that water

interruptions will not cause operational

interruptions. Systems

can be integrated within existing

rainwater harvesting tanks or

used for dedicated backup tanks.

Ideally, you will need a tank large

enough to store two to three days

of reserve water.

Whatever your industry, taking

the time to invest in essential

contingency steps is the best way

to get full peace of mind.

For assistance in doing this

visit www.sbstanks.co.za or

contact 086 048 2657.

71

SOUTH AFRICAN BUSINESS 2017


FOCUS

Advantages of commercial

rainwater harvesting

In a country that is prone to drought and water shortages,

SBS Tanks is promoting the value of commercial rainwater harvesting.

With the rise in green, sustainable building technology,

property developers all over the country are turning to

solutions that help to save resources.

Rainwater tanks are common in the residential

sector, but are now becoming popular in commercial developments.

Schools, factories, hotels, mining corporations, municipal buildings,

office parks, shopping centres and many other industries can benefit

from a large-scale tank.

Five reasons to consider commercial

rainwater harvesting

Much as residential water tanks help homeowners save money and

water, commercial rainwater tanks are designed to save water on a

large scale. Rainwater is collected and stored in heavy-duty bolted

steel tanks that are coated in Zincalume, which ensures that tanks

are resistant to corrosion and able to withstand virtually any climate

and condition. Tanks for commercial rainwater range in size from 12kl

to 3 300kl, and, as they are modular in design, they can be relocated

should the need arise.

Some of the most significant benefits of commercial rainwater

harvesting include the following:

• Savings on water costs: From a municipal rates perspective,

a water tank can reduce water costs notably. For industries

that typically require a large amount of non-potable water for

manufacturing or operation, these savings are especially high.

• Clean, safe, soft water: Rainwater is free of chemicals, and in some

cases, it is safe and clean enough to be used for drinking water.

It makes excellent "grey" water to use for fleet washing, toilets

and showers. Grounds and gardens also benefit from rainwater.

• Reduces run-off: In high-rainfall areas particularly, run-off from

gutters and downpipes can wreak havoc on soil, causing erosion

and increasing the risk of damp and flooding. Tanks are designed

to integrate within the current

roofing and gutter structure,

but can be relocated as needed.

Once drainage paths have

been identified, tanks can be

placed strategically to capture

run-off.

• Reduces stress on public

water supply: Public water is

used for a variety of purposes,

including plumbing, drinking

water supply, reservoirs for

fire control, maintenance for

public spaces and numerous

other purposes. By collecting

and using rainwater, businesses

can help lower the risk of

water shortages in the event

of drought and restrictions.

• Increases sustainability:

Rainwater is a free commodity

that can be utilised in a wide

range of applications without

putting further strain on

diminishing supplies.

As a specialist in high-quality

Zincalume tanks, SBS Tanks can assist

with a wide range of commercial

rainwater harvesting tanks.

Contact us to discuss your

tank requirements. Call us on

086 048 2657 or visit us at

www.sbstanks.co.za

SOUTH AFRICAN BUSINESS 2017

72


Engineering

Transnet Engineering is targeting international orders.

OVERVIEW

South Africa has several vertically integrated engineering and

consulting companies that offer a wide range of services and

are active internationally. All of the biggest construction companies

(including Murray & Roberts, WBHO and Group Five)

are multi-disciplinary companies and they are active in several sectors.

Concerns about delays in the implementation of national government’s

ambitious infrastructure plans have persuaded several companies

to load their order books in favour of international projects.

Aveng has cut its reliance on South African projects to 37% as

opposed to 56% in 2015. Aveng, South Africa's largest construction

company, will increase its profile in Asia and Australia. The downturn in

the South African mining and manufacturing sectors is another factor

that has dampened growth in engineering.

However, Murray & Roberts (which now operates in oil and gas,

power and water, construction, underground mining and infrastructure)

still managed to bring in revenue – from operations on five continents

– of R30.6-billion in 2015. At home, the company was involved in

the Gautrain project and is delivering the boilers to the power stations

at Medupi and Kusile for Hitachi Power Africa.

Some elements of the national infrastructure plan are moving

faster than others. Renewable energy is a massive new sector for engineers,

and construction companies are busy building solar and wind

power infrastructure in many parts of the country. Housing (such as

Basil Read's R1.8-billion housing project north-west of Johannesburg,

Malibongwe Ridge) continues to be a national priority, and several

new dams are being built.

Transnet Engineering (TE) wants to cut its reliance on other divisions

of Transnet. At the moment, just more than 10% of orders come

ONLINE RESOURCES

Engineering Council of South Africa: www.ecsa.co.za

South African Association of Consulting Engineers: www.saace.co.za

Steel and Engineering Industries Federation of South Africa:

www.seifsa.co.za

Transnet Engineering: www.transnetengineering.net

SECTOR INSIGHT

Prominent South African

engineering and construction

companies are

increasingly focusing

on international projects.

from outside the group – the aim

is to grow that to 40%. A locally

designed and developed locomotive,

the Trans-Africa Locomotive,

is symbolic of this thinking: some

R300-million went into research

and development of this unit,

which, it is hoped, will sell well in

other parts of Africa. TE wants to

become an original equipment

manufacturer (OEM) of wagons,

coaches and locomotives. It also

hopes to offer its services in Africa

for maintenance, repair and overhaul

(MRO). TE’s new business unit,

Port Equipment Maintenance, is

another signal of the company’s

wider focus. There are 13 000 TE

employees at 132 depots and six

factories around South Africa.

73 SOUTH AFRICAN BUSINESS 2017


OVERVIEW

Manufacturing

Several state programmes are promoting manufacturing.

The manufacturing sector accounts for approximately 15% of

Gross Domestic Product (GDP). The sector employs the thirdhighest

number of people, about 1.7-million, after financial

services and retail. Three of South Africa’s most important

manufacturing sectors (automotive, food and beverages and chemicals)

are dealt with in separate sections of this publication.

The Department of Trade and Industry (dti) is the state's lead

promoter of the sector, with initiatives such as the Competitiveness

Enhancement Programme, which targets medium-sized manufacturers

and includes a cost-sharing grant of between 30% and 50% for

investments up to R50-million and up to 80% on specific projects.

The main vehicle for the dti has been its Industrial Policy Action

Plan (IPAP), the seventh version of which was launched in 2016. The

most recent focus is science and technology and the promotion of

local manufacture for designated products in aspects of the construction

sector (pipes and vehicles) and the energy sector (power lines).

The Support Programme for Industrial Innovation (SPII), run by

the Industrial Development Corporation (IDC) on behalf of the dti,

promotes technology development in South African industry. SPII

comprises three programmes: the Product Process Development,

Matching schemes and Partnership schemes. The type of funding

made available depends on the project size.

Another IDC initiative has allocated R23-billion over three years to

support the Black Industrialist Programme to help existing entrepreneurs

grow their businesses to significant scale.

Part of the drive to improve South Africa's rail infrastructure involves

getting South African companies to manufacture rolling stock. The

Passenger Rail Agency of South Africa (PRASA) in 2013 signed local

consortium Gibela (including Alstom) to deliver 600 passenger

trains. The R51-billion contract will be supported by a new factory in

Ekurhuleni and Gibela has pledged to put a lot of business the way

of local companies.

In sourcing the 1 064 new diesel and electric locomotives that

it wants to spruce up its services, Transnet Freight Rail has split the

contract across four suppliers, including General Electric South

Africa Technologies, CNR Rolling Stock South Africa and Bombardier

Transportation South Africa.

SECTOR INSIGHT

The seventh version of the

dti's Industrial Policy Action

Plan was launched in 2016.

Growth in the manufacturing

sector since 1994 has been led by

the automotive sector, followed

by resource-based manufacturing

(Quantec). The latter sector

includes steel, aluminium, petrochemicals,

paper and pulp and

non-metallic minerals.

The forest product export

sector in South Africa is made

up of paper (45.2%), solid wood

(23.3%) and pulp (28.9%). Imports,

weighted towards paper products,

cost the country R9.8-billion

annually, clearly indicating scope

for increased domestic production.

The pulp and paper sector

makes a direct contribution to

South Africa’s balance of payments

of R4.5-billion. The country’s

largest hardboard plant is

at Estcourt and South Africa’s

only woodchip export plants are

located at Richards Bay.

Among other important sectors

are metals beneficiation

(more than 50% of the world’s

ferrochrome is produced in South

Africa), coke and refined petroleum

products and information and

SOUTH AFRICAN BUSINESS 2017 74


OVERVIEW

communication technology. Steel and petroleum collectively make up

about 45% of South Africa’s total manufacturing production capacity.

April, May and June 2016 were hopeful months in South African

manufacturing – production went up in all three. Stable electricity

supplies and the relatively weaker rand (which helped to drive exports)

helped.

Steel has been experiencing a volatile few years, with reduced

demand from China severely reducing production volumes in South

Africa. Mpumalanga producer Evraz Highveld Steel and Vanadium

applied for business rescue in 2015 and independent producer

Cisco closed. The country's biggest steel producer, ArcelorMittal SA

(AMSA), was fined R1.5-billion in 2016 by the Competition Commission.

However, China will no longer enjoy subsidies in selling steel into

South Africa and AMSA has well-resourced plants in three provinces so

analysts are predicting a recovery, which may include a joint purchase

of Evraz Highveld (with the IDC).

New technology has been embraced by some innovative manufacturers.

Desert Wolf's Skunk Riot Control Chopper is one of the

unmanned light aerial vehicles (UAV) that has proved popular in the

world market. Drones have been very much in the news because the

US military has been using them in its operations in the Middle East.

South Africa's Denel makes a drone product that can be adapted for

use by conservationists.

Clothing and textiles

There has been a recovery in this subsector, greatly helped by an injection

of R7-billion from the state in various forms since 2009. There

are just over 90 000 workers employed in the sector, which means

numbers are increasing very slightly after a big dip several years ago

when the sector suffered from cheap imports.

Support from the dti has allowed manufacturers to invest in new

equipment. Cotton Traders received an injection of capital from the

dti that enabled it to buy new equipment and expand. This led to 200

new jobs being created.

The Textile and Clothing Unit within the Industrial Development

Corporation (IDC) has been very active in supporting companies

that need help, either to get over a tough period or to expand or to

invest in new equipment in order to make new lines. Canvas and Tent

Manufacturing (Pty) Ltd has more

than 400 employees in Ladysmith

and won Exporter of the Year in

2014/15.

KwaZulu-Natal is home to 219

clothing companies (Coface).

Ninian & Lester is one of the larger

employers in the textile sector,

with 1 500 people making clothing

(including the Jockey brand),

textiles and polypropylene.

The footwear sector is showing

good recovery after taking a

battering from Chinese imports.

Two international safety footwear

firms operate out of Pinetown:

Bata Industrial and Beier. The latter

company joined forces with

three other South African safety

footwear manufacturers in 2014

to form the BBF Safety Group,

making them more competitive.

K-Way, which supplies Cape

Union Mart, is a very successful

outdoor clothing manufacturer

with a factory in Cape Town.

Gelvenor Textiles specialises in

fabric suitable for military uses.

Hanes Brands makes underwear

in Durban and wants to double

its output by 2020.

The furniture sector is not

growing but there are about

2 200 companies in the country,

employing more than

26 400 workers (contributing 1%

of manufacturing GDP and 1.1% of

manufacturing employment).

ONLINE RESOURCES

Industrial Development Corporation: www.idc.co.za

Manufacturing Circle: www.manufacturingcircle.co.za

Support Programme for Industrial Innovation: www.spii.co.za

75 SOUTH AFRICAN BUSINESS 2017


OVERVIEW

Chemicals and pharmaceuticals

Both sectors are attracting internal and foreign investment.

South Africa's chemical industry contributes 5% to national

gross domestic product (GDP) and about 60% of its earnings

are derived from exports.

The complexes run by Sasol at Secunda, in Mpumalanga,

and Sasolburg, in the Free State, underpin the national manufacturing

capacity in chemicals. Sasol makes a range of products for fertilisers,

explosives and polymers. Nearly 60% of Sasol's earnings come from

chemicals, amounting to a turnover of R105-billion in 2015.

Sasol Chemical Industries makes about 60% of South Africa’s polypropylene.

Safripol, which is also based in Sasolburg, is South Africa’s only other

producer. More than half of Sasol’s production of 625 000 tons is exported.

Omnia and Kynoch (fertiliser), Karbochem (rubber and carbochemicals),

Safripol (plastics) and Afrox are among the other major companies

operating out of Sasolburg. Kynoch makes fertiliser in Middelburg

and Schoeman Estates has a plant in Marble Hall. Middelburg-based

Solchem Industrial and Mining Chemicals specialises in degreasers for

mining and industrial applications.

The by-products of the sugar and forestry processing plants of

KwaZulu-Natal benefit the chemicals sector. Illovo Sugar manufactures

downstream products such as furfural, furfuryl alcohol, diacetyl and

ethyl alcohol.

AECI is one of South Africa’s biggest groups in the sector. The two

principal divisions are AEL Mining Services (with a large factory site at

Modderfontein near Johannesburg) and Chemical Services, which have

20 separate companies.

Foskor is the country’s only vertically integrated phosphates producer.

It has a mining operation in Limpopo Province (at Phalaborwa) from which

it sends raw materials to its acids division in Richards Bay in KwaZulu-Natal.

Sulphuric acid, phosphoric acid and phosphate-based granular fertilisers

are manufactured there.

The Chemical and Allied Industries Association (CAIA) has 162 member

companies.

ONLINE RESOURCES

Chemical and Allied Industries’ Association: www.caia.co.za

Chemical industry information portal: www.chemissa.co.za

National Association of Pharmaceutical Manufacturers:

www.napm.org.za

SECTOR INSIGHT

There are more than 200

pharmaceutical companies

in South Africa.

Pharmaceuticals

Pharmaceuticals are manufactured

primarily in Gauteng and

the Eastern Cape. Although there

are more than 200 pharmaceutical

firms in the country, large companies

dominate the field. In 2016,

Aspen had a market capitalisation

of R160-billion and Adcock Ingram,

R7.6-billion. Ascendis, which was

established in 2008 and now has

a market cap of R6.9-billion, has

been busily acquiring companies,

such as a generic manufacturer

based in Cyprus, and building

up its portfolio in the sector.

Cipla Medpro is another large

company.

The local industry was valued

at R39.7-billion in 2013 and

contributed 1.1% to national GDP

(dti). The sector employs nearly

10 000 people. South Africa has

the world's largest anti-retroviral

programme, which provides for

more than three-million patients.

Aspen SA produces about

10-billion tablets per year at its

Port Elizabeth facility. The company

has another factory in Gauteng

and successful operations in

South America and Australia.

SOUTH AFRICAN BUSINESS 2017 76


Food and beverages

Food and drink account for a quarter of all manufacturing.

OVERVIEW

ONLINE RESOURCES

FoodBev SETA: www.foodbev.co.za

National Chamber of Milling: www.grainmilling.org.za

SECTOR INSIGHT

Food and beverages account

for a significant share of the

country's manufacturing

sector.

The global trend towards healthier eating habits and being

aware of the source of foods has come to South Africa. This

means growth in sales of organic produce, but legislation

is also part of the new equation. A proposal in 2016 to introduce

a sugar tax on beverages has created a lot of debate. Even

if a tax is not introduced, there is no doubt that the trend towards

healthier food (and better labelling) is here to stay.

Starbucks thinks the South African market is worth investing in.

When the American coffee giant, in partnership with Taste Holdings,

opened its first shop in Johannesburg in April 2016, customers queued

through the night. Coffee shops are hugely popular in South Africa.

The food and beverage sector is responsible for 24.4% of total

manufacturing production and employs 230 000 people. Beverages

account for just over 4% of all manufacturing sales while food is

responsible for 13.5%. Within the sector, beverages account for 24%

of sales. One quarter of the 37% of national GDP that is generated

by agri-industries derives from agri-processing.

Gauteng, the Western Cape and KwaZulu-Natal are the leading

provinces with respect to food and beverages manufacturing. About

half of the companies operating in the sector are in Gauteng.

Unilever received a tax incentive in 2015 under the Department

of Trade and Industry's 12-I Tax Allowance Incentive scheme for its

new ice-cream factory in Midrand, Gauteng. This is Unilever's fourth

plant in South Africa, following its investment in a savoury foods

plant in 2011.

RCL Foods, formerly Rainbow Chickens, has lately been on an

aggressive run of acquisitions. Despite the large number of extra

chickens available to the South African consumer (as above) and

the persistent drought, RCL managed to increase revenue in the

12 months to June 2016 by 6.8%, to R25-billion. The groceries and

logistics divisions performed best but RCL is reconsidering its business

model with a thought to

producing fewer frozen chickens

and doing more in the fast-food

sector.

South Africa has mature fast

food and family restaurant franchise

sectors, ranging from indigenous

brands Spur and Nando’s

to international giants such as

KFC, McDonald’s and recent

arrival Burger King.

Nando’s, the Portuguesechicken

chain, has done extremely

well internationally and

is proving to be something of a

phenomenon in Britain. Wimpy

is the second-largest franchise

operation in South Africa

(after KFC).

Frost & Sullivan values the

South African retail chocolate

market at R5-billion with an

expected growth rate of 10%

per year for the next five years.

Cadbury, Nestlé and Beacon

account for 85% of sales.

77

SOUTH AFRICAN BUSINESS 2017


OVERVIEW

Automotive

Car makers exported a record number of cars in 2015.

SECTOR INSIGHT

A joint venture between BAIC

and the IDC will see Chinese

vehicles manufactured at

Coega IDZ.

Automotive and automotive components make up one of the

most important parts of the South African manufacturing sector:

30.2% of total manufacturing output, about 7% of the nation's

Gross Domestic Product (GDP) and they are responsible for a

significant proportion of exports.

In 2014, South Africa exported 276 404 vehicles and in 2015 a new

record was achieved – 338 802. The total value of this (together with

automotive parts exported) amounted to R151-billion. Total production

in South Africa in 2016 was expected to reach 640 000 units.

South Africa’s most important automotive trading partners are the EU,

North American and certain African countries. Total South African vehicle

and component exports to 148 countries in 2014 were worth R115.7-billion.

Automotive manufacturing takes place in three provinces: Gauteng

(Nissan-Renault, BMW and Ford); KwaZulu-Natal (Toyota, Bell Equipment)

and the Eastern Cape (Volkswagen, Mercedes-Benz, General Motors and

Ford engines). In May 2015, Mercedes-Benz SA produced its one-millionth

passenger car. The East London plant, which regularly wins awards for

quality, is producing the W205 C-Class car.

National government (through the Department of Trade and Industry,

dti) has had a plan in place since 2013 to encourage investment in the sector,

the Automotive Production Development Programme (APDP). It is estimated

that the scheme has attracted about

R50-billion through incentives.

The latest foreign investment,

and one of the biggest, will see

Beijing Automobile International

Corporation (BAIC) take a 65% stake

in a multi-billion-rand joint venture

with the Industrial Development

Corporation at the Coega Industrial

Development Zone outside Port

Elizabeth. BAIC is a Chinese stateowned

enterprise with several

brands. The intention is to start production

on the 85 000m² site in 2018

and the target is annual production

of 100 000 cars, bakkies and sports

utility vehicles. About 2 500 jobs

are expected to be created in the

longer term.

This follows the arrival of

Chinese automotive manufacturer

First Automotive Works

(FAW), which has established a

R600-million assembly plant in

Zone 2 at Coega. The Coega IDZ

is run by the Coega Development

Corporation.

Companies like BAIC and FAW

may well be positioning themselves

to push into Africa, not only

SOUTH AFRICAN BUSINESS 2017 78


OVERVIEW

for selling vehicles but for sending

automotive parts and partlyassembled

kits further north. A

new pan-African organisation has

been established to promote the

auto industry on the continent, the

African Association of Automotive

Manufacturers (AAAM).

Recent announcements of increased

investments by existing

Original Equipment Manufacturers

(OEM) in South Africa include:

• The Volkswagen Group South

Africa, R4.5-billion rand, new

lines of production

• Ford South Africa, R2.4-billion,

Everest sports utility vehicles

• BMW, R6-billion, conversion to

production of X3 model

The industry association, NAAMSA,

pegged the total expenditure

within the industry in 2015 at

R6.6-billion and projected a

R1-billion increase for 2016. South

Africa produces a small number of

cars relative to world production

(about 91-million in 2015) but considering

that South Africa's share

of global GDP is about 0.46%, a

figure of 0.68% of cars produced is

quite impressive.

Automotive components

South Africa has a sophisticated

automotive component sector,

with the producers of catalytic

converters doing particularly well

in the international market. From a

start-up industry in the mid-1990s,

the sector now supplies 14% of the

world market and is worth at least

R18-billion.

Catalytic converters convert

bad gases coming out of exhausts

into less harmful gas. The

converter uses platinum group metals (PGMs), of which South Africa has

about three-quarters of the world's reserves.

Tyre and glass manufacturers are clustered around the areas where the

automotive industry is active. Sumitomo Rubber South Africa, which includes

Dunlop among its brands, is spending R2-billion on expanding production

in Ladysmith, KwaZulu-Natal. Bridgestone Tyres has plants in Port Elizabeth

and Brits and Continental makes tyres in Port Elizabeth.

The large number of vehicle models produced in South Africa is a complicating

factor for the components sector: low volumes often mean high

prices. Two Port Elizabeth companies export significant portions of their

production to overcome this: Schaeffler SA exports to its international

parent so that it can achieve higher volumes. Shatterprufe supplies the

majority of windscreens to the South African market but there are 12 model

ranges to serve.

The provincial government of the North West and the Automotive

Industry Development Centre (AIDC) combined to help wire harness manufacturer

Pasdec Automotive Technologies open a new assembly line in

Brits. Other big companies in the North West are Bosch, Bridgestone and

Giflo Engineering.

In Gauteng, the AIDC teamed up with government agencies, Ford and

Nissan to establish incubation parks to encourage more black businesses

to enter the sector. Automotive parts made in South Africa are exported to

more than 70 countries including Japan, Australia, the United Kingdom, the

United States, Algeria, Zimbabwe and Nigeria.

The Automotive Incubation Centre based at the Nissan plant in the

Tshwane suburb of Rosslyn aims to boost small and medium sized enterprises

that can supply components to Nissan South Africa’s production line.

Training will also be provided.

Only 35% of the components and parts used to make vehicles in South

Africa are produced locally; the balance is imported. Gauteng’s car-makers

spend nearly R8-billion a year on imports of automotive parts, components

and accessories.

To tackle this, the first Automotive Incubation Centre was launched in

2011 at Ford Motor Company of Southern Africa’s manufacturing plant in

Silverton, as well as in Tshwane.

The incubation centre was established by the AIDC, a subsidiary of the

Gauteng Growth and Development Agency (GGDA), which is a unit of the

Gauteng Department of Economic Development.

ONLINE RESOURCES

Automotive Industry Export Council: www.aiec.co.za

Automotive Industry Development Centre: www.aidc.co.za

National Association of Automotive Component and Allied

Manufacturers: www.naacam.co.za

National Association of Automobile Manufacturers of South

Africa: www.naamsa.co.za

79

SOUTH AFRICAN BUSINESS 2017


OVERVIEW

Transport

South Africa's port and rail infrastructure is being upgraded.

South Africa has a sophisticated and well regulated transport

network, with a mix of state-owned enterprises (SOEs),

large private firms and small enterprises providing a range

of services.

The South African Department of Transport has several agencies and

businesses reporting to it: Air Traffic and Navigation Services, Airports

Company South Africa (ACSA), National Transport Information System,

Road Accident Fund, South African Civil Aviation Authority, South

African Maritime Safety Authority (SAMSA), South African National

Roads Agency Limited (SANRAL) and the Passenger Rail Agency of

South Africa (PRASA).

Almost 90% of freight is transported by road and the logistics sector

is very reliable. However, these volumes are not good for the condition

of the country's roads and SOE Transnet is working hard to attract more

business to the rail network.

Transnet Freight Rail (TFR) has, for example, put 28 new electric

locomotives on the line, supporting steel producer ArcelorMittal in

order to improve service. Transnet is also undertaking a very ambitious

upgrade of its infrastructure and equipment, which should

put it in a better position to pitch for freight business. More than a

SECTOR INSIGHT

Almost 90% of South

Africa's freight is transported

by road.

thousand new locomotives have

been ordered from four different

manufacturers.

South Africa has 21 000km of

railway lines, 747 000km of roads

and 566 airports and airstrips

(Made in SA). South Africa has

325 019 heavy-load vehicles and

the road freight industry employs

65 000 drivers.

Significant investments in

improved infrastructure are being

made at all of South Africa's

SOUTH AFRICAN BUSINESS 2017 80


OVERVIEW

ports, partly with a view to improving

turn-around times for

loading and off-loading containers.

Special Economic Zones (including

Industrial Development

Zones (IDZs) are either in place

or being developed at several

sites alongside harbours from

Saldanha on the West Coast

to Richards Bay in northern

KwaZulu-Natal.

Many South African cities

are trying to improve public

transport and local bus body

manufacturers have delivered

740 buses to the City of Cape

Town (Busmark 2000 and Volvo

SA), 134 new buses to add to

Johannesburg's Rea Vaya system

(Mercedes-Benz SA) and 80

commuter buses for Great North

Transport of Limpopo (MAN).

The Maputo Development

Corridor is Africa’s most advanced

spatial development

initiative. Run by the Maputo

Development Corridor Logistics

Initiative (MCLI), the corridor runs

from near Pretoria in Gauteng to

Maputo in Mozambique.

The Harrismith Logistics Hub

(HLH) on the N3 is an inland port

that can handle cargo containers

and shift cargo from road to rail,

reducing congestion and costs.

Rail

There are private rail operators in

the mining industry (Sheltam and

Railroad Logistics Grindrod operate

in the gold-producing areas

of the Free State and Gauteng)

and in the tourism sector (Rovos

Rail is a popular luxury rail touring

company) but the sector is

dominated by the Transnet Group, which is responsible for the railway

lines and has most of the country's rolling stock. It has a number of

divisions such as Transnet Engineering and Transnet Freight Rail.

Transnet is pursuing a Market Demand Strategy (MDS), which

aims to create customers outside the group. So instead of Transnet

Wagons selling only to Transnet Freight Rail, it wants to create new

markets for its wagons elsewhere in Africa and beyond. It intends

spending more than R300-billion over five years to realise the MDS.

The major rail haulage lines are the manganese line from the

Northern Cape to Port Elizabeth; from Sishen in the Northern

Cape to the Port of Saldanha (iron ore); and from the coalfields of

Mpumalanga to Richards Bay. More than 55-million tons are regularly

transported along the former and upwards of 70-million tons

can travel annually along the latter. A new line to carry coal from

the inland to the coast through Swaziland is being investigated.

This has the potential to add 30-million tons to the amount of coal

transported to the coast.

Grain tonnages carried by Transnet Freight Rail (TFR) will almost

double in the years leading up to 2019. The assets of TFR’s new

Container and Automotive Business (CAB) unit have been ringfenced.

The CAB has been created because of the importance of

the Johannesburg-Durban line.

Transnet Freight Rail intends to increase the amount of freight it

carries from 200-million tons to 300-million tons.

The Passenger Rail Agency of South Africa (PRASA) oversees

a passenger rail network of 22 300km. The agency is spending

R51-billion on upgrading its trains, which provide passenger services

through Metrorail. The agency employs 16 500 people and its assets

(including bus companies such as TransLux and City to City, along

with a property division) are valued at R36-billion.

A new factory is under construction in Ekurhuleni that is budgeted

to cost R1-billion: the Gibela Rail Transport Consortium is one

of the companies contracted to supply PRASA with new trains.

Air

Airports Company South Africa (ACSA) owns and operates the country’s

10 biggest airports. The company also manages airports in India

and Brazil. The company will spend R50-billion on expansion and

R20-billion on maintenance up to 2023.

Ekurhuleni wants to leverage the location of South Africa's biggest

airport, O.R. Tambo International, into a major economic asset. An airport

city, or Aerotropolis, is planned, whereby a variety of economic sectors

are encouraged to set up business in the vicinity of the airport and, in

this way, going beyond the passenger traffic and freight traffic, which an

airport naturally attracts.

81

SOUTH AFRICAN BUSINESS 2017


OVERVIEW

O.R. Tambo International in Gauteng caters for more than

17-million passengers every year, receives more than 105 000 arriving

air-traffic movements and employs 18 000 people.

The Cape Town International Airport has been expanded and improved.

King Shaka International Airport (KSIA) opened north of Durban

in 2010. Emirates is the international carrier to KSIA.

Several airports have been mooted as possible regional freight

nodes: Wonderboom Airport in Pretoria, Polokwane International

Airport in Limpopo and Mahikeng Airport in the North West Province.

Maritime

The national government has introduced a maritime policy intended

to better exploit the "Oceans Economy". Altogether, the

government wants these projects to contribute R20-billion to

the South African economy by 2019. Investments in South Africa's

port infrastructure will have an impact on the broader transport

and logistics sector.

In the Western Cape, investment has begun to kick-start this

policy: a new fuel-storage facility is going up at the Cape Town

docks and the Port of Saldanha will soon have an Offshore Supply

Base (OSSB) to support the maritime oil and gas industry (very

active off the coast of Africa at the moment).

Incentives to boat manufacturers in Durban and Cape Town have

been offered, small harbours around the coast of South Africa are to

ONLINE RESOURCES

Airports Company South Africa: www.airports.co.za

Passenger Rail Agency of South Africa: www.prasa.com

South African National Roads Agency Limited: www.sanral.co.za

be rehabilitated and three new

harbours are to be launched in

KwaZulu-Natal, the Northern

Cape and the Eastern Cape. If

the Port Nolloth harbour project

on the West Coast gets the

green light, then accompanying

infrastructure will follow. A new

rail link between the coast and

Upington could be needed.

Deputy Minister of Transport,

Sindisiwe Chikunga, has said

that of all the vessels that carried

300-million tons of cargo

through SA's ports annually,

not one was registered in South

Africa. The result of South Africa

not having a merchant fleet is

that more than R40-billion is

paid to foreign ship operators.

The province of KwaZulu-Natal

is well-placed to take advantage

of the focus on the maritime

economy. Between them, the

ports of Durban and Richards

Bay handle 78% of South Africa’s

cargo tonnage. Durban’s annual

throughput of containers is about

one-million, more than 60%

of the country’s total. The Port

of Durban is already home to a

variety of maritime companies.

Southern African Shipyards (SAS)

is an experienced manufacturer

of ship hulls. To improve their

competitiveness, three South

African shipbuilders (SAS, Damen

Shipyards Cape Town and Nautic

Africa) will pool their resources on

contracts in other parts of Africa.

Different South African ports

probably need to specialise to

some degree, but cooperation

pacts like this one might also be

a template for the boat repair and

servicing sector.

SOUTH AFRICAN BUSINESS 2017 82


Airports Company

South Africa

PROFILE

Airports Company South Africa is expanding its successful local operation

into an international one.

Company profile

Airports Company South Africa was formed in

1993 as a public company and, although majority

owned by the South African Government, is

legally and financially autonomous and operates

under commercial law. As the largest airport authority

in Africa, the company manages a network

of nine major airports in South Africa, including the

three main international gateways ie O.R. Tambo

International, Cape Town International and King

Shaka International airports.

Traffic development

The traffic development mandate is to identify,

evaluate and develop air service opportunities

collaboratively with key stakeholders (ie

airlines, regulators, national, provincial, local and

tourism) across the Airports Company South Africa

network of airports to enable trade, tourism, and

mobility of goods and services for sustainable

economic growth. Air service is important for connecting

the local economies with the rest of the

world, thus emphasis is placed on prioritisation of

small and rural communities within the Republic

of South Africa for seamless access/connectivity to

the national air transport system. Traffic development

works collaboratively with key stakeholders

such as airlines, regulators, government and tourism

agencies to identify, evaluate and develop potential

air service opportunities across the globe. This links

Airports Company South Africa’s network of airports

with the aim of enabling trade, tourism, and mobility

of goods and services within Southern and sub-

Saharan Africa.

Its main focus is on building sustainable relationships

and economic development to transform the opportunities

the region has to offer into sustainable

value for all. Although the introduction of new air

services has potential to stimulate demand for air

travel, it is equally important to strike a good balance

between supply and demand to ensure that the current

needs are served without compromising the future

air travel needs. Airport Company South Africa's

role is to provide route/traffic development services

and support to all airlines and air travel stakeholders

in line with the Competition Commission Act

83

SOUTH AFRICAN BUSINESS 2017


PROFILE

of 2009 of the Republic of South Africa. Its service/

support includes:

• Market data analysis and research

• Opportunity identification and modelling of a

potential air service/opportunity

• Development of an air service/route business case

with a prospective airline(s)

• Operational start-up information support through

a central airline account manager

• Continuous collaborative review of the route performance

and advice as required

• International focus

International focus

In 2006, Airports Company South Africa formed part of

a consortium that took over the expansion and management

of Chhatrapati Shivaji International Airport in

Mumbai, India. The success of this venture encouraged

the company to seek similar opportunities elsewhere.

Such undertakings allow the leveraging of the pool of

skills and experience amassed over the years to grow

the business and increase shareholder value.

In 2012, Airports Company South Africa, in partnership

with the Brazilian company, Invepar, was successful

in a bid to manage the development, maintenance

and operations of Guarulhos International Airport in

São Paulo, Brazil.

Airports Company South Africa’s international

growth strategy is centred on strengthening

and expanding existing footprints in India and

Brazil through upcoming opportunities in these

respective countries. The company also intends

to focus on developing the African continent’s

aeronautical infrastructure landscape.

Our airports at a glance

South Africa: International airports

O.R. Tambo International Airport

Airports Company South Africa’s flagship airport, O.R.

Tambo International, is South Africa’s principal and

largest airport, servicing airlines from all five continents

and with more than 50% of the country’s air passengers

passing through it.

Situated in Gauteng, the airport is ideally situated in

the heart of South Africa’s commercial and industrial

hub with excellent road infrastructure linking

it to Johannesburg, Pretoria and the national road

network. The Gautrain rapid rail system now

links the airport with the CBDs of Johannesburg,

Sandton and Pretoria. This truly world-class facility

now handles about 19-million passengers a year,

with a capacity of 28-million, and boasts a total of

more than 14 300 parking bays.

Cape Town International Airport

Cape Town International Airport is Africa’s thirdlargest

airport, with an annual passenger throughput

of nearly 8.5-million and a capacity of 14-million.

It is also Africa’s premier tourist and VIP destination

and has established a reputation as Africa’s foremost

international award-winning airport, consistently

performing among the best in the world in its

category for passenger service.

This is the first Airports Company South Africa operated

airport to achieve the internationally recognised

ISO 14001 accreditation for its environmental

management system.

King Shaka International Airport

King Shaka International Airport is the newest

in Airports Company South Africa’s local airport

network, and has been in operation since 2010.

The site of the previous Durban International

Airport was to small to handle the growth in air

traffic and this prompted the construction of

a new airport 35km north of Durban. The new

airport currently handles about 4.5-million passengers

annually and has a capacity of 7.5-million,

with opportunities for significant expansion

as required (up to 45-million passengers by

2060). Its multi-storey parkade caters for 1 500

vehicles, while there are atotal of 4 500 vehicle

parking bays at the airport.

South Africa: Regional airports

East London Airport

Each year, East London Airport processes around

665 000 passengers, with just over 31 000 air traffic

movements. It has an overall passenger capacity of

1.2-million passengers. The airport provides a cru-

SOUTH AFRICAN BUSINESS 2017

84


PROFILE

cial link in the local cargo chain, playing an important

role in the growing economy of the Eastern

Cape. Its flights carry a variety of cargo headed for

domestic destinations, as well as countries such as

France and Holland. Although the two domestic

airlines that operate from the airport (South African

Airways and SA Express) only employ A320s, the

airport can also accommodate A300 aircraft.

George Airport

George Airport is located at the heart of the

Western Cape’s Garden Route, a much-loved holiday

destination for domestic and international

tourists alike. With increasing numbers of visitors

travelling to the region’s mountains, beaches and

forests, George Airport now facilitates over 570 000

passengers each year, with the capacity to handle

900 000. The airport also acts as a national distribution

hub for cargo such as flowers, fish, oysters,

herbs and ferns. The unwavering commitment to

service and efficiency has won it the South African

Airport of the Year award six times in total.

Kimberley Airport

Kimberley Airport is situated in the Northern Cape

and facilitates about 10 500 air traffic movements

a year. It handles nearly 160 000 passengers annually,

of which three-quarters are business travellers,

and has a total passenger handling capacity of

200 000, together with 114 public parking bays. It

also has a thriving cargo business that dispatches

a remarkable range of cargo, ranging from game

trophies to industrial equipment.

Bram Fischer International Airport

Bram Fischer International Airport is the thirdlargest

of Airports Company South Africa’s

national airports and provides an important

gateway to the Free State, which is a land-locked

province. The airport processes around 380 000

passengers annually, the majority of whom are

business travellers, and 14 000 air traffic movements

are facilitated. Bloemfontein also operates

a significant cargo business.

The growth and development opportunities at

this airport include:

Boulevard Precinct

Immediately adjacent to the airport, the

Boulevard Precinct will include a private hospital,

residential, retail, schools and commercial premises.

This is an exciting and innovative, 44ha development,

which will support the N8 development corridor.

It will accommodate a wide range of tenants,

ranging from mixed-use offices, a service station

and a private hospital. Construction of the first three

developments commenced in 2016, acting as a

catalyst for the node.

The Grasslands

Approximately 98ha in extent, this development property

represents a diverse range of business opportunities.

These include an extended general aviation area, freight,

cargo, logistics and housing.

Port Elizabeth International Airport

Affectionately known as the "10-minute airport", Port

Elizabeth International Airport is situated within five minutes

of the CBD and the beachfront, and just 10 minutes

from all other key city locations. The airport currently

handles more than 1.25-million passengers per year and

over 800 tons of cargo. The growth in tourist numbers

to the region, together with preparations for the 2010

FIFA World Cup, resulted in a number of improvements

to the airport including a terminal expansion and it now

has the capacity to handle up to two-million passengers

every year. The airport boasts a new retail area, together

with a fully compliant international arrivals and departures

terminal to complement upgraded amenities for

domestic traffic.

Upington International Airport

Although Upington International Airport is a small

operation with an annual passenger capacity of

100 000, it boasts a number of unique services and

facilities that are unmatched on the African continent.

The airport has three runways, the primary one measuring

5 900m (the longest civilian runway in the Southern

Hemisphere and one of the few able to land a Space

Shuttle). Both South African Airways and the South

African Air Force use the airport to train pilots in the

handling of large aircraft such as Boeing 747s, 707s and

the South African presidential jet. The airport also has

a cargo business, sending anything from livestock to

85 SOUTH AFRICAN BUSINESS 2017


PROFILE

cars and mining equipment to Europe, the Middle East

and the rest of Africa.

Rest of the world

India

As an integral part of its growth strategy, Airports

Company South Africa looks to identify and participate

in global airport management and operation concession

opportunities. Today, the airport handles over

30-million passengers and more than 650 000 tons

of cargo. In February 2014 a new, integrated terminal

was opened, increasing the airport’s annual capacity

to 40-million passengers and with a retail footprint

of 18 580m 2 .

Airports Company South Africa’s involvement at

Chhatrapati Shivaji International Airport in Mumbai is a

flagship demonstration of the growing economic ties

between India and South Africa. It is a shining example

of coordinating experience and skills for the benefit of

two nations. Chhatrapati Shivaji International Airport

has received various accolades since 2006.

Brazil

Airports Company South Africa’s role, through a

Technical Services Agreement, is to provide airport

operation and management services to Guarulhos

International Airport in São Paulo. This was a particularly

relevant requirement for the airport, as it had to

be prepared for the 2013 FIFA Confederations Cup,

the Pope’s visit for World Youth Day in 2013, the 2014

FIFA World Cup and the 2016 Olympic Games. This

was the only concession to deliver on time.

Ghana

In 2016, Airports Company South Africa entered

into a Technical Services Agreement with Ghana

Airports Company Limited to provide advisory

and technical consultancy services on all airportrelated

matters.

Competencies

• Airport technical advisory services

• Airport operation and management

• Transfer of airport operations from one airport

to another

• Training and develoment

• Investment in airport concessions

Accolades

2011: 3rd Best Airport in Africa of the Airport Service

Quality Awards by Airports Council International

2012: 2nd Best Airport in Africa of the Airport Service

Quality Awards by Airports Council International

2013: 1st Best Airport in World Handling under

5 Million Passengers of the Skytrax World Airports

Awards by Skytrax

2014: 1st Best Regional Airport in Africa of the Skytrax

World Airports Awards by Skytrax

2014: 2nd Best Airport in World Handling under

5 Million Passengers of the Skytrax World Airports

Awards by Skytrax

2014: 3rd Best Domestic Airport in the World of the

Skytrax World Airports Awards by Skytrax

2014: Nkonki SOC Integrated Reporting Award

2014: Chartered Secretaries Integrated Reporting

Award

2015: Environmental Award

2015: 1st Best Airport in the World Handling under

5 Million Passengers of the Skytrax World Airports

Awards by Skytrax

2015: 1st Best Regional Airport in Africa of the Skytrax

World Airports Awards by Skytrax

2015: 3rd Best Domestic Airport in the World of the

Skytrax World Airports Awards by Skytrax

2015: 4th Best Regional Airport in the World of the

Skytrax World Airports Awards by Skytrax

2011-2015: KZN Top Business Award (5 years in a row)

CONTACT INFO

Elsie Rateiwa –

Email: Elsie.rateiwa@airports.co.za

Charles Shilowa –

Email: Charles.Shilowa@airports.co.za

Website: www.airports.co.za

SOUTH AFRICAN BUSINESS 2017

86


OVERVIEW

Information and communications

technology

Fibre optic networks are growing quickly.

SECTOR INSIGHT

Local and provincial government

authorities are rolling

out Wi-Fi in public areas in selected

areas of South Africa.

South Africa's appetite for fast internet connectivity is growing

fast. The state-owned company Telkom controls most

of the country's fibre cable but several smaller private companies

are winning contracts to lay fibre optic cables around

the country.

The Mail & Guardian reported in April 2016 that "nimble new entrants"

such as Vumatel, Fibrehoods, Link Africa (which runs its network

in the sewerage system, obviating the need to dig new trenches), and

Dark Fibre Africa are forcing the bigger telecommunications companies

to up their game. With faster internet speeds, customers could switch

away from subscriber television services.

Access in South Africa is improving all the time. As part of its mandate,

the Independent Communications Authority of South Africa

(ICASA) has seen to it that various private operators have connected

more than 623 schools around the country. The Universal Service and

Access Agency of SA connectivity project is currently underway in

the Vhembe and Gert Sibande Districts. The Western Cape Provincial

Government and Neotel will roll out 384 Wi-Fi hotspots in public

areas, and is aiming for complete

coverage by 2019.

The ICT sector's direct contribution

to the gross domestic

product (GDP) was R94.7-billion

(2.9% of the total) in 2012 (StatsSA).

South African households

spent R91.6-billion on ICT products

in 2012 and R4.60 of every

R100 spent by households was

spent on ICT products. Of that,

R2.90 was spent on telecommunications,

broadcasting and

information supply services (eg

pay-television subscriptions, cellphone

airtime and broadband);

80 cents on communication

equipment (eg televisions); 50

cents on content and media products

(eg newspapers and books);

and 30 cents on computing machinery.

The remaining 10 cents

was spent on other ICT items,

according to a StatsSA report.

About two-thirds of South

Africa’s ICT companies are located

87 SOUTH AFRICAN BUSINESS 2017


OVERVIEW

in Gauteng Province. The sector

contains a diverse range of hardware

manufacturing, software

design and various service offerings

such as software management,

systems programming and

technical support. South Africa is

highly regarded as a centre of

software development and offers

attractive inward investment

opportunities, especially in:

• Automotive electronic

systems

• Access control and security

• Financial sector ICT services

• Silicon processing for fibre

optics

• Integrated circuits and solar

cells

There are many opportunities for

employment in the sector. It is a

huge irony that in a country with a

very high unemployment rate, the

Johannesburg Centre for Software

Engineering (JCSE) puts the figure

of vacancies in software and application

development, cloud computing

and information security

at 40 000 (Skills & HR Development,

Sunday Times, June 2016).

Training is available from organisations

such as the Quad

Digital Academy, a Standard

Bank initiative, an ICT Incubator

in Port Elizabeth run by the

Small Enterprise Development

Agency (Seda), from the City of

Johannesburg (which runs a

digital intern programme called

COJEDI) and scarce skills training

offered by the City of Cape Town

(in partnership with SAP Africa)

in software programming; the

programme is called "Western

Cape Skills for Africa".

According to itnewsafrica.

com, South Africa accounts for

5% of all phishing attacks in the world. This is where a person in a

company gives away account information or codes that allow thieves

to steal or disrupt operations. When the data that a company holds is

the main point of the business, the case for cybersecurity is obvious.

Hacking of websites can also have a devastating effect on a business,

so operations like penetration testing and technical surveillance

countermeasures are offered by security companies.

Innovation in the sector is encouraged by mLab, a centre designed

to support entrepreneurs in the mobile technology field. The CSIR in

Pretoria hosts the facility together with The Innovation Hub.

Traditional technologies for broadband connection (dial-up and

VSAT) are declining in popularity in South Africa as more sophisticated

mobile technology becomes available. This includes WiMax, HSDPA

and HSPA+. Growth in the sector is expected to be driven by mobile

broadband and services that add value in the data field.

Data centres are increasing their capacity at a fast rate as cloud

usage grows. Teraco, which runs data centres in Johannesburg,

Cape Town and Durban, is considering adding another 10 000m²

in Ekurhuleni because of what World Wide Worx's Arthur Goldstuck

calls the "unquenchable" thirst of businesses and consumers for data.

Teraco is also the host of a joint venture that steers data traffic (a peer

point) called NAPAfrica.

Public transport systems are moving to cashless ticketing supported

by ICT. Digicore and Absa Bank have combined in Cape Town

to roll out the system for minibus users driving between the city

and the V&A Waterfront. With Vodacom spending in the region of

R6-billion per year on its 3G and 4G long-term evolution network (LTE),

the capacity of South Africa’s telecommunications network is growing

fast. MTN and 8ta are also investing heavily in LTE.

New players in the market were announced in September 2016

when two former bankers, Paul Harris and Michael Jordaan, put together

a consortium to buy Multisource with the intention of investing

billions in an LTE-Advanced (or 4.5G) network.

In 2016 Neotel changed hands. Liquid Telecom, a subsidiary of

Econet, has teamed up with Royal Bafokeng Holdings to purchase the

mobile and data business from Tata Group of India.

ONLINE RESOURCES

Independent Communications Authority of SA: www.icasa.org.za

National Department of Communications: www.doc.gov.za

State Information Technology Agency: www.sita.co.za

SOUTH AFRICAN BUSINESS 2017 88


A Leader In Solutions

Dr Vusi Mncube

Executive Chairman

Key Services and Products are as follows:

Uzulu Business Solutions is a wholly owned B-BBEE company which was initially founded

to drive the project of bridging the gap between the University of Zululand Computer

Science Students and the marketplace. Uzulu has since evolved as one of the critical

players in the financial services, credit management, payment fulfilment systems and

other value-adding ICT applications in partnership with various industry leaders.

Uzulu's philosophy is to provide high-quality IT solutions and consulting to customers

with an emphasis on service by striving to exceed expectations. This rare quality

has allowed Uzulu to grow swiftly whilst keeping pace with the rapidly developing IT

industry. Our operating model focuses on the basic view that any IT solution is only

relevant if it enables and adds value to the business. Through this approach, our clients

are guaranteed that the solutions we design and implement give them the maximum

return on their investment.

Our company also designs, develops and implements the most appropriate costeffective

solutions for its clients. The company ensures that the necessary skills are

transferred for ease of use and implementation.

“If there is no measurable business value for any solution deployment, it is not a solution.

Through our world-class partnership model with our clients, we jointly determine

the return on investing in a business solution before embarking on the project. Once

the solution is deployed, we continuously measure the realisation of ROI as one of our

fundamental post-implementation interventions. If our customers realise business value

and are therefore successful, so are we successful,” says Dr Vusi Mncube, Executive

Chairman, Uzulu Business Solutions.

Outsource Collections and Call Centre

We offer a broad range of customer contact services through the fully blended multichannel inbound and outbound

contact centre. We work closely with clients to drive their business initiatives. Tailor -made solutions are

often born as various businesses have specific needs. Our services include but are not limited to:

• Inbound/outbound customer service

• Debt collection

• Call centre recruitment and training

The proposed model is that of providing a debt collection capability to the municipality. This capability will co-exist

with the current billing and credit control activities of the municipality.

Business Advisory and ICT Integration Services

Business process and technology consulting

• Information architecture; system/technical architecture

• Application development

• Online and physical tracing

• Back-office and fulfillment

• Collections strategy and credit risk analytics

• Data processing and cleansing

• Back office systems, infrastructure and integration

• IT support and solutions maintenance

• Project management

• Forensic audit services

Contact details

Address: 4th Floor, West Tower, Nelson Mandela Square, Sandton City,

Sandton, Johannesburg

Email: info@uzulusolutions.co.za | Tel: +27 11 100 5165 | Fax: +27 86 648 4925


PROFILE

VeriFi

VeriFi is the leader in the business of verification and certification

for BBBEE recognition.

South Africa requires an economy that can meet the

needs of all its economic citizens – its people and their

enterprises – in a sustainable manner. Government’s

objective is to achieve this vision of an adaptive economy

characterised by growth, employment and equity.

Achieving authentic BEE has required a reassessment

of traditional business models and corporate

cultures. The Bill, code and strategy document rely

upon two core policy instruments that have been

designed to bring about BEE. Both of these instruments

are essentially measurement tools that will

permit the public and private sectors to evaluate the

BEE status of a particular enterprise. Failure to adapt to

the new paradigm will have significant consequences.

A real commitment to BEE is now an economic

imperative.

Description of services

• Assess and certify BBBEE rating

• Provide insight into BBBEE challenges

facing various organisations

• Provide insight and guidance on the actions

required to elevate BBBEE status

• Verification of supplier BBBEE status

• To assist small, medium and large enterprises

in acquiring a certified BBBEE verification,

and to clarify the codes of good practice,

BBBEE Act and guide and advise where

necessary, thus ensuring a suitable level of

recognition

Target markets

Small, medium and large enterprises achieving

an annual turnover of below R10-million and over

R50-million respectively (including all charter sectors).

Pricing

Pricing for BEE consultancy services is based on the

client’s requirements and can be structured on an

hourly or monthly basis.

For BEE Verification and issue of a BEE Compliance

Certificate, please contact the office for the

current rates.

BBBEE explained

Government BBBEE legislation consists of:

• The Strategy for Broad-Based Black Economic

Empowerment

• The Broad-Based Black Economic

Empowerment Act, No 53 of 2003

• The Codes of Good Practice for Black Economic

Empowerment

• Various sectoral BEE Charters or Codes

In terms of these Codes of Good Practice,

businesses are divided into three categories:

• Where turnover is less than R10-million a year,

or when in the first year of incorporation, a

business is categorised as an Exempt Micro

Enterprise (EME). However, it is necessary

to confirm this status by providing proof of

annual income.

Businesses with a turnover of between

R10-million and R50-million a year are categorised

as Qualifying Small Enterprises (QSEs).

SOUTH AFRICAN BUSINESS 2017

90


PROFILE

The criteria for each of these elements are less

onerous for QSEs than for companies with

turnovers exceeding R50-million per annum.

The value of verification

With BBBEE recognised as an imperative by companies

committed to building an equitable South

Africa, verification is an essential requirement that

confirms a company’s participation and contribution.

Verification is performed in a manner similar

to that of a financial audit: it provides an independent

assessment of investment, performance

and initiatives as a control system. Criteria against

which companies are measured are provided by

government, and like an audit, verification must

be performed annually.

A BEE certificate from VeriFi is advantageous for:

• Proposals for new business with government

• The licensing of regulated activities which

include mining, liquor sales and the granting

of credit

• Leasing of premises from government or

private businesses

• The creation or continuance of business

relations with clients seeking assurance of a

company’s BEE compliance

Once a verification and certified rating through VeriFi

is accomplished, a company can perform business

in confidence when engaging with other organisations,

as its commitment to equality, nation-building

and unique South African business processes will

be recognised.

Key facts and figures

Year established: 2005

No of staff: 15

Major clients: BP, Scaw Metals, Hertz Car Rental,

Public Investment Corporation Limited, IBM

South Africa, SAAB, South African Express Airways

Soc Ltd.

CONTACT INFO

Tel: +27 86 175 3233

Email: info@verifibee.co.za

Website: www.verifibee.co.za

91 SOUTH AFRICAN BUSINESS 2017


PROFILE

Secur

Superior risk management

services for South African companies.

E C U R

A CYBER SECURITY CONSULTANT

E C U R

A CYBER SECURITY CONSULTANT

Secur provides risk management services and solutions,

including technical consulting, to organisations

in South Africa.

Secur employs digital forensic software engineers,

ethical hackers, secure website architects, polygraph

examiners and other relevant experts. This expertise

enables it to offer clients penetration testing and

incident response in addition to consulting services

– all of which are designed to strengthen an

organisation’s security in cyber space.

Secur operatives are widely considered the ‘gold

standard’ within the information security industry,

due to their unique experience with information

security standards and protocol.

Products

Secur distributes and resells a range of best-of-breed

security solutions including:

• Cybereason

• Datalocker

• Iron Key

• Intellinx

• Check Point

• FLIR

• Rapid7

• Acunetix

• Barracuda

• Palo Alto

• AirWatch

• Drivelock

• Cellopoint

• Morphisec

• Cellebrite

• Silent Circle

• Immunity

• Teramind

• SecurEnvoy

• ElcomSoft

• Passmark

• Symantec

• Magnet Forensics

• Panoscan and many more

Services

Secur offers a wide array of services such as:

• Computer forensics

• Penetration testing

• Competitive intelligence

• Incident response

• Managed services

• POPI consulting

• Employee background screening

CONTACT INFO

E C U R

A CYBER SECURITY CONSULTANT

Physical address: Ground Floor, Southdowns

Ridge Office Park, c/o John Vorster Road and

Nellmapius Drive, Irene, Centurion 0157

Tel: +27 12 003 3233

Fax: 086 638 9959

Email: info@secur.co.za

Website: www.secur.co.za

Online shop: shop.secur.co.za

SOUTH AFRICAN BUSINESS 2017

92


Education and training

New universities are improving access to higher education but funding is

under the microscope.

OVERVIEW

South Africa is setting aside ever-increasing amounts of money

for education but events on university campuses in 2015 and

2016 suggest that the funding model is going to have to be

re-examined. Nearly R300-billion was allocated to various

aspects of education in the 2016/17 budget, but protesting students

continued to demand free tertiary education.

Apart from the very large amount spent on the biggest sector (basic

education at schools), there has been a big increase over the last few

years on spending on Technical and Vocational Education and Training

(TVET) colleges, reflecting the state's concern to develop the skills of

the country's workforce.

Access to higher education has been steadily on the rise since the

country become a democracy for all citizens. For example, in the years

since 2009, university enrolment has increased by nearly 16% and at

TVET colleges by 67%. Finding ways of paying for this improved access

is now providing headaches.

Various regulatory bodies fall under the Department of Higher

Education and Training:

• SETAs (Sector Education and Training Authorities)

• SAQA (South African Qualifications Authority)

• CHE (Council on Higher Education )

• QCTO (Quality Council for Trade and Occupations)

• NSFAS (National Student Financial Aid Scheme)

• NSA (National Skills Authority)

Higher education

With the inauguration of the Sol Plaatje University (Northern Cape) and

SECTOR INSIGHT

Every province in South Africa

has at least one university.

the University of Mpumalanga,

every province now has its own

university, of which there are

26 in all. The Sefako Makgatho

Health Sciences University was

also opened in Gauteng.

There are three categories of

university: universities offering

only degrees and post-graduate

courses with a strong research

component, comprehensive universities

offering a mix of degrees

and diplomas and universities of

technology, formerly known as

technikons.

There are also 87 registered

and 27 provisionally registered

private higher education

institutions.

The University of Cape Town

has 40% of South Africa’s A-rated

researchers (32) and a strong

international reputation. UCT is

93

SOUTH AFRICAN BUSINESS 2017


OVERVIEW

rated as Africa’s top university and Pretoria and the University of the

Witwatersrand (Wits) are also highly regarded as research institutions.

Wits has been ranked in the top 1% of world institutions in seven fields

of research. The university offers studies in more than 40 schools in

five faculties.

The University of South Africa (UNISA) offers correspondence

courses. Its headquarters are in Pretoria but it has sites throughout

South Africa. UNISA has a staff of more than 4 000 and

300 000 registered students in South Africa and Africa.

Universities of technology have a specific focus on educating

young people in fields that will enhance the country’s

economic performance. Technology is at the core of the

learning experience.

Business schools

Gauteng has three of South Africa’s top five business schools: the Wits

Business School, the University of South Africa’s Graduate School of

Business Leadership and the Gordon Institute of Business Science.

The Graduate School of Business (UCT) is accredited by the European

Foundation for Management Development while Stellenbosch’s

Business School has a specialist unit called the Centre for Project

Management Intelligence.

The University of KwaZulu-Natal’s Graduate School of Business

is a founder member of the Association of BRICS Business Schools.

Rhodes University’s Business School has a strong focus on environmental

management.

Schools

South Africa has 26 000 public schools. Many schools need upgrading.

The Department of Basic Education reports that 684 schools have

been built between 2009 and 2016 and an additional 343 schools are

planned for the period 2017 to 2019.

The Mathematics, Science and Technology (MST) Grant, is intended

to promote the teaching and learning of these subjects. This Grant, an

amalgamation of the Technical Schools Recapitalisation Grant and the

Dinaledi Schools Grant, has been allocated a total of R1.1-billion over

ONLINE RESOURCES

National Department of Basic Education: www.education.gov.za

National Department of Higher Education: www.dhet.gov.za

Southern African Regional Universities Association: www:sarua.org

the 2015/16 to 2017/18 MTEF period.

The Department’s 2015/2016

budget allocates infrastructure

delivery funding through the

Education Infrastructure Grant

(EIG) at R29.622-billion for the

MTEF period; and the Accelerated

Schools Infrastructure Delivery

Initiative (ASIDI) funded to the

tune of R7.042-billion. Through

the ASIDI programme, 163

new schools have been built

since 2011.

Advtech is a JSE-listed

company that runs several

schools including Abbotts

College and Varsity College

with an enrolment of some

35 000 students. Curro Holdings

is also listed on the JSE. A funding

agreement with Old Mutual

Investment Group SA (OMIGSA)

and the Public Investment

Corporation (PIC) will see Curro

roll out 11 low-fee independent

schools in the period to 2019.

These will be called Meridian

Independent Schools.

The LEAP Science and Maths

School model is far from the JSE

company model: these schools

have low fees and have to raise

funds to survive but they offer

excellent teaching, particularly

in mathematics, science and

English. There are six schools in

South Africa and they are enabling

children from black townships

to do well enough at school

to go on to study engineering

at university.

SOUTH AFRICAN BUSINESS 2017 94


Discuss.

Educate.

Innovate.

DURBAN

Tel: +27 31 300 7200

EAST LONDON

Tel: + 27 43 721 1774

JOHANNESBURG

Tel: +27 11 853 3000

POLOKWANE

Tel: +27 15 290 2896/9

MANCOSA is registered with the Department of Higher Education and Training (DHET) as a private

higher education institution under the HE Act, 1997. Registration No.2000/HE07/003.

www.mancosa.co.za

CAPE TOWN

Tel: +27 21 671 6576


PROFILE

College of Cape Town

The forward-looking college has a history dating back to

the early 20th century.

The College is a public Technical and Vocational

Education & Training (TVET) College, under the

Department of Higher Education and Training.

Qualifications offered are accredited, affordable and

quality assured by Umalusi, various SETAs and SAQA.

Description of educational offerings

The College is a leading provider of education and

training in mainly the Technical and Vocational

Education and Training (TVET) band and has much

to offer students and prospective partners as an

alternative to Basic and Higher Education and

Training. Qualifications include skills programmes,

technical, vocational and occupational training that

lead to recognised, accredited qualifications that are

in high demand by commerce and industry.

Description of location of facilities

The College is situated in the central area of the

Peninsula with campuses located in Athlone, Cape

Town city centre, Crawford, Gardens, Guguletu,

Pinelands, Thornton and Wynberg. The central

office is located in Salt River, Cape Town. The College

of Cape Town also has three residences.

Key facts and figures

Year established: The College of Cape Town is

the oldest Technical and Vocational Education and

Training institution in South Africa with a proud

history dating back to the beginning of the 20th

century. As the name suggests, we are based in

Cape Town. Four former technical colleges, Athlone

College, Cape College, Sivuyile College and Western

Province Technical College, were officially merged

on 1 February 2002 to become the College of Cape

Town. This arose from a rationalisation in TVET

colleges in which some 150 colleges around the

country were reduced to 50.

No of staff: 670 (full-time)

No of registered students: 14 379

Faculties offered: Art & Design, Beauty Therapy,

Building & Civil Engineering, Business Studies,

Education & Training, Electrical Engineering,

Haircare, Hospitality, Information & Communication

Technology, Mechanical Engineering, Travel &

Tourism

Qualifications offered: Certificates, Higher

Certificates, Diplomas, UNISA B.Ed Degree

(Foundation Phase), Skills Programmes, Learnerships,

Accredited Trade Test Centre

CONTACT INFO

Key contact people:

Louis van Niekerk, Principal.

Wilfred Jackson, Chief Financial Officer.

Sharon Grobbelaar, Marketing Manager.

Physical address: 334 Albert Road,

Salt River, Cape Town 7945

Postal address: PO Box 1054,

Cape Town 8000

Tel: +27 21 404 6700 / 086 010 3682

Fax: +27 21 404 6701 / 086 615 0582

Email: info@cct.edu.za

Website: www.cct.edu.za

SOUTH AFRICAN BUSINESS 2017 96


PROFILE

Southern African

Wildlife College

Through conservation education and skills development the college

contributes to the preservation of Africa's natural heritage.

Southern Africa's network of parks and reserves is

an important means of safeguarding the region's

biological wealth. Whether parks are trans-frontier,

state-run or privately owned, if managed well they

are focal points for rural development and economic

growth. As a result, adequate training and skills development

programmes, such as those offered by the

Southern African Wildlife College (SAWC), are vital

for the conservation of the continent’s rich biological

diversity while also enabling the flow of benefits

from protected areas to communities as part of the

development of the wildlife economy.

The cutting-edge, hands-on training offered covers

a wide spectrum of skills needed by protected

area managers and natural resource managers from

Southern Africa. It involves those who are either

already in the service of conservation and environmental

agencies, as well as individuals starting their

careers in the conservation field.

An important facet of the College’s training is its

Wildlife Guardian Programme, which is aimed at

equipping field rangers with the necessary skills

to help ensure the integrity of protected areas and

counter the onslaught of poaching in the region. In

addition, the College offers a host of certificate programmes,

learnerships, skills programme and short

courses aimed at up-skilling people and providing

employment within the conservation sector. This

is done through its four key training units, which

include: Wildlife Area Management, Protected Area

Integrity, Sustainable Use and Guiding as well as

Community Development and Youth Access.

The College’s business plan has also been developed

in line with key elements of the National

Development Plan and as such will contribute to

the goals and objectives of the National Biodiversity

Economy Development Strategy and targets of the

Department of Envionmental Affairs’ Vision 2024.

Projects developed in partnership with, and funded

by, the Department of Environmental Affairs and the

National Treasury’s Jobs Fund are indicative thereof.

Since its inception, the College has trained more than

14 000 students from 26 countries in Africa, mostly

from countries in the SADC region. Approximately

80% of the learners who have received training at

the SAWC are still in wildlife management and many

of its graduates have been promoted to more senior

management positions.

CONTACT INFO

Tel: +27 15 793 7300

Email: info@sawc.org.za

Website: www.wildlifecollege.org.za.

SOUTH AFRICAN BUSINESS 2017 98


Improving skills

in sustainable

development

INTERVIEW

Theresa Sowry

BIOGRAPHY

CEO of the Southern African

Wildlife College Theresa Sowry

holds a Master of Science Degree

in Botany from the University

of the Witswatersrand.

She gained experience in the

conservation fi eld while working

for SANParks on a rare antelope

programme in the Kruger

National Park. She went into

conservation education when

she joined the Southern African

Wildlife College as Training

Manager and Lecturer in Natural

Resource Management. She

was later promoted to Executive

Manager: Training and was

appointed as the college’s CEO

in January 2011.

Describe any changes that the College has experienced

in recent years.

Given that we are a non-profit training institution that does not receive

any government subsidies, the College has become a lot more business

focused in order to survive in a sector which traditionally has not

been well funded. In line with the College’s new business plan, and

with the introduction of our conservation-focused business units,

I believe that the SAWC is playing a pivotal role in improving the skills

and knowledge needed for sustainable development.

Tell us about some of the highlights experienced.

The major highlight is working with an amazing group of people, all

dedicated and committed to conservation education, and having

excellent relationships with our donors who play such a crucial role in

the College's development. With the support of our partners, WWF-SA,

Peace Parks Foundation and the Southern African Wildlife College Trust

(SAWCT), the College has made great strides over the past few years.

A personal highlight was long-term donor, the Tusk Trust, inviting

me to Windsor Castle to celebrate their 25th anniversary. I was personally

able to introduce the field-ranger training programme, which

the Tusk Trust supports, to Prince William! A subsequent visit by Prince

Harry to the College and his announcement of a partnership between

the SAWC and United for Wildlife, via the Royal Foundation, definitely

made it onto the 2016 highlights list!

Are internship/job placements readily available for

graduates of the College?

Many of our learners are already employed in the field of conservation.

However other SAWC training projects such as the National Treasury’s

Jobs Fund project are aimed at training unemployed people from

local communities and integrating them into the conservation sector

by ensuring job placement after completion of their studies, which

includes work-integrated learning.

99

SOUTH AFRICAN BUSINESS 2017


OVERVIEW

Tourism

Tourism is a growth industry that quickly creates jobs.

As one of the sectors in which growth is directly (and quite

quickly) translated into new jobs, the tourism industry is a

particularly important part of the South African economy.

The global tourism industry is fairly resilient to economic

downturns. International tourist arrivals have increased steadily, even in

the years following the 2008 global economic downturn. South Africa

hosted the FIFA Football World Cup in 2010, which helped to boost arrival

figures and market the country across the globe.

StatsSA reported that 11% more tourists arrived in May 2016

(760 000) than in the same month in 2015. Total tourist arrivals for January

to May 2016 rose to more than 4.2-million, a 15.7% increase and more

than three times the average annual global growth rate in global tourism.

Spending by foreign visitors to South Africa in 2015 amounted to

R68.2-billion. Tourism accounts for 3% of South Africa's gross domestic

product and there are about 655 609 jobs in the sector (Treasury).

A lot of effort has gone into increasing the number of South Africans

who take trips within the country. In the 2016/17 financial year, South

African Tourism has committed R100-million to promote domestic

tourism. Domestic tourism generated R8.8-billion in the first quarter

SECTOR INSIGHT

Marriott International and

Protea Hotels have signed

a deal.

of 2016, an improvement on the

same period in the year before.

The Tourism Incentive

Programme (TIP) has been

launched by the Department of

Tourism, recognising how important

the sector is in creating

growth and jobs. Tourism has

been earmarked as one of the

six key growth sectors in national

government's New Growth Path.

An Enterprise Development

Project Management Unit (PMU)

SOUTH AFRICAN BUSINESS 2017 100


OVERVIEW

has been established within the

Department of Tourism. Among

the PMU's tasks will be to manage

an Enterprise Development

Online Information Portal for

small, medium and micro enterprises

(SMMEs). Two tourism incubator

hubs are also to be established

in the Pilanesberg (North

West Province) and Manyeleti

(Mpumalanga Province).

One of the reasons for the

success of South Africa's tourism

sector is its diversity. Superb

natural beauty, excellent beaches

(45 have Blue Flag status), incomparable

wildlife, vibrant cities and

cultural and heritage attractions

that represent a heterogeneous

population and a dramatic history,

South Africa really does have it all.

Culture and heritage accounts for

fully 40% of world tourism and is

one of the fastest-growing subsectors.

Halaal tourism is a growth

industry and South Africa is well

placed to benefit from this trend.

In the five years to 2021, South

Africa will be the venue for more

than 200 conferences that will add

R1.6-billion to the economy and

attract about 300 000 participants.

South Africa has 19 national

parks and each province has its

own as well. There are a great

number of private game farms and

nature reserves, many of which

cater to the luxury market. There

are eight UNESCO World Heritage

Sites in South Africa: Robben

Island, Cradle of Humankind,

Mapungubwe Cultural Landscape,

iSimangaliso Wetland Park, uKhahlamba

Drakensberg (newly named

Maloti Drakensberg Transfrontier

Park), Richtersveld, Cape Floral

Kingdom and Vredefort Dome.

Other popular history or cultural sites include the Nelson Mandela

Museum, Mandela House (Soweto), Hector Petersen Memorial

(Soweto), Apartheid Museum, Freedom Park, Voortrekker Monument,

Constitution Hill, District Six Museum, Bo-Kaap Museum and many others

are popular tourist attractions. There are a number of opportunities

to further develop the full potential of tourism in heritage sites. The

Department of Arts and Culture is responsible for the promotion of

Heritage Month, including Heritage Day.

Structure

The South African tourism industry is well segmented. The distribution

channel is dominated by four major groups, each of which runs

several companies in different parts of the value chain. According

to Wesgro, the Western Cape’s investment promotion agency, the

biggest groups are:

Imperial Holdings: companies include Europcar and Tempest Car

Hire, Springbok Atlas and Grosvenor Tours

Bidvest Travel and Aviation: Rennies Foreign Exchange, BidTravel,

Harvey World Travel, Budget Car Rental, HRG Rennies Travel and

BidAir Services

Cullinan Holdings: Thompsons, Hylton Ross Tours, Pentravel

Tourvest: The group has companies dealing with many aspects of the

tourist experience: tour operators and conference organisers, foreign

exchange, retail (gift shops and duty-free shops) and hotels (African

Hotels and Adventures)

The principal airline operators in South Africa are SAA, the alliance

of British Airways, Comair, and Kulula, a low-cost airline. SAA has ties

with SA Express and owns low-cost carrier Mango. Fly Safair's inaugural

flight took place in late 2014. SA Express and SA Airlink fly to smaller

destinations in South Africa and Southern Africa.

101

SOUTH AFRICAN BUSINESS 2017


OVERVIEW

Casinos are a popular part of many entertainment and accommodation

complexes around the country, although relatively few

licences are in operation.

Private game reserves and golf resorts has been one of the fastestgrowing

markets in recent years.

The Garden Route and the KwaZulu-Natal coastline are areas rich

in golfing venues. St Francis Links is located between Plettenberg

Bay and Port Elizabeth. With a spectacular course designed by Jack

Nicklaus and wonderful views over the bay and nearby mountains, St

Francis Links is routinely featured among Compleat Golfer magazine's

Five Star Experience Golf Awards. The International Association of Golf

Tour Operators (IAGTO) has on occasion selected South Africa as its

Golf Destination of the Year.

Wine tourism is said to contribute indirectly more than R4.5-billion

to the South African tourism sector (South African Wine Industry

Information and Systems, SAWIS).

According to Wine Tourism South Africa, a website and publishing

concern that provides information about the wine industry, 43% of

visitors to South Africa visit the Cape Winelands.

The Industrial Development Corporation has committed to investing

R2-billion in local resorts (and in the African hotel market).

There are a number of unused or under-used facilities in South

Africa that could be fixed up to cater to the many South Africans who

currently don’t take holidays. An audit of possible properties is underway.

One suggestion is that former military bases could be converted

into low-fee resorts.

Other niche areas that are being explored include astrology and

adventure tourism. The cruise-ship market has massive potential. Both

Durban and Cape Town are considering building dedicated cruiseship

terminals in order to capture somewhat more than 0.5% of the

world market that South Africa currently does. More than 15-million

passengers travel on cruise ships globally every year.

Hotels

Large hotel groups such as Tsogo Sun and City Lodge Hotels run several

brands. Marriott International and Protea Hotels have concluded a deal

which gives the multinational brand (with about 4 000 hotels either

owned or franchised worldwide) the additional title of biggest hotel

operator in Africa. Some hotels in South Africa have been renamed

Protea Hotels by Marriott but the deal was not a straightforward sale.

The former owners of the Protea brand retain possession of the properties

(as a property company) and a mixture of lease, franchise and

management agreements was entered into by these two companies.

Over the next five years, the company expects the Marriott

International brands, including the Protea brand, to expand from 10

African countries to 18, involving

the development of an additional

38 properties across seven brands.

The existing Protea brand has

about 10 000 rooms.

The Marriott International

brand itself will soon have a

presence in South Africa: a 150-

room hotel and a set of executive

apartments at Melrose Arch in

Johannesburg will open in 2018.

Radisson Blu and Hilton are

among the international companies

to have invested inSouth

Africa recently. A new brand is

set to launch in 2016: Radisson

Red, aimed at the millennial market.

The Rezidor Hotel Group,

which currently operates five

hotels in Cape Town, opened

the The Radisson Red Hotel V&A

Waterfront Cape Town in late 2016.

Hilton International has recently

acquired the Coral Hotel

in Cape Town’s CBD. It also runs

the Double Tree by Hilton in

the same city and has hotels in

Johannesburg and Durban.

SOUTH AFRICAN BUSINESS 2017 102


OVERVIEW

Southern Sun has relaunched

itself as Tsogo Sun, the result of

a merger with Gold Reef Resorts.

Southern Sun remains as a brand

for premier hotels in the group,

which has a total 95 hotels and

15 casinos across Africa, the

Middle East and the Seychelles.

The new Southern Sun Elangeni

& Maharani complex will boast

734 rooms and nine restaurants

when Tsogo Sun completes the

R220-million project to amalgamate

two previously separate hotels

on Durban’s Golden Mile.

The new group’s latest acquisition

is The Grace in Rosebank,

Johannesburg, renamed "54 on

Bath". The Beverly Hills in KwaZulu-

Natal is the group’s other ultraluxury

hotel property.

Other Tsogo Sun hotel brands

include Sun Square, Garden Court

and StayEasy.

Several local companies have

partnerships with international

brands. Sun International’s Table

Bay Hotel and Lost City at Sun

City are also members of the

Leading Hotels of the World

group. Sun International runs 17

hotels and 20 casinos throughout

Southern Africa. Locations include

Botswana, Namibia, Swaziland

and Zimbabwe.

Orient-Express Hotels has two

five-star hotels: The Westcliff in

Johannesburg and the iconic

Mount Nelson Hotel in Cape Town.

Within the luxury segment,

companies like The Mantis

Collection aim to cater to clients

anywhere in the country; for

instance, it has a small hotel in

Port Elizabeth where clients stay

before transferring to the game

lodge at Shamwari.

Relais & Châteaux has 10 properties in South Africa including

Londolozi Private Game Reserve, within Sabi Sands, and the Gorah

Elephant Camp inside the Addo Elephant Park.

Forever Resorts offers a range of accommodation options for every

pocket. The group has 12 hotels and lodges together with many selfcatering,

camping and caravanning destinations, mostly located in the

north of the country but also located at Gariep Dam and Plettenberg

Bay in the Western Cape.

Nature

South Africa has a great reputation for beaches, landscapes, superb

wildlife and a rich cultural history.

South African National Parks and the South African National

Biodiversity Institute (SANBI) are outstanding national organisations

that oversee a range of important, but easily accessible sites. The Kruger

National Park is about the size of Belgium and attracts almost a million

visitors every year. Kruger covers nearly 20 000 square kilometres, it has

six ecosystems, 1 982 species of plants, 517 species of birds and 147

species of mammals – including the "Big Five": lion, leopard, African

elephant, African buffalo and rhinoceros. The area adjacent to Kruger

is rich in private game reserves, some of which are regarded as among

the finest luxury tourist offerings in the world. The Sabi Sands Game

Reserve has several accommodation options within its 65 000 hectares,

ranging from the luxurious to the ultra-luxurious.

The Addo Elephant National Park in the Eastern Cape is a

164 000-hectare facility that attracts more visitors than East Africa’s

Serengeti National Park. Addo Park uniquely offers the Big Seven: with

more than 450 elephants and significant numbers of the rest of the

Big Five, the park includes a marine section where great white sharks

and whales can be sighted.

The brief of the South African National Biodiversity Institute is to

run nine national botanical gardens. The 7 500 hectares of conserved

gardens represent an astonishing biodiversity, ranging from the fynbos

of Harold Porter to the harsh beauty of the Karoo Desert garden.

ONLINE RESOURCES

National Department of Tourism: www.tourism.gov.za

South African National Parks: www.sanparks.co.za

South African Tourism: www.southafrica.net

Tourism Grading Council of South Africa: www.tourismgrading.co.za

103

SOUTH AFRICAN BUSINESS 2017


OVERVIEW

Banking and financial services

Despite general economic concerns, South African banks have

increased operating income.

SECTOR INSIGHT

ZAR X is South Africa's

newest stock exchange.

The South African banking and financial-services sector has a good

international reputation because of a strong regulatory and legal

framework. The sector provides a full range of services including

commercial, retail and merchant banking, mortgage lending,

insurance, auditing and investment.

The South African Reserve Bank (SARB) is the central bank and falls

under the National Department of Finance. It sets monetary policy and

decides on domestic interest rates. The SARB oversees the bankingservices

sector, while the Financial Services Board (FSB) governs the

non-banking financial-services industry.

The Banking Association of South Africa represents all registered

banks, local and international. Major subcommittees oversee capital

supervision, credit risk, consumer affairs and the SA Securities Lending

Association.

The national stock exchange, the JSE Ltd, is the largest stock exchange

in Africa and consistently ranks in the world’s top 20 derivatives

exchanges by number of contracts traded. Listed total market values of

the companies on the JSE amount to R14.7-trillion. The AltX is a division

of the JSE and attracts a range of small and medium-sized high-growth

companies, but the JSE will face competition after the ZAR X launched

in October 2016. The new exchange is looking to attract trading in

black empowerment shares in particular.

In the retail banking sector,

despite really tough economic

conditions in recent months

and years, South Africa's Big

Four (Standard Bank, Absa,

First National Bank (FNB) and

Nedbank) increased headline

earnings by 5.7% in the second six

months of 2015, to R34.6-billion.

Profits across the Big Four totalled

R73.8-billion in the year, according

to a survey done by PWC (Major

Banks Analysis).

Relative newcomer Capitec

Bank has shown remarkable

growth with its low-cost offerings:

a cheque account, a savings

account and an unsecured loan.

Capitec was established in

2001 and listed on the JSE in 2002.

As of August 2015, Capitec had

691 branches, a rapid increase

over the benchmark figure of

500 that was achieved in January

2012. Capitec customers can also

draw cash in retail stores such as

Pick n Pay, Boxer and Shoprite.

In early 2016 the bank had

6.7-million customers (as opposed

to "clients", people for

whom Capitec is their primary

SOUTH AFRICAN BUSINESS 2017 104


OVERVIEW

bank). Capitec had 3.3-million clients

at the same time and 11 000

employees.

The banking sector could

soon be welcoming another newcomer:

the Discovery group has

indicated that it will be applying

for a licence. Discovery is already

a giant on the JSE (market value of

R83-billion) with a wide range of

products and services (health insurance,

credit cards, investment

portfolios) that gives it access to

millions of customers.

Further change in the sector

relates to Absa's British investor,

Barclays, which has indicated

its intention to sell its stake in

African operations. Financial

services group Old Mutual (54%

stakeholder in Nedbank) has announced

its plan to create four

stand-alone businesses out of the

Old Mutual Group. This would allow

the UK-based wealth management

business and the New

York-based asset managers to

be free of linkages to the rand,

while the South African businesses,

Nedbank and Old Mutual

Emerging Markets, could focus on

their specialities. In its six-month

report for the period ending 30

June 2016, Old Mutual Emerging

Markets reported that it had

11-million customers and had

paid out R9.2-billion in retirement

benefits and matured savings

policies in that period.

Standard, which operates

as Standard Bank or Stanbic in

17 African countries outside

South Africa, is Africa’s largest

corporation. Banks such

as the Development Bank of

Southern Africa and the Land and

Agricultural Development Bank

of South Africa focus their loans on support for infrastructure and

developmental projects.

Access

South Africa is an ideal stepping stone into Africa and several international

concerns have set up head offices, primarily in Johannesburg.

These include Bank of China, Bank of Taiwan, Citibank, Deutsche Bank

AG and HSBC Bank.

A small number of firms handle most of the country’s biggest

auditing accounts. The big four are Deloitte, Ernst & Young, PwC and

KPMG, with SekelaXabiso also in the running thanks to the award by

Transnet of a R1.3-billion account.

With the renewable energy sector being actively pursued in South

Africa, a whole new sector in need of funding has opened up. One

example in the province of KwaZulu-Natal is the creation by Investec

and the European Investment Bank of a renewable-energy fund of

€100-million, which will create many options for investors.

Despite the incredible strides that have been made in providing

banking services to the previously unbanked, there is still a long way

to go. MasterCard has pointed out that only 2% of retail transactions

on the continent of Africa are conducted electronically. The consulting

firm McKinsey puts the figure for Africa's population not connected

to formal banking at close to 80%: this presents an opportunity for

South African banks in Africa. South Africa has the highest connection

rate in Africa.

Finscope's 2014 survey of South African banking and financial surveys

shows that between 2004 and 2014 a remarkable eight-million

people were connected to the financial system in some way. Overall,

the "financially included" reached 31.4 million (up from 17.7-million in

2004). In a category called "formally served" which includes services

other than formal banks with branch networks, the percentage of

South Africans so served grew from 50% to 80%; in the "banked" category

(more traditional but including new devices), the percentage

grew from 46% to 75%.

The stokvel (savings clubs) market is estimated at R44-billion and

developing products for this market could be a lucrative outlet for

South African financial services companies.

ONLINE RESOURCES

Banking Association South Africa: www.banking.org.za

Financial Services Board: www.fsb.co.za

JSE Limited: www.jse.co.za

105

SOUTH AFRICAN BUSINESS 2017


OVERVIEW

Development finance and

SMME support

Studies are showing that township markets are much bigger than previously thought.

A

measure of the South African government's awareness of

the importance of small, medium and micro enterprises

to the nation's economy is the creation of a new ministry

to cater for and promote SMMEs, the Department of Small

Business Development.

President Jacob Zuma announced in his State of the Nation address

in 2016 that 30% of the state's budget for buying goods and

services would be allocated to SMMEs, co-operatives, rural and

township businesses.

A Black Business Supplier Development Programme (BBSDP) has

been launched and the Department of Small Business Development

will supply business training, grants and co-funding together with

municipalities to create business infrastructure for small businesses.

National Treasury has allocated R3-billion to the Department of

Small Business Development for mentoring and training and a tax

exemption for small businesses with an annual turnover below R335

000 has been introduced.

A key agency in the promotion and improvement of SMMEs is

the Small Enterprise Development Agency (Seda), which reports to

the DSBD. In a recent publication, Seda reported that the number of

SMMEs in South Africa increased in the last seven years by only 3%,

from 2.18-million in 2008 to 2.25-million in 2015. The national GDP

grew by 14% in the same period.

Of the 2.2-million SMMEs in South Africa, most (nearly a million)

are active in the wholesale and retail sector and the

accommodation sector.

Recent studies have shown that South Africa's townships represent a

market that is far more substantial than was previously believed. The CEO

of Minanawe Marketing, GG Alcock, told the FMCG Insights Conference

in May 2016 that what he called the "invisible market" was worth

R10-billion. Alcock was quoted in the Sunday Times saying that a

particular fast-food operator made R50 000 per day from three outlets

in a Johannesburg township.

A survey by the Sustainable Living Foundation showed that the

number of informal businesses in a township in the Western Cape

grew from 879 in 2010 to 1 798 in 2015.

SECTOR INSIGHT

Government departments

will increase procurement

from SMMEs.

Support

Every state institution has some

programmes devoted to promoting

small business, and most financial

institutions have special

desks devoted to SMMEs.

One of the most influential

institutions is the Industrial

Development Corporation,

which controls billions of rands

that it makes available through

seven funds. This can take the

form of loans (in targeted sectors

or to groups such as youth or

women) but the IDC often takes a

stake in businesses as well.

Many of the support agencies,

such as Seda, offer non-financial

help only as well as providing advice

in the drafting of business

plans, marketing strategies and

in skills training, although that

help may include informing small

business owners how to apply for

financing and where to go for it.

Provincial governments and

municipalities are obliged to

promote procurement policies

SOUTH AFRICAN BUSINESS 2017 106


OVERVIEW

that support small businesses.

Regional bodies such as the

Eastern Cape Development

Corporation also play a major

role in this regard.

The Northern Cape

Department of Finance,

Economic Development and

Tourism (DEDT) has a unit devoted

to product development and

it channels funds into promising

small enterprises, particularly in

the manufacturing sector.

The Development Bank of

Southern Africa (DBSA) set aside

R170-million for 734 SMMEs in

2015. The DBSA is responsible for

administering the national Jobs

Fund. As at the end of March 2016,

the Jobs Fund had disbursed R3.2-

billion in grant funding to implementing

projects, which had leveraged

a further R6.4-billion from

project partners.

The national government

has created a financial agency

devoted to the development

of SMMEs. The Small Enterprise

Finance Agency (Sefa) is now doing

the work previously done by

three separate bodies and aims to

get loans out to small businesses

as quickly as possible. In 2014/15,

Sefa achieved its highest-yet level

of funding at R446-million. Sefa's

loan book shows 41% of funding

going to construction projects

with manufacturing in second

place at 14%.

A private-public joint initiative,

which holds promise for the

financing of the SMME sector, is

an SMME Fund, which will receive

equal inputs from private-sector

investors and government of R1.6-

billion. The fund hopes to attract

investors so that a big fund can

be created, which will give the sector stability. The fund will incentivise

investments in companies that are owned by black entrepreneurs.

Seda has 42 incubation centres in South Africa under its Seda

Technology Programme (STP). An example is the Zenzele Technology

Demonstration Centre, a project that helps small-scale miners and mineral

processors to create viable businesses.

Anglo America’s Zimele fund has hub managers, who support small

business in the downstream sectors relevant to the resource mined by

the Anglo subsidiary. The Thermal Coal Hub and the Platinum Hub are

two examples. The Mondi Zimele Hub in Piet Retief supports businesses

in the supply chain and forestry.

Another company supporting SMMEs through their buying chain

is Woolworths, which is funding the NGO TechnoServe to ensure that

small tomato growers can grow produce that will meet the demanding

standards of the retailer, and to help them expand production. A regular

supplier to Woolworths – Qutom – assists with the project.

Business Partners' Franchise Fund amounts to R107.03-million and

consists of R48.65-million from National Treasury’s Jobs Fund (R38.92-

million for financing and R9.73-million for technical assistance), as well

as R58.38-million from Business Partners Limited.

All of the major banks have SMME offerings. Absa Bank’s SME Fund

is driven by its Small Business Division and the Enterprise Development

unit. Absa's SME Fund is available to fund projects from R5 000 to R3-

million, and it can be given to start-ups or existing businesses. The

Absa Development Credit Fund, a partnership with the United States

Development Credit Authority, is another avenue for entrepreneurs.

Standard Bank’s Community Investment Fund (CIF) initiative extends

loans to informal businesses. The CIF has distributed more than R7-million

to more than 630 businesses through its six funds in three provinces.

The Masisizane Fund makes loan financing available in sectors such

as agriculture and agri-processing, commercial, supply chain and manufacturing.

It also offers training and technical support as well as funding

to help businesses to comply with legislation.

The Vumela Enterprise Development Fund of First National Bank is

available to small businesses. FirstRand has put R186-million into the fund

and, to date, it has invested R50-million in small businesses that have shown

potential for growth.

ONLINE RESOURCES

Development Bank of Southern Africa: www.dbsa.org

National Department of Small Business Development:

www.dsbd.gov.za

Small Enterprise Development Agency: www.seda.org.za

Small Enterprise Finance Agency: www.sefa.org.za

107

SOUTH AFRICAN BUSINESS 2017


LISTING

South African National Government

An overview of South Africa’s national government departments.

www.gov.za

President

Address: Union Buildings, Government Avenue, Arcadia, Pretoria 0001

Postal address: Private Bag X1000, Pretoria 0001

Tel: +27 12 300 5200

Fax: +27 12 323 8246

Website: www.thepresidency.gov.za

Website: www.economic.gov.za

Deputy President

Address: Union Buildings, Government Avenue, East Wing,

1st Floor, Arcadia, Pretoria 0001

Postal address: Private Bag X1000, Pretoria 0001

Tel: +27 12 300 5200

Fax: +27 12 323 8246

Website: www.thepresidency.gov.za

Minister in the Presidency

Address: Union Buildings, Government Avenue, East Wing,

1st Floor, Arcadia, Pretoria 0001

Postal address: Private Bag X1000, Pretoria 0001

Tel: +27 12 300 5200

Fax: +27 12 300 5795

Website: www.thepresidency.gov.za

Dept of Agriculture, Forestry and Fisheries

Address: No 20, Agriculture Place, Block DA, 1st Floor, cnr Beatrix Street

and Soutpansberg Road, Arcadia, Pretoria

Postal address: Private Bag X250, Pretoria

Tel: +27 12 319 7319

Fax: +27 12 319 6681

Website: www.daff.gov.za

Department of Arts and Culture

Address: 10th Floor, Kingsley Centre, 481 corner Steve Biko & Stanza

Bopape streets, Arcadia, Pretoria 0001

Postal address: Private Bag X899, Pretoria 0001

Tel: +27 12 441 3000 | Fax: +27 12 440 4485

Website: www.dac.gov.za

Department of Basic Education

Address: Sol Plaatje House, 222 Struben Street, Pretoria 0001

Postal address: Private Bag X9034, 8000

Tel: +27 12 357 3000

Fax: +27 12 323 5989

Website: www.education.gov.za

Department of Communications

Address: Tshedimosetso House, 1035 Frances Baard (Cnr Festival

Street), Hatfield, Pretoria 0001

Postal address: Private Bag X745, Pretoria 0001

Tel: +27 12 473 0000

Fax: +27 12 462 1646

Website: www.doc.gov.za

Department of Cooperative Governance and

Traditional Affairs

Address: 87 Hamilton Street, Arcadia, Pretoria 0083

Postal address: Private Bag X802, Pretoria 0001

Tel: +27 12 334 0705

Fax: +27 12 326 4478

Website: www.cogta.gov.za

Department of Correctional Services

Address: 123 Poyntons Building, West Block,

cnr Schubart and Church streets, Pretoria 0001

Postal address: Private Bag X136, Pretoria 0001

Tel: +27 12 307 2934/2884

Fax: +27 12 323 4111

Website: www.dcs.gov.za

Department of Economic Development

Address: Block A, 3rd Floor, 77 the dti Campus, cnr Meintjies &

Esselen streets, Sunnyside, Pretoria 0001

Postal address: Private Bag X149, Pretoria 0001

Tel: +27 12 394 1006

Fax: +27 12 394 0255

Website: www.economic.gov.za

SOUTH AFRICAN BUSINESS 2017 108


LISTING

Department of Defence

Address: cnr Delmas Avenue & Nossob St, Erasmuskloof, Pretoria 0001

Postal address: Private Bag X427, Pretoria 0001

Tel: +27 12 355 6101 | F ax: +27 12 347 0118

Website: www.dod.mil.za

Department of Energy

Address: 192 cnr Visagie and Paul Kruger St, Pretoria 0001

Postal address: Private Bag X96, Pretoria 0001

Tel: +27 12 406 8000

Fax: +27 12 319 6681

Website: www.energy.gov.za

Department of Environmental Affairs

Address: Environment House, 473 Steve Biko and Soutpansberg Road,

Arcadia, 0083

Postal address: Private Bag X447, Pretoria 0001

Tel: +27 12 310 3537 | Fax: +27 086 593 6526

Website: www.environment.gov.za

Department of Finance (National Treasury)

Address: 40 WF Nkomo Street,

Old Reserve Bank Building, 2nd Floor, Pretoria

Postal address: Private Bag X115, Pretoria 0001

Tel: +27 12 323 8911 | Fax: +27 12 323 3262

Website: www.treasury.gov.za

Department of Health

Address: 20th Floor, Civitas Building, cnr Struben and Andries Streets,

Pretoria 0001

Postal address: Private Bag X399, Pretoria 0001

Tel: +27 12 395 8086/80 | Fax: +27 12 395 9165

Website: www.doh.gov.za

Department of Higher Education

and Training

Address: 123 Francis Baard Street, Pretoria 0001

Postal address: Private Bag X893, Pretoria 0001

Tel: +27 12 312 5555

Fax: +27 12 323 5618

Website: www.dhet.gov.za

Department of Home Affairs

Address: 909 Arcadia Street, Hatfield 0083

Postal address: Private Bag X114, Pretoria 0001

Tel: +27 12 432 6648 | Fax: +27 12 432 6675

Website: www.dha.gov.za

Department of Human Settlements

Address: Govan Mbeki House, 240 Justice Mahomed, Sunnyside, Pretoria 0001

Postal address: Private Bag X644, Pretoria 0001

Tel: +27 12 421 1310 | Fax: +27 12 341 8513

Website: www.dhs.gov.za

Department of International Relations and

Cooperation

Address: OR Tambo Building, 460 Soutpansberg Road, Rietondale,

Pretoria 0001

Postal address: Private Bag X152, Pretoria 0001

Tel: +27 12 351 1000 | Fax: +27 12 329 1000

Website: www.dirco.gov.za

Department of Justice and Constitutional

Development

Address: Salu Building, 316 cnr Thabo Sehume and Francis Baard

Streets, Pretoria 0001

Postal address: Private Bag X276, Pretoria 0001

Tel: +27 12 406 4669 | Fax: +27 12 406 4680

Website: www.doj.gov.za

Department of Labour

Address: 215 Laboria House, cnr Francis Baard and

Paul Kruger Streets, Pretoria 0001

Postal address: Private Bag X499, Pretoria 0001

Tel: +27 12 392 9620 | Fax: +27 12 320 1942

Website: www.labour.gov.za

Department of Military Veterans

Address: 328 Festival Street, Hatfield, Pretoria 0001

Postal address: Private Bag X943, Pretoria 0001

Tel: 080 232 3244 (SA only)

Website: www.dmv.gov.za

Department of Mineral Resources

Address: 70 Meintje Street, Trevenna Campus, Sunnyside 0007

Postal address: Private Bag X59, Pretoria 0001

Tel: +27 12 444 3000 | Fax: +27 86 624 5509

Website: www.dmr.gov.za

Department of Police (Civilian Secretariat for

Police Service)

Address: Wachthuis Building, 7th Floor, 231 Pretorius Street, Pretoria 0001

Postal address: Private Bag X463, Pretoria 0001

Tel: +27 12 393 2800 | Fax: +27 12 393 2812

Website: www.saps.gov.za

109

SOUTH AFRICAN BUSINESS 2017


LISTING

Department of Public Enterprises

Address: Infotech Building, 1090 Arcadia Street, Hatfield, Pretoria 0001

Postal address: Private Bag X15, Hatfield 0028

Tel: +27 12 431 1000

Fax: +27 12 431 1039

Website: www.dpe.gov.za

Department of Public Service and

Administration

Address: Batho Pele House, 116 Johannes Ramakhoase Street, Pretoria

Postal address: Private Bag X884, Pretoria 0001

Tel: +27 12 336 1700

Fax: +27 12 336 1809

Website: www.dpsa.gov.za

Department of Public Works

Address: 7th Floor, CGO Building, cnr Bosman and Madiba Streets,

Pretoria Central

Postal address: Private Bag X65, Pretoria 0001

Tel: +27 12 406 21978

Fax: +27 086 276 8757

Website: www.publicworks.gov.za

Department of Rural Development and

Land Reform

Address: 184 Old Building, cnr Jeff Masemola

and Paul Kruger Streets, Pretoria 0001

Postal address: Private Bag X833, Pretoria 0001

Tel: +27 12 312 9300

Fax: +27 12 323 3306

Website: www.ruraldevelopment.gov.za

Department of Science and Technology

Address: DST Building, Building No 53, CSIR South Gate Entrance,

Meiring Naude Road, Brummeria, Pretoria 0001

Postal address: Private Bag X727, Pretoria 0001

Tel: +27 12 843 6300

Fax: +27 12 349 1041/8

Website: www.dst.gov.za

Department of Small Business Development

Address: The dti, Block A, 3rd Floor, 77 Meintjies Street, Sunnyside,

Pretoria 0001

Postal address: Private Bag X84, Pretoria 0001

Tel: +27 12 394 1006

Fax: +27 12 394 1006

Website: www.dsbd.gov.za

Department of Social Development

Address: HSRC Building, North Wing, 134 Pretorius Street, Pretoria 0001

Postal address: Private Bag X904, Pretoria 0001

Tel: +27 12 312 7479 | Fax: +27 086 715 0829

Website: www.dsd.gov.za

Department of State Security

Address: Bogare Building, 2 Atterbury Road, Menlyn, Pretoria 0001

Postal address: PO Box 1037, Menlyn 0077

Tel: +27 12 367 0700 | Fax: +27 12 367 0749

Website: www.ssa.gov.za

Department of Sport and Recreation

South Africa

Address: Regent Place, 66 cnr Madiba and Florence Ribeiro Street,

Pretoria 0001

Postal address: Private Bag X896, Pretoria 0001

Tel: +27 12 304 5000 | Fax: +27 12 323 7196 / 086 644 9583

Website: www.srsa.gov.za

Department of Tourism

Address: 17 Trevena Street, Tourism House, Sunnyside, Pretoria 0001

Postal address: Private Bag X424, Pretoria 0001

Tel: +27 12 444 6780 | Fax: +27 12 444 7027

Website: www.tourism.gov.za

Department of Trade and Industry

Address: The dti, 77 Meintjie Street, Block A, Floor 3,

Sunnyside, Pretoria 0001

Postal address: Private Bag X274, Pretoria 0001

Tel: +27 12 394 1568 | Fax: +27 12 394 0337

Website: www.thedti.gov.za

Department of Transport

Physical address: Forum Building, 159 Struben Street,

Room 4111, Pretoria 0001

Postal address: Private Bag X193, Pretoria 0001

Tel: +27 12 309 3131 | Fax: +27 12 328 3194

Website: www.transport.gov.za

Telecommunications and Postal Services

Address: Iparioli Office Park, 399 Jan Shoba Street,

Hatfield, Pretoria 0001

Postal address: Private Bag X860, Pretoria 0001

Tel: +27 12 427 8000

Fax: +27 12 427 8016

Website: www.dtps.gov.za

SOUTH AFRICAN BUSINESS 2017

110


LISTING

Department of Water and Sanitation

Address: Sedibang Building, 185 Frances Baard Street,

Pretoria 0001

Postal address: Private Bag X313, Pretoria 0001

Tel: +27 12 336 8733

Fax: +27 12 336 8850

Website: www.dwa.gov.za

Department of Women

Address: 36 Hamilton Street, Arcadia Pretoria 0001

Postal address: Private Bag X931, Pretoria 0001

Tel: +27 12 359 0000

Fax: 086 765 3365

Website: www.women.gov.za

National coat of arms

The national coat of arms was adopted on 27 April 2000. It is constructed in two circles, which

are described as the circle of foundation and the circle of ascendance.

Circle of foundation

Shield – The two Khoisan figures on the shield are taken from a Bushman rock

painting known as the Linton stone, and represent the common humanity and

heritage of South Africans. Depicted in an attitude of greeting, the figures

symbolise unity. Spear and knobkierie – Together, these objects symbolise

defence and authority, but the flat angle at which they lie symbolises peace.

Wheat – The ears of wheat, as emblems of fertility, represent germination,

growth and the development of potential, as well as nourishment

and agriculture. Elephant tusks – Elephants symbolise wisdom, strength,

power, authority, moderation and eternity, and the use of tusks is a tribute

to the world’s largest land mammal, Loxodonta Africana, which is found in

South Africa. Motto – Taken from the language of the now extinct /Xam

Bushmen, the motto translated means ‘people who are different come

together’ or ‘diverse people unite’.

Circle of ascendance

Protea – Protea cynaroides is the national flower of South Africa and is symbolic of the beauty of

the country and flowering of the nation’s potential. Secretary bird – Characterised in flight, the

secretary bird represents growth and speed, and is a symbol of divine majesty and protection.

Rising sun – The sun is an emblem of energy and rebirth, a source of light and life appropriate for

a country characterised by sunshine and warmth.

111

SOUTH AFRICAN BUSINESS 2017


A REGIONAL OVERVIEW OF THE

OVERVIEW

EASTERN CAPE

he TEastern Cape's long coastline of pristine

beaches and rocky coves has long been one of

South Africa's prime tourism spots. The same

coastline is increasingly being seen as an asset

in the Oceans Economy strategy that the country

is rolling out.

With three major ports, two of which house industrial

development zones (IDZs), the province is well

placed to leverage the advantages that will come

with the promotion of several maritime sectors:

trade, shipping repairs, training, logistics, oil and gas

(and servicing of rigs and vessels) and aquaculture.

National government aims for the Oceans

Economy to contribute R29-billion to the national

gross domestic product (GDP) by 2019 and a possible

R177-billion by 2033. This is part of the broader

National Development Plan (NDP).

The potential the province offers is significantly

bolstered by the shipping traffic that operates

between Europe and Asia and the Far East.

Logistically, the Eastern Cape is well served, with

two major airports in Port Elizabeth and East London,

and several facilities serving smaller towns such as

Mthatha and Bhisho. Many farms and private game

reserves also have airstrips. Another key logistics factor

is the large new port at Ngqura, within the Coega

IDZ, bringing to three the number of effective ports

operating in the Eastern Cape.

Key sectors

Financial services, real estate and banking are the

largest contributors to the province’s GDP. Absa,

Nedbank, Standard Bank and Capitec Bank are

among several big finance groups which have a

strong presence in the Eastern Cape.

The automotive industry provides 30% of the jobs

in the province’s manufacturing sector and accounts

for 32% of gross added value. Half of South Africa’s

passenger vehicles are made in the Eastern Cape

and 51% of the country’s motor exports originate

here. The two biggest manufacturers are Volkswagen

(Uitenhage) and Mercedes-Benz SA (East London).

Ford makes engines in Port Elizabeth.

General Motors South Africa (GMSA) no longer

confines itself to manufacturing and assembling motor

cars: GMSA is also a leader in producing catalytic

converters. The Eastern Cape supplies 14% of the

world market in catalytic converters. Among the

other products exported by GMSA to Mexico, the US,

Europe and Australia are seat belts and aluminium

heat shields.

The Industrial Development Corporation (IDC)

has identified the automotive-parts sector as a

specialist field in which South Africa may have a

competitive advantage. The IDC has a 45% stake in

Port Elizabeth-based Umicore Autocat South Africa.

SOUTH AFRICAN BUSINESS 2017 112


REGION

The balance of the equity is held by Belgian concern,

Umicore Group.

The Coega IDZ outside Port Elizabeth has recently

attracted massive investments from Chinese

car manufacturers and has also attracted food and

beverage manufacturers. The East London IDZ, located

near the Mercedes-Benz SA factory, has an

automotive focus.

Tourism

The five-star Boardwalk Hotel and Casino (Sun

International) is a new offering. The large meeting

hall that can host up to 1 700 delegates attracted the

Democratic Alliance for its elective conference in 2015.

Nelson Mandela Bay Metropolitan Municipality

has established a conference bureau to assist in

conference booking and planning. Smaller venues

are situated in the city, surrounding game reserves,

seaside resorts or luxury hotels. The Feather Market

Convention Centre is a successful adaptation of

a Victorian building for modern use. It is used to

host gala dinners, exhibitions, product launches

and concerts.

The Eastern Cape has some unique natural advantages

as a tourist destination. For example, the

province covers seven different biomes (communities

of plants and animals coexisting in a particular

place), of which the grassland, Nama Karoo, thicket

and savanna biomes are the most extensive. The

Eastern Cape has three areas of endemism: Albany,

the Drakensberg and Pondoland.

Port Elizabeth has become synonymous with the

Iron Man event and various sporting events and festivals

are a strong aspects of Eastern Cape tourism.

The National Arts Festival in Grahamstown is a key

national festival.

The Addo Elephant National Park is the jewel in

The Eastern Cape's crown. It is a 164 000-hectare

facility that attracts more visitors than East Africa’s

Serengeti National Park. Plans to expand Addo Park

from the sea to the Karoo are well advanced, and ultimately

the intention is for it to become a megapark.

Other national parks in the province are the

Camdeboo National Park (around Graaff-Reinet

and now home to some lions), the Mountain Zebra

Park (near Cradock) and the Garden Route Park, a

marine reserve.

The Eastern Cape Provincial Government is responsible

for 21 nature reserves and is planning

to commercialise the administration of many of

these facilities.

The province also intends to target the improvement

of roads to remoter parts of the province such

as Baviaanskloof, Hole-in-the-Wall, Dwesa-Cwebe

and Coffee Bay.

Economic future

Renewable energy projects are flourishing throughout

South Africa, and the Eastern Cape has become

one of the hotspots for this burgeoning industry,

particularly with regard to wind power.

Of the 17 projects approved in the province in

terms of the national independent producers' programme,

fully 16 are on-shore wind projects with

large numbers of turbines dotting the landscape

around the Tsitsikamma and Jeffrey's Bay and further

north near the town of Bedford. More than

1 500MW has so far been procured within the borders

of the province, and there is potential for much

more. Nationally, the programme has attracted

about R200-billion in investment.

The implementation of the Strategic Integrated

Projects in the province is progressing well. The

upgrades of the Mthatha Airport runway and apron

are complete, with work nearing completion on the

Mthatha Airport terminal building. The Mzimvubu

Multipurpose Development Project is another development

which comprises a multi-purpose dam to

supply water for new irrigation development, hydropower

generation and domestic water requirements

in the Mzimvubu River Catchment.

Capital Bhisho

Population 6 916 200 (2015)

Area 168 966km 2

Premier Phumulo Masualle (ANC)

Languages Afrikaans, English, Xhosa

SOUTH AFRICAN BUSINESS 2017

114


VISION

"Well-governed, connected,

green and innovative."

MISSION

• Promotes a culture of good governance;

• Provides effective and efficient municipal services;

• Invests in the development and retention of human

capital to service the City and its community;

• Promotes social and equitable economic development;

• Ensures municipal sustainability and financial viability;

Creates a safe and healthy environment; and

• Places Batho Pele at the Centre of Service Delivery.

www.buffalocitymetro.gov.za


FOCUS

Improved

infrastructure in

Buffalo City

An overview of three key infrastructure

projects in Buffalo City.

Cllr Xola Pakati, Executive

Mayor of Buffalo City

Metropolitan Municipality

In line with its vision to promote

social and equitable economic

development, Buffalo

City Metropolitan Municipality

(BCMM) has completed (and is

currently busy with) a number

of key projects in the metro.

Three of these projects are

detailed below.

Flow (ADWF) capacity of the existing Quinera Wastewater Treatment

Works from 6ML/d to 18ML/d.

The second phase of the project comprised the installation and

commissioning of various mechanical equipment supplied under

Phase 1. It also included the construction of a new substation building

and alterations to the existing buildings.

The works undertaken during this contract included:

• Construction of a new substation building

• Construction of a paved access road

• Construction of a water reticulation network

• Concrete demolition and repairs to existing aerator basin

• Installation and commissioning of mechanical equipment

(supplied under Phase 1)

• Process commissioning of the plant

• Electrical and electronic works

Employment opportunities / beneficiaries

The project maximised the use of local labour from the nearby

Mzamomhle and greater Gonubie area. About 88 000 of the approximately

122 000 man-hours invested in Phase 2 of the project

Upgrading of the Quinera

Wastewater Treatment Works

(Phase 2)

The objective of this project

was to provide additional treatment

capacity in the Quinera

Wastewater Treatment Works to

cater for future development in

the Quinera and Beacon Bay areas.

This was achieved by increasing

the Average Dry Weather

SOUTH AFRICAN BUSINESS 2017

116

www.buffalocity.gov.za


FOCUS

comprised local labour. Operator training was also

conducted where necessary for new equipment.

Furthermore, construction of the new fully enclosed

inlet works with an odour control system has

minimised odour pollution in nearby Mzamomhle

and Eastward-Ho residential areas.

• Diversion of existing Telkom cables/ducts,

electricity cables, water mains and other services

to align with BCMM’s Water and Sanitation

Masterplan and LSDFP.

• Installation of sleeves under the proposed road

for future services.

• Installation of street lights.

• Upgrading the intersection of Gullsway/Estuary

Road.

Employment opportunities

During the three-year lifespan of this project 308 job

opportunities were created.

Enlargement and upgrading of the Gonubie

Main Road

Basil Read was contracted to do the following:

• Widen the existing three lanes of Gonubie Main

Road to four lanes from the Gulls Way intersection

in the east to approximately 400m from the

intersection with the N2 in the west. The entire

four lanes will consist of a Continuous Reinforced

Concrete Pavement (CRCP).

• Construct four new junctions on this portion of

road, consisting of three new roundabouts and

one free-flow T-junction.

• Create a new roundabout at the junction of

Gonubie Main Road and the R102 (Meisies Halt)

on the Western Side of the N2.

• Develop footpaths (or cycle paths) with grassed

edges to the shoulder breakpoint where

specified.

• Construct concrete V drains as required.

• Ensure six lanes for approximately 150m west of

Junction 5 to allow for future merge and a left

turning by-pass.

• Installation of Telkom ducts along the full length

of the road.

Provision of Internal Services and the

Construction of Top Structures – Reeston

This project forms part of the broader Duncan Village

Redevelopment Initiative. Upon completion of the

project, beneficiaries will be relocated from Duncan

Informal Settlement to Reeston. The intention is to

de-densify the Duncan village by moving some

people out and later develop in the space available

after relocation has taken place. Work started on 29

April 2014, with the completion dates revised to 19

October 2015 for Portion 1, and 20 November 2016

for Portion 2. Portion 1 comprised 460 units while

Portion 2 comprised 536 units, giving a project total of

996 units. The completed work involved: cutting of

platforms, completed foundation slabs, brickwork,

roof structure, houses plastered (internal and external),

glazing and doors, ceilings, internal plumbing

and external plumbing, painting internal and

external, and a Certificate of Completion.

www.buffalocity.gov.za

117 SOUTH AFRICAN BUSINESS 2017


A REGIONAL OVERVIEW OF THE

FREE STATE

The centrally located Free State province shares

borders with most of the other provinces and

it has an international boundary with Lesotho.

The provincial capital is only 150km from

Maseru, the capital of the Mountain kingdom, and

a good deal of trade happens along this corridor. The

N8 highway also extends westwards to the Northern

Cape capital of Kimberley, and a number of projects

are planned to leverage the advantages of this busy

route. The Orange and Vaal rivers define the southern,

western and northern borders of the Free State.

This centrally located province uses its position

to its advantage. The Maluti-A-Phofung Special

Economic Zone takes advantage of the strategic

position Harrismith holds in the Free State's northeastern

corner. The N3 highway carries huge volumes

of cargo between Gauteng and the ports of

KwaZulu-Natal so it is logical that the first focus of

this SEZ is logistics. Over and above the Gauteng-

KwaZulu-Natal route, another logistics axis extends

between Harrismith and Bloemfontein for the

delivery of products by rail and road.

Special rules apply within an SEZ, including

more liberal taxation for companies that invest in

the zone (15% corporate tax applies, as opposed to

28%). Other benefits include a building allowance,

employment incentives and the fact that an SEZ is

a customs-controlled area.

Within the Maluti-A-Phofung SEZ, the Tshiame

Food Processing Park has 60 000m² available for

investors in food production, storage and distribution.

To entice investors, services such as logistics

will be provided as will warehousing, cold storage

and manufacturing facilities. A strong focus is to try

to get more local produce turned into products that

can be exported.

Two Chinese companies have undertaken to invest

in the SEZ. Mediquip SA, a joint Chinese-South

Africa venture, will make advanced medical equipment

such as X-ray, ultra-sound and ECG machines

at three manufacturing plants. A smart meter company,

Shanghai-Xielin SA, has also booked space in

the zone to make its devices.

The varied provincial economy currently has

3.2-million hectares of cultivated land, although the

services sector is the biggest economic contributor.

The Free State is experiencing considerable growth

in the services sector. BPO and call centres are flour-

SOUTH AFRICAN BUSINESS 2017

118


REGION

ishing in the province. Bloemfontein, the main city

for economic activity, is at the core for Telkom’s

switching centres. Various call centres are located

in the city and have created many employment

opportunities in the process.

Two of the biggest projects in the manufacturing

sector of the Free State have been in Sasolburg

where Sasol's Wax plant expansion project and

Omnia's new nitrate plant have, between them,

made a significant impact on economic output.

Altogether, Sasol's project will see R13.6-billion

invested. Omnia put R1.4-billion into building a new

nitrate facility in Sasolburg.

Economy

Mining and agriculture were for many decades the

bedrock of the Free State economy. The northwestern

part of the province sits on top of a rich

gold-bearing reef more than 400km long, known

as the goldfields region.

South Africa is one of the world’s largest gold

producers. Although gold mining volumes are

down (and some towns are having to adjust to

changed economic profiles), some mining companies

such as Sibanye Gold are very active. Diamonds

are also found in the south of the province.

Large percentages of South Africa’s agricultural

production, particularly grains, originate in the

Free State. More than half the nation’s sorghum,

nearly half the sunflower and more than 30% of

all wheat, maize, potatoes and groundnuts come

from the fertile plains of the western and northern

Free State, while the valleys of the east produce

almost all of South Africa’s cherries and asparagus.

Livestock and flowers are other important agricultural

products.

Economic future

Newly discovered natural gas and helium fields are

said to have proven reserves of 25-billion-feet³ and

Afrox has become the first of may soon be a string of

investors in exploiting this resource near the towns

of towns of Virginia, Welkom and Theunissen. This

area used to be famous for the gold that lay under

the surface of the soil. Afrox is a subsidiary of the

Linde Group of Germany and has signed a deal

with renewable energy company Renergen. A

R200-million helium extraction plant will be built,

to be ready in 2019.

Sasolburg, an important petrochemical site in

the Free State, recently fired up a new power plant

running solely on gas. This power plant is the largest

of its kind in Africa. The plant produces 140MW

of power for the usage of Sasol’s chemical factory

adjacent to the site, and feeds into the national grid.

Eskom has a few projects lined up that will feed

the national grid. The Ingula pumped storage project

scheme, bordering KwaZulu-Natal, has started

delivering power. Two dams are connected via

underground turbines just short of 5km long, and

water is pumped to the top of the mountain for

use when power is urgently needed.

Of the five projects that have been approved

in the Free State so far in terms of the country's

Renewable Energy Independent Power Producers

Procurement Programme (REIPPP), two are small

hydro projects. H1 Holdings and Building Energy

are the drivers behind the 4.7MW Kruisvallei Project

on the Orange River, which uses the flows from the

Vanderkloof Dam to generate power. Solar projects

include the 60MW Boshoff Solar PhotoVoltaic (PV)

park (Sun Edison) and the 64MW Letsatsi Solar PV

(Solar Reserve, Kensani Group and Intikon Energy).

A solar park is planned for the Xhariep region, and

the provincial government sees this as a driver of

economic growth along the banks of the powerful

Orange River.

Capital Bloemfontein

Population 2 817 900 (2015)

Area 129 825km 2

Premier

Languages

Elias Sekgobelo "Ace" Magashule

(ANC)

Afrikaans, English, Sotho,

Tswana

119 SOUTH AFRICAN BUSINESS 2017


A REGIONAL OVERVIEW OF

GAUTENG

The smallest province of South Africa in area

is also the most significant economically. An

estimated 40.6% of South Africa’s manufacturing

is done here, a third of its electricity,

gas and water output, 41.9% of the country’s

construction, 39.7% of its finance, real estate and

business activity, 34.8% of its wholesale, retail, motor

trade and accommodation, 32% of transport,

storage and communication, and 38.8% of general

government services.

Gauteng comprises three large metropolitan municipalities

in Tshwane (the administrative capital of

South Africa and home to the diplomatic corps and

many institutions of higher learning and research);

Johannesburg (the capital of Gauteng Province,

headquarters to many companies in a wide range of

sectors, including the financial sector symbolised by

the location of the JSE) and Ekurhuleni (the manufacturing

hub of South Africa and host of the country's

biggest airport, O.R. Tambo International). Plans are

being investigated for the creation of an "aerotropolis"

around the busy O.R. Tambo International Airport.

The City of Ekurhuleni wants to leverage the benefits

of being in an area where freight, logistics and every

kind of transport intersect.

The province has several outstanding universities,

and the majority of South Africa’s research

takes place at well-regarded institutions such as the

Council for Scientific and Industrial Research (CSIR),

the South African Bureau of Standards (SABS), Mintek,

the South African Nuclear Energy Corporation

(NECSA), the Human Sciences Research Council

(HSRC) and a number of sites where the work of

the Agricultural Research Council is done.

In 2016 there were interesting developments in

the political field in that two of the province's three

metropoles (Tshwane and Johannesburg) came

under the control of a coalition of political parties

opposed to the ANC, the party that has formed the

national government ever since 1994 (the first democratic

election) and had control of most provinces

and cities across the country. Most commentators

were impressed with the manner in which power

switched from the party of liberation to the opposition,

a reflection on the strength of the country's

democratic institutions.

The province's gross domestic product (GDP) is

R811-billion, which is nearly 34% of South Africa's

and about 10% of the GDP of Africa.

SOUTH AFRICAN BUSINESS 2017

120


REGION

Key sectors

The leading economic sectors, as defined by

the Gauteng Growth and Development Agency

(GGDA), are finance (21% of provincial GDP), manufacturing

(19.7%), government services (15.7%) and

trade (12.8%).

Most of the major banks are positioned around

Johannesburg (which is home to Africa’s largest

stock exchange, the JSE), and the finance and business

services sector is a key focus in the provincial

economy. Many international corporates such as

Citibank, Microsoft and McDonald’s are headquartered

in the province, as it is seen as the commerce

capital and the gateway to Africa.

Media services in Gauteng are extensive. South

Africa’s national broadcaster is based there, as are

many popular radio stations and large publishing

houses. Gauteng has a highly competitive newspaper

market which includes local and national

publications such as the Sunday Times, the Sowetan,

The Star, Rapport and also the Mail & Guardian.

Gauteng has a varied manufacturing sector, from

heavy-steel, automotive assembly to the food and

beverages industry as well as light commercial and

industrial activity. Key food and beverage brands are

in operation around Gauteng. Nestlé and Pioneer

Foods have spent millions on new developments

and improvements. RCL, one the country’s leaders

in poultry production, has 18 farms and two feed

mills in the province.

Companies such as Kimberly-Clark, Proctor

& Gamble, ArcelorMittal, Transnet Engineering

and Aspen all have manufacturing facilities in

Gauteng Province. The manufacturing sector in

Gauteng employs 600 000 people in more than

9 000 enterprises.

Gauteng’s contribution to the country’s gold

and diamond production is still significant, and the

province’s mines account for about 21% of employment

in the sector nationally. The other primary

sector, agriculture, contributes little to the provincial

GDP but there are important districts such as

Delmas, Cullinan, Krugersdorp, Bronkhorstspruit

and Heidelberg where a variety of crops are cultivated.

Large maize- and grain-farming enterprises

are found in the western and southern parts of the

province. Other products produced in large volumes

are vegetables, fruit, dairy, poultry and eggs.

Economic future

Gauteng's infrastructure and transport are vital to its

economic health. The multi-year Gauteng Freeway

Improvement Project has widened roads and improved

the connections between parts of the province

but there is still controversy over the method

of payment, ie tolling.

The Gautrain has been an enormous success:

based on the connection to O.R. International

Airport, the high-speed train also links Pretoria and

Johannesburg. User numbers have been so good

that a contract went out in 2016 to supply 48 additional

coaches for the service, which is also set to be

expanded by a further 200km. Property prices near

to Gautrain stations have shown steady increases,

and whole new property developments have been

based on proximity to the rail line.

Apart from the "aerotropolis" concept, development

at Gauteng’s other airports is also taking place.

These include a mixed-use development (Lanseria)

and an upgrade intended to make Wonderboom a

suitable site for freight movements.

The Top 20 Priority Township programme aims to

uplift the economies of targeted townships. Social

assistance and the provision of improved services are

among the first steps in this programme.

A green economic development strategy has

been developed for the province, intended to turn

the challenge of climate change into an opportunity.

Projects include energy from waste, food security,

waste sorting in informal settlements and creating

incentives in the solar industry.

Capital Johannesburg

Population 13 200 300 (2015)

Area 18 178km 2

Premier David Makhura (ANC)

Languages

Afrikaans, English, Sesotho,

Zulu

121 SOUTH AFRICAN BUSINESS 2017


PROFILE

City of Ekurhuleni

Ekurhuleni, home to Africa's manufacturing hub, makes a significant

contribution to the economy of Gauteng Province.

Economic overview

The City of Ekurhuleni is located within a province

that has a fast-growing population – Gauteng

Province. The province is one of the four largest

economies in Africa, contributing over 35% to South

Africa’s gross domestic product.

Ekurhuleni’s economy contributes 18% to Gauteng’s

GDP and 6.5% to SA’s GDP. The city’s manufacturing

sector alone contributes gross value add of

R143-3billion and R351-billion to the provincial and

national economies respectively. The manufacturing

sector is a major contributor to the city’s economy

at 22%. The sector contributes 17% to the national

economy.

Investment destination of choice

The city has defined an inclusive and broad-based

Growth and Development Strategy (GDS 2055),

anchored on five pillars:

1. Re-urbanise – achieve sustainable urban

integration

2. Re-industrialise – achieve job-creating economic

growth

3. Re-generate – achieve environmental well-being

4. Re-mobilise – achieve social empowerment

5. Re-govern – achieve effective cooperative

governance

The City of Ekurhuleni has received the highest

investment grade rating from Moody’s Investors

Services, affirming the prudent management of the

city’s finances.

Moody’s placed Ekurhuleni at Aaa.za/Prime-1 national

scale rating, a four-notch upgrade from a previous

rating of A1.za/Prime-1. The city also received a

global scale rating of Baa2/Prime-2. The good credit

profile, in terms of Moody’s, means that Ekurhuleni

has an “extremely strong” capacity to meet its financial

commitments. This allows Ekurhuleni to raise

debt at favourable rates, putting less onerous debt

repayment costs on residents.

This rating makes it easier for the city to compete

in the international bond markets as well as other

project finance and investment opportunities to

address infrastructure funding. The rating reflects

the city’s prudent financial management, which

SOUTH AFRICAN BUSINESS 2017

122


PROFILE

Executive Mayor, Cllr

Mzwandile Masina

also saw it awarded two consecutive clean audits.

Ekurhuleni is rated at the high end of the range of

South African municipalities. The municipal debt

and debit service levels are relatively lower than

the median of rated metropolitan municipalities. It

notes the city’s diverse and resilient industrial base

stretching from Springs to Wadeville and Isando,

and hosting world-class manufacturers of glass,

consumer goods and steel.

Manufacturing sector

Ekurhuleni’s manufacturing sector remains one

of the important sectors for employment alongside

trade, finance and community services. The

sector contributed 18% to total employment

in Ekurhuleni by 2012 but has seen a decline in

recent years.

The Revitalisation of the Manufacturing Sector

flagship project is aimed at re-industrialising the

city’s economy to become a more sustainable

economy by 2055. The PRASA/Gibela rolling stock

manufacturing project in Dunnottar, which will see

the local production of some 3 600 locomotives,

is one of the Strategic Urban Developments in the

city. The City of Ekurhuleni has already approved

the leasing of 288 hectares of land for the project.

Investment facilitation

The city has an Investment and Development

Facilitation Strategic Policy Framework, which has

been developed to improve turnaround times in

facilitating and decision-making on investment

and development applications, thus improving the

city’s investment-friendly environment.

The city boasts a business and investment onestop

shop established within the city’s aerotropolis

core. The Ekurhuleni Business Facilitation Network

is situated in Kempton Park and houses the business

centre to support local enterprise development

and the investment centre (EIC).

The Ekurhuleni Investment Committee meets

twice a month to appraise and provide technical

support including pre-application support to

mega investment and development applications.

The EIC also provides aftercare to newly established

and existing businesses within the

city. The centre collaborates with various

provincial and national departments to provide

unmatched facilitation of investments and

developments within the city and support to

local businesses.

CONTACT INFO

Ekurhuleni Investment Centre

Tel: +27 11 999 3516 / 20

Email: eic@ekurhuleni.gov.za

Website: ekurhuleni.gov.za

123 SOUTH AFRICAN BUSINESS 2017


FOCUS

Building Africa's first aerotropolis

The City of Ekurhuleni, home to O.R. Tambo International Airport, Africa’s largest and

busiest airport, is all set to become the continent’s first aerotropolis.

As a flagship project of Ekurhuleni, development of the aerotropolis

(first announced in 2011) leverages public and private

sector investment at the airport and in its surrounds. The

aerotropolis is cleared to become a high-activity node within

the Gauteng province, of similar scale to the inner cities of Johannesburg

and Tshwane, positioning Ekurhuleni as having a true airport city

economy. Ekurhuleni is already considered the aviation, logistics and

manufacturing hub of Africa, with O.R. Tambo International Airport

as Africa’s most strategic airport and the unrivalled gateway to the

continent. Formation of the aerotropolis will enable Ekurhuleni to

become a genuine terminal city, with air, rail and road networks aiding

its economic development. That development is outlined in the city’s

30-year Ekurhuleni Aerotropolis Master Plan (EAMP), a wide-ranging

economic development strategy.

A strategic roadmap, the EAMP has already produced a five-year

plan outlining immediate deliverables and 109 key projects. The EAMP

has identified a range of opportunities to accelerate upstream and

downstream economic activities that rely on just-in-time airport connectivity.

Each of the targeted industries has a function within the

aerotropolis and varying levels of interaction and reliance on airport

connectivity.

To date, the Ekurhuleni

Investment Centre has registered

and facilitated over 12 large-scale

projects that are valued at billions

of rands, and which have the potential

to create approximately

287 000 jobs over the next 15

years. To enable development

in the City, there will also be

a release of significant number

of strategic land parcels.

Furthermore, Ekurhuleni is working

with the Gauteng Provincial

Government to leverage its two

Special Economic Zone licences.

Key industries for the aerotropolis

development are:

• Aerospace manufacturing and

aviation

• Logistics and distribution

• Manufacturing and high tech

• Health and life sciences

• Agri-business and food

processing

• Natural resources and energy

• Education and skills training

• Tourism and culture

• Retail

• Prolessiona I services, banking

and public administration

For more information visit our

website or email the investment

centre.

SOUTH AFRICAN BUSINESS 2017

124


Come invest

Ekurhuleni Aerotropolis


PROFILE

Qhawe Quantity Surveyors

No stranger to the construction and management consultancy field in

South Africa, Qhawe Quantity Surveyors hardly needs an introduction.

An artist's impression of the Esicabazini Youth Development Academy.

Qhawe, which means hero in isiZulu, is recognised

for the value and innovation it brings to every project

undertaken. Founded in 2006, Qhawe is primarily

a quantity surveying and project management

firm although it offers a broad range of other built

environment-related services. Managing Director

Nomaqhawe Christel Mpala established the company

when she realised there was a gap for a business

offering proactive services in the South African

built environment.

Qhawe strives to meet the expectations of clients

through provision of full turnkey solutions in the

built environment and economically viable project

engineering and construction consultancy services.

Its services are offered to primarily the public and private

sector, implementing agencies and NGO clients.

An integrated and inclusive

rural economy

Qhawe has embarked on an initiative to aid in solving

the scourge facing the country, that of rural

communities that have struggled with limited

access to quality nutrition and basic healthcare.

Quality social services are key to giving people living

in rural areas opportunities to find employment.

By 2030 the National Development Plan (NDP) aims

to ensure that rural communities enjoy better opportunities

to participate fully in the economic,

social and political life of the country and that

those citizens who work and live in these areas are

included in South Africa’s future development.

People must have access to high-quality basic services,

and rural economies must be supported by

agriculture, mining, tourism, agro-processing and

fisheries. Integration through land reform will be

an important consideration, as will infrastructure

development, job creation and poverty alleviation.

People living in rural areas should have access to

social and infrastructure services.

It is in this light that Qhawe has partnered with different

municipalities with the aim of establishing

rural development and eradication of poverty. Two

such rural developments that will attract investors

into South Africa are:

SOUTH AFRICAN BUSINESS 2017

126


PROFILE

• A proposal for local economic

initiatives to eradicate

poverty in the Hala

area and the Engcobo Local

Munincipality at large.

• The Komalume Sustainable

Village Mnini Development

on the South Coast of

Durban under eThekwini

Metropolitan Municipality.

Successfully

completed projects

Esicabazini Youth Development Academy: Qhawe

worked as project manager and quantity surveyor

for Esicabazini Youth Development Academy – a

Department of Social Development project implemented

under Umkhanyakude District Municipality.

PRASA's National Station Improvement

Programme: Qhawe provided quantity surveying

services for the improvement of 10 stations.

Renovations were done to Stanger, Burlington,

Fynnland, Pinetown, Hammersdale, Verulam and

four other stations. The project was completed on

time and within budget.

Before and after renovations for Johannesburg Social Housing Company.

Intermediary School, Inyamazwe High School and

an Early Childhood Development (ECD) programme,

which saw the construction of 10 ECD centres in the

uThukela region of KwaZulu-Natal.

Qhawe has extended its services to property development

and has started serving private clients and

mixed-use developments.

Kambo Business Square: The development valued

at over R500-million will comprise a shopping centre,

hotel, conference facilities, petrol station and truck

stop as well as residential houses in Manguzi on the

border of Mozambique.

Johannesburg Social Housing Company (JOSHCO):

In a project valued at R54-million, Qhawe changed

the facade and interiors of dilapidated buildings as

part of their conversion to social housing.

Independent Development Trust: This is a longterm

client and Qhawe has completed more than

R500-million worth of projects for the organisation

since 2009. These projects range from schools and

clinics to service stations.

Coega Development Corporation: Coega acts

as an implementation agent for various government

contracts related to infrastructure projects in

the Eastern Cape and KwaZulu-Natal. Qhawe has

participated in several Department of Education

programmes as part of a R300-million portfolio.

This include Mpumelelo Senior School, Bhevu

Mnini Development: This project on the South

Coast of KwaZulu-Natal is still in its infancy stages.

The intention is to revamp the historical tourist hub

by constructing a variety of buildings for use by

locals and visitors.

CONTACT INFO

Head office: 78 Jupiter Road,

Westville North, 3629

Branch telephone numbers:

Johannesburg: +27 11 791 6362

Durban: +27 31 266 6619

Nelspruit: +27 13 755 3292

Email: noma@qhaweqs.co.za

Web: www.qhaweqs.co.za

127 SOUTH AFRICAN BUSINESS 2017


A REGIONAL OVERVIEW OF

KWAZULU-NATAL

KwaZulu-Natal is famous for its tourism offering

that ranges from the majestic Drakensberg

mountains to the beautiful beaches along

the Indian Ocean, but the province is also

home to thousands of manufacturing concerns that

play a major role in South Africa's economy.

With two of the country’s busiest ports, Richards

Bay and Durban, the province also plays a vital role

in national logistics and international trade.

Success in international trade relies on a developed

transport and logistics infrastructure. The Dube

TradePort (DTP) helps to drive economic growth.

It is home to the King Shaka International Airport,

an agricultural greenhouse, a cargo terminal and

various other sections relating to trade, business and

transport, all on 3 000 hectares of land just north

of Durban.

The airport itself has announced new international

direct flights: 4.5-million passengers passed

through the airport in 2014/15, almost 300 000 of

whom were foreign visitors or tourists (Acsa).

DTP has attracted a R2-billion foreign direct investment

through Indian business conglomerate

Action Group and is making a solid contribution to

KwaZulu-Natal’s economy.

The province has shown considerable growth in

the business services, transport and retail sectors.

Manufacturing in KwaZulu-Natal makes up almost

a third of South Africa’s capacity.

Key sectors

Manufacturers such as Unilever, RCL and Clover

have a big presence in KwaZulu-Natal. Illovo Sugar

and the Tongaat-Hulett Group are international

companies with substantial sugarcane holdings,

manufacturing plants and downstream beneficiation.

Tongaat is also a significant property developer

in the province and is active in a number of

large projects.

The estimated export value of KwaZulu-Natal

business in 2014 was R112.4-billion. Steel, iron and

aluminium account for nearly a third of exports followed

by metal products. The third sector making a

big contribution is the automotive and automotive

components sector, with about 18%. Chemicals is

the other major export-driver.

In the base-metals and metal products sectors,

giant companies such as BHP Billitan, Hulamin,

Arcelor Mittal and Assmang have a big presence

in the province. Toyota and Bell Equipment are

important companies in the automotive sector

while the Engen Oil Refinery and dissolving pulp

SOUTH AFRICAN BUSINESS 2017

128


REGION

manufacturer Sappi are among other strategically

important entities in the provincial economy.

Manufacturing contributes 21.5% of the gross

regional product (GRP). In recent months Samsung

Electrics has chosen the province as the site of a

$20-million television factory, a Chinese company

intends establishing a multi-billion-rand steel plant

at Richards Bay and a pipe-manufacturing concern

has put R300-million into a new plant.

KwaZulu-Natal is a national leader in the forestry

and paper sector. The forest-product export sector

in South Africa is made up of paper (45.2%), solid

wood (23.3%) and pulp (28.9%). Mondi and Sappi are

both large international companies and the pulp and

paper sector makes a direct contribution to South

Africa’s balance of payments of R4.5-billion.

Mpact, the paper manufacturing and plastics

packager that was spun out of Mondi, invested a

further R200-million in its waste paper and recycling

operation at Empangeni. The company collects

more than 450 000 tons every year.

Tourism plays a vital role in the economy of

the region, with the conference and events sector

supported by excellent facilities. The jewel in

the crown is the huge Albert Luthuli International

Convention Centre Complex which hosts the annual

tourism Indaba.

The province's excellent climate lends itself

to every kind of outdoor pursuit and its excellent

beaches are always popular. Big sports events are

regularly hosted in KwaZulu-Natal which has become

something of a home to mass participation

events such as the Comrades Marathon and Dusi

Canoe race. The province has excellent game and

nature reserves.

Isimangaliso Wetland Park is a World Heritage Site

and helps to fund 80 small businesses associated

with its business as a tourist site.

RBIDZ to the gas fields of Mozambique makes this

a potentially giant project.

An area of anticipated growth – and a focus of

policy interventions – is in the marine manufacturing

sector. Sectors such as oil and gas, ship-building and

rig repair are being targeted.

Strategies to grow the so-called Oceans Economy

will dovetail with all of the plans to boost the capacity

of the harbours at Durban and Richards Bay and

to explore for gas and oil in the Indian Ocean.

Ship-building and ship repairs is an existing industry

but it is currently not very big. If oil rigs were

to start visiting the KZN coastline on a regular basis,

this industry would grow exponentially.

The decision to build a cruise-ship terminal at

the Port of Durban is a good example of the kind

of decision that is nicely in line with an "Oceans

Economy" approach.

A bill was put before the provincial legislature

in 2016 to bring into existence the KwaZulu-Natal

Maritime Institute. This will be run out of the restructured

Sharks Board and training programmes will be

coordinated with Transnet to make sure that relevant

courses are offered. Since 2012, 800 students have

been studying maritime-related courses.

In 2015 the Richards Bay Industrial Development

Zone (RBIDZ) welcomed SPS Manufacturing (Pty)

Ltd, a pipe manufacturer which will invest R300-

million in uMhlathuze, creating 87 permanent jobs.

The R1.5-billion Inkululeko Development Project,

piloted within the Ndumo community, is an integrated

multi-purpose and multi-sectoral initiative

that includes constructing high-quality education

centres, health services, modern roads and libraries,

clean running water, sustainable livelihoods,

job creation and community centres for vulnerable

children and orphans.

Economic future

Energy is the focus of several initiatives in KwaZulu-

Natal. With the announcement by national government

of its support for major gas-to-power projects,

the Richards Bay Industrial Development Zone is

in line to host a large facility. The proximity of the

Capital Pietermaritzburg

Population 10 919 100 (2015)

Area 94 361km 2

Premier Willies Mchunu (ANC)

Languages English, Zulu

129 SOUTH AFRICAN BUSINESS 2017


A REGIONAL OVERVIEW OF

LIMPOPO

Limpopo is a huge province that ranges

across the north of South Africa and shares

borders with Mozambique, Botswana and

Zimbabwe. The Great North Road passes

through the middle of the province, so places like

Polokwane (the provincial capital) and Musina

(on the northern border) are natural bases for

logistics companies.

The strategic value of these locations is being

exploited through the creation of Special Economic

Zones (SEZs).

The province has wonderful natural resources,

from coal, platinum and chrome to avocados, tomatoes

and macadamia nuts. Wonderful vistas in

very varied landscapes, golf estates and adventure

tourism underpin the tourism industry.

Limpopo’s national parks are among the country’s

places to visit for international visitors and are

among the most popular family holiday destinations

for domestic tourists.

Key sectors

Subtropical fruit like mangoes, paw-paws, litchis,

bananas and pineapples are in abundance in the

province and make up the bulk of export income.

Cattle, sunflowers, cotton, maize, peanuts, avocados,

tea, tomatoes, citrus and macadamias are

among Limpopo’s key agricultural resources.

Mining is a key sector of the provincial economy.

Limpopo has a very rich and varied mineral asset

base. Platinum occurs on both limbs of the Bushveld

Igneous Complex (BIC), and the Waterberg district is

seen as the answer to South Africa's coal needs for

the next several decades.

The provincial government reports that the

mining sector constituted 26% of Limpopo gross

domestic product (GDP) in 2013. In 2015, a Mining

Roundtable was held under the title "Limpopo's

Minerals for a Broad-Based Industrialisation Agenda"

and attended by 250 delegates from the mining

sector, universities, NGOs and government. A key

focus area is to try to ensure that 20% of procurement

in the mining sector goes to small businesses

and co-operatives.

De Beers has approved a mining infrastructure

expansion project at its diamond mine in Musina

worth R163-billion.

In August 2016, Unit 6 of the Medupi power station

came on stream. The Medupi power station

project is one of the biggest engineering projects

undertaken in South Africa. Medupi is located in

Lephalale in the far west of Limpopo, and next to an

existing power station where coal is abundant. Unit 5

is expected to come on stream in the first half of 2017.

The De Hoop Dam across the Steelpoort River

in the east of Limpopo has started supplying water

SOUTH AFRICAN BUSINESS 2017

130


131 SOUTH AFRICAN BUSINESS 2017


REGION

to rural communities who previously had to walk

to rivers to fetch water. These communities in the

Waterberg, Capricorn and Sekhukhune districts are

beneficiaries of a vast project that will also deliver

water to towns and mining operations in the area.

More than a million people will get water from the

dam, which cost approximately R3.4-billion to build.

Economic zones

In 2016 the national cabinet approved the Musina-

Makhado Special Economic Zone (SEZ) located in

the far north of Limpopo in the Vhembe region. The

location of the Musina SEZ, with links to Zimbabwe,

Botswana and Mozambique, promotes the Trans-

Limpopo Spatial Development Initiative. Logistics

will be one of the key focus areas of the SEZ. Other

sectors will include agri-processing, energy and mineral

beneficiation. De Beers' giant Venetia diamond

mine is nearby.

The national Department of Trade and Industry

(dti) is the lead agent in SEZ creation, which in turn

feeds into the national Industrial Policy Action Plan

(IPAP). SEZs are designed to attract investment,

create jobs and boost exports. The dti says that a

consortium of Chinese investors, Sino, has agreed

to put R40-billion into the Musina SEZ where they

will operate the mineral beneficiation operations.

A second application for an SEZ at Tubatse is

pending. Tubatse is in the Sekhukhune District

Municipality and hosts a number of mining operations.

The SEZ in Tubatse will focus on the beneficiation

of platinum group metals and miningrelated

manufacturing.

Tourism

Limpopo has two transfrontier conservation parks,

two World Heritage Sites, three biospheres, three

national parks, 53 provincial nature reserves and

more than 6 000 privately owned game farms. The

Limpopo Environmental Management Act was

drawn up to address specific provincial issues.

The South African Golf Tourism Association says

that up to 10% of visitors to the country are attracted

by its golf courses, and Limpopo's offering has been

extended and improved in recent years. At the highend

of the luxury offering are the Zebula Golf Estate

and Spa (west of Bela Bela) and the Legend Golf and

Safari Resort.

The growth of the Marula Festival, held annually

in February in Phalaborwa, caters more to the

local market. At least 13 000 litres of marula beer

were brewed by the 13 co-operatives that participated

and more than 14 000 people turned up for

the outdoor music concerts that were a feature of

the festivities.

Limpopo Province has very varied tourism assets

that include the bare bushveld of the north,

misty mountains in the central highlands, hot

springs, a unique cycad forest, great golf courses

and the northern part of the Kruger National Park.

The provincial government is committed to

enhancing the value of Limpopo's two World

Heritage Sites, Mapungubwe Heritage Site and

Makapans Valley.

Adventurous visitors can choose from off-road

biking, hunting, elephant rides and tough 4x4 trails.

A vast array of different cultures extend from the

Rain Queen and her people in the central districts,

to the myth-inspired art of the Venda in the north, to

the bright geometric house designs of the Ndebele

people in the Sekhukhune district.

Although most of the province’s resorts and

lodges are in private hands, the province has three

national parks, and the provincial government runs

54 nature reserves of different types. The combined

land area of Limpopo's national, provincial and private

game and nature reserves is 3.6 million hectares.

The tourism sector in the province employs

about 22 414 people.

Capital Polokwane

Population 5 726 800 (2015)

Area 125 754km 2

Premier Stanley Mathabatha (ANC)

Languages Sesotho, Tshivenda, Xitsonga

SOUTH AFRICAN BUSINESS 2017

132


Polokwane Chamber

of Business

The Chamber seeks to support and develop local businesses

and encourage investment in the city.

PROFILE

Vision

To be the home that advocates

the voice of business.

Mission

• To create value for members.

• To unlock business opportunities

for members.

• To facilitate a platform for best

business practice.

• To promote sound governance

principles by maintaining high

business ethics.

• To encourage socially responsible

corporate citizens in business.

• To provide a platform for dialogue and partnership

within business and public sector.

Policy

The policy of the chamber is to, without reference

to colour of skin, race, gender, culture or religious

conviction:

• Attend to the interests of its members as an

a-political, non-racial organisation

• Effect, maintain and promote an optimum free

market system in a predominantly capitalist

system

• Promote and protect free enterprise and protect

the interests of its members as business persons

and to act as a representative for its members

Strategy

The overall strategy for 2016 is to:

Polokwane Chamber of Business 2016 Exco.

• Reposition the Chamber as a respected contributor

to the Limpopo economy through active

engagement of key stakeholders for the promotion

of Chamber interests and benefits for its

members.

• Enhance value-add to its members through

effective networking opportunities.

• Engage on pertinent business issues within the

province.

• Enhance closer working relations between the

Chamber and its members and stakeholders.

CONTACT INFO

Physical address: No 47, 19th Industria

Street, Polokwane

Tel: +27 15 297 8057

Fax: 086 513 2644 / 015 297 8058

Email: admin@pcob.co.za

Website: www.pcob.co.za

133 SOUTH AFRICAN BUSINESS 2017


Smart City

City of Polokwane vision is alive

"The city has achieved consensus with the business community to find a way

to unlock job opportunities, find smart ways to unlock economic growth

using the land that the city owns, and effectively deal with illegal land use."

- Executive Mayor Cllr Thembi Nkadimeng

The City of Polokwane is one of the fastest

growing in the north and is bustling with

economic and business opportunities

that have made it become the centre for

regional economic development in the area.

According to the Executive Mayor Cllr Thembi

Nkadimeng, the municipal Council has successfully

put in place measures to transform the institution

into viable machinery to tackle ageing infrastructure,

water and sanitation backlog, rural electrification

and develop a solid maintenance programme for its

infrastructure.

She says there is significant progress underway

to improve the total road network in the city. "Our

commitment to development is unquestionable

in this regard," she says, adding that the city continues

to consistently invest in our people and service

offerings in order to improve how we service our clients.

The Integrated Rapid Transport System, aptly called

"Leeto la Polokwane" is progressing very well. It is intended

to provide transport infrastructure, increase

utilization of public transport services and improve

the image and acceptability of public transport. The

extension of the Nl bypass also brings with it potential

for investment opportunities.

The city is hard at work to ensure that smart connectivity

in the city is created to have access to broadband

and Wi-Fi.

The municipality will continuously implement the

Smart City Concept in the other service delivery fields

to create an encouraging environment for investment

growth. "We have achieved consensus with the business

community to find ways to unlock job opportunities,

find smart ways to unlock economic growth using

the land that the city owns and effectively deal with

illegal land use," she says.

The mayor says there is great potential for investment

in central city property management and the

entertainment sector. The arts theatre project also

brings with it massive investment opportunities in

the entertainment sector. The city centre requires

revitalization and remodelling of business operations.

"I invite potential investors to check out Polokwane

for our offering and value proposition in line with our

position on various investment opportunities that

exist in the area."


Open for business

The City of Polokwane welcomes enquiries from investors

potentially interested in exploring opportunities in the vicinity.

FOCUS

Polokwane is the largest city in and regional

capital of Limpopo Province. The city has

all the infrastructure and facilities required

for the successful operation of a business

and is considered by many to be “the vibrant capital

of the North”.

Although the city is growing rapidly, vast tracts of

industrial land and commercial spaces are still available

for development. Some of the investment opportunities

that are ripe for exploitation include:

Services to the mining sector

Polokwane is well-positioned as an operational base

for suppliers to mining companies throughout the

Province and in the wider region. A broad range

of minerals and precious stones are mined in the

Province and the commissioning of a new power

station means that there are additional opportunities

for alert suppliers.

Agricultural services and

agro-processing activities

From the earliest days, agriculture has been a key pillar

of the economy of the region and it still represents an

important component of likely future developments

for Polokwane-based food and beverage manufacturers

and service providers. Related opportunities include

milling of grains, packaging of fresh fruit, fruit and vegetable

canning, processing of tomatoes, oil extraction

from sunflower seeds and peanuts, meat processing

and the production of marula and sorghum beer.

Commercial possibilities

Economic growth in Polokwane has contributed to

population growth as more and more people move

to the city to benefit from work opportunities and

infrastructure. In turn, this presents numerous commercial

and retail opportunities including extended

banking services, the provision of office and related

services, the sale of fast foods, telecommunication

services, medical, transport and courier services to

name a few.

Franchise opportunities

Keen entrepreneurs will be eager to investigate

opportunities related to food-franchise services,

the distribution of cosmetics, the distribution of

educational aids, cleaning services, the supply of

motor spares and franchised transport services.

Tourism and adventure sports

With its physical beauty, variety of wildlife and its

proximity to Gauteng, Botswana, Mozambique and

Zimbabwe, Limpopo has much to offer tourists.

Polokwane would make a good base for any company

interested in exploring tourism and travelrelated

investment opportunities in the Province.

Some of the opportunities that could be explored

are: camping facilities, a quad-biking trail within

easy proximity of the city, a cycle race or marathon,

conferencing facilities and services aimed at

business tourists.

For information on these and other investment

opportunities in Polokwane contact the City of

Polokwane (the local municipality). More detail

can be found at www.polokwane.gov.za.

135 SOUTH AFRICAN BUSINESS 2017


A REGIONAL OVERVIEW OF

MPUMALANGA

Mpumalanga means “the place where the

sun rises” and the province lies north

of KwaZulu-Natal and shares borders

with Swaziland and Mozambique. It

constitutes 6.5% of South Africa’s land area. In the

north it borders on Limpopo, to the west Gauteng,

to the south-west the Free State and to the south

KwaZulu-Natal. The former capital Nelspruit has

been renamed Mbombela.

An ambitious plan to develop a Strategic

Economic Zone (SEZ) at Nkomazi is under way. The

area is close to both Mozambique and Swaziland

and lies on the Maputo Development Corridor

that links the economic powerhouse of South

Africa (Gauteng) with the ports and gas supplies

of Mozambique.

The Nkomazi Local Municipality has earmarked

land for the SEZ which will focus on logistics, beneficiation

and agri-processing. There are tax advantages

for investors in the SEZ and proximity to

the Mozambican port of Matola would be a large

benefit to anyone wanting to create a dry port or

logistics base.

Key sectors

The climatic contrasts between the drier Highveld

region, with its cold winters, and the hot, humid

Lowveld allow for a variety of agricultural activities.

More than 68% of Mpumalanga is used

for agriculture.

Crops include maize, wheat, sorghum, barley,

sunflower seed, soya beans, groundnuts, sugar cane,

vegetables, coffee, tea, cotton, tobacco, citrus, subtropical

and deciduous fruit. A large proportion of

South Africa's grain, citrus, sugar and soft fruits come

from Mpumalanga. The province is one of the key

exporters of macadamia nuts, a subsector that is

growing at a remarkably fast pace.

Forestry is extensive around Sabie. It is the site

of one of South Africa’s largest paper mills, the

Ngodwana mill owned by Sappi.

Natural grazing covers approximately 14% of

Mpumalanga. The main products are beef, mutton,

wool, poultry and dairy.

Extensive mining is done and minerals include

gold, platinum group metals, silica, chromite, mag-

SOUTH AFRICAN BUSINESS 2017

136


REGION

netite, zinc, antimony, cobalt, copper, iron, manganese,

tin and many more. Gold was first discovered

in Mpumalanga province in 1883 in the mountains

surrounding what is now Barberton.

Mpumalanga accounts for 83% of South Africa’s

coal production; 90% of South Africa’s coal consumption

is used for electricity generation and

the synthetic fuel industry. Coal power stations

are located close to the coal deposits. Sasol's coal

liquefaction plant in Secunda creates petroleumfrom-coal.

South Africa produces 75% of the world’s platinum,

80% of its manganese, 73% of its chrome and

45% of its vanadium. Mpumalanga has significant

resources of each of these minerals, and several others.

The Witbank coalfields are the most productive

in Africa and the province lies at the southern end of

the eastern limb of the Bushveld Igneous Complex.

Chromite, magnetite and vanadium are found in

significant quantities in the province. The ferroalloy

industry is centred on the town of Middelburg

Deposits of chromite, magnetite and vanadium

in this area are the basis of the ferro-alloy complex

in Witbank-Middelburg (in the Nkangala District

Municipality) and Lydenburg (Mashishing). Nkomati

Mine is South Africa's only pure-nickel operation.

The province's coalfields are in the south and west

of the province.

Mining contributes 21.8% to provincial Gross

Domestic Product (GDP).

Economic future

Mpumalanga aims to provide at least 2 000MW as

part of the national Renewable Energy Independent

Power Producers Procurement Programme (REIPPPP).

The Boschejskop Hydro Dam project would achieve

two goals – alleviate the water shortage in the provincial

capital of Mbombela and provide 300MW

of power.

A private investor would be asked to do the

feasibility study and then finance and construct the

facilities with two future revenue streams in prospect:

a water off-take agreement with Mbombela

and the sale of electricity to the national power

utility Eskom.

Other projects suitable for public-private partnership

include the construction of a solar park to

power the Nkomazi Special Economic Zone and a

wind power plant to be built at Sabie and Lydenburg.

Investors are sought for the development of the

Blyde River Tourism Cluster. More than a million visitors

every year look into this awe-inspiring canyon,

but they seldom stay for long. This project aims to

give the visitor something to do and a closer look

at the canyon via a cable-car trip to Blyde Lake. A

related hotel and restaurant development (and a

skywalk for another, adventurous, way of looking)

are all part of the proposal, which could be parcelled

out to a number of investors depending on their

interest or speciality.

Land is available for developers in the province's

capital city of Mbombela to create an International

Convention Centre. Conference delegates always

like to be in nice places, and the selling point here

would be to link the centre to the province's greatest

tourism assets like the Kruger National Park, the

Blyde River Canyon and God's Window. Space is also

available for the construction of a related hotel and

multi-purpose recreational facilities.

There is relatively little agri-processing that takes

place in the province, with most of the products being

exported in their raw state. The Fresh Produce

Market in Mbombela has been planned to accommodate

investors who want to start factories to

manufacture products such as juice, or packaging

firms. Land has been bought and registered for the

required use in Mbombela as the Mpumalanga

International Fresh Produce Market. Investors in

fresh produce are invited to be take advantage of

Mpumalanga's superior fruit, vegetables and nuts.

The 248ha site is near rail and road links and private

investors are sought to be partners in building

the top structure; services are being laid on by the

province.

Capital Mbombela

Population 4 283 900 (2015)

Area 76 495km 2

Premier David Mabuza (ANC)

Languages Ndebele, Swati, Zulu

137 SOUTH AFRICAN BUSINESS 2017


REGION

A REGIONAL OVERVIEW OF THE

NORTHERN CAPE

The Northern Cape is the largest of South Africa’s

provinces but has the smallest population. The

Orange River is a great green lung that runs

through the province, providing water for

grape-growers and other irrigation projects, power

through hydro-power and great opportunities for

tourism activities like river rafting. Despite the vast

distances, the province enjoys good infrastructure,

a major positive factor in persuading investors in

renewable energy to choose the province.

Within the first four bidding periods of the

national Renewable Energy Independent Power

Producer Procurement Programme (REIPPPP), 92

projects were approved – and 48 of these projects

were in the Northern Cape.

The province has many major attractions, including

its vast, open spaces, unique vegetation – notably

the beautiful spring flower spectacle that transforms

a semi-desert landscape into one of striking

colour and beauty – and the Kgalagadi Transfrontier

Park, which is famous for its lions.

The small eastern portion of the Northern Cape

Province bordering the Free State is known as the

Diamond Fields. Kimberley, which is also the capital

of the Northern Cape and the location of the

Kimberley Big Hole, is at the heart of the province’s

diamond fields. There are several diamond-mining

and historical attractions in Kimberley itself, including

the Big Hole and Kimberley Mine Museum. These

attractions make the Northern Cape an attractive

destination for visitors.

The province’s first university, Sol Plaatje, opened

its doors in 2014 and is located close to Kimberley.

The university is merging technikon courses with

traditional university degrees in one department.

It will add value to the Northern Cape economy

and make a considerable contribution to the

government-services sector.

With extensive stock and vegetable farming land,

agriculture is central to the Northern Cape economy,

and mining remains very important. Livestock including

sheep and goats form an important part of

the economy, as does horse breeding.

Major exports include fruit, especially table

grapes, and meat from the sheep and goat farming

in the province. Agriculture contributes more than

SOUTH AFRICAN BUSINESS 2017

138


REGION

its fair share to the economy, especially in terms of

employment creation. For this reason, the revitalisation

of the agriculture and agri-processing value

chain is critically important.

Initiatives like the Vaalharts Irrigation Scheme

are being prioritised to meet the needs of irrigation

across a large swathe of the province.

Economic future

Renewable energy has the potential to provide a

major boost to the economy of the province, which

has previously been mainly about agriculture, and

historically, diamonds. The REIPPPP aims to add

6 000MW to the national grid by 2020 (and 13 225MW

by 2025). The majority of the projects in the Northern

Cape (28) are using the solar photovoltaic method,

with seven employing concentrated solar power

(CSP) technology.

The Northern Cape is the natural home for the

generation of solar power. Long-term annual direct

normal irradiance (DNI) at Upington is 2 816kWh/m 2 ,

according to a survey done for Stellenbosch

University by Slovakian company GeoModal Solar.

CSP Today reports a national average that is among

the best in the world. Stellenbosch University’s Solar

Thermal Energy Research Group has six sites monitoring

irradiation levels.

The biggest solar farm so far in South Africa was

launched in March 2016 when Solar Capital presented

its 175MW farm at De Aar. Formerly famous

as the railway junction that combined the countries

two rail systems, De Aar is becoming better known

as a renewable energy hub.

The Northern Cape is also home to 12 approved

wind farms and one small (10MW) hydro-electric

project on the Orange River.

The Northern Cape Province is connected to

Namibia via the Kalahari and the Orange River Basin

Corridors, strengthening trade and transport linkages

between the two countries.

The Northern Cape has been earmarked as a

manufacturing zone for solar components. Currently

solar panels are imported. A good opportunity exists

to increase local content and the creation of the

Upington Special Economic Zone will promote this

goal. With a large number of solar projects already

underway in the province, stated interest from several

investors, and sufficiently high solar radiation

intensity to support such investment, the prospects

are good.

In the budget speech of the South African

Department of Energy in May 2016, Minister Tina

Joemat-Pettersson officially announced the procurement

of the Northern Cape Solar Parks Programme.

Some planning has already been done but the

cabinet go-ahead is significant.

The planned Upington Solar Park is the sort of

infrastructure that should reduce the cost of solar

power due to economies of scale and create an

opportunity for localisation. Private-sector investors

will be persuaded to operate IPP plants within

the park.

Feasibility plans are being drawn up by Eskom

to investigate the potential of building a massive

solar park that will generate an eighth of the county’s

electricity needs – 5 000MW – near Upington.

Sixteen square kilometres of land has been identified

and Eskom is looking for private partners. The park,

which will cost more than R150-billion, will generate

1 000MW in its first phase.

Some work has also been done on creating harbours

along the west coast of the Northern Cape.

Port Nolloth itself is today a small fishing harbour

and studies have shown that better potential exists

at nearby Boegoe Baai to develop deep-sea facilities.

The plan would incorporate both areas. Preliminary

research indicates that the project could generate

income of R2.1-billion annually by handling bulk

cargo and minerals such as manganese and iron

ore. There would be possibilities for linking the port

to the gas fields and developing ship-repair facilities.

The intention is to find a private investor or a

consortium to take the project forward.

Capital Kimberley

Population 1 185 600 (2015)

Area 372 889km 2

Premier Sylvia Lucas (ANC)

Languages Afrikaans, Setswana, Xhosa

139 SOUTH AFRICAN BUSINESS 2017


PROFILE

Sol Plaatje Local

Municipality

Sol Plaatje is a key municipality in South Africa’s largest province.

Sol Plaatje Local Municipality is located in the

Frances Baard District Municipality in the Northern

Cape Province. It includes the diamond mining city

of Kimberley and the town of Ritchie.

Sol Plaatje Municipality is named after Solomon

Tshekisho Plaatje, who was a South African intellectual,

journalist, linguist, politician, translator and writer.

Solomon Plaatje was born just outside Boshof, formerly

the Orange Free State (now Free State province).

In terms of population size, Sol Plaatje is the largest local

municipality in the Frances Baard District Municipality.

Key demographics

Population: 248 041

Population growth rate: 2.04% pa

Percentage of population with matric: 29.2%

Unemployment: 31.90% (official rate)

Main economic sectors

• Community services (33%)

• Finance (24%)

• Trade (14%)

• Mining (8%)

The flamingos of Kamfers Dam nearby Kimberley

are a popular tourist attraction.

Flagship projects/initiatives in the

municipality and the surrounds

• Infrastructure upgrading and development

• New Sol Plaatje University

• Game farming/tourism

• Fresh Produce Market Transformation Initiative

• Office space

• N12 upgrade

• Mittah Seperepere International Convention

Centre

• Renewable energy projects

• Rough diamond training

• Cluster of produce

• Transport infrastructure improvements

• Lenmed Royal Hospital and Heart Centre

• Mediclinic Gariep

• Careline Clinic - private psychiatry hospital

• Life Kimberley Hospital

• Droogfontein Phase 1 and Droogfontein Phase

2 solar PV energy plants

CONTACT INFO

Key personnel:

Mayor: Honourable Octavious

Mangaliso Matika

Municipal Manager: Mr G Akharwaray

ED – SEDP: Mrs N Tyabashe - Kesiamang

Key contact person: Lesley van Gensen,

Area Based Manager

Email: lvangensen@solplaatje.org.za

Tel: +27 53 830 6911/6100

Fax: +27 53 833 1005

Physical address: Sol Plaatje Drive,

Kimberley

Website: www.solplaatje.org.za

SOUTH AFRICAN BUSINESS 2017

140


Sol Plaatje

the place to grow your investments

The Sol Plaatje Local Municipality seeks to attract and grow investments

by steering investment into industries in which our City has a

competitive advantage. The investment strategy is therefore aimed

at gaining the optimal return on investments.

The Municipality – through its cooperation with the dti and Treasury –

facilitates the provision of various investment incentives to potential

new investors into our city.

We are pleased that we have greatly enhanced our service delivery

capabilities. These include the additional electricity capacity from Eskom

that will be used for development, the refurbishment of the old water

purifi cation plant at Riverton and Homevale Wastewater Treatment

Plant, which will provide more capacity. Our future together can only

strengthen through our mutual cooperation.

Several multi-million rand projects have also been approved for

development or have recently been developed. These will result in

a huge capital injection in infrastructure over the coming years.

Photo: Soraya Crowie

The investment environment

of the Municipality is sound and

meets the highest standards.

www.solplaatje.org.za


A REGIONAL OVERVIEW OF THE

NORTH WEST

North West is on the Botswana border

and fringed by the Kalahari desert in the

west, Gauteng province to the east and

the Free State to the south. It is known as

the Platinum Province for the wealth of the metal it

has underground.

The capital is Mahikeng (previously Mafeking), a

town that achieved a degree of fame for the famous

siege during the Anglo-Boer War.

South Africa's nuclear-research centre is located

at Pelindaba near Hartbeespoort Dam,

and is run by the South African Nuclear Energy

Corporation. The Nuclear Engineering Department

at North-West University is the only one of its kind

in the country and the National Department of

Science and Technology granted a chair in Nuclear

Engineering to NWU. Researchers are working

with Korean, US and Italian scientists on subjects

such as gas centrifuge uranium-enrichment

cascade models.

Bioethanol, biodiesel and methane gas from

waste and renewable resources are among the types

of biofuels being investigated.

As a major grain-producing area, North West

Province is well suited to supplying feed stock for

biofuel projects, but a new set of national government

guidelines has seen the emphasis in this

nascent industry shift towards finding fuel stock

from crops that are less likely to affect food security.

Key sectors

The Western Limb of the Bushveld Igneous Complex

is a geological phenomenon astonishingly rich in

minerals. The North West lies directly over most of

this formation.

Gold and uranium are found along the border

of the province with the Gauteng and Free State

(Klerksdorp and Orkney). Diamonds are mined at

Christiana, Bloemhof and Lichtenburg. Lichtenburg

is also the centre of the cement industry. Chromite

is the other major mineral mined throughout the

province, and there are several ferrochrome smelters

and other processing plants.

Other minerals found in the North West include

fluorspar, vanadium, rhodium, uranium, copper,

limestone, slate, phosphate, manganese, coal

and nickel.

The province produces 64% of South Africa's

platinum, 46% of its dimension stone and granite,

32% of its chromite and 25% of its gold.

Mining contributes 23.3% to the North West

economy.

SOUTH AFRICAN BUSINESS 2017

142


REGION

Platinum is found in the Rustenburg and Brits

regions, which produce more platinum than any

other area in the world. Employment along the

Platinum Corridor, from Pretoria to eastern Botswana,

accounts for over a third of total employment in

North West, but the depressed platinum price in

global markets has led to a reduction in production

volumes, and many workers being laid off.

The North West Province has a strong agricultural

sector with several very large companies involved

in grain. Cattle and crops such as sunflower seeds

are among the other subsectors that generate significant

income and feed large numbers of South

Africans. North West produces about one third of

the country's maize.

The manufacturing sector comprises mostly fabricated

metals, food and beverages and non-metallic

minerals such as cement and stone.

Food and beverages is the biggest subsector

contributing to the manufacturing industry. The

town of Brits has a number of companies in the

automotive components sector.

Major companies with manufacturing capacity

in the North West like Nestlé, RCL, Tydstroom and

Clover have all taken advantage of the province’s

strategic location adjacent to the business hub

of Gauteng.

Agriculture

North West's distinct climatic regions are home to

three very different types of agriculture. The dry

western region is home to large beef-cattle herds,

and this is where the growing game-ranching and

hunting industry has its base. An Absa Agribusiness

study shows that a R5-million investment in cattle

over six years makes a 4.8% return, against 27.7% for

buffalo and 45.2% for sable.

North West is sometimes referred to as the Texas

of South Africa, with some of the largest cattle

herds in the world found at Stellaland near Vryburg.

North West has approximately 1.7-million beef cattle,

representing 13% of South Africa's herd. Major

breeds include Simmentaller, Brahman, Bonsmara

and Simbra, a cross between the Brahman and

Simmentaller breeds.

The Marico region is also cattle country, while the

areas around Rustenburg and Brits are fertile, mixed

crop farming land.

Maize and sunflowers are the most important

crops and the North West is the major producer of

white maize in the country.

The eastern and north-eastern parts of the province

receive relatively good rainfall and are suitable

for the cultivation of crops. The central and southern

sections of the province are dominated by maize

and wheat farming.

One of South Africa's biggest agricultural companies

is Senwes. The company specialises in the storage

and handling of grains and oilseeds. Its extensive

silo infrastructure extends across the interior. Senwes

sells John Deere tractors.

Suidwes is based south of Klerksdorp in

Leeudoringstad. More than 90% of the shares in

the company are held by farmers. Grain handling is

the main business and there are divisions for retail (17

outlets and one animal feed depot), mechanisation,

finance and research and agricultural economics

(Terratek). Brits is the location of the headquarters

of the MGK Group, formerly Magaliesburg Graan

Kooperasie. MGK runs a plant that makes fullfat soy,

a component in animal feed.

NWK is another company with manufacturing

capacity. The Lichtenburg-based enterprise makes

liquid fertiliser (up to 10 tons per month), animal

feed (Opti Feeds), processes sunflower seeds (Epko),

and runs three grain mills. Another subsidiary, Opti

Chicks, has a capacity of 600 000 chicks per week.

NWK also deals in grain, runs several retail outlets

and has a financial arm, Univision Financial Services.

There are several milling operations in North West

Province. Masilo Mills is located in Hanneman (where

Papa Super Maize is ground) and Tau Roller Mills is

in Wolmeranstad.

Capital Mahikeng

Population 3 707 000 (2015)

Area 104 882km 2

Premier Supra Mahumapelo (ANC)

Languages

Afrikaans, Sotho, Tsonga,

Tswana, Xhosa

143 SOUTH AFRICAN BUSINESS 2017


REGION

A A REGIONAL OVERVIEW OF OFTHE

WESTERN CAPE

WESTERN CAPE

The Western Cape stretches from the dry northwestern

coast to the heavily-forested Garden

Route regions of the southern Cape via the

rugged mountains of the Cedarberg, the rolling

winelands of the Boland and the Overberg, the fertile

valleys of the Klein Karoo and the wide plains of the

Great Karoo. The province and the region are most

commonly associated with Table Mountain, which

watches over the city of Cape Town and forms a

national park of its own.

The Western Cape is very well served with infrastructure.

Three ports at Saldanha, Cape Town

and Mossel Bay serve different markets and Cape

Town International Airport and George Airport see

to air travel needs. The Cape Town International

Convention Centre is the province’s leading facility

in the events and conference field, which is an area

of growth for the province.

The major contributors to the Western Cape’s

gross domestic product (GDP) are services (58.2%),

agriculture and agri-processing (8.1%) and manufacturing

(6.9%). A traditional strength of the Cape, financial

services, makes up 10.9% of the services basket.

Saldanha on the West Coast is one of South

Africa’s busiest ports. Apart from being home to

several trawler fleets, it is the principal iron-ore

export port and is gearing itself to service the

continent’s oil and gas industry and to be a steel

manufacturing hub. Mining is becoming an increasingly

important sector, with titanium, zirconium,

phosphate and limestone being among the most

important finds in the region.

A country that is gaining investment momentum

in the Western Cape is China, with Hisense

being one of the most important investors. This

Chinese manufacturer of consumer electronics

and household appliances opened a 25 200m 2

factory in Atlantis – an area some 40km outside

of Cape Town, on the West Coast.

For many years, Cape Town was known as the

home of financial services industry with insurers

in particular choosing to house their head offices

in the city. Many of South Africa’s and Africa’s largest

retailers have their offices in and around Cape

Town, including Pick n Pay, Shoprite, Clicks and

Woolworths.

The trend is now continuing with a new generation

of companies such as Takealot and Yuppiechef.

Nearly 70% of South Africa’s wine comes from

the Winelands District area (Stellenbosch, Paarl,

SOUTH AFRICAN BUSINESS 2017

144


Robertson). A good percentage of this wine is

exported but the wine estates themselves attract

tourists which in turn boosts the leisure

industry. Tourism in the Winelands has matured

beyond day-trips from Cape Town to incorporate

wellness spas, adventure tourism and even game

farms boasting the Big Five.

Manufacturing is concentrated on processing

grapes and fruit into wine, juice, brandy, dried

and tinned fruit products. Dairy manufacturer

Parmalat has an award-winning cheese-making

facility in Bonnievale. Robertson is known for

roses and thoroughbred horses. Stellenbosch is

home to its eponymous university and houses

the headquarters of several large companies,

such as British American Tobacco.

Mossel Bay is home to South Africa’s main

gas-processing plant while George is a node of

manufacturing, trade and administration. The

Nelson Mandela Metropolitan Municipality has

facilities in George. Knysna and Plettenberg Bay

are favoured tourist destinations.

The Klein Karoo has its own wine route, and

contains the country’s Port Capital in Calitzdorp,

which hosts an annual festival to celebrate its

main product. Fruit, vegetables and ostriches are

other main products of the Klein Karoo.

Economic future

According to the provincial treasury, the fastgrowing

sectors to 2020 will be construction,

financial services (and real estate and business

services) and transport, storage and communication.

Financial services is expected to make

the biggest contribution overall.

However, the provincial government of the

Western Cape and the private sector are putting

their heads together to find out what projects

will best boost economic growth and create

jobs: it is called Project Khulisa and it is due to

run to 2019. Three sectors have been targeted

in the first phase: tourism and agri-processing

are perhaps predictable areas of focus, but a

new – and potentially very exciting – sector is

oil and gas.

Oil and gas

REGION

With the number of oil rigs passing around the Cape

on their way either to the rich fields on both sides of

Africa, this is a sector that can grow exponentially. It

has already created 35 000 formal jobs, and there are

many opportunities for trained artisans in rig repair

and other boat-related jobs. National government

has identified Saldanha Bay as a hub for rig repair.

Tourism

The sector already contributes R17-billion to the provincial

economy and jobs are created quite quickly

in this sector. There is a belief that this sector can

still contribute much more. One example is the successful

bid for the World Rugby Sevens tournament,

which Cape Town hosted for the first time in 2015.

With international visitors spending up to R10 000

each, the weekend tournament added to the city's

GDP by R539-million. Cape Town will host the event

until 2018. Plans to further boost the sector include

marketing the province as an all-year destination,

focussing on cultural and heritage tourism and

promoting more local business tourism.

Agri-processing

By playing to the Western Cape's strengths, which

include an excellent reputation for fruit and wine

in the international market, the province wants to

take the agri-processing sector beyond the R12-

billion that the sector already contributes to the

local economy. Investment in infrastructure and

support for exporters together with an improved

regulatory environment are strategies that are going

to be adopted.

Capital Cape Town

Population 6 200 100 (2015

Area 129 462km 2

Premier Helen Zille (DA)

Languages Afrikaans, English, Xhosa

145 SOUTH AFRICAN BUSINESS 2017


LISTING

INDEX

Airports Company South Africa ........................................................................................ 81 - 84

Brother .................................................................................................................................... 5, 63

Buffalo City Metropolitan Municipality........................................................................... 113 - 115

Capricorn District Municipality ................................................................................................. 129

City of Ekurhuleni.............................................................................................................. 120 - 123

City of Polokwane .................................................................................................................... 132

College of Cape Town ............................................................................................................... 94

Cummins South Africa ............................................................................................................... 61

DRA Projects .............................................................................................................................. 20

Durban Investment Promotion (DIP) ........................................................................................... 2

Eastern Cape Development Corporation (ECDC) .................................................................. 111

Export Credit Insurance Corporation (ECIC) ................................................................. 36, OBC

Future Home Energy Services .................................................................................................. 25

Human Resource Development Council of South Africa (HRDC) ........................................... 40

Kemtek .......................................................................................................................................... 7

Lesedi Nuclear Services ............................................................................................................ 27

Mancosa ..................................................................................................................................... 93

Masisizane Fund ........................................................................................................................ 42

Mondi Group South Africa ........................................................................................................ 52

Novus Holdings .......................................................................................................................... 44

Qhawe Quantity Surveyors ............................................................................................. 124, IBC

REDISA ........................................................................................................................ IFC, 28 - 33

SBS Tanks ............................................................................................................................ 66 - 70

Secur ........................................................................................................................................ 9, 90

Sol Plaatje Local Municipality ................................................................................................. 138

Southern African Wildlife College .............................................................................................. 96

Uzulu Business Solutions .......................................................................................................... 87

Verifi ............................................................................................................................................. 88

SOUTH AFRICAN BUSINESS 2017 146


The Unwavering Strength

Behind All Our Clients

Johannesburg:

505 West Avenue, 80 Brushwood, Ferndale 2160

Tel: 011 791 6362 • Cell: 082 640 5001 • Fax: 086 684 6113

Durban:

23 Jan Hofmeyer Road, Business Partners Ground Floor,

Suite 13, Westville 3630

Tel: 031 266 6619 • Fax: 031 266 5509

Nelspruit:

1 Parkin Street, The Pinnacle Building, Suite 807,

Nelspruit 1206

Tel: 013 755 3292 • Fax: 086 684 6113

Web: www.qhaweqs.co.za

Email: noma@qhaweqs.co.za

Qhawe Group of Companies:

Property Development

Designs