South African Business 2018 edition
Welcome to the sixth 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. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as sustainability and African trade provide unique insights, together with an interview with the newly elected chairman of the African Association of Automotive Manufacturers, Mr Thomas Schaefer. Another special feature focusses on an exciting project to transform South Africa’s small harbours and coastal properties. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at www.globalafricanetwork.com. 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 Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as sustainability and African trade provide unique insights, together with an interview with the newly elected chairman of the African Association of Automotive Manufacturers, Mr Thomas Schaefer. Another special feature focusses on an exciting project to transform South Africa’s small harbours and coastal properties. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. Visit www.globalafricanetwork.com for more business and investment news, opportunities and events.
Welcome to the sixth 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.
Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as sustainability and African trade provide unique insights, together with an interview with the newly elected chairman of the African Association of Automotive Manufacturers, Mr Thomas Schaefer. Another special feature focusses on an exciting project to transform South Africa’s small harbours and coastal properties.
South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at www.globalafricanetwork.com.
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
Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as sustainability and African trade provide unique insights, together with an interview with the newly elected chairman of the African Association of Automotive Manufacturers, Mr Thomas Schaefer. Another special feature focusses on an exciting project to transform South Africa’s small harbours and coastal properties.
South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. Visit www.globalafricanetwork.com for more business and investment news, opportunities and events.
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
SOUTH AFRICAN
2018 EDITION
BUSINESS
THE GUIDE TO BUSINESS AND INVESTMENT
IN SOUTH AFRICA
EASTERN CAPE PROVINCE
FREE STATE PROVINCE
GAUTENG PROVINCE
KWAZULU-NATAL PROVINCE
LIMPOPO PROVINCE
MPUMALANGA PROVINCE
NORTHERN CAPE PROVINCE
NORTH WEST PROVINCE
WESTERN CAPE PROVINCE
JOIN US ONLINE WWW.GLOBALAFRICANETWORK.COM | WWW.SOUTHAFRICANBUSINESS.CO.ZA
Commercial
Vehicles
Why Invest
in Space
OUR IMPACT is derived from our national capacity, experience
and expertise in space science and technology through six thematic focus areas:
• Earth Observation - SANSA collects, assimilates and disseminates
Earth observation data to support South Africa’s policy making,
economic growth and sustainable development initiatives. Earth
observation data is used for human settlement growth mapping,
infrastructure monitoring, as well as disaster and water resource
management. Earth observation satellite data contributes to
monitoring environmental variables in the water cycle such as
water quantity, quality, soil erosion and vegetative health which
ensures water safety and security for the country.
• Space Operations - SANSA provides global competitive space
operations and applications, tracking, telemetry and command
services while managing ground stations for international clients.
Space Operations provides world class launch support for space
missions (from Earth into our solar system) and ensures satellites
are continuously monitored when they are travelling over African
skies.
• Space Science - SANSA conducts cutting edge space science
research, development and magnetic technology innovation.
Space science research is vital for gaining a deeper understanding
of our space environment in order to protect essential
infrastructure such as power grids and communication and
navigation systems on Earth and in space. SANSA operates the
Space Weather Regional Warning Centre for Africa, providing
forecasts and warnings on space weather conditions. Extreme
space weather may impact technological systems such as
satellites, power grids, avionics and radio communication.
• Space Engineering – SANSA aims to provide access to state-ofthe-art
satellite assembly, integration and testing services, as well
as satellite systems coordination and development, to ensure
an environment conducive to industrial participation in satellite
programmes.
• Human Capital Development - SANSA aims to advance human
capital development to grow the knowledge economy and
create awareness about opportunities in engineering, science and
technology. This is achieved through scarce skills development,
summer and winter schools, the supervision of MSc and PhD
students, and teaching at partner universities.
• Science Advancement and Public Engagement - SANSA
promotes science advancement and public engagement through
participation in national science awareness events and through
using the fascination of space to drive a greater uptake of studies
in science, maths, engineering and technology.
SANSA
provides stateof-the-art
ground
station facilities and
services including
satellite tracking, launch
support, mission
control and space
navigation.
SANSA monitors
the Earth’s magnetic
field and space weather
storms to assist in
protecting technology
on Earth and in space.
Satellite imagery
helps manage food
and water security as
well as natural disasters
on Earth like floods,
droughts and fires.
In a country faced with numerous challenges in
housing, crime, poverty and the provision of basic
necessities, you may ask why invest in space?
The answer is clear.
Space investment is essential
for economic sustainability
and development!
Without space applications we would not be able to mitigate
disasters or effectively manage our resources such as water, food, land
and housing. Mobile phones, internet, GPS, ATMs, meteorological
forecasting and safe land and sea travel all rely on satellites positioned
in space. Government, industry and academia also rely on space
data to deliver on their priorities through the creation of applied
knowledge, products and services.
SANSA provides value-added products and services that are utilised
in both space and non-space applications. Space information
enables everyday decision making at all levels of society. SANSA has
contributed towards goals within the National Development Plan
(NDP) and the goals of the Department of Science and Technology
(DST) by delivering products and services to its stakeholders and the
public.
South Africa’s next earth observation satellite is an example of one of
these deliverables and is also one of the incredible opportunities to
showcase the importance of investment in space science, engineering
and technology and for South Africa to take its place in the global
space arena.
@SANSA7
South African National Space Agency
South African National Space Agency
Enterprise Building, Mark Shuttleworth Street, Innovtion Hub, Pretoria, 0087
T: 012 844 0500 | F: 012 844 0396 | information@sansa.org.za | www.sansa.org.za
Welcome
to Durban!
A lifestyle of business and pleasure together.
Facilitating sustainable investment in Durban
for the benefit of all
Invest Durban (previously DIPA) is an
entity of the eThekwini Municipality,
recommended by the Durban City Council
and organised private business as the
most appropriate vehicle to promote and
facilitate new investment into the Durban
metropolitan area.
Invest Durban’s primary objective is to
accelerate sustainable investment in
Durban for the benefit of all through the:
• Proactive investment promotion
and marketing of Durban Metro as a
premium investment destination
• Proactive communication and
marketing of the City’s large investment
projects and core strategies
• Identification and development of new
investment opportunities, especially
for previously disadvantaged groups
• Attraction, support and facilitation
for prospective foreign investors
in Durban
• Improvement in the investment and
economic development environment,
in partnership with National, Provincial,
City and Business Authorities.
Invest Durban offers FREE:
• Investment Information and
Facilitation Services
• Immigration, Import and Legal Services
• Business Establishment and Incentives
• Investor Administration Services
Doing business in Durban
Durban has been developed around a
natural ocean port, major industrial base
and scenic tourism assets which play key
roles in the city, plus across Africa.
Strategic location
The port of Durban is modern and wellequipped.
It offers investors a range of
competitive and strategic advantages. The
city has emerged as the de facto coastal
trade ‘gateway’ to Southern Africa. It boasts
the largest port in Africa, as regards value of
cargo, and is South Africa’s premier general
cargo and container port. It is positioned
to access international shipping links to the
Americas, Europe, the Persian Gulf, South
East Asia, the Pacific Rim and Australia/New
Zealand and perfectly located for the transshipment
of cargoes between Eastern,
Middle-Eastern and Western economies.
Infrastructure and business
Durban offers established and advanced
road, rail, sea, air and ICT network
infrastructure. This underpins the second
largest industrial base in SA.
Quality logistics systems include:
• Port operation facilities
• Rail network – cargo and passenger
• International airport with air cargo
facilities
• Extensive road network with national and
regional linkages
• Oil/petroleum pipeline to Gauteng and
Free State Provinces
• Gas pipeline emanating from Sasol, in
Mpumalanga province
• Metro-wide fibre-optic systems.
Durban provides a number of new
opportunity areas for investors, both large
and small.
Investment opportunities may be
categorised into the following fields:
• Agri-processing
• Auto and allied manufacturing
• ICT, BPO and shared service centres
• Medical devices, health services and
pharmaceutical manufacturing
• Logistics and maritime
All of the above driven by world-class
innovation and holistic sustainability
Invest Durban, eThekwini Municipality
11th Floor, 41 Margaret Mncadi Avenue (old Vic. Embankment),
Durban, 4001 South Africa
Tel: +27 31 311 4227 | Email: invest@durban.gov.za
Website: www.durban.gov.za
CONTENTS
CONTENTS
South African Business 2018 Edition.
Introduction
Foreword10
A unique guide to business and investment in South Africa.
Special features
An economic overview of South Africa 12
South Africa is a country of great diversity – of its population,
its landscapes and its natural resources.
Business expands into Africa 22
Manufacturing and services are targeted for export growth.
Invest in the Mountain Kingdom 28
The Lesotho National Development Corporation has
attractive projects in several sectors.
Sustainability is a new priority for business 30
The circular economy, renewable energy and energy efficiency
are creating new industries.
Skills development 34
Job-relevant training is key to economic growth.
Realising the promise of the Oceans Economy 46
South Africa’s coastline is to become a catalyst for new
business opportunities, economic growth and job creation.
Economic sectors
Agriculture 60
Agriculture companies are active on the stock exchange.
SOUTH AFRICAN BUSINESS 2018
4
O&M CAPE TOWN 2382/E
IT‘S NOT JUST THE AMAROK
DRIVING UP A HILL.
www.amarok.co.za
IT’S THE ABILITY TO
HAUL A 1-TON LOAD
UP A 45 O INCLINE.
On the outside, you’ll see the Amarok making tough look effortless. But what you don’t see is the
German-engineered TDI engine that combines 132kW of power and 420Nm of torque with
outstanding fuel efficiency. You don’t see the permanent 4MOTION® system or unique off-road
ABS, ASR and ESP that ensure a steady ride over even the harshest terrain. You see the one ton
payload being effortlessly hauled up a 45° slope, but you don’t see the under-the-skin technology
that makes tough possible.
The Amarok. Not just tough, smart.
Commercial
Vehicles
Range includes: 103kW TDI Comfortline 4x2 and 4MOTION® manual; 132kW BiTDI® Highline 4x2 and 4MOTION®, manual and automatic; 132kW BiTDI® Highline Plus 4x2 and 4MOTION®
automatic; 132kW BiTDI® Extreme 4MOTION® automatic; 165kW V6 TDI 4MOTION® automatic available in Highline, Highline Plus and Extreme.
CONTENTS
Mining 65
The South African mining landscape is changing.
Oil, gas and petrochemicals 69
The sector is alive with activity.
Energy 76
South Africa’s energy mix is becoming more diverse.
Water 84
Water infrastructure is a priority.
Engineering 88
The renewable energy sector holds great promise for
engineering firms.
Manufacturing 94
Large incentives are available to investors in manufacturing.
Automotive 100
Multi-billion-rand investments are boosting vehicle production.
Chemicals and pharmaceuticals 103
Drug research is in the spotlight.
Food and beverages 104
Consumer companies are looking to Africa for growth.
Transport 106
Investments in rail are increasing.
Business services 110
Consulting is a growth industry.
Tourism 116
Ten-million tourists visited South Africa in 2016.
Information and communications technology 126
A rural network is providing free local calls.
SOUTH AFRICAN BUSINESS 2018
6
A city so good
you’ll want to invest in it.
live | play | invest
Aerotropolis City
The City of Ekurhuleni is home to OR Tambo International Airport, Africa’s biggest and
busiest airport on the continent. The City is also considered the manufacturing hub
of the country, which boasts a significant logistics corridor along the R21 highway and
an extensive transport network across rail, road and air.
Come invest in Ekurhuleni, the Aerotropolis City.
CONTENTS
Banking and financial services 128
New banks and new stock exchanges are adding to South
Africans’ choices.
Development finance and SMME support 130
South Africa has over two-million SMMEs.
Government
South African National Government 134
Regions
Eastern Cape 140
Free State 142
Gauteng 144
KwaZulu-Natal 148
Limpopo 150
Mpumalanga 152
Northern Cape 154
North West 156
Western Cape 158
Reference
Sector contents 58
Index160
Maps
NAMIBIA
ZIMBABWE
BOTSWANA
Limpopo
Mpumalanga
Gauteng
North West
SWAZI-
LAND
Free State
KwaZulu-
Natal
MOZAMBIQUE
South African provincial map. 15
Northern Cape
LESOTHO
Detailed map of South Africa. 137
Eastern Cape
Western Cape
SOUTH AFRICAN BUSINESS 2018
8
EPC IN POWER GENERATION
Leaders in execution of turnkey engineering
in South Africa
Home-grown Lesedi Nuclear Services is a leading EPC (Engineering,
Procurement and Construction) company with extensive experience
in the execution of turnkey engineering projects, in both nuclear
and conventional environments. It has operational footprints
throughout the South African power industry.
Having completed numerous projects,
primarily at Eskom’s Koeberg Nuclear
Power Plant, construction of the
14X150MW Open Cycle Gas Turbine
Power Plant in the Western Cape,
and executing EPC contracts for the
balance of plant systems for Eskom’s
Medupi and Kusile Coal Power Plants
- still under construction - Lesedi is
well-placed to play a leading role in
offering competitive EPC proposals
to the country’s power infrastructure
industry.
Lesedi is now a Level Three B-BBEE
(Empowering supplier) company
and has registered *8EP, 9ME,
7SF certification levels with the
Construction Industry Development
Board. The company’s main
shareholder is global nuclear
company, AREVA, with the remaining
shares split between Group Five,
the J&J Group and local Lesedi
management. Since 2001, Lesedi
Nuclear Services has provided a wide
range of services to Koeberg Nuclear
Power Station. Our major involvement
has been in the supply of technical
personnel for plant upgrades (150
modifications), engineering, project
management, procurement and
maintenance.
Lesedi has a number of key
partnerships, one being our
partnership with Exosun. Exosun
is a worldwide leading supplier of
advanced, cost-effective solar tracking
solutions for ground-mounted
photovoltaic (PV) plants.
Since the partnership of Exosun
and Lesedi took place in March
2017, Lesedi has been focusing on
optimising its local supply chain
with a target of cost reduction and
an increase in local content in order
to benefit its clients and prospects.
In parallel to the progress made on
local manufacturing, Lesedi is also
focusing on optimising logistics with
local transporters and installation with
our certified installers. Due to some
uncertainty in the REIPPP in South
Africa, Lesedi is getting more involved
in private projects, and also assessing
a number of opportunities in SADC.
Lesedi’s Competencies Include:
• Project Development
• Project Management
• Construction Management
• Design Engineering
• Engineering Procurement
and Construction (EPC)
• Specialised Shutdown
Maintenance Activities
(Globally)
• Provision of Technical
Personnel
• Heating, Ventilation and
Air–Conditioning
• Power Plant Construction
• Nuclear, Gas Turbine, Coal
Power Stations, Solar Single
Excess Trucking
• Biomass, BioEnergy,
Hydrogen, Hydro, Waste-to-
Energy
LESEDI NUCLEAR SERVICES (PTY) Ltd
GET IN TOUCH
12 Edison Way, Century City, 7441,
Cape Town, South Africa
Tel: +27 21 525 1300
Fax: +27 21 525 1333
Email: lesedi@lesedins.co.za
www.lesedins.co.za / www.areva.com
*8EP Certification expected by
August 2017
FOREWORD
South African Business
A unique guide to business and investment in South Africa.
Welcome to the sixth 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.
Regular pages cover all the main economic sectors of the South
African economy and give a snapshot of each of the country’s
provincial economies. Feature articles on topical issues such as
sustainability and African trade provide unique insights, together
with an interview with the newly elected chairman of the African
Association of Automotive Manufacturers, Mr Thomas Schaefer.
Another special feature focusses on an exciting project to transform
South Africa’s small harbours and coastal properties.
South African Business is complemented by nine regional publications
covering the business and investment environment in each of
South Africa’s provinces. The e-book editions can be viewed online at
www.globalafricanetwork.com. 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
CREDITS
Publisher: Chris Whales
Publishing director:
Robert Arendse
Editor: John Young
Online editor: Christoff Scholtz
Art director: Brent Meder
Design: Colin Carter
Production: Lizel Olivier
Ad sales: Sydwell Adonis, Nigel
Williams, Gavin van der Merwe,
Sam Oliver, Gabriel Venter,
Siyawamkela Sthunda,
Vanessa Wallace, Jeremy Petersen
and Reginald Motsoahae
Managing director: Clive During
Administration & accounts:
Charlene Steynberg and
Natalie Koopman
Distribution & circulation
manager: Edward MacDonald
Printing: FA Print
DISTRIBUTION
South African Business is distributed internationally on outgoing
and incoming trade missions; to foreign offices in South
Africa’s main trading partners; at top national and international
events; through the offices of foreign representatives in South
Africa; as well as nationally and regionally via chambers of
commerce, tourism offices, trade and investment agencies,
provincial government departments, municipalities, airport
lounges and companies.
PUBLISHED BY
Global Africa Network Media (Pty) Ltd
Company Registration No: 2004/004982/07
Directors: Clive During, Chris Whales
Physical address: 28 Main Road, Rondebosch 7700
Postal address: PO Box 292, Newlands 7701
Tel: +27 21 657 6200 | Fax: +27 21 674 6943
Email: info@gan.co.za | Website: www.gan.co.za
Member of the Audit Bureau
of Circulations ISSN 2221-4194
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, Anglo American, SA Tourism, Bloomberg, Eugene
Armer, RailPictures, Trans Caledon Tunnel Authority, Paul Saad, BM
Jackson, Aveng, Philip Mostert and Shutterstock.
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.
Join us!
Advertise your organisation in this journal to reach
business and government. Contact sales@gan.co.za
SOUTH AFRICAN BUSINESS 2018
12
SPECIAL FEATURE
AN ECONOMIC OVERVIEW OF
SOUTH AFRICA
South Africa is a country of great diversity – of its population, its landscapes and its natural resources.
Great mineral wealth has underpinned the South African economy ever since the first diamond was
stumbled upon in 1867. Gold was found soon afterwards and that industry effectively saw to it that
South Africa became an industrialised nation. Now those gold mines are tapering off production but
iron ore and platinum reserves are impressively large.
Global demand for these resources, however, has
been very variable, dependent to a large extent on
the Chinese market. This is part of the reason why
South Africa’s economic growth in 2015 and 2016
was very modest.
The other reason is policy and political uncertainty.
The national government is run by the African
National Congress and its president, who is also
president of the country, Jacob Zuma. He has repeatedly
changed cabinet ministers and his decision to
fire the respected Finance Minister Pravin Gordhan
led to several ratings agencies downgrading South
Africa’s credit rating. The other historically strong
economic sector, agriculture, brought good cheer to
the overall economic picture in the second quarter
of 2017, boosting GDP growth by 2.5%. This was
because of a tremendous rally off a bad period
caused by a long-term drought. So good was the
recovery that South Africa reported record grain
crops and exports.
The grains of the central regions of the country,
together with the fruits and vegetables of
Mpumalanga and Limpopo, the wines and grapes
of the Western Cape, and the sheep and mohair
of the Eastern Cape, all contribute to a diverse and
vibrant agricultural sector. There are many strong
agricultural companies in the sector. KwaZulu-Natal
is the country’s leading sugar area, and has a strong
suite in forestry and paper production.
The other economic sector that has held up
well is automotive manufacturing and automotive
components.
13 SOUTH AFRICAN BUSINESS 2018
SPECIAL FEATURE
Trends
There are several areas in which new or revitalised
sectors are providing employment and creating new
opportunities:
• tourists are visiting South Africa in record numbers
• the successful renewable energy private investor
programme is due to be restarted
• companies are trading into Africa with considerable
success
• niche agricultural markets are booming with macadamia
nuts being the most successful. Wine and
grape exports to China also hold great potential.
• several provincial governments and investment
agencies are establishing trade relations and
study programmes with BRICS countries
• private education (at school and tertiary level) is
a boom sector
• new banking licences have been issued and several
more are in the pipeline
• new stock exchanges came on line in 2017 and
more are expected
• investment in infrastructure (especially ICT and
railways) is strong
• national government has committed to the
National Development Plan (NDP), a blueprint
for how to move the country forward. Part of that
plan entails setting up deliverable schemes, such
as the Strategic Integrated Projects.
Strategic Integrated Projects (SIPs)
The National Department of Economic Development
is responsible for economic planning. It has set
out a list of 18 major projects called the Strategic
Integrated Projects (SIPs) which are intended to spur
growth and development in a sector or geographical
area. The focus is spread across seven primary
concerns to be addressed: geographic focus (five
SIPs), spatial (three), energy (three), social infrastructure
(three), knowledge (two), regional integration
(one), water and sanitation (one).
They cover all nine provinces with an emphasis
on areas that need more investment, and focus on
economic and social infrastructure. The 18 projects
themselves contain many smaller plans and
projects, each with budgets and deadlines. These
projects are:
1. Unlocking the Northern Mineral Belt with
Waterberg as the catalyst
2. The Durban-Free State-Gauteng Logistics and
Industrial Corridor
3. South-eastern node and corridor development
4. Unlocking the economic opportunities in North
West Province
5. Saldanha-Northern Cape Development Corridor
6. Integrated Municipal Infrastructure Project
7. Integrated Urban Space and Public Transport
Programme
8. Green energy in support of the South African
economy
9. Electricity generation to support socio-economic
development
10. Electricity transmission and distribution for all
11. Agri-logistics and rural infrastructure
12. Revitalisation of public hospitals and other
health facilities
13. National school build programme
14. Higher education infrastructure
15. Expanding access to communication
technology
16. SKA and MeerKat (international radio astronomy
project)
17. Regional Integration for African cooperation and
development
18. Water and Sanitation Infrastructure Master Plan.
To illustrate how many projects are undertaken
in support of an SIP, there has been a lot of action to
support the overall goal of creating an integrated logistics
corridor between Durban and Johannesburg
(SIP 2). Projects within the SIP include:
SOUTH AFRICAN BUSINESS 2018
14
SPECIAL FEATURE
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
• a R2.3-billion container terminal at City Deep,
Johannesburg
• a R3.9-billion project to upgrade Pier 2 at the
Port of Durban
• R14.9-billion of rolling stock for the rail line
• R30.4-billion completion of the New Multi-
Product Pipeline by Transnet Pipelines
• official inauguration in 2017 of the Maluti-A-
Phofung Special Economic Zone (logistics
hub, fuel distribution depot, manufacturing) at
Harrismith in the Free State.
Geography
South Africa’s location between the Atlantic and
Indian oceans ensures a generally temperate climate.
The 2 954km coastline stretches from the border with
Namibia on the Atlantic to the border with Mozambique
in the east. The cold Benguela current sweeps along the
western coast while the warm Indian Ocean ensures
that the Mozambique/Agulhas current is temperate.
South Africa’s coastal plain is separated from the
interior by several mountain ranges, mostly notably the
Drakensberg which runs down the country’s eastern
flank. Smaller ranges in the south and west mark the
distinction between the fertile coastal strip and the dry
interior known as the Karoo.
The city of Johannesburg is located on the continental
divide, whereby water runs south of the city
towards the Atlantic Ocean while waters to the north
drain towards the north and east. Johannesburg is
1 753m above sea level.
Most of the country has summer rainfall but the
Western Cape, which has a Mediterranean climate,
receives its rain in winter. Droughts are not uncommon
and although the national average is 464mm,
most of the country receives less than 500mm of rain
every year. The Western Cape is currently experiencing
a severe drought.
15 SOUTH AFRICAN BUSINESS 2018
SPECIAL FEATURE
The Orange and Vaal rivers play important roles in
water schemes and irrigation and the Limpopo River
defines the country’s northern boundary. A number
of rivers run strongly from the Drakensberg to the sea
but South Africa has no navigable rivers.
Maize is produced in large quantities in the interior.
The dry interior mostly supports livestock in the
form of sheep and cattle. South Africa is the world
leader in mohair production. Wines and fruit are specialities
of the Western Cape while KwaZulu-Natal
and the low-lying areas of Mpumalanga are known
for sugar cane and tropical and subtropical fruits.
Limpopo is a major vegetable producer.
History
One of South Africa’s premier museums and tourist
attractions is known as the Cradle of Humankind,
pointing to the fact that what is now South Africa
has been home to the human species for thousands
of years.
Each of the country’s nine provinces presents
its official documents in the relevant regional languages
so the Western Cape, for example, presents
material in Xhosa, Afrikaans and English. The most
widely spoken languages are Zulu and Xhosa. Other
languages, in order of the number of people who
speak the language as a home language, are Pedi,
English, Setswana, Sotho, Tsonga, Swati, Tshivenda
and Ndebele.
Historically, the Nguni-speaking people (Zulu,
Xhosa, Swazi and Ndebele) settled along South
Africa’s east coast (and what is now Swaziland) while
Venda and Tsonga people made their homes south
of the Limpopo River. The Mapungubwe cultural
landscape, a UNESCO World Heritage Site, in northern
Limpopo Province illustrates a highly sophisticated
kingdom that flourished between 900 and
1300AD. The central regions of South Africa (and
Lesotho) were populated by Sotho and Tswana.
The Cape was colonised first by the Dutch, by
the Batavian Republic and by the British. Prolonged
British rule began in 1806. By the late 19th century
there were four territories in what is now South Africa:
two British colonies (Cape Colony and Natal) and two
independent Boer republics. The Anglo-Boer War was
fought between 1899 and 1901 and ultimately led
to the creation of the Union of South Africa in 1910,
uniting the four territories but ignoring the wishes of
the black population. South Africa became a republic
in 1960 and severed ties with Britain soon afterwards.
After Nelson Mandela was released and a series of
negotiating conferences were held, South Africa held
its first democratic elections in 1994. South Africa reentered
the Commonwealth after 1994.
PROVINCE CAPITAL PREMIER POPULATION 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 13 400 000 18 178km 2 R1 305.6
KwaZulu-
Natal
Pietermaritzburg Willies Mchunu 11 919 100 94 361km 2 R610.1
Limpopo Polokwane
Stanley
Mathabatha
5 800 000 125 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: STATSSA, 2016.
SOUTH AFRICAN BUSINESS 2018
16
FACT FILE: REPUBLIC OF SOUTH AFRICA
President: Jacob Zuma (African National
Congress)
Capitals: Pretoria/Tshwane (administrative,
seat of government), Cape Town (legislative),
Bloemfontein (judicial).
Provinces and provincial capitals: Western Cape
(Cape Town), Eastern Cape (Bhisho), KwaZulu-
Natal (Pietermaritzburg), Mpumalanga
(Nelspruit), Limpopo (Polokwane), Gauteng
(Johannesburg), North West (Mafikeng),
Northern Cape (Kimberley), Free State
(Bloemfontein).
Time: GMT+2
Population: 55.91-million (2016)
Population under 15 years: 30%
Population over 60 years: 8%
Life expectancy: 65.1 (female); 59.7 (male)
Size: 1 220 813km²
Major languages: South Africa has 11 official
languages but the main language of government
and business is English. Zulu, Xhosa and
Afrikaans are widely spoken.
Religion: There is no state religion. The majority
of the population are Christian but many other
religions are followed such as Islam, Jewish and
Hindu.
Currency: The rand (100 cents). R13.48 = $1
(October 2017)
Political system: South Africa is a republic with
an executive president who is appointed by the
political party that wins the majority of votes in
parliamentary elections. There are three tiers
of government: national, provincial and municipal
but the revenue raising capacity of the
latter two spheres is limited. Allocations for
health and education for example, are made
by national government and then administrated
by provinces. Eight of South Africa’s nine
provinces are run by premiers from the African
National Congress; the Western Cape is administered
by the Democratic Alliance. In 2016,
municipal elections saw the DA come to power
in some of South Africa’s biggest cities, supported
by other parties such as the Congress
of the People and the United Democratic Front.
SPECIAL FEATURE
Legal system: South Africa is a constitutional
state with separation of powers between the
legal and executive authorities. All laws must
pass muster with the Constitutional Court which
is the ultimate court of appeal on legislation.
South Africa’s legal system is based on Roman
Dutch law.
Infrastructure: Ports of Cape Town, Saldanha,
Mossel Bay, Port Elizabeth, Ngqura East London,
Durban and Richards’ Bay. International airports
at Cape Town, Johannesburg and Durban and
domestic airports at all major cities. South
Africa has 34 000km of railway track and half
of the country’s road network is paved. Most of
South Africa’s power is generated by coal-fired
power stations run by the state utility Eskom.
A vigorous programme to encourage private investment
into renewable energy began in 2012.
Resouces: Platinum, gold, iron ore, chromium,
vanadium, manganese, alumino-silicates, coal,
copper, diamonds, uranium, zirconium.
GDP: R3 055-billion (2015)
GDP growth: 0.5% (2016), projected 1.3% (2017)
(SA Treasury)
Exports: Precious and semi-precious stones,
mineral products, base metals, vehicles,
machinery, chemical products, vegetable products,
fruits, foodstuffs and beverages, paper
and pulp.
Main export markets: China, USA, Japan,
Germany, UK, India.
Imports: Machinery, mineral products, vehicles,
chemicals, original equipment, base metals,
plastics and rubber, textiles, optical and medical,
foodstuffs and beverages.
Main import markets: China, Germany, USA,
Japan, Saudi Arabia, Iran, UK, India, France,
Nigeria.
17 SOUTH AFRICAN BUSINESS 2018
MESSAGE
City of Ekurhuleni
Message from the Executive Mayor Councillor Mzwandile Masina.
In May 2016, our council embarked on a journey of social transformation,
to ensure that our residents see improved and impactful service
delivery, with accelerated access to a constant provision of quality
services. This commitment includes a focus on economic development
and increased investment.
A KEY POINT OF CONNECTIVITY
AND INDUSTRY
Councillor Mzwandile Masina
Priorities
Immediate and clear priorities include security of water and energy
supply; completion of transport infrastructure and launch of the much
anticipated bus rapid transit system – Harambee; rollout of Wi-Fi;
unleashing of strategic land parcels for development; and implementation
of our 10-point economic plan. The economic plan is a comprehensive
programme of economic growth and development, intended
to create jobs and attract investment into the city. The Aerotropolis
development is one of the key points in this economic plan.
Our city is named to
reflect the aspirations
of our residents
as a place of peace. In
this spirit, we welcome you to the
City of Ekurhuleni. Ekurhuleni is a
major hub that connects South
Africa to the world, and serves
as a key point of connectivity
and industry for the country and
continent.
Building a pact
This term of office is one in which we will focus on building a humane
pact between the city and its citizens, in which the aspirations of our
people, regardless of their current circumstances, can be given a fair
opportunity for progress. The City of Ekurhuleni can’t attain these
ambitious goals without the support of all of our stakeholders. In turn,
we commit ourselves to deliver on our mandate, efficiently, effectively
and in a way which improves the city and the state of its people.
In conclusion, let me reiterate our commitment to working
with all of our stakeholders, in growing and developing our city,
so that we can ensure increased equality and prosperity for all of
our residents.
SOUTH AFRICAN BUSINESS 2018
18
City of Ekurhuleni
Africa’s first Aerotroplis holds great promise.
PROFILE
A new identity for the City of Ekurhuleni is being
forged out of the towns and urban nodes surrounding
Africa’s biggest and busiest airport, OR Tambo
International Airport. The airport is the epicentre of
Africa’s first Aerotropolis, which will set it apart from
any other South African city and turbocharge the
regional economy.
The city has prime residential estates, glitzy entertainment
venues, mega shopping malls, lively townships,
historical villages, good schools, recreational
facilities and wide open spaces.
Ekurhuleni is a digital city and is investing in digital
infrastructure that will streamline the way it delivers
services to the community, including smart grids,
payment gateways, e-learning and e-health systems,
and closed-circuit TV to improve safety and security.
Ekurhuleni has long been known as the manufacturing
hub of the country and it is building on this
history to create a smart city that will underpin the
new economic growth trajectory. The city boasts a
world-class transport network, telecommunications
and energy grid, a youthful citizenry and a strong
financial position. Its connectivity across rail, road
and air is significant. The Gillooly’s interchange is the
busiest in the southern hemisphere, and Germiston
railway hub is one of the busiest on the continent.
The city is being developed through a series of
strategic mixed-used urban developments and
transformational projects like the GreenReef Megaproject,
S&J Industrial Estate, Glen Gory, Leeuwpoort
Housing Development, TwentyOne Industrial Park,
Carnival Junction, Lordsview Industrial Park and the
Riverfields R21 development, taking shape along the
R21 Albertina Sisulu Highway which links Ekurhuleni
to Pretoria. And the city has the infrastructure to
support investments like Prasa-Gibela, which will
see the building and maintenance of 600 new trains
for South Africa’s rail commuter network over the
next two decades. Other public-sector strategic
developments which promise to bring economic
development include the Tambo Springs inland port
and the OR Tambo Airport cargo terminal expansion.
Come LIVE PLAY INVEST
in Ekurhuleni, the Aerotropolis City.
The rebirth of Ekurhuleni is not just a dream. Several
companies have taken up residence in their new
premises and a significant logistics corridor has
mushroomed along the R21 highway. Designed
to strengthen the logistics, aviation and transport
sector, key projects are laying the groundwork for
19 SOUTH AFRICAN BUSINESS 2018
PROFILE
a powerful distribution centre and logistics node,
including Blue Sky Logistics, Jonsson Workwear, Fast
Freight, DB Schenker, Würth and DHL Supply Chain.
Additional strategic land for industry is due to be
released for development.
One of the ways in which planners will promote
competitiveness is to create an environment that
will allow disruptive innovation through technology.
One such project is the Alternative and Renewable
Energy strategy which will limit the City’s dependence
on the national grid. Ekurhuleni hopes to derive
about 10% of overall electricity supply from renewable
energy by 2021.
Over and above this there are also six mega housing
projects that are being planned across the
City over the next five years. Mega human settlements
are housing projects of 100,000 units
or more. They offer various types of housing
from fully subsidised, gap housing, social housing
and bonded units. These settlements help
the city to transform its disparate urban special
patterns, increase access to socio economic opportunities
and encourage social cohesion. These
developments offer significant opportunities for
investors across the full value chain including land
acquisition, supply of goods and services, as well
as actual implementation.
SOUTH AFRICAN BUSINESS 2018
20
Another exciting project is the redevelopment of
Germiston into an administrative headquarters for
the city, with other precincts following a similar
path. The Kempton Park-to-Germiston corridor
aims to develop a new urban core and central
business district for a metro that was formed out
of nine small towns, each with its own business
district. The precinct comprises 10 major projects
which are mostly owned by the city – the court
is owned by national government and one is privately
owned. Projects include a new administration
building, hotel and conference centre, knowledge
centre and magistrates square. Partnership
between the public and private sector will be
important in enabling these developments.
With this initiative and others like it, city planners
are expanding the horizon that will see Ekurhuleni
blossom into a prosperous region for all its citizens.
PROFILE
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: www.ekurhuleni.gov.za
21 SOUTH AFRICAN BUSINESS 2018
Business expands into Africa
Manufacturing and services are targeted for export growth.
Shoprite is a household name for many South
Africans who buy their weekly groceries at
one of hundreds of outlets across the country,
but that is an experience which many
Africans living in other parts of the continent are sharing
more and more frequently, and in large numbers.
Retailers and bankers from South Africa have been
exploring opportunities north of the Limpopo River
for many years, and they have been followed by engineering
firms, consulting companies and, more
recently, automotive manufacturers. They key attraction
is the size of the market, and the potential of that
market to grow and to grow more sophisticated in its
tastes. Africa has a population of 1.2-billion.
South African and international hotel brands are
investing strongly in Africa. Tsogo Sun has hotels in
Zambia, Tanzania, Kenya, Nigeria and Mozambique.
Sun International operates in six countries outside
South Africa. Marriott International’s acquisition of
Protea Hotels has given it an expanded footprint in
Africa.
Hyatt Hotels & Resorts will double its presence in
Africa by 2020, with new investments in Cameroon,
Senegal and Algeria, to go with its existing hotels
in Morocco and Tanzania. The group is eyeing
East Africa, citing increased infrastructure spending
there as a reason to consider investing.
While South Africa is still seen as a good staging
post for international firms to base their Africa strategies,
some industries have refined that process. In
the automotive industry, for example, head offices
in Europe and the US have mandated their South
African operations to lead the drive into Africa.
According to the CEO of Sanlam Africa
Investments, St John Bungey, the subtleties of investing
in Africa should be respected. The growth
path and the demographics are solid reasons to
invest in Africa but specific strategies are needed.
He notes three key ingredients: respect for local
knowledge, understanding the local environment
and partnering with the right local people
(Sunday Times).
SOUTH AFRICAN BUSINESS 2018
22
SPECIAL FEATURE
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.
The Export Credit Insurance
Corporation of South Africa
(ECIC) exists to help trade and
investment across borders. ECIC
provides 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.
The South African Department
of Trade and Industry (dti) plays a
key role in promoting trade between
South Africa and the rest
of Africa. South African exporters
can enroll in the dti’s training
programme, Global Export Passport Programme
(GEPP). The dti wants to expand South African exports
in manufacturing (which it wants to double
in 10 years) and services (40% of the export basket
by 2030).
The Integrated National Export Strategy (INES)
is managed by a unit called Trade and Investment
South Africa (Tisa), which is targeting emerging
markets, including the BRIC states (Brazil, Russia,
India and China).
Connecting
Intra-African trade currently stands at 16% of trade
volumes. This is in contrast to the continent of
Europe, where 60% of all trade is conducted among
European nations, and in Asia, where the figure
is 40%.
Border delays, tariffs and infrastructure are the
biggest barriers to expanding this trade. Shoprite
spends about R20 000 per week in permits, and long
waits at border posts are routine. The revamped
Chirundu one-stop border post in Zambia has
reduced transit times by a third.
There are plans to create a Tripartite Free Trade
Area covering three regional groupings across
26 countries. Extending from South Africa in the
south to Uganda and Kenya in the north, the proposed
free trade area would encompass more
than 620-million consumers in three regional
organisations: the Southern African Development
Community (SADC), the Common Market for East
and Southern Africa (Comesa) and the East African
Community (EAC).
The Sustainable Development Investment
Partnership (SDIP) comprises 30 institutions and
aims to fund 16 African infrastructure projects, valued
at more than $20-billion. The founders of the
SDIP were the World Economic Forum (WEF) and
the Organisation for Economic Co-operation and
Development (OECD).
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.
Railway upgrades will probably reap the quickest
rewards in the push to promote intra-African
trade. Fully 70% of the freight that arrives in South
Africa is delivered by road: this is both a problem
and an opportunity. One of the companies
eyeing that opportunity is South African rail operator
Sheltam Group. It has created a rail track
infrastructure funding vehicle with a dedicated
African mandate.
The Development Bank of Southern Africa and
Transnet have developed a financing scheme for
selected buyers of rail rolling stock and port equipment.
Transnet is already very active in African
countries north of the South African border.
This is part of Transnet’s Market Demand Strategy
(MDS), which aims to sell it products and services
around the world. Transnet Engineering’s Trans-
Africa Locomotive (for branch lines and shunting
yards) is being marketed to other African countries
and mining companies. Transnet Engineering plans
is establishing Maintenance Repair and Operations
centres in four African countries.
23 SOUTH AFRICAN BUSINESS 2018
SPECIAL FEATURE
Automotive opportunities in Africa
The African Association of Automotive Manufacturers chairperson Thomas Schaefer (CEO
of Volkswagen SA) explains why new African markets are vital for growth.
What are the primary goals of the AAAM?
The AAAM was founded with a strategic view
regarding all South African original equipment
manufacturers (OEMs), namely, that Africa is super
important for our future. We need Africa so that
South Africa can thrive. The AAAM is for the industry
to say how can we work with Nigeria or Kenya for
the good of both countries.
Is the intention to set up full-scale plants
of SA OEMs or to create independent
industries?
In Kenya at the moment there is no passenger car
manufacturing other than what we have started.
There is some truck manufacturing but nothing
else, so you have to start slowly. This entails starting
with semi-knock-down assembly, then medium
knock-down, and finally full-scale construction. It
is dependent on the annual volume you produce.
Indonesia and other countries in the world have
gone through this development phase. To build
up a body shop with welding and all the logistics,
you can only do that beyond production of 20 000
or 30 000 cars per year.
What is current Volkswagen operation in
Kenya?
We are planning on a thousand Polo vehicles per
year for now, but at the moment it is a little slow
because of the political aspects.
Do you have something in Nigeria?
In Nigeria we have had an operation since 2014; however,
it was dormant until recently due to the oil and
SOUTH AFRICAN BUSINESS 2018
24
SPECIAL FEATURE
forex issues. It’s getting invigorated
and we have had good meetings
with the Nigerian and South
African governments. They are
serious about curbing used car
sales – that is the drag that keeps
them off the new car market, the
used cars getting dumped.
What other markets is
Volkswagen targeting?
We are focusing on the East
African market, in countries like
Rwanda and Tanzania. Ethiopia is very promising
but their massive dam for the Nile is where they are
spending all their forex at the moment.
Are all South Africa’s OEMs looking north?
All OEMs operating in South Africa have now received
the guardianship of Africa from head office.
They are probably continuously looking up north
to see opportunities. We are not all looking at the
same countries: Ford is looking at Angola and Nissan
is looking at Nigeria.
Is the Department of Trade and Industry
(dti) encouraging an African focus?
The OEMs’ focus on Africa aligns well with the
dti’s review of the Automotive Production and
Development Programme (APDP) – the new APDP
is about regional trade, and that is the most important
aspect for the South Africa OEM industry.
If we don’t get the regional trade and regional
industry right then it’s going to be difficult in the
future. Labour and logistics costs are high but with
regional trade we could offset most of it. We are
pushing the dti for better incentives to help us to
open those markets.
Is Africa the key?
If production stays far below a million cars production
per year, we will never be profitable or
sustainable, so Africa could be the key? When you
look at the number of cars per thousand inhabitants
in most African countries there is opportunity in
places like Kenya and Nigeria. If you take away the
used car drag, there’s no reason why their market
could not grow. If Kenya came to a level like South
Africa they could achieve a market of five or six
hundred thousand.
So you are positive about the future?
Nobody else can do it better than from Africa for
Africa. Although it is a South African initiative, it
needs to be an African initiative. It must benefit the
other countries as well. We are working to refocus
the AAAM to make this a significant organisation that
will bring the auto industry further in Africa. It takes
determination to create an auto industry. If you focus
on it, it will come – there is a real opportunity.
25 SOUTH AFRICAN BUSINESS 2018
FOCUS
Export Credit Insurance
Corporation of South Africa
Celebratng 15 years of Success
Proudly supporting South African exporters and investors.
The Export Credit Insurance Corporation of South Africa (ECIC)
was established 16 years ago, in July 2001, when it was given
the mandate of filling a market gap through the provision of
medium to long-term export credit and investment guarantees
by underwriting bank loans for political and commercial risk insurance
cover, 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 formation of the ECIC. Acting as a
catalyst for private investment, the ECIC steps in where commercial
lenders are either unwilling to or unable to accept long-term risks
While the ECIC is part of a broader government policy, it remains
an independent 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.
The ECIC has recently developed new products including lines of
credit, lease and return of plant equipment. It also continues to be
a catalyst for increased lending capacity by financial institutions by
entering agreements with other export credit agencies (ECAs). In this
way, it creates a framework for both re- and co-insurance. To this end,
it has adopted a comprehensive plan of action aimed at actualising cooperation
programmes for mutual benefit in conjunction with, among
others, BRICS ECAs, Afreximbank
and African Trade Insurance.
Most African markets are considered
as uncharted territories
with challenging business environments.
Thus, the business
strategies foreign investors apply
elsewhere in the world cannot be
used in the continent.
Access to competitively
priced export credit creates the
ability for 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 are becoming
more credible.
This has a far-reaching impact
on fostering a stronger economy
and drives domestic job creation,
contributions to fixed capital formation
and the GDP, as well as
the generation of fiscal revenue.
The ECIC is committed to
sustainable business through
innovative solutions, operational
and service excellence,
business development and strategic
partnerships. In enabling
frontier markets to optimise production,
the ECIC is effectively
motivating a positive socioeconomic
impact.
SOUTH AFRICAN BUSINESS 2018
26
SPECIAL FEATURE
Invest in the
Kingdom of Lesotho
The Lesotho National Development Corporation has attractive projects in several areas.
Lesotho is richly endowed in mineral resources
such as diamonds and has abundant water
reserves. Lesotho is branded as “The Kingdom
in the Sky” owing to its beautiful sceneries
especially in winter when it has snowed or in spring
when the alpine flora of Lesotho blossom.
Lesotho is a high-altitude country, landlocked by
the Republic of South Africa and criss-crossed by
a network of rivers and mountain ranges. Lesotho
covers an area of 30 355 square kilometres and has a
population of just over two-million. The vast majority
of the population is Basotho (Lesotho natives) with
a small group of Europeans and Asians. The official
languages of Lesotho are English and Sesotho. The
country’s GDP growth rate in 2016 is estimated at 3.1%.
The country is actively seeking new investments
into a wide variety of sectors to boost the economy
and provide employment for its people.
The Lesotho National Development Corporation
(LNDC) is the main parastatal of the Government
of Lesotho charged with the implementation of
the country’s trade and industrial development
policies.
The role of the Corporation is to promote Lesotho
as an attractive investment location for both foreign
and indigenous investors. The LNDC is the first point
of contact for investors who intend to set up projects
in the manufacturing and processing industries
in Lesotho. In 2016, the LNDC received a best
IPA (Investment Promotion Agency) Award from
UNCTAD (United Nations Conference on Trade and
Development) at the 14th UNCTAD Conference.
Lesotho has progressed in moving from a predominantly
subsistence-oriented economy to an economy
exporting natural resources (diamonds and water)
and manufactured goods (excelling in textiles and
apparel). This has been driven by the country’s dutyfree
quota-free market access to major international
markets and an improving investment climate.
Priority sectors for investment include:
• Agriculture and agri-processing
• Manufacturing
• Renewable energy
• Infrastructure and construction
• Services
• Tourism
Selected projects
Agri-processing
Basotho Fruit and Vegetable Canners is a manufacturing
company that processes raw materials to produce
consumer products, canned baked beans, organic
peaches and asparagus, fruit juice and tomatoes. It
was operating as an export-oriented company with
success in exporting its products to South Africa and
other international markets (EU). The existing plant
is currently not in operation. A joint venture investment
partner is sought to operate Basotho Canners
on a management contract basis. The objective is to
resuscitate and expand the current facilities.
• Project size/cost: US$30-million
• Proposed procurement process: Joint Venture –
Management Contract
• Financing status, amount and structure
required: US$30-million in equity
• Government guarantee or involvement: Policy
sponsorship, land allocation, infrastructure, energy
and water supply, visa facilitation for scarce skills.
Manufacturing and hospitality
Makeka Mollometsi is a multi-pronged business
concern, geared towards the large-scale quality
SOUTH AFRICAN BUSINESS 2018
28
SPECIAL FEATURE
beneficiation of aloe and agave lifestyle products. An
investor is sought to inject capital to develop the world’s
highest altitude eco-distillery for the production of spirits
from agave.
Mollometsi (mollo – fire; metsi – water) is an alcoholic
beverage product. Historical and modern techniques
are used to produce and bottle a range of
premium and entry-level “Firewaters” from the agave
plant. The core business will be a Lesotho-based bottling
and distillation plant and packaging, distribution
and sales of Mollometsi.
The business is also looking to establish a fourstar
boutique hotel at a demonstration farm in Botha
Bothe, which will also have a spa and mud baths;
conferencing facility for groups of up to 100 people;
a restaurant and spirit bar for tasting and sales; a
chapel; staff housing; a library and the potential of a
nine-hole golf course. The tourism success of nearby
AfriSki Mountain Resort provides a basis for good
occupancy rates.
• Project size/cost: US$25-million
• Proposed procurement process: Joint Venture –
Management Contract
• Financing status, amount and structure
required: US$25-million in equity
• Government guarantee or involvement: Policy
sponsorship, land allocation, infrastructure, energy
and water supply, visa facilitation for scarce skills.
ICT services
The establishment of a Lesotho Call Centre: call centre
outsourcing is a big business opportunity for developing
countries with a qualified workforce and high
unemployment rates. A country like India has proven
this point. Hosting call centres for foreign organisations
creates job opportunities and grows the economy.
• Project size/cost: Unknown
• Proposed procurement process: Joint Venture –
Technical Partner
• Financing status, amount and structure
required: Equity
• Government guarantee or involvement: Policy
sponsorship, visa facilitation for scarce skills.
Infrastructure: ICT
National Broadband Network (NBN) Initiative:
for the establishment of the Lesotho Shared
Telecommunications Infrastructure Company, a
telecommunications infrastructure investor – a
strategic partner – is sought to partner with the LNDC
(anchor investor) and the Lesotho Telecommunications
service providers. The scope of the NBN is to consolidate
available telecoms infrastructure, expand
the consolidated base and make it available on an
open-access, non-discriminatory and uniform pricing
basis to a large number of service providers. To
ensure international communication price efficiency,
it is proposed to consolidate multiple international
capacity links into the NBN. The NBN will also deploy
additional ICT infrastructure to stimulate bandwidth
demand in the form of an e-government program,,
inclusive of data centre and call centre infrastructure.
Capital required by the NBN will be raised against
the shareholder balance sheets as well as long term
off-take agreements for use of infrastructure by
existing operators.
• Project size/cost: US$150-million
• Proposed procurement process: Joint Venture –
Technical Partner
• Financing status, amount and structure
required: US$150-million in equity
• Government guarantee or involvement: Policy
sponsorship, visa facilitation for scarce skills.
CONTACT INFO
Lesotho National Development Corporation
Address: Development House, P Bag A96,
Kingsway Road, Maseru 100
Contact person: Marina Bizabani, Foreign
Investment Manager
Tel: +266 22 312012
Email: bizabani@lndc.org.ls or ip@lndc.org.ls
Website: www.lndc.org.ls
29 SOUTH AFRICAN BUSINESS 2018
Sustainability is a
new priority for business
The circular economy, renewable energy and energy efficiency are creating new industries.
In June 2017 the Jeppe Park Primary School in
Johannesburg became the 250th building to receive
a green building certificate from the Green Building
Council South Africa. In the process, it became the first
school building in Africa to receive such a certificate.
The combined effect of the 250 buildings being
built in a sustainable way will lead to annual savings of
450-million kilograms of CO2, 350-million litres of water
and 380-million kilowatt hours of energy.
Awareness of sustainability has grown exponentially
in the last few years and every sector is trying to
become greener, cleaner and more efficient. Buildings
are massive consumers of energy and so it is fitting
that they have been targeted for savings, or energyefficiency
drives.
But paying attention to sustainability in every sector
in the economy makes good sense, both economically
and for the health of the planet and its inhabitants.
The idea of the circular economy is taking hold: rather
than using resources and simply throwing them away,
thought is given to the source of energy (renewable
rather than finite), the efficiency of the production
process (reducing leaks and getting optimal use of
resources) and recycling or reusing materials (rather
than dumping them).
Organisations such as the National Cleaner
Production Centre (NCPC-SA) encourages “Industrial
Symbiosis”, the use of unused or left-over resources
by one company after another company has used
them. The material itself could be material, energy,
water or waste. The last three are at the core of the
sustainability debate.
GreenCape puts the value of South Africa’s waste
economy at R15-billion but suggests that another
R17-billion could be unlocked if all of a specified 13
waste cycles were recycled (Waste Economy Market
Intelligence Report).
Household waste is managed by municipalities or
companies contracted to municipalities. Only 10% of
South Africa’s waste is currently recycled and the waste
industry is dominated by collection and landfilling. A
national goal is to double that percentage by 2019 but
finding alternatives could be an expensive process.
GreenCape suggests that there are several business
opportunities for the private sector in these
sectors: recyclables (plastics), organics, e-waste, and
construction and demolition waste.
The Southern African Energy Efficiency
Confederation (SAEEC) website refers to the areas it
covers, and listing them illustrates the scope of the
field: energy engineering and energy management,
renewable and alternative energy, power generation,
energy services, sustainability, and all related areas.
South Africa’s moves towards sustainability are
happening in a global context that includes the adoption
in 2015 of the United Nation’s 17 Sustainable
Development Goals. The Paris Agreement on climate
change in 2016 is providing further stimulus on the
road to reduced carbon emissions and reduced
reliance on fossil fuels.
These agreements set out to protect the planet
from destruction, but they also represent an opportunity
to create new markets: wind, solar, biogass, fuel
efficiency, improved roofing and window sealant
materials – the list is long.
Practical steps
South Africa embarked on an ambitious programme
to promote renewable energy with its
Renewable Energy Independent Power Producers
Procurement Programme (REIPPPP). Between 2012
and 2016 it generated nearly R20-billion in actual or
SOUTH AFRICAN BUSINESS 2018
30
SPECIAL FEATURE
committed investments into mostly solar and wind
power. The programme stalled when energy utility
Eskom baulked at paying for power it said it didn’t
need but the programme will restart in late 2017.
Nobody does renewable energy more enthusiastically
than Denmark and South Africa has entered
into multiple agreements with the northern European
country. Denmark is the world leader in wind power
and a trend-setter in energy-efficiency building codes.
According to the Danish Energy Association, the
best instruments to achieve energy efficiency are
building standards, equipment standards, obligation
schemes for energy utilities, energy audits and tax
rebates, and taxation. Architects and builders often
get ahead of targets: in 2013, 30% of all new floorspace
in Denmark was built to 2015 standards. In terms of
energy per square metre, if the country continues to
meet its targets, it will soon be at 6% of the norm in the
1970s. When a Danish building is finished, an energy
audit is done before it can be used.
The Energy Efficiency Directorate in the South
African Department of Energy aims to optimise the
energy sector through efficient use, production and
consumption of energy resources. A Draft National
Energy Efficiency Strategy was published in December
2016.
Among the directorate’s collaborations is one with
Danish Energy Management and the International
Energy Agency (IEA). An advisor from the Danish
Energy Association has been seconded to South Africa
as part of an inter-governmental energy partnership.
The Danes have created an export industry out of
their expertise in energy: in 2015 it was worth about
R140-billion and they want to expand it to “at least”
R280-billion by 2030.
GreenCape’s report on South Africa’s waste market
includes some references to broader economic opportunities
in the sustainable economy. Some examples:
Agriculture: solar-powered irrigation (SA market,
R2.9-billion)
Energy services: energy efficiency retrofitting; solar
PV systems; local manufacturing
Utility-scale renewable energy: independent power
production; rest of Africa; local manufacturing
Waste: private-public partnerships, construction
and demolition waste; growing reuse and
recycle market
Secondary materials: growing market for plastics,
metals and e-waste
Water: industrial water reuse; recycling and
resource recovery
Food value retention: better cold chain management
and waste reduction; solar thermal (in agri-processing,
the SA market potential is R3.7-billion); biogas.
TRANSITIONING INDUSTRY TO
A LOW CARBON ECONOMY
The Century City
Conference Centre in Cape
Town was host to more
than 400 delegates from
industry, business and
government who gathered
in September 2017 to discuss how to make
industry and commerce cleaner, greener and
more resource efficient.
The biennial Industrial Efficiency Conference
of the National Cleaner Production Centre
South Africa (NCPC-SA) had as its theme,
“Transitioning industry to a low carbon economy”
and offered workshops, presentations
and panel discussions on a range of resource
efficient and cleaner production (RECP)
methodologies.
The two-day programme offered information
on better use of energy, water, materials and
waste, as well as analysis of legislation and
policy that may affect business operations.
The presentation of successful case studies
formed an integral part of the conference.
The NCPC-SA is a national programme, funded
by the National Department of Trade and
Industry and hosted by the Council for Scientific
and Industrial Research (CSIR). It exists to support
industrial companies to reduce their environmental
impact through the use of RECP.
The biennial conference is offered as one
of these support mechanisms, which is why
there is no cost for attendance. Both days included
a non-commercial exhibition, allowing
delegates to interact with government and
industry programmes that may be of assistance.
SOUTH AFRICAN BUSINESS 2018
32
Protecting roofs and
stopping leaks
worldwide since 1958
PROFILE
Topps Products delivers sustainable, commercial roof and industrial roof
maintenance solutions.
Our roof coatings and roof sealants have been
protecting and sealing roofs, stopping roof leaks and
extending roof life for decades.
The Topps® company roots in this business – which
date back to 1958 – are based upon a simple concept:
product selection for your roofing needs is as
important as the company that installs it. Our roof
coating systems work together to restore, protect and
enhance the energy efficiency of commercial and
industrial buildings. These systems always include a
versatile group of surface preparation, reinforcement,
roof repair and roof coating products which all work
together to improve the performance of your roof.
Providing effective roofing solutions to contractors,
building owners and facility managers – and supporting
our full line of roof coating and roof repair products
with a dedicated support team – is our top priority.
SUPPORT TEAM
At Topps, our support team works closely with you to
ensure the project goes smoothly. Our support team
is experienced in the roofing industry and can provide
you with what you need to get the job done right.
Our roofing products are second to none, exceeding
industry standards and standing up in the harshest
of climates.
Nothing can be more important to your project’s
success than the confidence that comes
with quality roofing products, combined with the
reliability of both local installers and the manufacturer’s
resources working together.
PolyCore embedded
into Polyprene
around vent.
Fits in and forms
around vent.
At Topps, our production management team oversees
the purchase of all raw materials and the production
for every litre of roofing product produced
for you. Our business development division assists
and helps train roofing contractors with certification
seminars and on-site training worldwide.
We pride ourselves on our attention to customer
service. Strict product production guidelines involving
our own people together with local certified
independent installers helps ensure results.
Because Topps® products are used in virtually every
climate of the world, including Antarctica and others
typically referred to as the graveyard of protective
coatings, Topps® likely has the best option to serve
you. Let our staff and trained independent installers
assist you.
CONTACT INFO
Tel: 087 813 0349
Email: admin@toppsproductssa.co.za
Website: www.toppsproductssa.co.za
33
SOUTH AFRICAN BUSINESS 2018
Skills development
Job-relevant training is key to economic growth.
Twenty-two South Africans headed to
Abu Dhabi in October 2017 for the
WorldSkills International competition. The
South Africans were selected from 20 skills
areas which forms part of the WorldSkills South
Africa project and The Decade of the Artisan campaign,
both supported by the National Department
of Higher Education and Training (DHET).
Participation in the WorldSkills International
(WSI) competition showcases talented young
South Africans, but also highlights the need to
get young people enthused by the idea of becoming
artisans and technicians. The National
Development Plan (NDP) envisages South Africa
producing 30 000 artisans per year by the year
2030. The current figure is about 13 000 per year.
WSI participants from South Africa included
skilled young people in the fields of water technology,
mechatronics, IT networks, graphic design,
plumbing and heating, welding, bricklaying, cooking,
refrigeration, spray painting, hairdressing and
mobile robotics.
South Africa has one engineer to every 3 166
citizens, compared to Malaysia where the figure is
543 citizens per engineer. The Skills Development
Amendment Act is intended to improve the situation,
and not only in engineering. Several institutions
have been created to help guide policy
in skills and training, and to guide the actions of
training institutions.
Sector Education and Training Authorities (SETAs)
collect dues from companies in a particular industry
(Wholesale and Retail, Banking, Construction,
Chemical Industries, for example) 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 by the SETA to offer skills training.
In the Eastern Cape the Manufacturing,
Engineering and Related Services Authority
SOUTH AFRICAN BUSINESS 2018
34
SPECIAL FEATURE
(MerSETA) plays an important
role in supporting skills
development in the automotive
and automotive parts
sector. The authority is involved
in the National Tooling
Initiative and artisan training,
especially with regard to creating
a skilled workforce for the
Coega Industrial Development
Zone. MerSETA helped establish
the Centre of Excellence
for Welding at the Eastcape
Midlands TVET College in
Uitenhage.
A national programme
of the Local Government
SETA (LGSETA) offers learnerships
in auditing to municipal
employees.
The National Skills Authority
(NSA) works with 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.
A key element in delivering skills training are
Technical and Vocational Education and Training
(TVET) colleges, which are tasked with bridging the
skills gap in South Africa. TVET colleges are concentrating
on 13 trade areas, including bricklayers,
millwrights, boilermakers and riggers.
Large amounts of money are spent on basic
education at schools, but there has also been a
big increase in spending on TVET colleges, reflecting
the state’s concern to develop the skills
of the country’s workforce. R16.5-billion has been
allocated by national government to skills development
and infrastructure over the medium term.
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.
In KwaZulu-Natal, the Maritime School of
Excellence trains students for the Sharks Board,
Transnet Port Terminals (TPT), Transnet National
Ports Authority (TNPA) and for the wider field of
maritime and logistics employers. More than 250
students graduated in 2016 as cargo coordinators,
marine pilots, tug masters and operators of
lifting equipment.
The South African Maritime Safety Authority
(SAMSA) is investigating the feasibility of establishing
specialist maritime schools in South Africa’s
coastal provinces, including the Eastern Cape and
Western Cape.
Industry
Creative interventions from industry bodies such
as the Engineering Council of South Africa (ECSA)
are also creating new pathways for training. The
ECSA has started a programme whereby trainees
can earn certificates in specific disciplines
from a broader range of institutions. The qualifications
will be in line with the council’s Exit
Level outcomes.
Six of South Africa’s biggest construction companies
have established a R1.25-billion skills fund
which will be deployed to fund programmes that
will teach relevant skills.
The Jobs Fund (run by National Treasury)
supports several initiatives around the country.
Among them is a programme to put 135 unemployed
engineers to work, in partnership with the
Automotive Industry Development Centre Eastern
Cape (AIDC EC) and its members. Among the companies
supporting the programme are Lumotech,
Benteler, G.U.D Holdings and Johnson Contols.
In-house training is a vital component of the
sector. Training at Work is a consultancy that
specialises in offering exactly that: programmes
can be customised to suit the employer’s and the
employees’ needs. DaySeven Training is another
company that offers courses that include Business
Skills, Leadership and Workplace Readiness.
35 SOUTH AFRICAN BUSINESS 2018
SPECIAL FEATURE
Roof maintenance specialists Topps Group South
Africa has developed a detailed training module
where roofers and waterproofers can attain qualifications
while learning about the characteristics
of the products they will apply to roofing surfaces.
The programme is delivered by the company that
applies the roofing products after their staff have
been trained by Topps.
Volkswagen South Africa has several skills and
training programmes which include the Commercial
Trainee Programme, the Graduate Trainees, Further
Education Training and Wanderjahre programmes.
In the motor manufacturer’s home town of
Uitenhage, Volkswagen has five learning academies.
Open to employees and suppliers, the academies’
programmes are SETA-accredited. and offer a range
of courses available through workshops, exercises,
e-learning or on-the-job-training.
Higher education
With the inauguration of the Sol Plaatje University
(Northern Cape) and the University of Mpumalanga,
every province now has its own university, of which
there are 26 in all. The Sefako Makgatho Health
Sciences University has 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.
Universities of technology have a specific focus on
educating young people in fields that will enhance
the country’s economic performance.
Some of the courses can be very demanding.
Among the new courses on offer at the Cape
Peninsula University of Technology (CPUT) are diplomas
in geomatics (one of South Africa’s most
sought-after skills to aid surveyors, town planners and
civil engineers), clothing and textile technology, and
horticulture and landscape architecture. CPUT also
offers a range of short courses, allowing employed
people the opportunity to get up to speed in an area
of specialisation or to understand new developments
in a particular field. Sometimes an employer will ask
CPUT to structure a course for a group of employees,
for example, in ICT. These courses do not earn candidates
diplomas, but may be used to gain credits.
Traditional universities are also aware of the need
to align their courses and research programmes with
the needs of the economy.
There are three World Health Organisation (WHO)
Collaborating Centres at UWC and the Centre of
Excellence in Food Security (with Pretoria University)
is funded by the National Research Foundation
and the Department of Science and Technology.
Biotechnology and food security come together
in the Plant Biotechnology Research group at UWC,
which studies ways of developing crops that can
resist drought.
This kind of focus on specific challenges facing
society in South Africa is an example of universities
working to make their research relevant.
The University of Cape Town is offering a course
in Health Innovation that encourages talented young
South Africans to find solutions to the country’s
health problems. Another UCT degree that tackles a
specific challenge faced in the South African economy
is a master’s in Sustainable Mineral Resource
Development.
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.
SOUTH AFRICAN BUSINESS 2018
36
INTERVIEW
Empowerment through
training
Marius Alberts, Sales Manager for Topps Products Group
Africa, explains how the company’s training programme is
empowering roofers and waterproofers.
Marius Alberts
Tell us about the training you offer.
We offer training for the coating application in waterproofing.
We developed training which is focused on workmanship and
consumer satisfaction.
What underpins the training programme?
In our Corporate Social Responsibility programme, we understand
that there are challenges in South Africa. If you can understand your
challenges, that knowledge becomes power. It is not always about
the money. If you are completing the value chain and the main focus
is the end consumer, they will get the benefit, and that is a story to tell!
BIOGRAPHY
Marius Alberts received his
Diploma as Coating Inspector
Level 2 from the NACE Corrosion
Institute in 2013 and is
planning to finish Level 3 soon.
He has extensive experience in
the coating industry: Coating
and Waterproofing. For Marius,
you can see him as a life
coach. His core values you can
measure ongoing, which are:
Integrity, not being Complacent,
Honest and Transparent in
all dealings.
What is the focus of the course?
To enhance the surface preparation, workmanship, customer satisfaction
as well as product knowledge. We have done training with 42
companies; these companies offer the training to their staff. We offer
a back-to-back guarantee, which means the company takes responsibility
for the workmanship and we as Topps Products SA give the
product guarantee.
Is the training certified?
Yes, absolutely. The regulation speaks for itself. Now the consumer gets
a pillow to sleep on.
What is the next phase?
Our Corporate Social Responsibility programme is focused on uplifting
the value chain. We will be measuring the growth of every student and
report back, ongoing.
What next for Topps Products SA?
With the green movement in SA, our products fit like a glove. We see the
trend in the market for green products and there is a big appetite out
there. With our proven track record of over two decades we will roll out
in every sector of SA. We are focused on contractors and retail stores.
37 SOUTH AFRICAN BUSINESS 2018
INTERVIEW
Training at Work
Founder and CEO Patricia Chiloane is committed to rural
upliftment through skills training and education.
Patricia Chiloane
BIOGRAPHY
Patricia Malegoba Chiloane
has been involved in skills development
since the inception of
Sector Education and Training
Authorities (SETAs). After founding
her own business, Training
at Work Private College, accreditation
with the Services SETA
was achieved in 2003. Chiloane
founded a Non-Profit Organisation
called Bohlale Foundation
which has engaged in a number
of events and community projects
for women in Bushbuck
Ridge. Chiloane has dedicated
herself to skills development.
Her passion is community
development through education.
Is Training at Work officially accredited?
Training at Work is a 16-year-old accredited and registered organisation
with the Department of Higher Education as a Private College
within the TVET band. We are further accredited by 12 Sector
Education and Training Authorities (SETAs).
Do you have a particular focus on training young
people?
Training at Work has programmes that cover young people, organisations,
government and the private sector. Our focus on youth is
both in qualifications, learnerships and short courses in programmes
like SMME training, life and employability skills, career guidance,
mentorship and coaching. There are also courses in health and
welfare training, OHS training and IT-related programmes.
What do you offer an agency or government department
that needs training?
We offer them customised training based on their request in both
aligned and non-aligned programmes. In a nutshell, we are offering
credit-bearing programmes (Accredited) and workshop-based (Nonaccredited)
learning to government and agencies.
Are rural people able to gain access to the training you
offer?
Training at Work is a mobile training provider meaning we can make
our services available anywhere in the country where there is a
learner. We have also established ourselves in the rural areas of the
Lowveld.
SOUTH AFRICAN BUSINESS 2018
38
Excellent education
through innovation
VISION
Excellent education through innovation
ABOUT US
Training at Work (also inscribed as Training@Work) is a training
and consulting private company established in 2001. In 2006
the company was converted from a close corporate to a limited
private company. The company is 100% woman owned by
Patricia Chiloane.
Training at Work develops and offers a flexible range of learning
solutions that meet specific needs of individuals, government,
private and non-profit organisations. A range of these solutions
are aimed at developing the competencies of young people, local
communities, the unemployed, corporate agencies, officials in
local government and local development agencies.
Services
• Training
• Development
• Consulting
OUR PROGRAMMES
Specialised fields
• Water and Sanitation
• Traffic Training
• Professional Driving
• Information Technology
• Entrepreneurship
• Artisanal
• Agricultural Training
• Local Government
• OD-ETDP and Services
QUALIFICATIONS FOCUS TARGET
Short courses Unemployed Rural
Learnerships Employed Organisational
Artisan development Youth and young people Unorganised formations
Skills training Work readiness NPOs and CBOs
Mentoring and coaching Entrepreneurs Cooperatives
Industries
Government and state agencies
TRAINING AT WORK (PTY) LTD
Registration Number: 2006/0285516/07 • Date Registered: April 2006 • DHET registration: 2011/FE07/057
Address: 15 Leonie Street Cnr Rifle Range Winchester Hills Johannesburg 2019
Tel: +27 11 433 9318 or +27 11 433 3096 | Fax: +27 86 519 2889
Email: info@trainingatwork.co.za | Website: www.trainingatwork.co.za
The hardest workers
You shouldn’t have a
favourite, but you will.
Get more than you bargained
for, without having to bargain.
A school’s transport requirements vary as much
as the excuses scholars give for not having done
their homework. Thankfully the Caddy Crew Bus
combines flexibility, versatility and reliability to
deal with any situation. The Caddy Crew Bus is
Volkswagen’s hard-working compact people mover
that exceeds expectations. It seats 5 comfortably
and has an optional 7-seater package if you’re
looking for even more of an overachiever in your
vehicle. Add to that comprehensive standard safety
features such as Automatic Post-Collision Braking,
ESP, EDL, Hill Hold and Traction Control and you’ll
be hard pressed to find a situation on the school
run that the Caddy Crew Bus can’t handle with
ease. All of that and we haven’t even mentioned
the German-engineered technology that results in
a low cost of ownership. It’s the ultimate runabout
school shuttle, a bit of a teacher’s pet really.
With every generation the Transporter Crew Bus
just keeps getting better. Its versatile nature
means it doesn’t just adapt to any situation,
it excels at them. There are two wheelbases
available, short and long, meaning you can have
from five seats all the way up to eleven seats!
With all the extra space for people you’ll be
glad to know it has the full host of enhanced
safety features including ESP, Automatic Post-
Collision Braking and 4MOTION®, our permanent
all-wheel-drive system that delivers power to all
four wheels as required. Not only does it meet
international safety regulations, but parental
safety expectations too. Topping it off, the
Transporter Crew Bus is covered by a 2-year /
unlimited kilometre warranty and a 3-year /
60,000km Genuine AutoMotion Service Plan.
in the faculty.
O&M CAPE TOWN 2382/E
The longest serving
member of the faculty.
Member of the rugby,
netball and chess teams.
For over 70 years the Kombi has been transporting
parents, teachers, kids, teens, kids who think
they’re teens and teens who think they’re kids. It’s
South Africa’s most loved people mover and an
iconic member of our school shuttle fleet. Excellent
fuel efficiency, performance and torque are made
possible thanks to Volkswagen’s TDI engines
paired with the smooth DSG® gearbox. The Kombi
is comfortable, reliable and so spacious that you
won’t even hear the scholars at the back asking,
“Are we there yet?” Its list of safety and driver
assistance systems resembles the impressive mass
of scrolls on a head boy’s blazer: ESC, ESP, ASR,
EDL, MCB, Hill Hold Assist and Traction Control.
And it comes with a 5-year / 60,000km Genuine
AutoMotion Maintenance Plan meaning not only
are your services covered, but so is wear and tear.
The Kombi will very quickly become one of your
most loved staff members.
There is no school shuttle task too large for this
Volkswagen. The Crafter has been crafted to meet all
your scholars’ travel needs and proudly represent
your school. Sold by our network of dedicated
Commercial Vehicles Dealerships, the Crafter
is converted through Dealer partners into the
perfect transport solution for students, teams,
coaches and teachers. Its efficient TDI and BiTDI®
engines welcome out-of-town field trips, while
its up-to 23 seats allow for the entire first team,
reserves and kit to travel comfortably. The 100%
all-new Crafter will be arriving in the second quarter
of 2018, ready to get to work.
Commercial
Vehicles
INTERVIEW
Meeting national
development
imperatives
As the Head of Secretariat: Human Resource Development
Council of South Africa, Brenda Ntombela is
responsible for the overall leadership and
management of the Secretariat.
Brenda Ntombela
BIOGRAPHY
Brenda Ntombela is a graduate
of the University of Limpopo,
has a Master’s Degree in Nursing
from the University of South
Africa and has completed various
management courses. She
has worked in Higher Education
and ICT. She has served as a
Councillor for the Independent
Communications Authority of
South Africa (ICASA), is currently
a Council member at the Durban
University of Technology and on
the transformation Committee
of the South African Council
for Project and Construction
Management Professions.
What are the key goals of the Revised HRD Strategy
Towards 2030?
The HRD Strategy aims to:
• Strengthen basic education and foundation programmes in
Science, Technology, Engineering, Maths, Languages and Life
Orientation/Skills
• Expand access to quality post-schooling education and training
• Improve research and technological innovation outcomes
• Produce appropriately skilled people for the economy
• Promote a developmental/capable state
How does the plan differ from its predecessor?
Various new government priorities and plans have been developed
including the National Development Plan (NDP). Global trends and
developments have also been taken into account, particularly the
impact of the Fourth Industrial Revolution on government, business,
individuals and society. These changes required a review of the
Human Resource Development Strategy of South Africa (HRDSA)
2010 to 2030. This Revised HRD Strategy outlines the human resource
development imperatives that are needed to meet national
development imperatives.
What are the roles of various social partners in the
strategy?
Labour: Focuses on worker education including the training of shop
stewards and negotiators to improve their understanding of labour
law. Supports the analysis of requirements, including the implementation
of skills audit and identifies programmes, general education
as well as technical skills and supports training for the unemployed.
Business: Continue to work on commitments within the Skills Accord.
Implement the Chief Executive Officer initiative to support a Youth
Employment Scheme (YES) which aims to put one-million youth into
SOUTH AFRICAN BUSINESS 2018 42
internships. Provide additional funding for bursaries
as well as other skills priorities (over and above the
skills levy).
Government: Ensure that cross-departmental
blockages can be addressed. In addition, provinces
may also adopt special programmes that are specific
to the province.
Civil Society: Communities act as a direct mechanism
for channelling HRD imperatives through participation.
Community involvement enables citizens
to influence the decisions that affect their lives,
as well providing vital information on community
development issues. Communities will be able to
make decisions on impacts associated with the
implementation of the strategy. These decisions
will be made through their representatives who
participate in the HRD Council structures.
Who are the key beneficiaries?
The key beneficiaries that the revised HRD Strategy
towards 2030 is targeting are Government as key
leaders, Social partners (organised labour, business
and civil society), Women, Youth, Communities,
Vulnerable groups and Small, Medium and Micro
Enterprise (SMMEs).
What are the current projects being
implemented?
The HRD Council is currently coordinating the following
projects: Strengthening of Maths & Science
teachers education, development & implementation
of a funding model for worker education
partnerships between TVET Colleges and Industry.
INTERVIEW
Priority Programmes are:
Programme 1
Foundation Education with Science, Technology,
Engineering, Maths and Languages and Life
Orientation/Skills.
Programme 2
TVET and the Rest of the College System.
Programme 3
Higher Education and Training, Research and
Innovation.
Programme 4
Skills for the transformation of society and the
economy.
Programme 5
Development/capable state.
How does the Strategy tackle youth
unemployment?
It supports various interventions to create employment
and reiterates the need for the involvement
of all stakeholders in the HRD processes. The HRD
Council is strengthening the partnerships between
TVET colleges and industries to help reduce youth
unemployment by calling on industries to open up
doors for workplace experience for youth.
Does the Strategy deal with “radical
economic transformation”?
Yes, the HRD Strategy promotes social and economic
development. It also supports the Government’s
Medium Term Expenditure Framework (MTSF)
which focuses on a competitive economy, creation
of decent work opportunities, encouragement
of investment and promotes inclusive
growth. This allows every individual in South Africa
to access Human Resource Development
facilities and resources.
CONTACT INFO
Physical address: 6th Floor, Ndinaye House,
178 Francis Baard Street, Pretoria
Telephone: +27 12 943 3187
Mobile: +27 82 573 3716
Email: ntombela.b@dhet.gov.za
Website: www.hrdcsa.org.za
43
SOUTH AFRICAN BUSINESS 2018
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 2018
44
Realising the promise
of the Oceans Economy
Hundreds of state properties along South Africa’s coast are to become sites of new
business opportunities and catalysts for economic growth and job creation.
The Oceans Economy is a new strategic opportunity for South Africa. A broad national strategy to tackle
projects that will reap benefits quickly–Operation Phakisa– has a number of priority streams, one of
which is the Oceans Economy.
46
SPECIAL FEATURE
47 SOUTH AFRICAN BUSINESS 2018
SPECIAL FEATURE
As part of the Oceans Economy strategy
within Operation Phakisa, a unit within the
National Department of Public Works has
been created, the name of which explains
its mandate – the Small Harbours and State Coastal
Property Development unit (SH&SCPD).
The key objectives of the Small Harbours and
State Coastal Property Development unit are to:
• attract investment in state coastal maritime
infrastructure and properties
• grow businesses
• create jobs
• stimulate economic growth
• redistribute wealth.
The new unit has four main tasks: it lets out
state coastal property for economic development;
it manages state coastal properties (including all occupied
and vacant Admiralty Reserve, land parcels,
buildings, estuaries and unproclaimed harbours); it
oversees the maintenance of small harbours and
coastal properties and it is responsible for a special
intervention programme to repair and maintain 12
proclaimed fishing harbours in the Western Cape.
South Africa is bordered by the ocean on three
sides. In 2010 the ocean contributed approximately
R54-billion to South Africa’s GDP and accounted
for approximately 316 000 jobs. Studies suggest
that the ocean has the potential to contribute up
to R177-billion to GDP and between 800 000 and
one-million direct jobs.
A series of investment conferences were
launched in each of South Africa’s coastal provinces
in 2017, introducing the investors community
to “Small Harbours and State Coastal Property
Development”. A wide range of sectors in the
Northern Cape, Western Cape, Eastern Cape and
KwaZulu-Natal are being targeted for investment.
The scheme aims to attract a minimum of R12-
billion in investment proposals, generate over 2 000
job opportunities in the short to medium term and
500 permanent jobs over the long term. The products
generated should be viable and contribute
to growing the economy, small businesses should
have a chance to be part of large-scale manufacturing
and construction initiatives, and the regularisation
of business activities along the coastal
belts will promote increased revenue for local
municipalities through the collection of rates and
municipal services.
The country’s 2 800km of coastline already supports
many communities and businesses but the potential
to increase and improve yields is enormous.
At the moment, there are more than 300 businesses
leasing state-owned land in sectors ranging from
mining, farming and fishing to logistics, leisure and
retail. The SH&SCPD unit wants to increase these opportunities
in partnership with other national government
departments such as National Treasury, the
Department of Agriculture, Forestry and Fisheries
and the Department of Environmental Affairs, provincial
governments, district municipalities and
local municipalities.
Several priority projects have been identified,
but the scope for further smaller projects is huge.
Much will depend on the initiative of local business
people and local municipalities.
The first five priorities identified under the
project are:
1. development of the harbour at Port Nolloth,
Northern Cape
2. development of the harbour at Port St Johns,
Eastern Cape
3. development of a new harbour at Port Edward,
KwaZulu-Natal
4. repair and maintenance of proclaimed fishing
harbours, Western Cape
5. one priority project per coastal municipality (on
Public Works land).
State coastal land and buildings will be available
to private-sector investors to achieve any of the
following objectives: expand an existing business;
create a new business; stimulate the local economy;
create new jobs; generate revenue; deepen economic
transformation.
Investment proposals will be evaluated on a set
of criteria that include:
• scale of investment
• projected growth of business and turn over
• retention and creation of jobs
• degree of empowerment
• project revenue
• appropriateness with regard to zoning
• commitment to support small, medium and
micro-enterprises (SMMEs) and localisation.
SOUTH AFRICAN BUSINESS 2018
48
SPECIAL FEATURE
Local economic development
Economic sectors that have been identified as suitable
for local economic development through investment
are Education and Training; Renewable
Energy; Farming; Fish Processing and Packaging;
Food and Beverages; Hospitality; Infrastructure
Development; Logistics; Maintenance and Repair
(Vessels and Harbour Infrastructure); Manufacturing
and Engineering Services; Mining; Pipelines and
Pump Houses; Rescue, Safety and Security; Sport
and Recreation; Tourism; Transport (Commercial and
Leisure); Water and Waste Management.
The range of sectors and business opportunities
available to potential investors into the Small
Harbours and State Coastal Property Development
project is wide. They include:
• Water theme parks
• Fishing and fish processing
• Fuel supply
• Special Economic Zones
• Desalination
• Energy production
• Caravan parks/holiday resorts
• Shipwreck museums
• Yacht mole facilities
• Transport (ferries and water taxis)
• Energy production
• Public beaches
• Slipways
• Warehousing
• Breweries and distilleries
• Aquaculture
• Mariculture
• Small ship/boat-building
• Ship maintenance and repairs
• Restaurants
• Retail
• Fish processing factories
• Offices
• Tourism
• Ice-making and supplies
• Education (Maritime and Aquaculture Training
Centres)
• Renewable energy
Small harbours
Small harbours can play a big role in driving new
economic activity. Small harbours are also important
in terms of safety, security and safeguarding the territorial
integrity of the South African state.
As a first step in the small harbours programme,
12 Proclaimed Fishing Harbours in the Western Cape
were identified and work began on a series of projects
to start the revival process: repairing slipways,
towing away sunken vessels and dredging. The repair
and maintenance project should be completed
by March 2019.
Many more creative and value-adding interventions
lie ahead, and are expected to be undertaken
49 SOUTH AFRICAN BUSINESS 2018
SPECIAL FEATURE
even in areas that are currently not Proclaimed
Fishing Harbours. South Africa’s four coastal provinces
have as many as 50 potential and existing unproclaimed
harbours. There is a particular emphasis
on developing assets beyond the Western Cape,
traditionally the home of maritime activity.
The key is to use small harbours to stimulate
the local economy. Activities to promote primary
maritime activity could include:
• infrastructure to support fishers: processing, ice
production, cold storage
• infrastructure for boat-building and repair
• additional berthing and launching facilities
• new recreational fishing points
• access to better amenities for fishers.
Business opportunities that might work at a
small harbour include ice-making, desalination,
yacht mole facilities, water taxis and a variety of
tourism ventures.
Tourism could be promoted through relatively
simple interventions such as:
• improved pedestrian access
• cleaning and maintenance
• policing
• stalls or shelters to sell crafts
• partnerships with developers to develop
restaurant, curio shops, retail, maritime/marine
museum or wreck museum and accommodation
options
• infrastructure that allows for water recreation
and sports.
Steps are being taken to include the country’s
small harbours as national assets in terms of the
Government Immovable Assets Management
Act (GIAMA). DPW is the custodian of the state’s
immovable assets.
The unit intends implementing the Spatial and
Economic Development Frameworks (SEDFs) for the
12 proclaimed fishing harbours which were completed
in 2014 and develop SEDFs for the remaining
small harbours along South Africa’s coastline.
An audit of all state coastal reserves needs to
be done, and land for aquaculture projects is to be
made available for these enterprises. Short-term
leases within harbours are also to be converted to
three-to-five-year leases so that business owners
can have better security of tenure, allowing them
to plan and expand.
The 12 existing and Proclaimed Fishing Harbours
are all in the Western Cape. Outside the Western
SOUTH AFRICAN BUSINESS 2018
50
SPECIAL FEATURE
Cape, the Small Harbours and State Coastal Property
unit has plans in hand for priority projects at nine
locations in three provinces:
• Northern Cape: Port Nolloth; Hondeklip Bay and
Kleinsee.
• Eastern Cape: Port St Johns; Port Alfred and Gonubie.
• KwaZulu-Natal: Port Edward; Hibberdene and
Port Shepstone.
Operation Phakisa
Operation Phakisa is a national plan that targets
sectors that can best achieve quick returns in terms
of growth and job creation. Operation Phakisa
falls under the National Department of Planning,
Monitoring and Evaluation and is aligned with the
National Development Plan (NDP) 2030.
The plan seeks to get things done quickly.
Phakisa mean “hurry up” in SeSotho and is adopted
from the Malaysian method of delivering economic
transformation, “Big Fast Results”. That operation
addressed Malaysia’s key priorities such as poverty,
crime and unemployment. It involved setting up
clear targets and following up with monitoring process
and making the results public. The Malaysian
government registered impressive results within a
short period.
In the South African plan, there are eight steps.
Various knowledgeable and relevant people from
the public and private sectors, academia as well as
civil society organisations are brought together to
collaborate in “laboratories” so there is, for example,
a Health Lab, an Education Lab and an Oceans
Economy Lab. From these sessions, detailed plans
are developed with timelines and delivery dates.
The Oceans Economy has been chosen as one
of the key sectors for Operation Phakisa because of
the massive opportunity to create value that resides
onshore and offshore. There are five target areas
within the Oceans Economy strategy:
• aquaculture
• offshore oil and gas
• marine protection and governance
• marine transport and manufacturing
• Small Harbours and State Coastal Property.
51 SOUTH AFRICAN BUSINESS 2018
SPECIAL FEATURE
Northern Cape
The Northern Cape has a coastline of 313km but
the economic value of this asset has barely been
touched, despite a growth in the abalone industry in
recent years and some fishing and lobster operations.
The province has been allocated an increased
quota for landing fish (primarily hake) which makes
Port Nolloth more attractive as a site for investors in
fish processing. A pilot abalone ranching project located
south of Port Nolloth will start operating soon.
Bigger plans are under way to convert Port
Nolloth into a deepwater port capable of receiving
large vessels. Both a pre-feasibility study and
a follow-up Gap Analysis have been done, and the
plans have been registered with the provincial and
national Treasuries. In terms of the Small Harbours
and State Coastal Property Development project,
plans for Port Nolloth include the creation of a waterfront
for retail and tourist activity, expanding fishing
and aquaculture, and developing a boat-building
and maintenance industry.
The Namakwa District Municipality is one of five
district municipalities in the Northern Cape and the
only one with access to the coast. Each of the three
coastal local municipalities within Namakwa DM
will be the focus of a project on Public Works land,
brokered by the Small Harbours and State Coastal
Property Development unit.
Priority projects
Port Nolloth: a new harbour development with
economic activities such as alluvial mining, boatbuilding
and maintenance, fishing and aquaculture
and the development of a waterfront.
Hondeklip Bay: development of coastal property;
with economic activities such as alluvial mining,
aquaculture and fishing.
Kleinsee: development of coastal property; with
economic activities such as aquaculture and the
creation of an economic zone.
Northern Cape Provincial Government
Department of Economic Development and
Tourism: www.economic.ncape.gov.za
Namakwa District Municipality
Website: www.namakwa-dm.gov.za
Coastal local municipalities: Richtersveld LM;
Nama Khoi LM; Kamiesberg LM.
Coastal assets include: Alexander Bay, Port
Nolloth, Hondeklip Bay, Koingaas and Kleinzee.
SOUTH AFRICAN BUSINESS 2018
52
Western Cape
The Port of Cape Town (general trade), Saldanha
Bay (exportation of iron ore and trawler fleets),
Mossel Bay (gas and trawler fleets) and Simon’s
Town harbour (naval headquarters) are major port
facilities underpinning the maritime sector in the
Western Cape.
The Small Harbours and State Coastal Property
Development project has committed to a programme
of repair and maintenance of the Western
Cape’s 12 Proclaimed Fishing Harbours. In addition,
a capital and maintenance programme valued at
R400-million has been outlined.
Several of the smaller harbours being targeted for
these repair projects and for further development
fall within the metropolitan area of the City of Cape
Town; the others are distributed across four of the
province’s five district municipalities.
Saldanha is a base for deep-sea trawling operators.
The port of Mossel Bay is the region’s fishing
industry base with facilities for fleet maintenance
and for processing catches.
The Harbour Road development at Kleinmond
near Hermanus has seen the area leading to the
sea near the slipway upgraded and transformed:
roadside trees shade coffee shops and traders, and
bookshops and restaurants line the cobbled road
leading to the water’s edge. Several new apartments
are for sale or available for holiday rental. This kind
of upmarket development will not suit every small
harbour, jetty or cove along the coast of South Africa,
but it highlights what can be done with a bit of
imagination and intelligent partnerships between
public landowners and private developers.
Priority projects
The unit will implement the Spatial and Economic
Development Frameworks (SEDFs) for the 12
Proclaimed Fishing Harbours of the Western Cape
which were completed in 2014. Various projects
are at different stages in the development pipeline.
On the West Coast there is Lamberts Bay, Laaiplek,
St Helena and Saldanha Bay. Within the City of Cape
Town lie Hout Bay and Kalk Bay and around False Bay
is Gordons Bay. Further east are Hermanus, Gansbaai,
Struisbaai, Arniston and Stilbaai. Each of these
SPECIAL FEATURE
harbours has economic activity to a greater or lesser
extent, but upgrades and diversification will serve
them (and potential investors) well.
By way of example, budgeted amounts for repairs,
upgrades, dredging and security for Hout Bay
harbour for the period 2015-2018 are set at R14.4-
million. Gordons Bay harbour is to have some of
its access roads rerouted to create separate zones
for operations and tourism/commerce. At Kalk Bay
harbour the focus is on creating a dedicated area
for small-scale fishers which will also create new
cold-storage facilities.
Western Cape Provincial Government
Department of Economic Development and
Tourism: www.westerncape.gov.za/dept/edat
City of Cape Town
Website: www.capetown.gov.za
Proclaimed Fishing Harbours: Hout Bay, Gordons
Bay and Kalk Bay.
West Coast District Municipality
Website: www.westcoastdm.co.za
Coastal local municipalities: Matzikama LM;
Cederberg LM; Bergriver LM; Saldanha Bay LM;
Swartland LM.
Proclaimed Fishing Harbours: Lamberts Bay,
Laaiplek, St Helena, Saldanha Bay.
Other coastal assets include: Doring Bay, Elands
Bay, Ysterfontein.
Overberg District Municipality
Website: www.odm.org.za
Coastal local municipalities: Overstrand LM; Cape
Agulhas LM.
Proclaimed fishing harbours: Hermanus, Ganbsaai,
Struisbaai.
Other coastal assets: Kleinmond, Hawston, Arniston.
Eden District Municipality
Website: www.edendm.co.za
Coastal local municipalities: Hessequa LM; Mossel
Bay LM; Knysna LM; Bitou LM.
Coastal assets include: Port of Mossel Bay,
Plettenberg Bay, Knysna lagoon and jetties, Stillbaai
and Witsand.
53 SOUTH AFRICAN BUSINESS 2018
SPECIAL FEATURE
Eastern Cape
The Eastern Cape is perfectly positioned to take advantage
of the new interest in developing a maritime
economy. The province has 800km of coastline, three
ports, two Industrial Development Zones and an
academic community geared to maritime research.
The Eastern Cape’s maritime sector is anchored by
its three large ports in the metropolitan municipalities
of Buffalo City (Port of East London) and Nelson
Mandela Bay (Port Elizabeth and Ngqura). The Nelson
Mandela University has established a campus for
Ocean Sciences.
The ports of East London and Ngqura serve
Industrial Development Zones, the ELIDZ and the
Coega IDZ. Apart from attracting foreign direct investment
and boosting employment, IDZs play a
role in helping to add new sectors or subsectors to
an economy.
Beyond the metropolitan municipalities, three
district municipalities host other coastal properties,
existing small harbours or areas that could become
small harbours.
The tourism potential of the sandy beaches along
the Eastern Cape coastline is already well known.
With investment and targeted projects, some of the
“hidden gems” among the small harbours, bays and
coastal properties may turn out to be providers of
income and improved turnover in unexpected ways.
Priority projects
Port St Johns: development of a new harbour and
development of coastal property, with economic
activities such as a new economic zone, fishing and
aquaculture and the establishment of a waterfront.
Port Alfred: development of coastal property, with
economic activities such as tourism and aquaculture.
Gonubie: development of coastal property, with
economic activities such as a mini-waterfront, leisure
activities and recreation.
Eastern Cape Provincial Government
Department of Economic Development,
Environmental Affairs and Tourism:
www.dedea.gov.za
Nelson Mandela Bay Metropolitan
Municipality
Website: www.nelsonmandebay.gov.za
Assets: Ports of Port Elizabeth, Ngqura.
Sarah Baartman District Municipality
Website: www.sarahbaartman.gov.za
Coastal local municipalities: Greater Kei LM;
Sundays River LM; Kouga LM; Ndlambe LM.
Coastal assets: Jeffreys Bay, Port St Francis,
Port Alfred.
Buffalo City Metropolitan Municipality
Website: www.buffalocity.gov.za
Assets: Port of East London, Gonubie.
OR Tambo District Municipality
Website: www.ortambodm.go.za
Coastal local municipalities: King Sabata
Dalindyebo LM; Nyandeni LM; Port St
Johns LM; Ingquza LM; Mbizana LM.
Coastal assets: Port St Johns, Mcwasa,
Hole in the Wall.
Amathole District Municipality
Website: www.amathole.gov.za
Coastal local municipalities:
Ngqushwa LM; Great Kei LM;
Mnquma LM; Mbashe LM.
Coastal assets: Morgan Bay,
Kei Mouth.
SOUTH AFRICAN BUSINESS 2018
54
SPECIAL FEATURE
KwaZulu-Natal
With its two important ports, KwaZulu-Natal is very
much a maritime province. Between them, Durban
and Richards Bay handle 78% of South Africa’s
cargo tonnage. Richards Bay, apart from being the
country’s main site for the export of coal, is also a
registered Industrial Development Zone (IDZ) and
consequently attracts a range of investors.
The state owns property adjacent to many of
the province’s fine beaches and these will be used
to further develop tourist infrastructure, primarily
on the South Coast. The great annual Sardine Run
is one of the highlights on the tourism calendar
and generally involves thousands of individuals
plunging into the surf in search of silvery treasure.
Some of planned infrastructure involves fish
processing.
The remote destinations in the northern parts
of KwaZulu-Natal have been mentioned in some
of the preliminary planning for the project, but no
details have yet been announced.
Four district municipalities and the metropolitan
municipality of eThekwini preside over
ports, small harbours and coastal properties in
the province.
Priority projects
Port Edward: development of a new harbour and
coastal property, with economic activities such as
fish and processing, fishing and leisure activities.
Hibberdene: development of coastal property, with
economic activities such as the creation of a waterfront
and a Music City.
Port Shepstone: development of coastal property,
with economic activities such as boat-building and
repairs and the creation of an economic zone.
KwaZulu-Natal Provincial Government
Department of Economic Development,
Tourism and Environmental Affairs:
www.kzndedt.gov.za
eThekwini Metropolitan Municipality
Website: www.durban.gov.za
Coastal assets: Port of Durban, Umkomaas,
Amanzimtoti, Umhlanga.
Ugu District Municipality
Website: www.ugu.gov.za
Coastal local municipalities: Ray Nkonyeni LM;
Umdoni LM.
Coastal assets: Port Shepstone, Port Edward,
Hibberdene, Shelley Beach.
iLembe District Municipality
Website: www.ilembe.gov.za
Coastal local municipalities: Mandeni LM;
KwaDukuza LM.
Coastal assets: Ballito, Zinkwazi beach.
King Cetshwayo District Municipality
Website: www.uthungulu.gov.za
Coastal local municipalities: uMlalazi LM;
uMhlatuze LM; uMfolozi LM.
Coastal assets: Port of Richards Bay, Richards
Bay IDZ.
uMkhanyakude District Municipality
Website: www.ukdm.gov.za
Coastal local municipalities: Mhlabuyalingana LM.
Coastal assets: Kosi Bay, St Lucia.
SOUTH AFRICAN BUSINESS 2018 56
Small Harbours and State
Coastal Property Development
Unlocking the potential of South Africa’s oceans economy.
A unit has been established within the National
Department of Public Works to focus on the enormous
potential that South Africa’s coastline holds for
economic upliftment and job creation.
The key objectives of the Small Harbours and State
Coastal Property Development unit are to:
• attract investment in state coastal maritime
infrastructure and properties
• grow businesses
• create jobs
• stimulate economic growth
• redistribute wealth.
Mandate and functions
• Letting out of state coastal property for economic
development.
• Management of state coastal properties. (This
includes all occupied and vacant Admiralty Reserve,
land parcels, buildings, estuaries and unproclaimed
harbours.)
• Maintenance of state coastal properties and
infrastructure.
• Special intervention programme: repair and
maintenance of 12 proclaimed fishing harbours in
the Western Cape.
“Ensuring inclusive Economic Growth
and Development through the
Empowerment of Local Communities”
Local economic development
Economic sectors that have been identified as suitable
for local economic development through investment
are Education and Training; Renewable
Energy; Farming; Fish Processing and Packaging; Food
and Beverage; Hospitality Industry; Infrastructure
Development; Logistics; Maintenance and Repair
(Vessels and Harbour Infrastructure); Manufacturing
and Engineering Services; Mining; Pipelines and
Pump Houses; Rescue, Safety and Security; Sport
and Recreation; Tourism; Transport (Commercial and
Leisure); Water and Waste Management and others.
National priority projects
DPW intends building three new small harbours in
the Northern Cape, Eastern Cape and KwaZulu-Natal
provinces.
Phase one: The new harbours to be developed under
Phase one are as follows:
• Port Nolloth of Richtersveld Municipality (Northern
Cape)
• Port St Johns of PSJ Municipality (Eastern Cape)
• Port Edward of Ray Nkonyeni Municipality
(KwaZulu-Natal)
Phase two: Phase two projects under consideration for
development of the following areas:
• Northern Cape: Kleinzee and Hondeklip Bay.
• Eastern Cape: Port Alfred, Gonubie, Port Grosvenor
and Coffee Bay.
• KwaZulu-Natal: Port Shepstone, Shelley Beach,
Mthunzini and Richards Bay La Mercy.
Enquiries: shscpd@dpw.gov.za
KEY SECTORS
Overviews of the main economic
sectors in South Africa
Agriculture 60
Mining 65
Oil, gas and petrochemicals 69
Energy 76
Water 84
Engineering 88
Manufacturing 94
Automotive 100
Chemicals and pharmaceuticals 103
Food and beverages 104
Transport 106
Business services 110
Tourism 116
Information and
communications technology 126
Banking 128
Development finance and
SMME support 130
OVERVIEW
Agriculture
Agriculture companies are active on the stock exchange.
When South Africa’s first alternative stock exchange in
South Africa started trading in February 2017, the first
listing was agricultural company Senwes and its holding
company. On the JSE, agricultural companies make up
4.3% of market cap.
Senwes has been described as a “rock solid, conservatively run
agricultural titan” (Anthony Clark) while Kaap-Agri, which listed on the
JSE in June 2017, might be, according to Investors Monthly, “the best
retailing conglomerate in South Africa”. Afgri, biggest of the former
co-operatives that are now multi-dimensional companies, has delisted
from the JSE but in 2017 bought the South African Bank of Athens.
The JSE has also launched a wool futures contract as the sector
strives to add 25-million kilograms to the existing crop of about
44-million kilograms.
Zeder Investments is the agricultural arm of investment holding
company PSG Group (which has become well known through Capitec
Bank and Curro schools). Zeder has been increasing its stake in agricultural
companies, most notably Capespan. Capespan has a turnover of
R7.6-billion across three divisions: farms, logistics and fruit.
Zeder also owns 27.1% of Pioneer Foods which makes and distributes
many big food and drink brands across Southern Africa, including
Weet-Bix, Liqui-Fruit, Ceres, Sasko and White Star. The company has an
SECTOR INSIGHT
A record maize harvest is
boosting exports.
• Land under macadamia
nuts is increasing rapidly.
annual turnover of R20-billion and
it has two Bokomo facilities producing
wheat biscuits, cereal and
muesli in the United Kingdom.
These facts give an indication
of the large influence which the
agricultural sector has in South
Africa. When national agricultural
output surged in mid-2017 on the
back of good rains and harvests,
the country was lifted out of the
technical recession into which it
had fallen in the first quarter.
A maize crop of 16.4-million
tons for 2016/17 means a surplus
SOUTH AFRICAN BUSINESS 2018
60
OVERVIEW
of about four-million tons, definitive
proof that the long drought
which hit South Africa is over, at
least in the central and northern
regions. The Western Cape
drought continues.
The Land Bank intends to put
aside R1-billion in supporting
black agricultural entrepreneurs.
The hope is that by making the
sector more inclusive, long-term
food security will be ensured.
Fruit, sugar and wine make up
about 7% of the country’s total
export basket. Avocadoes, tomatoes
and macadamias are among
other important export crops.
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. Primary agriculture
provides 5% of formal employment
in South Africa.
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 and plans to develop the SEZ
at Harrismith (Maluti-A-Phofung)
into a hub for agri-processing.
Several former farmers’ cooperatives
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) while others like Afgri
have a national presence.
Senwes has a strong grain division
and it controls 68 silos. Its operations
are run from Klerksdorp in
the centre of the country 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
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 000ha of wheat-producing land.
Macadamia nuts is one of the fastest-growing sectors in South Africa.
Almost all of nuts produced are exported and the global market is
expanding every year: nearly 2 000ha are added to the land under
macadamias every year. Mpumalanga and Limpopo provinces are big
nut-growing provinces. Another sector enjoying a boom (mainly because
of Chinese demand) is avocadoes, with almost 1 000ha per year
of new land being planted.
The South Africa 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 because of the extended
drought and the broader trend for sugar production and the
amount of land under sugar cane is downwards. The prospect of a
sugar tax will not help sales. Both of these companies have diversified
portfolios with Tongaat Hulett active in property in KwaZulu-Natal. The
other big sugar company, TSB Sugar, has been acquired by RCL Foods.
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, of which 35% is citrus, 23% subtropical
and nuts, 26% pome fruit, 11% stone fruit and 9% table grapes.
Export volumes, particularly in tropical fruits such as mangoes and
avocadoes, 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. With clarity now achieved on
refrigeration protocols in China, South Africa intends increasing table
grape exports to that country to R2.5-billion within five years.
61 SOUTH AFRICAN BUSINESS 2018
OVERVIEW
Wine
Large volumes of exports are achieved in deciduous fruits such as
apples, table grapes, pears, peaches, plums and apricots. Avocadoes
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, part of the Hans
Merensky Group, is an avocado grower of note while ZZ2 is a huge
fresh tomato enterprise. Halls has an international reputation for
avocadoes and litchis.
Companies such as Capespan and DoleSA move huge quantities
of fruit around the world. South Africa exports about 650 000 metric
tons to the EU (about 40% of the total). A new development in the
citrus sector is the establishment for small growers of the Growers’
Development Corporation.
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.
ONLINE RESOURCES
Agricultural Research Council: www.arc.agric.za
Fresh Produce Exporters’ Forum: www.fpef.co.za
Grain SA: www.grainsa.co.za
Land Bank: www.landbank.co.za
National Department of Agriculture, Forestry and Fisheries:
www.daff.gov.za
SA Table Grape Industry: www.satgi.co.za
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 earned
R17.5-billion in exports in 2016.
Europe is the main market but
exports to China and Russia are
growing as South Africa seeks to
exploit its membership of BRICS.
The industry is located for
the most part in the Western
Cape but Orange River Cellars
in the Northern Cape is growing
production volumes. 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
subsector in South Africa.
The Eastern Cape is the largest livestock
province. South Africa has a
beef-herd of 14-million. 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. Clover is Africa’s largest milk
processor. The Eastern Cape provides
approximately a quarter of
South Africa’s milk. Parmalat has
two plants in Port Elizabeth.
SOUTH AFRICAN BUSINESS 2018
62
O&M CAPE TOWN 2382/E
www.vwcommercial.co.za
It will move the earth for you.
1,438kg at a time.
With its impressive chassis capable of carrying a payload of up to 1,438kg
(Single Cab) and drop-sides that make loading and offloading lighter work, the
Transporter Single and Double Cabs have been designed with the toughest tasks
in mind. Driving and safety features such as ESC, ASR, EDL, Traction Control and
Automatic Post-Collision Braking mean the crew can focus on the job at hand with
complete peace of mind. Combined with German engineering, a standard 2-year/
unlimited kilometre warranty and a 3-year/60 000km Genuine AutoMotion Service
Plan, these vehicles are the best choice if you’re as serious about building your
business as we are.
Visit vwcommercial.co.za or your nearest Volkswagen Dealership to find out more about the
Transporter Single and Double Cab Range.
Commercial
Vehicles
Range includes: 75kW TDI 4x2 manual Single Cab; 75kW TDI 4x2 manual Double Cab, 103kW TDI 4MOTION® manual Double
Cab and 132kW BiTDI® 4MOTION® DSG® Double Cab.
Mining
The South African mining landscape is changing.
OVERVIEW
When Gold Fields in 2013 spun off some of its older
mines to a new company to be called Sibanye Gold,
most of the attention was focussed on the older
company’s remaining asset in South Africa, the South
Deep mine. The thinking was that South Deep would be a more
attractive investment proposition if it was uncoupled from the less
profitable mines.
What has happened instead is that Sibanye has diversified and
grown to such an extent that it now has a new name, Sibanye Stillwater,
which reflects its R30-billion purchase of mines in the US that produce
platinum and palladium. It also bought several South African platinum
assets including Aquarius Platinum and the Rustenburg mines
of Amplats. Sibanye is now the third-largest producer of palladium
and platinum in the world, and one of the 10 biggest gold producers.
The gold sector has lost thousands of jobs in the last five years.
Part of the reason for Gold Fields wanting to unbundle was political
uncertainty in the mining sector. A new mining charter (Mining
Charter 3) has not gone down well with mining companies. The
level of black ownership and whether or not that percentage must
be “topped up” every time a black shareholder sells, are just two of
the contentious issues. The Chamber of Mines says that the value of
SECTOR INSIGHT
Sibanye Stillwater has become
a global leader in just
three years.
• Operation Mining Phakisa
Lab aims to fast-track
solutions.
BBBEE deals since the year 2000
is R205-billion.
The mining industry itself is
looking at new ways of doing
business. At its 127th annual general
meeting where a new CEO
was appointed in May 2017, the
Chamber of Mines announced
that it would be rebranding.
Guided by the Zambezi Protocol,
the Chamber wants mining to
be more positive and construc-
65 SOUTH AFRICAN BUSINESS 2018
OVERVIEW
tive, working better with the
communities in which it operates.
New CEO, Mxolisi Mgojo,
is simultaneously leading his
company, Exxaro Resources, on
a programme to make mining
sustainable through measures
such as water sharing with local
communities and finding ways
to help communities gain access
to energy.
The national government’s
Phakisa programme is also to be
applied to mining. Intended to
fast-track solutions to development
problems, an Operation
Mining Phakisa Lab has been set
up to create concrete plans.
Another significant change in
the South African mining landscape
was the decision of Anglo
American to focus on three
minerals: copper, platinum and
diamonds. Although Anglo has
not begun a wholesale sell-off of
coal, manganese and platinum
assets (because rising prices have
made some mines very profitable
again), sales have begun. The
first move came in April 2017
with the sale of Anglo’s thermal
coal operations to Seriti, a blackowned
company lead by Mike
Teke, the outgoing president of
the Chamber of Mines.
Seriti paid R2.3-billion for the
New Vaal, New Denmark and Kriel
collieries as well as four closed
collieries. Seriti thus became the
second-largest provider of thermal
coal to Eskom.
The other big supplier to
Eskom is Exxaro, which supplies
about 33-million tons. Exxaro’s
recent purchase of Total Coal
South Africa (TCSA) took to six
the number of mines the company
has in Mpumalanga. Exxaro’s Grootgeluk mine in Limpopo is a
huge operation and gives the company a presence in the Waterberg
area, where an estimated 40% of South Africa’s coal reserves lie. This
amounts to about 75-billion tons of coal, but to get that coal to the
coast for export would mean a rail extension of 464km at a cost of
R37-billion. Transnet Freight Rail (TFR) is conducting a feasibility study.
Assets
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 also produces 75% of the world’s platinum
and 73% of its chrome.
Despite uncertainty on the global market, Northam Platinum has
continued to buy assets. In 2015 it bought Everest South in Limpopo
from Aquarius, a move that will allow it to consolidate operations at
its adjacent property, Booysendal South. Northam, which also has
assets in the North West province, aims to produce 850 000oz of
PMGs from 2022.
A court ruling in February 2017 has opened the way for Ivanhoe to
build its Platreef Project on the northern limb of the Bushveld Igneous
Complex. R70-million has been committed to the first phase. If the
mine achieves the projected production rate of 12 Mtpa with 1.2-million
ounces of PMG, it will rank as the biggest PGM mine in the world.
Amplats and Lonmin are trying to reduce costs. Amplats has sold
its Rustenburg operations to Sibanye and Lonmin has put some shafts
that are expensive to run on care and maintenance.
With a depressed platinum price, platinum miners are hoping that
SOUTH AFRICAN BUSINESS 2018
66
APE Pumps
Pumps at the heart of Africa
Mining Institutions
Petrochemical Industries
Manufacturers of:
Vertical industrial turbine pumps
Multi-stage high pressure pumps
Split casing pumps
End suction pumps
Vertical sump pumps
API 610 pumps
Power Generation Authorities
Water Processing Utilities
26 Nagington Road, Wadeville
Germiston 1400, South Africa
Tel +27 11 824 4810 | Fax +27 11 824 2770
PO Box 14733, Wadeville 1422, South Africa
Email: apepumps@mweb.co.za
Website: www.apepumps.co.za
Leaders in pump innovation
OVERVIEW
demand from the fuel cell industry will replace the decline in demand for
catalytic converters. Other areas that are being investigated are jewellery,
where the Platinum Guild International will try to stimulate more demand.
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 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. Copper 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 the North West Province located
along a reef running from Brits to Rustenburg and serviced by several
ferrochrome smelters.
The Northern Cape produces more than 84% of South Africa’s iron
ore. Kumba Iron Ore is the country’s biggest iron-ore miner. Its two mines
(Sishen and Kolomela) produced 69.8-million tons in 2016. The company’s
Thabazimbi mine was sold to ArcelorMittal South Africa in 2017.
ArcelorMittal also stepped in to keep the structural mill of Evraz Highveld
Steel in Mpumalanga running. Evraz Highveld went into business rescue
in 2015. Assmang (a joint venture between Assore and African Rainbow
Minerals) is the other big iron-ore producer. Analysts at Investorintel.com
expect the South African ferrochrome market to be dominated by two
major players, Samancor and Glencore. This follows the closure of three
operations: Tata (in KwaZulu-Natal), International Ferro Metals and ASA
Metals. Mitsubishi has said that it wants to sell its shareholding in Hernic
Ferrochrome. Afarak and Traxys are smaller operators in the sector. A new
iron-ore sampling plant at Saldanha, a joint venture between Kumba and
Transnet, allows exporters to certify the quality of their product before
the ore is loaded on to ships for export.
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 black-owned manganese projects
are under way.
Vedanta started work in 2015 on its R9.4-billion Gamsberg
Zinc project. The new mine is near to Vedanta’s existing Black
Mountain mine in the Northern Cape Province.
ONLINE RESOURCES
Chamber of Mines of South Africa: www.chamberofmines.org.za
Geological Society of South Africa: www.gssa.org.za
Mining Qualifications Authority (MQA): www.mqa.org.za
National Department of Mineral Resources: www.dmr.gov.za
South African Institute of Mining and Metallurgy:
www.saimm.co.za
Anglo American is investing
R2-billion to expand production
at its diamond mine near
the town of Musina in Limpopo.
In the Free State, De Beers’
Voorspoed mine will have a
production capacity of 800 000
carats per year when it is fully
operational.
A new mineral sands project
on the West Coast near Lutzville
and Koekenaap has started sending
product to China. Australian
miner Mineral Commodities
says it will spend R5-billion at its
Tormin mine to 2019 in search of
zircon, rutile, ilmenite and garnet.
Sixteen rare earth minerals
have been identified north of
Vanrhynsdorp, with the most
prevalent being cerium, an
important component of catalytic
converters. South Africa
is a world leader in converters.
Other minerals found at the site
are used in magnets, batteries
and electric-powered cars.
SOUTH AFRICAN BUSINESS 2018
68
Oil, gas and petrochemicals
The sector is alive with activity.
OVERVIEW
Licences for onshore and offshore exploration for gas, allocation
of sites for liquified national gas power plants, the creation of
new units within national departments, investment in a new
helium plant, testing for shale gas, massive investments by
Sasol – these are some of the things that are putting a spark into the
South African oil, gas and petrochemicals sector.
An agreement has been signed between PetroSA and Russia’s
geological exploration company, Rosgeo, which will see $400-million
invested. The agreement relates to offshore exploration blocks which,
it is hoped, will deliver four-million cubic metres of gas every day to
the gas-to-liquids refinery at Mossel Bay (Mossgas). The refinery has
been struggling to find new feedstock for some time, and a great deal
of money was spent on a project called Ikhwesi, which was supposed
to find gas.
The South African oil industry generates annual sales of about R365-
billion. Companies in the oil sector include global giants such as Engen,
BP, Shell, Total and Caltex. In 2016 Chevron began the process of exiting
South Africa. Sinopec of China has bought a 75% share in Chevron
SECTOR INSIGHT
A Russian exploration company
will supply gas to
Mossgas.
• A R200-million helium
plant is under construction.
South Africa for R12.6-billion.
Assets include a lubricants plant
in Durban, an oil refinery in Cape
Town and 820 petrol stations
across South Africa and Botswana.
South Africa’s own global giant,
Sasol, is a major player in the oil
sector and the only player in the
petrochemicals sector.
69 SOUTH AFRICAN BUSINESS 2018
OVERVIEW
Assets
Most of the oil that feeds the country’s four crude-oil refineries is imported.
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.
The Chevref oil refinery in the Cape Town suburb of Milnerton produces
about 110 000 barrels a day of South Africa’s total production of 703 000
barrels a day. The Natref refinery is strategically placed at Sasolburg near
to the industrial hub of southern Gauteng. The petrochemical complex
at Sasolburg is a major national asset. One of Sasol’s many companies,
Sasol New Energy, has been working on moving the group away from
reliance on fossil fuels. The Natref refinery is a joint venture between Sasol
Oil (63.6%) and Total SA (36.3%). It is a technologically advanced facility,
which refines heavy crude oil into petrol, diesel, commercial propane, jet
fuel and bitumen. The capacity is 92 000 barrels per day.
KwaZulu-Natal hosts two oil refineries which jointly account for more
than 300 000 barrels of refined crude oil that South Africa produces. South
Africa’s biggest refinery is Sapref in Durban. Owned jointly by Shell SA
Refining (25%), Thebe Investments (25%) and BP Southern Africa (50%), it
has a capacity to produce 180 000 barrels per day. The refinery also makes
propylene feedstock, solvents, sulphur, asphalt, industrial processing oils
and liquefied petroleum gas.
The Enref refinery owned by Engen can produce 135 000 barrels per
day. This sophisticated refinery can convert light and heavy crude oil into
high-value products that include jet and diesel fuel, solvents, bitumen,
sulphur, bunker oil and aviation gasoline.
Safor is a base-oil production facility (jointly owned by Engen,
Caltex and Total but operated by Engen) that produces 45% of
Southern Africa’s base oils. Engen also owns the adjoining Lube Oil
Blend Plant, which produces more than 72-million litres of finished
lubricants annually.
A new facility has been added to the oil and gas sector in Cape Town,
a 118 000m³ fuel storage unit. The Bergan terminal comprises 12 tanks
located on the Eastern Mole of the Port of Cape Town.
New gas policies and fields
The Liquefied Natural Gas Independent Power Producer Procurement
Programme (LNG IPPPP) is part of the broader programme of the
Department of Energy which encourages private investment in renewable
energy, namely the Renewable Energy Independent Power
Producer Procurement Programme (REIPPPP). The total allocated
to gas-to-power in the national power plan is 3 726MW, of which
3 000MW is for LNG.
The first two sites identified
by the DoE for LNG plants are
Richards Bay (2 000MW) and the
Coega IDZ (1 000MW). To produce
its allocation of 2 000MW, the
KwaZulu-Natal plant would have
to use a million tons a year of liquid
natural gas (LNG).
In 2016 the Department of
Trade and Industry (dti) established
a Gas Industrialisation Unit
(GIU) which will make plans to exploit
the huge fields of natural gas
off the coasts of Mozambique and
Angola and boost industrialisation
in South Africa.
At Coega, it is estimated
that the new plant will inject
R25-billion into the Eastern Cape
economy. Large commercial gas
companies such as Afrox and
Air Products have plants within
the Coega IDZ. First Automobile
Works has established its motor
assembly plant next door to Air
Products’ air separation unit, allowing
it ready access to the industrial
gas that it needs. Liquid
oxygen and nitrogen play important
roles in the metals processing
sector for cutting and laser
applications.
Companies like Hydra Arc are
big gas users in welding operations
as well as the construction
and refinery maintenance that
they undertake in the petrochemical,
construction, mining
and power generation industries.
The Coega IDZ is also home to
the country first gas-fired plant to
be run by a private consortium.
The Dedisa power plant is controlled
by a consortium including
Engie, Legend Power Solutions,
Mitsui (Japan) and the Peaker
Trust. A new gas turbine open
SOUTH AFRICAN BUSINESS 2018
70
OVERVIEW
cycle power plant near Durban
has been commissioned by Avon
Peaking Power.
The regulator and promoter of
oil and gas exploration in South
Africa, Petroleum Agency South
Africa, has awarded coalbedmethane-gas
exploration rights
in KwaZulu-Natal and natural
gas exploration permits in the
Free State. Early data suggests
that the Free State has 23-billion
cubic feet of gas underground. If
this is confirmed, then four new
power stations could be built in
the province.
A major investment by Afrox
will see a R200-million plant built
to extract helium in the Free State.
Afrox will operate the plant and sell
the helium and compressed gas.
Tests have begun in the Karoo
in search of shale gas. Estimates
vary greatly and detailed testing
still needs to be done to
determine whether there are
viable quantities available.
Environmental concerns must
also be addressed.
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.
The Port of Saldanha in the
Western Cape launched a new
open-access liquefied petroleum
gas (LPG) plant in 2017. It will be
run by Sunrise Energy.
The major economic sectors
using gas are the metals
sector and the chemical, pulp
and paper sector. Brick and
glass manufacturers are also big
consumers.
GOING BIG, GOING LOCAL
A large new tandem horizontal boring mill installed in Mpumalanga
has given the local steel fabrication sector a welcome boost. The
sophisticated boring mill not only gives Hydra Arc the capacity
to do work that previously could only be done overseas but the
company’s machine shop expansion allows it to take on apprentice
machinists, providing much-needed training in valuable skills.
Installed at the Sky Hill fabrication facility in Secunda, the mill’s
two rotary platforms can manage loads of 60 tons and 40 tons.
The machine can also handle more delicate work and can automatically
change tools inside the milling head.
A great deal of research and development went into the project,
with the result that the mill’s two machines can work together
or individually, giving great flexibility to managers.
The mill was made by TOS Varnsdorf of the Czech Republic, who
sent mechanical and installation engineers to South Africa to
assist Machine Tool Promotions, who oversaw the installation
process.
Hydra Arc is now able to do big projects which previously had to
be contracted to companies outside of South Africa. This will
have a positive effect on the local economy and on employment.
ONLINE RESOURCES
Independent Power Producers Programme: www.ipp-projects.co.za
National Department of Trade and Industry: www.thedti.gov.za
National Energy Regulator of South Africa: www.nersa.org.za
Petroleum Agency SA: www.petroleumagencysa.com
South African National Energy Association: www.sanea.org.za
South African Petroleum Industry Association: www.sapia.co.za
Transnet Pipelines: www.transnetpipelines.net
SOUTH AFRICAN BUSINESS 2018
72
Service that
delivers the
Difference
Air Products South Africa (Pty) Limited manufactures, supplies and distributes a diverse portfolio of
atmospheric gases, specialty gases, performance materials, equipment and services to the
Southern African region.
Air Products touches the lives of consumers in positive ways every day, and serves customers across
a wide range of industries from food and beverage, mining and petrochemicals, primary metal and
steel manufacturers, chemical applications, welding and cutting applications to laboratory
applications.
Founded in 1969, Air Products South Africa has built a reputation for its innovative culture,
operational excellence and commitment to safety, quality and the environment. In addition the
company aims to continue its growth and market leadership position in the Southern African
region.
www.airproducts.co.za
TRANSNET PIPELINES MULTI-PRODUCT
PIPELINE: Enabling South Africa's Future
Transnet Pipelines owns, operates and maintains a 3 800km network of high pressure underground petroleum
and gas pipelines. Established in 1965, the company plays a strategic role in the supply of petroleum products to
South Africa's economic hub in Gouteng. To ensure security of supply, a new 24-inch Multi-Product Pipeline (MPP)
was constructed and commissioned in 2012. Lennie Moodley, Chief Executive ofTransnet Pipelines, discusses the
latest milestone in the MPP project.
Is the Multi-Product Pipeline working to
expectations? Yes, since it was brought into operation
in January 2012 it has transported over 18 billion litres
of diesel. We have now successfully brought it into
multi-product operation. In addition to transporting
two grades of diesel (D50 and D500) we are now
transporting 93 and 95 unleaded petrol as well as
jet fuel.
Can you put a figure on the number of road trips (or
number of tankers) that have been reduced because
of the introduction of the Multi-Product Pipeline?
Not directly as all modes of transport are required
to service the market, pipelines are ideal for large
volumes and long distance, whilst road and rail service
other areas. We can however say that if we did not have
the Multi-Product Pipeline you would need an
additional 1 ODO road tankers per day between Durban
and Gauteng.
What are current volumes of throughput in the
various categories? The capacity of the line is 1 080
cubic metres per hour and the average throughput is
approximately 115 million litres per week. The volume
split per product depends on weekly market demand
and varies from week to week.
Is TPL on target with regard to these volumes? The
volumes are slightly behind target, but this is reflective
of the lower demand in the market due to the slowdown
of the economy. From a capacity and operational point
of view TPL is able to meet the demand required by its
customers.
And the balance sheet? Pipelines is currently forecast
to exceed financial targets in the 2017 /18 year:
• Revenue of R4.2bn
• EBITDA margin of 74%
• Return on assets of 6.7%
• Asset base of R36bn excluding capital work in
progress
• Cash generated from operations of R3.l bn
Please tell us about your journey to the CEO's desk?
What was your first job at TPL? Was there a moment/
event where you thought, "Yes, pipelines is where I
want to be"? My journey started in Transnet Pipelines
in 2002 as an Executive Business Manager in charge
of operations and has evolved through various roles
since then. From the onset I knew this is where I want
to be and approached each day with enthusiasm and
determination. Pipelines is a fascinating. complex and
challenging environment. In 2002, Transnet Pipelines,
then known as Petronet, transmitted 334 million m 3
of gas and 13.8 billion litres of fuel and our revenue
was R719 million. In comparison to the previous year.
we have transported 17 billion litres of fuel and our
revenue was R4 285 million. I have aspirations of
growing the company even further, with specific focus
on diversification into the liquefied natural gas (LNG)
market and expanding our footprint into Africa.
Do you feel that your stint in Operations gives you
an especially good perspective on the complexities
of the business? Yes, it provides good insight into
the operational and technical aspects of
the business. It also provided great
understanding into the various roleplayers
in the market segment and
the number of challenges faced
by the industry. Furthermore, it
empowers me to challenge views
and make informed decisions.
How much success is TPL
having in terms of applying
the relatively new policy
of diversifying revenue
streams? Please expand on
which are working best, and give
examples (eg, training
in Africa). Our initiatives to
diversify our revenue streams
are at an infancy. However
we are confident that we will
achieve our aspirations in
the medium term. In addition
to becoming a key player in
the LNG market, Pipelines is
also committed to operate and
maintain pipelines, operate and
maintain terminals in other
African countries and provide
pipeline-specific training to the
oil and gas Industry.
How do you ensure security of supply? Our biggest
challenge is to stay ahead of market demand and
ensure efficient operations. We meet regularly with our
customers to understand their market and needs and
execute our plan accordingly, thus ensuring that their
market demands are met and facilitating security of
supply. We have pertinent KPls that we track to ensure
our performance is in line with what the market
requires. In addition to just the pipeline as a mode of
transport, we also use rail, our Transnet Value CC
initiative, whereby areas not serviced by pipelines are
still serviced by rail; one such example is the supply
of jet fuel to ORTIA, whereby both rail and pipeline
is used.
How do you protect pipes from corrosion? In addition
to the pipeline being coated, we have an extensive
cathodic protection programme in place that monitors
and deals with stray currents thus preventing
corrosion. We also do periodic "intelligent pig"
investigations to check the integrity of the pipeline.
What risk is involved for the environment through
which pipelines pass? Pipelines by their nature are a
safe, environmentally friendly mode of transport. The
biggest threat is unauthorised third party activities,
encroachments and attempted pilferage. In saying this,
incidents do happen, however our track record to date
is exemplary and we have an emergency response plan
to react to any incident together with all stakeholders.
Are you getting the rates you want from the National
Energy Regulator of South Africa {NERSA}? Yes, the
Regulator has an approved tariff methodology which
we comply with that allows us a fair return on assets
managed.
Please outline TPL's skills development programmes?
Most of our programmes are focussed on pipeline
specific requirements both technical and operational.
But we also have specific courses such as the "Women
in Pipelines" course which we are now going to expand
to all employees in Pipelines to equip them with skills
that will allow them to grow personally and in their
careers, with specific focus on diversity, finance
management, self-esteem and leadership skills.
Constructed according to international standards and best practices, the pipeline
runs underground over 555km from Durban to Heidelberg. Developed to ensure
security of fuel supply for the industrial heartland of our country, both now and
into the future, the pipeline is currently transporting four types of fuel: Diesel 50,
Diesel 500, ULP 93, and ULP 95. It can transport 1 million litres of fuel per hour,
and with future investments this can increase to 3 million litres per hour.
We're committed to fueling our country's economic hub for many decades to come.
,.
1RANSNEr
...
pipelines
www.transnetpipelines.net
OVERVIEW
Energy
South Africa’s energy mix is becoming more diverse.
Between November 2011 and July 2016, South Africa received
commitments of investments to the value of nearly R200-
billion through an innovative and efficient programme
which encouraged private investment into the South
African power generation sector. The Renewable Energy Independent
SECTOR INSIGHT
Private investors have put
nearly R200-billion into
renewable energy.
SOUTH AFRICA: INSTALLED CAPACITY
Eskom: legacy coal
plants
Eskom: peaking
power
Decommissioning from
2020
Gas, pumped storage, hydro
37 754MW
5 819MW
Eskom: new coal Medupi and Kusile 9 564MW
Nuclear Koeberg, Cape Town 1 940MW
Eskom: RE
100MW
IPP, renewable
energy
REIPPPP
3 314MW
Other IPPs
1 713MW
Total
60 204MW
SOURCE: ESKOM INTEGRATED ENERGY REPORT, 2017
Private Producers Procurement
Programme (REIPPPP) came
about in a hurry because the
lights went out in South Africa –
literally – in 2008. Officials within
Treasury were mandated to set up
a programme to attract private
investors.
According to figures released
by the Department of Energy,
the REIPPPP by 2016 had not only
delivered multiple millions in investments,
but also created more
than 30 000 jobs and benefited
local community development to
the tune of R256-million.
SOUTH AFRICAN BUSINESS 2018
76
OVERVIEW
Whereas national utility
Eskom’s supply of power was insufficient
for a booming South
African economy in 2008, the
global economic slowdown that
kicked in later that year meant
that by the time independent
producers were selling to the
grid (also controlled by Eskom),
electricity demand was much
reduced. Eskom itself had been
adding power to the grid and
improving the maintenance of
its existing fleet.
Eskom is investing heavily in
two new coal-fired power stations.
Medupi and Kusile power
stations will jointly generate
9 564MW. These factors resulted
in Eskom refusing to sign any more
power purchase agreements with
independent producers.
Although Eskom’s shareholder,
the Minister of Energy, said that
the REIPPPP was still government
policy, it was not until the third
quarter of 2017 that the process
was started again, but this time
with a limit imposed by the state
on how much could be charged
for energy in new contracts. Many
in the renewable energy sector
believe that the price cap of 77
cents per kilowatt-hour (kWh) will
deter many possible investors and
make small-scale renewable energy
projects (such as small-hydro)
impossible.
One of the consequences of
the policy uncertainty of 2016-
2017 was that DCD Group sold
its share in the Coega IDZ-based
DCD Wind Towers joint venture
for R1.
South Africa’s electricity comes
mainly from Eskom’s coal-fired
power stations. The Koeberg
WATERPROOFING PROMOTES ENERGY
EFFICIENCY
With energy efficiency being a vital part of all new building codes,
having a cool roof coating pays off in a number of ways. With the
surface and the interior of the building being cooler, air-conditioning
costs are reduced, the environment is better off, the building
is code compliant and incentives and tax breaks could come into
play. Roof coatings available from Topps make all of this possible.
A cool roof acts like a sunshade in the windshield of a car. The
white coating deflects the sun’s rays away from the building. An
industrial grade cool roof maintenance coating like Topps Seal®
brings the additional benefit of extending the life of the roof.
In Knoxville, Tennessee, a retail store recorded 24.5% energy
reduction after the application of Topps Seal®. Topps Seal® is
triple-certified, by Miami-Dade County (US), CRRC and Energy
Star. Energy Star-qualified products can reduce the amount of
air conditioning needed in buildings and can reduce peak demand
by 10%-15%. A cool roof reduces greenhouse gases and keeps the
building cooler inside by deflecting the sun’s rays.
Some government and local utilities offer incentives and tax
breaks for roofs that qualify as a “cool roof” along with tax
deductions for performing roof maintenance.
Topps Seal® won’t freeze and it won’t wash off, saving unwanted
expenses and mess.
Use of the world’s leading repair product, Topps Polyprene®, ensures
that what is sealed remains sealed. With roofing materials
expanding and contracting at different rates, stresses develop on
seams and the areas around penetrations – vents, signs, flashings,
pitch pockets, joints and rooftop equipment.
Heavily fibred Polyprene won’t crack when it gets cold. It stays pliable
permanently and stops leaks from recurring. It has been voted
the #1 repair compound among professional roofers. Creating a
reliable seal promotes building efficiency by keeping the building’s
heat within the envelope, reducing costs by avoiding heating loss.
The same is true for cooling systems. A long-lasting seal also
contributes to reducing maintenance costs.
77 SOUTH AFRICAN BUSINESS 2018
OVERVIEW
nuclear power station supplies about 5% of the nation’s needs and has
been operating since 1984.
South Africa’s long-term energy plan is underpinned by the Integrated
Energy Plan of which the electricity-specific Integrated Resource Plan
(IRP) forms a part.
There is considerable debate about the methodologies and scenarios
which underpin the Draft 2016 Integrated Resource Plan Base Case.
The South African Renewable Energy Council represents four industry
associations, one of which is the South African Photovoltaic Industry
Association (SAPVIA). The CEO of SAPVIA, Mike Levington, had this response
to the new plan: “The biggest issue with the draft IRP2016 is that
it artificially limits the amount of renewable energy that can be added
to the grid over the next 20 years with no rationale for imposing them.
Under this constrained scenario there will be greater allocations given to
nuclear and coal in the IRP at significantly more expensive cost than new
solar and wind energy.”
Proponents of coal and nuclear argue that there are some hidden costs
that renewable energy advocates don’t reveal. They also argue that coal
and nuclear are necessary to provide stable supply. There are also questions
about the ability of the grid to cope with multiple sources of energy.
Two recent reports (a “Flexibility Study” and a CSIR study) have concluded
that South Africa’s grid could be flexible enough and renewables supported
by gas could provide base load.
ONLINE RESOURCES
IPP Projects: www.ipp-projects.co.za
National Energy Regulator: www.nersa.org.za
National Department of Energy: www.dme.gov.za
South African National Energy Association: www.sanea.org.za
South African Nuclear Energy Corporation: www.necsa.co.za
South African Photovoltaic Industry Association: www.sapvia.co.za
South African Renewable Energy Council: www.sarec.org.za
South African Wind Energy Association: www.sawea.org.za
Strengths
The Northern Cape is South Africa’s
hotspot for solar power and the
Eastern Cape has attracted most of
the approved wind power projects.
Although KwaZulu-Natal
received few REIPPPP bids,
the Richards Bay Industrial
Development Zone is positioning
itself to be a hub for renewable
energy, with the proximity
of the rich gas fields off the shores
of Mozambique a major selling
point. The huge forestry, timber,
paper and pulp industries of the
province can provide feedstock for
the renewable energy sector.
KwaZulu-Natal’s most widely
grown crops, sugar cane and sugar
beet, are among the most efficient
and cost-effective feedstock for the
creation of biofuel.
The Provincial Government
of the Western Cape is another
entity prioritising energy and this
includes generation (gas, biogas
and renewables), distribution and
energy-saving. In the REIPPPP, the
Western Cape has so far been allocated
11 projects, six wind projects
and five photo-voltaic solar power
projects.
Western Cape Minister of
Economic Opportunities Alan
Winde says that Cape Town alone
has 2 000 private producers. These
range from a solar panel on the
roof of a single household to major
installations in the Waterfront.
Winde is lobbying for the allocation
of a gas-to-power plant to
Saldanha Bay where there are already
bulk power consumers like
ArcelorMittal Steel. This could be a
catalyst for the use of gas in many
other sectors.
SOUTH AFRICAN BUSINESS 2018
78
Pele Natural Energy
INTERVIEW
Managing Director Obakeng Moloabi explains how his
company is expanding into other African countries.
Obakeng Moloabi
What is the core mandate of Pele Natural Energy?
To develop, own and operate traditional fuel power assets in the drive
for inclusive growth.
How do you go about identifying possible projects?
Establishing customer demand is the cornerstone of every project.
Availability of feedstock and project viability from a technical and
financial perspective is the next element to consider. Social impact
becomes the final and most important consideration as this will speak
to the sustainability of the project.
Please tell us about your first plant being developed
beyond South Africa’s borders?
We are almost at commercial operations for a gas-to-power 40MW
project located in Mozambique.
BIOGRAPHY
Obakeng Moloabi is a founding
member of the Pele Energy
Group and the Managing Director
of the conventional power
subsidiary, Pele Natural Energy.
Obakeng holds an undergraduate
degree in Investment
Management from the University
of Johannesburg. Under
Obakeng’s leadership, Pele
Natural Energy has developed
its presence across Southern
Africa with an asset portfolio
of 340MW, 40MW in Mozambique
(commercial operations)
and 300MW (financial closed
asset) in South Africa.
How much generating capacity is under development,
and what are your goals in this regard?
We have 40MW under construction, 300MW expected to reach
financial close in the next few months and 1 000MW in development.
79 SOUTH AFRICAN BUSINESS 2018
INTERVIEW
Knowledge Pele
Knowledge Pele Managing Director Fumani Mthembi
shares her company’s commitment to using
knowledge for economic transformation.
Fumani Mthembi
BIOGRAPHY
Fumani Mthembi is a founding
member of the Pele Energy
Group and the Managing Director
of its research and development
subsidiary, Knowledge
Pele. She holds an undergraduate
degree in Politics, Philosophy
and Economics from UCT
and an MA Science, Society
and Development from Sussex
University. Under Fumani’s
leadership, Knowledge Pele
has grown into a reputable firm,
leading development thought
and practice, particularly in the
renewable energy sector and
related host communities.
Please explain the concept of linking power and knowledge.
The philosophical premise of our company is that it is our duty to make
a material contribution to the imperative of structural transformation.
We understand that power and knowledge are the bedrock of the
modern social structure. Therefore, through our research division, we
focus on surfacing the knowledge of those who have been historically
silenced to ensure that they can reclaim their power by reassuming
their rightful place as architects of social progress.
Please explain the concept of “community industrialisation”.
Community Industrialisation is one of Knowledge Pele’s instruments
for undoing the historical construct that is the poverty of the majority.
It is common knowledge that the majority live in communities that are
best described as labour reserves, spaces of consumption with limited
production capabilities. Knowledge Pele’s community industrialisation
division is focused on recreating these township, peri-urban and
rural communities into thriving, knowledge-based economies. We do
this by researching the economic development possibilities of these
communities, understanding the types of industries that can emerge
and the related knowledge and skills necessary to sustain them. This
work, along with an articulation of the type of future that communities
seek for themselves, forms what we then identify as the community
industrialisation strategy. We then work with our clients to invest aggressively
in training programmes at the community level, for which
we are SETA-accredited. We structure co-investment vehicles between
industry and communities to build local industries that are both run
and owned by local community members. In the long run our intention
is to build sovereign wealth funds for communities on the basis
of the portfolio of industrial assets that they will own.
Please tell us about your partnership with UCT?
We recognise that our work has policy relevance and therefore our
partnership with UCT is vital for ensuring that we remain in constant
dialogue with academics and policy-makers who share our concerns.
SOUTH AFRICAN BUSINESS 2018
80
Pele Green Energy
INTERVIEW
Renewable energy has enormous potential, according to
the Managing Director of Pele Green Energy, Gqi Raoleka.
Gqi Raoleka
BIOGRAPHY
Gqi Raoleka is a founding member
of the Pele Energy Group
and the Managing Director of
the renewable energy subsidiary,
Pele Green Energy, which
was founded in 2009. He has
a degree in Economics and
Econometrics and an Honours
degree in International and
Monetary Finance from the Johannesburg
University. Under
Gqi’s leadership, Pele Green
Energy has developed into
one of the largest Independent
Power Producers in South
Africa with a portfolio of over
850MW.
What are the key principles that underlie your business?
An unending commitment to excellence, value creation and effecting
structural change in the communities we provide power to.
Please explain the concept of new value creation?
The ability to build one’s own enterprise in contrast to only seeking
to acquire that which has already been created and is in circulation.
How important is research in community projects?
In the absence of research, there is limited to no knowledge. Without
knowledge there can be no development. Research is one of the key
tools towards the attainment of knowledge and the only tangible
answer to a community’s blueprint towards sustainable development.
Research forms the base upon which community projects will bring
about structural and meaningful change.
The patterns and propensity towards certain types of physical
and mental work styles that a specific community may have is best
uncovered through detailed and targeted research. This enables
industries to map their location based on the geographical spread of
the workforce they may require and fosters more effective involvement
and participation of the local community.
What are the proportions of RE in your portfolio?
Our renewable portfolio consists of 291MW of solar PV projects and
613MW of wind farms.
Where do you see the greatest growth potential?
The growth prospects across the wind and solar technologies is immense.
The reduction in prices of solar PV modules continues to fall
at a rapid rate; the economies of scale, optimisations and efficiencies
being reached are helping to keep the price reduction momentum.
Decentralised power generation represents the largest growth
prospect in the South African market. The decreasing costs of storage
together with the falling prices in PV modules are allowing large,
medium and small users of power the ability to consider alternate
independent power sources for their domestic consumption.
81 SOUTH AFRICAN BUSINESS 2018
PELE BRINGS POWER TO THE PEOPLE
Together, THE PELE GROUP of companies complement each other in driving structural change
and delivering essential services. The building of sustainable and reliable electrical infrastructure,
to light up and brighten our continent, confirms that they understand that power is about people.
With their huge investment in infrastructure and development programmes they are deeply
invested in the sustainable growth of African communities.
Through Knowledge And Power – Rea Ko Pele
PELE ENERGY GROUP
PELE ENERGY GROUP (PEG) is a wholly
black-owned company, comprising of three
subsidiaries. PEG was founded in 2009 by
five young black South Africans with the
dream to contribute to the structural reform of
the African continent. An objective they
contribute to is making freedom tangible,
through their operating subsidiaries:
Pele Green Energy, Knowledge Pele
and Pele Natural Energy.
PELE GREEN ENERGY
PELE GREEN ENERGY (PGE) is an independent
power producer that develops, owns and operates
renewable-energy power-generation plants and
solutions. Through PGE, the group aims to deliver
electrical power that is clean and safe to
households and industries. It is also invested in
creating off-grid solutions that can be delivered to
geographically remote communities at affordable
prices. PGE owns and operates 895MW of
renewable-energy power plants, including wind,
solar PV and concentrated solar power technology.
PELE BRINGS POWER TO THE PEOPLE
KNOWLEDGE PELE
KNOWLEDGE PELE (KP) is a research and development
company through which the group works to transform township,
peri-urban and rural communities into thriving economic hubs.
KP gives a voice to the needs and assets of thousands of
historically excluded community members, and leverages its
position to implement development programmes on behalf of
public and corporate social investors. It delivers socio-economic
and accredited enterprise-development programmes across the
country and currently they are working in the Western Cape.
PELE NATURAL ENERGY
PELE NATURAL ENERGY (PNE) develops, owns and operates
base load power stations. The latter is defined as power that
can be generated at all hours of the day; as well as easily
dispatched to match demand. Through PNE, the group is
contributing to the continent-wide need for stable,
grid-connected power. PNE is part of the consortium that owns
the Kuvaninga project, a 40.29MW natural gas-fired powered
plant in Mozambique. It was also announced as the preferred
bidder for the 300MW Khanyisa coal-fired power plant to be
located in Mpumalanga.
3 Centex Close, Brooklyn Place, Eastgate
Kramerville, Sandton
+ 27 11 262 0515
info@peleenergygroup.com
www.peleenergygroup.com
OVERVIEW
Water
Water infrastructure is a priority.
In 2017/18 the National Department of Water and Sanitation will
spend R12.5-billion on dams, water transfer schemes and bulk
distribution. Improving and expanding water infrastructure are
key elements to ensuring water security in a water-scarce country.
The completion of the De Hoop Dam in eastern Limpopo means
that people living in small municipalities can now expect bulk water
delivery. The Trans Caldeon Tunnel Authority (TCTA) is responsible
for seeing that bulk water supplies are laid on, but making the local
connections and physically delivering the water is up to municipalities
and water boards.
The De Hoop Dam is the centrepiece in the large Olifants River
Water Resource Development Project which is transforming the water
environment for industrial, commercial and private users. The Olifants
River System feeds the region that is South Africa’s greatest producer
of citrus and subtropical fruits, and supplies many platinum mines
with vital water.
A long drought was finally broken in most of the country in late
2016, but the Western Cape continues to experience severe shortages.
Tenders for desalination in various guises (including barges in Cape
Town harbour) have been issued.
According to Water Wheel magazine, 37% of water delivered to
the nation’s municipalities is lost, at a cost of R7-billion per year. This
presents an opportunity for companies to provide better pipes and
SECTOR INSIGHT
The De Hoop Dam has been
completed.
smart meters. Government plans
to arrest this trend include a training
programme for plumbers
and artisans.
Many small municipalities
and water boards have not been
able to properly manage their
water facilities. In response, a
new national strategy gives a
bigger role to well-resourced
water boards such as Umgeni
Water and Sedibeng Water. Rand
Water has expanded its original
footprint and now serves an area
which includes Gauteng, and
parts of Limpopo, North West,
Mpumalanga and the Free State.
SOUTH AFRICAN BUSINESS 2018
84
OVERVIEW
The national Minister of Water
and Sanitation is the shareholder,
representing the government of
South Africa.
In terms of the National Water
Resource Strategy, catchment
area management agencies
have been established to oversee
water resource management on
a regional basis. The Imkomati-
Usuthu Catchment Management
Agency covers Mpumalanga,
parts of Limpopo and part of the
Kingdom of Swaziland. Another
example of a CMA is the Breede-
Gouritz Catchment Management
Agency in the Western Cape.
Among the responsibilities of
a CMA are checking that water
is being used lawfully, allocating
resources to parties along a
river (farmers, municipalities or
businesses), long-term planning,
dam safety and checking on the
quality of water.
In the 1950s, the Orange River
Project delivered water from the
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.
South Africa’s river systems
are mostly not where its people
are, 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,
an ongoing project that is behind
schedule. The Vaal basin, which
serves the most populated and
industrialised part of the country
including Johannesburg, receives
water from seven inter-basin
transfer schemes.
SBS TANKS
SBS® Water Systems (Pty) Ltd, the visionary company that pioneered Zincalume
tanks to the South African marketplace in 1998 and the proud manufacturer of
SBS Tanks®, will be celebrating its 20th year of unparalleled service excellence as
the premium liquid storage solution for multiple applications.
SBS Tanks® are the preferred liquid storage solution in the South African mining,
municipal, fixed fire protection, water conservation and food and beverage industries.
What sets the company apart is the ability to go beyond supplying a liquid
storage solution. It engages on all levels of a project from brief and design through
to completion, ensuring not only a world-class installation, but a positive client
experience. This proficiency is key to the company’s high level of return business.
The SBS® range of tanks has been engineered, designed and developed from
years of practical experience in the water storage industry and continues to improve
from strength to strength. SBS® Water Systems (Pty) Ltd is ISO 9001:2015
accredited. The company is also proudly affiliated to various professional bodies
and organisations.
The company operates from a 5 000m² manufacturing facility in Pinetown, Durban.
The City of Durban also boasts the largest and busiest port on the African continent
and the company’s proximity to this facility is extremely advantageous in terms of
export logistics. SBS® services South Africa and the African continent and has a large
network of approved distributors worldwide. SBS® Water Systems was the proud
recipient of the 2016 Durban Chamber of Commerce Exporter of the Year Award.
SBS® Water Systems (Pty) Ltd employs 60 highly skilled staff members. The
company prides itself on continual improvement and staff training ranks high on
the company’s corporate objectives.
SBS® strives to manufacture and supply a comprehensive range of world-class
liquid storage solutions to a diverse market. The company endeavours to optimise
services by delivering the right product and service on time and within budget.
SBS® undertakes to provide technical assistance and after-sales service. The
company maintains an ethical and honest business practice.
ONLINE RESOURCES
National Department of Water and Sanitation: www.dwa.gov.za
South African Water Research Commission: www.wrc.org.za
Trans Caledon Tunnel Authority: www.tcta.co.za
Water Institute of South Africa: www.wisa.org.za
85 SOUTH AFRICAN BUSINESS 2018
Grundfos
A global leader in efficient pump solutions
Grundfos is a global leader in advanced pump
solutions and a trendsetter in water technology.
We contribute to global sustainability with focus
on clean water, sanitation and climate change
by pioneering technologies that improve the
quality of life for people and show concern for
the planet. It is our commitment to being
responsible, thinking ahead and innovating that
enables us to meet all our clients’ needs on all
levels.
Water gives life to people, animals and plants
and is a necessity for industry to maintain
production. Water is essential when heating and
cooling buildings, and is also used to drain off
waste products. Therefore, anywhere where
water is a coveted resource, or needs to be
drained away, Grundfos plays a central role. We
specialise in circulator pumps for heating and
air-conditioning as well as other centrifugal
pumps for industrial applications, water supply,
sewage, dosing and disinfection and fire
protection.
In addition to pumps and pump systems,
Grundfos develops, manufactures and sells
energy-efficient standard and submersible
motors and state-of-the-art electronics for
monitoring and controlling pumps. With
electronic built into the pumps, they become
“intelligent”, i.e. capable of assessing the
current demand for water and adapting their
performance accordingly – all of which results
in a significant reduction in energy
consumption.
Grundfos has developed a number of
groundbreaking technologies within a
sustainable perspective; for example Grundfos
BioBooster which effectively cleans industrial
wastewater at source; and Grundfos LIFELINK,
AQtap water dispenser unit and AQpure a
solar-powered water treatment unit for
drinking water in the poorest areas of the
world.
Fast Facts
• Grundfos developed and produced the first
solar power driven borehole pump range.
• Grundfos is a global leader in advanced pump
solutions and a trendsetter in water
technology.
• Grundfos produces more than 16 million
pump units annually
• Grundfos is a full systems solution provider –
Water Supply, Wastewater & Water Treatment
• Grundfos introduced the first integrated drive
technology onto pump motors
GRUNDFOS (PTY) LTD
Physical address: 16 Lascelles Road,
ZA-1609 Germiston
South Africa
Postal address: P O Box 1456
Bedfordview
South Africa
Tel: (+27) 10 248 6000
Email: info_za@grundfos.com
Website: www.za.grundfos.com
OPTIMISED
SOLUTIONS
FOR THE ENTIRE
WATER CYCLE
OUR OPTIMISED SOLUTIONS AND SERVICES COMPLEMENT AN UNRIVALLED FOCUS ON
RESOURCE EFFICIENCY, DESIGN VERIFICATION AND PROJECT CONSULTANCY AND EXECUTION.
THAT IS WHAT YOU GET FROM GRUNDFOS, A FULL-LINE SUPPLIER OF PRODUCTS AND
SOLUTIONS FOR ALL WATER UTILITY APPLICATIONS.
OVERVIEW
Engineering
The renewable energy sector holds great promise for engineering firms.
Several South African engineering firms are restructuring,
aiming to become more flexible and better able to pursue
projects in other countries in Africa and overseas.
South Africa has many vertically integrated engineering
and consulting companies that offer a wide range of services. South
African companies have a presence in South American and Australian
mining, African energy and infrastructure and Middle Eastern construction
and project management. All of the biggest construction
companies (including Aveng, Aurecon, Raubex and WBHO) are multidisciplinary
companies. WorleyParsons has a minerals, metals and
chemicals project cluster (and a presence in 17 cities) in Southern
Africa. Its other major divisions are hydrocarbons and infrastructure.
Group Five, which relies on its engineering and construction division
for 80% of turnover, announced in 2017 that it was to split the
division. The group has more than 8 500 employees in Africa and is
active in Europe.
As part of its plan to become a diversified project engineering, procurement
and construction group in specific natural resource sectors,
Murray & Roberts sold Murray & Roberts Infrastructure and Building
Platform to Firefly Investments for R314-million in 2016. Investors in
Firefly include the Government Employees Pension Fund. The sale does
SECTOR INSIGHT
South African engineering
companies are restructuring.
• The WorleyParsons
Mining Centre of
Excellence is based in
Johannesburg.
not include a share in the consortium
which runs the Gautrain.
Whereas Murray & Roberts had a
focus on construction and mining
in South Africa, the drive is
now more international and focussed
on four sectors: power,
oil and gas, metals and minerals,
and water.
While there are many large
projects to occupy engineers
in South Africa, the level of
SOUTH AFRICAN BUSINESS 2018
88
iX Engineers
INTERVIEW
CEO Lebo Leshabane reflects on prospects for growth in a
number of engineering sectors in South Africa.
Lebo Leshabane
How and when did iX Engineers come into existence?
iX Engineers is a product of a merger between WorleyParsons
Infrastructure business and Black Jill’s Engineers Consulting business.
The merger took place in 2016. I was the founder and Managing Director
of Black Jill’s Engineers, which I started 10 years ago.
What is the role of women in the business?
Women play a role in all levels of management and operations from
the board, Exco and other management positions. Black women own
36% of the company and overall, we are sitting at 37.5%.
BIOGRAPHY
Lebo Leshabane is a Civil Engineer
with 15 years’ experience
in infrastructure delivery,
project management and
business management. With
a BSc. Eng. Civil (Hons) from
Wits University and diplomas
in business management and
engineering (GDE), she worked
for a consulting engineering
firm, Transnet Freight Rail and
South African Airways before
becoming founder and Managing
Director of Black Jill’s Engineers.
She sat on the Board of
Spectrum Asset Management
Company and the Gauteng
Partnership Fund (GPF) and is
an ECSA council member.
What is the focus of your business?
We are a multi-disciplinary engineering company, and we participate
in all sectors: water, roads, sanitation, buildings, power and asset management
and HSE. We are also broadening our focus to turkey projects
due to clients requests and preferences, therefore we’re partnering
with construction companies to offer turnkey solutions.
What are the prospects for the infrastructure sector?
In the short term the market is under some pressure. We see good
prospects in the water, and waste-water treatment sectors. We’re
also working on some desalination projects to address the current
water shortages.
Any other sectors showing potential?
Integrated human settlement development where you don’t only
provide housing but all the supporting services. Shopping centres,
clinics, office space and light industrial, all within the same developments
are becoming more and more popular.
Describe some of your other key projects.
We have worked on the Kusile Power Station and a new airport, which
was built from scratch at St Helena Island. Also the Mokolo Crocodile
Water Augmentation Scheme in Limpopo, Gautrain Phase 1 and the
Vale Rail Line in Mozambique.
89 SOUTH AFRICAN BUSINESS 2018
OVERVIEW
investment in infrastructure by
the state has not been at levels
that were expected in the
years since South Africa hosted
the 2010 World Cup. With slow
growth, national freight and logistics
company Transnet has not
been able to pursue its R300-
billion infrastructure programme
at the speed that it wanted to.
Aspects of the programme,
such as the acquisition of locomotives,
are going ahead and the expansion
programmes of Gautrain
and the Passenger Rail Agency
of South Africa (PRASA) are also
keeping engineers busy. Transnet
Engineering’s mechanical workshop
complex at Koedoespoort in
eastern Pretoria has been tasked
with making 90 locomotives.
The high-level specifications of
the modern locomotive are engaging
the intense focus of the
facility’s 3 692 employees. There
are seven business units located
at Koedoespoort, including a
foundry.
Transnet Pipelines recently
completed a sophisticated new
multi-product pipeline between
the coast and Gauteng. It operates
a 3 800km network of underground,
high-pressure petroleum
and gas pipelines throughout the
eastern parts of South Africa, as
well as the infrastructure and
property associated with them.
The Renewable Energy
Independent Power Producers
Procurement Programme has
created an entirely new industry
in less than seven years, with investment
of about R200-billion in
solar parks and wind farms. This
has created huge opportunities
for engineers of every sort. The
programme stalled in 2016 but is set to begin again in the fourth
quarter of 2017.
Two of the world’s largest coal-fired power stations are still under
construction in Limpopo (Medupi) and Mpumalanga (Kusile) and there
are several coal and platinum projects in both of those provinces that
are also sources of work for engineering companies.
The South African National Roads Agency Limited (Sanral) has a
good credit rating and it continues to pursue projects in all parts of
South Africa.
South Africa has one engineer to every 3 166 citizens, compared
to Malaysia where the figure is 543 citizens per engineer. The Skills
Development Amendment Act is intended to improve the situation.
Universities, universities of technology and companies are increasing
their focus on the training of engineers.
The Engineering Council of South Africa (ECSA) has started a programme
whereby trainees can earn certificates in specific disciplines
from a broader range of institutions. The qualifications will be in line
with the council’s Exit Level outcomes.
Gauteng’s long history in mining has given its engineers decades
of experience in that field and they have developed over the years
into highly competent all-rounders. In its early days, the University of
the Witwatersrand (Wits) was called the South African School of Mines
and Technology. According to Mining Weekly, Wits and the University
of Pretoria enrol more first-year mining engineering students than the
combined enrolment of Canada, the USA, Australia and New Zealand.
The University of Pretoria’s Graduate School of Technology
Management (GSTM) offers a range of degrees and short courses,
including Masters in Engineering Management, Project Management
and Technology Management. At a national level, the National Skills
Authority (NSA) works with 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.
Six of South Africa’s biggest construction companies have
established a R1.25-billion skills fund.
ONLINE RESOURCES
Consulting Engineers South Africa: www.cesa.co.za
Engineering Council of South Africa: www.ecsa.co.za
National Department of Public Works: www.publicworks.gov.za
South African Consulting Engineering Firms: www.consultsa.co.za
Southern African Institution of Civil Engineering: www.civils.org.za
Transnet Engineering: www.transnet.net
SOUTH AFRICAN BUSINESS 2018
90
Transforming South Africa’s engineering sector
Building on the success of its Enterprise Development
programme, which saw a combined turnover growth
of the initial ED partner companies by 204% and the
creation of over 100 permanent and temporary jobs
in South Africa, WorleyParsons is collaborating with
small- and medium-sized black-owned enterprises to
jointly deliver services in the mining, water, energy
and infrastructure sectors, says WorleyParsons’ CEO
Denver Dreyer.
“As part of our unwavering commitment to
transformation, we are leading this agenda in
engineering across all sectors in South Africa and are
partnering with sustainable, empowered businesses
that are capable of growing with us,” says Dreyer.
“We do not consider transformation a ‘numbers
game’ in terms of BEE points. It is imperative for
long-term success as our traditional markets are
changing. Service providers have to adjust their
business models to reflect the transformation
agenda or else be at risk of becoming obsolete.
“The partnerships that we are creating are mutually
beneficial. We will evaluate the strengths that each
party brings to the table and identify where we can
help each other. These enterprises will benefit from
skills transfer and gain an understanding of how to
successfully deliver bigger projects with our support,
while we do our part to transform the engineering
sector in South Africa,” says Dreyer.
WorleyParsons RSA to their own client base, enabling
a mutually beneficial relationship of growth.
“We are entering into agreements with suitable
companies as equals for the benefit of both parties.
Transformation is the right thing to do for our
country, but on an enterprise level, it will also secure
a better future for all the people engaged in our
organisation, regardless of who they are. Through our
transformation partnerships, we will be able to land
bigger projects alongside those partners, which will
benefit everyone in our employ,” adds Dreyer.
Denver Dreyer
Chief Executive Officer of WorleyParsons RSA
Denver Dreyer is a vibrant executive with 20 years
of strategic business development and operational
experience in the chemicals, infrastructure, power
and hydrocarbons sectors in sub-Saharan Africa.
Denver is the CEO of WorleyParsons RSA, part of
the global WorleyParsons Group, and is responsible
for the company’s mining, hydrocarbons and
power operations based in Johannesburg, South
Africa. He is passionate about the meaningful
and sustainable transformation of engineering in
South Africa.
Referred to as the Enterprise and Supplier
Development (ESD) programme, WorleyParsons RSA
is also assisting the ESD partner companies with
branding, marketing collateral, legal compliance,
market positioning, financial compliance and
introducing potential clients that WorleyParsons
RSA is already servicing to ESD partner companies.
Conversely, these SMEs have introduced
Helping our customers meet the world’s
changing resources and energy needs
WorleyParsons delivers projects, provides
expertise in engineering, procurement and
construction, and offers a wide range of
consulting and advisory services. We cover
the full lifecycle, from creating new assets
to sustaining and enhancing operating
assets, in the hydrocarbons, minerals, metals
and chemicals, and infrastructure sectors.
Our resources and energy are focused on
responding to and meeting the changing
needs of our customers over the long term and
thereby creating value for our shareholders.
The WorleyParsons global operations is
headquartered in Australia and listed on the
Australian Stock Exchange. In operation since
the 1970s, WorleyParsons is one of the world’s
largest project-delivery organisations. Our
comprehensive geographic presence enables
us to provide our customers with a unique
combination of extensive global resources,
world-recognised technical expertise and deep
local knowledge to deliver small studies through
to mega-projects.
To better meet our customers’ needs, and
leverage our global skills, WorleyParsons’
operating model has been reorganised across
four business lines: Advisian provides
management and strategic advisory services,
coupled with technical consulting and deep
domain expertise, to address our clients’
business and asset challenges. Our dedicated
Major Projects business line is focused on
successfully delivering projects that pose a
higher level of commercial risk due to their size,
complexity and scope. Our Services business
line delivers projects of all sizes across a
range of industry sectors, bringing the best of
global thinking, technology and experience to
local challenges. The Integrated Solutions
usiness line focuses on EPC engineering
activities in the brownfield space and offers our
customers a single point of responsibility in the
management of their existing assets.
Zero Harm is our corporate vision for health,
safety and the environment (HSE). We are
committed to our vision and apply it to all
operations, at all times, in all locations, and at all
levels of responsibility. EcoNomics provides
our customers with the systems, technologies
and expertise to optimise and balance financial,
social and environmental outcomes, improving
sustainability performance while enhancing
profit and long-term viability.
Hydrocarbons
WorleyParsons has been delivering engineering
and project management services to the global
hydrocarbons industry for over 60 years. Our
full-scope global project services span the
entire asset lifecycle from the initial conceptual
phase of major greenfield developments
to ongoing asset services and brownfield
modifications projects. Our capability and
experience spans all oil and gas extraction and
processing facility types.
Minerals, Metals & Chemicals
WorleyParsons has over 50 years’ experience,
gained through the delivery of some of the
most complex and challenging minerals and
metals projects across the world. We specialise
in new project developments and existing
facility upgrades or expansions, across a whole
range of commodities, including base metals,
precious metals, coal, chemicals, ferrous metals,
alumina, aluminium and iron ore. WorleyParsons’
Mining Centre of Excellence in Johannesburg
has niche expertise in underground mining,
particularly in hard rock and precious minerals
and metals. This local capability, coupled with
WorleyParsons’ global expertise, enables us to
deliver successful pit-to-port infrastructure
projects across the whole customer value chain.
Infrastructure
WorleyParsons’ infrastructure business
supports our resource and energy sector
projects and offers complete infrastructure
solutions for urban markets. Our service offering
covers environmental and restoration services,
development of water gathering and processing
facilities, rail and port assets, power generation
(across coal, gas, renewables and nuclear)
and transmission.
Supported by the global business, WorleyParsons
RSA prides itself on understanding and
committing to its customers’ goals in the sectors
that we operate.
Website: www.worleyparsons.com
Email: wprsainfo@worleyparsons.com
OVERVIEW
Manufacturing
Large incentives are available to investors in manufacturing.
SECTOR INSIGHT
The Manufacturing Circle
aims to create one-million
jobs.
• The structural mill at
Evraz Highveld is working
again.
The Manufacturing and Competitiveness Enhancement
Programme (MCEP) of the National Department of Trade and
Industry (dti) announced in 2017 that it had disbursed a total
of 1 552 grants to the value of R5.8-billion which had resulted
in 230 000 jobs being “sustained”. Plastics, pharmaceuticals and
chemicals received 31% of the money, metal fabrication, capital and
real transport equipment 28% and agri-processing 21%.
Italian forged wheel manufacturer Lucchini received tax and
training allowances from the dti which helped it decide to invest
R200-million in a new forged wheel-making facility. Blank railway
wheels imported from Italy will be completed at the Germiston plant.
Industry support from the state is necessary because the manufacturing
sector’s contribution to the national economy has slipped
to below 13% from a high of 24% in the 1980s. This is according to the
chairperson of the Manufacturing Circle, as reported in Engineering
News. Andre de Ruyter added that if the percentage could be
brought to 30%, the sector could contribute up to one-million
more jobs. The Manufacturing Circle is in talks with government
about how to improve policy to bring this about.
The sector that has done best since 1994 in terms of growth is
the automotive sector, followed by resource-based manufacturing.
The latter sector includes steel, aluminium, petrochemicals, paper
and pulp, and non-metallic minerals.
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 communication technology.
Steel and petroleum collectively
make up about 45% of South
Africa’s total manufacturing
production capacity.
Steel has been experiencing
a volatile few years, with
reduced demand from China
severely reducing production
volumes in South Africa. The
Steel and Engineering Industries
Federation of Southern Africa
(Seifsa) reported that 19 000
jobs were lost in the metals and
engineering sector in the nine
months to September 2016. This
sector makes up 28% of manufacturing.
Cheap imports have
been at the heart of problems for
the steel sector, as they have for
textiles, but other issues include
energy prices and labour costs.
SOUTH AFRICAN BUSINESS 2018
94
OVERVIEW
The National Department of
Trade and Industry has moved
to try to protect the local steel
industry by regulating the use
in the construction sector of
locally produced and manufactured
steel and steel products.
Another possible intervention is
related to energy prices. Silicon
Smelters, which has plants in
Mpumalanga and Limpopo, has
asked for a two-year negotiated
price agreement (NPA) on electricity,
which would allow it to
resume production. The National
Energy Regulator of South Africa
(Nersa) has the power to grant
such exemptions where the industry
is regarded as strategic.
The structural mill of Evraz
Highveld Steel in Witbank was
officially relaunched in June 2017
after ArcelorMittal South Africa
signed a contract to supply
blooms and slabs for the mill to
make into heavy structural steel.
Evraz Highveld went into business
rescue in 2015. The contract is for
two years with an option to renew
for another year. Alternately,
ArcelorMittal may buy the mill
after the two years.
Elsewhere in Mpumalanga,
the presence of Ferrometals
means that Mpumalanga is still
an important place for metals
and machinery manufacturing,
but the turbulence in the steel
sector has reminded everyone of
the need to diversify. Samancor
Chrome (which runs Ferrometals)
is the second-largest ferrochrome
producer in the world with
three plants.
Middelburg-based Columbus
Stainless is a major supplier of
stainless-steel products to the
SOLUTIONS FOR AFRICA
Modern manufacturers are coming up with ways to improve
efficiency. In Africa, water saving and conservation is becoming
a vital part of doing business.
Marley Pipe Systems has released a revolutionary new hot and
cold water supply solution called Pro-fit. Not only is Pro-fit
made from the highest grade PE-RT (Polyethylene with Raised
Temperature Resistance), which reduces loss through punctures
and tears, but it also reduces installation costs by 50% and is
resistant to corrosion and impact. Water passing through the
system is healthier and by avoiding the use of metal any scrap
value is eliminated, thus making the product more secure.
The recent extended drought has reminded all South Africans
of how fragile water supply can be. The Marley Vynadeep®
Rainwater System efficiently channels roofwater into tanks,
reducing demand on ground water and supplying vital back-up
for individual private or corporate premises.
Marley Pipe Systems is active in several parts of Africa and
with an increased uptake in the use of gas, Marley’s presence
is growing. As big retailers expand their footprints in Namibia,
Mozambique and Malawi, so Marley distributes larger volumes
through those channels. With the mining sectors of countries
such as Zambia, Tanzania and the DRC showing signs of recovery,
so the gas market is growing further still.
domestic and international market. The Manganese Metal Company
in Nelspruit is the largest producer of pure electrolytic manganese
metal in the world. Delta EMD, in the same town, is one of the biggest
producers of electrolytic manganese dioxide.
Iron production at Saldanha in the Western Cape includes hot-rolled
coil produced by ArcelorMittal and cold-rolled and galvanised steel
by DSP, a joint venture between South Africa’s Industrial Development
Corporation (IDC) and a Belgian company, Duferco.
Local production
The manufacturing sector employs the third most people, about
1.7-million, after financial services and retail. Three of South Africa’s
95
SOUTH AFRICAN BUSINESS 2018
OVERVIEW
most important manufacturing sectors (automotive, food and beverages,
and pharmaceuticals and chemicals) are dealt with in separate
sections of this book.
The Department of Trade and Industry (dti) is the state’s lead promoter
of the sector, as seen in the MCEP example above. The main vehicle
for the dti is the Industrial Policy Action Plan (IPAP), the seventh version
of which was launched in 2016. The Support Programme for Industrial
Innovation (SPII), run by the Industrial Development Corporation (IDC)
on behalf of the dti, promotes technology development.
New technology has been embraced by some innovative manufacturers.
Desert Wolf’s Skunk Riot Control Chopper is an unmanned light
aerial vehicles (UAV) that has proved popular in the world market. Denel
makes a drone product that can be adapted for use by conservationists.
Another IDC initiative has allocated R23-billion over three years to support
the Black Industrialist Programme to help existing entrepreneurs grow.
Part of the drive to improve South Africa’s rail infrastructure involves
getting local companies to manufacture rolling stock. The Passenger Rail
ONLINE RESOURCES
Aluminium Federation of South Africa: www.afsa.org.za
Centre for Advanced Manufacturing: www.cfam.co.za
Manufacturing Circle: www.manufacturingcircle.co.za
National Department of Trade and Industry: www.thedti.gov.za
South African Textile Federation: www.texfed.co.za
Steel and Engineering Industries Federation of Southern Africa:
www.seifsa.co.za
Agency of South Africa (PRASA)
has signed local consortium
Gibela to deliver 600 passenger
trains. Transnet Freight Rail
has contracted four suppliers to
build 1 064 new diesel and electric
locomotives.
There has been a recovery in
the textiles sector, greatly helped
by an injection of R7-billion
from the state in various forms
since 2009. There are about
90 000 workers employed in the
sector, which means numbers
are increasing after a big dip
when the sector suffered from
cheap imports.
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 also
showing a good recovery. 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 is a very
successful outdoor clothing
manufacturer with a factory in
Cape Town which supplies Cape
Union Mart.
The furniture sector is not
growing but there are about
2 200 companies in the country,
employing more than 26 400
workers (1% of manufacturing
GDP and 1.1% of manufacturing
employment).
SOUTH AFRICAN BUSINESS 2018
96
INTERVIEW
Marley Pipe Systems
Managing Director Brett Kimber explains how quality is at
the heart of this expanding company.
Brett Kimber
Has the decision to create two divisions paid dividends?
It has created the understanding that mining and industrial is really
focused on projects. Our PVC plumbing business in Nigel is mainly
focused on replenishment of stocks at retail outlets.
Do you have partnerships with multiple retailers?
We have relationships with all the major retailers but also with smaller
hardware stores, so we supply across the board.
BIOGRAPHY
Brett Kimber studied at the
universities of KwaZulu-Natal,
Cape Town and Johannesburg
for degrees in Chemistry, Geology
and Mineral Economics.
He worked as a senior geologist
for Anglo American before
working for Afrox (South Africa)
and parent group Linde in the
US and the Far East. He was
CEO and Managing Director
of Afrox and has been nonexecutive
Chairman of renewable
energy resources company
Renergen since 2015. In May
2016, Kimber was appointed
Managing Director of Marley
Pipe Systems.
Please tell us about being part of Aliaxis.
They are focussing on the professional market. The focus is on key major
megatrends such as high-rise developments and irrigation for farming
and food production. We also cater for both markets.
What does Marley stand for?
There has been a deterioration in standards in the country, with SABS
struggling to meet its mandates and shortcuts being taken. Importantly,
what Marley stands for is quality and has done so for fifty years.
What is your key offering?
We have a full range of products and we have more than enough capacity
to meet customer demands. We have a large footprint throughout
the SADC countries. We have the quality, the range, the capacity
and the service levels so that’s the key commitment that Marley offers
our customers.
Are there any popular new products?
Marley Pipe Systems has recently relaunched their revolutionary
hot and cold water supply solution called Pro-fit. Not only is Pro-fit
made from the highest PE-RT (Polyethylene with Raised Temperature
Resistance), which reduces loss through punctures and tears but it also
reduces installation costs by up to 50% and is resistant to corrosion
and impact.
97 SOUTH AFRICAN BUSINESS 2018
OVERVIEW
Automotive
Multi-billion-rand investments are boosting vehicle production.
SECTOR INSIGHT
Auto manufacturers and
government are setting
ambitious targets.
• General Motors has sold
to Isuzu.
South Africa’s automotive industry is on course to produce
a record number of cars in 2017, a remarkable achievement
in the face of the wider economy’s modest performance.
In September 2017, the National Association of Automobile
Manufacturers of South Africa (NAAMSA) was projecting a figure of
622 000, which would beat the volume produced in 2015 by about
5 000. Long-term state support of the industry through the Automotive
Production and Development Programme (APDP) is a major reason
for the continuing health of this vital sector.
The decision in 2017 of General Motors to disinvest from South
Africa does not seem to have had any kind of knock-on effect. The
company’s selling of its plant in Port Elizabeth was just one sale of
many around the world; Isuzu has bought the factory.
Many analysts believe that a figure of one-million vehicles must be
achieved for the industry to become truly sustainable. In the context of
policy uncertainty in some areas of the South African economy it was
significant that a South African Auto Master Plan was announced in July
2017, soon after the policy congress of the African National Congress.
The Department of Trade and Industry, working together with
NAAMSA, set targets for 2035 to increase production to 1% of world
volumes (which would mean 1.4-million vehicles made in SA), to
increase local content and to double employment and black-owned
businesses in the sector.
Automotive and automotive
components make up 30.2% of
total manufacturing output and
about 7% of the nation’s Gross
Domestic Product (GDP).
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). Armoured cars are
also produced in Gauteng. DCD
Protected Mobility makes armoured
cars in Boksburg, which
are branded as Vehicle Mounted
Mine Detectors. In Benoni, BAE
Systems OMC designs and manufactures
protected vehicles.
Volkswagen and Ford are the
country’s only engine manufacturers.
Policy certainty is allowing
for major domestic investments
and it is attracting foreign direct
investment. Some recent milestones
include:
SOUTH AFRICAN BUSINESS 2018
100
O&M CAPE TOWN 2382/E
Volkswagen
Economy Parts
www.vwcommercial.co.za
Your vehicle is not merely a means of transport to fulfill your clients’ needs. It forms a
critical part of your business success. Volkswagen Commercial Vehicles understands that
your vehicle is your Business Partner.
In order to keep your out-of-warranty Volkswagen Commercial Vehicle a 100% pure
Volkswagen, we’ve developed a cost-effective range of genuine parts that we hold to the
highest standards: Volkswagen Economy Parts.
Economy Parts are manufactured to Volkswagen’s Global Quality Standards and, when
fitted by trained technicians in our Dealer network, will ensure the critically important
service and repair history of your vehicle.
Volkswagen Economy Parts, along with our Dealers’ technical experts will ensure you
have the support and peace of mind to keep your Business Partner on the road for many
more kilometres. And because we uphold the highest international standards, there is no
compromise on safety, performance, or durability in these parts.
Now you might be wondering: How do we keep the price of Volkswagen Economy Parts
down? That’s simple, we manufacture each part so it can be fitted to multiple out-ofwarranty
vehicle models.
Critical to understand, is that Volkswagen will never compromise on quality. The materials
used, manufacturing and quality assurance processes of Economy Parts are similar to that
of Volkswagen Genuine Parts, and both Volkswagen Economy and Genuine Parts carry
the same warranty.
Ask your Volkswagen Commercial Dealership about the range of Economy Parts available
for your commercial vehicle.
Commercial
Vehicles
OVERVIEW
• Volkswagen SA exported 20%
more Polos in 2015 than the
year before, and kept up the
momentum into 2016 and
2017. In 2018, the Uitenhage
plant will introduce three
shifts, increasing export
volumes even further.
• National export volumes
reached a record 344 822 in
2016, earning R118.1-billion.
• Mercedes-Benz exported
more than 10 000 vehicles out
of the Port of East London in
one month in April 2016.
• BMW will invest R6-billion to
start producing the X3 sportutility
vehicle.
• Nissan will double local production
from 2018.
• Ford will hire 1 200 new staff as
it ramps up production of the
Ford Ranger and introduces
the Ford Everest.
• In 2016, Toyota invested
R6.1-billion into a large plant
at Prospecton, Durban. The
company regularly sells about
a quarter of the vehicles sold
in South Africa, and accounts
for the same proportion
of exports.
The latest foreign investment,
and one of the biggest, will see
Beijing Automobile 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 state-owned 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 sport-
utility vehicles. About 2 500 jobs are expected to be created. This follows
the earlier investment of Chinese manufacturer First Automotive
Works (FAW), which has established a R600-million assembly plant in
Zone 2 at Coega.
Companies like BAIC and FAW may well be positioning themselves
to push into Africa, not only for selling vehicles but for sending automotive
parts and partly-assembled 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).
Automotive components
South Africa has a sophisticated automotive component sector. The
catalytic converter sector experienced incredible growth for a number
of years but some volatility in the platinum mining sector, together
with increased interest in electric vehicles and hybrids, means that
exporters (largely based in Port Elizabeth) have had to work harder.
A catalytic converter changes bad gasses 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.
ONLINE RESOURCES
Automotive Industry Development Centre: www.aidc.co.za
Automotive Industry Export Council: www.aiec.co.za
Automotive Supplier Park: www.supplierpark.co.za
National Association of Automobile Manufacturers of South
Africa: www.naamsa.co.za
National Association of Automotive Component and Allied
Manufacturers: www.naacam.co.za
SOUTH AFRICAN BUSINESS 2018
102
Chemicals and pharmaceuticals
Drug research is in the spotlight.
OVERVIEW
The Drug Discovery and Development Centre (H3D) at the University
of Cape Town wants to become the African continent’s first drug
discovery entity. Companies such as Merck, Novartis and Janssen and
non-profits like the Bill and Melinda Gates Foundation are working
with the centre.
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 acquiring companies such as a genetic manufacturer
based in Cyprus. Cipla Medpro is another big company.
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 Africa’s chemical industry contributes 5% to national gross domestic
product (GDP) and about 60% of earnings are derived from exports.
The complexes run by Sasol at Secunda (Mpumalanga) and Sasolburg
(Free State) underpin the national manufacturing capacity in chemicals.
Sasol Chemical Industries makes about 60% of South Africa’s polypropylene.
Safripol 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 carbo-chemical),
Safripol (plastics) and Afrox are among the other major companies
operating out of Sasolburg.
The by-products of the sugar and forestry processing plants of
KwaZulu-Natal benefit the chemicals sector. Illovo Sugar manufactures
downstream products such furfural, furfuryl, alcohol, diacetyl and
ethyl alcohol.
ONLINE RESOURCES
Chemical and Allied Industries’ Association: www.caia.co.za
National Association of Pharmaceutical Manufacturers:
www.napm.org.za
Plastics SA: www.plasticsinfo.co.za
SECTOR INSIGHT
Sappi makes 17% of the
world’s dissolving wood pulp.
Sappi makes 17% of the world’s
dissolving wood pulp. Two of the
company’s three mills are in South
Africa, Ngodwana (Mpumalanga)
and Saiccor (KwaZulu-Natal).
The latter mill has a capacity of
800 000 tons per annum of sulphite
dissolving wood pulp, making it the
world’s single largest manufacturing
site.
Two large oil refineries and a
sophisticated sugar milling and
refining industry underpin chemical
manufacturing in KwaZulu-
Natal. German chemicals group
Lanxess has built a carbon dioxide
concentration unit at its existing
plant in Newcastle where the steel
works of ArcelorMittal produce
by-products such as ammonium
sulphate. Large companies such as
Karbochem, Bayer, African Amines
and SA Calcium Carbide also operate
in the area.
AECI is one of South Africa’s
biggest groups. The two principal
divisions are AEL Mining Services
and Chemical Services .
Foskor is the country’s only
vertically integrated phosphates
producer.
103 SOUTH AFRICAN BUSINESS 2018
OVERVIEW
Food and beverages
Consumer companies are looking to Africa for growth.
Global consumer goods company Unilever has invested
nearly R4-billion in recent years, including R600-million in
a Gauteng ice-cream factory that will boost the company’s
drive into Africa.
This highlights a trend across the food and beverage sector. In 2016
Nestlé South Africa invested R1.2-billion in adding instant coffee to
the products it makes in South Africa. Heineken’s fairly new brewery
in Gauteng is already undergoing expansion, with cider production
set to increase.
The food and beverage sector experienced 18% growth from 1996
to 2013. A very serious drought and higher input costs led to tough
conditions for companies in the sector in the six months to June 2017.
An Ernst & Young analysis of consumer products companies with collective
annual revenues of R180-billion stated that the period had been
“one of the weakest” because of a combination of political, economic
and climate conditions.
Some of the biggest companies in the sector are Tiger Brands, RCL
Foods, Pioneer Foods, Clover, AVI and Astral. According to the EY report,
the industry’s revenue comes mostly from agri-business (25.8% of total
industry revenue), diversified companies (23%), food producers (13.6%),
beverage producers (12.5%) and sugar producers (8.9%).
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 accounts 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 about half of the companies in the sector located
in Gauteng.
ONLINE RESOURCES
Agricultural Research Council: www.arc.agric.za
FoodBev SETA: www.foodbev.co.za
National Agricultural Marketing Council: www.namc.co.za
SECTOR INSIGHT
Agri-business contributes
a quarter of revenue in the
sector.
The South African beer market
is growing by 1.5% per year.
Key players in the industry in
South Africa include South
Africa Breweries (SAB) (malt
beer), United National Breweries
(sorghum beer), Distell (spirits and
flavoured alcoholic beverages, or
FABs) and Brandhouse (malt beer,
spirits and FABs). SAB became part
of Anheuser-Busch in 2016.
RCL Foods, formerly Rainbow
Chickens, has been on an aggressive
run of acquisitions. RCL is reconsidering
its business model
with a thought to producing
fewer frozen chickens and doing
more in the fast-food sector.
The fast-food and familyrestaurant
franchise sectors are
sophisticated and cover a broad
range, from the indigenous
Spur and Nando’s brands to international
giants such as KFC,
McDonald’s and recent arrival of
Burger King.
Wimpy is the second largestfranchise
operation in SA (after
KFC).
SOUTH AFRICAN BUSINESS 2018
104
PROFILE
SYSPRO software is an award-winning, best-of-breed
Enterprise Resource Planning (ERP) software solution
for on-premise and cloud-based utilisation. Scalable
for rapid growth, SYSPRO is acknowledged by industry
analysts to be among the finest enterprise
resource planning solutions in the world. SYSPRO
software’s powerful features, simplicity of use, information
visibility, analytic and reporting capabilities,
business process and rapid deployment methodology
are unmatched in its sector.
While SYSPRO customers represent all industry
segments, rich extensions for food, medical devices,
electronics and machinery companies, make
SYSPRO the first choice for growing companies
looking for a cost-effective ERP solution.
SYSPRO, formed in 1978, has earned the trust of
thousands of companies globally for its suite of
visionary software that enhances the competitive
thrust of small and mid-sized manufacturers and
distributors. SYSPRO enjoys one of the highest
customer retention rates in the industry.
What is ERP?
Enterprise Resource Planning (ERP) Software automates
and integrates core business processes such
as customer orders, production, inventory control,
and reporting. An ERP system can drive significant
improvements in manufacturing, distribution and
financial management.
“With SYSPRO, our data tracking ability is phenomenal.
Improved visibility of sales history is also a powerful tool.
SYSPRO provides the quality reporting and analysis of
our business needs.”
Sandi Loggenberg – Cibapac’s Chief Technology
Officer.
CASE STUDY
Integrating manufacturing and distribution
pays off for packaging company Cibapac, one of
the largest manufacturers of PVC stretch film
in South Africa, that also holds a major share
of the expanded polystyrene tray market for
fresh produce, meat, poultry and fast foods.
Disjointed processes between the manufacturing
and distribution departments meant that
efficiencies were suffering. Production rosters
and stock levels were not based on accurate
sales forecasts or demand estimates.
A fully integrated SYSPRO ERP solution with
multiple core modules was implemented. As a
result, Cibapac was able to bring its independent
supply chain processes and components
into one seamless supply chain. Modules included
financial modules, core distribution
and manufacturing. Improved data tracking,
streamlined inventory management and
accurate accounting practices are just some of
the more noticeable benefits.
CONTACT INFO
Physical address: Block A, Sunninghill Place,
9 Simba Road, Sunninghill 2191
Tel: +27 11 461 1000
Email: info@za.syspro.com
Website: www.syspro.com
105 SOUTH AFRICAN BUSINESS 2018
OVERVIEW
Transport and logistics
Investments in rail are increasing.
SECTOR INSIGHT
Sheltam is expanding its rail
operations into Africa.
South Africa has 21 000km of railway lines and 747 000km
of roads, 325 019 heavy-load vehicles and the road freight
industry employs 65 000 drivers. The logistics and courier
market is worth R10-billion. There are 135 licensed airports
in the country, 10 of which have international status.
Investment in improved infrastructure is being made at all of
South Africa’s ports. Special Economic Zones are in place at the
ports of Saldanha on the West Coast, Coega (Port Elizabeth), East
London, and Richards Bay in northern KwaZulu-Natal. 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 at the Maluti-A-Phofung SEZ on the
N3 is an inland port that can handle cargo containers and shift cargo
from road to rail, reducing congestion and costs.
Transnet is the state-owned enterprise focussed on transport and
logistics. It comprises Transnet Freight Rail, Transnet Engineering,
Transnet National Ports Authority, Transnet Port Terminals and Transnet
Pipelines. Transnet Freight Rail’s operations represent about 80% of
Africa’s rail infrastructure. With 25 000 employees TFR has specialist
divisions for hauling coal and iron ore together with a general freight
division which transports everything from grain to chemicals.
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 is regularly transported
along the former and upwards
of 70-million tons can travel annually
along the latter.
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 Transnet is working
hard to attract more business to
the rail network. TFR has put 28
new electric locomotives on the
line supporting steel producer
ArcelorMittal to improve service.
The rail sector is receiving
many investments. The speedy
Gautrain which started life as
a service to the main airport in
Johannesburg has been tremendously
popular and there are
plans to expand its network. Bids
to supply 12 new trains will be
adjudicated on in 2018.
A total of 600 new passenger
trains will be added to Metrorail’s
fleet at a cost of R51-billion.
Transnet Freight Rail has ordered
1 064 diesel and electric locomotives
from four suppliers.
Sheltam Group is expanding
its services beyond rail services.
A new lease company (for rolling
SOUTH AFRICAN BUSINESS 2018 106
OVERVIEW
stock) and an investment company
(focussed on rail infrastructure)
underpin the group’s African
ambitions.
Multi-billion-rand road projects
planned by the South African
National Roads Agency Limited
(Sanral) include a Wild Coast toll
road project. The bridge over the
Mtentu River will be the highest
bridge in the country at 217m and
will cost R1.6-billion.
Air
Airports Company South Africa
(Acsa) owns and operates the
country’s 10 biggest airports. The
company also manages airports in
India and Brazil. In 2016/17 the company
reported a profit of R2-billion.
Ekurhuleni wants to leverage
the location of South Africa’s
biggest airport, OR Tambo
International, into a major economic
asset. OR Tambo International
in Johannesburg caters for more
than 17-million passengers every
year. The Cape Town International
Airport has been expanded and
improved and recorded 10-million
passengers in 2016. King Shaka
International Airport (KSIA) is north
of Durban.
Several airports are possible
future regional freight nodes:
Wonderboom Airport in Pretoria,
Polokwane Airport in Limpopo and
Mafikeng Airport in North West
Province.
The South African Ministry of
Transport has several agencies
and businesses reporting to it: Air
Traffic and Navigation Services
Company, 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 SA (PRASA).
TAKEN – ACROSS THE BORDER
Stolen cars being driven over the border to neighbouring countries
has been a phenomenon for some time in South Africa, but new
markets are emerging. According to a January 2017 article on
sowetanlive, some cars are going through Maputo harbour to
buyers in the Middle East.
The article reported on six luxury vehicles taken from one dealership
in a single heist. The Chief Operating Officer of the SA Insurance
Crime Bureau, Hugo van Zyl, said there was “certainly an increase”
in the hijacking and theft of luxury cars.
In response to this trend, EKS Secure Technologies has created
a highly proactive Tactical Reaction Recovery Team that is fully
skilled to deal with any treacherous situation. A force of over
200 tactical officers and high-response recovery units positioned
throughout South Africa and across the borders are at all times
armed with a rifle to cater for any unforeseen situations. Vehicles
and helicopters are deployed as appropriate. Team members all
have a minimum of three years’ experience in the security environment
and undergo rigorous training, shooting tests, fitness
training, polygraphs and vetting. The EKS Team is assisted by
the South African Police Service with arrests and recovery in
the event of theft.
ONLINE RESOURCES
Airports Company South Africa: www.acsa.co.za
National Department of Transport: www.transport.gov.za
Passenger Rail Agency of South Africa: www.prasa.com
South African National Roads Agency: www.sanral.co.za
Transnet: www.transnet.net
107 SOUTH AFRICAN BUSINESS 2018
PROFILE
EKS Secure
Technologies
Securing assets in South Africa, and beyond.
EKS Secure Technologies is a certified Tracking
Company. A fully fledged black and proudly South
African-owned company, EKS was founded in 2016
and operates nationwide. The company’s head
office is in Pretoria. We have a footprint of over 200
ground recovery vehicles and choppers in all nine
provinces and we have a cross-border recovery
team. With these resources, we can definitely assure
our clients of state-of-the-art security, nationwide.
We specialise in Vehicle Tracking, Asset Tracking,
Asset Management Solutions, Fleet Management
Solutions and ground security such as Guarding
and CCTV Monitoring.
EKS Secure Technologies has built a formidable
reputation of delivering efficient, quality service at
a competitive price on all levels of tracking. Through
a culture of continuous innovation, driven by an
experienced and dynamic team, EKS has built a reputation
of providing proactive value-added service to
our partners and clients.
Mission
To provide clients with innovative security solutions
in vehicle tracking, fleet management solutions,
asset management and ground security using
excellent technology, teamwork and professionalism,
while growing rapidly and developing in
terms of the political landscape and demographics
of South Africa.
The way we work
• An unconventional, innovative and yet compliant
professional approach to delivering
our services
• An emphasis on the implementation of the
service and delivery of all pre-agreed outcomes
• Recognition of a unique opportunity to make a
difference in everything we do
• A “can do “attitude as well as crafting solutions
for our clients
• Empowerment: creating opportunities through
training and employment
Services and scope of work
• Vehicle tracking
• Asset tracking
• Fleet management
• Asset management
• Security and guarding
Quality assurance
All EKS Secure Technologies’ hardware and software
is well within the standard of SABS and ICASA regulations.
We have our own team of qualified hardware
and software engineers who are fully capable of
building and manufacturing cutting-edge hardware
that is compatible with our software to deliver
immediate service and configuration as required.
CONTACT INFO
EKS Secure Technologies (Pty) Ltd
Tel: +27 12 003 4126 | Fax: 086 123 4231
Email: info@ekssecure.co.za
Physical address: 22 Pretorius Street,
Pretoria 0001
Website: www.ekssecure.co.za
SOUTH AFRICAN BUSINESS 2018
108
INTERVIEW
EKS Secure
Technologies
Live Tracking and Monitoring that gives peace of mind.
Cornelius Rambelani, CEO
What technologies give your company an edge?
Our products and technology are flexible in that we customise to every
client’s need. The main driver is for clients to see substantial return on
investment and cost reduction.
Please describe the EKS Mobile Solution.
Our Mobile Solution brings your assets closer to you. Clients view and
monitor their vehicles on their mobile phone, giving them total control
of the whereabouts of the vehicle.
BIOGRAPHY
Cornelius Rambelani has an
Advanced Diploma in Management
from the Milpark Business
School and extensive experience
in the motor industry and
in fleet management. Having
started as an apprentice in Port
Elizabeth, Cornelius worked
in various car dealerships in
Gauteng, up to the position of
Aftersales Manager. As Technical
Manager at a tracking
company, he had 36 technicians
reporting to him before
becoming Operations Manager
of a fleet support company
with branches in three cities.
He is currently the CEO of EKS
Secure Technologies.
What are some of your consumer products?
EKS Recovery, EKS Live Tacking and EKS Monitoring. These products
are backed by our 24/7 Call Centre and a recovery team countrywide
meaning wherever the car gets stolen, we will go and recover it.
What are the benefits of the Fleet Solution?
It is used by all companies from small fleet to large fleet. Everyone
benefits, from the fleet manager right through to the business owner:
• The system gathers data, saving you time.
• You receive customised reports when you want them.
• Reminders are sent to clients of their licence disc renewals, service
reminders, PDP renewals, etc.
• Clients can print reports without contacting the office.
What is your flagship product?
Our camera solution gives the client live tracking and history retrieval
with benefits such as on-road and in-cab camera; recording of all alerts;
2Gig of space; video in HD quality; monitoring driver behaviour; and
scoring and rating of drivers among themselves.
Do you deal with a lot of cross-border asset searches?
Our products work across the globe with our immediate emphasis being
SADC countries like Zimbabwe, Mozambique, Swaziland, Botswana
and Zambia.
109 SOUTH AFRICAN BUSINESS 2018
OVERVIEW
Business services
Consulting is a growth industry.
South Africa represents about 75% of Africa’s consulting market,
but there has been good growth in other parts of Africa in
recent years.
Several large international consulting firms are active in
South Africa and offer a broad range of services. After South Africa
achieved democratic status in 1994, the sector experienced a boom.
Companies such as PricewaterhouseCoopers (PwC), Deloitte,
Accenture, McKinsey & Company, Bain & Company and EY are amongst
the biggest consulting firms operating in South Africa. A major controversy
erupted in 2017 when KPMG South Africa became embroiled
in the issue of state capture because of its auditing contract with the
Gupta family and its report on an alleged secret unit within the South
African Revenue Service (SARS). Eight senior executives resigned. The
“Big Four” auditing firms, all of which have diverse consulting divisions,
are responsible for auditing South Africa’s big banks so they play a vital
role in the financial system. The other three are Deloitte, EY and PwC.
The uproar about KPMG illustrated the importance of the role of industry
regulators such as the South African Institute of Chartered Accountants
and the Independent Regulatory Board for Auditors.
The Southern African management consulting market was estimated
to be worth R15.6-billion in 2014 (Source Information Services). South
African consultancies such as DaySeven Group offer management
consulting, advisory services and research.
In the financial sector, banks have divisions that offer advice when
big transactions are made in areas such as the structuring of deals,
ONLINE RESOURCES
Business Process enabling South Africa (BPeSA):
www.bpesa.co.za
Independent Regulatory Board for Auditors: www.irba.co.za
Institute of Management Consultants and Master Coaches of
South Africa: www.imcsa.org.za
National Department of Trade and Industry: www.dti.gov.za
South African Institute of Chartered Accountants:
www.saica.co.za
SECTOR INSIGHT
Regulators were active in
2017.
equity finance and asset finance.
Several consulting firms specialise
in economic policy, strategy and
risk management. Among these
are DNA Economic, Econometrix,
Eunomix and Genesis Analytics,
the largest economic consulting
firm in Africa.
Business support services
include those services that companies
may prefer to outsource
to specialist providers so that
they can focus on their own core
competencies. This might include
security, catering, cleaning, legal
services, furniture and stationery
supply, software and hardware
management, recruitment, call
centres, customer care and many
other key services that are better
left to the experts.
Call centres are a key element of
the Business Process Outsourcing
(BPO) sector. The national Minister
of Trade and Industry, Rob Davies,
says that the local BPO sector has
had compounded growth since
2012 of 25% year-on-year. There
are approximately 30 000 jobs nationally
with the top market being
the UK.
SOUTH AFRICAN BUSINESS 2018
110
DaySeven Group
OVERVIEW
Patrick Ooro, Director of DaySeven Group, outlines the
growth strategy for this fast-growing group.
Patrick Ooro
Please describe the main areas of your business.
DaySeven Group comprises four companies:
• DaySeven Consulting – Management Consulting, Advisory Services
and Research Services
• DaySeven Training – Training facilitation services and courses
• DaySeven Projects – Project identification, development, execution
and management
• DaySeven Technology – Technology consulting and custom ICT
solution development
What is your area of operation?
I am involved mainly in the management and strategic business expansion
of the entire DaySeven Group. I also have roles within DaySeven
Consulting, Projects and Technology.
BIOGRAPHY
Patrick Ooro is a Director at
DaySeven Group and is responsible
for business and project
identification and development
across Sub-Saharan Africa. He
was previously the Marketing
Manager, Sub-Saharan Africa
at Hitachi Europe (Johannesburg
office) and has been involved
in several projects in
the energy, water, healthcare
and ICT sectors across Sub-
Saharan Africa. Qualified in
economics, he has worked in
the banking sector as well as
in private sector consulting,
advisory and research across
Sub-Saharan Africa.
When was DaySeven formed?
DaySeven Group was formed in 2008 and has evolved over the past
nine years to encompass the different specialist companies.
What is the story behind the group’s name?
The group’s name is inspired firstly by a week having seven days and
secondly by the belief in the perfection of the number seven.
Please tell us about recent successful projects?
DaySeven Consulting provided research services for Hitachi Chemical
Ltd on the South African market and the different potential entry
strategies that they could use to enter the market and be competitive.
DaySeven Technology was contracted to develop, publish and
host an online survey to collect data on behalf of the African Capacity
Building Foundation. The survey collected data on the awareness and
alignment of UN Strategic Development Goals (SDGs) to country-based
National Development Plans.
What is planned for the future?
DaySeven Group plans to expand and focus on projects outside
South Africa in Sub-Saharan Africa. Our focus areas will be technology
solutions and water and sanitation projects.
111 SOUTH AFRICAN BUSINESS 2018
PROFILE
DaySeven Group
Providing world-class business services.
DaySeven Group is a Level 3 BBBEE company providing
world-class services across several core areas of
expertise. These include management consulting,
advisory services and research to clients across Sub-
Saharan Africa.
Vision
DaySeven Group follows a value-based culture and
as such, undertakes to uphold the following values
in providing services to its clients:
• Maintain, and use, international best practices
• Strive towards excellence, growth and industry
development
• Maintain the highest levels of ethical and
professional business practices
• Ensure that our clients’ needs and objectives
are always met.
Mission
DaySeven Group ensures that every client receives
the best and appropriate service according to the
client’s needs and objectives. All the services we
offer are based on international best practices and
policies. We always strive to ensure that all best
practices and policies are passed onto you as a client,
in order to develop and have an impact on your
business, your life and your community.
Staff
Our consultants are highly experienced and seasoned
professionals. We draw on other highly experienced
consultants in the relevant professional
fields as and when required. DaySeven is continually
seeking to employ administrative staff, sales and
client representatives, analysts and other core team
members as we grow. We also employ the services of
appropriately skilled and experienced professionals
on various projects that we undertake.
Services offered
DaySeven Consulting
DaySeven Consulting focuses on three key areas of
expertise that are critical to any business:
• Management consulting covers strategy
identification, development and implementation,
business development and strategic leadership
• Advisory services specialises in sustainable
development, investment and infrastructure
advisory with a focus on Sub-Saharan Africa
• Research services conducts country research,
cross-sector research and develops and
implements surveys.
DaySeven Training
DaySeven Training is a Level 2 BBBEE company
facilitating certified training courses on construction
contracts covering GCC2010, NEC3, JBCC, FIDIC and
customised training courses for our clients. We use
SOUTH AFRICAN BUSINESS 2018 112
PROFILE
facilitators who are qualified industry specialists in
their areas of expertise.
DaySeven Training is based in Johannesburg and
provides training services to a diverse pool of clients
covering both the public and private sectors across
the African continent.
The four core components are:
• Business skills
• Learnerships (including project management
and business administration)
• Workplace readiness (including prioritising and
organising, conflict resolution and workplace
ethics)
• Customised courses (ICT and customer defined).
DaySeven Technology
DaySeven Technology is a Level 2 BBBEE company
offering a full suite of technology solutions:
• Graphic and web design
• Doman registration and web hosting
• Custom ICT solutions
• Software and hardware.
DaySeven Projects
DaySeven Projects is a Level 2 BBBEE company
currently focusing on project identification,
development, execution and management.
DaySeven Projects has grown from humble
beginnings and has become a key business unit
within DaySeven Group. DaySeven Projects currently
develops and leads projects across multiple sectors,
providing world-class services. We currently hold
CIDB ratings of 1GB and 1CE.
Our team uses the world-leading project
management methodologies, and modern tools
to provide cutting-edge services and stay relevant
and competitive.
We offer a full range of services with a focus on the
following key aspects:
• Project identification and development:
cross-sector; Sub-Saharan Africa focus; critical
infrastructure; development to commercialisation.
• Project management: modern methodologies;
full project management cycle; project rescue.
• Process design and re-design: business process
analysis and mapping; business process redesign;
total quality management.
• Project development.
• Project management services.
• Process engineering: we assist and support
our clients to redesign processes and achieve
efficiency.
CONTACT INFO
Physical address: Regus Business Centre,
1st Floor, 292 Surrey Avenue, Randburg,
Johannesburg.
Tel: +27 81 247 5246
Email: info@dayseven.co.za
Website: www.dayseven.co.za
113
SOUTH AFRICAN BUSINESS 2018
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 core policy instruments that have been
designed to bring about BEE. 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 a business 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; and verification
of supplier BBBEE status.
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
in a control system. Criteria against which
companies are measured are provided by government
and like an audit, verification must be
performed annually.
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.
SOUTH AFRICAN BUSINESS 2018
114
PROFILE
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.
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).
The criteria for each of these elements are less
onerous for QSEs than for companies with
turnovers exceeding R50-million per annum.
Advantages of BEE certificate
from VeriFi
• 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; and
• 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, as its commitment to equality, nationbuilding
and unique South African business processes
will be recognised.
Key facts and figures
Year established: 2005
No of staff: 15
Major clients: BP, Public Investment Corporation
Limited, IBM South Africa, Saab Grintek Defence,
Independent Newspapers, Premier Fishing & Brands
Limited, African Equity Empowerment Investment
Limited, South African Express Airways SOC LTD.
CONTACT INFO
Tel: +27 86 175 3233
Email: info@verifibee.co.za
Website: www.verifibee.co.za
115
SOUTH AFRICAN BUSINESS 2018
OVERVIEW
Tourism
Ten-million tourists visited South Africa in 2016.
Growth of close to 4% propelled South Africa’s incoming
tourist arrivals to over 10-million in 2016, with year-on-year
statistics from China showing an increase of 38%.
The Indian market grew by 22% and Africa accounted
for about 7.5-million of the visitors. The UK remains the number-one
source of overseas tourists with more than 400 000 visitors in 2016,
followed by the US and Germany.
There are 711 745 people employed in the tourism industry, with
road transport (29%), food and beverages (20%) and accommodation
(19%) absorbing the largest numbers. The sector contributes 9% to
South Africa’s gross domestic product (GDP) and the national tourism
ministry wants to increase that.
The rise in tourist numbers follows determined efforts by national
and provincial tourism bodies to promote the country. In Mpumalanga,
links to BRICS countries have yielded results and in KwaZulu-Natal
there has been a strong focus on the meetings, incentives, conference
and exhibition sector (MICE). A dedicated unit within the KZN
Tourism Authority, the Convention Bureau, has booked more than 50
events and conferences since 2012, bringing about R3-billion into the
provincial economy.
A Western Cape project to increase the number of seats on routes
to and from Cape Town called Cape Town Air Access has been
spectacularly successful. Cape Town International Airport’s capacity
has increased by more than 600 000 seats in the two years that the
programme has been running. Destinations include Turkey, Dubai,
SECTOR INSIGHT
The R500-million Zeitz
Museum of Contemporary
Art will attract international
visitors to Cape Town.
• Cullinan Holdings has
expanded its tourist
offering.
• Cape Town Air Access
has added 600 000 new
aeroplane seats.
Ethiopia, Victoria Falls and the
Netherlands. A big push has been
made to increase access to the US.
Cape Town Air Access is a
partnership between investment
agency Wesgro, the City
of Cape Town, the Western Cape
Provincial Government, Airports
Company South Africa, Cape
Town Tourism and South African
Tourism.
SOUTH AFRICAN BUSINESS 2018
116
OVERVIEW
The Port of Cape Town has
launched its dedicated cruise-ship
terminal, and the area between
the terminal and the Cape Town
International Convention Centre
is being developed. The precinct,
called the Yacht Club, includes a
hotel, residential and commercial
complex owned by the Amdec
Group, and will be linked to the
Waterfront by the extension of the
existing canal.
Elsewhere on the Foreshore, a
major development is in the works
which will include two Marriott
hotels. In the Cape Town CBD
there are going to be 500 new
rooms, courtesy of two Tsogo
Sun hotels, plus a smaller hotel in
the De Waterkant (Capital Mirage).
Tsogo Sun already operates several
hotels in greater Cape Town,
including three full-service hotels
in the city centre, the Cullinan,
Southern Sun Waterfront and
Southern Sun Cape Sun. The other
seven hotels cover five brands in
the Tsogo Sun stable. Elsewhere in
the Western Cape, Tsogo Sun has
hotels in Caledon, Beaufort West,
Mossel Bay and Plettenberg Bay.
The opening of the R500-
million Zeitz Museum of
Contemporary Art in the Victoria
& Alfred Waterfront in Cape Town
made a huge impact in 2017. With
a footfall of 24-million visitors going
through the Waterfront every
year, the Zeitz is well located to attract
good crowds. It is expected
to attract global art lovers as well.
The conversion of the old grain
silos which created 6 000m² of
gallery space was paid for by
the owners of the Waterfront,
Growthpoint Properties and the
Public Investment Corporation.
The Waterfront has two new hotels: Radisson Red and the Silo Hotel
attached to the Zeitz Museum.
The Port of Durban envisages a 32 000m² area that will cater for
two ships and at least 5 000 passengers. South Africa attracts 0.5% of
the world’s cruise-ship market which comprises about 15.4-million
passengers annually.
South Africa is bidding for the Rugby World Cup 2023. The bidding
committee claim that the tournament will produce an economic effect
of R27.3-billion (direct, indirect and “induced”). The plan envisages using
seven cities where existing infrastructure already exists. No major
building will be necessary as South Africa has good stadiums.
The international HSBC Rugby Sevens tournament was held for the
first time in Cape Town in 2015 and has been successful. The City of
Cape Town says that the tournament attracted more than 100 000 fans,
at least 25 000 of whom were international visitors. The local economy
benefited to the tune of R539-million.
Trends
The newest global trend in tourism, Airbnb, has come to South Africa.
A total of 394 000 visitors stayed in Airbnb accommodation in South
Africa in 2016, something that hoteliers and managers of guest lodges
will have to take into account for planning purposes. Roughly 50% of
the bed nights were taken up by foreigners with the majority visiting
the country’s three big metropolitan areas. Cape Town and Durban
showed the most growth, with 29 000 reported for Johannesburg.
The Airbnb visitors in South Africa are estimated at have engaged in
R2.4-billion worth of economic activity.
Another trend that is being explored is Halaal tourism, a global
market that is expected to reach $300-billion by 2026. The Western
117 SOUTH AFRICAN BUSINESS 2018
OVERVIEW
Cape has upwards of 200 mosques and a cosmopolitan lifestyle that
has seen various faiths coexist for many years.
Another potential growth area is health tourism. Upwards of sevenmillion
people travel the world annually for procedures, and South
Africa is well placed to receive a percentage of this market. A conference
held in Richards Bay in 2017 put the focus on issues such as investment,
training and the development of products.
A significant move in the South African hotel sector is the decision
by Marriott International to develop Marriott branded hotels in
Johannesburg and Cape Town. After acquiring the Protea brand in
2014, Marriott introduced “Protea Hotel by Marriott” as the model but
the decision in 2016 to use the mother brand for new hotels suggests
an increased commitment to the local market. In partnership with the
Amdec group, the group will spend about R1-billion on the Marriott
Hotel Melrose Arch (150 rooms) and Marriott Executive Apartments
Johannesburg Melrose Arch (200 flats).
Buying into Protea Hotels has given Marriott access not only to the
South African market, but to many other African countries. Between
Tshwane and Johannesburg (and in the nearby Magaliesberg mountains),
Protea by Marriott has no fewer than 17 hotels across three
brands: Fire and Ice, Protea; Protea Hotels and African Pride Hotels,
the premier brand.
Carlson Rezidor is another group wanting to expand, with plans for
hotels in eight of South African provinces on the schedule.
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
of 2016, an improvement on the
same period in the year before.
A Tourism Incentive Programme
(TIP) has been launched by the
National Department of Tourism.
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)
has been established. Among
the PMU’s tasks will be to manage
an Enterprise Development
Online Information Portal for
small, medium and microenterprises.
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.
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 reserves. There are many
SOUTH AFRICAN BUSINESS 2018
118
OVERVIEW
private game farms and nature
reserves, a number of which
cater to the luxury market.
There are eight UNESCO World
Heritage Sites in South Africa:
Robben Island Museum, 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,
Hector Petersen Memorial,
Apartheid Museum, Freedom
Park, Voortrekker Monument,
Constitution Hill, District Six
Museum and Bo-Kaap Museum.
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: mostly
logistics, companies include
Europcar and Tempest
Car Hire.
• Bidvest Travel and Aviation:
Budget Rent a Car, Bidvest Sky
Lounge, Rennies Foreign Exchange, BidTravel, Harvey World Travel,
HRG Rennies Travel and BidAir Services.
• Cullinan Holdings: iKapa Tours and Travel, Thompsons, Hylton Ross
Tours, Pentravel, Grosvenor Tours and Springbok Atlas. The latter
two were bought by Cullinan from Imperial in 2013.
• Tourvest: The group controls 63 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. SA Express and SA
Airlink fly to smaller destinations in South Africa and Southern Africa.
Safair is owned by ASL Aviation Group.
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. Between George and Cape St Francis there are many
highly-rated golf courses including Pinnacle Point, Fancourt (three
courses), Simola, Plettenberg Bay Country Club and St Francis Links.
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
several 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 under- way. 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.
ONLINE RESOURCES
African Business Travel Association: www.abta.co.za
National Department of Tourism: www.tourism.gov.za
South African Golf Tourism Association: www.sagta.co.za
South African National Parks: www.sanparks.co.za
South African Tourism: www.southafrica.net
South African Tourism Services: www.satsa.com
119 SOUTH AFRICAN BUSINESS 2018
INDABA HOTEL, SPA & CONFERENCE CENTRE
YOUR AFRICAN DESTINATION IN JOHANNESBURG
Just north of the fast paced business world of Sandton in the upmarket residential suburb of Fourways, lies
the 258 bedroom Indaba Hotel, Spa & Conference Centre. It is a compelling blend of business-like
convenience and efficiency, with a relaxed and warm country atmosphere.
Coupled with easy and convenient access to all main highways, OR Tambo International Airport and a
mere 15km from Lanseria International Airport, the hotel features an impressive selection of some 24
multi-purpose conference venues that can accommodate up to 2 000 delegates in total with banqueting
facilities for up to 500 guests.
With two restaurants on property, there is no need to leave the comfort of the hotel to enjoy world class cuisine.
Our 300 seater Chief’s Boma Restaurant caters for all tasted with over 120 African inspired dished ranging from
North African Moroccan cuisine to Koeksisters and Melktert from the cape – and with a “Shisa Nyama” grill
boasting a variety of game meats sizzled to your specification, everyone is sure to find their favourite.
Well known for the lavish full South African Breakfast Buffet, the Epsom Terrace Restaurant also boasts an
evening Bistro Menu which will delight even the most demanding gourmand’s exacting standards. A
traditional Carvery Lunch with live music can be enjoyed every Sunday with limited outdoor seating
available for those who prefer dining al fresco – after all, Jo’burg really has the best weather in South Africa.
INDABA HOTEL, SPA & CONFERENCE CENTRE
C/O WILLIAM NICOL DRIVE & PIETER WENNING ROAD, FOURWAYS
Phone: +27 11 840 6600 | Email: indaba@indabahotel.co.za | Website: www.indabahotel.co.za
Take a wander through the 17 hectares of lush bushveld gardens and you will find the Mowana Spa - a
wellness sanctuary which will revive your senses, rejuvenate your body and soothe your soul. The Mowana
Spa, which takes its name from the majestic Baobab Tree of African Lore and Legend, offers wellness
journeys based on the recognized healing energy of Tribal Massaging.
Signature Pamper Journeys include the decadent Mowana Full Day African Rejuvenation Spa pamper
which is an indulgent spa experience including breakfast, lunch, complimentary beverages and six
revitalizing treatments; the romantic Mowana African Skies Night Spa pamper with includes dinner,
complimentary beverages and 3 relaxing treatments; and the indulgent Mowana African Escape Spa &
Stay Pamper Journey for the ultimate decadent relaxation.
Our commitment to service excellence and staff empowerment through training and mentoring will ensure
that your needs are met and your expectations exceeded as you enjoy a Day of Pampering at Mowana Spa.
The Indaba Hotel and Mowana Spa are also PROUDLY GREEN ensuring responsible tourism and minimising
carbon foot print through extensive recycling of waste products, water-wise gardening, greening
conference initiatives, better material choices, minimising power usage and buying local - after all, a better
place to live is a better place to visit.
The Indaba Hotel is sure to meet all your business and leisure requirements. We look forward to welcoming
you to our oasis in the City.
15 MINUTES FROM SANDTON ... A MILLION MILES AWAY
Nothing says
welcome like
a Volkswagen.
From bergs, to bushes, to beaches, a Volkswagen will
always make your guests feel at home while they’re away.
Your executive suite on wheels.
Your vehicles are your business. They’re how you give travellers the best experience they could hope for.
So don’t just choose a vehicle that gets people from A to B. Choose a vehicle that will make the luxurious
journey in between a memorable part of the experience. Whatever your guests need, the Caravelle delivers.
Its comfortable interior, combined with a versatile driver workplace make it the ideal vehicle to take
your business class guests on the open road. Or a dirt road. Or a mountain pass. Any road really, thanks
to Volkswagen’s 4MOTION® all-wheel-drive system. Second row seats that swivel to face fellow passengers
in the back row, a pop-up table and a plethora of storage areas all over mean that your guests will always
travel in absolute comfort and with convenience. There is only one problem: you might struggle to get your
passengers out of it when you arrive at your destination…
O&M CAPE TOWN 2382/E
Your ready-to-go shuttle solution.
No other vehicle in its class combines versatility, reliability and durability as perfectly as the Caddy Crew Bus.
Its hard-wearing interior can be extended from five to an optional seven seats and, with just a few
adjustments, can also be converted into a 2-seater with a very generous 3.2m 3 load compartment if
you need to swap out some guests to deliver larger goods (4.1m 3 on the Maxi). You can always trust the
Caddy Crew Bus to get the job done. It’s like your star tour guide: once you’ve got one, you’ll wonder
how you ever managed without it.
Your group adventure partner.
There is so much to see in our diverse and beautiful country: mountain tops, beaches, desert
pans, game parks, bustling cities and tranquil villages. The options are as varied as the roads
you travel to get there. So you need a vehicle that can deal with everything this unique
country puts in your path. Capable of taking anything from 5 to 11 people, the Transporter
Crew Bus is ready to go at a moment’s notice. It’s spacious, comfortable, practical and
packed with safety features like ESP, ASR, EDL, Traction Control and Hill Hold control, for
when you’re feeling really adventurous. What’s more, Volkswagen’s 4MOTION® all-wheel
drive helps you on every road South Africa lays out in front of you and will get you to those
slightly harder to reach spots for the perfect photo opportunity. The Transporter Crew Bus is
your ideal fun-loving, adrenaline seeking tourist co-host.
Commercial
Vehicles
PROFILE
African Business
Travel Association
Bringing together Africa’s Corporate Travel Professionals.
As the only corporate travel association focusing not
just on South Africa but also Africa’s emerging markets,
the African Business Travel Association (ABTA)
provides a platform for corporate travel management
stakeholders across the continent through
education and the sharing of best practice.
The association holds region-specific events and
facilitates information flow using various platforms
in countries across Africa, including Angola, Ghana,
Kenya, Nigeria and South Africa.
These events bring together corporate travel buyers,
travel management companies and industry
suppliers from across Africa’s emerging markets and
are the best attended events of their kind. These
events allow all industry sectors the opportunity
to engage with each other, share challenges, brainstorm
solutions, identify trends and investigate best
practice, thereby elevating the level of communication
between sectors and building stronger industry
practices.
ABTA has over 300 members and member companies
spanning the African continent and all industry
sectors. ABTA membership is a key advantage in
assisting stakeholders and companies in information
gathering, educational input and peer-to-peer
networking opportunities whether they are booking,
buying, managing or supplying business travel
products or services.
Any individual with a direct or indirect involvement
in business travel should become a member of ABTA,
including:
• Personal assistants
• Travel bookers and coordinators
• Travel buyers
• Finance managers
• Procurement managers
• Supply chain and sourcing managers
• Travel consultants
• Travel agents and TMCs
• Industry suppliers
• Travel press
• Academics.
Although ABTA initiatives are open and relevant to
all industry sectors, educational focus is aimed at
the corporate sector, with the belief that a bettereducated
buying community will drive the continued
advancement of the business travel industry.
Through Education, Innovation and Collaboration,
ABTA assists in raising the standard of the business
travel sector across Africa; increases awareness of
Africa among the global travel fraternity; assists
members in adding value to their organisations;
creates a platform for region-specific travel management
education, networking opportunities and
continued professional development; provides
cross-border benchmarks on travel services, and
finally, plays a pivotal role in Africa’s emergence as
a global player in the business travel industry.
CONTACT INFO
Physical address: 54 Milner Avenue, Roosevelt
Park, Johannesburg
Postal address: PO Box 2594, Pinegowrie 2123
Tel: +27 11 888 8178
Email: monique@abta.co.za
Website: www.abta.co.za
SOUTH AFRICAN BUSINESS 2018
124
OVERVIEW
Information and communications
technology
A rural network is providing free local calls.
SECTOR INSIGHT
Barclays Africa Group spent
R3.1-billion on ICT in 2016.
• Farmers and Vodacom
are working on a sheeptracking
collar.
The biggest spenders on information communications technology
(ICT) are banks and other financial institutions. Existing banks may
have large customer bases but agile new competitors are able to
do without branch infrastructure and can connect directly with
clients via mobile phones and other devices. The financial sector is
responding via large investments in fintech.
One example is Barclays Africa Group’s expenditure of R3.1-billion
on ICT in 2016. The Big Four banks spent R30-billion in the year to
June 2016, with Standard Bank laying out R14-billion in that period
(Tech Central).
Companies in the sector are also spending heavily to stay ahead in
terms of technology. By way of example, Vodacom has spent approximately
R577-million over three years in the province of Limpopo alone.
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.
Allowing access to the Internet
to rural people and poorer people
in urban areas is a policy priority.
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 Western Cape Provincial
Government and Neotel will roll
out 384 Wi-Fi hotspots in public
areas, and is aiming for complete
coverage by 2019.
Private companies like
Vodacom allocate specific budget
items to rural access and in
September 2017 it announced
that it would zero-rate its services
for university student and staff
who are Vodacom subscribers. To
illustrate the vastly different uses
to which technology can be put,
Vodacom is also developing an
affordable sheep-tracking collar
with farmers in the Eastern Cape.
There are also city programmes
such as the TshWifi (Tshwane), a
SOUTH AFRICAN BUSINESS 2018
126
OVERVIEW
free service available in 780 zones
such as libraries, educational institutions
and clinics and libraries.
More than 1 500km of network
fibre has been rolled out in
Gauteng province since 2014. A
total of 3 000 access sites should be
connected by 2020.
The Small Enterprise
Development Agency runs ICT
incubators in several parts of
South Africa. The SoftstartBTI
ICT incubator is in Midrand and
Tuksnovation, a high-tech incubator,
is at Pretoria University. In the
Nelson Mandela Bay Metropolitan
Municipality there is the SEDA
Nelson Mandela Bay ICT Incubator
(SNII). A new research and development
laboratory was established
by SNII in 2016, focussing
on apps, mechanical and technical
prototypes, and software
solutions.
SNII also hosted a national conference
on “Universal Affordable
Access to Communications in
South Africa” in 2016. An example
of what can be done to reduce
telecommunication costs in rural
areas was presented by the
University of the Western Cape,
who teamed up with the Mankosi
community in a rural part of
the Eastern Cape to create the
Zenzeleni Network. This is essentially
a community telecoms
company where local calls are free,
data is considerably cheaper and
calls to other networks are half the
normal cost.
The Universal Service and
Access Agency of South Africa
(USAASA) is providing connectivity
for schools in five provinces
and smart devices have been
distributed to schools.
Incentives relevant to companies and educational bodies in the
ICT sector are available from the Department of Trade and Industry
(dti) and include:
• The Technology and Human Resources for Industry Programme
(THRIP): companies and educational institutions working to
improve technology; 50/50 cost sharing grant to a maximum of
R8-million
• Technology Development Fund: the Technology Innovation
Agency makes up to R50-million available for up to 10 years
• Technology Venture Capital: managed by the Industrial
Development Corporation; commercialisation of innovative
products, processes and technologies.
The National Electronic Media Institute of South Africa (NEMISA) was
originally created to develop skills for the broadcasting environment,
but is now being integrated with eSkills Network and the Institute
for Satellite and Software Applications (ISSA) to form Ikamva National
e-Skills Institute (iNeSI). The focus is on developing e-skills capacity by
creating partnerships that guide e-skills initiatives.
There are many opportunities for employment in the sector. It
is ironic that in a country with a very high unemployment rate, the
Johannesburg Centre for Software Engineering (JCSE) in 2016 put
the number of vacancies in software and application development,
cloud computing and information security at 40 000 (Sunday Times).
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) and from the
City of Johannesburg (which runs a digital intern programme called
COJEDI). Scarce skills training is offered by the City of Cape Town (in
partnership with SAP Africa) in software programming. The programme
is called “Western Cape Skills for Africa”.
ONLINE RESOURCES
Ikamva National eSkills Institute: www.enesi.org.za
Independent Communications Authority: www.icasa.org.za
State Information Technology Agency: www.sita.co.za
Technology Innovation Agency: www.tia.org.za
127 SOUTH AFRICAN BUSINESS 2018
OVERVIEW
Banking and financial services
New banks and new stock exchanges are adding to South Africans’ choices.
SECTOR INSIGHT
Tyme has the first new
banking licence since 1999.
South Africa’s banking and financial services sector is experiencing
a surge of innovation with several new banking
licences expected to be granted before the end of 2018.
First to get over the line in 2017 was Tyme, which stands
for Take Your Money Everywhere and refers to the bank’s digital
origins and its plans for the future which do not involve opening a
branch network. Commonweath Bank of Australia bought a controlling
share of Tyme when it was a loans company and African Rainbow
Capital is the venture’s BEE partner. The banking licence is the first to
be issued since Capitec was granted a licence by the South African
Reserve Bank in 1999.
Capitec has since gone on to become a major player on the
South African retail banking scene. It now merits inclusion in a new
“Big Five”, with Standard Bank, Absa, FNB and Nedbank. In terms of
assets, the five biggest banks are Standard Bank, FirstRand (which
owns FNB), Absa (which is part of Barclays Group Africa), Nedbank
and Investec. According to the Reserve Bank, this group had 89% of
market share in 2015.
Merchant banking and investment
banking are the most competitive
sectors with companies
such as BoE Private Clients, Rand
Merchant Bank and Investec
prominent.
There are 40 international
banks with offices in South Africa,
including Bank of China, Standard
Chartered, JP Morgan Chase, HSBC
and Citibank.
Afgri, South Africa’s largest agricultural
company which already
offers financial services, bought
the South African Bank of Athens
in 2017. The bank was purchased
from the National Bank of Greece
Group and is still subject to regulatory
approval. Most South African
agricultural companies have
financial divisions.
Other applicants for new banking
licences are Discovery and Post
Bank, a division of the South African
Post Office. Discovery is already a
giant on the JSE (market value of
R83-billion) with a wide range of
products and services that give it
access to millions of customers. Life
SOUTH AFRICAN BUSINESS 2018
128
OVERVIEW
insurer MMI Holdings is entering a
partnership with African Bank to
enable it to start taking deposits
and loaning money.
A further two state banks are
planned: Ithala (currently an enterprise
funder in KwaZulu-Natal)
and the Human Settlements
Development Bank which will
focus on housing for poorer
households and state-funded
housing projects.
Financial services group Old
Mutual (a 54% stakeholder in
Nedbank) is set to create four
stand-alone businesses out of the
Old Mutual Group. This will 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, can
focus on their specialities.
Fintech is the new buzz word in
the world of banking. Barclays has
established a worldwide organisation
to promote the latest thinking
in app development. Rise has
seven outlets around the world, including
one in Woodstock in Cape
Town. The photograph on the previous
page shows Nedbank’s new
property venture office in Mount
Edgecombe.
The insurance market has
become more varied over time,
with a greater variety of products
available to more market segments,
including middle-income
earners. An example of a product
responding to new realities is Old
Mutual’s iWYZE medical gap cover,
designed to pay the difference between
what a medical aid scheme
is willing to pay and what the
hospital or doctor is charging.
Framework
The South African banking and financial-services sector has a good
international reputation because of a strong regulatory and legal
framework. In 2017 this was tested when several auditing and consulting
firms were implicated in accusations of “state capture”. The fact
that the allegations were brought into the open by alert civil society
organisations and the media has been cited by some commentators
as positive factors.
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 banking-services sector, while the Financial Services Board (FSB)
governs the non-banking financial-services industry.
The Banking Association South Africa represents all registered
banks, local and international. Major sub-committees oversee capital
supervision, credit risk, consumer affairs and the SA Securities
Lending Association.
The JSE is the world’s 19th-biggest exchange and nearly 400
companies are listed on the JSE or AltX, the JSE-owned exchange
for smaller companies. Other investment options that are available
through the JSE are Yield X (interest rate and currency instruments),
the South African Futures Exchange (SAFEX) and the Bond Exchange
of South Africa (BESA).
In 2017 several new exchanges won regulatory approval, with
ZAR X winning the nod from the Financial Services Board (FSB).
There is no trading in derivatives or high-frequency trading on
this exchange.
A2X, in which African Rainbow Capital is an investor, will offer
secondary listings platform for JSE-listed companies and aims to cut
costs for investors. 4 Africa Exchange (4AX) will focus on companies
with market capitalisation of up to R8-billion. Agricultural trading
company NWK is a shareholder in this venture. The newcomers all
promise to use the latest technology to make trading simpler, quicker
and cheaper.
ONLINE RESOURCES
Auditor-General South Africa: www.agsa.co.za
Financial Services Board: www.fsb.co.za
Insurance Institute of South Africa: www.iisa.co.za
Insurance South Africa: www.insurance.za.org
JSE Limited: www.jse.co.za
The South African Institute for Chartered Accountants:
www.saica.co.za
129 SOUTH AFRICAN BUSINESS 2018
OVERVIEW
Development finance and SMME
support
South Africa has over two-million SMMEs.
SECTOR INSIGHT
The Northern Cape is
supporting co-operatives.
The National Department of Small Business Development (DSBD)
has several programmes to assist small, micro and medium
enterprises (SMMEs) and co-operatives.
These include:
• The Black Business Supplier Development Programme, a costsharing
grant to promote competitiveness
• The Co-operative Incentive Scheme, a 100% grant.
The Small Enterprise Development Agency (Seda) is a subsidiary
of the DSBD. In a recent publication, Seda reported that the number
of SMMEs in South Africa increased by only 3%, from 2.18-million
to 2.25-million between 2008 and 2015. Limpopo had the highest
growth rate (34%), followed by Gauteng. Rural provinces tend to have
more informal SMMEs, due to their high number of hawkers and
informal traders. About half of South Africa’s formal SMMEs operate
in Gauteng and more than half are in the wholesale and retail sector
and the accommodation sector. The next most popular sectors are
community, social and personal services.
Recent studies have shown that South Africa’s townships represent
a substantial market. The CEO of Minanawe Marketing, GG
Alcock, told the FMCG Insights conference in 2016 that the “invisible
market” was worth R10-billion. Alcock told the Sunday Times that a
Johannesburg township fast food operator made R50 000 per day
from three outlets.
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 smallscale
miners and mineral processors
to create viable businesses.
The National Gazelles is a national
SMME accelerator jointly
funded by Seda and the DSBD.
The aim is to identify and support
businesses with growth potential
across priority sectors. Businesses
can receive up to R1-million for
training, productivity advice, business
skills development and the
purchase of equipment.
The Industrial Development
Corporation (IDC) supports
SMMEs either by disbursing loans
or by taking minority shares in
enterprises and giving advice.
An agricultural project in the
Northern Cape is an example of
the kind of work it does. Through
the IDC’s Transformation and
Entrepreneurial Scheme, a black
economic empowerment project
is underway at Kakamas, where
emerging farmers are planting
SOUTH AFRICAN BUSINESS 2018
130
OVERVIEW
citrus. Vaal Community Citrus
could create 1 330 jobs.
The Provincial Government of
the Northern Cape is an example
of a government body which
puts a strong emphasis on supporting
small business as a way
of stimulating economic activity,
getting more people into the
mainstream of the economy and
bolstering food security. In 2016,
support was given to 210 SMMEs
and 91 co-operatives. Business
and financial management training
was offered to 83 informal
traders. In partnership with the
Small Enterprise Development
Agency, nine cadets received
training before receiving work
places at various municipalities.
The Department of Economic
Development and Tourism hosted
an Economic Research Day
which brought together support
agencies, government and
private companies such as Petra
Diamonds and Anglo American.
A Provincial Incubation Strategy
is planned, as is a specialist
Renewable Energy Incubator.
Two of the Eastern Cape
Development Corporation’s seven
business units are devoted to small
business: Development Finance
and Enterprise Development.
The ECDC and the Technology
Innovation Agency (TIA) jointly
run the TIA-ECD Innovation Seed
Fund Programme which identifies
and co-funds early stage technology
innovation projects in the
Eastern Cape.
The National Department of
Labour has a programme to support
people with disabilities. The
Sheltered Employment Factories
initiative puts out about 3 000 different
product types in fields such as leather and canvas work, furniture,
textiles, screen printing and book binding.
The Enterprise Investment Programme (EIP) of the National
Department of Trade and Industry (dti) is another support programme.
In 2017, the success of a uniform and protection equipment company
was advertised by the EIP: having received a grant in 2014, Thorax LP
Equipment, a 100% black-women-owned company, has subsequently
turned over more than R8-million and employed many young people.
The Development Bank of Southern Africa (DBSA) is another major
funder of projects.
Private sector
The major banks all have SMME offerings. Standard Bank runs a
Community Investment Fund and Nedbank offers an enterprise development
product for businesses with turnovers up to R35-million.
Agribusiness and agri-processing are among the three sectors that are
targeted by the Masisizane Fund for loan financing. The others are franchising/commercial
and supply chain/manufacturing. Training is offered
through a Business Accelerator Programme. As a non-profit initiative of
the Old Mutual Group, the fund focusses on the cash flow of potential
businesses rather than insisting on security in the form of property.
Private companies are supporting SMMEs through their buying chain.
Woolworths is funding 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.
Using the supply chain to benefit small business is at the heart of
Anglo American’s Zimele, which runs four enterprise development and
investment funds. Hub managers 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 paper and
forestry supply chain.
ONLINE RESOURCES
Development Bank of Southern Africa: www.dbsa.org
Eastern Cape Development Corporation: www.ecdc.co.za
Gazelles: www.nationalgazelles.org.za
National Empowerment Fund: www.nefcorp.co.za
National Department of Small Business Development:
www.dsbd.gov.za
Small Enterprise Development Agency: www.seda.co.za
Small Enterprise Finance Agency: www.sefa.org.za
131 SOUTH AFRICAN BUSINESS 2018
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 2018
132
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
LISTING
South African National Government
An overview of South Africa’s national government departments.
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 and 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 and
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 2018
134
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
135 SOUTH AFRICAN BUSINESS 2018
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
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
Department of 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 2018
136
LISTING
Mahikeng
Mbombela
eMalahleni
137 SOUTH AFRICAN BUSINESS 2018
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.
SOUTH AFRICAN BUSINESS 2018
138
A REGIONAL OVERVIEW OF THE
EASTERN CAPE
The Eastern Cape extends over 169 580 square
kilometres, representing 13.9% of South Africa’s
land mass. The dry western interior is one of the
country’s premier sheep-rearing and mohairproducing
areas.
The mountainous regions of the north and east
of the province support timber plantations while the
coastal belt in the south-west is good for dairy farming.
The province has spectacular beaches stretching
from the surfer’s paradise at Jeffrey’s Bay all the way
to the famed Wild Coast.
The province has a strong agricultural base.
Aside from being one of the world’s major sources
of mohair, the province offers perfect farming
conditions for a wide range of produce. The fertile
Langkloof Valley in the south-west has enormous
deciduous fruit orchards, while the Alexandria and
Grahamstown area produces pineapples, chicory and
dairy products. It is the leading livestock province in
terms of numbers and supplies a quarter of South
Africa’s milk.
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 port at Ngqura, within the Coega
Industrial Development Zone (IDZ). The ports of Port
Elizabeth and East London are well-established, with
the latter breaking a record in April 2016 by handling
10 000 Mercedes-Benz vehicles for export in
the month.
Key sectors
The Eastern Cape is best known for its automotive
industry and its strong and varied agricultural sector.
The established companies in the automotive
industry (such as Volkswagen SA and Mercedes-Benz
SA) have been making major investments in the
automotive sector and they have been joined by
two large Chinese concerns. The agri-processing
sector continues to attract new investments, such
as Famous Brands’ new tomato paste factory at the
Coega Industrial Development Zone. Coega Dairy
is one of the biggest of its kind in South Africa and
manages the Famous Brands Cheese Company.
Financial services, real estate and banking are
large contributors to the province’s GDP. Absa,
SOUTH AFRICAN BUSINESS 2018
140
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.
Ford makes engines in Port Elizabeth. General
Motors South Africa (GMSA) manufactures and assembles
vehicles and is 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 target sector to
grow exports.
The largest mall to be constructed in South
Africa since 2004 has opened in Port Elizabeth. The
Bay West Mall is a sign of confidence in the Eastern
Cape economy.
Tourism
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.
The National Arts Festival in Grahamstown is a key
national festival.
The Addo Elephant National Park is a 164 000ha
facility that attracts more visitors than East Africa’s
Serengeti National Park. 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.
Economic future
REGION
More than 6 000 international athletes will line up on
a beach in Port Elizabeth in September 2018 for the
first African staging of the 2018 IRONMAN 70.3 World
Championship. This event illustrates the Eastern
Cape’s striving to be a world-class events destination.
International conferences on the Oceans Economy
have also been held in recent months, indicative of
this coastal province’s determination to make the
most of its 800km coastline, with three ports and two
associated industrial development zones geared to
attracting investments in new sectors. Programmes
are in place to promote ship-building and repair,
aquaculture, offshore oil and gas, marine protection
and governance, and marine transport and
manufacturing. The Nelson Mandela University
(NMU) launched an Oceans Campus in 2017 and
already has several research chairs studying this
potentially very lucrative field.
The Eastern Cape’s long coastline is an asset in the
national Oceans Economy strategy. 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 maritime sectors.
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).
Another new area of interest is renewable energy.
The Eastern Cape is a favourite destination for
wind power investors. Of the 17 projects approved
in the province in terms of the national independent
producers’ programme, fully 16 are on-shore wind
projects. More than 1 500MW has so far been procured
within the borders of the province, and there
is potential for much more.
Capital Bhisho
Population 6 916 200
Area 168 966km 2
Premier Phumulo Masualle (ANC)
Languages Afrikaans, English, Xhosa
141 SOUTH AFRICAN BUSINESS 2018
A REGIONAL OVERVIEW OF THE
FREE STATE
The Free State shares borders with six other provinces
and the Mountain Kingdom of Lesotho.
A summer-rainfall region with a mean annual
rainfall of 532mm, the Free State’s climate,
soil types and topography vary greatly within the
province, with plains in the west and mountains in
the east. The western and southern areas are semidesert,
with some Karoo vegetation occurring in the
south. The Orange and Vaal rivers define the southern,
western and northern borders of the Free State.
The Free State produces significant proportions
of South Africa’s wheat (30%), sunflowers (45%) and
maize (45%).
Five major national highways intersect the centrally
located province which is also well served by
rail and air links. The N8 highway extends westwards
to the Northern Cape capital of Kimberley, and several
projects are planned to leverage the advantages
of this busy route.
The Maluti-A-Phofung Special Economic Zone
(SEZ) takes advantage of the strategic position
Harrismith holds in the Free State’s north-eastern
corner. The N3 highway carries large volumes of
cargo between Gauteng and the ports of KwaZulu-
Natal so it is logical that the first focus of this SEZ is
logistics. 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.
The Bram Fischer International Airport in the
provincial capital city of Bloemfontein is the site of
a multi-phase industrial and commercial development.
Two leading universities (the University of Free
State and the Central University of Technology) have
several campuses across the province.
Key sectors
An important pillar of the economy of the Free State,
the chemicals and fuels hub at Sasolburg, is modernising
and expanding. International fuel, gas and
chemicals company Sasol regularly invests in new
technologies and in expanding production of its
various products.
SOUTH AFRICAN BUSINESS 2018
142
REGION
The Provincial Government of the Free State
has hosted two events targeting foreign investors,
called the Free State Global Investors Trade Bridge.
In 2016 the first Free State/Madeira Flower Festival
took place in Parys. This is a first step in creating links
to export markets in floriculture and horticulture.
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 the world’s
largest gold producer, and the country’s largest
gold-mining complex is Free State Consolidated
Goldfields, with an area of 330km². Gold-mining
volumes are down and some towns are having to
adjust to changed economic profiles. 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. Sorghum, sunflower, 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
Although agriculture and mining remain the mainstays
of the provincial economy, diversification
and expansion through initiatives such as Special
Economic Zones (SEZs) are key to the future of the
centrally located province. The official launch in April
2017 of the Maluti-A-Phofung Special Economic
Zone was thus a significant event for the provincial
economy’s future shape. The 1 000ha site will have
four zones: agri-processing, light industrial, heavy
industrial and a container terminal.
The N8 Corridor concept covers Bloemfontein,
Botshabelo and Thaba Nchu and encompasses projects
such as the ICC Precinct (hotel and convention
centre in Bloemfontein), Bio-Medical Park, Airport
Node (logistics and supply chain, warehouses, residential
apartments, hospitals, schools, hotels and
new shopping malls), and tourism infrastructure for
the Naval Hill Development.
The Free State also wants to create more valueadded
goods out of raw materials. This applies to
agriculture (in which the Free State enjoys great
riches) and minerals. Five agri-parks are planned in
each of the Free State’s district municipalities which
will boost production so that more produce is available
for beneficiation. 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 use of small towns such as Cornelia,
Tweeling, Excelsior and Tweespruit as hubs under
the Comprehensive Rural Development Programme
(CRDP) will boost the rural economy and provide
opportunities for investors.
Newly discovered natural gas and helium fields
are said to have proven reserves of 25-billion-feet³
and Afrox has become the first of what may soon be
a string of investors exploiting this resource. 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’s Ingula pumped storage project scheme,
bordering KwaZulu-Natal, has started delivering
power. 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 (REIPPPP), two are small
hydro projects and there are several solar projects.
Capital Bloemfontein
Population 2 817 900
Area 129 825km 2
Premier
Languages
Elias Sekgobelo "Ace" Magashule
(ANC)
Afrikaans, English, Sotho,
Tswana
143 SOUTH AFRICAN BUSINESS 2018
A REGIONAL OVERVIEW OF
GAUTENG
A
World Bank report has shown that a 10%
increase in infrastructure spending results
in a 1% growth in GDP. Consequently, the
Gauteng Province is prioritising infrastructure
development.
The smallest province of South Africa in area is
also the most significant economically. About 40%
of South Africa’s manufacturing is done here, a third
of its electricity, gas and water output, 41% of the
country’s construction, 39% of its finance, real estate
and business activity and 34% of its wholesale, retail,
motor trade and accommodation.
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); Ekurhuleni (the manufacturing
hub of South Africa and host of the country’s
biggest airport, O.R. Tambo International). The City
of Ekurhuleni is creating an “aerotropolis” around the
huge transport hub.
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 (ARC) is done.
The Gauteng Division of the High Court of
South Africa (which has seats in Pretoria and
Johannesburg) is a superior court with general
jurisdiction over the province. Johannesburg is also
home to the Constitutional Court, South Africa’s
highest court, and to a branch of the Labour Court
and the Labour Appeal Court.
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.
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 2018
144
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.
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 have
manufacturing plants in 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 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
The idea of the “City Region” is increasingly driving
economic planning and investment priorities,
REGION
both public and private. Linked to this is the need to
continually invest in infrastructure.
Gauteng is a national leader in attracting foreign
direct investment (FDI). In the period 2014-16, the
province attracted R66-billion. The Gauteng Growth
and Development Agency has a specialised subsidiary,
the Gauteng Investment Centre, which acts as a
“one-stop shop” for potential investors looking for
advice and support.
In 2016, the Gauteng City Region Economic
Indaba was attended by all the mayors of the region,
the national Minister of Finance and was addressed
the South African Deputy President. Gauteng
Premier David Makhura gave notice of “how we can
unlock, jump-start and reignite a sustainable and
inclusive growth trajectory for key sectors of our
provincial economy”.
Individually, the biggest Gauteng cities contribute
to the national GDP as follows: Johannesburg (15%),
Tshwane (9%) and Ekurhuleni (7%).
At the Indaba, several development corridors
of the City Region were identified, each with its
own industries and comparative advantages. A
15-year Gauteng Infrastructure Master Plan has
been adopted
Ekurhuleni is putting considerable resources into
infrastructure improvement. With a corridor-based
masterplan, the aim is to promote industrial activity.
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.
Capital Johannesburg
Population 13 400 000
Area 18 178km 2
Premier David Makhura (ANC)
Languages
Afrikaans, English, Sesotho,
Zulu
145 SOUTH AFRICAN BUSINESS 2018
The Vision and Mission
The Tshwane Economic Development Agency
The Vision and Mission
The Tshwane Economic Development Agency SOC Ltd
(TEDA) is a municipal entity of the Tshwane Metropolitan
Municipality (CoT).
VISION
TEDA strives to be a catalyst for economic growth and
development to position the City of Tshwane as a globally
competitive capital city.
MISSION
The mission of Tshwane Economic Development Agency
is: To provide integrated and innovative economic
development solutions through investment promotion
and funding, programme management and property
management.
SERVICE OFFERINGS
• Investment promotion and aftercare
• Export development and promotion
• Project management and development facilitation
CITY OF TSHWANE – AFRICA’S LEADING
CAPITAL CITY
The City of Tshwane is a vibrant, diverse and modernising
capital city. As the administrative seat of the South African
government and the birthplace of South Africa’s democracy,
it is home to over 130 foreign embassies and missions. The
metro was established in 2000 and has a population of
3.1-million.
ECONOMIC OVERVIEW
• GVA of R245.1-billion
• Contributes 25% to the Gauteng economy
• Accounts for 9% of the South African economy
• Biggest Free WiFi rollout in Africa
• Highest economic growth among all SA metros,
averaging a growth rate of 3.9% per annum to 2015
• Third-largest Metropolitan Municipality in the world in
terms of land mass
“LEVERAGING RESEARCH AND
INNOVATION TO PROMOTE
GROWTH.”
WHY INVEST IN TSHWANE
RESEARCH AND DEVELOPMENT HUB
Tshwane has an impressive concentration of academic,
research, technology and scientific institutes. An estimated
60% of all research and development in South Africa is
conducted in Tshwane by institutions such as Armscor, the
Medical Research Council, the Council for Scientific and
Industrial Research (CSIR), the Human Sciences Research
Council and educational institutions such as the Tshwane
University of Technology, the University of South Africa and
the University of Pretoria.
CENTRAL LOCATION
Tshwane is strategically positioned in the centre of the most
prosperous part of South Africa. Located a mere 30km from
Africa`s financial hub, Sandton, and bordering three of South
Africa`s provinces that lead directly into the SADC, Tshwane
offers easy access to a growing market of over 250-million
people in the fastest-growing regional economic bloc.
OUTSTANDING INFRASTRUCTURE
Efficient supply of water, power and bulk infrastructure
coupled with favourable climatic conditions and affordable
industrial sites and office space make Tshwane very attractive
to prospective investors.
EASE OF DOING BUSINESS
Recognising the importance of efficient and cost-effective
business operations, the City of Tshwane is continuously
looking at improving its business and investment climate.
COMPETITIVE INDUSTRIES
Tshwane’s reputation in automotive engineering is well
established. Home to motoring giants Nissan, BMW, Ford and
Tata, Tshwane accounts for 40% of South Africa’s automotive
production. Highly regarded for its manufacturing,
technology, electronics, defence design and construction
sectors, Tshwane offers many business and investment
opportunities in one of the city`s 16 mixed manufacturing
industrial estates.
Focus investment sectors
Aerospace & Defence Technologies
Tshwane is the key node in aerospace and defence
technology development in South Africa. The foundation of
the aerospace cluster is the Department of Defence and Air
Force headquarters. Industry leaders such as Armscor, the
CSIR, Denel Dynamics, Aerosud and Centurion Aerospace
Village are key role-players in the cluster.
access to transport infrastructure. The Automotive Industry
Development Centre contains a conference centre and a
retail centre. With a turnover of about R30bn in 2012 and
contributes 3.3% to the City’s economy, the automotive and
components industry constitutes about 25% of Tshwane’s
manufacturing output.
The Vision and Mission
Agriculture & Agro-processing
Although agriculture makes up an insignificant contribution
to Tshwane’s GDP, Region 7 has some of the best farming land
in Gauteng. TEDA has packaged investment opportunities
including an envisaged cotton cluster and Agro-Processing
Hub. The sector is strengthened by educational and research
facilities such as Onderstepoort Veterinary Institute (VRI) and
the Agricultural Research Council (ARC).
The Vision and Mission
Automotive & Components
The automotive and components industry in South Africa is a
major contributor to economic activity and export earnings,
with the heart of the industry located in the City of Tshwane.
This includes the Automotive Supplier Park (ASP) in Rosslyn
(130ha) which is located close to key vehicle manufacturers
including BMW, Ford, Nissan, Volvo and Tata, with excellent
Business Process Outsourcing & Offshoring
As the administrative as well an academic centre, the city’s
knowledge and information industry is well-developed,
which makes Tshwane an ideal location for BPO investments.
An established BPO sector includes one of the largest shared
services centre for the Barclays Africa operation The Gauteng
Growth and Development Agency is developing a BPO&O
Park at Hammanskraal.
Tourism
The City of Tshwane attracts business, leisure as well as
shopping, medical and sports tourism. The city also has and
is further developing a range of major conference facilities
and hotels. Cultural and heritage sites together with facilities
such as nature reserves and parks add further variety. Two
key project intended to further develop the sector are
the Mandela Statue and a plan to build a theme park and
waterfront at Cullinan/Bronkhorstspruit.
Green Economy
Tshwane aims to become a resilient, resource-efficient
and leading low-carbon economy by 2030. This translates
into opportunities, particularly in power and electricity
generation, renewables (including solar and wind
technologies), green component manufacturing, related
downstream services and general greener production
and transport practises, green agriculture and waste
management opportunities, and ecotourism.
Contact Details:
5th Floor, Anker Building, 1279 Mike Crawford Road, Centurion CBD
Tel: + 27 12 358 6552 | Email: pasekar@tshwane.gov.za | Website: www.teda.org.za
www.teda.org.za
A REGIONAL OVERVIEW OF
KWAZULU-NATAL
Two new economic trends will benefit the economy
of KwaZulu-Natal and attract investors to
South Africa’s east coast: the Oceans Economy
and the move to gas.
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 plays a vital role in
national logistics and international trade.
The Port of Durban’s annual throughput of containers
is about one-million, more than 60% of the
country’s total. A priority is to improve loading and
unloading times. The Port of Richards Bay is the main
coal export harbour and has added a new berth on
average every second year. Six cargo handling terminals
handle 60% of South Africa’s seaborne cargo.
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 000ha of land north of
Durban. 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 sugar-cane holdings, manufacturing
plants and downstream beneficiation. Tongaat is
also a significant property developer in the province
and is active in several large projects.
KwaZulu-Natal industries are major exporters.
Steel, iron and aluminium account for nearly a third
of exports followed by metal products and automotive
and automotive components. Chemicals is the
other major export-driver.
In the base-metals and metal-products sectors,
companies such as Hulamin, ArcelorMittal and
Assmang have a big presence in the province. Toyota
SOUTH AFRICAN BUSINESS 2018
148
REGION
and Bell Equipment are important companies in
the automotive sector while the Engen Oil Refinery
and dissolving pulp manufacturer Sappi are among
other strategically important plants.
Manufacturing contributes 21.5% of the gross regional
product (GRP). 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.
Economic future
The Oceans Economy and a national policy shift
towards the use of gas are both developments that
will boost the regional economy.
The province’s two large ports are natural sites
for the increase in Oceans Economy-related sectors
such as ship-building and repair, and oil and
gas support (rig repair). The creation of a marine
manufacturing and repair cluster at Richards Bay
is being considered. 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.
Richards Bay, apart from being the country’s
main site for the export of coal, is also a registered
Industrial Development Zone (IDZ) and consequently
attracts a diverse range of investors.
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. Several fish-farming projects
are planned for KwaZulu-Natal (mostly with kob)
and a catfish feasibility study is under way.
The Provincial Government of KwaZulu-Natal
has created the KwaZulu-Natal Maritime Institute.
This is administered by the restructured Sharks
Board and training programmes are coordinated
with Transnet to make sure that relevant courses
are offered. Since 2012, 800 students have been
studying maritime-related courses.
The Richards Bay Industrial Development
Zone (RBIDZ) has welcomed SPS Manufacturing
(Pty) Ltd, a pipe manufacturer which will invest
R300-million in uMhlathuze, creating
87 permanent jobs.
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 RBIDZ to the gas fields of Mozambique
makes this a potentially giant project.
Capital Pietermaritzburg
Population 11 919 100
Area 94 361km 2
Premier Willies Mchunu (ANC)
Languages English, Zulu
149 SOUTH AFRICAN BUSINESS 2018
A REGIONAL OVERVIEW OF
LIMPOPO
The proclamation of a Special Economic Zone
in the far north of South Africa’s northernmost
province could have major economic consequences
for Limpopo Province.
A large investment by diamond miners De
Beers at its Venetia Mine in the same district also
promises significant spinoffs for local communities
and businesses.
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 province has superb natural resources, from
coal, platinum and chrome to avocadoes, tomatoes
and macadamia nuts. Wonderful vistas in very varied
landscapes, golf estates and adventure tourism
underpin the tourism industry.
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
and routinely accounts for between 25-30%
of provincial GDP. 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.
Major investments in Limpopo include an ongoing
project by De Beers in Musina to convert its
Musina mine from an open-pit mine to a vertical
shaft mine and a multi-billion-rand new platinum
mine project led by Ivanplats. A key focus area
is to try to ensure that 20% of procurement in
the mining sector goes to small businesses and
co-operatives.
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.
SOUTH AFRICAN BUSINESS 2018
150
The De Hoop Dam across the Steelpoort River
in the east of Limpopo has started supplying
water 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.
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 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 high end 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 mainly to
the local market. About 13 000 litres of marula
beer are regularly brewed by the 13 co-operatives
on duty, and large crowds attend for the outdoor
music concerts that are a feature of the festivities.
Limpopo Province has very varied tourism
assets that include the bare bushveld of the northern
regions, the misty mountains of 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 extends
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 Ndabele 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.
Economic future
REGION
The strategic value of Limpopo’s position as a link
to the SADC region is being exploited through the
creation of Special Economic Zones (SEZs). The first
one has been promulgated at Musina-Makhado
where the focus is on logistics operations, agri-processing,
energy and mineral beneficiation. Exxaro
and De Beers have large mining operations nearby.
Located in the Vhembe district in the far north,
this SEZ is near the border of Zimbabwe and on the
Great North Road, thus linking with the broader
Trans-Limpopo Spatial Development Initiative.
A second application for an SEZ has been made
within the province’s platinum belt in the east of
the province. The Tubatse SEZ, in the Sekhukhune
District Municipality, will focus on the beneficiation
of platinum group metals (PGM) and miningrelated
manufacturing.
The following areas have been identified as
priority zones for the province’s industrialisation
strategy: Polokwane, Lephalale, Tubatse, Tzaneen
and the Musina-Makhado corridor.
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.
Capital Polokwane
Population 5 800 000
Area 125 754km 2
Premier Stanley Mathabatha (ANC)
Languages Sesotho, Tshivenda, Xitsonga
151 SOUTH AFRICAN BUSINESS 2018
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 provincial capital is Mbombela.
More than 80% of South Africa’s coal is sourced in
Mpumalanga. Other minerals found in the province
include gold, platinum group minerals, chromite,
zinc, cobalt, copper, iron and manganese.
South Africa’s major power stations, three of
which are the biggest in the southern hemisphere,
are in Mpumalanga. The building of the new Kusile
power station is one of the biggest infrastructure
projects in the country’s history.
Mpumalanga also has fertile soil that supports
diverse farming operations.
The province recently welcomed the first students
to the University of Mpumalanga. The Kruger
Mpumalanga International Airport and Hoedspruit
Airport are the province’s two main airports.
The Maputo Development Corridor is a transportation
corridor comprising road, rail, border posts,
port and terminal facilities, running from Pretoria
in Gauteng through Mpumalanga to the Port of
Maputo in Mozambique.
South Africa’s biggest tourist attraction, the
Kruger National Park, is mostly in Mpumalanga.
Several investment projects aimed at providing
infrastructure in the tourism sector have been put
forward by the Mpumalanga Economic Growth
Agency (MEGA). Heritage and Cultural Tourism are
two of the focus areas in the provincial plan because
Mpumalanga is already a leader in nature reserves
and parks.
Large investments are under way on the railways
that run to and through Mpumalanga. This
includes upgrading the commuter railway linkages
to the province from neighbouring Gauteng and
building new railway lines to transport coal through
Swaziland and on to either Richards Bay or Maputo
in Mozambique.
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.
SOUTH AFRICAN BUSINESS 2018
152
REGION
Most of the province receives summer rainfall,
often via thunderstorms. Frost is common on the
Highveld, but is almost absent in the subtropical regions
where fruit, nuts and citrus thrive. Crops include
maize, wheat, sorghum, barley, sunflower seed, soya
beans, groundnuts, sugarcane, 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 an exporter of macadamia nuts, a sector
that is growing at a remarkably fast pace.
The province’s rich agricultural produce is used
by companies such as McCain, Nestlé and PepsiCo
and there are also pulp and paper plants (Sappi and
Mondi), fertiliser facilities and textile manufacturing
concerns. The decision by Sappi to start producing
dissolving wood pulp at its Ngodwana Mill has significantly
increased the manufacturing capacity of the
province. York Timbers is a leading forestry company
and the sugar mills and refinery of RCL Foods are large
contributors to the provincial economy. Forestry is
extensive around Sabie.
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 ferro-alloy 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 and
Lydenburg. Nkomati Mine is South Africa’s only purenickel
operation. The province’s coalfields are in the
south and west of the province.
The restarting of the Evraz Highveld steel mill
in 2017 was good news for the regional economy,
after the company went into business rescue two
years before.
The province also hosts large companies in the
manufacturing sector, with internationally renowned
firms such as Sasol (synthetic fuels and chemicals)
and Xstrata (ferrochrome) having large operations
in the province.
Sasol, the integrated oil, gas and chemicals
company, runs several plants at Secunda. Products
manufactured at the complex include synthetic fuel,
petroleum, paraffin, jet fuel, creosote, bitumen, diesel
and lubricants. Sasol’s coal liquefaction plant is also
located in the town of Secunda. The primary feedstock
for synthetic-fuel production is coal, and the plant is
located in the heart of Mpumalanga’s coalfields.
Economic future
A major goal of the provincial government’s
Mpumalanga Economic Growth and Development
Path (MEGDP) is to expand the industrial base of the
provincial economy. The focus is on beneficiation,
agri-processing and value chain development.
The Provincial Government of Mpumalanga has
been talking to several foreign countries about investments
in the province. An assembly plant for Minsk
Tractor Works is one of the outcomes of this activity,
and several agreements relating to training and trading
have been signed. Russia, Belarus, China and Oman
are some of the countries with which Mpumalanga
is engaged. The Mpumalanga Economic Growth
Agency hosted a People’s Republic of China Business
Forum which was attended by 19 large Chinese
companies.
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.
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 is 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.
Capital Mbombela
Population 4 283 900
Area 76 495km 2
Premier David Mabuza (ANC)
Languages Ndebele, Swati, Zulu
153 SOUTH AFRICAN BUSINESS 2018
A REGIONAL OVERVIEW OF THE
NORTHERN CAPE
The Northern Cape is rich in resources. A new zinc
mine project at Gamsberg is attracting large
amounts of foreign direct investment, as are
several solar farms. The province’s huge iron ore
mines remain profitable. The prospect of a Special
Economic Zone at Upington could boost the manufacturing
sector, especially with regard to renewable
energy components.
The Northern Cape is the largest of South Africa’s
provinces but has the smallest population. The
Orange River is a green lung that runs through the
province, providing water for grape-growers and
other irrigation projects, power through hydropower
and great opportunities for tourism activities
like river rafting. Despite the vast distances, the
province enjoys good infrastructure and the ironore
export rail line that runs from Sishen to the coast is
a technical marvel.
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 province has many tourist attractions, including
its 4X4 trails, unique vegetation and the Kgalagadi
Transfrontier Park, which is famous for its lions. The
Augrabies Falls and the Orange River are very popular.
The vast open spaces of the Karoo have attracted
one of the great scientific projects of the age, the
Square Kilometre Array radio telescope. An international
collaboration, the SKA is sponsoring mathematics
and science teachers in the Northern Cape
and creating great excitement for science.
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.
The province’s first university, Sol Plaatje, has
been launched. The university is merging technikon
courses with traditional university degrees in one
department.
Key sectors
Wool, mohair, karakul, Karoo lamb, venison, ostrich
meat and leather are produced throughout the province.
The province is second only to the Eastern Cape
in terms of the number of sheep farmed and it is the
SOUTH AFRICAN BUSINESS 2018
154
REGION
fourth-largest wool-producing province based on
annual sale of producer lots.
The karakul-pelt industry is one of the most
important in the Gordonia district of Upington.
Agri-company KLK is the only organisation that
handles these pelts in South Africa, which are sorted
in Windhoek before being sent to Europe for
auction. Conditions around Colesberg are ideal for
horse breeding.
Major exports include fruit, especially table grapes
and meat. The Vaalharts Irrigation Scheme has supported
farming for decades. The newer Namakwa
irrigation scheme will link with the agri-parks being
established across the province. The plan is to increase
production of agricultural products, including
grapes and fish from aquaculture schemes and then
create new agri-processing plants.
Mining contributes 23.4% to the Northern Cape
economy and makes up nearly 7% of South Africa’s
total mining value. The mineral resource of the province
is wide-ranging and impressive with significant
deposits of iron ore, manganese, zinc, copper, lead,
titanium, pig iron, zircon and gypsum.
The majority of the world’s manganese comes
from the Postmasburg and Kalahari regions of the
Northern Cape. The province is responsible for 25%
of the world’s exports of the mineral.
The Northern Cape produces more than 84% of
South Africa’s iron ore. The province has two major
iron belts, from Postmasburg to Hotazel, and running
through Sishen and Kathu. Kumba Iron Ore has the
huge Sishen facility at Kathu and Kolomela.
Petra Diamonds continues to expand production
at Finsch mine. Indian giant Vedanta is putting R9.4-
billion into the Gamsberg Zinc project near Aggenys.
Economic future
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.
There would be possibilities for linking the port to
the gas fields and developing ship-repair facilities.
A unit within the National Department of Public
Works, Small Harbours and Coastal Property
Development, is working with district and local
municipalities to create new economic opportunities.
Port Nolloth is earmarked as a “new harbour”
with other onshore developments such as aquaculture
to take place at Hondeklip Bay and Kleinzee.
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. Most of these were solar photovoltaic
projects, with seven employing the concentrated
solar power (CSP) technology.
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 has been earmarked as a
manufacturing zone for solar components. A good
opportunity exists to increase local content and the
creation of a Northern Cape Special Economic Zone
(at Upington) will promote this goal.
The 400ha site of the Upington SEZ in the
Northern Cape Province is close to the Upington
International Airport and is well served by access
roads. Khara Hais Municipality has agreed to transfer
the necessary land to the SEZ, and has approved
the infrastructure plan that has been put forward.
Airports Company South Africa (ACSA) is a partner
in the project.
Upington International Airport’s 4.9km runway
allows it to land the largest aircraft. Airports Company
South Africa has allocated 55ha for the creation of
an aviation park to store and maintain aircraft, and a
further 30ha for commercial development.
ACSA’s research suggests that over the next
decade there will be a big demand for aircraft storage
and dismantling (a subsector of the broader
Maintenance, Repair and Overhaul market).
Capital Kimberley
Population 1 185 600
Area 372 889km 2
Premier Sylvia Lucas (ANC)
Languages Afrikaans, Setswana, Xhosa
155 SOUTH AFRICAN BUSINESS 2018
A REGIONAL OVERVIEW OF
NORTH WEST
The North West Province is also known as the
“Platinum Province” and the “Texas of South
Africa”. Platinum mines, cattle ranches, game
reserves and the entertainment complex at
Sun City are the province’s best-known features.
North West shares a border with the Republic of
Botswana (and the Kalahari desert), Gauteng and
the Free State.
South Africa’s nuclear-research centre is located
at Pelindaba near Hartbeespoort Dam, and is run
by the South African Nuclear Energy Corporation.
A provincial priority is to improve the link between
rural and urban economies, something which
a strong focus on agri-processing could achieve. As
one of the country’s biggest producers of livestock,
North West’s automotive industry could profitably
source hides for car seats locally. The Industrial
Development Corporation (IDC) is one of the bodies
that is helping the province to expand (and maintain)
the diversity of its manufacturing sector.
Key sectors
The North West Province is aligned with the Western
Limb of the Bushveld Igneous Complex, a remarkably
rich minerals formation. Mines in the province
produce 50% of the platinum produced in the world,
and 65% of South Africa’s platinum group metals.
Chromite is the other major mineral mined
throughout the province, and there are several ferrochrome
smelters and other processing plants.
Gold and uranium is found along the border
of the province with Gauteng and the 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.
Platinum is found in the Rustenburg and Brits
regions. 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
SOUTH AFRICAN BUSINESS 2018
156
REGION
involved in grain. Cattle and crops such as sunflower
seeds are among the other sectors that generate
significant income and feed large numbers of South
Africans. North West produces about one third of the
country’s maize.
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.
Brits, Rustenburg, Tlokwe (Potchefstroom),
Matlosana (Klerksdorp) and Mahikeng account for
more than half of the total manufacturing capacity
in North West Province. Mining beneficiation,
automotive components and food and beverage
play important roles in the sector.
Food and beverages is the biggest subsector
contributing to the manufacturing industry. The
town of Brits has several 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. 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.
Economic future
The provincial government has pointed out that
the share of manufacturing to the Growth Value
Add (GVA) of the province is only 5% – a figure that
must grow if employment is to grow along with the
expanding economy.
A provincial Integrated Manufacturing Strategy has
been compiled. One of the report’s findings was that
because North West is strategically located near to
the industrial hub of Gauteng, has low input costs, lies
on established trade routes and has easy access to
natural resources, it should make the development of
the chemical processing sector a good bet. This is especially
true for phosphate and nitrogen-based fertilisers.
The Platinum Valley Special Economic Zone (SEZ)
is to be established at Mogwase in the Bojanala
District, north of Rustenburg and east of Sun
City. When fully developed, 200ha of land will be
given over to three infrastructure facilities comprising
Logistics, Light Manufacturing and Heavy
Manufacturing. Areas of investment that are expected
to grow fastest include fuel cell technology (in
which platinum is a vital component), machinery for
mining, energy generation and renewable energy
component manufacturing.
The Seda Platinum Incubator (SPI) is an initiative
of the Platinum Trust of South Africa and is funded
by the Small Enterprise Development Agency
(Seda) through its Seda Technology Programme
(Stp) with the support of the North West Provincial
Government and private companies.
The sun shines in the North West, on average,
300 days of the year. In addition, the province mines
more platinum than any other place on earth. These
two facts combine to present a suite of opportunities
for energy generation and for the manufacture
of equipment for the energy sector.
The Department of Trade and Industry (dti) says
there is potential in the automotive sector which
can be applied to the manufacturing sector for
renewable energy.
An opportunity for solar panel market manufacturers
is being promoted by the North West Development
Corporation at Mahikeng. Investors are sought to manufacture
and supply panels to farms, housing schemes,
the mining industry and government.
The Potchefstroom campus of the North West
University is home to HySA Infrastructure Centre for
hydrogen production, storage and delivery. HySA
is part of a national strategy designed to make use
of hydrogen and fuel cell technology, particularly
arising from platinum group metals (PGM).
Capital Mahikeng
Population 3 707 000
Area 104 882km 2