Eastern Cape Business 2019 edition

SPECIAL FEATURE
numbers of Mercedes-Benz vehicles loaded for
export. The country’s largest grain elevator in a
port will start to run more efficiently as a result of
a contract signed in 2018 with Afgri. The private
contractor will work with Transnet Port Terminals
to improve efficiency at the terminal.
National government has named the Coega
SEZ as the potential site for a 1 000MW Liquefied
Natural Gas (LNG) plant. The value to the regional
economy of the project is estimated at R25-billion.
A gas-fired power plant (Dedisa) started operating
at Coega in 2016, and there are plans to expand
this sector.
The Eastern Cape Development Corporation
(ECDC) is the lead agency in driving economic
growth in the province. The Investment Promotion
Unit of the ECDC actively markets and facilitates
investments. Eight economic sectors have been
targeted as priorities, including renewable energy,
the oceans economy and tourism.
Work is being done on rail links to the Eastern
Cape to enable more manganese to be exported
through the province. These logistics upgrades
are an indicator that the political will exists to
improve infrastructure.
In his 2018 State of the Province Address,
Eastern Cape Premier Phumulo Masualle said that
the province had become “one gigantic roads
construction site” with active projects underway
to the value of R7-billion and another R5-billion
to be completed before 2022.
The Eastern Cape is fast becoming South
Africa’s wind-farm hotspot. Just two areas, greater
Jeffreys Bay and Cookhouse/Bedford, will soon be
contributing 1 185MW to the national grid.
A joint venture in the Eastern Cape between
Osho Ventures and Heidelberg Cement will create
South Africa’s seventh cement manufacturer.
Established sectors
Historically, wool and ostrich feathers were the region’s
first exports and these items are still in the
export basket. The Eastern Cape was and is a global
leader in mohair, the luxury fibre taken from Angora
goats. The fertile Langkloof Valley in the west has
enormous deciduous fruit orchards and Alexandria
and Grahamstown produce pineapples, chicory and
dairy products. The Eastern Cape is the leading livestock
province in terms of numbers of sheep and
cattle and produces a quarter of South Africa’s milk.
The manufacturing facilities of Volkswagen South
Africa (in Uitenhage) and Mercedes-Benz South
Africa (East London) are at the core of the province’s
important automotive sector. It was to support this
sector that industrialisation took place in the province.
Smelters and metal works were built to service car
makers and automotive component manufacturers.
Ford engines are built in Port Elizabeth and a wide
range of makers of automotive glass, catalytic
converters, vehicle tyres and other parts are found in
Uitenhage, Port Elizabeth and at the Special Economic
Zone (SEZ) in East London.
Two Chinese car makers have recently invested
in the Coega IDZ, First Automotive Works (FAW)
and Beijing Automobile Corporation (BAIC). Local
giants Volkswagen SA and Mercedes-Benz SA have
invested heavily in increased capacity for new
lines of production.
The Eastern Cape’s beaches and natural beauty
have been attractive to tourists for many years,
but recent initiatives to expand the province’s
offerings are paying off. With a focus on events
and “adventure tourism”, visitor numbers are
steadily growing. The province aims to be a “Top
Three” domestic destination by 2020. Spending
by tourists has grown from R2.4-billion in 2013 to
R4.1-billion in 2015 and the average length of stay
(5.3 days) is the best in South Africa.
The Eastern Cape MEC for Economic
Development, Environmental Affairs and Tourism
Oscar Mabuyane reported in a booklet prepared
for the 2019 Eastern Cape Investment Conference
that several large investments have been made in
the province. He cited:
• SAB, R438-million plant upgrade
• Mercedes Benz SA, R10-billion
• Aspen Pharmacare, R3.4-billion
• Nestle, R663-million
• Yekani Technologies, R1-billion at Coega SEZ
• MultiChoice, R900-million at ELSEZ
• ​Volkswagen SA, R6.1-billion
• ​BAIC, R11-billion at Coega SEZ.
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EASTERN CAPE BUSINESS 2019