South African Business 2020 edition

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xaro Resources Limited (“Exxaro”) and
outh Africa Investment Conference invites
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THE GUIDE TO BUSINESS AND INVESTMENT
IN SOUTH AFRICA
2020 EDITION
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Conference, invite media to experience
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MESSAGE PROFILE
South Africa continues
to inspire new ways
The South Africa of today is definitely not the same country
that emerged from a tumultuous history only 25 years ago in
1994. During 2019, the country’s sixth democratically elected
administration took office, under the leadership of President
Cyril Ramaphosa.
As the country completes its first quarter century of democracy, the
strategic objectives of the sixth administration were made clear during
his first State of the Nation Address (SONA) of the new administration
(20 June 2019). In this SONA, the President stated that, “As we enter this
new administration, we will focus on seven priorities:
• Economic transformation and job creation
• Education, skills and health
• Consolidating the social wage through reliable and quality basic
services
• Spatial integration, human settlements and local government
• Social cohesion and safe communities
• A capable, ethical and developmental state
• A better Africa and world.”
The South Africa of the sixth administration is a country with
much to offer its citizens, and the world. Objectives set by the current
administration can be achieved, if
viewed against the background
of the broader competitive and
comparative advantages up its
proverbial sleeve.
South Africa is, for example,
one of the most transparent
state governance systems in
the world. Ranking second out
of 102 countries in the Open
Budget Index, and also ranking
as first out of 141 countries for
Budget Transparency, in the
World Economic Forum Global
Competitiveness Index (WEF GCI).
In terms of its financial systems it is
evident that the country is a world
leader in that it ranks 19th in the
Finance pillar of the WEF GCI. But
it does not stop there.
SOUTH AFRICAN BUSINESS 2020
4

MESSAGE PROFILE
Beyond the business and
economic realm, South Africa
is also in the Good Country
Index pegged as third out of 153
countries in its contribution to
International Peace & Security, 18th
for Science & Technology, and 31st
for its contribution to World Order.
This means that South Africa is not
only an economic force on the
African continent, but also a force
for “good” through its contribution
to international peace and security,
particularly in the African continent.
In a period of mounting
uncertainties in the global
environment, South Africa
remains an innovative and
inspiring nation. In this regard, the
sixth administration is focused
on enhancing the ease of doing
business in South Africa. To this
end the Department of Trade,
Industry and Competition’s
national Invest SA One Stop Shop
for investors aims to provide
would-be investors with the
necessary support to enter the
market. Several reforms are
underway to deal with regulatory
and administrative hurdles. The
country’s Special Economic
Zones, its incentives for investors,
its quality of life (and climate),
as well as an advantageous
geographical position and
infrastructure is an enabler for
business in the broader African
market environment. For
evidence of the above one need
to look no further than the World
Bank Logistics Performance
Index where South Africa ranks 33rd out of 160 countries. This also
illustrates the infrastructural and enabling regulatory environment
the country creates.
It is to this end important to note another inspiring aspect of the
South Africa of today. According to the EY Africa Attractiveness Survey
(2019), South Africa is the fifth-largest source of Foreign Direct Investment
in the pan-African economy. This in itself says a lot not only about
the maturity and capability of South African private and publically
owned corporations to globalise operations, but even more about the
enabling financial, infrastructural, human-resource and doing-business
environment South Africa offers those interested in carving a niche in
the African marketplace.
During 2020, the African Continental Free Trade Area Agreement
will be operationalised. South Africa, as signatory to this agreement, is a
champion of African integration. The country’s National Development
Plan (Vision 2030) has a whole chapter devoted to measures to enhance
intra-African trade.
A further illustration of the fact that South Africa is proverbially open
for business is that since taking office, President Ramaphosa has been
championing an annual South Africa Investment Conference. At the first
conference in 2018, major local and international corporates pledged
close to US$20-billion towards investment in South Africa. This conference
will be a standing feature on the country’s annual calendar going forward.
It is impossible to summarise all the unique features of the South
African Nation Brand. But one thing that is certain is that the country’s
geographic, linguistic, cultural, economic and religious diversity
inspires creativity, and positions the country as a compelling trade
partner and investment destination.
During 2020 South Africa will chair the African Union. In the same
year the African Continental Free Trade Area will come into effect. It
has therefore never been a better time to engage with, and explore
new opportunities not only in South Africa, but in the free trade area
as a whole.
With all of this said, it is also important to be reminded of the fact
that while the country has many hidden gems, and surprising innovation
capabilities, South Africa is a nation in transformation. The seven key
priorities of the sixth administration are all geared to enable positive and
constructive change and transformation in society, the economy, and
the way South Africa interacts with the world.
If you have never considered travelling to, or doing business in
an inspiring and innovative South Africa – all we can say is: the time
is now.
5 SOUTH AFRICAN BUSINESS 2020

CONTENTS
CONTENTS
South African Business 2020 Edition.
Introduction
Foreword12
A unique guide to business and investment in South Africa.
Special features
An economic overview of South Africa 14
Three small rural towns in a remote part of South Africa’s
dry north-west are the sites of the very latest in technology,
and could hold the key to boosting growth in the South
African economy.
Provinces of South Africa 20
A snapshot of South Africa’s nine provinces.
The Blue Economy 28
South Africa is alert to the growing opportunity offered
by the maritime sector.
Trade into Africa 30
Continental free trade will galvanise African economies.
Doubling tourist arrivals is a national priority 32
Airports Company South Africa is on a massive
spending drive
Mining for the future 38
South African miners are finding new uses for platinum and
gearing up for the age of renewable energy.
SOUTH AFRICAN BUSINESS 2020
6

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CONTENTS
Economic sectors
Agriculture 58
South Africa is the world leader in mohair.
Energy62
Policy decisions hold the key to stabilising power supply.
Oil, gas and petrochemicals 68
South African ports are gearing up to service the oil
and gas industry.
Water 72
Cape Town has learned big lessons from a harsh drought.
Engineering 74
Training new engineers is a national priority.
Construction and property 76
Green buildings are becoming more common.
Manufacturing80
A new national drug tender is an opportunity for local
manufacturers.
Food and beverages 82
PepsiCo has bought Pioneer Foods.
Automotive84
Vehicle exports are boosting the South African economy.
Transport and logistics 86
A private-public partnership is upgrading facilities at ports.
SOUTH AFRICAN BUSINESS 2020
8

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CONTENTS
ICT88
Cloud services have come to South Africa.
Banking and financial services 89
New stock exchanges are attracting investors.
Development finance and SMME support 94
Supply chains can create and support small businesses.
References
Sector contents 56
Overviews of the main economic sectors of South Africa.
Map
Exxaro
of provinces’ sectoral
Resources
strengths
Limited
23
(“Exxaro”) and
the South Africa Investment Conference invites
Index96
media to the first-of-its-kind digital and
About the cover
connected mine in the country.
Exxaro’s Belfast Implementation Project in Mpumalanga comes
as a result of the company’s R20-billion investment pledged at
the inaugural South Africa Investment Conference held in 2018.
Exxaro’s Belfast coal mine is the first-ever digital and connected
mine in South Africa.
SOUTH AFRICAN BUSINESS 2020
10

FOREWORD
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BUSINESS 2020
J25589

FOREWORD
South African Business
A unique guide to business and investment in South Africa.
Welcome to the eighth 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. A special feature focusses on the huge potential for growth
and job creation which the tourism industry holds. The possibilities
presented by the age of renewable energy for the mining industry is
the topic of another special feature and the CEO of Minerals Council
South Africa responds to a set of questions on the state of mining in
the country.
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 26 000.
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: Richard Smith
Production: Lizel Olivier
Ad sales: Gavin van der Merwe,
Sam Oliver, Gabriel Venter,
Vanessa Wallace, Jeremy Petersen,
Shiko Diala and Sandile Koni.
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
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Directors: Clive During, Chris Whales
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Email: info@gan.co.za | Website: www.gan.co.za
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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 | Abengoa Solar, ACSA, African Pride/Marriott
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iStock by Getty Images, SA Tourism, Zimele.
DISCLAIMER | While the publisher, Global Africa Network Media (Pty)
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or completeness of the information. Global Africa Network Media will
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SPECIAL FEATURE
An economic overview
of South Africa
Three small rural towns in a remote part of South Africa’s dry north-west are the
sites of the very latest in technology, and could hold the key to boosting growth
in the South African economy.
By John Young
The Northern Cape towns of Carnarvon, Aggeneys and Keimoes
are not the first places where analyses of economic growth in
South Africa normally begin – but there is good reason to look
carefully at what is going on in this dry and remote region.
Carnarvon, just north of the N1, is best known for dorper sheep, low
hills and wind pumps but this has changed since the Square Kilometre
Array project chose the area for the erection of the very latest in radio
telescope technology. A multi-national project of awesome potential,
construction on the project will run to hundreds of millions of euros
and is already sparking interest in technical subjects in schools of the
Northern Cape and at South Africa’s newest university, Sol Plaatje
University, in Kimberley.
About 300km north-west, the tallest structure in South Africa (taller
than the Ponti City tower in Johannesburg) has been erected near
Keimoes between Upington and Kakamas. Keimoes is not entirely
unfamiliar with fame: the area’s sultanas are world famous and Orange
River Wine Cellars does important work on the banks of the Orange
River, but the scale of the nearby solar thermal project is vast, and
the technology is significant. Khi Solar One (pictured on this page) is
a joint venture between Spanish form Abengoa Solar, the Industrial
Development Corporation (IDC)
and the Khi Community Trust.
Concentrated solar power
is a more expensive method of
generating power from the sun
than photovoltaic (PV) systems
but the potential for storage
is greater. While the Northern
Cape is the national leader in
solar power, the Eastern Cape
has attracted more than half of
the wind power projects in the
Renewable Energy Independent
Power Producer Procurement
Programme (REIPPPP).
The effect of the introduction
of renewable energy into the
South African energy market
has been noted at a macro level
in several ways, but now it is
SOUTH AFRICAN BUSINESS 2020 14

SPECIAL FEATURE
showing at micro level as well.
An announcement by
infrastructure development group
Raubex in October 2019 that it
was experiencing strong growth
because of contract work related
to renewable energy was just one
indicator of a massive shift that
is starting to happen. For several
years, South Africa’s construction
and engineering companies
have been stressed, with many
commentators blaming a lack of
infrastructure investment from
central government and stateowned
enterprises for this state
of affairs. Renewable energy
may well offer the route back to
profitability.
Aggeneys is a about 240km
west of Keimoes, and close to
Springbok. It’s always been a
mining town and is the base
for the Black Mountain project
which produces copper, lead and
zinc, with silver as a by-product.
Vedanta Zinc International has
launched a project nearby which
will deliver 600 000 tons of zinc
annually once phase three is
complete. It is the biggest current
mining project in South Africa,
having attracted $400-million
in investment so far. There is a
possibility of a new smelter and
refinery being built to service this
digitally advanced mine.
Agriculture and tourism
Basing economic growth on a
devaluing currency is not always
the best long-term method of
boosting economic growth, but
high-value agricultural exports
and increased numbers of highspending
international tourists hold some promise for helping to get
the South African economy back on a growth path.
Horticulture in particular is seen as holding great potential not only
for increased earnings, but for creating jobs. The same holds true for
tourism. StatsSA reported that the tourism sector created 31 752 net
new jobs in 2017 and Wandile Sihlobo of Agbiz has written about how
every hectare of blueberries planted needs 2.64 workers.
When assessing South Africa’s prospects and suggesting solutions,
the country’s history of economic and social exclusion and current
unemployment figures must be part of the equation.
Another new area that holds great potential for the South African
economy is the Oceans Economy.
South Africa has 3 000km of coastline and the extent of the country’s
territorial waters is greater than its land size. And yet the country does
not have a merchant marine fleet and only scrapes the surface in terms
of the percentage of repair and maintenance of boats and oil rigs which
could potentially bring work to its ports.
What is also called the Blue Economy has enormous potential for
economic growth and concomitant job creation. National government
wants to see the Oceans Economy contribute a R177-billion to gross domestic
product by 2033. This is part of the National Development Plan (NDP).
National strategy on the Oceans Economy is also aligned with
Operation Phakisa, a plan that targets sectors that can best achieve quick
returns in terms of growth and job creation. The four target areas within
the maritime strategy are: aquaculture; offshore oil and gas; marine
protection and governance; marine transport and manufacturing.
Transnet National Ports Authority is spending heavily on upgrading
the nation’s ports.
One statistic illustrates the potential: South Africa does maintenance
on only 5% of the 13 000 vessels that use its ports, and services 4-5% of
the approximately 130 rigs that pass along the coast each year. Large
quantities of oil are transported around the Cape Point every year: 32.2%
of West Africa’s oil and 23.7% of oil emanating from the Middle East.
Traditional strengths
Great mineral wealth has underpinned the South African economy
ever since the first diamond was stumbled upon in 1867. Gold was
found soon after and that industry effectively saw to it that South Africa
became an industrialised nation. Now those gold mines are tapering
off in production volumes, but coal, iron ore and platinum reserves are
impressively large.
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
15
SOUTH AFRICAN BUSINESS 2020

SPECIAL FEATURE
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.
Automotive manufacturing and automotive components are
doing well, with major investments by most of the major marques
and increased exports a feature of the sector.
The publication in 2018 of a new Integrated Resource Plan (IRP) is
another symptom of the type of increased certainty that an economy
needs in order to thrive. The IRP is a road map for South Africa’s
electricity generation and the previous administration seemed
determined to push for an expensive nuclear programme. The
latest plan confirms that the already hugely successful drive for
renewable energy will be continued and expanded. Apart from
being greener and cheaper, the renewable energy programme has
also attracted lots of foreign direct investment (FDI) and provided
new employment opportunities.
Special Economic Zones (SEZs)
South African industrial planners have turned to Special Economic Zones
(SEZs) as a model for manufacturing goods locally to replace imports.
South Africa has several existing Industrial Development Zones
(IDZ) and a Free Trade Port (FTP). The Coega IDZ (Nelson Mandela Bay
Metropole) and the Dube TradePort at the King Shaka International
Airport outside Durban are two well-known examples. Other licensed
IDZs are at Saldanha Bay, East London and Richards Bay. A process has
begun to have them all called SEZs.
A new SEZ has been formally declared in the northern part
of Limpopo, the Musina-Makhado SEZ. The Upington SEZ in the
Northern Cape is eagerly awaiting its licence, as is the Tubatse SEZ
in eastern Limpopo.
Key goals behind the establishment of SEZs are to encourage
industries to develop in clusters, leading to economies of scale,
skills-sharing and easier access by suppliers. The creation of
industrial infrastructure also serves to attract investment and
promotes further development.
Apart from attracting foreign direct investment and boosting
employment, SEZs can also play a role in helping to add new sectors
or subsectors to an economy.
South Africa is targeting a variety of sectors in SEZs around the
country, but there is a decided emphasis on beneficiation, mainly of
minerals but also of agricultural products. There is a strong belief that
South Africa can do much more with the product of its soils – whether
that be using manganese to convert iron into steel or creating fruit
juices out of apples and pears.
Special Economic Zones are
created in terms of the Special
Economic Zones Act of 2014
(Act 16 of 2014). The act defines
an SEZ as “geographically
designated areas of the country
that are set aside for specifically
targeted economic activities
and supported through special
arrangements and systems that
are often different from those that
apply to the rest of the country”.
Lower corporate tax rates and
duty-free imports are among
the advantages that accrue to
investors.
Sectoral composition of GDP in 2017
Mining and quarrying 8%
Manufacturing 13.2%
Electricity, gas and water 3.7%
Construction 3.9%
Trade, catering and accommodation 15%
Transport, storage and communication
9.9%
Finance, real estate and business services
20.2%
Personal services 5.8%
General government services
17.7%
Agriculture, forestry and fishing
2.6%
SOURCE: IDC from StatsSA
SOUTH AFRICAN BUSINESS 2020 16

SPECIAL FEATURE
Investing in South Africa
The South Africa Investment Conference 2019, held
in Sandton, Johannesburg, from 5-7 November
2019, is the second such conference, held under
the leadership of President Cyril Ramaphosa and
represents a major plank in the big drive of his
administration to encourage inward investment.
At the first such conference, commitments to
the value of more than $20-billion were made in
the course of discussions about how best to create
partnerships and grow the South African economy.
South Africa provides active support for investors
by providing a wide range of incentives, including a
comprehensive suite of tax incentives for investment
in Special Economic Zones (SEZs).
Information on this page is taken from the
executive summary of “The case for investing in
South Africa. Accelerating economic growth by
building partnerships”, published by the Department
of Trade, Industry and Competition (the dtic).
Key facts
South Africa offers a unique combination of
developed-world infrastructure and logistics
networks, and a diversified emerging market (EM)
economy offering low sectoral concentration risks.
Its gross domestic product (GDP) of R4.65-trillion
($349.4-billion at the average $/R exchange rate for
2017) represents circa 16% of Africa’s GDP.
The composition of South Africa’s GDP is similar
to those of developed economies, diversified and
positioned to generate sustainable long-term
returns on invested capital.
Investment environment
• Ranked number one in Africa with regard to
Strength of Investor Protection (21st globally) and
Protection of Minority Shareholders’ Interests
(30th globally).
• Ranked 31st in the world in terms of Efficiency of
Legal Framework in Settling Disputes.
• Progressive constitution.
• Independent judiciary provides respect for the
rule of law.
• Actively addressing corruption.
• Meaningful contributor to global governance.
• South Africa has produced solid financial returns.
The Johannesburg Securities Exchange All Share
Index has outperformed other emerging market
indices since the start of the new millennium.
FDI
• The overall stock of foreign direct investment
(FDI) in the economy represented 42.8% of GDP
in 2016, up from 5.8% in 1994.
• Inward FDI has been traditionally dominated by
European investors, particularly from the United
Kingdom.
• Fast-growing presence of Asian investors in
recent years, predominantly from China.
Raising capital
• Twelve initial public offerings (IPOs) in 2017
with total proceeds of $2.3-billion, compared
to $261-million in 2013. A total of 44 IPOs over
the period 2013 to 2017, collectively totalling
$4.8-billion.
• Five of the top 10 IPOs by value in Africa in 2017
were raised in South Africa.
• A total of 251 further offerings (FOs) in 2017 (collectively
valued at $37.6-billion), up from 35 FOs
(totalling $4.6-billion) in 2013.
• South Africa accounted for seven of the top 10
further offerings in Africa in 2017.
Websites:
www.investsa.gov.za
www.sainvestmentconference.co.za
17
SOUTH AFRICAN BUSINESS 2020

SPECIAL FEATURE
FACT FILE: REPUBLIC OF SOUTH AFRICA
President: Cyril Ramaphosa (African National
Congress)
Capitals: Pretoria/Tshwane (administrative, seat of
government), Cape Town (legislative), Bloemfontein
(judicial).
Time: GMT+2
Life expectancy: 65.1 (female); 59.7 (male)
Population: 55.91-million (2016)
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 is Christian, but many other religions
are followed such as Islam, Jewish and Hindu.
Currency: rand (100 cents). R15.15 = $1 (October
2019)
Resouces: Platinum, gold, iron ore, chromium,
vanadium, manganese, alumino-silicates, coal,
copper, diamonds, uranium, zirconium.
Political system: South Africa is a republic with
an executive president who is appointed by the
political party that wins a majority 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 Province is
administered by the Democratic Alliance.
The third level of government is local or
municipality. In 2016 the DA came to power in
three of South Africa’s biggest cities, supported by
other parties such as the Congress of the People
and the United Democratic Front. The Freedom
Front said it would support these anti-ANC alliances
on a vote-by-vote basis, but it would not sign up
to a coalition. The FF has subsequently stopped
supporting the DA.
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.
GDP: R4.65-trillion ($349.4-billion at the average
2017 exchange rate).
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. Membership of BRICS will see focus on
Brazil, Russia, India and China.
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.
Infrastructure (information from dti):
• 158 952km of paved roads (10th globally).
South Africa is ranked 50th globally for quality
of roads.
• 20 986km of railways (13th globally for length
of railways).
• Eight sea ports including two of the world’s top
container ports (Durban and Cape Town).
• Two of the world’s largest dry bulk ports
(Richards Bay and Saldanha Bay).
• Installed generation capacity of 47.3KW, with
significant excess capacity coming on stream.
• Internet and personal computer penetration
is the highest in the region, with 54% of
individuals using the Internet.
• 144 airports with paved runways.
• Ranked 25th globally for Quality of Air Transport
Infrastructure. ■
SOUTH AFRICAN BUSINESS 2020 18

10 REASONS
WHY YOU SHOULD INVEST IN SOUTH AFRICA
01.
HOT EMERGING
MARKET
Growing middle class, affluent consumer
base, excellent returns on investment.
02.
MOST DIVERSIFIED
ECONOMY IN AFRICA
South Africa (SA) has the most industrialised economy in Africa.
It is the region’s principal manufacturing hub and a leading
services destination.
LARGEST PRESENCE OF MULTINATIONALS
ON THE AFRICAN CONTINENT
SA is the location of choice of multinationals in Africa.
03.
Global corporates reap the benefits of doing business in
SA, which has a supportive and growing ecosystem as a
hub for innovation, technology and fintech.
05.
FAVOURABLE ACCESS TO
GLOBAL MARKETS
ADVANCED FINANCIAL SERVICES
& BANKING SECTOR
SA has a sophisticated banking sector with a major
footprint in Africa. It is the continent’s financial hub,
with the JSE being Africa’s largest stock exchange by
market capitalisation.
The African Continental Free Trade Area will boost
intra-African trade and create a market of over one
billion people and a combined gross domestic product
(GDP) of USD2.2-trillion that will unlock industrial
development. SA has several trade agreements in
place as an export platform into global markets.
YOUNG, EAGER LABOUR FORCE
09.
SA has a number of world-class universities and colleges
producing a skilled, talented and capable workforce. It
boasts a diversified skills set, emerging talent, a large pool
of prospective workers and government support for training
and skills development.
07.
04.
06.
08.
PROGRESSIVE
CONSTITUTION
& INDEPENDENT
JUDICIARY
SA has a progressive Constitution and an independent judiciary. The
country has a mature and accessible legal system, providing certainty
and respect for the rule of law. It is ranked number one in Africa for the
protection of investments and minority investors.
ABUNDANT NATURAL
RESOURCES
SA is endowed with an abundance of natural resources. It is the leading producer
of platinum-group metals (PGMs) globally. Numerous listed mining companies
operate in SA, which also has world-renowned underground mining expertise.
WORLD-CLASS
INFRASTRUCTURE
AND LOGISTICS
A massive governmental investment programme in infrastructure development
has been under way for several years. SA has the largest air, ports and logistics
networks in Africa, and is ranked number one in Africa in the World Bank’s
Logistics Performance Index.
10.
SA offers a favourable cost of living, with a diversified cultural, cuisine and
sports offering all year round and a world-renowned hospitality sector.
EXCELLENT QUALITY
OF LIFE
Page | 2
19
SOUTH AFRICAN BUSINESS 2020

SPECIAL FEATURE
Provinces of South Africa
A snapshot of South Africa’s nine provinces.
Eastern Cape
Capital: Bhisho
Main towns: Port Elizabeth, East
London, Uitenhage, Graaff-
Reinet, Mthatha, Grahamstown
(Makhanda)
Population: 6 916 200 (2015)
Area: 168 966km² (13.8%
of South Africa)
Premier:
Lubabalo Oscar Mabuyane (ANC)
Key sectors: Automotive,
agriculture, agri-processing,
forestry, finance, retail, tourism,
renewable energy.
Infrastructure: Coega Industrial
Development Zone, East London
Industrial Development Zone,
ports of East London, Port
Elizabeth and Ngqura, airports at
Port Elizabeth and East London.
Notable tourism assets: Addo
Elephant National Park, Mountain
Zebra National Park, Wild Coast,
Jeffreys Bay, National Arts Festival.
Provincial government website:
www.ecprov.gov.za
Eastern Cape Development
Corporation: www.ecdc.co.za
Free State
Capital: Bloemfontein
Main towns: Welkom, Sasolburg,
Parys, Kroonstad
Population: 2 817 900 (2015)
Area: 129 825km² (10.6%
of South Africa)
Premier:
Sefora Hixsonia Ntombela (ANC)
Key sectors: Agriculture,
agri-processing, chemical
manufacturing, mining, transport
and logistics.
Infrastructure: Maluti-A-Phofung
Special Economic Zone, Bram
Fischer International Airport,
University of the Free State,
Central University of Technology,
N8 Corridor.
Notable tourism assets: Vaal
River, Gariep Dam, Golden Gate
Highlands National Park, Cherry
Festival, Mangaung African
Cultural Festival (Macufe).
Provincial government website:
www.freestateonline.fs.gov.za
Free State Development
Corporation: www.fdc.co.za
Gauteng
Capital: Johannesburg
Main towns: Tshwane
(including Pretoria), Ekurhuleni,
Vanderbijlpark, Roodepoort
Population: 13 200 300 (2015)
Area: 18 178km² (1.5%
of South Africa)
Premier:
David Makhura (ANC)
Key sectors: Financial and
banking, manufacturing, trade,
creative industries, media.
Infrastructure: OR Tambo
International Airport, Gautrain,
major universities and research
institutions, large convention
centres, FNB Stadium (Soccer City).
Notable tourism assets: Cradle of
Humankind, Apartheid Museum,
Constitution Hill, Magaliesberg,
Soweto tours, Dinokeng.
Provincial government website:
www.gauteng.gov.za
Gauteng Growth and
Development Agency:
www.ggda.co.za
SOUTH AFRICAN BUSINESS 2020 20

SPECIAL FEATURE
KwaZulu-Natal
Capital: Pietermaritzburg
Main towns: Durban, Newcastle,
Ballito, Port Shepstone,
Empangeni, Ulundi
Population: 10 919 100 (2015)
Area: 125 755km² (7.7%
of South Africa)
Premier:
Sihle Zikalala (ANC)
Key sectors: Chemicals, dissolving
pulp manufacture, sugar, forestry,
automotive, textiles and footwear,
mining, oil and gas, logistics.
Infrastructure: King Shaka
International Airport, Dube TradePort,
Richards Bay Industrial Development
Zone, ports of Richards Bay and
Durban, Albert Luthuli International
Convention Centre Complex.
Notable tourism assets: HluhluweiMfolozi
Park, the Drakensberg
mountains, iSimangilso Wetlands
Park, Durban beaches, South Coast,
Zulu cultural heritage, historical
battlefields.
Provincial government website:
www.kznonline.gov.za
Trade and Investment KwaZulu-
Natal: www.tikzn.co.za
Limpopo
Capital: Polokwane
Main towns: Musina,
Ba-Phalabora, Bela-Bela,
Steelpoort, Tzaneen, Thohoyandou
Population: 5 726 800 (2015)
Area: 125 755km² (10.2%
of South Africa)
Premier:
Chupu Stanley Mathabatha (ANC)
Key sectors: Mining, agriculture,
tourism, logistics.
Infrastructure: Musina-Makhado
Special Economic Zone, N1
highway and rail network, new
Medupi power station.
Notable tourism assets: Kruger
National Park, Mapungubwe
Heritage Site, Makapans Valley,
Marula Festival, Waterberg
Biosphere.
Provincial government website:
www.limpopo.gov.za
Limpopo Economic
Development Agency:
www.lieda.gov.za
Mpumalanga
Capital: Mbombela
Main towns: Emalahleni,
Middelburg, Sabie, Lydenburg
Population: 4 283 900 (2015)
Area: 76 495km² (6.3%
of South Africa)
Premier:
Refilwe Mtshweni-Tsipane (ANC)
Key sectors: Agriculture, forestry,
mining, steel manufacturing,
petrochemicals, pulp and paper,
power generation, tourism.
Infrastructure: Nkomazi Special
Economic Zone, Mbombela
International Fresh Produce
Market, Maputo Development
Corridor, Kruger Mpumalanga
International Airport.
Notable tourism assets: Kruger
National Park, Blyde River Canyon,
Barberton Makhonjwa Mountains
(a UNESCO World Heritage Site).
Provincial government website:
www.mpumalanga.gov.za
Mpumalanga Economic Growth
Agency: www.mega.gov.za
21
SOUTH AFRICAN BUSINESS 2020

SPECIAL FEATURE
Northern Cape
Capital: Kimberley
Main towns: Douglas, Upington,
De Aar, Port Nolloth, Colesberg
Population: 1 185 600 (2015)
Area: 372 889km² (30.5%
of South Africa)
Premier:
Dr Zamani Saul (ANC)
Key sectors: Agriculture, mining,
renewable energy, astronomy.
Infrastructure: Upington Special
Economic Zone, Sol Plaatje
University, Vaalharts Irrigation
Scheme.
Notable tourism assets: Six
national parks including the
Kgalagadi Transfrontier Park,
Orange River, spring flower
displays, diamond routes.
Provincial government website:
www.northern-cape.gov.za
Department of Economic
Development and Tourism:
www.northern-cape.gov.za/dedat
North West
Capital: Mahikeng
Main towns: Klerksdorp,
Rustenburg, Brits, Potchefstroom
Population: 3 707 000 (2015)
Area: 104 882km² (8.6%
of South Africa)
Premier: Professor Tebogo Job
Mokgoro (ANC)
Key sectors: Mining, agriculture,
agri-processing, automotive
components.
Infrastructure: Hartbeespoort
Dam, Pelindaba nuclear research
unit, North West University,
Bakwena Platinum Highway.
Notable tourism assets: Sun City,
Mmbatho Palms Hotel Casino
Convention Resort, Pilanesberg
National Park, 18 luxury lodges in
Madikwe Game Reserve.
Provincial government website:
www.nwpg.gov.za
North West Development
Corporation: www.nwdc.co.za
Western Cape
Capital: Cape Town
Main towns: Stellenbosch,
George, Plettenberg Bay, Beaufort
West, Oudtshoorn, Worcester,
Malmesbury
Population: 6 200 100 (2015)
Area: 129 462km² (10.6%
of South Africa)
Premier:
Alan Winde (DA)
Key sectors: Agriculture, agriprocessing,
wine and grapes,
financial services, manufacturing,
tourism, oil and gas, boatbuilding.
Infrastructure: Ports of Cape
Town, Saldanha and Mossel Bay,
Mossgas oil-to-gas refinery, Cape
Town International Airport, Cape
Town International Convention
Centre, Koeberg nuclear power
station.
Notable tourism assets: Table
Mountain, Garden Route National
Park, Karoo National Park, West
Coast National Park, Kirstenbosch
Botanical Gardens, Cape Point,
V&A Waterfront, Plettenberg
Bay, Route 62, Zeitz Museum of
Contemporary Art.
Provincial government website:
www.westerncape.gov.za
Wesgro: www.wesgro.co.za
SOUTH AFRICAN BUSINESS 2020 22

Sectoral strengths of
South African provinces
SECTORAL STRENGTHS OF
SOUTH AFRICA’S PROVINCES
A wide variety of investments are available.
Gauteng:
• Financial and business services
• Information and communications
technology
• Transport and logistics
• Basic iron and steel, steel products
• Fabricated metal products
• Motor vehicles, parts and accessories
• Appliances
• Machinery and equipment
• Chemical products, pharmaceuticals
North West:
• Agro-processing
• Mining
• Agriculture and agro-processing
• Tourism
• Metal products
• Machinery and equipment
• Renewable energy (solar)
Northern Cape:
• Mining
• Agriculture and agro-processing
• Fisheries and aquaculture
• Renewable energy (solar, wind)
• Jewellery manufacturing
Limpopo:
• Mining
• Fertilisers
• Tourism
• Agriculture
• Agro-processing
• Energy, including
renewables (solar)
Mpumalanga:
• Mining
• Tourism
• Forestry, paper and paper
products, wood and wood
products
• Agriculture and agroprocessing
• Metal products
FOCUS
KwaZulu-Natal:
• Transport and logistics
• Tourism
• Motor vehicles, parts and
accessories
• Petrochemicals
• Aluminium
• Clothing and textiles
• Machinery and equipment
• Agriculture and agroprocessing
• Forestry, pulp and paper,
wood and wood products
Western Cape:
• Tourism
• Financial and business services
• Transport and logistics
• ICT
• Agriculture and agro-processing
• Fisheries and aquaculture
• Petrochemicals
• Basic iron and steel
• Clothing and textiles
• Renewable energy (solar, wind)
Free State:
• Agriculture and agro-processing
• Mining
• Petrochemicals
• Machinery and equipment
• Tourism
Eastern Cape:
• Motor vehicles, parts and
accessories
• Forestry, wood and wood products
• Clothing and textiles
• Pharmaceuticals
• Leather and leather products
• Tourism
• Renewable energy (wind)
Source: Industrial Development Corporation (IDC); The Case for Investing in South Africa, Executive Summary
Source: Industrial Development Corporation (IDC)
(South African Investment Conference, 2018).
Page | 40
23 SOUTH AFRICAN BUSINESS 2020

INTERVIEW
CITY THAT’S
GEARED
FOR GROWTH
A truly smart city, Durban, KZN, South Africa seamlessly
combines an innovative business environment with an
exciting, contemporary lifestyle.
Connecting continents, here you will fi nd Africa’s busiest
port, the top ranking conferencing city and the home to
the continent’s very fi rst Aerotropolis. Boasting world-class
infrastructure, manufacturing and industrial concentration
that is constantly evolving, isn’t it time to join this
progressive society rich in investment opportunities?
…We can help you make it happen, now.
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SOUTH AFRICAN BUSINESS 2020
Tel: +27 31 311 4227
Email: invest@durban.gov.za
web: invest.durban
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INTERVIEW
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Dube
TradePort
and King
Shaka
International
Airport - 60-
year Master
Plan - driving
growth of
aerotropolis,
or airport city
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The city of Durban
(eThekwini Municipality)
is South Africa’s
second most important
economic region
Extensive first-world
road, rail, sea and air
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Rated in top 5
‘Quality of Living’
cities in Africa and
Middle East by
Mercer Consulting in
2015
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Named one of the
New 7 Wonders Cities
by the Swiss-based
New 7 Wonders
Foundation in 2014
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SOUTH AFRICAN BUSINESS 1 2020

FOCUS
Introducing you to Limpopo
An industrial powerhouse with an abundance of agriculture, mineral and tourism resources.
Dr Matata Mokoele, CEO
Limpopo is the natural resource treasure chest of South Africa, if
not the whole of Southern Africa. It boasts some of the greatest
reserves of agriculture, mineral and tourism resources, many
of which remain hugely under-exploited. The province is also
linked to the Maputo Development Corridor through Phalaborwa
Spatial Development Initiative, a network of road and rail corridors connecting
to the major sea ports that open up Limpopo and surrounding
regions for trade and investment. This is complemented by the
presence of airports in major centres of the province including Ellisras,
Makhado, Musina, Phalaborwa, Mokopane, Thabazimbi, Tzaneen,
Thohoyandou and Bela-Bela as well as the Gateway International
Airport in Polokwane.
In terms of agriculture, Limpopo could be described as the garden
of South Africa, or the whole continent, given its rich fruit and
vegetable production. The province produces 75% of the country’s
SOUTH AFRICAN BUSINESS 2020 26

FOCUS
mangoes, 65% of its papayas, 36% of its tea, 25% of
its citrus, bananas and litchis, 60% of its avocados,
two-thirds of its tomatoes, and 285 000 tons of potatoes.
Other products include coffee, nuts, guavas,
sisal, cotton and tobacco, and timber with more
than 170 plantations. Apart from all these, there is
cotton, sunflower, maize, wheat cultivation as well
as grapes. Most of the higher-lying areas are devoted
to cattle and game ranching, earning a reputation
for quality biltong, a popular South African delicacy
of salted, dried meat.
Limpopo is also endowed with an abundance of
mineral resources, positioning mining as the critical
sector of the provincial economy, contributing
22% of the GGP. The platinum group include platinum
itself, chromium, nickel, cobalt, vanadium, tin,
limestone and uranium clay. Other reserves include
antinomy, phosphates, fluorspar, gold, diamonds,
copper, emeralds, scheelites, magnetite, vermiculite,
silicon, mica, black granite, corundum, feldspar
and salt.
As if all this is not enough, there are financial
incentives through a package put down by the
National Government. A wide range of incentives
to investors include a tax holiday for up to
six years. As a result of this potential, the Provincial
Government has established LEDA (the Limpopo
Economic Development Agency). It offers a wide
range of services to entrepreneurs and investors
interested in setting up business in Limpopo. It
specialises in helping to attract inward investment
and assists companies to find the best opportunities
for acquisitions or greenfield investments in
Limpopo. This includes setting up joint ventures with
local partners, cross-holdings of equity between an
overseas and local partner, or collaborative agreements
in fields such as research and development,
transfer of technology, or sales and distribution.
LEDA is ready to receive investors…
About the Limpopo Economic
Development Agency
The mission of the Limpopo Economic
Development Agency (LEDA) is to
provide an integrated platform for the full
implementation of economic development
activities leading to accelerated
industrialisation in Limpopo, through
a focus on stimulating and diversifying
the industrial base. Its primary task is to
drive policy implementation through
high-impact, catalytic-growth projects,
which will result in inclusive economic
development and accelerate and sustain
the growth of the provincial economy, so
as to create productive and sustainable
employment.
The role of the Agency is to provide
business intelligence, and research and
development towards innovative solutions;
conceptualise economic programmes
and drivers; identify and package
development opportunities and leverage
partnerships; support local economic
development capabilities; customise
support for priority economic sectors and
subsectors; coordinate and manage the
implementation of strategic infrastructure
and economic interventions; and facilitate
trade and investment.
For more information: www.lieda.co.za
27
SOUTH AFRICAN BUSINESS 2020

SPECIAL FEATURE
The Blue Economy
South Africa is alert to the growing opportunity offered by the maritime sector.
Percetions are changing quickly. A new university campus, a new
institute, new training programmes at several venues across
the country, investment in ports and equipment – the Oceans
Economy is no longer just a concept talked about at conferences,
it is a reality that is starting to have an impact on South Africa.
South Africa has 3 000km of coastline and the extent of the country’s
territorial waters is greater than its land size. And yet the country
does not have a merchant marine fleet and only scrapes the surface
in terms of the percentage of repair and maintenance of boats and oil
rigs which could potentially bring work to its ports.
What is also called the Blue Economy has enormous potential for
economic growth and concomitant job creation. National government
wants to see the Oceans Economy contribute a R177-billion to gross
domestic product by 2033. This is part of the National Development
Plan (NDP).
National strategy on the Oceans Economy is also aligned with
Operation Phakisa, a plan that targets sectors that can best achieve
quick returns in terms of growth
and job creation. The four target
areas within the maritime strategy
are: aquaculture; offshore oil
and gas; marine protection and
governance; marine transport
and manufacturing. Transnet
National Ports Authority is
spending heavily on upgrading
the nation’s ports.
One statistic illustrates the
potential: South Africa does
maintenance on only 5% of the
13 000 vessels that uses its ports and
services 4-5% of the approximately
130 rigs that pass along the coast
each year. Large quantities of oil are
SOUTH AFRICAN BUSINESS 2020 28

SPECIAL FEATURE
transported around the Cape of Good Hope every year: 32.2% of West
Africa’s oil and 23.7% of oil emanating from the Middle East.
South African companies are alert to this potential. More than
7 000 direct jobs were created in the Western Cape ship and rig repair
sector in 2015.
Port Elizabeth has positioned itself at the centre of the academic
side of the Oceans Economy. Nelson Mandela University launched the
Ocean Sciences Campus in 2017 and the South African International
Maritime Institute (SAIMI) has chosen the city as its base as it sets about
supporting the sector through research and training. SAIMI runs the
National Cadet Programme which is paid for by the National Skills Fund.
The curriculum for these institutions ranges from the law of the
sea, shipping and transport, to aquaculture, boat-building, oil and gas
exploration, repair and maintenance and environmental management.
The university has four marine sector chairs funded by the South
African Research Chair Initiative (SARChI) and the National Research
Foundation (NRF).
Special Economic Zones
South Africa has a number of licensed Special Economic Zones (SEZs),
some of which are called Industrial Development Zones (IDZs). The
best established of these are the coastal IDZs at Saldanha, Coega (Port
Elizabeth), East London and Richards Bay.
These areas are central to the Oceans Economy strategy because of
their strategic positions and the favourable environment created for
investment by specific legislation related to SEZ tariffs, tax deductions
and grants. The first illustration of national commitment to the strategy
came late in 2016 with the allocation by the Department of Energy of
two Liquefied Natural Gas (LNG) plant options, one each to the IDZs
of Richards Bay and Coega.
The Saldanha Bay Industrial Development Zone is central to a
plan to grow the oil and gas sectors although it was not allocated
a possible LNG plant. Large industrial operations already exist at
Saldanha and the Port of Saldanha Bay is the portal for the export of
South Africa’s iron ore. The SBIDZ is set to become a hub for a range
of maritime repair activities and oil rig maintenance and repair.
The ports of Ngqura and East London are well positioned to act
as container transit points and the skills set of the Eastern Cape’s
workforce, particularly in the automotive and automotive parts
sector, could be attractive to repairers and manufacturers in marine
subsectors. Both Eastern Cape IDZs have aquaculture sections. The
East London IDZ already has investors such as Pure Ocean Aquaculture
and Ocean Wise.
Durban’s annual throughput
of containers is about one-million,
more than 60% of the country’s
total. As part of Operation Phakisa,
the Port of Durban is upgrading
its dry dock and buying new
cranes to speed up operations.
There is also an ambitious plan
to dig out the old airport south of
the city, connect the big hole to
the sea and make it a harbour; this
would allow Toyota to roll their
new vehicles directly from the
factory floor to the hold of a ship.
The Port of Durban is already
home to a variety of maritime
companies. EBH-SA has been in
the business marine engineering
and repairing ships since it
began as Elgin Brown and
Hamer in 1878. To improve their
competitiveness, three South
African shipbuilders (SAS, Damen
Shipyards Cape Town and Nautic
Africa) have agreed to pool their
resources on contracts.
Cooperation pacts like this
one might be a good template
for the nation’s ports and the
rig/boat repair and servicing
sector. With the Angolan
and Mozambique oil and gas
industries growing bigger
every day, it is unlikely that one
port could cope with demand
anyway.
The Port of Richards Bay has
added a new berth on average
every second year. It has deepwater
infrastructure and the
huge Richards Bay Coal Terminal,
the country’s primary site of
export for coal. The Richards
Bay IDZ intends becoming an
energy hub.
29
SOUTH AFRICAN BUSINESS 2020

SPECIAL FEATURE
Trade into Africa
Continental free trade will galvanise African economies.
The signing of the Kigali Declaration in 2018 marks a significant
shift in expectations for intra-African trade. Regarded
as the first step towards the establishment of a Continental
Free Trade Area (AfCTA), the commitment shown by African
political leaders shows that the issue is receiving priority status.
The continent’s population of 1.2-billion represents a huge and
potentially lucrative market, with the 55 members states of the
African Union having a combined gross domestic product (GDP)
of $2.5-trillion. However, many African countries have stronger
trading ties with countries on other continents that they do with
their neighbours.
The reasons for this are long-standing and complex and will require
investment in logistics and infrastructure to overcome. But political
will is a major component in the equation and the Kigali Declaration
shows an intention to make trading among Africans easier.
An AfCFTA Business Forum has
been established to allow for private
sector engagement with the
formulators of policy. This should
allow for realistic and workable
trade agreements. The United
Nations Economic Commission
for Africa (ECA) has suggested
that by the year 2022, the AfCFTA
could lead to an increase in intra-
African trade by as much as 52%.
Fully 30% of South Africa’s
exports are to other countries in
Africa, but a massive 83% of this
volume is into Southern Africa.
SOUTH AFRICAN BUSINESS 2020 30

SPECIAL FEATURE
This means that the potential for South Africa to grow its exports into
other parts of Africa is enormous, if the infrastructural obstacles can
be overcome.
The Southern African Development Community (SADC) is a
16-member inter-governmental organisation with its headquarters
in Gaborone, Botswana. Other members include South Africa, Lesotho,
Malawi, Namibia, Tanzania, Comoros and Mozambique.
SADC is one of several regional organisations on the continent and
there have been moves in the past for cooperation between these
bodies. For example, a tripartite summit was held between the leaders
of the Common Market for Eastern and Southern Africa (COMESA), the
East African Community (EAC) and SADC. The AfCFTA may supercede
these agreements as it applies to all of Africa.
SADC’s theme of “Promoting Infrastructure Development and
Youth Empowerment for Sustainable Development”. This was an
extension of the body’s focus on industrialisation, while also putting
the focus on infrastructure development, youth empowerment and
sustainable development.
The 38th summit of SADC held in Namibia in 2018 approved the
creation of the SADC University of Transformation, in the form of a
virtual university. This is further intended to support industrialisation
through subjects such as technology transfer, innovation, digital
and knowledge economy, entrepreneurship, commercialisation and
enterprise development. SADC has a Revised Regional Indicative
Strategic Development Plan (RISDP) 2015-2020, which deals with
industrialisation, regional infrastructure, agriculture and strategy.
Corridor development is an important part of growing intra-African
trade. Within the corridors of development, red tape and infrastructure
are other key elements.
South African retailer Shoprite spends about R20 000 per week in
permits, and long waits at border posts are routine. But the Chirundu
one-stop border post in Zambia has reduced transit times by a third.
Passenger transport delays have been reduced from three hours to
30 minutes and freight is now cleared in one day instead of three.
A number of corridor projects are in the pipeline or have already
been implemented. The Maputo Development Corridor has successfully
linked the thriving industrial and business centre of Gauteng Province
in South Africa with the Mozambican port city of Maputo. The idea
of corridors has been adopted by the Infrastructure Consortium for
Africa (ICA), and several corridors have been conceptualised since that
decision, for example the Northern Corridor of Central and East Africa.
A corridor strategy relies on infrastructure, with inter-related plans
being developed involving the upgrading and standardisation of
facilities at ports, railway lines, customs posts and energy projects.
South African rail, ports and pipeline operator Transnet is already
very active in African countries north of the South African border and
is intending to offer its services more widely.
The Sustainable Development
Investment Partnership (SDIP)
comprises 30 institutions which
aim to see 16 African infrastructure
projects (valued at more
than $20-billion) carried out. The
founders of the SDIP were the
World Economic Forum (WEF) and
the Organisation for Economic
Co-operation and Development
(OECD) and other members now
include the Bill and Melinda Gates
Foundation, the Senegal Strategic
Investment Fund (FONSIS),
US Agency for International
Development (USAID), the
Industrial Development
Corporation of South Africa (IDC)
and the Development Bank of
South Africa (DBSA).
The Export Credit Insurance
Corporation of South Africa
(ECIC) exists to help trade and
investment across borders. ECIC
can provide insurance for bank
loans that are taken by investors
and South Africans can get insurance
for investments and for small
and medium enterprises there is
a product available (performance
bonds to anyone exporting
capital goods and services.
The South African Department
of Trade, Industry and Competition
plays a key role in terms of promoting
trade between South Africa
and the rest of Africa, but also
supports regional bodies such as
SADC and promotes the kind of
integration contained in the plans
of the New Partnership for Africa’s
Development (NEPAD) and the
African Union’s Agenda 2063. The
dtic’s Africa Export Council (AEC)
was inaugurated in 2016 with the
goal of promoting South African
products and services in Africa.
31
SOUTH AFRICAN BUSINESS 2020

FOCUS SPECIAL FEATURE
Doubling tourist arrivals
is a national priority
Airports Company South Africa is on a massive spending drive.
More than twice as many foreign tourists will visit South
Africa in 2030 than is currently the case. President Cyril
Ramaphosa has publicly announced that a target of
21-million foreign tourists per year is attainable.
What might seem like a lofty goal is given credence by the success of
a remarkable Western Cape project to increase the number of seats on
routes to and from Cape Town called Cape Town Air Access. It has been
spectacularly successful. Direct flights to the city have increased the
number of seats available by more than 700 000 since the programme
was launched in 2015.
Cape Town Air Access is a partnership between Wesgro, the City of
Cape Town, the Western Cape Government, Airports Company South
Africa, Cape Town Tourism and South African Tourism.
The announcement of a new
direct flight between New York
and Cape Town in July 2019 by
United Airlines is significant
as it gives direct access to the
lucrative United States market.
The estimated impact on direct
tourism spend is in the region of
R283-million (Grant Thornton).
South African Tourism believes
that revenue from the US could
continue to grow at 16%, leading
to income for South Africa of
SOUTH AFRICAN BUSINESS 2020
32

SPECIAL FEATURE FOCUS
MELROSE ARCH
The 118-room African Pride
Melrose Arch Hotel forms part of
a popular mixed-use complex
in Johannesburg’s suburbs and
recently became part of the
Autograph Collection Hotels group.
TRAIN ON A BRIDGE
A hotel on a train on a bridge in a
game reserve. This is not the plot
of a children’s story, rather it is
the Kruger Shalati Development,
Thebe Tourism Group’s latest
accommodation offering in the
Kruger National Park.
R8.6-billion. By way of comparison, spending from the UK currently
accounts for R11-billion.
Cape Town International Airport has regularly been breaking its
own records for passengers, having topped 10-million passengers for
the first time in 2016. Airports Company South Africa (ACSA) will spend
R150-million every month for the next five years to build a new runway
and in creating domestic and international terminals.
Similar programmes have been underway at South Africa’s biggest
airport, OR Tambo International Airport (ORTIA) for some time, and
are continuing. This Johannesburg hub and the airport management
at Durban and Port Elizabeth are all exploring ways of introducing
some version of the successful Air Access programme at their venues.
Success will improve the chances of reaching President Ramaphosa’s
ambitious goals.
Another way of raising the numbers of visitors is to improve South
Africa’s visa and document regime. A decision to demand unabridged
birth certificates of travelling children proved damaging but steps have
been taken to amend this decision. The Department of Home Affairs
has committed to introducing e-visas. Some testing has been done
and it is expected to be rolled out in 2020.
Another initiative is a private-public data and booking platform to
help businesses in the tourism sector to track trends and allow people
to connect. The Department of Tourism, Thebe Tourism and Amadeus
IT are partners in Jurni.
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).
The R900-million expansion of the Cape Town International
Convention Centre (CTICC2) has given the city’s biggest venue
additional volume and flexibility. Johannesburg and Durban are the
other two South African cities with large MICE sectors, but towns linked
to research universities (like Potchefstroom and Stellenbosch) and game
and nature reserves are also popular destinations for conferences. Sun
City in the North West has a wide range of venues.
News
THE YACHT CLUB
The Yacht Club was launched in
Cape Town in 2019. With 170 flats,
offices and an AC Hotel by Marriott,
the R1.5-billion development by the
Amdec Group is near the Cape Town
International Convention Centre.
Club Med has bought land on the North Coast of KwaZulu-Natal, and
according to the Sunday Times, will open a 350-room, 50-villa resort in 2022.
A three-billion-year-old micro-fossil found in the Makhonjwa
Mountains in Mpumalanga is thought to be the oldest sign of life on
the planet. The Makhonjwa Mountains were declared a World Heritage
Site by UNESCO in 2018. Culture and heritage accounts for 40% of world
tourism and is one of the fastest-growing subsectors.
In Durban, a joint venture between MSA Cruises SA and Africa
33 SOUTH AFRICAN BUSINESS 2020

SPECIAL FEATURE
Armada Consortium will spend R175-million on the financing‚
construction‚ maintenance and operation of a cruise terminal for a
25-year concession period.
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 as a multi-use
precinct called The Yacht Club.
A significant move in the South African hotel sector is the
decision by Marriott International to develop Marriott-branded
hotels in the country.
On the eastern edge of Cape Town’s Foreshore, an ambitious plan
envisages two new hotels, flats, retail space and offices rising out of
ground currently occupied by three car dealerships and a roadworthy
station on Christiaan Barnard Street. The Harbour Arch concept is
based on Johannesburg’s Melrose Arch, with seven tower blocks
to be constructed on 200 000m², roughly half the footprint of the
V&A Waterfront.
In 2018 Autograph Collection Hotels, another Marriott International
brand, acquired five African Pride Hotels in South Africa. These range
from properties in Cape Town and Johannesburg to a lodge in the small
town of Irene and a mountain getaway in the Magaliesburg mountains.
Buying into Protea Hotels has given Marriott access not only to the
South African market, but to many other African countries. The company
now operates 61 hotels in South Africa across six brands, with a total
of 8 000 rooms.
Neal Jones is Marriott International’s Chief Sales and Marketing
Officer, Middle East and Africa. He says the company has another
five hotels under development which will add more than 1 000
more rooms. Still more brands are due to be rolled out: Residence
Inn by Marriott and Marriott Executive Apartments. Jones
describes South Africa as “one of our key markets and strategic
to our growth”.
Says Jones, “With our diverse brands we pretty much have a brand
for every type of traveller.”
Marriott is embracing new technology. “They key is to balance
hi-tech with hi-touch,” comments Jones. “So technology becomes an
enabler for our guests to experience a more personalised experience
and to do this seamlessly.” Through the Marriott Bonvoy app, guests
can check in and make requests.
Tsogo Sun Holdings split its casino and hotel operations in 2019
in order to unlock value in the two sectors. With a market cap of R25-
billion, Tsogo is the country’s biggest hotel group. It has 36 hotels
and three casinos in Gauteng. The hotels range across several brands
covering four market segments. SunSquare, Southern Sun Hotels,
Southern Sun Resorts, Garden Court and StayEasy are among the
group’s brands.
In the Cape Town CBD 500 new
rooms have been added to the city’s
stock, 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.
Peermont Hotels, Casinos and Resorts
has added the Emerald Resort & Casino
to its portfolio of properties. Peermont
purchased the Vanderbijlpark property
from US company Caesars Entertainment
Corporation, which brings to 11 the
number of casino resorts it runs on the
subcontinent.
Located on the Vaal River, Emerald
Resort has a water park, a game park, a
spa and several restaurants. Peermont’s
suite of four hotels in the Emperors Palace
complex next to OR Tambo International
Airport, also houses a large casino where
players have access to 1 724 slot machines
and 67 tables.
The Kruger National Park is one of
South Africa’s great tourism assets and
the Thebe Tourism Group has come up
with a unique new way to enjoy the reserve.
It has refurbished a train as a hotel
and parked it on a bridge on the Sabie
River, famous for its buffalo and hippo.
The Kruger Shalati Development is one
of three developments in Mpumalanga
being undertaken by Thebe. The other
two are the Blyde Canyon Community
Project and proposed developments
for Lisbon Estate which is adjacent to
Kruger Park. The Lisbon development
(not far from Skukuza Camp) is projected
to comprise two hotels, retail, hospitality
and dining facilities and staff housing
associated with the Lisbon Estate.
SOUTH AFRICAN BUSINESS 2020 34

INTERVIEW PROFILE
Maritz Electrical
Large area and sports lighting specialists.
From commercial electrical applications to
high-end floodlights and sports stadiums
and spotlights using state-of-the-art products,
Maritz Electrical delivers end-to-end
electrical solutions tailored to clients’ needs.
Delivering service excellence and exceptional
quality are key differentiators for Maritz Electrical and
what clients have come to expect.
Maritz Electrical is an empowerment company
established by Kurt Maritz in January 2000. Maritz
Electrical is BBBEE compliant (Level 1 contributor).
It is ISO 9001 certified and fully compliant with the
Occupational Health and Safety Act with a full-time,
trained safety representative.
Maritz Electrical occupies a newly renovated
3 000-square-metre factory and office facility in
Athlone. The company employs full-time, licensed
installation and master electricians. Artisans working
at Maritz have completed the ORHVS.
Maritz Electrical places great emphasis on its relationship
with clients, private or commercial, and
prides itself on the ability to respond to any contracting
requirements in an efficient and cost-effective
way. Maritz Electrical works closely with its customers,
ensuring that projects are completed on time and on
budget, using the highest-quality products available.
Maritz Electrical aims to contribute positively to the
South African economy, provide excellent workmanship
and be a leader in quality service provision.
Flagship projects
In 2017, St George’s Park became the world’s first
International Cricket Council-compliant, LED-lit stadium
and the first such stadium to be fitted with
theatrics. Maritz Electrical was part of the R40-
million revamp of Coetzenburg Athletics Stadium in
Stellenbosch and installed new LED lighting at the
hockey field of Western Province Cricket Club in 2019.
The lights comply with the latest FIH standard.
Other projects include the electrification of large
housing projects for municipalities, rural security lighting,
lighting for passenger areas and runway lighting
at airports, Cape Town’s Grand Parade and security
lighting for waste-water treatment plants.
Key areas of expertise
• Public lighting, high masts and sports lighting
• Commercial installations and maintenance
• Industrial installations and maintenance
• Domestic installations and maintenance
• Reticulation
• Substations
Professional memberships
BBBEE Level 1. ISO 9001 certified. Electrical Contractors
Association. Master Builder Association Member.
Member of South African Institute of Lighting (SAIL). ■
CONTACT INFO
Physical address: 11 Noll Avenue, Athlone,
Cape Town, 7764
Tel: +27 21 703 0867
Email: tenders@maritzelectrical.co.za
Website: www.maritzelectrical.co.za
SOUTH AFRICAN BUSINESS 2020
36

Leading the field in energyefficient
lighting
INTERVIEW PROFILE FOCUS
World first for Maritz Electrical.
LED lighting is a game-changer and Maritz
Electrical is leading the way in its introduction
at South African sporting venues.
LED refers to “Light-Emitting Diode”, a device
that is both brighter and more energy efficient
when electrical current is passed through it than a
conventional light bulb.
In a short space of time, Maritz Electrical has
achieved three significant landmarks in the LED sports
field lighting landscape:
• the world’s first International Cricket Councilcompliant
LED-lit stadium with theatrics,
St George’s Park, Port Elizabeth, 2017
• installation of new LED lights at internationally
recognised athletics stadium, Coetzenburg,
Stellenbosch, 2018
• first South African club hockey field to install
LED lighting to the standard of the FIH (the inter
national hockey body), Western Province Cricket
Club, 2019.
The installation at the WPCC hockey field is a
Musco lighting system, similar to the system used at
international stadiums such as Twickenham Rugby
Stadium, Arsenal’s Emirates Stadium and at baseball
and football fields in the US, where Musco is based.
The R27-million St George’s Park project was
completed on time and on budget, despite installing
lights on top of the Duckpond Pavilion at night in high
winds. The Musco solution is good at controlling spill
and glare and typically comes with a 10-year warranty.
The response has been enthusiastic, helping
Maritz Electrical on its goal to becoming the “goto”
company for stadium lighting installations. For
company MD Kurt Maritz, the television experts provided
the really important feedback. “We cared about
SuperSport the most and they have been raving. If
there are light and dark spots on the field the cameraman
must remember to change the aperture. They
said that the lighting was excellent.”
Large-area lighting
Stadium lighting falls within the broader category
of large-area lighting. The global move to LED lighting
has been a positive thing for Maritz Electrical. In
South Africa, however, Kurt notes that there is difference
between the indoor and outdoor scenarios.
For indoors, “everybody is going that route” but that
return on investment (ROI) is somewhat different in
the outdoor setting.
Maritz Electrical is active in large areas such as
Cape Town’s Grand Parade, rural mast lighting in
Buffalo City, airport runway lighting and security lighting
for city municipal facilities. The company operates
in the commercial, industrial and public sectors and
offers a wide range of services. ■
37 SOUTH AFRICAN BUSINESS 2020

SPECIAL FEATURE
Mining for the future
South African miners are finding new uses for platinum and gearing up for the age of
renewable energy.
New national strategies are being developed for platinum. Implats’ Marula Mine in Limpopo produced 85 100
ounces of platinum in concentrate in FY2018.
The head office of the Minerals Council South Africa is powered
by 40 ounces of platinum and natural gas. A fuel cell at the
Johannesburg site of the national mine owners’ association
is South Africa and Africa’s first base load installation.
Finding new uses for platinum is one of the new priorities exercising
the minds of the leaders of the South African mining industry as it
moves to adapt to a world which is moving away from fossil fuels.
While there is broad agreement that the world needs to steer away
from minerals that pollute the environment, the supply of minerals used
in electric car manufacture (such as nickel and cobalt) is also finite.
Speaking at the 2019 Investing in African Mining Indaba, Ford’s
head of Energy Storage Strategy and Research, Ted J Miller, said that
the motor industry was “uncomfortable driving these commodities”. He
noted that Ford has already reduced cobalt production by two-thirds,
but the challenge is scale.
In 2012 Anglo Platinum launched an underground locomotive powered
by a fuel cell. Platinum coating greatly enhances the hydrogen
absorption capacity of fuel cells. In 2016 Impala Platinum Refinery unveiled
a fuel cell forklift and a hydrogen refuelling station in Springs.
The editor of the Mining Weekly publication, Martin Creamer, has
published a series of articles and editorials extolling the virtues of what
he calls the “best of two new carbon-reducing technology worlds”.
Creamer notes that South Africa’s abundant supplies of platinum
group metals (PGMs) and manganese ore can make the country a
leader in battery electric vehicles
(BEV) and fuel cell electric vehicles
(FCEV). He further points to the
work being done by Hydrogen
South Africa (HySA) at three
universities and the Council for
Scientific and Industrial Research
(CSIR). South Africa’s good supplies
of sunshine and wind make
it ideally suited to generate hydrogen
and if the country could
capture 25% of the world market,
it would be worth $600-million
(Mining Weekly)
Coal
Several large players in the
South African market have sold
or intend selling their coal assets.
These include South32, Anglo
American and BHP Billiton. Seriti
Resources has purchased the
SOUTH AFRICAN BUSINESS 2020
38

SPECIAL INTERVIEW FEATURE
Women are
succeeding in mining
Thabile Makgala, Executive: Mining at Impala Platinum,
reflects on the role of women in this challenging sector.
Thabile Makgala
Did you encounter obstacles on your mining career path?
I encountered numerous obstacles while navigating my mining career path.
As the first female mining engineering graduate at Goldfields Kloof and
Driefontein division (now Sibanye Gold), I soon realised that the industry had
not adequately prepared itself to accept women in mining. The industry
was not ready. The response to women’s needs (infrastructure, personal
protective clothing and policies) was slow and very little was in place to
address women’s issues. Regardless of impeccable qualifications, solid work
ethic and the achievement of production targets, my abilities would continue
to be questioned and tested.
Is the environment more conducive to women progressing?
It is encouraging to witness so many women succeed in an industry that has
largely been developed for and by our male counterparts. Although there have
been positive steps taken to make the current environment more conducive
for women, more deliberate and proactive action is still required.
BIOGRAPHY
Thabile is the Executive: Mining
at Implats, and chairperson of
Women in Mining South Africa
(WiMSA). In 2018, she was selected
as one of the “Top 100 Global
Inspirational Women in Mining”
by Women in Mining UK. Thabile
has a Master’s degree in business
administration from the University
of Stellenbosch Business School
and a Bachelor of Science degree
in Mining Engineering (Cum
laude) from the University of the
Witwatersrand.
What should be prioritised to empower women?
Women and men should hold equal representation in the workplace, and
mining companies should prioritise and advocate for diversity, inclusion,
parity and greater recognition of female leadership within their organisations.
Is mining a transformed industry, or is it transforming?
The mining industry is transforming, and legislation has been instrumental
in driving this transformation. I sincerely hope that 10 years from now the
fundamental elements such as empowering, caring, showing respect,
connecting and growing our female talent would have been achieved.
I hope that the conversation about women, parity and inclusion would
have advanced, and that the industry would have made a concerted effort
to transform, without the need for legislation.
What innovation will be beneficial to the mining industry?
Data and the analytics will prove to be the competitive advantage for
mines of the future. Converting conventional mining practices to lower-risk
mechanisation and automation is key for the sustainability of the South African
mining industry.
39
SOUTH AFRICAN BUSINESS 2020

SPECIAL FEATURE
New Vaal Colliery and three Mpumalanga mines from Anglo American
for R2.3-billion.
South Africa’s largest coal producer is Exxaro, a South African company.
Typically, coal mines were linked to power stations as is the case
in Limpopo Province where Exxaro operates its Grootegeluk mine. This
site is next to the Lephalale power station and the giant new Medupi
power station. But uncertainty about how national utility Eskom wants
to proceed with its coal purchases has made miners look increasingly
to export markets.
Limpopo’s Waterberg coal field still has billions of tons of coal in the
ground. The country’s other big coal province is Mpumalanga (where
Sasol has just finished commissioning a third new mine) but it is also
found in the northern part of the Free State.
Zinc
When phase three is reached, the biggest new mining project in South
Africa will deliver 600 000 tons of zinc for Vedanta Zinc International.
Located at Aggeneys in the Northern Cape near the border with
Namibia, the Gamsberg zinc project has so far attracted $400-million in
investment from the company and started trucking product to the Port
of Saldanha in 2018. Phase one of the open-pit operation will deliver
an annual load of 250 000 tons of zinc. If it proceeds to phase three, it
will likely go underground.
The Northern Cape Province is planning for a deep harbour at
Boegoebaai. Part of the strategy involves the creation of a commodities
corridor linking the Upington Special Economic Zone (SEZ) with the port.
Australian miner Orion is putting considerable resources into
investigating the possible revival of the Prieska Zinc-Copper Project.
Diamonds
An ongoing project by De Beers to convert its Musina mine from an
open-pit mine to a vertical-shaft mine will extend the life of mine of
this northern Limpopo project to 2045. Venetia Mine is by far the most
important part of De Beers’ South African operation, accounting for
3.1-million of the 5.4-million carats recovered by the company from
its six operations.
A R1.6-billion processing plant is being built at Cullinan in
Gauteng by Petra Diamonds, with a throughput capacity of
6 Mtpa. The mine’s orebody contains a diamond resource of
194 Mcts which is why Petra is expanding with a goal of annual production
of 2.2Mcts by 2019.
In the Northern Cape, Ekapa Mining has paid R300-million to buy
out Petra Diamonds from a JV.
Iron ore and manganese
In 2019 Sitatunga Resources purchased
the East Manganese project
on the Hotazel-Kalahari ore
belt from Southern Ambition.
Menar Holdings, which controls
a majority share in Sitatunga, is
mostly invested in coal.
Afrimat, a listed construction
materials supplier and industrial
minerals group, has added openpit
mining to its portfolio with
the R322-million acquisition of
the Diro mine, which had been
in business rescue. The Diro mine
has proven run-of-mine reserves
of 10-million tons.
The overwhelming majority
of the world’s manganese
comes from the Postmasburg and
Kalahari regions of the Northern
Cape. Assmang has two manganese
mines in the province:
Nchwaning and Gloria.
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. Sishen is the
most important iron-ore mine
in South Africa, where operations
include extraction and four
beneficiation plants.
Kumba Iron Ore has the
huge Sishen facility at Kathu and
Kolomela. Assmang, a joint venture
comprising African Rainbow
Minerals and Assore, mines at
Khumani. The company will
spend R2.7-billion on upgrading
its Gloria mine.
South32 is active in the
Northern Cape: Hotazel
Manganese Mines is made up
of two mines, Wessels (under-
SOUTH AFRICAN BUSINESS 2020
40

FOCUS SPECIAL FEATURE
The tailings thickener at Vedanta’s huge Gamsberg zinc project in the
Northern Cape. Image: Kevin Wright/Vedanta Zinc International.
ground) and Mamatwan (open cut), and the Metalloys manganese
smelter.
Hotazel is also the site of a relatively new manganese mine, Tshipi
é Borwa. Tshipi e Ntle Manganese Mining (Tshipi) is a joint venture
between Pallinghurst Co-Investors (led by Brian Gilbertson) and a
black empowerment company representing several groups called
Ntsimbintle Mining.
Platinum
Sibanye Gold came into existence as a result of the unbundling of
Gold Fields. but it has been rebranded as Sibanye-Stillwater because of
the purchase of a platinum and palladium mine in the US of that name.
The company is now the world’s leading main producer of primary
platinum and the second largest producer of palladium. It has gold
mines in the Free State and Gauteng.
Impala Platinum (Implats) has an interest in two big operations on
the eastern limb of the Bushveld Igneous Complex. Marula is in Limpopo
and it produced 85 100 ounces of platinum in concentrate in FY2018. In
Mpumalanga, Implats is in a joint venture with African Rainbow Minerals
(ARM) at the Two Rivers mine.
Implats has created Tubatse Platinum, a vehicle in which local
businesses hold a 9% stake in
the Marula mine. The company
has also made Impala Refinery
Services (IRS) a division, where
it used to be a subsidiary. IRS
smelts and refines concentrate
and matte and recycles auto
catalysts.
Anglo Platinum’s (Amplats)
Mogalakwena Mine produced
a record 1 170 000 PGM ounces
in 2018, an improvement of 7%.
The sale in 2018 of Glencore’s
stake in the Mototolo PGM mine
and chrome plant marked the
end of that company’s foray into
platinum.
Northam bought the Tumela
block from Amplats and invested
heavily in a smelter expansion
project at its Zondereinde mine.
Gold
AngloGold Ashanti has sold most
of its Vaal River Complex mines
to Harmony Gold Mining for
$300-million. These assets will
increase Harmony’s underground
resource base in South Africa by
nearly 40%. The other buyer
was Heaven-Sent, a Chinese
company which controls the
Tau Lekoa mine through Village
Main Reef, bought the Kopanang
mine. Another Chinese company,
Taung Gold, runs the Jeanette
mine near Welkom.
Gold mines in the Free State
also supply a substantial portion
of the country’s silver produced,
and large concentrations of
uranium occurring in the goldbearing
conglomerates of the
goldfields are extracted as a
by-product.
SOUTH AFRICAN BUSINESS 2020
42

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The Mine Health and Safety Act is clear on the requirements for mines and the tests they are legally obliged to carry out. Furthermore, according
to the Mining Charter 2018 (and its implementaon guidelines released in December of the same year), any supplier that wishes to do business
with The Mine
the mining Health
industry and Safety
must Act
hold is clear
a BEE on the
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analysis analysis
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10 working days
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Phenols oxygen carbon
(THM) sample) ISO (TOC) ISO method and EPA methods 10 10 working days days
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oxygen
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carbon (THM)
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metals SANS carbon 241 (water analysis (TOC) sample) ISO SANS and method EPA methods 10 working days
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metals (water sample) ISO and EPA methods 10 working days
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informaon method methods 10
on Tesng’s working days
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Keshav
Full SANS
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241 analysis ISO
(Naonal Sales SANS and method EPA methods 10 working days
Full SANS 241 analysis SANS method 10 working days
Email: All Keshav
Full sample Beachen
SANS media 241 (Naonal Sales Manager)
analysis inclusive of analysis cost. For more SANS
informaon informaon method on NOSA Tesng’s Tesng’s services, please 10 working contact:
days
All sample Email: keshav.beachen@nosa.co.za
media is inclusive of analysis cost. For more informaon on NOSA Tesng’s services, please contact:
All sample media is inclusive of analysis cost. For more informaon on NOSA Tesng’s services, please contact:
Tel: Keshav All sample 071 Tel: Beachen 071 442 media 442 9418 9418 (Naonal (Naonal is inclusive Sales of analysis Manager) cost. For more informaon on NOSA Tesng’s services, please contact:
Keshav Beachen (Naonal Sales Manager)
informaon Tesng’s Email: Keshav
All sample keshav.beachen@nosa.co.za
Beachen
media
(Naonal
is inclusive
Sales
of analysis
Manager)
cost. For more informaon on NOSA Tesng’s services, please contact:
Email: Keshav keshav.beachen@nosa.co.za
Beachen (Naonal Sales Manager)
Tel: Email: Keshav 071 keshav.beachen@nosa.co.za
Beachen 442 9418
(Naonal (Naonal Sales Manager)
Tel: Email: 071 keshav.beachen@nosa.co.za
442 9418
Tel: Email: 071 keshav.beachen@nosa.co.za
442 9418
NOSA Tesng Tesng is is now a Level 2 BEE contributor
Tel: 071 442 9418
Tel: 071 442 9418
Global African Network Full Page ad copy August 2019.indd 1 2019/09/02 13:15:26

SPECIAL INTERVIEW FEATURE
Roger Baxter, CEO
BIOGRAPHY
Roger joined the Minerals Council
SA (then Chamber of Mines of South
Africa) in 1992 and was appointed
CEO in 2015. With a BCom (Hons),
he has 27 years of high-level advocacy
and strategy experience in the
business and mining sectors. He was
involved in the first mineral policy discussions
with the ANC in 1992 and
has participated in (and often led)
discussions on all aspects of mining,
economic, investment, transformation
and tax policy with government.
Developing
partnerships and
strategies to grow the
mining industry
The CEO of Minerals Council SA, Roger Baxter,
explains why confidence in the South African mining
sector is growing again.
How would you describe the state of mining in South Africa
at the moment?
It went through a particularly difficult time in the several years until
2017, both because of the poor state of the commodity markets internationally
and the corruption and other governance issues in South
Africa. Today there is improved confidence because of improvements
on both scores. However, there is more work to be done. Specifically:
• The better Mining Charter published in September 2018 still contains
a few issues of concern.
• The withdrawal of the MPRDA Amendment Bill is positive. But a set
of new amendments is required to fix a few issues. These include
section 11 procedures (regarding the transfer of rights) and turnaround
times for new mining and prospecting right applications.
• The carbon tax is potentially a highly negative factor, which will not
improve the country’s already adequate decline in carbon emissions
but will have an impact on investment and jobs.
Is there more certainty about the Mining Charter and
legislation than there was a year ago?
There is more certainty. And the Minerals Council and its members are
comfortable with the bulk of its contents. However, there are three key
unresolved issues that are the subject of continuing engagement with
the Minister and his department. The Minerals Council has also initiated
legal action in this regard should it not be possible to resolve them. The
main issue regarding is non-recognition of continuing consequences
of previous transactions in respect of the renewal or transfer of mining
rights (the so-called “once empowered, always empowered” principle).
What are the consequences for mining of the drive towards
renewable energy?
The Minerals Council and the industry are very conscious and sup-
SOUTH AFRICAN BUSINESS 2020
44

portive of the need to address the issue of climate
change. In South Africa, the issue is particularly
relevant, given the country’s high proportion of
coal-fired power generation in the energy mix.
Our research indicates that that will change over
time to a cleaner, less carbon-intensive one both
naturally and as a result of targeted and deliberate
efforts. The older, less efficient power stations will
see their lives come to an end, as the newer, cleaner
Medupi and Kusile take up a greater share of the
load, as will renewable energy sources. Many of the
older deep-level gold and platinum mines, which
are more energy-intensive, are gradually reaching
the ends of their lives. As a consequence, mining’s
aggregate energy consumption and carbon emissions
are declining. We advocate a just transition to a
lower carbon energy economy. We believe that this
transition will take time.
One serious challenge are the significant hurdles
faced by mining companies that attempt to put in
place alternative power projects. There is a huge
amount of red tape in the way of bringing renewable
energy cogeneration projects online.
Is a strategy being developed for coal miners
in a post-coal future?
Coal miners are developing a variety of strategies.
However, these are largely based on a recognition
that in the transition to a lower carbon intensive
economy, we cannot destroy what we have as a
country – an established coal sector with 33-billion
tons of coal resources. In 2018 the sector employed
almost 90 000 people (representing about 19% of
total employment in the mining sector), with an
estimated 180 000 further people employed as a
result of coal mining activities. The coal sector is a
significant contributor to the South African economy.
SPECIAL INTERVIEW FEATURE
electric vehicle market share growth. The partnership
needs to develop: a platinum reserve asset strategy;
a national platinum fuel cell strategy; market
development in jewellery; and a national strategy to
drive investment demand for platinum.
What is driving the large investments in the
Northern Cape?
The Northern Cape has large economic reserves in
industrial metals, most notably zinc and copper, that
we believe can be a foundation for that underdeveloped
region’s broader economic development
What other minerals are showing promise?
Other PGMs, notably rhodium and palladium, are
performing particularly well. As stated, coal still has
potential and iron ore is performing well.
What are the priorities of Minerals Council SA?
Our main broad strategic goals are to:
• Create an enabling policy, legislative, regulatory
and operating environment for a successful
mining industry
• Support members in implementing a positive
contribution model for South Africa and its
people
• Demonstrate progress by the industry on transformation,
social and environmental imperatives.
Website: www.mineralscouncilsa.org.za
Please outline your strategy with regard
to platinum’s future.
Develop strong and focused partnerships between
key stakeholders and role-players, including all relevant
government departments. There is a need to
identify the opportunities for short-term interventions
aligned with long-term strategic goals, including
market development in all platinum and PGM
demand segments and a specific focus on fuel cell
Minerals Council SA is putting its money where its
mouth is with regard to alternative energy sources.
The 100kW natural gas baseload fuel cell that powers
the council’s offices in downtown Johannesburg is the
only fuel cell of its kind in Africa. The fuel cell was made
by Fuji Electric.
45 SOUTH AFRICAN BUSINESS 2020

SPECIAL FOCUS FEATURE
Exxaro: powering communities
with purpose
Exxaro Resources Limited (“Exxaro”) and
he South Africa Investment Conference invites
media to the first-of-its-kind digital and
connected mine in the country.
Exxaro is powering forward with R20-billion worth of self-financed community power
projects, but there’s more at play for the company than just providing power and
infrastructure to the people.
Johan Meyer is a man on a mission, as his department has been
bankrolled with R20-billion of finance from the Exxaro board
to roll out vital power utility projects and ancillary structures
for communities in Mpumalanga and Limpopo.
Meyer is Exxaro’s Executive Head of Projects and Technology,
and he’s driving the company’s vision of making a difference in each
community, rather than just building and moving on to the next
project. Their mission is to create infrastructure that benefits the
community in the long term, and that starts with empowering and
protecting each individual.
“On the Belfast Mine project, for example, we had 4.7-million man
hours during construction… but nobody got hurt! Not one injury on
that site since we started the
Conference
project and until
in
we
2018.
delivered it, so it
can be done!” says Meyer.
This impressive safety record was achieved because Meyer and
his team had ensured that everyone working on the site understood
Exxaro, in collaboration with the SA Investment
Conference, invite media to experience
the Belfast Implementation Project,
which comes as a result of Exxaro’s R20-billion
investment pledged at the inaugural SA Investment
SOUTH
connected
AFRICAN BUSINESS
mine
2020
in South Africa 46 with a digital twin.
their role not just in building the
mine, but rather they saw the
picture of how they were working
towards the goals of South Africa
as a nation.
“I am passionate about making
sure that people understand their
purpose because then they know
the contribution they can make,”
adds Meyer. “One of the first things
people need to find in their work
is purpose, why are we doing this,
so it was important to encourage
them to think about how their
work would make a contribution
to a better South Africa.”
Exxaro’s Belfast coal mine is the first ever digital and
The innovative mine has propelled Exxaro to the

28 October 2019. closer to the time.
FOCUS
With the Matla Power Station,
Meyer stressed that the work
being done to extract the coal
would help to power the area
until 2040.
“When people think about
their work in those terms it really
helps to establish for themselves
their purpose for being part of
a project,” said Meyer. “My role
as the executive overseeing the
whole project is to make sure that
they understand the purpose of
each of the projects because if
you involve people – and if they
understand – then they know
how to contribute.”
The Exxaro board has
made substantial investments
in terms of empowering local
communities, with R20-billion
being made available from
a strategic point of view to
implement various projects
across the group. Around R10-
billion was made available for
Grootegeluk in the Waterberg
region, along with R10-billion
being directed towards areas in
Mpumalanga. In Mpumalanga,
the R3.3-billion Belfast Mine
project (pictured) was given
the green light in November
2017 and the team delivered the
project on 12 September 2019…
a staggering six months ahead of
schedule. “It’s great to see that in
Africa we can still deliver projects
under budget and ahead of
time,” said Meyer. “We have
received the announcement
that the Matla expansion project was approved by Eskom, which is
incredibly exciting news.”
The Matla expansion project is designed to bring the coal into
the power station from below on conveyor belt, and the R3.5-billion
project is already in execution. Completed in 2018 was the joint R1.9-
billion project with Mafube in Mpumalanga, while across in Limpopo
the Grootegeluk Plant 6 (GG6) expansion project near Lephalale was
granted R4.8-billion in funds.
Also in development are the Semisoft Coking Coal Load Out
Station (SSCC LOS) and the D8 Load Out Station (D8 LOS), which
were commissioned in order to join the dots between producing
the product and getting it to the harbour. Also in the Waterberg is
the R3-billion Tabametsi Project, although that has yet to kick off
because of all the dynamics regarding the new IRP.
“Hands are needed to build stuff, so in the R20-billion expansion
project we have utilised 7 000 people and in that way we are
partnering with those who have the right skills to build a building
like this or a rapid load-out station or an underground mine. You
have to partner with the right skills,” adds Meyer.
Exxaro has an internal rule that they need to employ 70% of
local communities on each build, but there’s another essential rule
on these projects – the need to pay back the money.
“Our purpose is not to spend all R20-billion in the budget, and
most of the projects have been completed under budget. This is
important because the lower the capital investment, the less you
have to pay back in the long run, so it is strategically important
that we don’t spend all of our budget,” says Meyer. “Spend what
you need to create the value required – it’s a simple business
equation that you need to run with. Our CEO Mxolisi Mgojo knows
exactly what he wants and needs in order to drive the strategy of
the business, and I know what my role is in the broader strategic
environment in supporting the CEO. My mandate is to deliver the
project on time and on schedule and, hopefully, to give back some
money,” added Meyer.
At the heart of all these projects are thousands of South Africans
who have contributed to creating these vital links in the energy
chain, and it’s these people that make the real difference.
“Empowering communities is real in our space as 7 000 people
have helped us in building these projects. Partnerships and
bringing people on board – and building ‘stuff’ – is what excites
me,” adds Meyer .
47
SOUTH AFRICAN BUSINESS 2020

INTERVIEW
Geological and structural investigations in the southern Karoo
I @CGS_RSA I I
49

PROFILE
Bonds with China boost jobs
in Phalaborwa
Palabora Mining Company (PMC) operates a smelter and refinery complex in Limpopo.
Palabora Copper (Pty) Limited
is an incorporated operative
subsidiary of Palabora
Mining Company (PMC), a
copper mine that also operates as a
smelter and refinery complex in Ba-
Phalaborwa Municipality, Limpopo
Province in South Africa.
The mine is 80% owned by a
Chinese Consortium comprising HBIS,
Tewoo, General Nice and CADFund
through Smart Union Resources
South Africa. The rest of the equity
is jointly owned by the South African
government through the Industrial
Development Corporation (IDC), a
black empowerment consortium,
PMC employees and communities.
Since its incorporation in 1956,
Palabora Copper (PC) has been
South Africa’s sole producer of refined
copper, and the mine produces other
by-products such as magnetite,
vermiculite, sulphuric acid, anode
slimes and nickel sulphate.
employees (direct and indirect) while the second scenario
would have led to the loss of jobs for more than 700 off-stream
employees at the smelter.
Soon after the sale transaction, the new owners fostered
partnerships between PC and Chinese companies in areas
such as economic development, trade, skills and technology
transfers to achieve ground-breaking and substantive results
in extending the life-of-mine, refurbishing the smelter and
building a floatation plant.
To this end, the Chinese Consortium approved R10.4-billion
to extend the life-of-mine to beyond 2033, R878-million to
refurbish the smelter to ensure that PC continues to produce
copper rod, and R199-million to construct the floatation plant
to improve copper recoveries, operational efficiencies and to
reduce operational costs.
Chinese investment
The Chinese Consortium acquired
PC in 2013 when PC was facing two
possible scenarios: (a) culmination of
the life-of-mine and (b) no overhauling
of the smelter which was outdated and
facing shutdown. The first scenario
would have resulted in the loss of
employment for more than 3 500
Looking into the future
Palabora Copper is undertaking a life-of-mine extension
project known as the Lift II. The project aims to extend the life
of the business up to 2033. The project includes the magnetite
reclamation and beneficiation study aimed at creating
additional revenue from the legacy stockpile. The company
committed about R700-million to the pre-feasibility study and
approximately R10-billion is expected to be spent throughout
the development of the project.
SOUTH AFRICAN BUSINESS 2020
50

PROFILE
The employer of choice
Since its inception, Palabora Copper has been
at the forefront of employment practices in the
local mining industry. Palabora, which employs an
average of 3 700 employees (Lift I and II) aims to
remain industry competitive through its favourable
conditions of employment.
This is reflected in the utmost importance
with which the safety and health of employees is
regarded in order to remain efficient and profitable
as a business.
The company has written and developed its
code of ethics to follow strategic imperatives
which include: providing a safe and healthy work
environment for all employees and contractor
employees and practising sound environmental
management to ensure the sustainable
biodiversity of the natural environment within
which it operates.
Palabora Copper acknowledges and respects
its stakeholders’ interest and concerns, striving to
be a leading corporate citizen within the mining
industry and supplying a high standard of quality
products and services, reliably and responsibly,
at national and global level. Palabora Copper is
certified as a Top Employer.
For more information: www.palabora.com
51
SOUTH AFRICAN BUSINESS 2020

FOCUS
Women of PMC
Experience, skill and drive underpin
two success stories.
A
number
of highly motivated women are
making stellar careers for themselves in
mining at PMC and providing inspiration for
scores of other women in the sector.
Matsela Ntsepe: Process Engineering
Manager
Matsela Dolphinah Ntsepe is a chemical engineer with
more than 17 years of experience in diamond, coal
and copper mining. Matsela is Palabora Copper’s (PC)
Process Engineering Manager for the Smelter Retrofit
Project, a position she earned through hard work and
ascending through the ranks. Matsela started her career
as a Metallurgical Trainee and rose through various
levels including System Engineer, Refinery Technical
Metallurgist, Refinery Technical Superintendent,
Concentrator and Magnetite Technical Superintendent
and Refinery Operations Manager.
Matsela or “Tsela” serves as the current Chairperson
of the Women in Mining (WiM) PC branch and is an
Ex-Officio Executive Member in the Limpopo region.
In addition, Tsela is a member of PC Transformation
Committee and a Trustee of PC Essop.
Matsela holds a National Diploma and B-Tech in
Chemical Engineering from Witwatersrand Technikon
and a Management Development and Financial
Management Programmes from the University of
South Africa.
As the member of the PC Transformation Committee,
Tsela influences and facilitates the direction of PC’s future
strategic transformation agenda. Tsela is a finalist for the
Limpopo Mine and Safety Council’s Women Achievers
Award and the Standard Bank Women in Science Award.
Manyabela Mailula: Manager for Training,
Development and Contractor Management
At only 35 years of age, Manyabela Mailula has more than
13 years’ experience in technical research and mining in
countries such as Turkey, Georgia, USA and South Africa.
Manyabela is Palabora Mining Company (PMC) Manager
Matsela Ntsepe:
Process Engineering
Manager
Manyabela Mailula:
Manager for Training,
Development
and Contractor
Management
for Training, Development and Contractor Management.
She holds a National Diploma in Metallurgical
Engineering from Vaal University of Technology, a
BTech in Metallurgical Engineering (Tshwane University
of Technology), Honours in Management of Technology
(University of Pretoria), a Higher Certificate in Education,
Training and Development (University of Johannesburg)
and a Work Place Assessor Certificate from the Drum
Beat Academy.
Manyabela started her career as a Metallurgical Trainee
at ASA Metals (Dilokong Chrome Mine). She joined PMC/
Palabora Copper (PC) as a Smelter Training Officer and
ascended to the position of Operational Readiness
Manager. Manyabela’s current responsibilities include
the development of PC’s training and development
strategies, policies and standards.
Manyabela is the Chairperson of Limpopo Region’s
Women in Mining. She is Chairperson of Employment
Equity Skills Development and serves as the member
of the board of Phalaborwa’s Technical and Vocational
Education and Training (TVET) College.
Manyabela is a finalist for the Limpopo Mine and Safety
Council’s Women Achievers Award and Standard Bank
Young Achiever of the Year Award. The latter award is for
women who have achieved a lot before the age of 40.
SOUTH AFRICAN BUSINESS 2020
52

Driving sustainability
Palabora Mining Company preserves the natural environment in which it operates.
FOCUS
Palabora Mining Company’s code of ethics includes consideration
given to the healthy work environment of employees but
also to ensuring that sound environmental management is
pursued so that the biodiversity of the natural environment in
which PMC operates can be sustained for many years to come. These
are among the company’s strategic imperatives.
Mining activities are inherently energy intensive, so PMC launched
an Energy Management Programme in 2012 to curb the half-a-billionrand
energy bill which was continually growing. PMC collaborated with
a consulting company, resulting in the employment of 12 energy specialists
and project managers who would, in conjunction with mining
personnel, identify, implement and sustain energy cost-saving projects.
As a result, 117 initiatives were identified. Following stringent technical
and financial adjudication processes, 31 projects were implemented,
using the Productivity Approach
The company has saved R232-million through avoided energy
costs. Palabora Mining Company’s Energy Management Programme
has not only created a sustainable model but has also emphasised the
company’s standpoint regarding its environmental responsibility. PMC
is now an energy efficiency leader in the mining sector.
Going green: The company
is a certified ISO 14001 business,
that subscribes to world-leading
practices. Located directly adjacent
to the world-renowned
eco-tourism attraction, the
Kruger National Park, Palabora
Copper coordinates several
onsite wildlife management and
cultural heritage programmes as
part of its ongoing sustainability
drive.
Over the past years, Palabora
Copper has retained a record of
being one of the safest mines in
South Africa and Africa. This is
particularly due to stringent SHEQ
regulations and procedures in
place, and the effective management
of contractors on site.
53
SOUTH AFRICAN BUSINESS 2020

The Export Credit Insurance
Corporation of South Africa
PROFILE
The Export Credit Insurance
Corporation of South Africa
(ECIC) was established, in
July 2001, with a mandate
to fulfil a market gap through the
provision of medium to long-term
export credit and investment
guarantees. The company
underwrites bank loans through
provision of political and commercial
risk insurance cover, on behalf of the
South African government.
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.
Along with its major shareholder – the
Department of Trade and Industry – the
ECIC makes use of market research tools
and specialised business development
units to create new insurance products
that support government’s export and
investment promotion objectives.
The ECIC has recently developed
new products including lines of
credit, lease and return of plant
equipment. The revised performance
bond insurance product which was
launched in 2016 is another example.
It also continues to be a catalyst for
increased lending capacity by financial
institutions by entering agreements
with other export credit agencies
(ECAs). 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. In this way, it creates a
framework for both re- and co-insurance.
The ECIC is also able to price African risk more competitively,
given its experience in underwriting African projects. The company
has been involved in flagship projects such as Nacala Corridor in
Malawi and Mozambique, Cenpower in Ghana, and Mozal Aluminium
Smelter in Mozambique to name just a few. The ECIC addresses
obstacles through facilitation and by aiding in the release of funding
required for infrastructure, which is of particular importance to
multinational organisations seeking a presence in Africa.
The ECIC is committed to sustainable business through
innovative solutions, operational and service excellence, business
development and strategic partnerships. In enabling frontier
markets to industrialise and diversify the economies, the ECIC
is effectively contributing to a positive socio-economic impact.
Vision
To be a world-class export credit agency in facilitating South African
export trade and investment globally.
Mission
To provide export credit and investment insurance solutions in
support of South African capital goods and services by applying
best-practice risk management principles.
CONTACT DETAILS
Postal address: Block C7 & C8, Eco Origins Office Park,
349 Witch Hazel Avenue, Highveld Ext 79, Centurion 0157
Tel: +27 12 471 3800
Email: info@ecic.co.za | Website: www.ecic.co.za
ECIC is a registered financial service provider and is regulated by the FSCA
and Prudential Authority (FSP No: 30656).
54

SUCCESSFULLY
SUCCESSFULLY
GROWING
GROWING
OUR
OUR
PORTFOLIO
PORTFOLIO
IN
IN
FRONTIER
FRONTIER
MARKETS
MARKETS
PROFILE
economic growth can be achieved. As Export Credit Insurance Corporation of South Africa (ECIC) we are committed to supporting our South African
economic growth can be achieved. As Export Credit Insurance Corporation businesses of South Africa who export (ECIC) we and are invest committed in capital to projects supporting beyond our South our borders. African
If youʼre planning on exporting to or investing in capital projects businesses beyond who export our and borders, invest in capital contact projects ECIC beyond for assistance
our borders.
If youʼre planning on exporting to or investing in capital projects beyond our borders, contact ECIC for assistance
+27 12 471 3800 | info@ecic.co.za | www.ecic.co.za
ECIC is a registered Financial Services Provider, regulated +27 by the 12 FSCA 471 and 3800 Prudential | info@ecic.co.za Authority | (FSP www.ecic.co.za
No: 30656).
ECIC is a registered Financial Services Provider, regulated by the FSCA and Prudential Authority (FSP No: 30656).
A $1 Billion funding facility available for the South African-Africa Trade and
A $1 Billion funding facility available Investment for the Promotion South African-Africa Programme Trade (SATIPP) and
Investment Promotion Programme (SATIPP)
Programme (SATIPP), a $1 billion funding facility aimed at boosting South African business export capacity, help them access investment
In partnership with
In partnership with
55 SOUTH AFRICAN BUSINESS 2020
To access SATIPP please visit - ECIC.CO.ZA
To access SATIPP please visit - ECIC.CO.ZA
Programme (SATIPP), a $1 billion funding opportunities facility aimed on the at boosting continent South and grow African the business country’s export trade capacity, activities help with them other access African investment countries.
opportunities on the continent and grow the country’s trade activities with other African countries.

KEY SECTORS
Overviews of the main economic
sectors in South Africa.
Agriculture 58
Energy 62
Oil, gas and petrochemicals 68
Water 72
Engineering 74
Construction and property 76
Manufacturing 80
Food and beverages 82
Automotive 84
Transport and logistics 86
ICT 88
Banking and financial services 89
Development finance and
SMME support 94
The railway line shown crossing the Olifants River
carries more than 40-million tons of iron ore annually
from Sishen in the Northern Cape to the Port of
Saldanha 861km away. Trains on the line have broken
world records for heaviest and longest trains. Image:
GroblerduPreez/iStock by Getty Images.

PROFILE INTERVIEW OVERVIEW
Agriculture
South Africa is the world leader in mohair.
While agriculture’s contribution to national GDP is variously given
in the range of 2.0%-2.5%, the upstream and downstream
links to agriculture through sectors such as processing and
logistics mean that the real contribution is more like 15%.
More than one commentator has raised the idea that South Africa
should be ramping up production of foods where the country is already
a world leader in production: macadamia (number one), citrus (number
two) and others such as avocados and pecan nuts. Hilary Joffe wrote
in Business Times that existing turnover for superfoods (avocadoes,
cherries, dates, blueberries, macadamias, pecans and almonds) is at
R24-billion but this could triple with the correct support.
A good example of an existing special strength that belongs to
South African agriculture is mohair, the fibre that comes from Angora
goats. The Eastern Cape is the centre of the global mohair sector. South
Africa produces about 55% of the world’s mohair.
Companies such as SAMIL have divisions covering farming, combing,
trading, spinning and dyeing. The Angora Genetics Laboratory
(ANGELA) was established in 2013 to improve yields.
Wandile Sihlobo of Agbiz believes that South Africa should focus on
horticulture, partly because it is labour intensive. He gives an example
of blueberries, which need 2.64 workers for every hectare planted.
There are signs that his advice is being followed: gross value rose from
R15.8-million in 2008 to R1.25-billion in 2018 with the total area planted
expanding four times. More than 70% of the blueberry crop is exported.
AgriSA states that the amount of agricultural land in South Africa
in 2016 stood at 93.5-million hectares. This represents 76.3% of
South Africa’s total land mass of 122.5-million hectares and about
3% less than in 1994. Following on a research project done by Agri
Development Solutions (jointly funded by AgriSA and the magazine
Landbouweekblad), Agri SA predicted that 80-million South Africans
would be fed by commercial farmers in the year 2035. They also gave
these figures for the sector:
• 34 000 full-time farmers
• 40 000 tax-paying farmers
• 100 000 emerging farmers
• 670 000 semi-skilled and unskilled workers.
Agricultural firm Laeveld Agrochem has made the link between the need
for high-quality soil and better returns if countries in Africa are going to
produce larger quantities of produce and livestock. As a result, a subsidiary
has been created to make soil health products. Called Agri Technovation,
SECTOR INSIGHT
Superfoods could boost
agricultural exports.
the company formulates and manufactures
specialised products that
aim to meet crop-specific nutrient,
stimulant and energy requirements.
In the context of new products
such as these, the need for
highly skilled people in the sector
becomes obvious. The kinds of
innovation and technology that
are needed to improve agriculture
need well-trained specialists.
The South African government
has produced a list of critical
skills in the agricultural sector.
Each of these occupations (such
as agricultural scientist) has additional
areas of specialisation (for
example, soil or pasture scientist)
so the extended list is a long
one. General occupations include
technician, produce inspector, engineer
technologist, mobile plant
operator and veterinarian. Some
specialities include seed research
technicians, abattoir veterinarians
and agri-chemical spray operators.
Black farmers are receiving loans
from the Land Bank in an attempt
to help transform the sector. The
SOUTH AFRICAN BUSINESS 2020
58

Land Bank is also looking to create ways
in which black entrepreneurs can invest
in agricultural assets through some form
of trust.
The Bureau for Food and Agricultural
Policy reports that the fastest -growing category
of new farmers is emerging farmers
who are taking a “market-led, sustainable
approach”. This group is the result of a new
model of cooperation between black and
white farmers, support from industry organisations
and new approaches to financing.
The drought in 2015 and 2016 had
severe consequences in Southern Africa.
StatsSA noted the following price increases
in that period: vegetables (12.7%), bread
and cereals (16%) while nearly 400 000ha
less was planted in the country in 2017 than
it was in 2014. Wine grape production was
down 2% in 2019 but this followed a 14%
dip the year before.
Exports of South African produce continue
to grow. Sihlobo noted that 2018
exports were the highest in 17 years,
reaching $10-billion. Africa was the biggest
market, accounting for 39% of the total.
South Africa’s biggest citrus shipment
company, Sundays River Citrus Company,
regularly ships 500 000 cartons per week. Beef increased
from 8 292 tons in 2001 to 31 888 tons. The largest areas
of growth were Muslim countries.
South Africa imports 80% of its fertiliser and 98% of
its agri-chemicals.
A total of 70% of South Africa’s grain production is
maize, which covers 60% of the cropping area of the
country. The South Africa feed industry has an annual
turnover of about R50-billion with most of the raw
material being soya and maize.
ONLINE RESOURCES
Agricultural Research Council: www.arc.agric.za
Fresh Produce Exporters’ Forum: www.fpef.co.za
Grain SA: www.grainsa.co.za
National Department of Agriculture, Forestry and
Fisheries: www.daff.gov.za
SA Table Grape Industry: www.satgi.co.za
Land use in South Africa
51.6%
0.4%
1.5%
32.8%
13.7%
Professors Johann Kirsten and Ferdi
Meyer argue that a detailed analysis
of what land is available and best
suited to various uses should be
undertaken as part of land policy
in South Africa. They explain the
different kinds of land shown in this
chart as follows:
• Extensive pastures/natural
veld (more than half of all
agricultural land): this land
has marginal agricultural
potential and farmers need
a lot of land to carry stock (10ha
for small livestock, 40ha per
larger animals such as cattle).
The Karoo and large parts of
the Northern Cape fall into this
category.
• Intensive pastures: 32.8% of
Extensive pastures pastures
Intensive pastures pastures
Extensive field cropsfield crop
Intensive
field cropfield crop
Orchards
OVERVIEW PROFILE
all land where rainfall is good
is suitable for activities such as
dairy farming.
• Extensive (dryland) field crops:
13.7% of all land is suitable for
crops such as sunflower seed
and soybean.
• Intensive (irrigated) field crops:
1.5% of land suits all horticul
ture and some field crops.
• Orchards: 0.4% of SA’s agricul
tural land, which is expensive to
maintain but the returns
are good. They require a high
degree of skill, are labourintensive
and must be responsive
to the export market.
SOURCE: Bureau for Economic Research at
Stellenbosch University, Bureau for Food and
Agricultural Policy.
KwaZulu-Natal and Mpumalanga produce
sugar, but volumes are down. The Free State
Province supplies significant proportions of the
nation’s sorghum, sunflower, potatoes, groundnuts,
dry beans, and almost all of its cherries.
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 avocados, have been
growing rapidly. Most of South Africa’s citrus
and subtropical fruit comes from the eastern
part of Limpopo. There are about 3 500 wine
producers in South Africa, with the large majority
located in the Western Cape.
Livestock farming is the largest agricultural
subsector in South Africa and the Eastern Cape
is the largest livestock province. South Africa
has a beef herd of 14-million.
59
SOUTH AFRICAN BUSINESS 2020

PROFILE INTERVIEW
Michael Brosnahan, CEO
Traceability is a key
differentiator for major
mohair producer
Michael Brosnahan, the CEO of SAMIL, explains why he is
positive about the future of the mohair industry.
What is the state of the mohair sector in South Africa at
the moment?
Despite all the challenges, we are extremely positive about the future. Mohair
farmers are a hardy breed of individuals used to facing and overcoming
adversity, including the recent drought. There are indications that the
situation is improving. The South African mohair production for the last
two seasons was 2.40-million kg in 2017, and 2.24-million kg in 2018. The
prediction is that production will be in the region of 2.35-million kg this
year. However, nature is a fickle entity.
What are the main countries to which Samil exports?
Italy and China are our two largest markets in terms of semi-processed tops.
We redirect between 15-20% (and this figure is increasing) of tops produced
at SAMIL Combing to SAMIL Spinning for conversion into magnificent yarns
which are mainly sold on the international stage.
What are the advantages of having multiple divisions?
SAMIL has a team of professionals with long years of experience in both
the mohair and textile industries. As traceability becomes more and more
important to the final consumer, SAMIL has a distinct point of difference
– we are involved from goat farming through all conversion processes to
the finished yarn.
BIOGRAPHY
Michael emigrated from the
UK to KwaZulu-Natal in South
Africa in 1981 in order to take up
the position of Quality Assurance
Manager with the Frame Group.
A chartered member of the
Textile Institute in South Africa,
he has managed several large
textile companies since then.
Mooi River Textiles was awarded
Cotton Spinner of the Year for
three consecutive years under
his leadership. He was appointed
CEO of SAMIL Natural Fibres in
Port Elizabeth in 2016.
What headwinds has mohair experienced?
Mohair has faced some serious challenges in recent years, the first of which
was PETA’s exposé on the South African mohair industry in May 2018. Though
a negative attack, the positive spin-off is that it has helped the industry to
fast-track the implementation of the Mohair Sustainability requirements. The
industry has engaged with the Textile Exchange in drawing up a Responsible
Mohair Standard. This is to satisfy consumers that mohair is a sustainable
and ethically produced product.
Secondly, the Lesotho farmers’ conflict with their government over
restrictive mohair export conditions. They have recently won a High
Court battle to have these restrictive conditions repealed but there is still
uncertainty as to when normal supply will resume.
What other plans do you have?
We are also investing in our combing and spinning operations to ensure we
are equipped to deliver quality products timeously to our clients.
SOUTH AFRICAN BUSINESS 2020
60

Sharing Africa’s beauty
with the world
SAMIL produces and processes mohair, the noble fibre.
South African Mohair Industries Limited
(SAMIL) is the link between mohair
producers, processors and consumers. Our
vision is to be an innovative South African
company specialising in the production and processing
of natural fibres, as well as speciality spun yarns.
Mohair, the fleece of the Angora goat, is:
• the noble fibre, known as the diamond fibre
• lustrous, resilient and offers exceptional colour
reflection
• one of the world’s most beautiful sustainable
natural fibres
• a symbol of luxury and exclusivity.
African Expressions
Our local brand African Expressions was born of the
desire to share Africa’s natural beauty with the rest of the
world. Through our unique range of yarns, we express
the essence of that which makes Africa magical. Our
network of local farmers, who farm in optimal Angora
goat conditions, breed stock which bear excellent fibres.
This ensures that our yarns are naturally soft to the touch,
easy to knit and luxuriously versatile.
SAMIL divisions
Farming: SAMIL Farming, was established with
the primary objective of stabilising and possibly
increasing mohair supply to the processors.
Combing: SAMIL Natural Fibres Combing is in Berlin,
outside East London in the Eastern Cape. As mohair
processing has decreased in other parts of the world,
SAMIL Combing has become one of the world’s
leading processors. Unlike many processing plants
SAMIL Combing focusses on and is committed to
processing only mohair.
Trading: Through a strong support base of affiliated
companies, partners and agents, SAMIL has established
strong connections throughout the world for the
purchase and sale of raw materials and finished goods.
South Africa processes in excess of 80% of the world’s
mohair production. The advantage of having both topmaking
and spinning operations in South Africa, as well
as access to raw material produced within the company,
is that SAMIL is able to offer lots guaranteed from origin,
a rare luxury in today’s business environment.
Spinning and dyeing: SAMIL Spinning is a global
manufacturer of outstanding quality mohair yarns,
producing a wide and exclusive range of mohair and
mohair blended fancy and fine-spun yarns in both
fine-count and coarser varieties. We are internationally
renowned for our superior product range and cater
for the hand knitting, machine knitting, weaving,
hosiery and decor markets. Although we specialise
in pure mohair, we also blend mohair with a range
of other natural and man-made fibres. Yarns can be
custom dyed to any shade at SAMIL’s state of the art
dye house.
Genetic research: The latest venture under the SAMIL
umbrella is the research project called ANGELA
which aims to enhance Angora goats and the
mohair industry, from increasing kidding rates to
the improvement of the different hair qualities. The
project will make available its results to all in the
mohair farming community.
Contact details
Tel: +27 41 486 2430
Email: yarns@samil.co.za
Website: www.samil.co.za

FOCUS OVERVIEW
Energy
Policy decisions hold the key to stabilising power supply.
The open-cycle gas turbine plant at Shakaskraal in KwaZulu-Natal.
The decision in May 2019 that power projects generating less
than 10MW do not have to get licences from national government
has given hope to independent power producers
and city governments across South Africa that a new era in
energy policy has begun.
These smaller projects can go ahead (up to a total of 500MW) outside
of the country’s Integrated Resource Plan but the next step – allowing
companies to sell any excess power they generate to the grid – will be
a real game-changer.
South Africa’s vaunted Renewable Energy Independent Power
Producer Procurement Programme (REIPPPP) attracted about
R200-billion in committed investments in just five years but it was limited
to large projects.
An example of the potential that lies within companies is Tongaat
Hulett. This company’s sugar mills are producing between 12MW and
14MW of power. The company believes that the national sugar industry
could generate between 700MW and 900MW. The same could be said
for Sappi’s wood and fibre mill and all of the country’s breweries. Most
mining companies are now investigating (or have started) generating
power for their own use.
Discussions about feed-in tariffs will have to be finalised before the
huge energy-generating potential of these sectors can be fulfilled. If
SECTOR INSIGHT
Small-scale independent
generation could be a
game-changer.
national utility Eskom is broken into
separate business units then the
likelihood of the tariff discussions
taking place will greatly increase.
In his first medium-term
budget policy statement in late
2018, new Finance Minister Tito
Mboweni, expressed an opinion
on the unbundling of Eskom.
Mboweni said, “Restructuring of
the electricity sector is underway.
This must include a long-term plan
to restructure Eskom and deal with
its debt obligations.”
Eskom runs electricity genera-
SOUTH AFRICAN BUSINESS 2020
62

FOCUS
HASSLE
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63 SOUTH AFRICAN BUSINESS 2020

OVERVIEW
tion, transmission and distribution
and it is a monopoly. Mboweni’s
statement opens up the possibility
that a long-stalled plan to
divide up these functions could
happen. In 2013, a parliamentary
bill called the Independent
System and Market Operator
(ISMO) was passed but allowed
to lapse in the same year.
Figures released by the South
African Wind Energy Association
(SAWEA) showed shareholding
for local communities reached
an estimated net income of
R29.2-billion over the lifespan of
the projects. Some 14 000 new
jobs are expected to be created,
mostly in rural areas, and more
than R30-billion has already
been spent on Black Economic
Empowerment (BEE) in the
construction phase.
In 2018, then Energy Minister
Jeff Rabebe restarted the REIPPPP
when he signed off on projects
totalling R56-billion that will add
2 300MW to the national grid.
There had been a long delay
as Eskom argued against
accepting more power purchase
agreements. Most of South
Africa’s electricity comes from coal
and Eskom is building two huge
coal-fired power stations.
Most commentators on the
Integrated Resource Plan (IRP) 2018
have praised its basis in science
and the fact that it has adopted the
“least-cost” method of analysing
options. With renewable energy
costs having been dramatically
reduced, the IRP concludes
that wind, gas and solar power
(photovoltaic) will be the three
methods to be allocated the most
new projects up to the year 2030.
The other form of solar power (concentrated solar power, CSP) is very
effective and some projects have been successfully commissioned, but
it is relatively expensive.
A majority of wind projects have been allocated to the Eastern Cape,
but approximately 60% of the projects so far allocated in the programme
have been in the Northern Cape, the nation’s sunniest province.
Projects such as Kathu Solar Park (100MW), a concentrated solar power
(CSP) project, and the Roggeveld Wind Farm (147MW) are indicative of the
large scale of most of the energy generation that is being rolled out.
Abengoa’s three plants in the Northern Cape use CSP which reflects
the sun’s rays during the day into a molten salt storage system. The energy
is then slowly released during the night. The 205m tower that collects the
rays at the Khi Solar One site is one of the tallest structures in South Africa.
Despite the emphasis on renewables in the IRP, South Africa’s energy
mix is still weighted towards coal. The IRP has attracted criticism for
enabling an expansion of the coal industry. Koeberg nuclear power
station is due to be decommissioned soon after 2045.
Gas
While the main sources of renewable energy being pursued are solar
and wind power, an open-cycle gas turbine plant at Shakaskraal in the
iLembe District Municipality (pictured) points the way to another method
being encouraged by energy planners. This 670MW gas turbine plant
can be converted to gas-fired technology. Its project company, Avon
Peaking Power, is jointly owned by a community trust, Mitsui (Japan),
Legend Power Solutions (South Africa) and ENGIE of France, which is
the largest shareholder.
Gas in various forms is very much in the spotlight. South Africa’s
neighbour Mozambique has large offshore deposits and a sub-committee
of the Southern African Development Community (SADC) has been
tasked with working out a master plan for the region.
A study prepared by the Energy Centre of the Centre for Scientific and
Industrial Research (CSIR) reports that wind and solar power (supported
by natural gas, biogas and hydro-electric power) could be up to the task
of providing “baseload” power. The Department of Energy is targeting
the procurement of 3 126MW and intends spending R64-billion on port,
pipeline, generation and transmission infrastructure at three key ports.
ONLINE RESOURCES
IPP projects: www.ipp-projects.co.za
National Energy Regulator of South Africa: www.nersa.org.za
South African Renewable Energy Council: www.sarec.org.za
South African Wind Energy Association: www.sawea.org.za
SOUTH AFRICAN BUSINESS 2020
64

OVERVIEW
The economic power
of renewable energy
Dr Tobias Bischof-Niemz, CEO of ENERTRAG South
Africa, aims to bring local value-add into the business
of solar and wind power.
Dr Tobias Bischof-Niemz, CEO
Why has ENERTRAG entered the South African market?
We believe in the power of economics. The economics for solar and wind
technologies in South Africa are so superior compared to the conventional
ways of producing energy, that we have absolutely no doubt that there
is a bright future ahead for the South African renewables market. Our
company always has a long-term vision based on strong fundamentals.
BIOGRAPHY
Before joining ENERTRAG
in September 2017, Tobias
successfully established and
led the Energy Centre at the
Council for Scientific and
Industrial Research (CSIR).
Tobias served as a member
of the inaugural South African
Ministerial Advisory Council
on Energy (MACE). He
was recently appointed as
Professor in Practice by the
University of Johannesburg. He
is author of the book “South
Africa’s Energy Transition” that
outlines a roadmap for a lowcost,
decarbonised and jobrich
future for South Africa’s
energy sector.
What are your priorities?
One is a focus on the Renewable Energy Independent Power Producer
Procurement Programme (REIPPPP) – large-scale, utility, wind and solar
photovoltaic power. The other focus is “new segments”, hybrid projects
which combine solar and wind, where we optimise all the customers’
options with a mix of technologies. We are looking at hydrogen production
from wind and solar as well.
Are there opportunities in hydrogen fuel cells for electric
vehicles?
Absolutely. The economics for the individual truck or bus owner are such
that hydrogen fuel cells, purely on the fuel side, are already very close to
parity with diesel.
What are your key differentiators?
Our socio-economic approach is key. Wherever we go we want to
be as local as possible. We maximise local value-add in developing,
implementing and operating our projects. For us and for our 15 employees,
ENERTRAG South Africa is a proudly South African company.
On the technical side what’s different is that we are not a “produce
and forget” wind turbine operator, we are a power plant operator and
we take full system responsibility. Our power plants are based on solar
and wind as the primary energy source; those are components. The
actual power plant combines them and spans across an entire region.
Does the regulatory environment encourage investment?
Over the last five years there were no investments. We need an updated
Integrated Resource Plan (IRP). The draft IRP 2018 is a positive move in the
right direction, but it is not promulgated yet. In the smaller megawatts
category, we need the regulations to embrace that. All studies show that
the future of South African electricity lies in solar and wind.
65
SOUTH AFRICAN BUSINESS 2020

PROFILE
ENERTRAG
One energy ahead
Darling Wind Farm, 5.2MW total installed capacity.
ENERTRAG is a German, family-owned energy
company that specialises in sustainability
and generates electricity exclusively from
renewable sources – mainly from wind energy.
We rank among the leading wind power producers in
Europe with more than 762 installed wind turbines and
2.5-billion kilowatt-hours generated annually.
We combine all the competencies necessary for
the successful operation, generation and supply
of renewable energy. From planning, permitting,
development and financing to the construction and the
operation up to feeding into our own power grid with
the associated transformer substations and connection
to the interconnected European power system, we
are one of the few companies worldwide that operate
every necessary link in the production chain with
sustainable energy. ENERTRAG has comprehensive
knowledge and experience along the entire value chain
of renewable energy projects. Since its establishment,
ENERTRAG has been focusing on accelerated
technological development with
great determination to increase
the efficiency of renewable
energies.
We know that a secure,
sustainable and inexpensive
energy supply is only possible
through wind power,
photovoltaics and hydrogen.
All other solutions are either too
expensive, not sustainable, too uncertain or simply
not available at sufficient scale. We are putting this
insight into practice. Furthermore, we store energy in
the most durable and simplest of all energy sources:
hydrogen. We strive to supply all energy sectors in a
balanced manner, from electricity to transport fuels
through to heat. Therefore, we are active wherever it
is necessary to make wind and solar power compatible
and to gain sufficient support for making it the basis
of our energy system.
The ENERTRAG success story
As an independent energy company we produce
electricity, hydrogen and heat exclusively from
renewable sources and deliver secure, affordable
energy for all aspects of life.
SOUTH AFRICAN BUSINESS 2020 66

Renewables leader
• >10% market share in German wind auctions in
2017 – tariffs as low as 3.8€ct/kWh
• Long-term experience as developer, EPC, operator
and service provider for renewables, including 20+
MW of gas-engine-driven biogas plants
Renewable power plant operator
• Approximately 5GW renewables in 24/7 remote
monitoring/control (thereof 830MW own assets)
• Technology-neutral system optimiser and
renewable power plant operator
• 1 000km of medium- and high-voltage grid and
substations designed, built, owned/operated
• ENERTRAG headquarters, including its 24/7
control centre, runs on 100% renewables.
Solutions for mines and large industries
• High availability and reliability of renewable
power plant and grid solutions
• Reliable, long-term partner for large industrial
customers
• Optimal choice of components and design from
a system perspective to minimise the cost of
energy delivered
The brand ENERTRAG
• Pioneer of the Energy Transition: first wind turbine
in operation since 1992
• Reliable, pragmatic shaper and implementer of the
Energy Transition
• Experienced in leveraging grant funding
opportunities for innovation projects.
Locations
A total of more than 600 employees work along
the entire value chain of renewables at ENERTRAG
in four countries. The headquarters in
Dauerthal is supported by six more offices in
Germany. ENERTRAG is also present in France,
Poland and South Africa.
ENERTRAG South Africa
ENERTRAG entered the South African renewable
energy market in 2016 and has established itself
as an important player in the renewable energy
industry with a pipeline of more than 2GW of
wind and solar projects under development,
plus green hydrogen projects to provide
innovative transport solutions.
A 100% subsidiary of ENERTRAG AG,
ENERTRAG South Africa is committed to
delivering reliable electricity supply, and
inclusive and innovative renewable energy
development to South Africa and beyond.
ENERTRAG South Africa highlights
• Proud owner and operator of the Darling
Wind Farm, South Africa’s first wind energy
facility.
• Our highly skilled, proudly South African
team is motivated to develop projects
that maximise benefits for our local
economy, leverage and capitalise South
Africa’s advantage in renewable resources
on the global stage.
• More than 2GW renewables projects
pipeline under development.
• Innovative green hydrogen solutions for
the transport sector under development.
ONLINE RESOURCES
Physical address:
Unit 101 B Heritage House, 20 Dreyer Street, Claremont, Cape Town, 7708
Tel: +27 21 207 2180/5
Email: info@enertrag.co.za
Website: www.enertrag.co.za
67
SOUTH AFRICAN BUSINESS 2020

OVERVIEW
Oil, gas and petrochemicals
South African ports are gearing up to service the oil and gas industry.
Natural gas lies offshore to the west of South Africa in the
Atlantic Ocean (Ibhubesi) and off the southern coast in the
Indian Ocean (Bredasdorp Basin). Both fields have great
potential: Block 2A of the Ibhubesi gas field north-west of
Saldanha is estimated to have reserves of 850-billion cubic feet of gas
and the Bredasdorp Basin one-trillion cubic feet but getting to the gas
has been difficult. In addition, massive new fields are being exploited
off the coast of Mozambique, opening up opportunities in the region
that never existed before.
Anadarko Petroleum, a US company, decided in 2019 to go ahead
with a $20-billion project to build a liquid natural gas (LNG) plant in
Mozambique. The projected spinoffs for the South African economy
are estimated to top R7-billion. Part of the projected benefit for South
Africa will be through the access to the project that will come with the
expected involvement of the Export Credit Insurance Corporation of
SA (ECIC). ECIC intends underwriting Standard Bank’s financing of this
and other projects and part of the conditions of such financing deals
is market access for South African firms.
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.
Large quantities of oil are transported around Cape Point every
year: 32.2% of West Africa’s oil and 23.7% of oil emanating from the
SECTOR INSIGHT
Coastal Special Economic
Zones are investing in
gas plants.
Middle East. Irrespective of market
volatility, the long-term prospects
for shipping and oil and gas are
strong enough for national government
to pursue Operation
Phakisa (which includes a strong
maritime economy element)
and for Transnet National Ports
Authority to spend heavily on
upgrading the nation’s ports.
In the Western Cape thousands
of direct jobs have been
created in the ship and rig repair
sector of the oil and gas business
and the Saldanha Bay Industrial
Development Zone is being
SOUTH AFRICAN BUSINESS 2020 68

OVERVIEW FOCUS
expanded with the oil and gas
sectors as priorities. The same is
true of Richards Bay in KwaZulu-
Natal and the Coega Industrial
Development Zone.
The Port of Saldanha has a new
open-access liquefied petroleum
gas (LPG) plant run by Sunrise Energy.
In 2016, the Department of
Trade, Industry and Competition
(dtic) established a Gas
Industrialisation Unit (GIU). The
first two sites identified by the
DoE for liquefied natural gas (LNG)
plants are Richards Bay (2 000MW)
and the Coega Industrial
Development Zone (1 000MW)
in the Eastern Cape. This has the
potential to turn the Richards Bay
Industrial Development Zone
(RBIDZ) and its Eastern Cape counterpart
into energy hubs. The fact
that Mozambique has significant
offshore deposits is a factor in
this ambition.
The Coega IDZ is also home to
the country first gas-fired plant to
be run by a private consortium, the
Dedisa power plant. A new gas turbine
open-cycle power plant near
Durban has been commissioned
by Avon Peaking Power.
Supply news
A number of South African facilities
are being expanded and new ones
are being built to accommodate
more fuel and gas storage. National
usage of LPG currently amounts to
400 000 tons per year, but this is set
to increase dramatically, partly as a
result of this increased storage capacity. Some examples are:
• Bidvest Tank Terminals is building a mounded LPG storage facility
that will have the biggest tanks in the world. Each of the four 60m
long tanks weighs 5 650 tons and they have a combined capacity
of 22 600 tons. The expected supply from the new facility will be
200 000 tons per annum. The LPG will be supplied by Petredec.
• Novo Energy have built a R130-million natural gas compression
plant in the Highveld Industrial Park in Mpumalanga. The park is
well connected by rail and road to all the major industrial nodes.
The facility will operate around the clock and has access to Sasol’s
natural gas pipeline.
• Sasol and BP have increased the storage capacity of the Alrode fuel
depot south-east of Johannesburg seven-fold, from 9-million
litres to 64-million litres.
• Air Products recently invested R100-million in its existing carbon
dioxide plants in Newcastle (KwaZulu-Natal) and at the Natref
refinery at Sasolburg.
Assets
The South African oil industry generates annual sales of about R365-
billion and includes global giants such as Engen, BP, Shell, Total and
Caltex. Sasol is a major player in the oil sector and the only company in
the petrochemicals sector.
Most of the oil that feeds the country’s four crude-oil refineries is
imported. The refineries are in Cape Town, Sasolburg and Durban (two).
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.
Getting fuel to Gauteng is the key mission of the new multi-purpose
pipeline (NMPP) which started delivering fluids in 2012. The NMPP terminals
allow for greater flexibility in supply. Refined products such as jet
fuel, sulphur diesel and both kinds of octane petrol are carried.
ONLINE RESOURCES
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
69 SOUTH AFRICAN BUSINESS 2020

OVERVIEW
Water
Cape Town has learned big lessons from a harsh drought.
Pipes before installation in the Western Aqueduct project, the massive scheme to bring water to Durban from
the Midmar and Spring Grove dams in KwaZulu-Natal. Image: Knight Piésold.
In 2030 South African demand for water will be 17% greater than supply.
That is the verdict of the 2030 Water Resources Group. The Water
Resources Group, an international consortium of private companies,
agencies and development banks has established a South African
chapter, the Strategic Water Partners Network.
The Western Cape, which bore the brunt of a fierce drought for
several years, in fact fares well in terms of providing water infrastructure
and maintaining its wastewater treatments plants. The Western Cape
Department of Agriculture has launched a climate action plan called
Smart Agri which includes doing studies on conservation agriculture.
When the long-term drought was at its worst, tourists to Cape Town
were encouraged to “Save like a Local”. Together with a range of technical
and legislative measures, the campaign to use less water worked
remarkably well. Where residents and businesses were using 1.2-billion
litres per day in 2015, by the middle of 2018 the figure was 516-million
litres. While the taps were not literally turned off (the dreaded “Day Zero”
was averted), pressure in the pipes was reduced. The International Water
Association’s Water Loss Conference in Cape Town reported that two of
the world’s largest advanced pressure control systems are operating in
Cape Town.
The drought also led to creative thinking by corporate South Africa.
Old Mutual’s large Pinelands campus (accommodating approximately
9 000 staff members) is producing its own water by purifying wastewater.
The City of Cape Town is thus relieved of the need to supply 15 000kl of
water every month as a result of the plant.
SECTOR INSIGHT
An inventor is using
macadamia nut shells
to filter water.
Technology and
innovation
Although Cape Town had an urgent
need for desalination plants
when drought came to the region,
the province of KwaZulu-Natal is
taking a lead in this technology.
Richards Bay has installed a
10-container desalination plant
next to the municipal water treatment
plant at Alkanstrand. The
first mobile sea water purification
unit in South Africa, it comprises
10 containers and is located adjacent
to the water treatment plant
at Alkantstrand. It can deliver
SOUTH AFRICAN BUSINESS 2020
72

OVERVIEW
10 megalitres of drinking water.
In 2018 JG Afrika and technology
partner NuWater delivered
a R72-million desalination plant
to South32’s Hillside aluminium
smelter in the same town.
A new kind of water filtration
was reported in Engineering
News in 2019, a system which puts
macadamia nut shells to use. The
brainchild of Murendeni Mafumo,
the idea was first put into action in
2018 and has been used in schools
and rural communities by Kusini
Water. Powered by solar power, the
purification system uses a carbon
filter that is made from macadamia
nut shells.
In an attempt to reduce the
amount of water sucked up by
alien plants, Coca-Cola aims to recover
nearly 3-billion litres of water
through the removal of invasive
plants. The Coca-Cola Foundation
is investing R18-million the
Replenish Africa Initiative (RAIN)
through catchment restoration,
invasive plant removal, wetland
rehabilitation and conservation in
four provinces.
The introduction by the
National Department of Water and
Sanitation and the Water Institute
of South Africa (WISA) of the Blue
and Green Drop Awards has been
successful. The nation’s municipalities
receive scores reflecting how
well they are doing in terms of
providing clean water.
In order to win a Drop Award
(Blue for water quality, Green
for waste treatment), water
systems have to score 95% or
higher. The DWS has allocated R4.3-billion to helping municipalities
deliver water. The Interim Water Supply Programme concentrates on
23 district municipalities.
Two water companies have recently been sold to local black
business leaders. Aveng Water was bought by a group of investors
that included E-Squared Investments and Suzie Nkambule, who was
the MD of Aveng Water at the time of the sale.
Sebata Group Holdings sold a majority shareholding in USC Metering
and Amanzni Meters, two of its subsidiaries, to Inzalo Capital Holdings
in August 2019. The transaction means that the two companies qualify
as “Black Industrialist” businesses in terms of the Department of Trade,
Industry and Competition’s Black Industrialist Policy (BIP).
Supplying water to households and businesses has often been a
task beyond the capabilities of some of South Africa’s municipalities.
The newly-formed Municipal Infrastructure Support Agency
(MISA) falls under the National Department for Cooperative
Governance and Traditional Affairs and will assist municipalities to
plan for, provide and maintain infrastructure. The first action of MISA
was to commission 81 engineers and town planners to get to work
in areas that need the most help.
Another response to the municipal problem is a new national
strategy which gives a bigger role to well-resourced water boards
such as Umgeni Water and Sedibeng Water.
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 eSwatini. Another example
of a CMA is the Breede-Gouritz Catchment Management Agency
in the Western Cape.
The National Water Resource Strategy considers groundwater to
a far greater degree than previous plans. Extracting groundwater
takes skill and money, but with droughts becoming commonplace
it is likely to become a much higher priority in water planning.
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
Umzimvubu Catchment Partnership Programme: www. umzimvubu.org
Water Institute of South Africa: www.wisa.org.za
73 SOUTH AFRICAN BUSINESS 2020

OVERVIEW
Engineering
Training new engineers is a national priority.
SECTOR INSIGHT
Murray & Roberts strengthened
its mining orders by
R10.4-billion.
A
study jointly commissioned by the Water Research
Commission and the South African Local Government
Association (SALGA) found that the country’s four-in-amillion
ratio of engineers is a long way from the required
50-per-million. In 2015 there were are 16 423 registered professional
engineers in South Africa.
One response at national level was the importation of Cuban engineers.
Several partnerships between the public and private sectors are
trying to address the skills deficit. One example is the partnership that
Wits’ National Aerospace Centre has with Boeing and Airbus.
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 a programme
where trainees can earn certificates in specific disciplines from a range
of institutions. The qualifications are 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.
The consulting engineering
industry celebrates its best work
on an annual basis through the
CESA Aon Engineering Excellence
Awards. In 2018 the winners were:
Projects with a value in excess of
R250-million: Winner: AECOM,
Construction of the Cape Flats 3
Bulk Sewer – Phase 2.
Projects with a value between
R50-million and R250-million:
Winner: Aurecon, Sol Plaatje
University Library and Student
Resource Centre (pictured). The
building on South Africa’s newest
university campus in Kimberley
also won a Fulton Concrete Award.
It was designed by designworkshop:
sa, the construction work
was done by Murray and Dickson
and Aurecon provided structural,
civil, electrical, fire and wet services
design for the project.
Projects with a value of less than
R50-million: Winner: Hatch Africa,
Tugela River Pedestrian Bridge.
A good sign for the engineering
sector came in the news that
the Boksburg site where DCD
Rolling Stock used to make rail
wagons and fix locomotives is
up and running again, courtesy
SOUTH AFRICAN BUSINESS 2020
74

OVERVIEW
of TMH Africa, a part of the TMH
Group, which has head offices in
Switzerland.
Mining continues to be an important
component of most engineering
firms’ portfolios. Murray
& Roberts reported that the six
months to December 2018 saw its
Underground Mining order book
increase to R25.7-billion (against
R15.3-billion in 2017).
Murray & Roberts has completed
its transition from being a
South African company focussing
on contracting to a multinational
engineering and construction
group with a focus on natural
resources markets.
ELB Group’s Engineering
Services division employs more
than 1 000 people and the company
is currently working fulltime
on the vast Gamsberg zinc project
in the Northern Cape. Manganese,
coal, iron ore and coal are other
mining sectors where ELB is active
and it does work for Eskom (the national
utility) and companies such
Nestlé and Unilever.
The Renewable Energy
Independent Power Producer
Procurement Programme (REIPPPP)
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 many opportunities for
engineers.
Infrastructure
Several engineering firms have
battled in recent years. The reason
normally given is that national infrastructure programmes that were
expected to provide work after the 2010 World Cup did not materialise.
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.
Big names have either seen their share price drop sharply (Aveng),
their market capitalisation shrink (Stefanutti Stocks) or they have been
subjected to the business rescue process (Group Five, Basil Read and Esor).
Aspects of the Transnet 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 providing work.
Infrastructure spending has slowed, but not dried up entirely. One
province alone, Gauteng, spent R30-billion on infrastructure between
2013 and 2016. A further R46-billion has been pledged. In addition,
Gauteng municipalities will spend R94-billion using their city budgets.
A study carried out by KMPG found that spending on infrastructure
resulted in additional economic activity worth R26-billion and created
92 000 direct jobs. The Gauteng Freeway Improvement Project was
technically demanding and involved many companies and several
joint ventures. GOBA Consulting Engineers and Project Managers
supervised the design and construction of the project, as it did the
even bigger Vaal River Eastern Subsystem Augmentation Project
(VRESAP). This water project entailed redirecting water flows from one
system to another to feed the petrochemical and mining industries
of Mpumalanga.
Marine repair and engineering form a significant sector in the Western
Cape and KwaZulu-Natal, with established companies such as EBH South
Africa offering comprehensive services. Both KwaZulu-Natal ports are
expanding (Durban is building a cruise-liner terminal and Richards Bay
is undertaking no fewer than 45 projects) and will continue to attract
engineers.
Dormac, which is headquartered in the Bayhead area of the Port of
Durban, is best known for its marine engineering but it offers specialised
services to the sugar industry and provides machinery for industrial giants
like Toyota and Defy.
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
75 SOUTH AFRICAN BUSINESS 2020

OVERVIEW
Construction and property
Corporates are building large new head offices.
SECTOR INSIGHT
Green buildings are
becoming more common.
The R3-billion building in Sandton that houses Discovery’s four
businesses is the largest of several new buildings that have
been constructed in recent years to accommodate corporate
headquarters.
The main contractors were WBHO and Tiber in a joint venture (JV) with
Aurecon consulting on environmentally sustainable design (ESD) and
designing and providing mechanical services. Boogertman and Partners
were the architects for the building which was developed by a JV
comprising Growthpoint Properties and Zenprop Property Holdings.
The project won the 2019 SAPOA Property Development Awards for
Innovative Excellence and received a five-star rating from the Green
Building Council SA.
WBHO also had a hand in the construction of the Thavhani Mall in
Thohoyandou, Limpopo (pictured). This 50 000m² regional mall won the
SAPOA award for Rural and Small Town Development.
Another corporate head office that ticks every available green box is
Exxaro’s new building in Centurion. Another Growthpoint development,
the building includes innovations such as a nutrient recovery urinal and
a pilot project for waterless urinals for women.
The imposing Absa Towers Main in central Johannesburg is not
new, but it is being renewed via a major upgrade in the course of its
conversion to a mixed-use building. Within its 30 storeys, there will be
restaurants and coffee shops, child-care facilities and 520 flats in the “affordable”
bracket. The total value
of the investment by Divercity is
said to be R2-billion.
Sandton, which hosts thousands
of businesses and has one
of Africa’s biggest shopping malls
in Sandton City, is also one of
the busiest building sites in the
country. Apart from the complete
Discovery headquarters, Old
Mutual is building new premises
and The Legacy Group is building
The Leonardo, a multi-use building
that will be South Africa’s tallest
building when it is complete.
At 55 stories, The Leonardo
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OVERVIEW
will rise 150m above the city
streets and will offer retail and
office space, a conference venue,
a hotel and accommodation
options ranging from one-bedroomed
flats to eight penthouses
and the Leonardo suite.
At national level, job losses
and business rescues were recurring
themes in the South African
construction sector in 2017 and
2018. The announcement in late
2018 that work on the R4.3-billion
Oceans Umhlanga project had
been halted seemed to confirm
this trend, but indications are that
work on this huge residential,
hotel and retail mall development
will resume.
In this context, it is easy to
understand why the annual Cesa
Aon Engineering Excellence
Awards acknowledged the developer
of eight large projects
covering commercial, industrial,
retail and residential. Property
company Tongaat Hulett
Developers won Visionary Client
of the Year at an engineering
awards event in 2017, a recognition
of how much construction
is underway north of Durban on
land that used to be covered in
sugar cane.
Tongaat Hulett has been rolling
out a series of developments
for several year, but in 2018 it
launched the large nTshongweni
Urban Development on either
side of the busy N3 highway west
of the city. Land use will be housing,
light industry and logistics
with a private developer committed
to building a shopping mall.
In order to fight urban decay and to encourage investment in inner
cities, a tax incentive was created called the Urban Development Zone
tax incentive. The UDZs for Johannesburg and Cape Town were first
allocated in 2004. Making inner cities more liveable is a worldwide
trend.
Trends
A big new development on Oxford Road in the Johannesburg suburb
of Rosebank says a lot about the South African construction and
property sector. The 300 000m² Oxford Parks mixed-use development
by Intraprop began construction in 2017 and the first phase
is valued at about R1-billion.
Firstly, South Africans love shopping malls. The South African
Council of Shopping Centres calculates that the country has the
sixth-highest highest number of shopping malls in the world. R2-
billion was recently spent on Menlyn Park in Pretoria to expand it
to 177 000m² of gross lettable space while the Gateway Theatre of
Shopping in Durban, South Africa’s second-biggest mall, recently
spent R750-million.
Secondly, development often follows existing patterns
(Rosebank-Sandton is already the richest and densest retail and
office precinct in Africa). Many of South Africa’s biggest firms have
their headquarters in this area: BPSA will take up residence in Oxford
Parks. Thirdly, the concept of “lifestyle” malls has caught on. The best
known of these is Johannesburg’s Melrose Arch.
Finally, the Oxford Parks project illustrates a big shift in the construction
sector away from large conglomerates towards smaller, blackempowered
companies. The sale in 2017 of Murray & Roberts
Construction to a black-led consortium is part of a wider trend.
Away from the glitz of multi-purpose malls and towering office
blocks, Statistics SA has found that the percentage of South
Africans living in flats has risen markedly. Whereas 26 out of 100
approved plans in 2013 were for flats, this figure reached 59 in 2016.
Although the total number of people living in flats is still relatively
small (5.4%), this figure will rise as urbanisation increases.
ONLINE RESOURCES
Construction Industry Development Board: www.cidb.org.za
SA Institute of Architects: www.saia.org.za
South African Property Owners Association: www.sapoa.org.za
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FOCUS
Growing a national footprint
Maritz Electrical is expanding.
Having established a loyal customer base in the private and
public sectors in the Western Cape, Maritz Electrical has
expanded its horizons, showing that it is ready to tackle
projects anywhere in South Africa.
Recent projects that indicate the versatility that the company brings
to lighting projects, in particular in LED lighting and in large-area lighting,
include: a world-first LED stadium lighting project in Port Elizabeth, another
stadium in the Free State, East London airport building lighting and
mast lighting for informal settlements for the Buffalo City Municipality.
With an expanding workload, Maritz Electrical made a move in 2018
to new premises in Athlone. Founder and Managing Director Kurt Maritz
explains, “We have moved 150 staff from three branches into one customised
3 000-square-metre facility. It is designed in such a way that we
have enough space for 50% expansion. Half of the massive space we
dry-walled so that we have a suite of offices.”
There are no specific targets, but Kurt is clearly looking forward with
anticipation. “We don’t have any ceiling we want to hit. Our engine is our
sales department. As much work as they bring in, that’s how we will grow.”
Free State
Kaizer Sebothelo Stadium was
built as a multi-use venue
but mainly used to host football
matches in the township
of Botshabelo east of
Bloemfontein. The 20 000-seater
stadium is the home ground for
Botshabelo Football Club and
Tower United FC.
Maritz Electrical replaced the
existing, outdated lighting, as
their output intensity was too
low to cater for high-definition
camera equipment. Mangaung
Municipality’s tender stipulated
that the lighting needed an up-
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FOCUS
grade to HD quality using a local
lighting brand. The Maritz solution
not only saved close to R3-million,
but provided a 10-year warranty,
resulting in further savings for
the client.
Musco 1500w metal halide
luminaries were installed for field
lighting and LED luminaries for
emergency lighting. The stadium’s
generator was upgraded to
110KVa. Using any other system
would have required the upgrade
of the power supply, but this was
not necessary as the Musco system
uses approximately 25% less power
than conventional systems
Eastern Cape
In 2017, St George’s Park became the world’s first International Cricket
Council-compliant, LED-lit stadium and the first such stadium to be fitted
with theatrics. Over four days in December 2017, the famous ground
celebrated the landmark of being the first South African venue to host a
day-night Test match, against Zimbabwe. The R27-million contract was
completed on time and on budget by a team from Maritz Electrical led by
Warren Williams. Two project managers from Musco Lighting supported
the installation. The lights on top of the Duckpond Pavilion were hoisted
at night, the process being illuminated by floodlight.
Project Manager Diketso Kumalo reports that the six-month contract
to install LED energy-saving lights at East London Airport was completed
on time and on budget. Says Kumalo, “One of our goals for all projects
that we do is to satisfy the client and leave them with a happy face.”
LED lighting can significantly reduce power consumption. Maritz
Lighting’s pre-installation and post-installation testing confirmed that
East London Airport will be saving on electricity costs.
The Maritz contract with the Buffalo City Metropolitan Municipality
entails providing mast lighting to informal settlements across the municipality.
“We are providing them with 20m-high masts with LED luminaires,”
says Kumalo. “LED consumes much less power compared to high-pressure
sodium or metal halide although the LED the lux level is better.” Costs
will be reduced and the power of illumination will be better for residents.
Kumalo says that there is a possibility that Maritz Electrical might
open an Eastern Cape office. “Our presence is growing,” he notes.
“Depending on the amount of work we receive from the province, we
might be looking at opening another office in the Eastern Cape.” Kumalo
points out that Maritz Electrical’s expertise extends beyond lighting.
“We do a variety of electrical works. We also offer project management,
consulting, compliance and hazardous area classification and MV and
LV maintenance.”
Western Cape
The municipal authorities of Overstrand and Stellenbosch have contracted
Maritz Electrical to work on low-cost housing projects. This is a
big market and Maritz Electrical is building its skills set in this area. Aspects
of this market include reticulation, electrification, street lights, road-side
furniture and mini-substations. ■
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SOUTH AFRICAN BUSINESS 2020

INTERVIEW OVERVIEW
Manufacturing
A new national drug tender is an opportunity for local manufacturers.
Manufacturing’s contribution to South African GDP is
14%, less than half its contribution in the 1980s and a
drop of about 10% from the 1990s. In 2018, the real-term
contribution to GDP was R386.8-billion (Stats SA). Overall
production was up 1.2% on 2017.
The manufacturing sector employs the third most people of South
Africa’s economic sectors, about 1.7-million, after financial services and retail.
Two of the manufacturing sectors that have achieved the best results
in recent years, automotive and food and beverages, are featured separately.
Food and beverages is the most significant, contributing 25% to
total manufacturing activity.
South African manufacturing is diverse, a fact that was on show when
the winners were announced in the 2019 Factory of the Year competition.
Run by management consultants AT Kearney, the overall winner was Port
Elizabeth-based exhaust systems company Eberspächer South Africa.
(An Eberspächer test bench is shown as the main image on this page.)
Other winners included stainless-steel manufacturers (Columbus Steel),
casting and machinists (Atlantis Foundries), packaging (Nampak Bevan)
and smart meter providers (Nyamazela Metering).
Several of the main organisations involved in manufacturing contribute
to the judging process: the Department of Trade, Industry and
Competition (DTIC), Council for Scientific and Industrial Research (CSIR),
the Industrial Development Corporation (IDC), the Manufacturing Circle
and the Lean Institute Africa, which has its office in the Graduate School
of Business (UCT) in Cape Town.
South Africa’s pharmaceutical sector is worth approximately
R20-billion annually. Although there are more than 200 pharmaceutical
firms in the country, large companies dominate, with Aspen (34%) and
Adcock Ingram (25%) the key players, followed by Sanofi, Pharmaplan
SECTOR INSIGHT
Clothing and textiles is
bouncing back.
and Cipla Medpro. The National
Association of Pharmaceutical
Manufacturers (NAPM) has rebranded
as Generic and Biosimilar
Medicines of Southern Africa.
A new tender for a national
supplementary HIV/Aids drug tender
which was previously awarded
to foreign companies is to be issued,
opening up opportunities for
local manufacturers such as Cipla
Medpro, which made up 23% of
the previous tender. The three-year
tender is worth R18.3-billion.
The opening in May 2018 of
a R1-billion specialised product
facility at the Port Elizabeth plant
of Aspen Pharmacare will add
500 jobs to the existing complement
of 2 000 staff members. The
new plant will make products for
chronic conditions for the company
which until now has focussed
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OVERVIEW
on generics. Annual production
is planned of about 3.6-billion
tablets.
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.
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. 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.
AECI is one of South Africa’s biggest
groups. The two principal divisions
are AEL Mining Services (with a
large factory site at Modderfontein
near Johannesburg) and Chemical
Services, which has 20 separate
companies. Foskor is the country’s
only vertically integrated phosphates
producer.
The Manufacturing and Competitiveness Enhancement Programme
(MCEP) of the Department of Trade and Industry and Competition
(the dtic) has disbursed grants which have resulted in 230 000 jobs
being “sustained”.
Because of the Clothing and Textile Competitiveness Programme,
that sector currently now employs around 95 000 workers, contributing
8% to manufacturing GDP and 2.9% to overall GDP. In the leather
sector 22 new factories have been opened, supporting 2 200 jobs.
In the Western Cape, this revival is reflected in member companies
of the Cape Clothing and Textile Cluster hiring 35% more staff in four
years. Some 23 600 people are employed in the province and exports
from the Cape amounted in 2017 to R4.4-billion with sales up by 34%
above inflation.
Metals
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. This sector makes up 28% of manufacturing. The
country consumes about 150 000 tons of stainless steel every year. South
Africa makes about 500 000 tons of primary stainless steel (most of which
is exported) and imports a further 40 000 tons. Cheap imports have been
at the heart of problems for the steel sector, but other issues include
energy prices and labour costs.
Middelburg-based Columbus Stainless is a major supplier of stainlesssteel
products to the domestic and international markets. The Manganese
Metal Company in Nelspruit is the largest producer of pure electrolytic
manganese metal in the world.
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.
ONLINE RESOURCES
Centre for Advanced Manufacturing: www.cfam.co.za
Chemical and Allied Industries’ Association: www.caia.co.za
Manufacturing Circle: www.manufacturingcircle.co.za
South African Textile Federation: www.texfed.co.za
Steel and Engineering Industries Federation of Southern Africa:
www.seifsa.co.za
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Food and beverages
Small municipalities are struggling to supply services to processors.
SECTOR INSIGHT
PepsiCo has bought
Pioneer Foods.
Two of the best-known large companies in South Africa’s food
and beverages sector were purchased by international companies
in 2019. The involvement of PepsiCo (which bought
Pioneer Foods) and Central Bottling Co of Israel (which made
on offer on Clover) confirms that the idea of South Africa being a
stepping-stone to the rest of Africa is still alive.
Pioneer Foods, which makes and sells a wide range of products
from bread, cereal and fruit juice to spreads and pies at various locations
around the country, sold for R24.4-billion. Clover is a listed dairy
company which in 2017 produced 554-million litres of milk and had
revenues of R10-billion.
Clover’s action in 2019 in closing three small-town plants in rural areas
illustrated a less positive aspect of South African manufacturing: the inability
of small municipalities to adequately supply services to companies.
Clover moved production to Port Elizabeth, Durban and Johannesburg.
Poultry producer Astral’s appeal to national government eventually led
to positive results in the Mpumalanga town of Standerton after water
and electricity had become scarce commodities.
Food and beverages make up 26% of the South African consumer
products sector, just ahead of agri-business (25%), diversified companies
(23%) and sugar producers. Between 2009 and 2016 the sector
grew by 2%. Most recent capital expenditure has targeted improving
ONLINE RESOURCES
Agricultural Research Council: www.arc.agric.za
FoodBev SETA: www.foodbev.co.za
National Agricultural Marketing Council: www.namc.co.za
Perishable Products Export Control Board: www.ppecb.com
efficiency rather than expansion
of production.
The food and beverages
sector employs about 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 half of the companies
in the sector in Gauteng. There
are about 4 000 food-processing
companies in Gauteng, employing
more than 100 000 people.
Global consumer goods company
Unilever has invested nearly
R4-billion in recent years. This highlights
a trend across the food and
beverages sector. In 2016, Nestlé
South Africa invested R1.2-billion in
adding instant coffee to the products
it makes in South Africa.
By volume and value, the
Joburg Market is the biggest in
Africa. There are 55 cold rooms
that can accommodate 4 561 pallets
of fresh produce at any one
time. An average of 10 000 buyers
congregate daily on the market’s
65 000m² of trading space.
SOUTH AFRICAN BUSINESS 2020 82

Kemtek pursues
continual growth
Kemtek keeps abreast of industry developments and potential
new markets while offering the best solutions to customers.
CONTENTS PROFILE
Targeted industry events and product demonstrations are proving highly popular with Kemtek
customers and prospective customers alike.
Long-established in the lithographic,
flexographic, digital and large-format
printing and packaging arenas, Kemtek has
evolved over time into a multi-pronged
organisation, entrusted with channel responsibility
by many of the world’s leading brands in the
barcoding and labelling sectors through widespread
professional resellers, plus 3D printing, through its
joint venture partner Rapid 3D.
Aligning with internationally-acclaimed brands is
one aspect of Kemtek's continued success, coupled
with expert sales and service support, and an agile
and specialised national distribution network,
annually achieving some 15 000 deliveries.
This fast-growing enterprise also represents
specialist additive manufacturing equipment and
materials providers in multiple sectors including
aerospace, automotive, manufacturing, medical,
dental and jewellery, with brands such as EOS,
Envisiontec and Zortrax.
Building on core strengths
Creating value on a sustainable basis is Kemtek’s marketing
approach that's based on a detailed understanding
of markets and the needs of the end user. These
needs are then married to the technologies provided
by Kemtek's principal brands. Providing a winning
edge for all Kemtek's customers means delivering the
most advanced technological equipment and service,
backed by a total commitment to service excellence.
With digital printing firmly growing in Southern
Africa, Kemtek and partner, HP Indigo, have recently
expanded their labels and packaging portfolio
with technology solutions to drive printing and
converting toward more flexible, productive and
profitable digital printing.
Taking digital finishing to the next level is the
ability to integrate the Indigo 6900 with an HP
Indigo GEM digital embellishment unit – a one-pass
label-printing and embellishment system for spot,
tactile, foil, holograms, mini textures and lamination.
In the packaging sector, Kemtek’s alliance with
Flint Flexographic products goes from strength to
strength. Flint has extended the range with nyloflex
FTF-UV plates, designed for high-resistance to UVbased
inks, and nyloflex FTP for paper packaging
applications such as multiwall sacks and liquid
dairy cartons. Another important development
between Kemtek and Flint Group is a distribution
agreement that allows Kemtek to supply the full
range of ThermoflexX laser imaging systems in
South Africa.
For more information, visit www.kemtek.co.za
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OVERVIEW
Automotive
Vehicle exports are boosting the South African economy.
SECTOR INSIGHT
Giant vehicles for defence,
construction and mining
are a growth sector.
South Africa’s automotive sector continues to excel in production
volumes and exports. Another first was achieved
in 2018 when the country’s vehicles were sent to a total of
155 countries.
Vehicle and automotive component exports in 2018 brought in
R178.8-billion, fully 14% of South Africa’s total export basket. Automotive
and automotive components make up 30.2% of total manufacturing
output and about 7% of the nation’s Gross Domestic Product (GDP).
Two of the newest production lines are up and running at BMW’s
Rossyln plant (BMW X3 SUV) and in Uitenhage where Volkswagen has
added an additional production line to produce more Polos. All of the
country’s major manufacturers such as Mercedes-Benz (East London),
Toyota (Durban) and Ford (Port Elizabeth and Tshwane) have invested
large sums in increasing production or in taking on new vehicle models.
The purchase by the United Arab Emirates of an armoured personnel
carrier made by defence and aerospace company Paramount Group at a
trade show in early 2019 was a reminder that the South African automotive
industry extends beyond sedans and pickup trucks (or bakkies as they
are known in South Africa).
The Mbombe 4 (pictured) is the third in a series of combat vehicles
produced by Paramount. Paramount South Africa has been created so
that it can participate in the local market. Gauteng also has DCD Protected
Mobility which manufactures armoured cars in Boksburg, branded as
Vehicle Mounted Mine Detectors.
In nearby Benoni, BAE Systems
OMC designs and manufactures
protected vehicles.
Bell Equipment, which originated
in Richards Bay and still has a
large manufacturing facility there,
now claims 50 000 machines operating
in over 80 countries around
the world. Its articulated dump
trucks supply hundreds of mining
operations and it has over 100
other products.
Bell is in the process of transferring
production of its truck range
to its factory in Germany, which
will double in size to accommodate
the growing demand for trucks in
Europe and America. The shift will
not affect employment levels at
the Richards Bay site because Bell
started assembling Kamaz heavyduty
trucks in 2019 for the African
market. Kamaz, a Russian brand
that has won 14 Dakar rallies, is
known for its reliability in tough
conditions. Bell’s intention is to
increase the percentage of local
components over time.
Dezzi Equipment also makes
loaders, dump trucks and haulers
in KwaZulu-Natal, 300km south of
Richards Bay at Port Shepstone.
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OVERVIEW
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 industry itself
is looking to Africa for new markets.
By increasing total production numbers
to one-million vehicles, the
sector will be more viable.
The National Department of
Trade and Industry and Competition
(the dtic), working together with the
National Association of Automobile
Manufacturers of South Africa
(NAAMSA) has set targets for 2035
to increase production to 1% of
world volumes (which would mean
1.4-million more vehicles made in
SA), increasing local content and
doubling employment and blackowned
businesses in the sector.
The Eastern Cape manufactures
half of the country’s passenger
vehicles and provides 51% of
South Africa’s vehicle exports. The
sector accounts for over 40 000
formal sector jobs in the province.
Phase 1 in the construction process
of the vehicle assembly plant of
Beijing Automotive Group South
Africa (BAIC SA) was completed
in 2018. The total project involves
an investment of R11-billion. BAIC
expects to be building 50 000 vehicles
per year at its site at Coega
SEZ by 2022.
The decision in 2017 of General
Motors to disinvest from South
Africa has not had any knock-on effect.
The company’s sale of its plant
in Port Elizabeth was just one sale
of many around the world. Isuzu
has bought the factory.
In January 2018, Mercedes-Benz
South Africa (MBSA) started producing
the Mercedes-AMG C 63 S at its
East London factory, after an investment of R200-million. MBSA started
exporting record volumes in 2016 and has kept up the pace since then.
BMW South Africa has invested R6-billion in its Rosslyn plant to
manufacture the new BMW X3 model. Nissan is another big automotive
manufacturer with a plant at Rosslyn, north-west of Pretoria.
Gauteng is also home to a strong automotive components industry,
together with several bus and truck assembly plants. These include
Scania, TFM Industries and MAN Truck and Bus South Africa, as well as
the Chinese truck manufacturer FAW, which owns an assembly plant in
Isando. Bejing Automotive Works (BAW) assembles taxis at Springs.
In 2016, Toyota invested R6.1-billion into its massive 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
Corolla car, the Hilux bakkie and the Fortuner SUV are manufactured at
the plant.
Automotive components
South Africa has a sophisticated automotive components sector. The
catalytic converter sector experienced incredible growth for a number of
years but 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.
Tyre and glass manufacturers are clustered around the areas where
the automotive industry is active.
Tyre manufacturer and distributor Sumitomo Rubber South
Africa was established in 2014 and makes and sells brands such as
Dunlop, Falken and Sumitomo Tyre into Africa. 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
National Association of Automotive Component and Allied
Manufacturers: www.naacam.co.za
National Association of Automobile Manufacturers of South
Africa: www.naamsa.co.za
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OVERVIEW
Transport and logistics
A private-public partnership is upgrading facilities at ports.
Africa’s first plastic road is under construction near
Humansdorp in the Eastern Cape. Finding ways of creating
roads that can last longer is an important priority for South
Africa which has yet to find a way to direct significant amounts
of goods traffic back to the rail system and away from trucks. Scottish
company MacRebur will partner with local firms Scribante Construction
and SP Excel Holdings in building 1km of road to test the technology
which adds waste plastics to asphalt for road construction to strengthen
the bitumen binder. It is estimated that 1.8-million plastic bags could go
into the building of just 1km of road.
With the completion the Gauteng Freeway Project, the South
African National Roads Agency (SANRAL) has been tackling big
projects in every province:
• the R573 east of Johannesburg, traverses three provinces and
is used by 50 000 commuters daily, is to be upgraded
• the R1.14-billion Mount Edgecombe interchange has been
opened in KwaZulu-Natal
• the R71 road out of Polokwane towards Moria in Limpopo carries
more than 17 000 vehicles per day at Easter time. A new
intersection and double carriageways have been constructed
• the N2 between Mtunzini toll plaza and Empangeni has been
made safer by the creation of a dual carriageway
• the 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
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.
SECTOR INSIGHT
Plastic bags are being used
in road construction.
Air
Airports Company South Africa
(ACSA) owns and operates the
country’s 10 biggest airports. The
company also manages airports in
India and Brazil.
Ekurhuleni wants to leverage
the location of South
Africa’s biggest airport, OR
Tambo International, into a major
economic asset. OR Tambo
International Airport in Gauteng
(pictured) caters for more than
21-million passengers annually.
The Cape Town International
Airport recorded 10-million
passengers in 2016. King Shaka
International Airport (KSIA) is
north of Durban.
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OVERVIEW
Several airports are possible
future regional freight nodes:
Wonderboom Airport in Pretoria,
Polokwane Airport in Limpopo and
Mahikeng Airport in North West
Province.
The South African Department
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), the South African
National Roads Agency Limited
(Sanral) and the Passenger Rail
Agency of SA (PRASA).
Rail
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;
iron ore from Sishen in the
Northern Cape to the Port of
Saldanha; and from the coal fields
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.
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 stock) and an investment company
(focussed on rail infrastructure) underpin the group’s African
ambitions.
Logistics
South Africa’s largest agricultural company has signed an agreement
with Transnet to partner in upgrading grain facilities at two ports. East
London and Durban will receive R100-million revamps as part of a 15-
year tender won by Afgri.
The East London Grain Elevator is operating well below capacity,
processing about 90 000 tons a year. At full capacity, the elevator could
handle as much as 720 000 tons. Durban’s other two agricultural terminals
are currently run by Bidvest and SA Bulk Terminals. Transnet is
hoping that the partnership will help it towards reaching its goals in
its road-to-rail strategy.
The building of the Musina-Makhado Special Economic Zone (SEZ)
will boost Limpopo’s role as a transport and logistics hub. The Musina
Intermodal Terminal is 15km from the busy Beit Bridge border crossing.
It will boost efforts to move cargo from road to rail.
The Nkomazi SEZ near the border with Mozambique in Mpumalanga
has similar advantages as it forms part of the Maputo Development Corridor.
Investment in improved infrastructure is being made at all of South
Africa’s ports and Special Economic Zones are in place at four of them.
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.
ONLINE RESOURCES
Airports Company South Africa: www.acsa.co.za
National Department of Transport: www.transport.gov.za
Road Freight Association of South Africa: www.rfa.co.za
South African Association of Freight Forwarders: saaff.org.za
South African Heavy Haul Association: www.saheavyhaul.co.za
87 SOUTH AFRICAN BUSINESS 2020

OVERVIEW
ICT
Cloud services have come to South Africa.
Cape Town and Johannesburg recently became the first
South African cities to host Microsoft Azure data centres.
Microsoft will make available cloud services for Office 365
and Dynamics 365.
Amazon Web Services (AWS) will set up a data centre in Cape Town
in 2020 to serve Sub-Saharan Africa. The French government has officially
designated the city as one of six global French Tech Hubs.
The Industrial Development Corporation (IDC) estimates that spending
on cloud services in South Africa will reach R11.5-billion by 2022,
nearly three times its level in 2017 (Tech Central). This trend could
generate more than 100 000 new jobs. Acuity Consultants was quoted
in 2019 as saying that software developers’ salaries had risen by 30% in
a year (Business Times).
The Council for Scientific and Industrial Research (CSIR) in Pretoria
will host a new body aimed at preparing South Africa for the Fourth
Industrial Revolution (4IR), the South African Affiliate Centre of the World
Economic Forum.
Among the biggest investors in new technology are banks and other
players in the financial sector, where technology is rapidly lowering the
barriers to entry for new businesses.
The Small Enterprise Development Agency (Seda) runs the SoftstartBTI
ICT incubator in Midrand and Tuksnovation, a high-tech incubator, at
Pretoria University. Several incentives relevant to companies and educational
bodies in the ICT sector are available from the Department of
Trade, Industry and Competition (dtic).
The Information Technology Association (ITA) is the trade and employer
body of the Information Technology industry in South Africa.
The ITA represents more than 200 companies which supply information
technology equipment, systems, software and services. Members include
IBM, Microsoft SA, Siemens, SAP and Axiz.
South Africa’s appetite for fast Internet connectivity is growing. The
state-owned company Telkom controls most of the country’s fibre cable
ONLINE RESOURCES
Independent Communications Authority: www.icasa.org.za
Information Technology Association of South Africa:
www.ita.org.za
State Information Technology Agency: www.sita.co.za
Technology Innovation Agency: www.tia.org.za
SECTOR INSIGHT
IT skills are at a premium.
but several smaller private companies
are winning contracts to
lay fibre-optic cables around the
country.
Allowing access to the Internet
to rural people and poorer people
in urban areas is a policy priority.
As part of its mandate, the
Independent Communications
Authority of South Africa (ICASA)
has organised that private operators
have connected more than
623 schools.
Dark Fibre Africa, a Remgro
subsidiary, has established a Digital
Villages unit to roll out fibre in
low-income areas. Another company
in which Remgro has a stake,
Vumatel, plans to offer uncapped
broadband services in Alexandra
(Johannesburg) for less than R100
per month.
Private mobile communications
company Vodacom has pledged
to spend R50-billion on network
infrastructure in rural areas.
Vodacom is also developing
an affordable sheep-tracking
collar with farmers in the Eastern
Cape. There are 2 000 ICT firms
in the Western Cape, with 17 000
employees. The Cape Innovation
and Technology Initiative
(CiTi) supports startups and
entrepreneurs.
SOUTH AFRICAN BUSINESS 2020
88

Banking and financial services
New stock exchanges are attracting investors.
SECTOR INSIGHT
Discovery Bank has
been launched.
OVERVIEW
On top of the recent issuing of new banking licences, South
Africa’s financial services sector has also been enlarged
with the opening of several new stock exchanges. The
decision by pharmaceutical giant Aspen Pharmacare to
conduct a second listing on one of them, A2X, suggests good timing
by the people behind the latest trend.
A2X has attracted nearly 20 companies in a wide range of sectors in
less than two years, with a primary focus on secondary listings. Patrice
Motsepe’s African Rainbow Capital is an investor in A2X.
Of the four new exchanges, Equity Express Securities Exchange (EESE)
trades in Black Economic Empowerment (BEE) while ZARX and 4AX are
targeting companies that are not listed elsewhere. ZARX has agricultural
holding companies like TWK and Senwes among its first clients.
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.
The green bond issued by the City of Cape Town is a sign of the
“climate change” times. South Africa’s third-ever green bond attracted
bids over R4-billion on an initial offering on projects worth R1-billion.
The JSE intends opening a green section to deal with the expected
growth of such instruments. The lead arranger for the bond was Rand
Merchant Bank.
In 2017 Tyme Digital received a licence to run a bank. By early 2019,
TymeBank was available in 500 Pick n Pay and Boxer stores and more
ONLINE RESOURCES
Financial Sector Conduct Authority: www.fsca.co.za
Insurance Institute of South Africa: www.iisa.co.za
South African Institute for Chartered Accountants:
www.saica.co.za
South African Reserve Bank: www.resbank.co.za
than 50 000 customers had an
account. Tyme stands for Take
Your Money Everywhere and
refers to the fact that the bank
does not have a branch network.
The bank is targeting the lowerincome
segment and promises
speedy transaction and approval
times. African Rainbow Capital
began as the venture’s BEE
partner but in 2018 bought out the
Commonwealth Bank of Australia.
Second to market among the
country’s new banks was Discovery
Bank, which officially launched in
March 2019. Discovery Bank will
apply the behavioural model
it uses in its health business to
reward good financial behaviour.
The Discovery group is already a
giant on the JSE (market value of
R83-billion) with access to millions
of customers.
The insurance market
now offers a greater variety
of products to more market
segments, including middleincome
earners. An example of
a specific 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.
89 SOUTH AFRICAN BUSINESS 2020

OVERVIEW PROFILE INTERVIEW
Developing excellence
in the auditing industry
Natalie Khambi, Business Development Manager of Audit and
Risk Management Solutions (ARMS), gives an overview of the
company history.
Natalie Khambi, Business
Development Manager
How do you differentiate yourself as a company?
Audit and Risk Management Solutions (ARMS) is a 100% black-owned and
black-staffed company. We develop black entrants to the auditing industry
and are committed to prove that black excellence does exist. Our client list
built over 13 years of existence is testament to this.
What are your main services?
Our services include internal auditing, risk management, assurance and
advisory, forensic investigations as well as training.
Do you focus on particular sectors?
Currently our client base is predominantly the public sector; however, we
have made noticeable inroads into the private sector in the last year.
How was the company formed?
The founders met while working together at a university where one of them
was the Chief Financial Officer. They decided to start a company and couldn’t
get funding from the banks. They then set out to self-fund and gradually
grew the business to where it is now.
BIOGRAPHY
Natalie Khambi is the Business
Development Manager at ARMS
where her responsibilities include
managing a team of business
development consultants, stakeholder
relations, marketing and
communications. Natalie joined
the company in February 2018.
How important is the training component of the business?
Training is a very important part of our business. We grow our own talent
internally through training and mentoring new entrants. We also offer
training as a service to our clients to capacitate their organisations. Further
to this, we ensure that skills transfer is prioritised with each project that
we undertake.
Please list some clients you are working with/have worked with.
Some of our clients include National Treasury, City of Ekurhuleni, City of
Mbombela, Polokwane Municipality, the Department of Social Development,
just to mention a few.
SOUTH AFRICAN BUSINESS 2020
90

Audit and Risk Management
Solutions (ARMS)
OVERVIEW PROFILE
ARMS is a dynamic
South African auditing
firm founded by black
professionals with
a passion for transformation,
professionalism and upliftment
of previously disadvantaged
persons. The firm focuses
on servicing all spheres of
government and SMMEs in South
Africa. ARMS has established
its base of operations in
Gauteng with headquarters in
Johannesburg. ARMS assists
clients with all matters relating
to assurance, enterprisewide
risk management and
governance. The founders
and partners of this firm
bring decades of accounting
and auditing experience to
the business. This group of
professionals are leading the
company as it establishes a
reputation of providing high
quality professional services.
The value drivers that ensure
that we provide consistent highquality
service to our clients are:
• Client focus
• Utilising appropriately
skilled staff for each
assignment
• Rigorous staff selection
and development
• Innovation
• Developing in-depth
specialised knowledge
in each service area
• Competitive pricing
Our services
We provide the following services:
• Advisory & Assurance
• Internal Auditing
• Governance & Compliance
• Risk Management
• Specialised Training
• Special Investigations
• Performance Auditing
• Performance Management Systems and Support
• IT Auditing
• SCOA implementation, support & training
Clients include
• City of Johannesburg
• Johannesburg City Parks
• Greater Tzaneen Municipality
• Randfontein Local Municipality
• City of Tshwane
• City of Ekurhuleni
• City of Polokwane
• Eastern Cape Liquor Board
• Joe Gqabi District Municipality
• Mkhondo Municipality
• Department of Home Affairs
• National Heritage Council South Africa
CONTACT INFO
Address: 1st Floor, Block 9, St David’s Place PI, Parktown 2019
Tel: 011 484 1235 • Fax: 086 619 9887
Nkululeko Swana: 083 462 5606
Adv Boreka Motlanthe: 084 588 3820
Namhla Gogo: 078 213 0746
Email: info@armsaudit.co.za • Web: www.armsaudit.co.za
91 SOUTH AFRICAN BUSINESS 2020

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OVERVIEW
Development finance and SMME support
Supply chains can create and support small businesses.
SECTOR INSIGHT
Anglo American’s Zimele
celebrated 30 years in 2019.
Funding for more than 2 300 small, medium and microenterprises
(SMMEs) and support for 50 000 jobs – that’s what
Anglo American’s Zimele programme has achieved in 30 years
of supporting small businesses.
Most of the support came through the purchase of goods from small
businesses in the supply chain of Anglo mines or from companies supplying
services to the relevant mine. Zimele (which means “stand on one’s
own two feet”) changed focus somewhat in 2017, with more emphasis
being placed on building up skills and on improving the sustainability
of SMMEs.
Most big companies in South Africa have two main programmes to
support SMMES: enterprise development (ED) and local supplier development
(or procurement). Venetia Mine in northern Limpopo is a De Beers
Group mine. Anglo American is a majority shareholder in De Beers. As of
2019, more than 50 SMMEs had enrolled in incubation programmes, 27
businesses were supported by the mine’s ED programme and 34 locally
owned companies were doing business with the mine.
For Patience Nqaba of Ikefree Projects (pictured), the chance to offer
maintenance services to the Venetia Mine was an opportunity to take
her business to a new level. With 29 employees, Ikefree has subsequently
signed up with Nando’s (to deliver food) and with Tiger Brands, to maintain
the food company’s property.
One of biggest problems
faced by SMMEs is cash flow. Most
government departments have
rules about procurement which
are biased in favour of purchasing
from SMMEs or co-operatives.
However, for many South African
entrepreneurs, the inability or unwillingness
of government to pay
within 30 days presents a major
risk to sustainability.
Public procurement from
township enterprises from provincial
and municipal governments
SOUTH AFRICAN BUSINESS 2020
94

OVERVIEW FOCUS
in Gauteng, the province where
more than half of the country’s
SMMEs are located, increased
in 2017 to R17-billion, up from
just R600-million in 2014. This
expenditure has allowed many
township businesses to enter the
formal economy and for them to
become more sustainable. The City
of Johannesburg runs seven SMME
hubs where office space, Wifi and
advice and training are available for
small business operators.
South African Breweries, a
subsidiary of AB InBev, wants to
use its four entrepreneurship programmes
to create 10 000 jobs by
2022. In 2018, Coca-Cola Beverages
South Africa launched the Mintirho
Foundation, a R400-million fund
to pay for training of farmers and
support business in the agricultural
value chain.
Toyota South Africa Motors is
funding the newly created Toyota
Empowerment Trust (TET) to the
tune of R42-million. The trust will
at first train specialised automation
technicians with the long-term intention
of helping qualified technicians
to start their own maintenance
firms.
An Incubation Centre has
been launched at Nissan’s assembly
plant in Rosslyn, north of
Pretoria. The facility supports small
enterprises through subsidised
rental and mentorship and training.
Management of the centre is
done by the Automotive Industry
Development Centre (AIDC), a subsidiary
of the Gauteng Growth and
Development Agency (GGDA). The
Jobs Fund contributes to financing
the project.
A small business can become
a substantial business quite quickly
with the right support. Programmes such as the Black Umbrellas offer
different levels of support, from early advice about business plans
through office support to mentoring. Civtech Engineers, a Richards
Bay consultancy, has grown its revenue and staffing levels as a result
of being on the full incubation programme.
The National Department of Small Business Development (DSBD) has
several programmes to assist SMMEs and co-operatives. These include:
• The Black Business Supplier Development Programme,
a cost-sharing grant to promote competitiveness
• The Co-operative Incentive Scheme, a 100% grant.
The Small Enterprise Development Agency (Seda) is a subsidiary of
the DSDB. Seda has 42 incubation centres in South Africa under its Seda
Technology Programme (STP).
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.
The National Department of Trade and Industry and Competition
(the dtic) is trying to stimulate township and rural economies. Various
programmes within the dtic and its agencies contribute to the creation
of SMMEs or to the rescue of ailing SMMEs in tough times.
The Enterprise Investment Programme (EIP) has achieved considerable
success. Having received a grant in 2014, Thorax LP Equipment, a
100% black-women-owned company based in Gauteng, has subsequently
turned over more than R8-million and employed many young
people. A grant to Kalagadi Manganese in the Northern Cape helped to
create 8 857 jobs.
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. The emerging farmers of Vaal Community Citrus
are planting citrus.
ONLINE RESOURCES
Industrial Development Corporation: www.idc.coz.a
National Department of Small Business Development:
www.dsbd.gov.za
National Small Business Chamber: www.nsbc.org.za
Small Enterprise Development Agency: www.seda.co.za
95 SOUTH AFRICAN BUSINESS 2020

OVERVIEW INDEX
INDEX
Afrimat 9
Air Products
IBC
Audit and Risk Management Solutions (ARMS) 90
BCX IFC, 41
Brand South Africa OBC, 4, 19
Chartered Institute of Finance Audit and Risk Officers (CIGFARO) 35
Citiq Prepaid 63
Council for Geoscience (CGS) 48
ENERTRAG South Africa 65-67
Export Credit Insurance Corporation of South Africa (ECIC) 54
Exxaro Resources 46
Implats 39
Invest Durban 24
Kemtech 11, 83
Limpopo Economic Development Agency (LEDA) 26
Maritz Electrical 36, 78
Metropolitan 2, 92
Minerals Council South Africa 44
National Cleaner Production Centre of South Africa (NCPC-SA) 13
NOSA Testing 43
Palabora Mining Company (PMC) 50-53
Petroleum Agency SA 70
South African Mohair Industries Limited (SAMIL) 60
Unemployment Insurance Fund (UIF) 7
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