South African Business 2021

SOUTH AFRICAN
BUSINESS
2021 EDITION
THE GUIDE TO BUSINESS AND INVESTMENT
IN SOUTH AFRICA
JOIN US ONLINE
WWW.GLOBALAFRICANETWORK.COM | WWW.SOUTHAFRICANBUSINESS.CO.ZA

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BUY LOCAL
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Let’s come together and heal as a nation.
Let’s focus on Renewing, Restoring and Rebuilding
successful partnerships and investment opportunities so we
can get back to promoting our city as the ideal destination
for business and pleasure to the rest of the world.
Your support coupled with our world-class infrastructure,
innovative business environment and ever evolving
investment opportunities, means we can get back to
‘connecting continents’ in no time.
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Tel: +27 31 311 4227
Email: invest@durban.gov.za
web: invest.durban
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The city of
Durban (eThekwini
Municipality) is South
Africa’s second most
important economic
region
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Extensive first-world
road, rail, sea and air
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Dube
TradePort
and King
Shaka
International 1
Airport - 60-
year Master
Plan - driving
growth of
aerotropolis,
or airport
city
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Rated in top 5
‘Quality of Living’
cities in Africa and
Middle East by
Mercer Consulting in
2015
Named one of the
New 7 Wonders Cities
by the Swiss-based
New 7 Wonders
Foundation in 2014
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Coega fast-tracking
economic recovery
Cecilia Makiwane Hospital is a large,
provincial, government-funded hospital
situated in the Mdantsane township
of East London, Eastern Cape.
Coega’s expertise in Infrastructure Project Management will help South Africa fast-track
economic recovery amid the Covid-19 pandemic.
The Coega Development Corporation (CDC),
developer and operator of the number-one
Special Economic Zone (SEZ) on the African
continent, namely the Coega SEZ, provides
expertise in the fast and efficient delivery of minor and
mega complex infrastructure development projects
in South Africa and the rest of the African continent.
The CDC has a 20-year proven record in infrastructure
development and facilities maintenance.
“We can assist all government departments to
fast-track the implementation of their infrastructure
projects, amid the coronavirus pandemic challenges,
to stimulate the local economy, lift local SMMEs,
and create job opportunities.
“We are the infrastructure implementing agency
of choice in the country because of our cuttingedge
customised solutions, international best
practices and methodology. Coega has ISO-certified
systems and processes that guarantee
the effective delivery of the projects
within scope, time and budget. We
can even save our clients money through
our project accounting solutions. Our
record of unqualified audit opinion
by the Auditor General of South Africa
on our projects speak for itself,” said
Dr Ayanda Vilakazi, CDC’s Head of
Marketing, Brand and Communications.
Lusikisiki Village Clinic opened by
the President of South Africa, HE Cyril
Ramaphosa, in 2019.

The CDC’s Infrastructure Project
Management Services include:
• Project methodology and system.
• Development of reporting and monitoring
services.
Nolitha Kingsburgh Clinic Primary opened School, by the Honourable Premier
• Stakeholder analysis and engagement
of Lovu the Town, Eastern KwaZulu-Natal.
Nolitha Clinic op
Cape, Lubabalo Oscar Mabuyane,
programmes.
of the Eastern C
on 22 November 2019.
• Integrated planning and budgeting.
Eastern Cape Departments of Health. Furthermore, on 22 Novembe
• Development of business plans.
the CDC has worked with other clients outside of
• Procurement of service providers and required these Furthermore, departments to fast-track the CDC the implementation has worked
Nolitha Clinic opened Furthermor by Hon
equipment.
of their with projects. other These clients include, outside among others, of these
of the Eastern Cape, with Lubabalo other O
• On-the-job training and contractor development. Mpumalanga departments Economic Growth to on 22 fast-track Agency
November
(MEGA), the
• Human capital solutions.
Northern Cape Development Agency (NCEDA) department
2019.
implementation of their projects;
and
• Post-implementation monitoring and facilities Richards Bay SEZ.
implementa
these include, Furthermore, amongst others,
maintenance.
On the African continent, the CDC is taking these
CDC incl
Mpumalanga Economic full advantage of inter-Africa with trade, other which clients Growth
Mpumalang
has outs
The CDC’s infrastructure project expertise and strategic
solutions are utilised by various government Continental Development Free Trade Agency Area implementation (AfCFTA) (NCEDA), agreement and
Developmen of th
Agency (MEGA),
been made possible by the departments Northern Cape
signing of the African
Agency to fas ef (M
departments and the private sector, locally and in by Richards African countries Bay to promote SEZ. these greater On the include, economic African
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INFRASTRUCTURE the rest of the African continent. DEVELOPMENT
Richards amon B
INFRASTRUCTURE integration continent, DEVELOPMENT
across the continent. CDC Mpumalanga
To is this taking end, the full
PROJECTS: Our clients (left) include, Cecilia among Makiwane others, the Hospital
Eastern CDC’s International Business under Coega Africa
continent, Econom ca
PROJECTS: (left) advantage Cecilia Makiwane of the - Cape a large, and provincial, KwaZulu-Natal government-funded
Agency Hospital Inter-Africa (MEGA), trade,
Departments of Basic Programme is managing the implementation advantage Nor
of
- a large, provincial, which government-funded
has been th
hospital Education, situated Eastern Cape in the and Mdantsane National Departments
township
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hospital situated the in signing the Mdantsane of the of Public East London, Works and Eastern Infrastructure, Cape and in South National Africa;
and Republic and Cameroon, among Richards township Africa Free
other countries. Bay Trade
the ■SEZ. signing On
INFRASTRUCTURE of East DEVELOPMENT
London, Agreement Eastern Cape by in South African S
(right) and the Kingsburgh Primary School -
continent, Africa; countries the to
Agreement CDC is
PROJECTS: (left) (right) Cecilia and Makiwane the
Lovu Town - in KwaZulu-Natal.
promote Kingsburgh Hospital greater Primary economic School - integration
La Mercy Maths, Science and Technology (MST) Academy advantage in KwaZulu-Natal. of the Inter au
- a large, provincial, Lovu government-funded
Town - in across KwaZulu-Natal.
promote gre
Coega is an Infrastructure Implementing Agency. the continent. which To has this end, been the
hospital situated in the Mdantsane CDC’s township
across made the c
International the Business signing under
of
of East London, Eastern Cape Coega in South Africa;
CDC’s of the Inter Afric
Programme Agreement is managing
(right) and the Kingsburgh Primary School -
Coega by African
sp
the implementation of infrastructure
Lovu Town - in KwaZulu-Natal.
promote greater the implem econom
projects in Zimbabwe, across Central the continent. African
projects in
VTo
Z
Republic, and Cameroon, CDC’s International amongst
Republic, Bu
other countries.
Ba
Lusikisiki Village Clinic opened by the President
Coega Africa other Programm count
of South Africa, H.E. Cyril Ramaphosa,
Lusikisiki on 17
Village Clinic opened by the the President implementation of i
September 2019.
of South Africa, H.E. Cyril Ramaphosa, on 17
projects in Zimbabwe, C
September 2019.
Republic, and Camero Th
For more information on the CDC’s Project Management Services,
other countries.
M
For please more contact information our
Lusikisiki on expert
Village For the CDC’s in Infrastructure
Clinic more opened information by Project Management Project
the President on the CDC’s Project Managem
Management,
of South Africa, H.E. Cyril Ramaphosa, on 17
Services, Mr. Chuma please Mbande INFRASTRUCTURE
please contact
contact on:
our expert in Infrastructure
DEVELOPMENT
our expert in Infrastructure Project M
September 2019. Mr. Chuma Mbande on:
•
Project Management, PROJECTS: Mr Chuma Mbande. La Mercy Maths, Science
For more information on the CDC’s Project Management Services
and
please
Technology
contact our
(MST)
expert in
Academy
Infrastructure
in
Email: chuma.mbande@coega.co.za
Project Management •
Tel:
KwaZulu-Natal.
+27 Mr. 43 Chuma 711 1600 Mbande Coega on: is an Infrastructure
Fax: +27 43 721 0210
E-mail: chuma.mbande@coega.co.za
Telephone: +27 43 711 1600
E-mail: chuma.mbande@coega.co.za
Implementing Agency.
BBBEE LEVEL 2 CONTRIBUTOR
Fax: +27 43 721 0210
Telephone: +27 43 711 1600 ISO 9001:2015 ISO 14001:2015 ISO 45001:2018
PRETORIA OFFICE
Fax: +27 43 721 0210
ISO 20000-1:2011 ISO 27001:2013
•
PRETORIA Address: OFFICE: 145 Herbert Road, East Wood,
145 Herbert Road, East Wood, Arcadia,
PRETORIA OFFICE:
www.coega.co.za
Pretoria, Arcadia, 0083
Pretoria 0083
145 Herbert Road, East Wood, Arcadia, •
Telephone: Tel: +27 12 +27 451 12 8300 451 8300
Pretoria, 0083
The Coega E-mail: Development chuma.mbande@coega.co.za
Telephone: +27 12 451 Corporation
8300
Telephone: +27 43 711 1600
•
BBB
Fax: +27 43 721 0210
ISO 9001:201

CONTENTS
CONTENTS
South African Business 2021 Edition
Introduction
Foreword 8
A unique guide to business and investment in South Africa.
Special features
An economic overview of South Africa 10
Building a more sustainable future while reducing debt will
require great skill from the country’s leaders.
Provinces of South Africa 16
A snapshot of South Africa’s nine provinces.
Building infrastructure is a
presidential priority 22
Projects worth R340-billion have been gazetted
for implementation.
The Maritime Economy offers blue
water opportunities 32
Contribution to GDP could rise to R177-billion by 2033.
Economic sectors
Agriculture 40
Berry production is up as exports rise.
Mining 44
Exploration is the next frontier.
Energy 56
Solar and wind projects are regularly coming onstream.
ICT 61
Data centres are booming.
Oil, gas and petrochemicals 62
Exploration for gas off the south-eastern coast is hotting up.
SOUTH AFRICAN BUSINESS 2021
4

SABS_SA-Bus.Journal_09/2020
SABS - 75 Years of dedication to Quality Compliance
The South African Bureau of Standards supports the industrialisation effort of the dtic.
SABS has an established network of national, regional and international partners that
develop technical solutions adopted as South African National Standards (SANS), this
in return enables business and government to:
Improve the quality of products and services
Enhance competitiveness and access to markets
Ensure that procurement of products and services meet quality standards
Improve the delivery of services underpinned by best practice
and support policy and regulatory objectives
SABS provides services to assist the implementation of best practice solutions
• More than 7000 South African National Standards
• Laboratory Testing Services for a diverse range of Products
• Certification of Companies to Management System Standards
• Certification of Products and the Application of the SABS Mark Scheme
• Training of Management and Employees on Implementations of SANS
• Local Content Verification for South African manufacturing industry
SABS a Trusted Partner in Delivering Quality Assurance.
Contact SABS to establish support for your Standardisation,
Testing, Training and Certification Aspirations.

CONTENTS
Water 66
Infrastructure spending will have to be consistently high.
Engineering 70
Many engineering groups are selling off assets.
Construction and property 72
Logistics property is strongly placed for growth.
Manufacturing 74
TFG plans to double manufacturing capacity..
Food and beverages 76
Starch mills are changing hands.
Automotive 78
The automotive sector makes up a third of
South Africa’s manufacturing capacity.
Transport and logistics 80
Decongestion of ports is a priority.
Tourism and events 82
The MICE sector faces special challenges.
Banking and financial services 84
Investors are getting behind fintech.
Development finance and SMME support 86
A new fund aims to make R5-billion available at a fair price.
References
Key sector contents 38
Overviews of the main economic sectors of South Africa.
Index 88
ABOUT THE COVER:
Sasol One at Sasolburg was established in
1950 and converted from coal gasification
in 2004. It now uses more efficient natural
gas in its production processes of products
such as ammonia, ammonium nitrate,
catalyst, ethylene, mining chemicals,
phenolics, solvents and wax. With more
than 25 000 employees, Sasol is a global
integrated chemicals and energy company
active in 33 countries.
SOUTH AFRICAN BUSINESS 2021
6

FOCUS
FOCUS
reliability The reliability of forehead of forehead infrared infrared
thermometers in South in Africa South Africa
blic can check The public with the can National check with Metrology the National Institute Metrology of South Institute Africa. of South Africa.
e screening The of people screening using non-contact of people using The non-contact National Metrology The National Institute Metrology of South Institute of South
hermometers has thermometers become one of has the become Africa one (NMISA), of the has established Africa (NMISA), a platform has established where a a platform where a
any striking images many to come striking out images of the to come Team of out Experts, of the representing Team of Experts, the relevant representing public the relevant public
ovid-19 crisis in South Covid-19 Africa. crisis in South Africa. entities as well as private entities calibration as well as laboratories,
private calibration laboratories,
d (forehead) Infrared thermometers (forehead) are thermometers widely are able are to widely review and are able provide to review reliable and responses provide reliable responses
creen people used for to high screen fever, people one for of the high fever, to topical one temperature of the to topical screening temperature related questions. screening related questions.
s of the coronavirus, symptoms of to the identify coronavirus, people to identify A video people on temperature A video screening on temperature is available screening is available
be infected that thereby may be reducing infected the thereby risk reducing and the the Team risk of Experts and the can Team be of contacted Experts can at: be contacted at:
ing the virus of spreading workplaces, the virus schools in workplaces, and www.nmisa.org/Pages/Temperature.aspx.
schools and www.nmisa.org/Pages/Temperature.aspx.
as. Since an public elevated areas. temperature Since an elevated does temperature does
lusively indicate not conclusively a Covid-19 indicate infection, a Covid-19 About infection, NMISA About NMISA
edical evaluation further medical is necessary evaluation to is Mandated necessary by to the Measurement
Mandated by the Measurement
if a person determine is infected. if a person is infected. Units and Measurement
Units and Measurement
Standards Act, 2006, Standards NMISA Act, 2006, NMISA
provides for the accuracy provides and for the accuracy and
international recognition international of recognition of
local measurement local results. measurement results.
This enables trade, This component enables trade, component
manufacturing, legal manufacturing, acceptance legal acceptance
of measurement of results measurement for results for
law enforcement, law accurate enforcement, accurate
measurement in environment
measurement in environment
and safety, and is and crucial safety, for and is crucial for
healthcare. healthcare.
NMISA is part of the NMISA Department is of of the Trade, Department of Trade,
Industry and Competition’s Industry (the and dtic) Competition’s family of the (the dtic) family of the
Technical Infrastructure Technical (TI) Institutes, Infrastructure which (TI) also Institutes, which also
includes the South includes African Bureau the South of Standards African Bureau of Standards
ver, many questions However, have many been questions raised by have (SABS), been raised National by (SABS), Regulator National for Compulsory Regulator for Compulsory
s about the businesses reliability of about the measurement
the reliability of the Specification measurement (NRCS) Specification and the South (NRCS) African and the South African
btained results from such obtained thermometers. from such thermometers.
National Accreditation National System Accreditation (SANAS) that System (SANAS) that
ctors influence Several the factors accuracy influence of these
accuracy together of provide these for together confidence provide in local for goods confidence and in local goods and
ment results, measurement including results, the type including of products the type and allows of products for successful and allows prosecution for successful in prosecution in
t used, the instrument accuracy of used, the thermometer accuracy of the cases thermometer of non-compliance. cases of ■non-compliance. ■
through (obtained calibration), through the measurement
calibration), the measurement
followed, procedure ambient conditions, followed, ambient etc. conditions, etc.
details Contact details
12 841 4152Tel: + 27 12 841 4152
fo@nmisa.org Email: info@nmisa.org
: www.nmisa.org Website: www.nmisa.org
RICAN BUSINESS
SOUTH AFRICAN 2021 BUSINESS 202156
56

FOREWORD
South African Business
A unique guide to business and investment in South Africa.
Credits
Publishing director:
Chris Whales
Editor: John Young
Managing director: Clive During
Online editor: Christoff Scholtz
Designer: Simon Lewis
Production: Lizel Olivier
Ad sales:
Gavin van der Merwe
Sam Oliver
Jeremy Petersen
Gabriel Venter
Vanessa Wallace
Shiko Diala
Administration & accounts:
Charlene Steynberg
Kathy Wootton
Printing: FA Print
Welcome to the ninth 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.
This issue has a focus on economic recovery plans which
have been put in place to tackle the challenges thrown up
by the global Covid-19 pandemic. National government’s
focus on infrastructure and the use of Special Economic
Zones is highlighted, together with a feature on the nascent
maritime economy. 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.
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 23 000.
In 2020, the inaugural African Business joined the Global
African Network stable of publications. ■
Chris Whales
Publisher, Global Africa Network Media | Email: chris@gan.co.za
DISTRIBUTION
South African Business is distributed internationally on outgoing
and incoming trade missions, through trade and investment
agencies; to foreign offices in South Africa’s main trading
partners around the world; at top national and international
events; through the offices of foreign representatives in
South Africa; as well as nationally and regionally via chambers
of commerce, tourism offices, airport lounges, provincial
government departments, municipalities and companies.
COPYRIGHT | South African Business is an independent publication
published by Global Africa Network Media (Pty) Ltd. Full copyright to
the publication vests with Global Africa Network Media (Pty) Ltd.
No part of the publication may be reproduced in any form without
the written permission of Global Africa Network Media (Pty) Ltd.
PHOTO CREDITS | Africamps at Ingwe, Amatola Water, AngloAmerican,
Betterect,Buckler’s Africa Lodge, Council for Geoscience, Data Centre
Map, De Beers Group, ELIDZ, Equites, 5M2T, Fortress Fund, Implats,
Khobab Wind Farm, Nissan, Perdekraal East Wind Farm, Port of Cape
SOUTH AFRICAN BUSINESS 2021
Town, SA Furniture Forum, SA Heavy Haul Association, SANRAL, SASOL,
THEGIFT777/iStock, TNPA, Tongaat Hulett, Utopia_88/iStock.
.
DISCLAIMER | While the publisher, Global Africa Network Media (Pty) Ltd,
has used all reasonable efforts to ensure that the information contained in
South African Business is accurate and up-to-date, the publishers make no
representations as to the accuracy, quality, timeliness, or completeness of
the information. Global Africa Network will not accept responsibility for any
loss or damage suffered as a result of the use of or any reliance placed on
such information.
8
PUBLISHED BY
Global Africa Network Media (Pty) Ltd
Company Registration No: 2004/004982/07
Directors: Clive During, Chris Whales
Physical address: 28 Main Road, Rondebosch 7700
Postal address: PO Box 292, Newlands 7701
Tel: +27 21 657 6200 | Fax: +27 21 674 6943
Email: info@gan.co.za | Website: www.gan.co.za
Member of the Audit Bureau
of Circulations ISSN 2221-4194

Early engagement with
the private sector is vital
INTERVIEW
Jason Lightfoot, Portfolio Manager at Futuregrowth, assesses the latest moves to
attract the private sector to invest in infrastructure.
What is constraining infrastructure investment in South Africa?
The concern is that a lot of noise has been made previously around
government’s infrastructure plans which have in few instances
resulted in real opportunities for investors to play a role. Many of these
issues have been around policy certainty and also ensuring that such
projects actually reach a level of bankability for such investors to make
an investment that will offer a proper risk-adjusted return. Perhaps this
time is different with the recent engagement with the private sector.
Jason Lightfoot
BIOGRAPHY
Jason is the Portfolio Manager of the
flagship Futuregrowth Infrastructure
& Development Bond Fund, as well
as the Yield Enhanced ALBI benchmarked
range of portfolios. In addition,
he plays a mentoring role within
the Credit team and is involved in
various aspects of risk assessment
within the investment process.
Do you mean the Sustainable Infrastructure Development
Symposium of South Africa (SIDSSA)?
This is a step in the right direction. It crowds in potential private sector
investors in a much more coordinated manner and includes them in
assessing how these various initiatives can be funded.
Why is gross fixed capital formation an important benchmark?
This measure captures how much money as a proportion of total
economic activity is being invested in capital goods, such as
equipment, tools, transportation assets and electricity and various
measurable outputs of these. The extent of infrastructure spending
in an economy is reflected in the level of gross fixed capital formation
(GFCF) as a percentage of Gross Domestic Product (GDP) which is an
important precursor of economic growth.
What can be learnt from the Renewable Energy Independent
Power Producer Procurement Programme (REIPPPP)?
Before capital market players invest, they need to have confidence
that the policy environment is stable and that such potential
investments will offer sufficiently attractive risk-related returns. To a
great extent, the Renewable Energy Independent Power Producer
Procurement Programme (REIPPPP) met these criteria, enabling the
private sector to play an important role. REIPPPP is an important
success story.
Of the major infrastructure projects being discussed at the
moment, which are the most significant?
Energy generation remains of utmost importance in an environment
where a massive strain on the system remains and the launch of
Emergency Procurement round of up to 2000MW will address that. ■
41 9
SOUTH AFRICAN BUSINESS 2021

AN ECONOMIC OVERVIEW OF
SOUTH AFRICA
Building a more sustainable future while reducing debt will require
great skill from the country’s leaders.
By John Young
Build back better has become the new
catchphrase. There is a lot of building to
do for the South African economy after
two recessions, a decade of looting of state
resources and a health crisis that all but shut down
the economy for several months.
The Chief Executive Officer of the
Johannesburg Stock Exchange, Leila Fourie,
wrote in June 2020 that she wants to “contribute
towards a better, fairer, more sustainable
world” (Business Day). As co-chair of the Global
Investors for Sustainable Development (GISD)
Alliance, a grouping of banks, bourses and asset
managers, Fourie has been working to promote
investment in Covid-19 bonds, the Sustainable
Development 500 fund and renewable energy.
This kind of thinking informs many of the plans
that were put forward by business, labour and
political parties as the Covid-19 lockdown served
to focus the minds of all South Africans about the
need to plot a better way forward. The National
Economic Development and Labour Council
(Nedlac) came up with an agreement which
focussed on infrastructure investment, creating a
supportive policy environment and the promotion
of “strategic localisation” and exports. An umbrella
business body, Business for SA (B4SA), identified
12 initiatives which, if accompanied by policy
reforms, would boost the economy significantly.
The African National Congress (ANC) produced its
own economic recovery document.
Having consulted with all these bodies,
President Cyril Ramaphosa on 15 October
revealed government’s recovery plan. The
Economic Reconstruction and Recovery Plan
(EcoRRP) names infrastructure investment and
building up the country’s manufacturing base as
priorities. The plan intends to unlock R1-trillion in
private investment. Furthermore, a commitment
is made to improving the capability of the state
SOUTH AFRICAN BUSINESS 2021
10

SPECIAL FEATURE
and to remove barriers to doing business or
investing in the country.
Soon afterwards, Finance Minister Tito
Mboweni announced the medium-term budget
policy statement where the most significant
promise related to reducing the state’s wage
bill. Mboweni is a former Reserve Bank Governor
and Labour Minister. The President is a former
miner and trade unionist. Both men have been
engaged for years in drafting the economic policy
of the ANC but it remains to be seen if they can
persuade the unions representing workers in the
public sector to accept a three-year freeze on
wage increases. This will be a major test because
South Africa’s debt to GDP ratio is high. The cost of
servicing debt is equal to nearly 14% of revenue.
A step that President Ramaphosa took in
July did not receive many headlines, but his
amendment of the regulations governing the
enquiry into state capture made a big difference
to the work of the National Prosecuting Authority
(NPA). Enabled by the amendment to work with
the evidence presented to the commission,
prosecutors quickly finalised cases and arrests
started happening. After a decade in which
it seemed that immunity was guaranteed for
corrupt officials and employees of state-owned
enterprises, the tide started to turn.
Prosecutions obviously do not provide
certainty against future corruption, but at least
the prospect of arrest might be a deterrent. One
of the biggest obstacles to economic recovery
is South Africa’s level of debt, and that is caused
largely by the state electricity utility, Eskom,
where corruption was rife for years.
The government’s directory lists 131 stateowned
entities but there are said to be about 700
altogether, at various levels of government. The
three biggest, all of which fall under the Department
of Public Enterprises, are Eskom, South African
Airways (SAA) and Transnet, with five large divisions
covering ports, railways and logistics. Eskom and
SAA are significant drains on the country’s finances
and getting control of all of the country’s SOEs is
another major priority.
Agriculture was one industry that saw
some positives during the Covid-19 lockdown.
Although sectors like wine suffered badly, a
reported increase in maize exports, as well as
greater international demand for citrus fruits and
pecan nuts, helped the industry expand by 15%
(StatsSA). Grain crops such as maize, wheat, barley
and soya beans are among the county’s most
important crops. Only rice is imported. Wine, corn
and sugar are other major exports.
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.
New economic sectors
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 oilrigs which could
potentially bring work to its ports.
The introduction of renewable energy into the
South African energy market via the Renewable
Energy Independent Power Producer Procurement
Programme (REIPPPP) was successful but the
programme stalled.
Hopes were raised with the publication of
a new Integrated Resource Plan (IRP) because
investors crave certainty. 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.
South Africa’s traditional strength in minerals
still holds good. Although gold mining is
declining in volumes (even while prices rise), the
major investment of Vedanta Zinc International
in a project in the Northern Cape and Sibanye-
11
SOUTH AFRICAN BUSINESS 2021

SPECIAL FEATURE
New roads such as this link to the North West from Gauteng are important parts of infrastructural
development. Credit: SANRAL
Stillwater’s acquisition drive in the platinum group
metals (PGM) sector are significant economic
drivers. Coal and iron ore continue to be exported
in large volumes through the Richards Bay
Coal Terminal on the east coast and the Port of
Saldanha on the west coast.
Automotive manufacturing and automotive
components continue to thrive, with large
investments by most of the major marques and
increased exports a feature of the sector. There
has been inward investment in recent years, most
notably by the Beijing Automotive International
Corporation (BAIC) in the Coega Special Economic
Zone outside Port Elizabeth. The Tshwane
Automotive Special Economic Zone (TASEZ) has
been launched at Silverton in Pretoria.
A new SEZ has been formally declared in the
northern part of Limpopo, the Musina-Makhado
SEZ. The Namakwa SEZ in the Northern Cape
is awaiting its licence, as is the Tubatse SEZ in
eastern Limpopo.
Geography
South Africa’s location between the Atlantic and
Indian oceans ensures a generally temperate
climate. The 2 954km coastline stretches from the
border with Namibia on the Atlantic to the border
with Mozambique in the east. The cold Benguela
current sweeps along the western coast while the
warm Indian Ocean ensures that the Mozambique/
Agulhas current is temperate.
South Africa’s coastal plain is separated from
the interior by several mountain ranges, most
notably the Drakensberg which runs down the
country’s eastern flank. Smaller ranges in the
south and west mark the distinction between the
fertile coastal strip and the dry interior known as
the Karoo.
The city of Johannesburg is located on the
continental divide, whereby water runs south of
the city towards the Atlantic Ocean while waters
to the north drain towards the north and east.
Johannesburg is 1 753m above sea-level.
Most of the country has summer rainfall but
the Western Cape, which has a Mediterranean
climate, receives its rain in winter. Droughts
are not uncommon and although the national
average is 464mm, most of the country receives
less than 500mm of rain every year. The Western
Cape experienced a severe drought which was
broken in 2018. The Orange and Vaal rivers play
important roles in water schemes and irrigation
and the Limpopo River defines the country’s
northern boundary. ■
SOUTH AFRICAN BUSINESS 2021
12

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

Why Invest
in Space
OUR IMPACT is derived from our national capacity, experience
and expertise in space science and technology through six thematic focus areas:
• Earth Observation - SANSA collects, assimilates and disseminates
Earth observation data to support South Africa’s policy making,
economic growth and sustainable development initiatives. Earth
observation data is used for human settlement growth mapping,
infrastructure monitoring, as well as disaster and water resource
management. Earth observation satellite data contributes to
monitoring environmental variables in the water cycle such as
water quantity, quality, soil erosion and vegetative health which
ensures water safety and security for the country.
• Space Operations - SANSA provides global competitive space
operations and applications, tracking, telemetry and command
services while managing ground stations for international clients.
Space Operations provides world class launch support for space
missions (from Earth into our solar system) and ensures satellites
are continuously monitored when they are travelling over African
skies.
• Space Science - SANSA conducts cutting edge space science
research, development and magnetic technology innovation.
Space science research is vital for gaining a deeper understanding
of our space environment in order to protect essential
infrastructure such as power grids and communication and
navigation systems on Earth and in space. SANSA operates the
Space Weather Regional Warning Centre for Africa, providing
forecasts and warnings on space weather conditions. Extreme
space weather may impact technological systems such as
satellites, power grids, avionics and radio communication.
• Space Engineering – SANSA aims to provide access to state-ofthe-art
satellite assembly, integration and testing services, as well
as satellite systems coordination and development, to ensure
an environment conducive to industrial participation in satellite
programmes.
• Human Capital Development - SANSA aims to advance human
capital development to grow the knowledge economy and
create awareness about opportunities in engineering, science and
technology. This is achieved through scarce skills development,
summer and winter schools, the supervision of MSc and PhD
students, and teaching at partner universities.
• Science Advancement and Public Engagement - SANSA
promotes science advancement and public engagement through
participation in national science awareness events and through
using the fascination of space to drive a greater uptake of studies
in science, maths, engineering and technology.

SANSA
provides stateof-the-art
ground
station facilities and
services including
satellite tracking, launch
support, mission
control and space
navigation.
SANSA monitors
the Earth’s magnetic
field and space weather
storms to assist in
protecting technology
on Earth and in space.
Satellite imagery
helps manage food
and water security as
well as natural disasters
on Earth like floods,
droughts and fires.
In a country faced with numerous challenges in
housing, crime, poverty and the provision of basic
necessities, you may ask why invest in space?
The answer is clear.
Space investment is essential
for economic sustainability
and development!
Without space applications we would not be able to mitigate
disasters or effectively manage our resources such as water, food, land
and housing. Mobile phones, internet, GPS, ATMs, meteorological
forecasting and safe land and sea travel all rely on satellites positioned
in space. Government, industry and academia also rely on space
data to deliver on their priorities through the creation of applied
knowledge, products and services.
SANSA provides value-added products and services that are utilised
in both space and non-space applications. Space information
enables everyday decision making at all levels of society. SANSA has
contributed towards goals within the National Development Plan
(NDP) and the goals of the Department of Science and Technology
(DST) by delivering products and services to its stakeholders and the
public.
South Africa’s next earth observation satellite is an example of one of
these deliverables and is also one of the incredible opportunities to
showcase the importance of investment in space science, engineering
and technology and for South Africa to take its place in the global
space arena.
@SANSA7
South African National Space Agency
South African National Space Agency
Enterprise Building, Mark Shuttleworth Street, Innovtion Hub, Pretoria, 0087
T: 012 844 0500 | F: 012 844 0396 | information@sansa.org.za | www.sansa.org.za

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 2021 2020 16 20

SPECIAL
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
17 SOUTH AFRICAN BUSINESS 2021
SOUTH AFRICAN BUSINESS 2020
21

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 2021 2020 18 22

An ExtrAordinAry
BusinEss EvEnts dEstinAtion
northern Cape, south Africa
An award winning business and incentive destination, this ageless land offers
a seamless fusion of first world technologies and infrastructure with ancient
authentic cultures, dramatic natural beauty and awesome adventure. This is
the Northern Cape. Now come and experience it for yourself…
For more information do visit
www.experiecenortherncape.com
businessevents@experiencenortherncape.com
Northern Cape Tourism @NorthernCapeSA northerncapetourism northerncapesa

FOCUS
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
SOUTH AFRICAN BUSINESS 2021
20 23 SOUTH AFRICAN BUSINESS 2020

Gert Sibande
District Municipality
A national leader in job creation through the EPWP programme.
PROFILE
Executive Mayor Councillor
Muzi Chirwa
Gert Sibande District
Municipality received
an unqualified audit
opinion from the
Auditor-General for the 2018/19
financial year for the second
consecutive year. Running a
clean municipality in terms
of financial management and
governance has been a priority
for the current administration
since coming into office in 2016.
Gert Sibande District
Municipality (GSDM) has a
comprehensive and credible
Integrated Development Plan.
The 2020/21 IDP document is
in line with the Municipal
Systems Act which makes
community participation in
the affairs of the municipality a
legal obligation. The municipality
has been consultative
and transparent in its approach.
GSDM cannot govern alone; the developmental agenda must be
determined by residents.
The impact of Covid-19 has put a huge strain on the economy.
Having been placed as a leading district in South Africa in terms
of job creation through the EPWP programme, GSDM commits to
grow this programme and to find more innovative ways to create
sustainable and dignified jobs. Further interventions are planned in
the agricultural and forestry sector, informal traders, construction,
manufacturing, mining and the tourism industry as we rejuvenate
our economy and the realise the economic freedom for our people.
Gert Sibande District Municipality is the largest of the three
districts in Mpumalanga Province at 31 841km², covering 40% of
the province’s land mass. According to Stats SA, Gert Sibande’s
population increased from 1 043 194 in 2011 to 1 135 409 people in
2016. This makes it the smallest district in population.
Name of Local Main Admin Area Population
Municipality Location (km²) Size (2016)
Chief Albert Luthuli Carolina 5 559 187 630
Dipaleseng Balfour 2 616 45 232
Dr Pixley Isaka Ka Seme Volksrust 5 227 85 395
Govan Mbeki Secunda 2 955 340 091
Lekwa Standerton 4 585 123 419
Mkhondo Piet Retief 4 882 189 036
Msukaligwa Ermelo 6 017 164 608
Vision
A community-driven district of excellence and development.
Mission
To support and coordinate our local municipalities to provide
excellent services and development.
Contact details
Tel: +27 17 801 7000
Email: records@gsibande.gov.za | Website: www@gsibande.gov.za
Follow us on Facebook & Twitter @GertSibandeDM
105 21
SOUTH AFRICAN BUSINESS 2021

SPECIAL FEATURE
Building infrastructure is a
presidential priority
Projects worth R340-billion have been gazetted for implementation.
young people will be employed to digitise
government information, including hospital
files and police dockets.
• Student accommodation.
• SA Connect Phase 1B, broadband expansion.
Richards Bay SEZ.
The two central planks of the South African
government’s post-Covid rebuilding
programme are infrastructure and
industrialisation.
To promote and monitor the first priority, an
Investment and Infrastructure Office has been
created in the Presidency. It is headed by the
former Gauteng MEC for Economic Development,
Dr Kgosientso Ramokgopa. In 2020 national
government gazetted 51 priority infrastructure
projects, with a total investment value of more than
R340-billion.
Sectors targeted for intervention include energy,
housing, transport, water and sanitation, agriculture,
agro-processing and digital infrastructure. Some
of the “special projects” that fall outside sector
categories include:
• Rural pedestrian bridges and rural roads.
• Energy and water savings on government
buildings.
• Digitising of government information: 10 000
A reconstituted Council of the Presidential
Infrastructure Coordinating Commission met
for the first time in July 2020. With President
Cyril Ramaphosa in the chair, the commission
includes national ministers, provincial premiers,
mayors of big cities and representatives of the
South African Local Government Association.
Where the council intends doing things
differently is by paying close attention to:
• Preventing corruption through transparent
tender processes and strong due diligence.
• Community involvement in planning and
implementation.
• Emphasis on local employment and procurement
and targeted involvement of SMMEs.
• Blended financing through the Infrastructure
Fund to mobilise more resources from the
private sector, multilateral development banks
and development finance institutions.
A World Bank report has shown that a 10%
increase in infrastructure spending results in a
1% growth in GDP. A study carried out by KMPG
for the Gauteng Province found that spending
on infrastructure resulted in additional economic
activity worth R26-billion in the province and
created 92 000 direct jobs.
In the country’s biggest province in
terms of economic activity, the Provincial
Government of Gauteng spent R30-billion on
infrastructure between 2013 and 2016. The
Gauteng Infrastructure Master Plan is expected
to account for expenditure of about R1.8-trillion
over a 15-year period.
SOUTH AFRICAN BUSINESS 2021
22

SPECIAL FEATURE
Special Economic Zones
A key component of the strategy to boost the value
of the country’s products is to develop infrastructure
where manufacturing can take place, namely
Special Economic Zones (SEZs) and industrial parks.
Each province has been allocated SEZs that
play to regional strengths. Described as “major
catalytic projects” for the northern province of
Limpopo, the Musina-Makhado SEZ (MMSEZ), the
proposed Tubatse SEZ and several industrial parks
are central to the strategy of expanding Limpopo’s
manufacturing capacity.
As of February 2020, Shaanxi CEI Investment
Holdings had committed to a $5-billion investment
in a vanadium and titanium smelter project at
the MMSEZ and a further $1.1-billion had been
pledged from other sources. The first-phase focus
is on energy and metallurgical processes but agroprocessing,
logistics and general manufacturing are
expected to follow.
In the Pretoria area, already home to several
Original Equipment Manufacturers (OEMs), the
Tshwane Automotive Special Economic Zone
(TASEZ) has been launched. It is a joint project of
the Gauteng Province, the Department of Trade,
Industry and Competition, and the City of Tshwane.
The implementing agent is the Coega Development
Corporation (CDC), the developer and operator of
the Coega Special Economic Zone (SEZ).
The Coega SEZ is at the Port of Ngqura near Port
Elizabeth and it too has an automotive component,
recently strengthened by the large investment of
the Beijing International Automobile Corporation
(BIAC). East London’s Industrial Development
Zone (ELIDZ) has many companies that sell to and
service the nearby Mercedes-Benz plant while both
coastal SEZs have a strong suite in logistics and are
planning expanded aquaculture parks.
Energy is a key infrastructural requirement for
the growth of any economy, and SEZs are playing
a role. The Coega SEZ has been named as the site
for one of two liquefied natural gas (LNG) plants to
be built (if partners can be found) in terms of the
national gas-to-power plan.
The Richards Bay Industrial Development
Zone (RBIDZ) in KwaZulu-Natal is the other site
Gauteng Premier David Makhura visited the Nissan
plant at Rosslyn in 2020.
designated for an LNG plant, with the capacity
planned for 2 000MW. RBIDZ is also the location
of a new biomass plant.
The OR Tambo SEZ in Gauteng underscores
Ekurhuleni’s strengths in manufacturing and
logistics. The OR Tambo SEZ has launched the
biggest food processing operation in the southern
hemisphere (and the world’s second-largest
refrigeration plant). With a special focus on exportoriented
value-added industry, the OR Tambo SEZ
leverages its connection to the country’s busiest
airport. The focus of this SEZ is on agro-processing,
jewellery manufacturing and mineral beneficiation
as well as the development of hydrogen fuel cell
technology. The SEZ is a subsidiary of the Gauteng
Growth and Development Agency (GGDA).
Two of the largest infrastructure projects in
South Africa’s history have unfortunately been
delayed and are running over budget. National utility
Eskom set out to build two huge power stations in
Mpumalanga (Kusile) and Limpopo (Medupi). Both
are near existing power stations and should have a
stable supply of coal.
Eskom committed to completing Medupi in
2020 and intends finishing Kusile by 2023. Medupi
will be able to feed 4 764MW into the South African
power grid when in full commission. Kusile will have
a capacity of 4 800MW and will be the fourth-largest
coal-fired power station in the world. It will also the
first in South Africa to use flue-gas desulphurisation
(FGD), a technology that removes oxides of sulphur,
such as sulphur dioxide, from exhaust flue gases. ■
23 SOUTH AFRICAN BUSINESS 2021

FOCUS
Ready to get behind government’s
ambitious infrastructure programme
Jason Lightfoot, Portfolio Manager at Futuregrowth, explains how private capital
can be mobilised to support infrastructure projects.
In a world in which the government and central
bank have several means available to stimulate
the economy, infrastructure spend is a powerful
anti-recessionary fiscal policy tool.
However, in South Africa economic growth has
been constrained by lower levels of investment in
infrastructure than in other developing economies,
which has been exacerbated by specific issues
such as ageing infrastructure and infrastructure
bottlenecks. The Covid-19 crisis and the fiscal
support needed to alleviate the damage done
to businesses and the most vulnerable citizens
as a result of the lockdown could also put the
government’s future infrastructure ambitions at risk.
The extent of infrastructure spending in an
economy is reflected in the level of gross fixed
capital formation (GFCF) as a percentage of
Gross Domestic Product (GDP). The measure
captures how much money as a proportion of
total economic activity is being invested in capital
goods, such as equipment, tools, transportation
assets and electricity and various measurable
outputs of these.
South Africa’s reported GFCF has been
historically low, with the exception of the build-up
to the FIFA World Cup in 2010. Latest statistics show
GFCF as a percentage of GDP was 18.19% in 2019,
which is considered far too low for a developing
economy. Several studies consider an acceptable
norm to be in the region of 30% to 35% of GDP.
South Africa’s GFCF ratio also has some way
to go before it will achieve the target in the
government’s National Development Plan of
30% by 2030. While assessing this, it is important
to note that a country’s current debt level does
have a bearing on its ability to fund infrastructure
initiatives – and South Africa’s government
debt burden doesn’t bode well for the country’s
infrastructure funding capacity.
When you include guarantees to State-Owned
Enterprises (SOEs), the government’s debt-to-
GDP ratio is expected to rise to well above 100%
compared to the average emerging market level
of around 45%. A debt-to-GDP level of more than
twice as large as the average emerging market
means that the South African government will have
very little scope to fund large-scale infrastructure
and developmental initiatives and thus the burden
will fall elsewhere.
Although there are historical reasons for this high
debt-to-GDP burden, the government’s finances
have also been stretched by the social and
economic measures it has needed to put in place
to alleviate the economic fallout from Covid-19.
A fiscal rescue package of R500-billion will add
to the already high debt burden and economic
lockdowns have already resulted in lower levels of
revenue generation, putting the government in a
difficult position fiscally.
If the environment is right, private investors
are ready
Banks, as well institutional investors, are no
strangers to fulfilling a funding role but have
become more apprehensive about doing so,
given the government’s governance, financial and
operational SOE failures.
While the various developmental finance
institutions need to fulfil a specific role when it
comes to industrial policy, economic development
and providing credit-enhancing capital, capital
market players need to have confidence that
the policy environment will remain stable and
that potential investments will offer sufficiently
attractive risk-related returns.
To a great extent, the Renewable Energy
Independent Power Producer Procurement
SOUTH AFRICAN BUSINESS 2021
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FOCUS
Programme (REIPPPP) met these criteria, enabling
the private sector to play an important role,
committing about R200-billion to the programme
to date. REIPPPP is seen as an important success
story, particularly in respect of the impressive
implementation role that the Independent Power
Producers Office played in that programme.
Unfortunately, the success of this programme
has not been emulated in other sectors
and there hasn’t been a coordinated approach
to address the other necessary infrastructure
investments until now. That may change with the
Investment and Infrastructure Office set up by
President Cyril Ramaphosa. The government
gauged private sector investment appetite
recently when it presented various project
pitches for various sectors deemed a priority
to the broader market, as a precursor to
the inaugural Sustainable Infrastructure
Development Symposium of South
Africa (SIDSSA). Sectors the government
has identified as in need of infrastructure
investment include energy, digital
infrastructure, water and sanitation, human
settlement, agriculture and transport.
The government’s latest engagement
with the private sector is a step in the right
direction. It crowds in potential private sector
investors in a much more coordinated manner
and includes them in assessing how these various
initiatives can be funded.
It is encouraging that the government is
engaging with capital market participants during
the conceptual stage of some of these projects
because it will allow concerns to be addressed
earlier and thereby potentially ensure a much
higher success rate.
Breaking out of SA’s low-growth trap
Although the range of projects is wide, there are
several significant ones that could change the
South African landscape to the benefit of all. From
a digital perspective, infrastructure investment
in broadband fibre connectivity could provide
peri-urban (townships) and rural communities,
which have been traditionally underserviced, with
affordable access to broadband connectivity.
The infrastructure initiatives under consideration
could be important contributors to
getting South Africa out of its current low-growth
trap. Although the estimated R1.5-trillion needed
to fund the projects over the next decade is a tall
ask, the private sector is ready to fund them as
long as they are well structured and managed,
that investors are compensated for the risks that
they are taking and that they ultimately have
policy certainty.
Futuregrowth is an investor in the Khobab Wind Farm.
Futuregrowth
Futuregrowth has been a long-standing
institutional investment partner in infrastructure
and developmental finance, funding projects for
close on 24 years. It manages the largest debt
fund of this nature in Sub-Saharan Africa, the
Futuregrowth Infrastructure and Development
Bond Fund, which has a market value of more
than R15-billion. It has funded various transactions
over the last two decades to the benefit of all
South Africans – and will continue investing in
projects that provide the impetus the domestic
economy needs to lift its economic growth rate to
sustainable levels in the future, while earning riskadjusted
returns. ■
FUTUREGROWTH ASSET MANAGEMENT IS A LICENSED FINANCIAL SERVICES PROVIDER
43 SOUTH AFRICAN BUSINESS 2021
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FOCUS
The game-changer:
Musina-Makhado
Special Economic Zone
Revitalising the Limpopo economy through industrialisation.
The Economic Reconstruction and Recovery
Plan outlines immediate actions to rebuild
the national economy and to provide
jobs and relief to the South African people.
These actions include an aggressive infrastructure
programme, far-reaching reforms to increase our
competitiveness and inclusiveness, measures to
catalyse industrialisation, relief for vulnerable
households and individuals, and a public investment
in employment programmes. This plan is a
response to a severe economic contraction unlike
any we have experienced in recent memory. South
Africa is not alone in experiencing an economic
crisis of this depth and extent. Unemployment has
risen across the world and nearly every economy
has shrunk. As President Cyril Ramaphosa has noted,
“It is true that the measures that were necessary
to delay the spread of the virus and prevent deaths
led to a sharp decline in economic activity.”
The strategic geographic location of the
Musina‐Makhado Special Economic Zone (MMSEZ)
and its close proximity to the main land‐based
route into SADC and the African continent,
together with supporting incentives and a good
logistics backbone, will make it the location of
choice for investment in mineral beneficiation,
agro‐processing industries, manufacturing and
logistics. This will provide job opportunities to the
people of Limpopo province currently in need of
jobs and skills development. The establishment of
the metallurgical cluster in close proximity to the
source of raw materials, along with a logistics hub
in the SEZ with access to markets, presents unique
opportunities for mineral beneficiation, which is a
key priority of national government.
Genesis of the MMSEZ
Following the enactment of the Special Economic
Zones Act, the Limpopo provincial government
submitted a comprehensive proposal on strategic
areas for consideration to develop the province’s
economy through industrialisation to the
Department of Trade, Industry and Competition
(dtic). The dtic designated the MMSEZ, which has
become the flagship of the provincial government.
Subsequently, the Musina-Makhado State Owned
Company (SOC), a subsidiary of the Limpopo
Economic Development Agency was established.
This entity is tasked with the responsibility of
facilitating and managing the planning and
development of the MMSEZ.
MMSEZ business case
The essence behind the creation of the MMSEZ
is the establishment of a new industrial hub in
the Vhembe District Municipality, which forms
part of the Trans‐Limpopo Spatial Development
Initiative, situated at two locations, Makhado and
Musina, each with its own unique industrial focus.
The energy and metallurgical cluster (power plant,
SOUTH AFRICAN BUSINESS 2021
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24

FOCUS
LEDET MEC Thabo Mokone, MMSEZ Executive
Manager: Investment Promotion Richard Zitha and
MMSEZ CEO Lehlogonolo Masoga.
steel plant, stainless steel plant, coking plant, pig
iron plant, ferromanganese plant, ferrochrome
plant, chrome plating, lime plant, ferromanganese,
silicon-manganese and calcium carbide plants and
vanadium-titanium magnetite plant) is located on
the Makhado side and the Northern Site in Musina
is focussing on general manufacturing, agroprocessing
and logistics.
“The MMSEZ has positioned itself as a
platform to revitalise the Limpopo economy
through industrialisation. Our focus is to generate
much-needed base-load electricity, establish a
metallurgical complex, develop a manufacturing
hub, enhance agro-processing and to develop a
regional logistics centre. The close proximity of
chain. The beauty of the MMSEZ lies in the
diversity of opportunities across sectors both at
the downstream and upstream with backward and
forward linkages. The North-South Corridor makes
the Musina-Makhado location a strategic passage
for trade between South Africa and the rest of the
Artistic Impression of the MMSEZ.
the Beit Bridge border post and the abundance of
mineral and agricultural resources gives the MMSEZ
a competitive advantage,” says Lehlogonolo
Masoga, MMSEZ Chief Executive Officer.
The MMSEZ SOC has another critical
responsibility of attracting and mobilising both
domestic and foreign direct investment in the
identified industrial activities across the value
SADC region and the African continent, further
given impetus by the Africa Continental Free Trade
Agreement. Limpopo Province has always enjoyed
a niche of being a gateway to the rest of Africa
as a home to one of the busiest ports of entry,
Beit Bridge Border Post. The development of the
MMSEZ becomes an ideal platform to cement this
strategic socio-economic position of the province.
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FOCUS
Agro-processing potential
Vhembe Region is the food basket of Limpopo
province as it is endowed with various agricultural
resources. some of which are sought after
in lucrative world markets. Exotic fruits and
vegetables are available in abundance, which
creates a viable potential for agro-processing of
value-added products for domestic consumption
and export markets. Food production has over
the years become a multi-billion industry that
requires the creativity of entrepreneurs to exploit.
Complemented by logistics support, the agroprocessing
cluster of the MMSEZ is destined to
become a big success over the next few years.
Various opportunities exist within the agroprocessing
cluster such as food processing,
fresh-produce handling, dry-fruits packaging,
food canning, timber processing, furniture
manufacturing, etc.
Manufacturing within the automotive sector
South Africa has established itself as the
powerhouse of the automotive industry in
Sub-Saharan Africa. Over 10% of the vehicles
manufactured in South Africa are supplied by
road via the Beit Bridge Border post to markets
to the north of South Africa in the SADC region.
This window of opportunity makes the MMSEZ
an ideal location for various opportunities across
the automotive sector value chain such as vehicles
and components manufacturing, storage and
distribution hub, after-care products distribution
hub, tyre manufacturing and distribution hub,
etc. The manufacturing cluster of the MMSEZ will
provide a platform for various Original Equipment
Manufacturers to manufacture products in
the SEZ for both domestic consumption and
export markets in Africa and beyond. A strategic
opportunity exists for manufacturers of products
such as fertilisers, agro-chemicals, industrial
chemicals, steel fabrication, etc.
Sustainable development
The South African Constitution enjoins us to pursue
economic development in a sustainable manner
and preserve the environment for the benefit of
current and future generations. Section 24 states
that everyone has the right to an environment that
is not harmful to their health or well‐being and to
have the environment protected for the benefit of
present and future generations, through reasonable
legislative and other measures, that prevents
pollution and ecological degradation, promotes
conservation and secures ecologically sustainable
development and the use of natural resources
while promoting justifiable economic and social
development. This constitutional provision is
supported by the National Environmental Act
(NEMA) which provides that negative impacts on
the environment and on people’s environmental
rights must be anticipated and prevented, and
where they cannot be altogether prevented, are
minimised and remedied.
Our country aspires to be a sustainable,
economically prosperous and self‐reliant nation
state that safeguards its democracy by meeting
the fundamental human needs of its people,
managing its limited ecological resources
responsibly for current and future generations, and
by advancing efficient and effective integrated
planning and governance through national,
MEC of Limpopo Economic Development Environment
and Tourism, Thabo Mokone (left) and MMSEZ
CEO Lehlogonolo Masoga at the launch of the MMSEZ
Corporate Identity. Credit: MMSEZ
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FOCUS
Artistic Impression of the MMSEZ.
regional and global collaboration. Our application
for the environmental impact assessment
(EIA) was guided by the above fundamental
values, principles, directives and the entity’s
environmental, social and governance (ESG)
policy provisions. We recognise that sustainable
development and sustainable use and exploitation
of natural resources are at the core of the
protection of the environment.
The months of September and October 2020
were dedicated to a public consultation process
for the EIA application for the South site, energy
and metallurgical cluster. The outcome of the EIA
process indicated that the benefits of the MMSEZ
will potentially promote justifiable economic and
social development although a negative impact
upon the environment will become inevitable.
The ultimate goal of the EIA process is to protect
ecologically sensitive areas and support sustainable
development and the use of natural resources,
whilst promoting justifiable socio-economic
development in the location of the project. In our
endeavour to ensure the effective implementation
of the mitigation and management actions,
an environmental management plan has been
developed to provide mitigation measures
necessary to ensure that the project is planned,
constructed, operated, and decommissioned in an
environmentally responsible manner.
The Draft EIA Report identified and assessed
all the potential impacts of the project as well
as the proposed mitigation measures and
management actions. Various specialist studies
have been conducted beyond the approved
EIA scoping report which included the aquatic
impact assessment, ecological impact assessment,
heritage impact assessment, palaeontology /
archaeology impact assessment, soil and land
capability assessment, visual impact assessment,
climate change assessment, air quality assessment,
socio-economic assessment, noise impact
assessment, health impact assessment, traffic
impact assessment, water assessment, high-level
energy study, economic analysis, biodiversity
study, biodiversity offset study, biodiversity offset
strategy, waste impact assessment, town-planning
29 27 SOUTH SOUTH AFRICAN BUSINESS 2020/21 2021

FOCUS
Artistic Impression of the MMSEZ.
impact assessment, tourism and food
security study, security of water study,
energy requirement study and energy
generation technology options.
Integrating SMMEs within
the SEZ
Special Economic Zones are
predisposed to attract foreign direct
investment which could translate into
blue-chip international enterprises
locating in the zone. Although it is a
good thing to attract international
companies to locate in the SEZ,
this should not happen at the
expense of local enterprises. Skills
and technology transfer forms an
integral part of the essence of the SEZ
phenomena. In the MMSEZ, SMME
promotion and integration is inherent
to the business model. An instrument
has been developed in the form of
an Enterprise Development Strategy
to mainstream SMMEs development
into the life cycle of the MMSEZ.
The strategy is supported by an
ambitious programme to develop
an SMME Incubation Centre as
a platform for entrepreneurship
excellence, creativity and skills and
technology localisation.
The MMSEZ is partnering with
the Department of Small Business
Development to roll out this magnificent
initiative. During the month
of October 2020, a Memorandum
of Agreement was concluded with
the Council for Scientific and Industrial
Research (CSIR) to collaborate
on supporting SMMEs in the
MMSEZ and ensuring technology
localisation through various initiatives
across sectors.
Lehlogonolo Masoga
has been a driving force
behind the development
of the MMSEZ.
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FOCUS
Developing small towns into cities
The MEC of Limpopo Economic
Development Environment and Tourism
(LEDET), Thabo Mokone, stated on the
occasion of the launch of the MMSEZ
Corporate Identity, “We are pleased that
finally the province has established a
capable and agile entity seized with a
mandate to implement the MMSEZ.
Our ambition is not just to build an
industrial park but rather to use the SEZ
as a catalyst to unlock a plethora of other
economic opportunities, including the
potential of realising a new Smart City in
our province.” It is our anticipation that
the MMSEZ as a mega-industrial project
will transform the spatial configuration of
the two towns of Musina and Makhado.
According to the external masterplan
report, the two towns requires an
investment of R133-billion in socioeconomic
infrastructure such as roads,
rail, human settlement, schools, health
facilities, ICT infrastructure, airport,
electricity, water and sewerage.
Catalytic projects such as the envisaged
High-Speed Rail Project connecting Johannesburg
and Musina will add the much-desired impetus
of engendering the creation of a new smart city.
The province is currently developing a model
for a new smart city based on the principles of
smart economy, smart mobility, smart housing,
smart environment, smart governance, artificial
intelligence and the internet-of-things. With the
creation of opportunities for local people to earn a
decent income, entrepreneurs to create wealth and
investment in socio-economic infrastructure, such
conditions will lay a solid base for the new smart
city to take shape.
Investment opportunities outside the zone
SEZ projects are by their nature catalytic. They
stimulate growth and development which is felt
outside the delimited geographic space. In Musina
and Makhado towns various stimulus packages
have been identified as investment opportunities
for the private sector outside the confinement of
the SEZ spaces. Among such opportunities are
the new Musina Dam, High Speed Rail Project,
Manaledzi Mega Housing Project in Makhado,
Musina Airport, MMSEZ human settlement, private
hospital, private schools and training centres, retail
property and hotels.
The launch of the MMSEZ Corporate Identity.
It is for this reason, among others, that the
Musina-Makhado Special Economic Zone is “a
world of game-changing opportunities”. ■
CONTACTS
MUSINA-MAKHADO SEZ SOC
29 Market Street,
Polokwane,
Limpopo Province (RSA)
www.mmsez.co.za
MR SHAVANA MUSHWANA
Marketing and
Communication Manager
Tel: +27(0) 15 295 5120
Cell: +27 (0)66 173 8957
Shavana.Mushwana@lieda.co.z
MR RICHARD ZITHA
Executive Manager:
Investment Promotion
Tel: +27(0) 15 295 5120
Cell: +27 (0)71 391 8188
Richard.Zitha@lieda.co.za
29 31 SOUTH SOUTH AFRICAN AFRICAN BUSINESS 2020/21 2021

SPECIAL FEATURE
The Maritime Economy offers
blue water opportunities
Contribution to GDP could rise to R177-billion by 2033.
Richards Bay is the site of South Africa’s largest coal export terminal.
Rarely does a country have an opportunity
to start a new sector from scratch, let
alone two. When the Renewable Energy
Independent Power Producer Procurement
Programme (REIPPPP) began in 2011 to find new
sources of electricity, a strong new economic
sector came into being.
In eight years, investment totalling R209.4-billion
was committed to the energy programme by local
and foreign entities. If anything, the potential of the
Maritime Economy, sometimes called the Oceans or
the Blue Economy, is even greater.
The anticipated numbers are impressive. The
share of the Maritime Economy to South Africa’s
gross domestic product (GDP) will by 2033 grow by
upwards of 250% (and perhaps as much as 350%)
compared to its current value, to a figure between
R129-billion and R177-billion. A million new jobs are
expected to be created.
In every field South Africa either has existing
infrastructure or is in the process of creating or reviving
it: ship-building and repairs, oil rig maintenance, oil
and gas operations, port operations, logistics, marine
engineering and bunkering.
South Africa’s eight ports are run by the stateowned
group Transnet, which has a strategic plan for
each port to focus on its strengths. Transnet spent
R2.5-billion on new port equipment in 2019/20.
On the west coast, Saldanha is the main
port for the export of iron ore. Large industrial
operations already exist and the Saldanha Bay
Industrial Development Zone (SBIDZ) is set to
become a hub for maritime repair activities and oil
rig maintenance and repair.
About 1 800km to the east and five degrees
further north, Richards Bay Coal Terminal (RBCT)
is South Africa’s primary export portal. Although
volumes dipped somewhat to 72.1-million tons
in 2019, the fact remains that the infrastructure
is in place to support expansion of aspects of the
Maritime Economy through the Richards Bay Special
Economic Zone (RBSEZ).
Sectors under investigation include alternative
energy generation and opportunities in the gas
sector. A feasibility study is being done on a gas-topower
plant and a large liquid petroleum gas import
and storage terminal was recently built for Petredec
by Bidvest Tank Terminals.
Saldanha Bay can offload Very Large Crude
Carriers as can the Port of Durban, which is Africa’s
busiest port. Durban handled more than 81-million
tons of cargo in 2019, which included 2.84-million
SOUTH AFRICAN BUSINESS 2021
32

SPECIAL FEATURE
TEUs (twenty-foot container equivalent). The
Durban Car Terminal handled 521 280 vehicles
(Africa Ports & Ships). Durban is responsible for
about 60% of the total volume of containers
handled by the country’s ports.
The Port of Durban is home to many maritime
companies. EBH SA has been in marine engineering
and ship repair since it began as Elgin Brown and
Hamer in 1878. Three South African shipbuilders
(SAS, Damen Shipyards Cape Town and Nautic
Africa) have agreed to pool resources on contracts
to become more competitive.
The KwaZulu Cruise Terminal (KCT) consortium
won the contract from TNPA to finance, build and
run the new Durban Cruise Terminal.
The Port of Cape Town has also launched a
dedicated cruise-ship terminal. A renewed focus
on ship repair through facilities such as the Sturrock
and Robinson drydocks is on the cards for the Port
of Cape Town, which has a diverse offering through
its Container Terminal, Multipurpose Terminal,
Liquid Bulk Terminal and Fresh Produce Terminal.
Drilling off the southern coast has revealed vast
resources in the Brulpadda field in the Southern
Outeniqua Basin. If some of this gas can be recovered,
the two SEZs on the Eastern Cape coast would
become critical to its utilisation. The Port of East
London is aligned to the East London Industrial
Development Zone while Port Elizabeth has two ports,
the city port being joined by the Port of Ngqura which
anchors the Coega Special Economic Zone.
R700-million have been made. The Coega Special
Economic Zone is planning a 440ha Aquaculture
Development Zone to accommodate new
projects. One possibility is to promote import
substitution, for example, with salmon, of which
South Africa currently imports more than 5 000
tons every year.
The allocation of commercial fishing rights in
12 sectors that was due to happen in 2020 has
been postponed to December 2021. It is likely
that the quotas of larger fishing companies will be
reduced in favour of small-scale fishing companies.
There have been several changes in ownership
in the fishing industry, most likely linked to the
upcoming determination of new fishing rights
in which black shareholding will be a factor. The
acquisition by black-controlled Sea Harvest Group
of Viking Fishing is part of a larger trend.
Tiger Brands has unbundled its 42% stake
in Oceana Group. Oceana holds the popular
pilchards brand Lucky Star, which enjoys 80% of
market share in South Africa, and has the highest
market value of fishing companies in South
Africa. The Oceana Group recently purchased
Foodcorp’s fishing rights and a US fishmeal and
oil company, Daybrook. ■
Fishing
South Africa has 3 000km of coastline and the extent
of the country’s territorial waters is greater than its
land size. About half of the fish that South Africans
eat is caught locally, and almost all of that comes
from the waters off the Western Cape. The two most
popular types of fish are hake and sardines, which
are harvested by deep-sea trawlers.
The fishing industry earns R3.4-billion in foreign
earnings annually and employs 26 500 people
across 22 sectors, the main ones being deep-sea
trawling and aquaculture (JSE).
The aquaculture industry is currently small, but
since 2014 investment commitments of about
Work underway at Durban’s drydock facilities.
33 SOUTH AFRICAN BUSINESS 2021

POSITIVELY IMPACTING LIVES
Now more than ever before the Oceans Economy will be one of the key
pillars on which the South African economy of the future will be rebuilt.
The Ocean, or Oceans Economy,
is positioned within the South
African Government’s National
Development Plan (NDP) as a
key driver of economic activity and
growth which will help eliminate
widespread poverty and inequality
by 2030.
As Africa’s largest fishing company,
and home to the South Africa’s
iconic brand, Lucky Star, Oceana
is focused on protecting the
integrity of the country’s marine
ecosystems, promoting sustainable
employment opportunities, and
contributing to the country’s food
security.
Oceana believes that South Africa’s
more than 3 000km of coastline
along a major international
strategic shipping route presents
the perfect platform for sustainable
and long-term usage of our oceans
and coastline for responsible
growth and development and
shared prosperity.
A sustainable oceans economy
incorporating both the traditional
and newer industries such as
fishing and maritime transport,
allied to newer sectors such as
marine tourism, renewable energy,
aquaculture and marine
biotechnology, have the potential
to meet the needs of all peoples,
particularly those who make up
rural coastal communities who
have borne the brunt of poverty.
From humble beginnings in the
tiny West Coast fishing village of
Lamberts Bay when the Lamberts
Bay Canning Company Ltd was
established in 1918, Oceana has
over the course of the last century
grown to be a leading global fish
protein company and Africa’s
largest fishing company. Oceana
is ranked among the top 5 most
empowered companies on the
Johannesburg Stock Exchange and
listed on the Namibian Stock
Exchange as well.
The Group operates in South
Africa, Namibia and the
USA and markets fish-based
products in 46 countries
across the world.
The fishing industry estimates that
it accounts for 20 000 direct jobs
and a further 60 000 indirect jobs
across the economy in South
Africa, where the Group continues
to drive economic empowerment,
real transformation and
environmental stewardship for
current as well as future
generations.
Government launched Operation
Phakisa (“hurry up” in Sesotho)
in mid-2014 to spur sustainable
economic growth across key areas
in a bid to address poverty,
inequality and unemployment.
The Oceans Economy was one of
seven targeted sectors, and listed
six priority areas including offshore
Oil & Gas, Aquaculture, the
further development of Small
Harbours, Coastal and Marine
Tourism, Marine Transport and
Manufacturing & Marine
Protection Services & Ocean
Governance.
The fishing sector was not included
as one of the key priority areas
under the Oceans Economy despite
its significant socio-economic
contribution which is estimated
at over R14 billion a year.
The fishing sector is far more
established than some of the newer
maritime industries punted under
Operation Phakisa but this does
not mean that fishing is not a key
contributor and enabler to
national imperatives of economic
growth, job retention and creation,
and sustainable economic
development, particularly in

coastal areas and communities
where unemployment and
underdevelopment are chronic
issues.
The commercial fishing sector,
of which Oceana is an important
stakeholder, makes a socioeconomic
contribution of Rl4.3
billion per annum, employing in
excess of 20 000 people directly
and a further 60 000 indirectly,
and has an annual spend of over
Rl billion in developing and
supporting around 2 000 SMMEs
all across South Africa.
The sector is also noted for its
capital intensive nature and, as
such, lists fleet and processing
facilities valued at over R13,5
billion, with further capital
investments of R7,5 billion over
the last 15 years.
The sector furthermore can speak
to demonstrable transformation,
having moved from one of the
most untransformed sectors into
one of the most transformed.
Under Apartheid only 1% of
commercial fishing rights were
held by black South Africans,
but black ownership has grown
and has continued to rise, from
35% in 2004 to over 75% currently.
Oceana operates 11 factories
across the world and also manages
a fleet of 54 vessels and 8 cold
storage facilities.
The Oceana Group works hard
to empower communities and
contribute to environmental
sustainability throughout all the
communities in which the
company operates.
Oceana is also committed to
job security, investing in skills
development, and bringing new
technologies to bear to support
and uplift coastal communities.
The Group is working hard to
drive positive transformation
in fishing to ensure that the small
scale fishing sector participates
in and contributes towards the
broader economic development
of South Africa by creating better
job opportunities, shared
prosperity and enabling sustainable
development in coastal
communities.
While the commercial fishing
industry is well transformed in
terms of broad ownership, here
is still a need for greater
transformation at participation
levels.
Continuity through certainty and
long-term stability provides the
platform for significant further
growth and economic
development and it is imperative
that all stakeholders work together
with a unified sense of purpose.
A fully transformed commercial
fishing industry is key to unlocking
economic development in South
Africa because the fishing value
chain offers enormous
opportunities for inclusive growth
and employment and enterprise
development in coastal
communities.
At Oceana, we believe that
any company that is afforded
the right to fish must prove
their tangible commitment to
converting these rights into
broad-based social and
economic benefits.
This should at all times be done
in a sustainable and inclusive
manner. As such, the company
launched the Oceana
Empowerment Trust (OET) in
2006 to unlock and convert the
value of harvesting fishing rights
into shared, broad-based value
for eligible black South African
employees.
The OET has a 10% shareholding
in Oceana with a market value
of almost Rl-billion, making the
Trust the largest 100% black-owned
fishing entity in South Africa in
terms of ownership value.
As of September 2019, 2 447
beneficiaries had received over
R400 million through the Trust,
allowing them to become
financially empowered and active
participants in South Africa’s
formal economy.
The Oceana Group will also
continue to play its part in skills
development as it is vital for
South Africa and the greater
continent’s growth.
Oceana’s interventions are
premised on the fact that holistic
skills development is central to
enabling young people and women
in particular to be active economic
participants and not mere
bystanders.
Oceana recognises that the
development of the small scale
fishing sector and the enhancing
of skills in this area is paramount
to longer term success, to empower
individuals and communities to
participate to a greater degree in
the formal economy, but crucially,
also creating the opportunities
and platforms to support and
meet these ambitions.
Communities need to move
beyond just survival mode to a state
where they are empowered enough
to become agents of economic
change, where dignity is restored
and long-held dreams fulfilled.
I am confident that we have a
sustainability strategy that enables

us to convert fishing rights into
shared value and continue to
deliver social and environmental
dividends to society.
Areas of potential growth include
marine science, engineering,
vessel crewing, supply chain,
artisans, food safety and supply
of vessels and related equipment.
Oceana invested R28.3 million
in skills development in South
Africa and Namibia in 2019 and
offered leamerships, internships
and graduate programmes to
empower the youth.
A key part of the Oceana Group’s
strategy in terms of empowerment
and greater participation in the
Oceans Economy is the Oceana
Maritime Academy which will be
launched and fully operational
in the first quarter of 2021.
Oceana has launched this exciting
initiative with an initial R40
million capital investment and
will spend R35 million a year on
fishing sector skills and training
with a particular focus on small
scale fishers.
The state-of-the-art facility in the
Hout Bay harbour precinct is an
investment in the future of the
South African and international
fishing industry, being the only
academy in South Africa that
focuses exclusively on the needs
of the fishing industry, both small
scale and commercial.
Seeking to address the scarce and
critical skills shortage in the
industry, the Oceana Maritime
Academy will offer world-class,
accredited and industry relevant
maritime skills and training that
will provide the industry with new
talent while enabling small scale
fishers to fish more productively,
profitably and sustainably.
The Academy will draw attendees
from the local Hout Bay
community, the small scale fishing
sector from all over South Africa,
Oceana Group employees, as well
as anyone interested in a career
in the fishing industry, and offer
training in a broad range of skills.
This shared value initiative will
not only strengthen the Oceana
business and the talent pipeline
pool for the entire industry, but
will help build a stronger, more
prosperous and equitable country.
While Oceana’s strength lies in
fishing, with its core business
being the catching, procuring,
processing, marketing and
distribution of canned fish,
fishmeal, fish oil, horse mackerel,
hake, lobster & squid, the Group
has a diversified portfolio of
operations which extend to the
provision of refrigerated
warehouse facilities and logistical
support.
Oceana markets and sells close
to 300,000 tons of fish and fish
products in 46 countries in Africa,
North America, Asia, Europe and
Australia and as part of further
diversification in the Blue
Economy, is seeking to move into
longer term sustainable fish supply
in aquaculture.
Oceana views the Oceans Economy
as a key driver of sustainable
economic growth, job creation
and food security, yet the Group
remains fully committed to
protecting the integrity of the
country’s marine ecosystems.
Yet fishing is but one way in which
the Oceana Group is seeking to
empower the communities in
which it operates.
Through the Group’s flagship
brand Lucky Star, the company
has partnered with the West
Coast Business Development
Centre (WCBDC) to assist aspirant
and existing business owners
in the small West Coast towns
of Laingville, Steenberg’s Cove,
Stompneusbaai, Velddrif and
Lamberts Bay.
Lucky Star provided the WCBDC
with the building to be able to
provide its services to the St Helena
Bay community, resulting in the
WCBDC in 2019 assisting almost
200 entrepreneurs with a variety
of services.
Oceana recognises that the Small
and Medium-sized Enterprise
(SME) sector will be one of the
key drivers of economic growth
and development and employment
in years to come and therefore is
an active enabler and supporter
through initiatives such as interestfree
loans, training and
infrastructure support, which
seek to unlock the inherent
potential in this sector, particularly
for rural coastal communities.
At Oceana, we believe that
by working together, the
glaring inequalities which so
blight South Africa’s beautiful
landscape, can be overcome
and we can create a country
where opportunity, inclusivity
and prosperity for all can find
a home.

SPECIAL FEATURE
Main ports, controlled
and managed by
Transnet National Ports
Authority
Facilities Key cargo/function Plans
Saldanha
Slipways, quayside
facilities (Mossgas
Jetty). Fabrication
facility (FerroMarine
Africa).
Iron ore.
Industrial Development
Zone. Oil and gas supply
base and rig repair.
Cape Town
SWL floating crane,
two graving docks,
syncrolift. Cruiseship
terminal.
General cargo,
General cargo.
containers, drydocking.
Enhance Promote drydock, marine invest engineering
marine capability fleet, improve for
oil loading and gas times. sector.
Mossel Bay
Two offshore mooring
points. Slipway.
PetroSA logistics
base.
Fishing.
Slipway upgrade.
Ngqura
Rig repair.
Containers, dry and
liquid bulk.
Expand rig repair. Serve
Coega IDZ.
Port
Elizabeth
Container terminals,
bunkering, slipway.
Vehicles, manganese,
general cargo.
Removal of manganese
to Ngqura, creation of
leisure waterfront.
East London
Dry dock and repair
quay.
Vehicles and grain.
Serves East London IDZ.
Recent upgrades have
been done.
Durban
Ship repair. One
graving dock, several
floating docks. Three
repair quays. Private
quayside facilities
(EBH and Dormac).
Cruise-ship terminal.
Vehicles and multicargo.
Improve access for
trucks, back-of-port.
New storage areas.
Richards Bay
Richards Bay Coal
Terminal. Repair
berth in small craft
harbour. Serves IDZ.
Coal.
Possible gas and
renewable energy hub.
Service offshore oil and
gas sector.
437 SOUTH WESTERN AFRICAN CAPE BUSINESS 2021 2019

KEY SECTORS
Overviews of the main economic
sectors of South Africa
Agriculture 40
Mining 44
Energy 56
ICT 61
Oil and gas 62
Water 66
Engineering 70
Construction and property 72
Manufacturing 74
Food and beverages 76
Automotive 78
Transport and logistics 80
Tourism and events 82
Banking and financial services 84
Development finance and SMME support 86

OVERVIEW
Agriculture
Berry production is up as exports rise.
The number of hectares of blueberries will rise over a fiveyear
period by 136% in Limpopo and 102% in Mpumalanga,
an agricultural economist has told the South African Berry
Producers’ Association (SABPA).
Nina Viljoen’s findings have big implications for employment and
exports, especially as blueberries are growing in popularity globally
as a so-called “superfood”. Wandile Sihlobo of Agbiz promotes the
idea of South Africa focussing on horticulture, partly because it is
so labour intensive. He cites blueberries, which need 2.64 workers
for every hectare planted. Signs are promising; 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.
The major production companies are Berryworld South Africa,
United Exports and Haygrove SA, an affiliate of UK-based Haygro.
There is plenty of scope for berry exports to grow. Current annual
exports are at about 13 500t compared to over 200 000t for table
grapes and about 300 000t for apples (SABPA). Once South African
producers pass muster with Chinese import authorities, volumes can
be expected to grow quickly.
An application launched by Fedgroup Ventures gives investors a
chance to invest in blueberry bushes without getting soil on their
hands. Fedgroup Impact Farming expects investors to earn 10-15%
over an eight-year timeframe and also offers investments in beehives
and solar panels.
SECTOR INSIGHT
The University of Pretoria has
joined an African alliance to
tackle food security.
Another subsector to
experience rapid export
growth is oranges. As a source
of vitamin C, oranges grew
in popularity as the Covid-19
pandemic spread. South Africa
is the world’s second-largest
citrus exporter, after Spain, and
the number 11 in the world
in terms of production. Citrus
exports earned South Africa
about R20-billion in 2019.
By contrast, flower
growers were badly hit by
the effects of the global
shutdown. Normally, Europe
accounts for 80% of exports
with the Americas and Japan
accounting for the balance.
SOUTH AFRICAN BUSINESS 2021
40

OVERVIEW
Wool exports suffered too, although this was mostly related to
China stopping imports due to a foot-and-mouth disease scare.
About 70% of South Africa’s export of this commodity are to China
in a normal year.
Avocado exports were worth about R4.3-billion in 2019, with
more than 1 000ha of new plantings taking place every year to try
to meet growing demand. South Africa is among the top three
countries exporting to Europe and the Chinese market is growing
at a rapid rate.
Beef exports increased from 8 292 tons in 2001 to 31 888 tons in
2018 with the largest areas of growth in Muslim countries.
A record crop of 59 050 tons of in-shell macadamias was
achieved in 2019 and production was up by more than 2 500 tons
over 2018. A less fruitful year is expected in 2020.
Total South African agricultural exports reached R175-billion in
2019 with about 40% going to other African countries and 25% to
Europe. The grain and fruit harvests in 2020 were good with the
maize return of 15.5-million tons the second-largest ever and fully
38% better than the previous year’s figure.
The global shutdown threatened the agricultural products
that South Africa imports: rice and palm oil are 100% dependent
and half of the maize that South Africans consume comes from
abroad. South Africa imports 80% of its fertiliser and 98% of its
agri-chemicals.
Variety and quality
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 processing and logistics mean that the real
contribution is more like 15%.
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.
A total of 70% of South Africa’s grain production is maize, which covers
60% of the cropping area of the country. KwaZulu-Natal and Mpumalanga
produce sugar, but volumes are down. The Free State Province supplies
ONLINE RESOURCES
Agricultural Research Council: www.arc.agric.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
South African Berry Producers’ Association: www.berriesza.co.za
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. 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 majority located
in the Western Cape, where
canola (pictured) is also grown.
The Eastern Cape is the
largest livestock province.
South Africa has a beef herd
of 14-million. South Africa’s
milk producers normally
produce about 3.3-billion
litres of milk every year (Milk
Producers Association).
The Faculty of Natural
and Agricultural Sciences
at the University of Pretoria
(UP) has joined an African Research
Universities Alliance
programme together with
the University of Nairobi and
the University of Ghana. The
Centre of Excellence for Food
Security that has been established
intends to create a
network to find solutions to
food security challenges in
Africa. The UP Department
of Plant and Soil Sciences is
working with Impilo Projects
to research aeroponics for deployment
in urban areas. The
faculty has a R13-million facility
to grow plants in different
conditions which mimic possible
future climate scenarios.
Potatoes are being grown in a
first experimental phase. ■
41
SOUTH AFRICAN BUSINESS 2021

INTERVIEW
Crafters and knitters
are returning to their
passion
Michael Brosnahan, CEO of SAMIL, unpacks the effects of
the Covid-19 lockdown on the mohair industry.
Michael Brosnahan, CEO
With people at home during the Covid-19 lockdown, was there
greater demand from creative people?
Happily for SAMIL the crafters and knitters of the world took refuge in
their art, many of them returning to their passion, with time on their
hands. The demand for our hand knitting and crochet yarns increased
dramatically during the hard lockdown periods and this increase in
demand shows no signs of abating.
What were other effects of the pandemic?
Sadly, the effect on farmers and processors was quite devastating
financially, particularly in the months of April to June, when we were
unable to export our mohair tops. This obviously impacted all who are
employed in the industry by way of significantly reduced income. We
are very grateful for the assistance provided by the government via the
UIF TERS system which helped to reduce the impact.
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.
How will the “new normal” affect the mohair industry?
Providing that South Africa and other countries do not return to a
hard lockdown situation, it should not have a further impact. Demand
for high-fashion goods will always be there and due to the reduction
in availability caused by the ongoing drought conditions in the Karoo
region, where most of the mohair is farmed, demand outstrips supply.
Is there a growing awareness of the importance of sustainability
among customers?
There is no doubt that the consumer of today makes purchase decisions
no longer merely on price alone, but also on their understanding of
the ethicality of the manufacturing process. They want to know that
the goods have not harmed the environment in any way. This concern
extends further to the welfare of the people producing the items and
the treatment of the animals.
The Responsible Mohair Standard is an established set of rules
drawn up by the global non-profit organisation, Textile Exchange.
These rules govern all aspects of the mohair industry, from the care of
the environment to the welfare of the animals and all the individuals
employed in the industry. ■
SOUTH AFRICAN BUSINESS 2021
54 42

Sharing Africa’s
beauty with the
Sharing world Africa’s beauty
with the world
SAMIL produces and processes
SAMIL mohair, produces the noble and processes fibre. mohair, the noble fibre.
South African African Mohair Mohair Industries Industries Limited (SAMIL) Limited
is the (SAMIL) link between is the mohair link producers, between processors
producers, and consumers. processors Our vision and consumers. is to be an Our in-
mohair
novative vision South is to be African innovative company South specialising African
company in the production specialising and in processing the production of natural and processing fibres, as
of well natural as speciality fibres, as spun well yarns. as speciality spun yarns.
Mohair, Mohair, the the fleece fleece of the of the Angora Angora goat, goat, is: is:
• the the noble noble fibre, fibre, known known as the as the diamond diamond fibre fibre
• lustrous, lustrous,
resilient
resilient
and
and
offers
offers
exceptional
exceptional
colour
colour
reflection
reflection
• one one
of
of
the
the
world’s
world’s
most
most
beautiful
beautiful
sustainable
sustainable
natural fibres
natural fibres
• a symbol of luxury and exclusivity.
• a symbol of luxury and exclusivity.
African Expressions
African Expressions
Our local brand African Expressions was born of the
Our local brand African Expressions was born of the
desire to share Africa’s natural beauty with the rest
desire
of the
to
world.
share Africa’s
Through
natural
our
beauty
unique
with
range
the
of
rest
yarns,
of the
world.
we express
Through
the
our
essence
unique
of
range
that which
of yarns,
makes
we express
Africa
the magical. essence Our of network that which of local makes farmers, Africa who magical. farm Our in
network optimal Angora of local farmers, goat conditions, who farm breed in optimal stock Angora which
goat bear conditions, excellent breed fibres. stock This which ensures bear that excellent our yarns fibres.
This are ensures naturally that soft our to yarns the are touch, naturally easy soft to to knit the touch, and
easy luxuriously to knit and versatile. 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 is in 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 to
processing only mohair.
Trading: Through a strong support base of of affiliated
companies, partners partners and agents, and agents, SAMIL has SAMIL established has
strong established connections strong connections throughout the throughout world for the the
purchase world for and the sale purchase of raw materials and sale and of finished raw materials goods.
South and finished Africa processes goods. in South excess Africa of 80% processes of the world’s in
mohair excess production. of 80% of the The world’s advantage mohair of production. having both The topmaking
advantage
and
of
spinning
having
operations
both top-making
in South
and
Africa,
spinning
as well
as
operations
access to raw
in South
material
Africa,
produced
as well
within
as access
the company,
to raw
material produced within the company, is that SAMIL
is that SAMIL is able to offer lots guaranteed from origin,
is able to offer lots guaranteed from origin, a rare
a rare luxury in today’s business environment.
luxury in today’s business environment.
Spinning and dyeing: SAMIL Spinning is a global
Spinning and dyeing: SAMIL Spinning is a global
manufacturer of outstanding quality mohair yarns,
manufacturer of outstanding quality mohair yarns,
producing a wide and exclusive range of mohair and
producing a wide and exclusive range of mohair
mohair
and mohair
blended
blended
fancy
fancy
and fine-spun
and fine-spun
yarns in
yarns
both
fine-count
in both fine-count
and coarser
and
varieties.
coarser
We
varieties.
are internationally
We are
renowned
internationally
for our
renowned
superior
for
product
our superior
range and
product
cater
for range the and hand cater knitting, for the machine hand knitting, knitting, machine weaving,
hosiery knitting, and weaving, decor markets. hosiery Although and decor we markets. specialise
in Although pure mohair, we specialise we also in blend pure mohair, we with also a blend range
of mohair other with natural a range and of man-made other natural fibres. and Yarns man-made can be
custom fibres. Yarns dyed can to any be shade custom at dyed SAMIL’s to state any shade of the art at
dye SAMIL’s house. 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: Contact www.samil.co.za
details
Tel: +27 41 486 2430
Email: yarns@samil.co.za
SOUTH AFRICAN BUSINESS 2021
Website: www.samil.co.za

OVERVIEW
Mining
Exploration is the next frontier.
South Africa is currently attracting just 1% of global
spending on mining exploration, a figure that normally
reaches R160-billion annually. Several industry leaders
have expressed concern about the low level of exploration
activity but in 2020 they were joined by the Economic
Transformation Committee (ETC) of the African National Congress
(ANC), the country’s majority political party. The ETC sees
exploration as a way of broadening the scope of ownership within
the mining industry.
Gwede Mantashe, South Africa’s Minister of Mineral Resources
and Energy, wants to see South Africa attracting at least 5% of
global exploration. For exploration to expand a reliable cadastre
is required. A cadastre is a record of property boundaries and
ownership. The Council for Geoscience is working on this. Drone
technology could take the mapping process forward, allowing for
more exploration at a lower cost.
In his 2019/20 budget vote, Mantashe noted that
about 4 000 permanent jobs would be created by the
recent investment of about R45-billion through projects
such as Exxaro’s Belfast expansion (coal), Sasol’s coal mine
replacement programme and Vedanta Resources’ huge zinc
mine in the Northern Cape.
Many mining companies want to start generating their own
power, particularly in the light of unreliable supply from the
national utility, Eskom.
SECTOR INSIGHT
Good mineral prices kept
mining shares buoyant during
the lockdown.
African Rainbow Minerals
is currently operating just
three of its 10 plants in the
ferroalloy sector, with the cost
of electricity the main reason
for reduced activity. ARM is
constructing a demonstration
ferromanganese plant to test
alternative energy systems
with the hope that costs can
be significantly reduced.
The CEO of Minerals
Council SA, Roger Baxter, calls
the hurdles faced by mining
companies trying to put
alternative power projects in
place, a “serious challenge”.
In 2019 Minister Mantashe
wrote to the National Energy
SOUTH AFRICAN BUSINESS 2021
44

OVERVIEW
Regulator of South Africa (NERSA) granting a deviation from the
existing Integrated Resources Plan (IRP) to allow for the quick
licensing of generation facilities up to 10MW.
Coal giant Exxaro has disposed of its stake in Tronox Holdings
(mining and processing of titanium ore, zircon and other minerals)
but in 2019 took full ownership of renewable energy company
Cennergi, which owns two wind farms in the Eastern Cape. Indian
company Tata Power held 50% of the company through a whollyowned
subsidiary before the sale.
Despite the global lockdown Exxaro expected earnings for the
first six months of 2020 to be higher than the R3.2-billion earned in
2019. The weaker rand and record coal exports helped to balance
lower dollar prices achieved.
Coal continues to be an important part of the South African
mining landscape, despite pressure to move to renewable
resources. As Baxter points out, “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.”
Gold Fields’ earnings for the half-year to June 2020 increased
four-fold because of a buoyant gold price. The August 2020 price
for gold reached nearly $2 000. Analysts warned against reading
too much into some of the more extreme rises in the value of gold
mining stocks (DRD Gold went up some 240% between January
and July) because the underlying conditions for gold mining in
South Africa are tough.
Implats (Impala Platinum) was expecting to report annual
headline earnings five times better as a result of improved
commodity prices.
Another company to report improved half-year results was
Sibanye-Stillwater which increased volumes at its platinum group
metals (PGM) operations and its gold mines in the first half of 2020.
Some production was lost due to the steps taken to deal with
Covid-19 but, because of the inclusion of the Marikana operations
(bought from Lonmin), South African PGM production actually
increased by 5% year-on-year to 657 828 ounces.
Gold production within the group was also up after strikes
affected volumes in 2019. Production of 403 621 ounces was 17%
higher than the previous year’s figure. The group expects all of
its South African operations to be running at optimal production
levels by the end of 2020.
The sale in 2020 by AngloGold Ashanti of its Mponeng mine
and Mine Waste Solutions to Harmony Gold for $300-million (about
R4.4-billion) marks the end of an era. Although the company’s
headquarters will continue to be in Johannesburg and it will be
listed on the JSE, its mines are in Ghana, the Americas and Australia.
AngloGold Ashanti was the
successor to the mining
company formed by Ernest
Oppenheimer in 1917.
Harmony Gold’s acquisition
strategy, including the
purchase from AngloGold
of Moab Khotsong mine in
2017, will result in it being
the country’s biggest gold
producer. With 350 000 new
ounces coming from Mponeng,
it could produce an annual
total of 1.7-million ounces.
Afrimat continued to
expand its commodities
portfolio in 2020. Previously
focussed on construction
materials, Afrimat bought
a 27.27% stake in a highgrade
anthracite mine in
Mpumalanga, Nkomati, and
followed this with the purchase
of Coza Mining, an iron ore
and manganese company in
the Northern Cape. Afrimat’s
first foray into commodities
was also in that province, the
R322-million acquisition of the
Diro mine. In October 2020
Afrimat applied for Nkomati
to be placed under business
rescue because of the Covid-19
lockdown but stated that it
believed the business could
indeed be resuscitated.
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
45 SOUTH AFRICAN BUSINESS 2021

OVERVIEW
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.
Petra Diamonds has made it known that it will consider offers for
parts of its business or all of its operations. This follows a strategic
review where the issue of a R11.25-billion debt repayable in 2022
loomed large. The review began when the South African Covid-19
lockdown began. Most of the company’s major expenditure on
expansion projects is behind it but reduced demand, even before
the lockdown, has affected earnings. Revenue for the six months to
December 2019 was down by 6%. Of the company’s three South
African mines Finsch (Northern Cape) and Cullinan (Gauteng)
generate 90% of output and 75% of revenue.
In the Northern Cape, Ekapa Mining paid R300-million to buy
out Petra Diamonds from a JV.
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 has started
trucking product to the Port of Saldanha. 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 Industrial Park with the port.
In August 2020 Australian miner Orion announced it had raised
$6.2-million in share capital towards its Prieska Zinc-Copper Project.
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.
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
(underground) and Mamatwan
(open cut), and the Metalloys
manganese smelter. ■
ONLINE RESOURCES
Council for Geoscience: www.geoscience.org.za
Minerals Council South Africa: www.mineralscouncil.org.za
Mintek: www.mintek.co.za
National Department of Mineral Resources and Energy: www.dmr.gov.za
SOUTH AFRICAN BUSINESS 2021
46

COUNCIL FOR GEOSCIENCE
November 2020
The Council for Geoscience (CGS) is the national custodian responsible for the collection, compilation and
curation of all onshore and offshore geoscience data and information. The CGS aims to use this information
and knowledge to develop geoscience solutions to real-world challenges in South Africa.
GEOSCIENCE MAPPING
Geoscience mapping is the core
function of the CGS and aims to
develop fundamental geoscience
knowledge using an integrated
and multidisciplinary approach
as well as innovation that merges
several onshore and offshore
geoscience themes such as
geology, geotechnical studies,
geochemistry, geophysics and
economic geology for mineral
and energy resources and their
mineralising systems information
to boost sustainable exploration
for economic growth.
ENGINEERING GEOLOGY
AND GEOHAZARDS
As the custodian of the national
seismological network, the
CGS monitors and maintains
a geohazard inventory for
South Africa. This information
is primarily used in developing
effective and novel geohazard
mitigation solutions for safe
and judicious land use. Modern
artifi cial intelligence techniques
are applied in subsidence
mapping and seismic hazards
characterization.
WORLD CLASS FACILITIES
The geoscience functions are
supported by a multi-faceted
laboratory that performs a wide
range of analytical services
such as petrography, whole
rock geochemistry, petrophysics,
coal science and hydrochemistry.
The CGS also manages a
geoscience museum, library,
bookshop, and national core
repository which are used by
the scientific community and
the general public.
WATER AND ENVIRONMENT
The CGS carries out hydrogeological studies and aquifer
modelling and is also responsible for environmental geoscience
research which aims to provide sustainable solutions to monitor
and mitigate the impact of geology and mining activities on the
health of the environment including its inhabitants.
AFRICAN FOOTPRINT AND
OTHER COLLABORATIONS
As the permanent secretariat
of the Organisation of African
Geological Surveys (OAGS), the
CGS has an impressive footprint
in the African continent where
various geoscience services
have been rendered in line with
global standards, international
policy and governance. The CGS
also collaborates with various
academic institutions and science
councils around the world.
CGS AT WORK
• The CGS is undertaking integrated and multidisciplinary geoscience mapping programme across South Africa.
• Some of the recent projects include:
- Multidisciplinary geoenvironmental baseline investigations in the Southern Karoo for possible shale gas
development, which uncovered previously undefi ned groundwater aquifers.
- Regional soil geochemical sampling and detailed follow-up surveys, particularly within the Northern Cape,
North West and Mpumalanga provinces.
- Geothermal energy and carbon capture and storage research, which aims to expand the current renewable
energy mix of South Africa and decrease the carbon footprint.
- Ground stability and geotechnical assessments for infrastructure development in the Northern Cape and Free
State Provinces.
CONTACT US
Our head office is located at: 280 Pretoria Street, Pretoria, 0184 I @CGS_RSA I I I
Tel: +27 (0)12 841 1911 I Email: info@geoscience.org.za I Web: www.geoscience.org.za

CREATING
LASTING
LEGACIES
By: Casper Badenhorst, Chief Operations Officer,
Pilanesberg Platinum Mines
Despite facing a tough economic
period, the mining sector continues to
play an important role in our economy
and still has the potential to make
a significant impact in the socioeconomic
development of our country.
We trust the upswing experienced in
2019 will spill over into 2020 and reclaim
profitability in the industry. Pilanesberg
Platinum Mines is cautiously optimistic;
a productive 2020 will support the
continuation of our plans to expand
mining operations thus increasing our
staff component and benefitting the
communities in which we operate.
As a growing mine, we are proud that we
sustained production in a constrained
environment, ensuring continued
contribution towards the social and
economic development of our wider
community. As we enter a new decade,
I reminisce on our achievements. In
2019, we purposefully held ourselves
accountable to our core values of zero
harm, upliftment and innovation.
Our specific focus on zero harm resulted
in no fatalities. In fact, because of our
commitment to the safety of our people,
we wrapped up this past decade with
over 5 million fatality-free shifts.
In addition, our efforts in uplifting
our female employees, has gained
some traction. Tebogo Metsileng was
nominated in the mining category for
the Women’s Lifestyle Award. Tebogo,
a Lab Technician, has been recognised
for her community service as a PPM
Wellness Team Member and for her
contribution as a Lab Technician.
She has also been recognised for
her motivation of the youth in her
community, making her a worthy
recipient of the 2019 Women Lifestyle
Award. This recognition will pave the
way for many women in this industry.
Furthermore, our commitment to reduce
our impact on the environment remains
a core focus.
We have taken innovative steps towards
decreasing our negative impact on the
environment, including the termination
of polystyrene packaging in our
canteens.
We will continuously strive to improve
the lives of our people, our immediate
communities; and protect the
environment, as we contribute to the
growth and transformation of this
sector. Over and above our operational
accomplishments, I am proud
of what we have achieved in our
respective communities. Our top three
achievements include:
Supporting small businesses
In creating a meaningful impact in
our communities, we realised that
supporting small businesses is critical.
The ‘Community Crusher’ which started
as a non-profit project is now proving its
potential to be a fully-fledged business,
rendering a service to most of our
building projects.

Most importantly, 14 community
members are employed in this project,
of which 64% are women – securing
future female community leaders!
Furthermore, the ongoing support of
the relocated farmers is anchored in our
mission to train, develop skills and build
capacity of the small-scale subsistence
livestock keeper; and grow them to
become sustainable and independent
commercial farmers. To this end, a
professional Extension Officer has been
allocated to service and capacitate
them and all the basic farming support
infrastructure has been set up.
Enabling economic development in
communities
As part of our contribution to socioeconomic
development in the Moses
Kotane Local Municipality and the
Bakgatla Ba Kgafela, our conviction is
that infrastructure interventions can play
a major role in enabling and catalysing
economic development. Consequently,
we have concluded construction of
Legkraal - Bofule paving and phase one
of the Motlhabe - Ngweding roads. This
will enable village to village connectivity
and access, with subsequent boosting
of the economies of the affected areas.
To secure a sustainable and productive
mine is not only about our employees’
jobs, but it is also about the impact that
these jobs and our operations have on
our people. As a mine, we are constantly
reminded that the future is a legacy in
the making and the best tomorrow for
all, relies on the crucial decisions we
make today.
“As a mine,
we are
constantly
reminded
that the
future is a
legacy in
the making
and the best
tomorrow for
all, relies on
the crucial
decisions
we make
today“
Educating the youth
Education is important for our youth,
who are the real bastions of tomorrow.
Maths and Science are key tools to
understand, analyse and impact local
communities. We assisted over 200
students with their studies through
a Saturday school programme. As a
result, the 2019 academic results have
improved significantly from a pass
rate of 40% to 80% providing more
opportunities to these learners.
Tel: 014 555 1800

FOCUS
World-class zinc operation in
the heart of the Northern Cape
R5-billion investment by Vedanta Zinc International is a major catalyst for growth.
Vedanta Zinc International (VZI) is a
grouping of zinc assets located in South
Africa and Namibia, owned by the sixthlargest
diversified resources company
in the world, Vedanta Limited. Vedanta Limited
recently invested R5-billion into VZI’s flagship,
Gamsberg open-pit and concentrator project in
the Northern Cape province, which is now fully
operational and was inaugurated in February 2019
by President Cyril Ramaphosa.
President Cyril Ramaphosa and Vedanta chairman
Anil Agarwal at the Gamsberg mine opening.
VZI’s operations include Black Mountain Mining
(Pty) Ltd (consisting of underground operations
Deeps and Swartberg as well as the flagship surface
operation, Gamsberg Project) located in South
Africa’s Northern Cape province and the Skorpion
Zinc Mine and refinery in Namibia’s //Kharas region.
VZI’s vision is to create an integrated, world-class
regional zinc complex with the values of Safety, Trust,
Entrepreneurship, Innovation, Excellence, Integrity,
Respect and Care at the core of their business.
As of March 2020, VZI employed more than
4 200 people (including business partners), of which
99% are South Africans: 80% are from the Northern
Cape and 60% from the Namakwa District.
VZI’s Gamsberg Phase I open-pit mine
represents $400-million worth of investment
into South Africa by the Vedanta Group. Life of
mine extension at other mines in the complex
($46-million), Gambserg Phase II ($350-million) and
a further $850-million worth of investment on a
possible Gamsberg Smelter-Refinery Complex are
potential future investments in the South African
mining sector. The smelter-refinery is subject to the
availability of power and support from government
to make the project economically viable.
Leveraging technology
Gamsberg has implemented a unique flotation
system, the Staged Flotation Reactors. They
break the conventional flotation paradigm into
individual, optimised reactors which drastically
reduce energy and air consumption. The footprint
in the plant gets reduced by around 50%,
operations become easier and maintenance costs
are lower. VZI is the first company in Africa to
adopt Staged Floatation Reactors.
Backfilling operations is an integral part of Black
Mountain. Underground mining creates voids
which need to be filled. This provides opportunities
for mining operations like Black Mountain to
dispose of waste material underground and
provide support and stability to the surrounding
rock mass.
>>>>>>>>
SOUTH AFRICAN BUSINESS 2021
SOUTH AFRICAN BUSINESS 2021
52
110

FOCUS
The Gamsberg Nursery houses
379 different species and will
have a capacity of 129 000
plants after the upgrade.
Biodiversity
The Succulent Karoo Biome is unique in its floral
diversity. Among the 36 global biodiversity
hotspots, the biome is home to at least 6 000
species of plants that have evolved over millennia.
VZI’s environmental specialists have worked closely
with a wide range of experts, including those from
the International Union for Conservation of Nature
(IUCN), to ensure the site’s necessary protection,
preservation and ultimate restoration.
The Gamsberg Nursery is derived from the
Environmental Management Plan (EMP) and the
requirements for the Integrated Flora Permit.
Since October 2019, there have been 12 000
plants grown with 379 different species. After
the upgrade, 129 000 plants will be housed in
the nursery.
Community commitment
VZI has joined hands with PinkDrive NPC, a
significant player in the gender-related cancer
sector, to bring critical screening to the Northern
Cape. The outreach programme is for the communities
of Okiep, Nababeep, Bergsig, Pella and
Pofadder. The campaign aims to create awareness,
provide education and render health-related
services to community members. Community
members are also provided with free screening
and testing for Covid-19.
In 2015, 12 new local businesses were created
and commercial opportunities to the value of
R7.1-million were provided.
Childcare and education
support programmes
benefit more than 1 800
children at a cost of R6-
million per annum. Youth
and sports clubs are
supported. The total spend
on corporate social responsibility and community
work is over $14-million to FY2020.
During the Covid-19 lockdown period, many
outreaches were made throughout the region.
Items distributed included masks, hand sanitiser,
gloves, care packages, face shields, food and
clothing to areas within the Khai Ma and Nama
Khoi municipal areas. Visits were made to old-age
homes and disability care centres and schools. ■
The outreach programme delivers groceries to
local communities and organisations.
111 53 SOUTH AFRICAN BUSINESS 2021

FOCUS
Showcasing Ivanhoe’s
education initiatives
Ensuring inclusive and equitable quality education.
Ivanhoe Mines places great value on the level of
host community acceptance and trust, which underpins
its social licence to operate. We strongly
believe in collaborative problem-solving and
employ a sustainability strategy that includes social
development goals, targets and projects in alignment
with host country regulatory frameworks and
international frameworks such as the UN’s Sustainable
Development Goals (SDGs).
Our sustainability strategy recognises the power
of education and aims to advance the objectives of
ensuring inclusive and equitable quality education
and promoting lifelong learning opportunities for
all (SDG 4). Ivanhoe has, accordingly, developed
and implemented various educational initiatives
across its three principal projects.
A case study at the Platreef Project
To enable access to education, and raise the quality
of education across all stages of the education
value chain (including the vulnerable in society), we
have invested numerous educational infrastructure
and support initiatives at our Platreef Project under
the first Social and Labour Plan (2015-2019):
• Investment into the development of the Lesedi
Centre and its staff capacity to support the Early
Childhood Development Function.
• Under its scholarship programme, Platreef
supported 426 learners from underprivileged
families. Platreef further provided study assistance
to 79 employees, and external bursaries to 37
employees and host community members, also
partnering with universities in Canada and Japan
for post-graduate qualifications.
• Platreef established five E-learning venues with
support from the Department of Education, which
remain crucial during the Covid-19 pandemic to
maintain momentum for learners at beneficiary
schools. Expansion to four more schools is
planned for 2021.
• Platreef introduced the MiniChess programme at
the Motshitshi Primary School through the Entrust
Foundation. This resulted in a marked improvement
in numeracy and mathematical abilities,
spatial perspective development, critical/strategic
thinking development and mastery of English
mathematical terminology among learners.
• Infrastructure support (food garden, irrigation system)
was provided to the Thobela Disability Centre,
which caters for 30 young people of various ages.
• Free Wi-Fi access to the host communities has
enabled digital inclusion.
The phased development plan
The MiniChess programme at Motshitshi Primary
School has been a huge success for learners.
SOUTH AFRICAN BUSINESS 2021
54
Ivanhoe is investigating a phased development
plan for the Platreef Project, targeting significantly
lower initial capital, to accelerate first production
by using Shaft 1 as the mine’s initial production
shaft. This plan will focus on initially targeting the
development of mining zones accessible from
Shaft 1 and maximising the hoisting capacity of this
shaft, followed by expansions to the production rate
as outlined in the 2017 Definitive Feasibility Study.
www.ivanhoemines.com

Platreef-sponsored science laboratories help
bring the subject to life and make it fun.
55 SOUTH AFRICAN BUSINESS 2021

OVERVIEW
Energy
Solar and wind projects are regularly coming onstream.
Credit: Abengoa
South Africa’s acclaimed Renewable Energy Independent
Power Producer Procurement Programme (REIPPPP)
attracted about R200-billion in committed investments,
mostly in solar and wind power, in just five years.
The early rounds of the independent power producers’
programme continue to produce regular dividends. In October
2020, another wind farm started commercial operations.
Located about 80km north-east of Ceres in the Witzenberg Local
Municipality, the Paardekraal East Wind Farm is in the Western Cape.
The 110MW project was constructed by the Concor and Conco
Consortium, Siemens Gamesa Renewable Energy supplied and
installed the wind turbines, the towers were built by GRI in Atlantis
and Mainstream Asset Management South Africa will manage the
operations.
According to the Department of Energy, the REIPPPP by
2016 had created more than 30 000 jobs and benefited local
community development to the tune of R256-million. 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.
The majority of wind projects have been allocated to the Eastern
SECTOR INSIGHT
Training for a renewable future
is a new priority.
Cape, but approximately 60% of
the solar projects so far allocated
in the programme have been in
the Northern Cape, the nation’s
sunniest province.
Gas is also in the mix.
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, Richards Bay,
Coega and Saldanha Bay.
The most popular method
relies on solar panels, namely
solar photovoltaic (PV). The
other form of solar power
(concentrated solar power, CSP)
is effective and some projects
SOUTH AFRICAN BUSINESS 2021
56

INTERVIEW
Liquefied natural gas can
help South Africa reach its
decarbonisation goals
INTERVIEW INTERVIEW
Liquefie
help SoS
decarbo
Aldworth Mbalati, CEO of DNG Energy, reveals how his company will offer a cleaner Aldworth Aldworth Mbalati
fuel stop for ships that travel along the South African coastline.
fuel fuel stop stop for ships for s
What are the main advantages of liquefied natural gas (LNG)?
Liquefied natural gas is a cleaner and cheaper fuel alternative for the
energy market. The environmental, social and economic benefits will
help the country meet its targets in reducing greenhouse gas emissions,
drive economic growth and improve the lives of its citizens.
Aldworth Mbalati, CEO
BIOGRAPHY
Aldworth Mbalati started his entrepreneurial
journey as owner and
CEO of Vutomi Properties in 2002.
In 2005 he was involved at Bayethe
Investment Company, a company
investing in coal and other energy
assets. Five years later, he expanded
into oil and gas exploration, production
and midstream activities
such as gas-to-power as the major
shareholder and CEO of African
International Energy, Africa. He started
DNG Energy in 2013. He obtained
rights and developed an LNG import
terminal in Mozambique.
Transnet National Ports Authority recently gave permission for
you to begin bunkering operations: how significant is that?
The promulgation of regulations by the International Maritime
Organisation (IMO) in January 2020 requiring all ships to use fuel that
has sulphur content of no more than 0.5% has put LNG to the fore
as a solution for decarbonising the marine industry. Finalisation of a
bunkering licence for DNG Energy at Coega gives us a go-ahead to
begin our integrated gas infrastructure for on-shore and off-shore LNG
logistics. We are building the first floating storage unit (FSU) Aldworth for Africa Aldworth Mbalati, C
and the largest in the southern hemisphere. Our position at Coega
gives us an opportunity to optimise trade for the global marine industry
by offering a cleaner fuel stop for ships that pass through Algoa Bay,
estimated at 57 000 ships every year.
BIOGRAPHY
What will be the impact of DNG Energy’s bunkering activities?
We support government’s strategy to develop the Coega Industrial
Development Zone as a gas hub. Our operations will reduce the
Aldworth
energy
Aldworth Mbalati Mbalati start
costs of doing business, expand the marine economy by creating trepreneurial trepreneurial jobs, journey journe as
developing skills and will also move South Africa closer to meeting CEO of CEO its Vutomi of Vutomi Properti
climate change objectives.
In 2005 In 2005 he was he involved was Investment Investment Company, a
Who do you see as your customers in the LNG space? investing investing coal in and coal ot a
Our customers are global and local shipping companies, assets. intensive assets. Five years Five years later, la he
energy users, logistics companies, industrial and commercial operations,
into oil into and oil gas and explor gas e
the taxi industry and households.
duction duction and midstream
and such such as gas-to-power as
What are the strengths of your team?
shareholder shareholder and and CEO
DNG Energy’s team has unity in vision, values and shared culture. International International The Energy, Energy Afric
working environment is steeped in a culture of hard workers ed who DNG ed are DNG Energy Energy in 2013. in 20 H
focused on the value proposition needed by the market. To those rights who rights and developed and develope an
say it cannot be done, DNG Energy asks, “Why not?” ■
terminal terminal Mozambique
in SOUTH AFRICAN BUSINESS 2021
57 SOUTH AFRICAN BUSINESS 2021
36
SOUTH SOUTH AFRICAN AFRICAN BUSINB

OVERVIEW
have been commissioned, but it is relatively expensive.
Projects such as Kathu Solar Park (100MW), a
concentrated solar power project, and the Roggeveld
Wind Farm (147MW) are indicative of the large scale of
most of the energy generation that is being rolled out.
At Black Rock Mine solar power is being put to use on
a smaller scale. To light the intersections leading to
the mine, BEKA Schréder has installed solar-powered
streetlights.
All of 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 South
Africa’s latest integrated resources plan (IRP), South
Africa’s energy mix is still weighted towards coal.
Two huge new power stations, Kusile and Medupi,
are being built by Eskom and 1 000MW has been
allocated to private producers to build coal-powered
stations known as Thabametsi and Khanyisa. 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.
A new centre has been established at Wits Business School
to teach the new skills that are needed for new kinds of energy.
The Africa Energy Leadership Centre (AELC) is supported by the
Chemical Industries Education and Training Authority (CHIETA).
Another body active in energy training is the Energy and Water
Sector Education and Training Authority (EWSETA).
Regulations in the energy sector are being keenly watched.
The 2019 decision that power projects generating less than 10MW
do not have to get licences from national departments 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 IRP but the next step – allowing
companies to sell any excess power they generate to the grid –
will be a real game-changer.
Mining companies such as Sibanye-Stillwater and Gold
Fields have made it clear that they want to marshall renewable
energy resources to power their own operations, to the
tune of 150MW and 40MW respectively, but clearance from
government is still needed.
An example of the potential that lies within companies is Tongaat
Credit: Perdekraal East Wind Farm
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 managing
director of South Africa’s other
sugar major, Illovo Sugar SA,
was quoted in the Sunday
Times in March 2020, saying,
“There are opportunities around
how do we sell power into
the grid, opportunities within
the whole biofuel, bio-energy
sphere.” Mamongae Mahlare
also said that the key to the
sugar industry’s future lay in
diversifying into energy.
Many of the same conditions
exist for Sappi’s wood and fibre
mills in Mpumalanga and
SOUTH AFRICAN BUSINESS 2021
58

OVERVIEW
KwaZulu-Natal and all of the breweries making
beer across South Africa.
Discussions about feed-in tariffs will have
to be finalised before the huge potential of the
relevant sectors can be fulfilled with regard to
energy generation. If national utility Eskom is
broken into separate business units then the
likelihood of the tariff discussions taking place
will greatly increase.
Funding
Enel Green Power has adopted a new approach
to funding its renewable energy projects. Law
firm Norton Rose Fulbright has concluded a
R3.5-billion financing arrangement with Absa
and Nedbank which treats five wind farms to be
built by Enel as one project, resulting in better
terms. This is the first time such a method has
been adopted in Africa.
Investec intends listing a renewable energy
fund on the JSE, to be called Revego Africa
Energy. In addition, private banking clients of
Investec may now receive loans to fund the
installation of solar power in their homes, which
payment can be linked to the home loan.
The support of two of South Africa’s
biggest institutional investors, the Industrial
Development Corporation (IDC) and the Public
Investment Corporation (PIC), has been crucial
in getting the renewable energy sector off
the ground. They have also played a role in
helping communities fund their participation in
community trusts.
Many partnerships between local and
international companies have been established.
ONLINE RESOURCES
IPP projects: www.ipp-projects.co.za
National Energy Regulator of South Africa: www.nersa.org.za
South African National Energy Development Institute: www.sanedi.org.za
South African Photovoltaic Industry Association: www.sapvia.co.za
South African Renewable Energy Council: www.sarec.org.za
South African Wind Energy Association: www.sawea.org.za
South African partners are often local energy
companies and representatives of residents.
Typically, a community trust is established to
represent the interests of the local community.
Investment by black people into the
renewable energy programme is not limited to
community trusts. Pele Green Energy is engaged
with a photovoltaic plant at Touwsrivier in the
Western Cape as a shareholder and as a provider
of construction management services. Once the
facility starts generating power, Pele will operate
and maintain the plant.
Among the international investors
active are Enel Green Power (Italy), Scatec
Solar (Norway), Globeleq (UK), Mainstream
Renewable Power (Ireland), Gestamp
Renewable Energies and Abengoa (Spain),
Solar Capital (Phelan Energy Group, Ireland),
SunEdison (USA), ACWA Power (Saudi Arabia),
China Longyuan Power Group (China), Engie
(France), juwi Group (Germany) and Tata
Power of India. The last-named company
recently sold to partner Exxaro Resources its
50% stake in Cennergi, which owns two wind
farms in the Eastern Cape.
Partnerships with foreign utilities or power
companies are becoming more common,
in part because the competition is bringing
down the price which bidders are offering
to sell power. This makes it difficult for South
African firms to compete on their own. Many
foreign investors such as large national utilities
have strong reserves of cash and do not need
to borrow money.
The bank created by the five nations of
BRICS, the New Development Bank (NDB), has
made $180-million available to Eskom to help it
integrate power from renewable energy sources
to the national grid. ■
SOUTH AFRICAN BUSINESS 2021
60

ICT
Data centres are booming.
OVERVIEW
As South Africa joins the global trend towards online
shopping and with the first networks rolling out 5G in
2020, data centres are going up all over the country.
Teraco stores data in Johannesburg, Durban and Cape
Town. A second 30MW site is under construction in Brackenfell
to complement the existing facility in Rondebosch (pictured).
Microsoft Azure has facilities in Cape Town and Johannesburg
and Amazon has two sites in Cape Town. Huawei Cloud Services
will use a partner company in Johannesburg to store its data.
Africa Data Centre (ADC), part of the Liquid Telecom Group, has
purchased a Tier IV data centre in Johannesburg, previously used
by Standard Bank.
A 2019 study by Microsoft found that the cloud ecosystem
will create around 112 000 new jobs in South Africa by 2022
(IT Web). The number of permanent employees of Amazon Web
Services reached 7 000 in October 2020. Acuity Consultants was
quoted in 2019 as saying that software developers’ salaries had
risen by 30% in a year (Business Times).
A new entrant to the South African market relies entirely
on the cloud. Uniconta, an enterprise resource planning (ERP)
system for small and medium-sized businesses, opened its first
offices in Cape Town in 2019, a precursor to plans to expand
elsewhere in Africa.
Cell C became South Africa’s third mobile operator in 2001,
following MTN and Vodacom. Cell C was in the news early in
2020 when it defaulted on interest payments on a loan and this
had an effect on the shares of Blue Label Telecoms, which owns
45% of the operator. When Cell C’s results were announced in
October 2020, reference was made to a turnaround strategy.
Telkom, which became the country’s fourth operator in 2010,
intends selling its cellphone towers and masts (estimated to be
worth about R12-billion) in order to invest in 5G.
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
ONLINE RESOURCES
Business Process Enabling SA: www.bpesa.org.za
Independent Communications Authority: www.icasa.org.za
Technology Innovation Agency: www.tia.org.za
SECTOR INSIGHT
Vodacom is rolling out 5G.
Credit: Data Centre Map
Affiliate Centre of the World
Economic Forum.
The Small Enterprise
Development Agency
(Seda) runs the SoftstartBTI
ICT incubator in Midrand
and Tuksnovation, a hightech
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. ■
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OVERVIEW
Oil, gas and petrochemicals
Exploration for gas off the south-eastern coast is hotting up.
SECTOR INSIGHT
Sasol is selling assets to
reduce debt.
The Karoo Deep Drilling and Geo-environmental Baseline Project is
investigating the potential impact of shale gas drilling.
(Credit: Council for Geoscience)
There was great excitement in the oil and gas sector when
Total and its joint venture partners announced in the 2019
that they had made a discovery at a site called Brulpadda,
off the coast of Mossel Bay.
The drilling was successful enough to warrant the return of the semisubmersible
rig Deepsea Stavenger from Norway to South Africa and in
August 2020 the rig was in place to drill the nearby Luiperd prospect in
Block 11B/12B. The block, in the Outeniqua Basin 175km off the southern
coast, covers an area of about 19 000km² in water depths of 200-1 800m.
In October 2020, Total announced that it made a second significant gas
condensate discovery on the Luiperd prospect.
Total E&P South Africa BV is the operator (45%) with partners
Qatar Petroleum International Upstream LLC (25%), CNR
International (South Africa) Ltd
(20%) and Main Street 1549
Proprietary Ltd (10%, of which
Africa Energy has a 49% stake).
Petroleum Agency South
Africa (PASA), which encourages
exploration and regulates the
oil and gas industry, has noted
the significance of international
oil companies committing to
exploration off South Africa’s
coast. Increased confidence by
such companies can only lead
to growth in the industry, and
with the massive gas finds in the
Rovuma Basin off Mozambique
in 2020, there are sure to be
more companies interested in
South Africa’s potential.
Another drilling project – on
land this time – was launched in
September 2020 in the Karoo.
The Council for Geoscience
(CGS) announced phase two
of the Karoo Deep Drilling and
Geo-environmental Baseline
Project (KDD) in Beaufort West.
The geoscientific research
project in the Karoo Basin is
aimed at developing a geoenvironmental
baseline model
with a focus on assessing
the potential environmental
impacts of shale gas
development in the Karoo.
A Gas Utilisation Master Plan
(GUMP) is being developed as a
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OVERVIEW
part of national energy policy. Private companies are responding
to this changed environment. Renergen, which owns rights to a
field of liquified natural gas (LNG) in the Free State, has started
taking orders for its product from logistics companies. Bulk Hauliers
International Transport (BHIT) has signed an agreement to take LNG
to fuel 50 of its trucks, which should lead to lower operating and
maintenance costs. South African Breweries is another client.
Delta Natural Gas (DNG) Energy announced in 2019 the rollout of
400 natural gas refuelling sites across South Africa with a focus on the
taxi and logistics sectors. The major economic sectors using gas are
the metals sector and the chemical, pulp and paper sector. Brick and
glass manufacturers are also big consumers.
Anadarko Petroleum, a US company, is investing $20-billion
to build a liquid natural gas (LNG) plant in Mozambique. The
projected spin-offs for the South African economy are estimated
to top R7-billion.
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 will deliver gas to Johannesburg and nearby towns.
International chemicals and energy company Sasol has
several large plants in Mpumalanga and the Free State. Sasol Gas
is one of the four Sasol operations at Secunda, supplying natural
gas to Sasol Synfuels and buying Sasol Synfuels’ methane-rich
pipeline gas.
Air Liquide Large Industries SA, a subsidiary of French company
Air Liquide, has purchased Sasol’s oxygen production site in Secunda
for R8.5-billion. The site, which contains 16 air separations units, will
continue to supply gas and oxygen to Sasol’s various plants in terms
of a supply agreement. Sasol is selling a number of its assets in an
effort to reduce debt.
Large quantities of oil are 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. Irrespective of market volatility, the longterm
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. The Port
of Saldanha has a new open-access liquefied petroleum gas (LPG)
plant run by Sunrise Energy.
The Department of Trade, Industry and Competition (dtic)
has established a Gas Industrialisation Unit (GIU). The first two
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
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 Coega IDZ is also
home to the country first gasfired
plant 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.
The South African oil industry
generates annual sales of about
R365-billion and includes global
giants such as Engen, BP, Shell,
Total and Chevron.
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 the province
of 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. ■
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FOCUS
A game-changer for
South African oil and gas
Light oil and gas condensate discoveries could be the start
of something big off the Southern Cape coast.
If the South African gas market is to take off and
thrive, significant drilling has to take place. As the
new CEO of Petroleum Agency SA, Dr Phindile
Masangane, describes the situation: “That would
be a game-changer for South Africa’s upstream oil
and gas industry.”
As it happens, a major discovery has been made
at a site south-east of Mossel Bay called Brulpadda.
Says Dr Masangane: “The recent discovery by Total
and its JV partners in Block 11B/12B (Brulpadda) is
the first giant step in that direction.”
Odfjell’s Deepsea Stavanger semi-submersible
oil rig relocated from Norway to South Africa
in June 2020 to start exploratory drilling. The
Luiperdpadda prospect where the rig is drilling
is the second of five prospects in the group. With
light oil and gas condensate having been found
in the Brulpadda well, it is possible that other
prospects will be found with this further drilling.
Africa Energy holds a 4.9% effective interest
in the Exploration Right for Block 11B/12B.
The Company owns 49% of the shares in Main
Street 1549 Proprietary Limited, which has a 10%
participating interest in the block. Total as operator
holds a 45% participating interest in Block 11B/12B,
while Qatar Petroleum (25%) and CNRI (20%) are
the other participants.
The exploration drilling in Block 11B/12B
is in deep waters similar to where the gigantic
Mozambique Rovuma Basin gas discoveries were
made in 2010. The drilling campaign has long-term
benefits to South Africa which include introducing
frontier deepwater (>1400m) exploration drilling,
building confidence and potentially shifting
petroleum exploration activities to private
international oil companies (IOCs), de-risking
deep-water acreage which is believed to be
prospective for large oil and gas resources. This will
encourage other IOCs to take risk in drilling deepwater
prospects, which could result in the country
discovering more oil and gas resources.
In June 2020, the Block 11B/12B joint venture
received the fast-track 3D seismic dataset
from Petroleum Geo-Services ASA for the
2 305km² 3D seismic programme completed
earlier in the year on the block. Initial
interpretive work has identified a number
of additional leads, including a potential
northern extension to the Luiperd Prospect.
When the Block 11B/12B JV receives
the fully-processed 3D dataset it will then
integrate the PGS data with the Polarcus
3D seismic data from 2019 in order to
mature previously identified leads into
prospects. “Further development of the
discovery is highly dependent on the
success of this further drilling,” comments
Dr Masangane. “Possible development
could see condensate being piped to the
PetroSA facility in Mossel Bay,” she adds, “but
these decisions are ultimately up to the
operator, Total and its partners.”
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FOCUS
Petroleum Agency SA: promoting
and regulating exploration and production.
Petroleum Agency SA evaluates, promotes and
regulates oil and gas exploration as well as related
production activities in South Africa, in addition
to archiving all relevant geotechnical data. The
Agency acts as an advisor to the government and
carries out special projects at the request of the
Minister of Mineral Resources and Energy.
South Africa’s energy mix is changing to include
more gas through importing liquefied natural gas
(LNG), using shale gas if reserves prove commercial,
and developing infrastructure for the import of
LNG. Petroleum Agency SA plays an important
role in developing South Africa’s gas market by
attracting qualified and competent companies to
explore for gas. Another major focus is increasing
the inclusion of historically disadvantaged South
African-owned entities in the upstream industry.
Currently, natural gas supplies just 3% of South
Africa’s primary energy. A significant challenge
facing the development of a major gas market
is the dominance of coal. Opportunities for gas
lie in the realisation of South Africa’s National
Development Plan (NDP) and the Integrated
Resource Plan (IRP).
As custodian, Petroleum Agency SA ensures
that companies applying for gas rights are
vetted to make sure they are financially qualified
and technically capable, as well having a good
environmental track record. Oil and gas exploration
requires enormous capital outlay and can
represent a risk to workers, communities and the
environment. Applicants are therefore required to
prove their capabilities and safety record and must
carry insurance for environmental rehabilitation. ■
Contact details
Tel: +27 21 938 3500
Email: plu@petroleumagencysa.com
Website: www.petroleumagency.com
PASA’S NEW CEO HAS A BACKGROUND IN ENERGY POLICY AND STRATEGY
Dr Phindile Masangane was appointed as the
CEO of the South African upstream oil and gas
regulatory authority, Petroleum Agency South
Africa, in May 2020. Before then, Dr Masangane
was an executive at the South African state-owned
energy company, CEF (SOC) Ltd, which is the
holding company of PASA.
Dr Masangane was responsible for
clean, renewable and alternative energy
projects. In partnership with private
companies, she led the development
of energy projects including the deal
structuring, project economic modelling
and financing on behalf of the CEF Group
of Companies. Her responsibilities included
supporting the national government
in developing energy policy and
regulations for diversifying the
country’s energy mix. In 2019, Dr Masangane was
Head of Strategy for the CEF Group of Companies
where she led the development of the group’s
long-term strategic plan, Vision 2040+ as well as
the group’s gas strategy. From 2010 to 2013, she
was a partner and director at KPMG, responsible for
the Energy Advisory Division. She successfully
led the capital raising of $2-billion for
hydro and coal power plants expansion
programmes of the Zimbabwean power
utility, ZESA/ZPC.
An alumnus of three universities, Dr
Masangane has a BSc (mathematics
and chemistry) from the University of
Swaziland, a PhD in Chemistry from
Imperial College, London and an
MBA from the University of the
Witwatersrand. ■
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OVERVIEW
Water
Infrastructure spending will have to be consistently high.
SECTOR INSIGHT
The National Cleaner
Production Centre South
Africa is finding ways to use
less water.
Amatola Water.
The National Department of Water and Sanitation has
released a master plan in response to the severe droughts
that have affected the country in recent years. It calls
for annual investment for a decade of R3.3-billion in
infrastructure to achieve water security. This is a figure that can
only be achieved with the help of the private sector.
In 2030 South African demand for water will be 17%
greater than supply. That is the verdict of the 2030 Water
Resources Group, an international consortium of private
companies, agencies and development banks that has
established a South African chapter, the Strategic Water
Partners Network.
The National Cleaner Production Centre South Africa (NCPC)
is the technical partner for the water use part of Phase 2 of the
Strategic Water Sector Cooperation between the governments
of Denmark and South Africa. NCPC, which runs the Industrial
Water Efficiency project, has found that more efficient use of
energy (a key focus area of its work) has also led to less water
being used in production processes.
A strategic review led Aveng to dispose of Aveng Water and
Aveng Namibia Water in June 2019, together with a range of
other businesses deemed to be non-core. The buyer was Infinity
Partners, a 100% black-owned company jointly held by investor
E-Squared Investments and Suzie Nkambule, who was the MD of
Aveng Water up until the time it was sold.
Another sale in 2019 resulted in Inzalo Capital Holdings taking
a 60% stake in the water group of Sebata Group Holdings. The two
companies affected are USC Metering and Amanzi Meters which,
as a result of the transaction,
qualify as “Black Industrialist”
businesses in terms of the Black
Industrialist Policy (BIP) of the
Department of Trade, Industry
and Competition (dtic).
The Western Cape, which
bore the brunt of a fierce
drought for several years, 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.
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.
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OVERVIEW
Technology and innovation
A plant that makes water from air was launched in 2019. Aqua Air
Africa has established an atmospheric water-generation plant at
Ga-Rankuwa near Pretoria and is producing about 10 000 litres
per day through a process that involves the condensation of
water vapour into liquid.
Simpler technology is giving the pupils at a school
in Limpopo access to drinking water. Students from
the University of Pretoria’s Department of Geography,
Geoinformatics and Meteorology have helped to build a net
in the mountains where Tshiavha Primary School is located.
Fog is captured by a big net and channelled into tanks by
a gutter running along the bottom of the net. About 2 500
litres of water is captured per day which means that there is
enough to share among the villagers.
A new kind of water filtration system has been pioneered by
a water entrepreneur from the same province, 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.
The province of KwaZulu-Natal is taking a lead in
desalination 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 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.
In an attempt to reduce the amount of water sucked up by
alien plants, Coca-Cola aims to recover nearly three-billion litres
ONLINE RESOURCES
National Cleaner Production Centre South Africa: www.ncpc.co.za
National Department of Water and Sanitation: www.dwa.gov.za
South African Water Research Commission: www.wrc.org.za
Water Institute of South Africa: www.wisa.org.za
of water through the removal
of invasive plants.
Supplying water to
households and businesses
has often been a task
beyond the capabilities
of some of South Africa’s
municipalities. The 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 wellresourced
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 Swaziland.
Another example of a CMA is
the Breede-Gouritz Catchment
Management Agency in the
Western Cape. ■
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FOCUS
Gert Sibande Water
Quality Testing Laboratory
Improving water quality for citizens of the district.
The Gert Sibande Water Quality Testing
Laboratory is the only SANASaccredited,
government-owned
facility in the Mpumalanga Province.
It is situated on the N17 corridor in
Ermelo, bounded by Ekurhuleni Metro of the
Gauteng Province to the west, Sedibeng District
Municipality of the Northern Free State to
the south-west, Ehlanzeni District Municipality
of Mpumalanga Province to the northeast,
Nkangala District Municipality to
the north (Mpumalanga Province), Amajuba
District Municipality to the south-east of
KZN and Swaziland to the east and, therefore,
easily accessible.
The facility is evidence of Gert Sibande District
Municipality’s vision to be “A community-driven
district of excellence and development” and is in
line with the National Development Plan (NDP)’s
vision 2030 which is:
“To ensure that all South Africans have access to
clean running water in their homes.”
The centrality and the strategic location of
this facility ensures easy accessibility by all stakeholders.
Informed by the need to improve water
quality in the district, the laboratory was established
in 2011 to guarantee safe drinking water
provided to millions of citizens within the district
according to section 9 (1) of the Water Services Act
No. 108 of 1997.
GSDM laboratory staff at the GSDM Water Quality Testing Laboratory led by Ms Victoria Tshabalala (centre).
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FOCUS
Mr Siyabonga Makhathini, the Senior Technician (Chemistry) at the ICP room in the GSDM laboratory.
The focus of the facility is on the following:
• Chemical analysis.
• Microbiological analysis.
• Physical analysis.
These services are available to all stakeholders
and customers including local municipalities
and industries. A pricelist is available on request.
Gert Sibande District Municipality prides itself
about this facility which meets the requirements of
the ISO/IEC 17025:2017. In addition, the Gert Sibande
Water Quality Testing Laboratory promotes water
quality and care for water in communities through
active involvement in awareness programmes
offered by local municipalities. It also promotes
careers in science by providing opportunities to
students in the form of in-service training.
The laboratory boasts of the provision and
delivery of superior laboratory services and aims to
promote and support the development of a culture
of scientific learning. The Gert Sibande Laboratory
regards its clients as valuable stakeholders whose
interests are a priority for the laboratory.
OFFICE HOURS
Monday to Thursday: 07h30-13h00; 13h30-16h30
Friday: 07h30 to 14h00.
Contact details
Address: Cnr N17 Bethal and Nelspan Roads,
Cassim Park. PO Box 1748, Ermelo, 2350.
Tel: +27 17 801 7143.
Email: laboratoryservices@gsibande.gov.za
Website: www.gsibande.gov.za
Facebook: @gertsibandedm
Twitter: @GertSibandeDM
GPS coordinates: S26 31’ 25.73” E29 58’ 19.25
107 69 SOUTH AFRICAN BUSINESS 2021

OVERVIEW
Engineering
Many engineering groups are selling off assets.
SECTOR INSIGHT
A presidential infrastructure
office may breathe new life
into the sector.
A semi-portable crane from RGM Cranes. Credit: Betterect.
Aveng’s disposal of non-core assets is typical of
the activity of larger companies in the sector. The
company’s website lists Aveng Trident Steel and
Aveng ACS (Automotive Control Solution) as solid
businesses which will realise good value once a new owner
is found and lists another eight businesses (in roads, rail,
civils and electrical) which the group sold in 2019.
With a renewed focus on infrastructure, resources and
mining solutions, Aveng’s main operating companies are
now Moolmans in South Africa (contract mining and mining
services) and McConnell Dowell (engineering, construction
and maintenance) in Australasia, Southeast Asia and the
Middle East.
Some of the big names such as Group Five, Basil Read
and Esor are in business rescue. Others such as Murray &
Roberts and WBHO rely heavily on offshore contracts for
revenue. 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.
An Investment and Infrastructure Office has been created
in the Presidency. It is headed by the former Gauteng MEC for
Economic Development, Dr
Kgosientso Ramokgopa. In
2020, 51 infrastructure projects
with a total investment value
of more than R340-billion were
gazetted and hopes are high
that this initiative will provide
a boost for engineering firms.
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.
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 has
built 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.
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Sector news
Expansion at Betterect’s manufacturing plant in Krugersdorp has
helped to push production to a monthly level of 650 tons of steel
plate work. This has necessitated the installation of strong and
reliable cranes which have been provided by RGM Cranes for
more than 30 years. Betterect specialises in mild and stainless
steel fabrication, steel erection and corrosion protection.
Betterect recently commissioned RGM Cranes to supply a
30-ton semi-portable crane and two 10-ton single-girder cranes.
The smaller cranes lift items for the erection of semi-assembled
or fully assembled tanks and skids in the workshop area. Most of
the RGM cranes are on site at the Chamdor site but when a fuel
gantry was constructed at the airport on the island of St Helena,
the two companies worked together there.
RGM is the South African agent and supplier for Turkish
company Güralp. The Güralp hoist is sent to South Africa in kit
form (the hoist, cabling and electrics) and RGM manufactures the
girders and assembles the crane.
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 of
TMH Africa, a part of the TMH Group, which has head offices in
Switzerland.
ELB Group’s Engineering Services division employs more than
1 000 people and the company is currently working full-time on
the vast Gamsberg zinc project in the Northern Cape. Manganese,
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.
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
Training
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. ■
71 SOUTH AFRICAN BUSINESS 2021

OVERVIEW
Construction and property
Logistics property is strongly placed for growth.
SECTOR INSIGHT
Cement and brick
manufacturers are hoping for
a quick recovery.
Credit: Equites
The trend which saw logistics property growing as a
sector because of the Amazons of the world needing
more space to store their products will speed up in
the post-Covid world as more people work and order
from home.
The Economist focused in its 30 May 2020 issue on
Prologis, Amazon’s biggest landlord. The American company
has assets of $125-billion and 90km² of floor space, and spent
$25-billion in 2019 in America and Europe. E-commerce now
accounts for about 40% of its construction activity, whereas
it was a fifth before the pandemic.
A similar trend playing out in South Africa was noted by
Nick Wilson in the Business Times (Sunday Times 5 July 2020).
The logistics property sector had “boomed in recent years due
to the growth of e-commerce” but was likely to do even better
because of Covid-19. About a third of Fortress’s R30-billion
portfolio is in the logistics sector and it signed contracts in
2020 with Takealot and a Netflix production company.
The clients of Equites, a company which focusses on
logistics property, include Amazon, Super Group, HDL and
DSV, a Danish transport and logistics company. Equites is the
only specialist logistics property company listed on the JSE. In
six years, its portfolio has grown from R1-billion to R15-billion.
There are more than 30 real estate investment trusts (REITs)
on the JSE and they generally deliver good value.
FNB, which publishes a regular property barometer,
has done an in-depth analysis of previous crises to help
understand what may occur in the post-Covid property
market. According to John Loos, a property strategist at FNB
Commercial Property Finance, the most vulnerable sector is
likely to be Retail Property. Smaller neighbourhood centres,
with more essential items
and greater convenience,
will be less vulnerable.
This is borne out by
the results announced by
Resilient in 2020. Of the
company’s 28 retail centres
across South Africa, the
ones that did best were the
smaller, rural malls.
The South African Council
of Shopping Centres calculates
that the country has the sixthhighest
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 secondbiggest
mall, recently spent
R750-million.
The lockdown accelerated
the trend for people to work
from home, and so the
Office Property sector will
come under pressure. Many
companies will be reducing
office space but, as Loos
writes, “Improved technology
has gradually been driving a
greater remote working trend
for some years. Covid-19 has
merely sped this trend up.”
SOUTH AFRICAN BUSINESS 2021
72

OVERVIEW
Industrial Property will take a hit but is expected to
recover strongly while Residential Property is expected to be
the least at risk. Prices will likely go down, but people need
a place to live and the work-from-home trend will increase
the importance of residential property. Loos concludes that,
“In a few decades time, the composition of the property
stock may look noticeably different to what it is today, the
key features being a smaller portion of the total being retail
and office property, and an even larger portion of the stock
being residential property than is currently the case.”
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.
Construction rebuilding
Job losses and business rescues have been recurring themes
in the South African construction sector for some time.
The fact that some kind of recovery must happen after the
lockdown will give hope to all construction and construction
material companies, and they will hope that increased order
books will allow them to restart some of their facilities.
Corobrick is a manufacturer of masonry, pavers and
concrete earth retaining systems. The company, which has its
headquarters in Durban and employs 1 400 people, announced
in 2020 that four of its 13 factories would be closing.
PPC Cement suffered losses for the year ending 30 March
2020 with cement demand significantly down from the
previous year. The Covid-19 lockdown will have made the
situation worse and a rights issue is likely to follow.
Road-building, renewable energy and affordable housing
have proved good sectors for Raubex, which returned
good results in 2020, despite the lockdown occasioned by
ONLINE RESOURCES
Construction Industry Development Board: www.cidb.org.za
SA Institute of Architects: www.saia.org.za
SA Reit Association: www.sareit.prowly.com
South African Property Owners Association: www.sapoa.org.za
Credit: Fortress Reit Ltd
Covid-19. The company’s
Earthworks and Materials
division delivers two-thirds
of its operating profit but
it is upbeat about its Roads
division winning contracts
in South Africa in the short
term. Tenders were entered
for R22-billion worth of
road construction in the six
months to March 2020.
The Inner City Local Area
Plan (LAP) for Durban has
been developed for the
Strategic Planning unit of the
eThekwini Municipality by a
Joint Venture called IPPU. A
major milestone was reached
in 2019 when the beachfront
promenade extension
reached the harbour. The
project began in early 2018
and cost R400-million.
According to the organisers
of the 2019 KZN Construction
Expo, infrastructure will attract
more than R200-billion in
investment over seven years
and R35-billion will be spent
over 15 years at the Port
Waterfront development. ■
73 SOUTH AFRICAN BUSINESS 2021

OVERVIEW
Manufacturing
TFG plans to double manufacturing capacity.
TFG, whose South African brands include TotalSports,
Markhams and Foschini, has a five-year plan to double its
manufacturing capacity.
Having purchased Prestige Clothing Maitland and
Prestige Clothing Caledon in 2012 and spent R75-million on
expanding the factory in Caledon in 2017, TFG now plans to
significantly increase the percentage of locally-made clothing
items from the current level of 35% to 55%. This expansion should
lead to more jobs within the group, which expanded in 2020 with
the purchase of Jet from Edcon.
The Manufacturing and Competitiveness Enhancement
Programme (MCEP) of the Department of Trade, 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. About 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.
SECTOR INSIGHT
The furniture sector is finding
ways to grow.
The furniture manufacturing
sector earned R3.9-billion in
exports in 2018 and contributed
1% to the country’s gross
domestic product (GDP).
Employment across the sector
amounts to more than 26 000,
but that figure is markedly
down from a high of 80 000 in
the 1990s. Exposure to foreign
imports and distance from
lucrative markets continue to
pose threats to the sector, but a
group of manufacturers, buyers,
government and traders has set
out to do something about it.
A first Furniture Sector
Forum (pictured) was held
SOUTH AFRICAN BUSINESS 2021
74

OVERVIEW
Johannesburg in 2019 where government incentives and ideas
about how to reduce the cost of expensive machinery through
co-ownership and partnerships were shared. The forum was cohosted
by the South African Furniture Initiative (SAFI), Proudly
South African, PG Bison and the Department of Trade, Industry and
Competition. The second Forum took place in October 2020, with
the support of Interior Design Professions (IID) and Trend-Forward.
The dtic’s Agro Processing Support Scheme (APSS) includes
furniture manufacturing as a core sector for future growth and
support. Other efforts to get government departments to buy locally
were explained. Average employment per manufacturer is 13 people
per facility which makes the sector well suited to expansion and to
measures requiring flexibility, but it can lead to manufacturers feeling
isolated. The idea-sharing forum is one way of overcoming that.
Contribution to GDP
Manufacturing’s contribution to South African GDP is 13%, less
than half its contribution in the 1980s and a drop of about 11%
from the 1990s. In 2018, the real-term contribution to GDP was
R386.8-billion (Stats SA).
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.
The global surf ski market is worth about R220-million.
According to Dale Granger of biznews, some 30-40% of that niche
market belongs to South African manufacturers such as East
London’s Fenn and Durban-based Revo and Carbonology. The
South African after whom the world’s first surf ski was named, Oscar
Chalupsky, is now CEO of Nelo Surf Skis in Portugal. A new surf ski
sells for between $3 000 and $6 000.
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 and Cipla Medpro. The
National Association of Pharmaceutical Manufacturers (NAPM)
ONLINE RESOURCES
Chemical and Allied Industries’ Association: www.caia.co.za
Manufacturing Circle: www.manufacturingcircle.co.za
South African Furniture Initiative: www.furnituresa.org.za
South African Textile Federation: www.texfed.co.za
has re-branded as Generic
and Biosimilar Medicines of
Southern Africa.
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.
South Africa’s chemical
industry contributes 5%
to national gross domestic
product 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.
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 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 companies three mills are
in South Africa, Ngodwana
(Mpumalanga) and Saiccor
(KwaZulu-Natal). ■
75 SOUTH AFRICAN BUSINESS 2021

OVERVIEW
Food and beverages
Starch mills are changing hands.
SECTOR INSIGHT
South Africans love chicken
and hamburgers.
Tongaat Hulett, best known as a sugar producer, is selling
its starch business (with three milling plants in Gauteng
and one in the Western Cape) to the KLL Group, a whollyowned
subsidiary of Barloworld Logistics Africa. The
Germiston plant is pictured.
The R5.3-billion transaction was in doubt because of concerns
about the value of the business expressed by the buyer in the
context of Covid-19 but the Competition Tribunal in July 2020
approved the deal.
The top five fast-food companies in terms of outlets in 2019 were
KFC (900), Steers (600), Debonairs (569), Wimpy (467) and Nando’s
(340). McDonald’s, FishAways and King Pie were close together in the
next three positions in a survey done by Business Tech. The survey
found a total of 5 287 stores, which includes the somewhat vague
“over 200 stores” claimed by Chicken Licken.
Famous Brands owns Steers, Debonairs, Wimpy and FishAways,
a typical scenario in the South African fast-food sector. The Spur
Corporation has outlets in several segments including family
diners, pizzerias, hamburger outlets and steak houses, including
the Hussar Grill.
Taste Holdings announced in 2020 that it was placing its
food business into voluntary liquidation after a failed attempt
to sell the Domino’s Pizza business. The Starbucks franchise
was sold for R7-million.
More than half of the companies operating in the food
and beverage sector in South Africa are in Gauteng, including
Nestlé, Tiger Brands, Pioneer Foods, RCL, AVI and Astral. There are
approximately 4 000 food processing companies in the province,
employing more than 100 000 people.
ONLINE RESOURCES
Agricultural Research Council: www.arc.agric.za
FoodBev SETA: www.foodbev.co.za
National Agricultural Marketing Council: www.namc.co.za
Two of the best-known large
companies in South Africa’s
food and beverages sector were
purchased by international
companies in 2019. PepsiCo
bought Pioneer Foods and
Central Bottling Co of Israel made
on offer on dairy company Clover.
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.
Food and beverages makes
up 26% of the South African
consumer products sector,
just ahead of agro-business
(25%), diversified companies
(23%) and sugar producers.
Recent capital expenditure
in the industry has targeted
improving efficiency rather
than expansion of production.
The food and beverages
sector employs about 230 000
people. Beverages accounts 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 agro-industries derives from
agro-processing. ■
SOUTH AFRICAN BUSINESS 2021
76

FOCUS
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SOUTH AFRICAN BUSINESS 2021
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108

OVERVIEW
Automotive
The automotive sector makes up a third of South Africa’s manufacturing capacity.
SECTOR INSIGHT
Supplier parks and Special
Economic Zones are playing
to South Africa’s automotive
strength.
The East London IDZ hosts a number of automotive companies.
Vehicle sales declined sharply in the Covid-19 lockdown
period. For the year to September 2020, sales of passenger
vehicles went down by 34.4% and by a similar amount in
light commercial vehicles.
Analysts will be closely watching consumer behaviour as
economies open again to monitor the effects of working from home
and the further growth of the ride-hailing trend.
The manufacturing part of the automotive and components
sector is a vital part of South Africa’s manufacturing landscape. It is
responsible for more than 112 000 jobs which translates to more than
450 000 jobs once the multiplier effect is taken into account.
The South African automotive industry also accounts for:
• 30.1% of the country’s manufacturing output.
• 6.9% of GDP (4.4% manufacturing, 2.5% retail).
• 27.6% of value addition within domestic manufacturing.
• exports to 151 countries, 74% to EU.
• exports in 2018 of vehicles and components of R201.7-billion, a
record (and 15.5% of country total).
• exports in 2019 of 387 125 vehicles achieved a new record
amount of R148-billion and components also set a new record
of R53.7-billion.
(National Association of Automobile Manufacturers of South Africa,
NAAMSA)
Foreign direct investment
(FDI) into South Africa from
seven of the eight Original
Equipment Manufacturers
(OEMs) totalled R7.3-billion
in 2019 and a further
commitment was made
of another R40-billion
investment over the next
five years. The component
sector invested R3.5-billion
in 2019 (Automotive Industry
Development Centre, AIDC).
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 onemillion
vehicles, the sector will
become more viable.
The National Department of
Trade, 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
SOUTH AFRICAN BUSINESS 2021
78

OVERVIEW
in SA), increasing local content and doubling employment and blackowned
businesses in the sector.
South Africa has three centres of automotive production: the
Eastern Cape, Gauteng and KwaZulu-Natal. In the Eastern Cape, the
OEMs are Volkswagen, Mercedes-Benz, Isuzu and Beijing Automobile
Investment Corporation (BAIC). Ford has an engine plant in Port
Elizabeth.
In KwaZulu-Natal Toyota has a large plant just south of Durban.
Although the manufacturers of loaders, dump trucks and haulers are
not counted in the tally of South African OEMs, Bell Equipment, a
global leader in its field, runs a large manufacturing site in Richards
Bay. Dezzi Equipment is based in Port Shepstone. In 2018 AIH
Logistics started assembling Mahindra and Bolero bakkies from kits
imported from India on a site at the Dube TradePort. Pretoria is home
to BMW, Nissan and Ford.
All three centres are making use of targeted land allocation to
try to boost the sector through industrial parks or Special Economic
Zones. The idea is to get economies of scale through grouping
companies which serve one another. Training becomes easier and
costs can be reduced.
Chinese OEM BAIC is the first new entrant into the market to set
up within an SEZ. The planned investment in the Coega SEZ by BAIC
and its partners is R11-billion. BAIC expects to be building 50 000
vehicles per year at its site at the Coega SEZ by 2022.
Automotive component suppliers and downstream
manufacturers such as electronics components, metal fabrication,
plastic moulding, precision machining and trim are expected to
take up opportunities in the Automotive Zone within the Coega
SEZ, as they do at the East London Industrial Development Zone
(ELIDZ). Companies in the ELIDZ which manufacture in support of
the Mercedes-Benz operation include Feltex Automotive Trim, TI
Automotive (brake and fuel pipes), Yanfeng Automotive Interiors,
Linde+Wiemann (seat frames, recliners, metal surface treatment)
and Onelogix VDS, which is a logistics company that delivers
motor vehicles.
In line with the policy of developing industrial economic
hubs, the Durban Automotive Supplier Park is being built at Illovo,
south of Durban and near to the Toyota plant. The Dube TradePort
Corporation will manage the project, which covers 1 013ha. The
Durban Automotive Cluster, which has 39 member companies,
ONLINE RESOURCES
Automotive Industry Development Centre: www.aidc.co.za
Manufacturers: www.naacam.co.za
National Association of Automotive Component and Allied
National Association of Automobile Manufacturers of South Africa:
www.naamsa.co.za
is funded by the municipality.
Together, these firms have
about 17 000 employees.
Trade and Investment
KwaZulu-Natal (TIKZN) estimates
that the province’s component
automotive manufacturers
enjoy a combined turnover
approaching R10-billion.
The Tshwane Automotive
Special Economic Zone (TASEZ)
is a project of the Gauteng
Province, the Department of
Trade, Industry and Competition
(dtic) and the City of Tshwane.
The implementing agent
is the Coega Development
Corporation (CDC), the
developer and operator of the
Coega SEZ.
The TASEZ, branded as
“Africa’s First Automotive City”,
has a mandate to promote
economic participation for
SMMEs and create employment
in the region. Sectors
targeted include security,
ICT maintenance, facility
maintenance, construction,
automotive supply chain,
marketing and advertising,
catering and events.
Both the Nissan and
BMW plants are expanding
and Ford is investing in
Silverton. An Incubation
Centre for SMMEs has been
launched at Nissan’s assembly
plant in Rosslyn. The facility
supports small enterprises
through subsidised rental
and mentorship and training.
Management of the centre
is done by the Automotive
Industry Development Centre,
a subsidiary of the Gauteng
Growth and Development
Agency (GGDA). ■
79 SOUTH AFRICAN BUSINESS 2021

OVERVIEW
Transport and logistics
Decongestion of ports is a priority.
SECTOR INSIGHT
Airlink has signed partnerships
with two world-leaders.
Credit: South African Heavy Haul Association
Getting freight through South Africa’s ports in a more
efficient manner has become an urgent priority. A Port of
Durban Decongestion Task Team includes a broad range
of private and public sector organisations involved in the
port. Through nine targeted workstreams the team is tackling the
root causes of Bayhead congestion and is working on improving
coordination, planning, operations and cargo flows.
A mandatory automated truck booking system has been
introduced at Durban Container Terminal Pier 1 and Pier 2, while the
Grindrod, FPT and Bulk Terminal depots have also piloted their own
booking systems.
Although Transnet Port Terminals and Transnet Freight Rail are
vital to the smooth running of the loading systems, private operators
of storage facilities and trucking companies also need to synchronise
their operations. In Cape Town, efforts to work on decongestion
include the City of Cape Town, the Cape Chamber of Commerce and
Industry and the provincial government.
The 2020 Technical Conference of the South African Heavy Haul
Association tackled the issue of bringing smart technology to the
railway system under the theme, “Smart, Resilient Railway Operations
& Infrastructure”. Smart systems can self-monitor and self-diagnose
railway conditions and then predict failures or problems before
they occur. One of the biggest
problems facing the South
African rail system is cable theft,
which leads to frequent delays
along the network.
Transnet Freight Rail (TFR)
has had a new CEO since
April 2020. Siza Mzimela, with
a background in airlines and
logistics, wants to divert road
freight to rail, which currently
attracts just 20% of South
Africa’s general freight. One
of her goals is to find a South
African manufacturer who can
produce railway lines.
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.
It is on these specialised
lines that TFR excels. A new
record was set in 2019 when
375 wagons were hitched
to the Sishen-Saldanha train
that hauls iron ore from the
Northern Cape to a dedicated
terminal at Saldanha in the
Western Cape. The total
volume transported in 2019
amounted to 58.4-million tons.
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OVERVIEW
Coal tonnage reached 72mt in the same year and general freight
accounted for a further 85mt.
Increasing the amount of general freight transported by rail
would not only bring down costs but it would also take the burden
of thousands of heavy trucks off South Africa’s roads.
South Africa has 22 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.
Air
Four airlines were still flying after the Covid-19 lockdown: Airlink,
Mango, Cemair and FlySafair. The business rescue process was
applied to SAA, SA Express and Comair.
A R1.5-billion business rescue offer was made to Comair that
would enable it to restart in time for Christmas 2020. The offer entails
delisting from the JSE. Comair operates as a British Airways franchisee
on domestic routes and launched its own low-cost airline, kulula.
com, in 2001.
In October 2020, Airlink signed two deals in quick succession with
Qatar Airways and Emirates, giving customers single-ticket travel and
one-stop baggage check-in.
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 in Johannesburg caters for more than
21-million passengers annually. Cape Town International Airport
recorded 10-million passengers in 2016, a figure that rose in 2019 to
a shade under 11-million. King Shaka International Airport (KSIA) is
north of Durban.
The South African Ministry of Transport has several agencies
and businesses reporting to it: Air Traffic and Navigation Services
Company, ACSA, National Transport Information System, Road
Accident Fund, South African Civil Aviation Authority, South
ONLINE RESOURCES
Airlines Association of Southern Africa: www.aasa.za.net
Airports Company South Africa: www.acsa.co.za
Road Freight Association of South Africa: www.rfa.co.za
South African Association of Freight Forwarders: www.saaff.org.za
South African Heavy Haul Association: www.saheavyhaul.co.za
African Maritime Safety
Authority (SAMSA), the
South African National Roads
Agency Limited (Sanral) and
the Passenger Rail Agency of
SA (PRASA).
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.
Transnet is hoping that the
partnership will help it towards
reaching its goals in its road-torail
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 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. ■
81 SOUTH AFRICAN BUSINESS 2021

OVERVIEW
Tourism and events
The MICE sector faces special challenges.
SECTOR INSIGHT
Tsogo Sun Hotels has
increased its stake in three
hotels post-lockdown.
Credit: AfriCamps at Ingwe
Although all projections about the tourism sector and
its potential for growth and for job creation were shortcircuited
by the Covid-19 pandemic, the fact remains that
the sector can grow quickly and it is a good job creator. In
the short term, domestic tourism will be the focus but the potential
of the sector, and South Africa’s riches in terms of what it can offer,
remain significant.
According to John Loos, a property strategist at FNB Commercial
Property Finance, an overlooked factor in many analyses of the
Covid-19 lockdown has been how technology has shown that some
business travel can be avoided altogether. Corporate travel budgets
will be cut, and fewer physical conferences will be held, he predicts,
which will put the meetings, incentives, conferences and events
(MICE) sector under even more pressure.
A relatively small market currently, but one with massive
potential, is Muslim tourism. The Western Cape has already started
doing research in its agricultural and tourism sectors and there is no
doubt that with good marketing, South Africa could start gearing
up for a growing number of Muslim tourists. The fact that most of
the country’s major cities have a proportion of Muslim residents and
mosques are widely spread across the country means that travelling
around the country is easy.
The 16 units that comprise
the Buckler’s Africa Lodge by
BON Hotels on the banks of the
Crocodile River overlooking
the Kruger National Park has
halal certification. A coastal
option that allows for selfcatering
is AfriCamps Boutique
Glamping site at Ingwe near
Plettenberg Bay. Situated on a
hilltop with great views of the
ocean and the Tsitsikamma
Mountains, the luxury tents
have fully-fitted kitchens.
Virtual tours have been
taken up by heritage operators
such as Constitution Hill and
Liliesleaf Farm and this option
is likely to grow as people in
other countries seek out a
South African experience free
from any worries.
When the Marriott
International hotel group
closed three of its South African
hotels during the Covid-19
lockdown, Tsogo Sun Hotels,
which owns a controlling stake
in all three hotels, stepped up
its commitment by agreeing
to bring them into its portfolio,
keep them open and run them.
Two of the affected
hotels were the Protea Hotel
by Marriott Hazyview in
SOUTH AFRICAN BUSINESS 2021
82

OVERVIEW
Mpumalanga and Durban’s Protea Hotel by Marriott Durban
Edward. The third hotel, the Mount Grace in the Magaliesberg, was
originally developed by the Brand family and was the sister hotel
to The Grace in Rosebank. Tsogo bought and restored The Grace
in 2015 and it currently operates as 54 on Bath. The Tsogo group
believes that demand for conferencing, weddings and shorter
family getaways will grow and that the Mount Grace, with its close
proximity to Johannesburg, is in a good position to respond to
those markets.
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 hotel brands cover four
market segments, and they include a handful of stand-alone hotels
such as the Palazzo (at Montecasino) and the boutique hotel in
Rosebank. SunSquare, Southern Sun Hotels, Southern Sun Resorts,
Garden Court and StayEasy are among the group’s brands.
The move by Marriott International into the South African
market was seen as significant, and it retains most of its
properties. In partnership with the Amdec Group, Marriott
spent about R1-billion on the Marriott Hotel Melrose Arch and
Marriott Executive Apartments Johannesburg Melrose Arch.
Buying into Protea Hotels has also given Marriott access to
other African countries.
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
Armada Consortium is spending 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.
On the western edge of Cape Town’s Foreshore, an ambitious
plan envisages two new hotels, flats, retail space and offices rising out
ONLINE RESOURCES
African Business Travel Association: www.abta.co.za
South African Golf Tourism Association: www.sagta.co.za
South African National Parks: www.sanparks.co.za
South African Tourism: www.southafrica.net
South African Tourism Services: www.satsa.com
Credit: Buckler’s Africa Lodge
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.
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.
There are 711 745 people
employed in the tourism
industry nationally, 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). ■
83 SOUTH AFRICAN BUSINESS 2021

OVERVIEW
Banking and
financial services
Investors are getting behind fintech.
Naspers Foundry is one of several investment funds
looking for opportunities in the financial sector.
Insurance technology is of particular interest, together
with credit services and payment systems.
The appointment by mobile operator Vodacom of a new
Chief Financial Officer (CFO) in 2020 gave further insight into
the growing link between the digital world and the world of
finance. The new executive, Raisibe Morathi, was for 10 years
CFO of Nedbank.
Morathi also served on the board of Sanlam, a giant in
the South African financial sector. In 2019, Sanlam, which
has 20 319 South African employees, distributed R190-billion
between employees, shareholders, government and clients.
Capital Appreciation, which is part-owned by the Public
Investment Corporation, is already invested in a software
developer, a credit card payment terminal provider and has
R500-million available for further investments.
African Rainbow Capital, with about 5%, has a stake in the
investment company and is the owner of TymeBank, which
received a banking licence in 2017.
Tyme stands for Take Your Money Everywhere and refers to
the bank not having a branch network. Perhaps the lockdown
encouraged customers to think in digital terms because Tyme
reported in October 2020 that it had 2.4-million customers, up
from 1.4-million at the end of March. A 400% increase in the
use of services such as airtime and electricity purchases was
also noted.
Discovery Bank officially launched in March 2019 and is
experiencing rapid growth with deposits of R3.7-billion. Discovery
Bank is applying the behavioural model it uses in its health
business to reward good financial behaviour.
Another relatively new bank is Capitec, which is steadily increasing
its customer base by providing banking for business and
individual customers in what it describes as a simple manner. In
SECTOR INSIGHT
PSG is selling a big stake
in Capitec Bank.
May 2020, investment holding
company PSG announced that
it would reduce its holding in
Capitec Bank from 32% to 4%,
earning about R4-billion by
selling those shares.
South Africa’s financial
services sector has expanded
by the opening of several
new stock exchanges.
Pharmaceutical company
Aspen Pharmacare has taken a
second listing on 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 clients.
The JSE is the world’s 19th
biggest exchange and nearly
400 companies are listed
on the JSE or AltX, the JSEowned
exchange for smaller
companies. ■
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 BUSINESS 2021
84

CPD
CONTiNUOUS PROFESSiONAL DEVELOPMENT
“ Attending CIGFARO Training
and webinars has allowed me to
earn CPD points while
participating in Technical
discussions to help improve my
professional capacity. This is a
great time to be associated with
a SAQA recognised Professional
Body. ”
Ms Zanele Malaza
(PGFO), CFO City of
Mbombela
CONTACT US:

OVERVIEW
Development finance and
SMME support
A new fund aims to make R5-billion available at a fair price.
Anew fund for SMMEs was launched in 2020 with the
aim of providing capital at a fair price. Former SA Post
Office CEO Mark Barnes, who previously worked in
investment banking and private equity, is heading the
Kisby Investment Fund. Partners in the fund are Arena Holdings
(media), 4AX Africa Exchange, 4AX Debt Services and Rainfin
(online credit). Barnes told Business Day that the fund would be
compensated for the risk in supporting companies that have to
“hunt around in the overpriced debt market” by taking equity in
the firm. Kisby is aiming for a R5-billion fund to support companies
in the R10-million to R1-billion revenue bracket.
Funding is available for technology start-ups in many
forms but getting funding early in the process can be difficult
because the concept is not proven. For asset management
company Futuregrowth, ring-fencing some funding for
allocation to early-stage development is a way of ensuring
that potential is not overlooked. The company has put 10% of
its development equity fund (or R280-million) into businesses
such as payment devices (Yoco), infrastructure platform
(Rubicon), fintech (LifeCheq) and an app for domestic workers
(SweepSouth).
Data company 5M2T (5Minutes2Town) has started offering
sophisticated information about the township market. From how
many spazas in Soweto have refrigeration units (4 700) to brand
loyalty, 5M2T covers 60 000 spazas, salons, barbers and other
informal trade outlets an “in-market audit”. This allows for better
ordering and planning for suppliers and logistics operators.
The Covid-19 lockdown had a severe impact on many small
businesses. A survey conducted by risk finance company Business
Partners Limited found that 95% of SMME respondents thought they
would not survive without help. The company’s packages in response
included a Repayment Relief Programme and a Financial Assistance
Programme capitalised at R100-million.
Most big companies in South Africa have two main
programmes to support SMMES: enterprise development (ED) and
SECTOR INSIGHT
Futuregrowth has a focus
on early stage start-ups.
local supplier development (or
procurement). Venetia Mine in
northern Limpopo, a De Beers
Group mine, has more than 50
SMMEs enrolled in incubation
programmes and 34 locallyowned
companies are doing
business with the mine.
The National Department
of Small Business Development
(DSBD) has several programmes
to assist SMMEs and cooperatives.
The Small Enterprise
Development Agency (Seda),
a subsidiary of the DSDB,
has 42 incubation centres in
South Africa under its Seda
Technology Programme (STP).
The National Department of
Trade, Industry and Competition
(the dtic) is trying to stimulate
township and rural economies.
Programmes include the
Enterprise Investment
Programme (EIP).
The South African SME
Finance Association (SASFA) is a
national, self-regulating body for
alternative finance companies. ■
ONLINE RESOURCES
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
South African SME Finance Association: www.sasfa.net
SOUTH AFRICAN BUSINESS 2021
86

FOCUS
Coega Development
Corporation
a.co.zaPromoting small business as a way of sparking economic growth, creating jobs
and tackling inequality.
, Arcadia,
In championing socio-economic development,
the Coega Development Corporation (CDC)
places the interests of small businesses at the
centre of economic growth. Small business development
and support is crucial as a catalyst for
addressing poverty, unemployment and inequalities
in the society.
The National Development Plan 2030 encourages
Small, Medium and Micro Enterprise (SMME)
support through procurement and developing
BBBEE LEVEL 2 CONTRIBUTOR
ISO 9001:2015 ISO 14001:2015 ISO 45001:2018
The CDC has a ISO dedicated 20000-1:2011 SMME ISO Business 27001:2013
Unit that prioritises empowerment to unlock
opportunities particularly www.coega.co.za
in the built environment
such as infrastructure development and facilities
maintenance. “The billions of rands to be spent
on infrastructure development in the country to
revive our economy should also benefit SMMEs,”
says Dr Ayanda Vilakazi, CDC’s Head of Marketing,
Brand and Communications.
SMME participation on large contracts is
black and female managers and professionals.
Between 2015 and 2020, SMME-procurement
spend achieved by the CDC was 29%. In 2019,
R461.77-million benefited small businesses in all
areas where the organisation has operations.
Contact details
Head Office: Coega SEZ Business Centre,
Corner Alcyon Road and Zibuko Street, Zone 1,
Coega SEZ, Port Elizabeth 6100
Tel: (RSA only): 08610 COEGA | 08610 26342
Tel: +27 41 403 0400 | Fax: +27 41 403 0401
Email: info@coega.co.za
Website: www.coega.co.za
Coega has offices in Pretoria, East London,
Cape Town and Durban.
increasing, a sign of the success of the CDC’s SMME
development programme. Some highlights:
• SMME involvement in the construction of the fourstar
Bluewater Bay Sunrise Hotel, Port Elizabeth.
• As of March 2020, 383 SMMEs benefited from
training, 178 CETA accredited.
• In 2019/20 CDC, SARS and CIDB held compliance
workshops for 652 SMMEs.
• 72 SMMEs successfully upgraded on CIDB
through CDC intervention and support.
A key organisational objective of the CDC is
to facilitate, promote and drive the inclusion of
SMMEs in procurement opportunities. The CDC is
also working at improving its B-BBEE status. The
organisation improved its B-BBEE status from level
4 in 2019 to level 2 in 2020. ■
87 SOUTH AFRICAN BUSINESS 2021

INDEX
INDEX
Airlink............................................................................................................................................................................................IBC
Air Products............................................................................................................................................................................... 59
Chartered Institute of Government Finance Audit and Risk Officers (CIGFARO)...................... 85
Coega Development Corporation (CDC)....................................................................................................2-3, 87
Council for Geoscience (CGS)................................................................................................................................47-49
DNG Energy.............................................................................................................................................................................. 57
Futuregrowth Asset Management...............................................................................................................9, 24-25
Gert Sibande District Municipality.............................................................................................................21, 68-69
Musina-Makhado Special Economic Zone (MMSEZ)............................................................................26-31
Northern Cape Tourism Authority (NCTA)........................................................................................................... 19
Invest Durban ........................................................................................................................................................................IFC
Ivanhoe Mines..................................................................................................................................................................54-55
Kemtek.............................................................................................................................................................................77, OBC
National Metrology Institute of South Africa (NMISA)................................................................................... 7
Oceana..................................................................................................................................................................................34-36
Petroleum Agency SA.................................................................................................................................................64-65
Pilanesberg Platinum Mines...................................................................................................................................50-51
South African Bureau of Standards (SABS)............................................................................................................. 5
South African Mohair Industries Limited (SAMIL)....................................................................................42-43
South African National Space Agency (SANSA).......................................................................................14-15
Vedanta Zinc International......................................................................................................................................52-53
SOUTH AFRICAN BUSINESS 2021
88

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