South African Business 2021

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