Free State Business 2018 edition

A REGIONAL OVERVIEW OF

A REGIONAL OVERVIEW OF FREE STATE PROVINCE A new Special Economic Zone is attracting investors The official launch in April 2017 of the Maluti-A-Phofung Special Economic Zone was a significant event for the economy of the Free State. By John Young Although agriculture and mining remain the mainstays of the provincial economy, diversification and expansion through initiatives such as Special Economic Zones (SEZs) are key to the future of the centrally located province. Sectors prioritised at the Maluti-A-Phofung SEZ (which is located on South Africa’s busiest highway, the N3) include logistics, ICT, automotive, pharmaceuticals, manufacturing and agri-processing. The 1 000ha site will have four zones: agri-processing, light industrial, heavy industrials and a container terminal. The reference to agri-processing points to a broader trend in economic planning in South Africa – the desire to create value-added goods out of raw materials. This applies to agriculture (in which the Free State enjoys great riches) and minerals. Five agri-parks are planned in each of the Free State’s district municipalities which will boost production so that more produce is available for beneficiation. Within these parks, support for rural smallholders will be available in terms of equipment hire from a central source, storage facilities, packaging of produce and getting products to market. The use of small towns such as Cornelia, Tweeling, Excelsior and Tweespruit as hubs under the Comprehensive Rural Development Programme (CRDP) should boost the rural economy and provide opportunities for investors. The idea of clustering developments is also behind the N8 Corridor concept which covers Bloemfontein, Botshabelo and Thaba Nchu. Within this are several projects including the ICC Precinct (hotel and convention centre in Bloemfontein), Bio- Medical Park, Airport Node (logistics and supply chain, warehouses, residential apartments, hospitals, schools, hotels and new shopping malls), and tourism infrastructure for the Naval Hill Development. Another important pillar of the economy of the Free State, the chemicals and fuels hub at Sasolburg, is modernising and expanding. International fuel, gas and chemicals company Sasol regularly invests in new technologies and in expanding production of its various products. FREE STATE BUSINESS 2018 8

SPECIAL FEATURE The Provincial Government of the Free State has hosted two events targeting foreign investors, called the Free State Global Investors Trade Bridge. In November 2016 the first Free State/Madeira Flower Festival took place in Parys. This is a first step in creating links to export markets in floriculture and horticulture. A new water pipeline from the Xhariep Dam is being built to serve the Xhariep District and the Mangaung Metro. A steady and reliable water source is an important component in attracting investment. Five major national highways intersect the centrally located province which is also well served by rail and air links. The Bram Fischer International Airport in the provincial capital city of Bloemfontein is the site of a multi-phase industrial and commercial development. Two leading universities (the University of the Free State and the Central University of Technology) have several campuses across the province. Game-changing development A potentially game-changing development in the local economy is the building of a R200-million helium extraction plant to exploit a natural gas and helium field near the towns of Virginia, Welkom and Theunissen. With proven reserves of 25-billion cubic feet, the rights to the field are owned by Renergen and they will be worked by Afrox, a subsidiary of the Linde Group of Germany. Another emerging sector is solar energy. The Xhariep, Lejweleputswa and Mangaung regions have among the best direct solar radiation kWh/m² in the country. Rezoning for solar farms has already taken place in Theunissen, Bloemfontein, Fauresmith and Hoopstad. The Free State shares borders with six other provinces, in addition to the Mountain Kingdom of Lesotho. A summer-rainfall region with a mean annual rainfall of 532mm, the Free State’s climate, soil types and topography vary greatly within the province, with plains in the west and mountains in the east. The western and southern areas are semi-desert, with some Karoo vegetation occurring in the south. The Free State produces significant proportions of South Africa’s wheat (30%), sunflowers (45%) and maize (45%). As such, it is ranked third in contribution to national GDP in agriculture. Municipalities in Free State The Free State has one metropolitan municipality (Mangaung), four district municipalities and 19 local municipalities. Mangaung Metropolitan Municipality Mangaung Metropolitan Municipality is a Category A municipality which governs Bloemfontein, Botshabelo and Thaba Nchu. The sixth-largest city in the country, the Mangaung municipal area covers more than 6 263km² and has a population of about 850 000 people. The languages spoken in the area are mainly Sesotho, Afrikaans, English and Setswana. Bloemfontein, which is responsible for about 25% of provincial GDP, is at the centre of a development node known as the N8 Corridor which is intended to boost development along the road from Lesotho to Kimberley and Upington in the North West province. Several projects are under way in and around the provincial capital, including an Airport Node (logistics, supply chain, flats, shopping malls), Naval Hill (projected new hotel in the nature reserve), expansion of Hamilton Business Park. The city’s Fresh Produce Market is an important cog in the distribution of agricultural produce in the region while it is connected to all other centres by good rail and road links. There is a marshalling yard, a petroleum depot and two airports (one military). The national Supreme Court of Appeal is located in Bloemfontein and the National Museum has superb rock art exhibits. 9 FREE STATE BUSINESS 2018