OVERVIEW Manufacturing
OVERVIEW Manufacturing New chemicals plant opens in Special Economic Zone. SECTOR INSIGHT Textiles and shoes are a Free State speciality. Deputy Minister of Trade and Industry, Bulelani Magwanishe, at the launch of Kevali Chemicals’ new plant. Attractive incentives are on offer to manufacturers at the Maluti-a-Phofung Special Economic Zone (MAP SEZ) which was officially launched in 2017. The 1 000ha facility at Harrismith is strategically located on the N3 highway, which runs between the ports of KwaZulu-Natal and the industrial heartland of Gauteng province. In 2018 Kevali Chemicals became the first beneficiary of the Black Industrialists Scheme (BIS) of the National Department of Trade and Industry (dti). A grant of R35-million allowed the company to acquire machinery and equipment to start a new line of production and manufacturing at a facility in the MAP SEZ. Kevali is the first company in the chemicals, pharmaceuticals and plastics sector to receive support in this programme. The plant, which will manufacture cleaning and disinfecting solutions and water-treatment chemicals, will create 57 direct and 12 indirect jobs. The Industrial Development Corporation (IDC), a development financier, is also supporting the scheme and it has helped workers at the plant become shareholders in the venture. Companies from China, Bulgaria and India have expressed interest in the SEZ proposition. Among the projects in the pipeline are a factory making transformers and one to make medical equipment. Between 2017 and 2019, investments valued at about R550-million will be made into the zone. Investments made into infrastructure at the SEZ will result in 250 direct permanent jobs and 420 indirect jobs in 2018/19. The revitalisation of industrial parks at Botshabelo and Phuthaditjhaba has contributed to manufacturing increasing its contribution to provincial gross value add (GVA). The Industrial Park in Botshabelo was relaunched in June 2016. The R60-million project, part of a scheme to revitalise industrial parks in the province, hosts 12 manufacturing companies. A Risk Sharing Funding and Black Industrialist Scheme aims to support five black industrialists in the manufacturing sector. Botshabelo has a manufacturing sector which employs more than 10 000 people in textiles, plastics and other sectors. However, the bulk of the employed population of Botshabelo commute to Bloemfontein. A number of factory buildings and parcels of publicly owned land in Botshabelo and along the N8, which are either not used or under-utilised, are being targeted for development. Phuthaditjhaba is home to several textile operations. Shoemakers like Tirisano Holdings make a varied range of products FREE STATE BUSINESS 2019 36
OVERVIEW and provide employment opportunities. The IDC is supporting the clothing and textile industry with loans and investments. Manufacturing makes up 9% of Free State gross domestic product, and this comprises 4% of South Africa’s total. The Free State Regional Industrialisation Policy is being reviewed to ensure integration of infrastructure, bulk service provision, industrial sites and export and tax incentives to attract investment. Innovation in manufacturing is encouraged at the Product Development Technology Station (PDTS) at the Central University of Technology (CUT). The PDTS helps small businesses with the technology to design new products, to test them or to improve existing products. The PDTS is funded by the Technology Innovation Agency (TIA) and works in partnership with another CUT unit, the Centre for Rapid Prototyping and Manufacturing (CRPM). This innovative thinking ONLINE RESOURCES Free State Development Corporation: www.fdc.co.za Manufacturing Circle: www.manufacturingcircle.co.za National Department of Trade and Industry: www.dti.gov.za Product Development Technology Station: www.cut.ac.za/pdts South African Textile Federation: www.texfed.co.za is helping the Free State look for ways to develop new kinds of manufacturing. The existing manufacturing sector has capacity in many sectors including chemicals, agri-processing (covered in the overview on agriculture), textiles, carpets, engineering, packaging, furniture and jewellery. Harrismith is home to Nouwens Carpets and Boxmore Plastics. Boxmore Packaging’s new PET beer bottles are the first PET bottles specifically designed for beer on the SA market. Empire Gloves makes industrial gloves. Kroonstad-based Octa Engineering makes specialised rail carriages for the mining sector. In Bloemfontein, Transnet Engineering manufactures new wagons for the Transnet group, including iron ore and cement wagons and fuel tankers. About 20% of the Free State’s manufacturing sites are devoted to food and beverages, with soft drink giant Coca-Cola Fortune operating a large bottling plant in Mangaung. Landzicht Wine Cellar, an operation that distributes 2.4-million litres of wine every year from Jacobsdal, has a new bottling plant. Chemicals are a major sector within the Free State manufacturing basket. Sasol, Omnia and AECI are the major companies. 37 FREE STATE BUSINESS 2019
