South African Business 2016 edition

Mpumalanga: Key Sectors

Mpumalanga: Key Sectors Mpumalanga is one of South Africa’s most productive and important agricultural regions. It also offers an ideal climate and topography for forests, major mineral resources, formidable manufacturing capacity as well as a sophisticated and well-segmented tourism sector. METAL ORES 6.7% GOLD & URANIUM 3.1% OTHER MINING & QUARRYING 6.8% MINING Mpumalanga exports over US-million of macadamia nuts annually. The mining sector accounts for a quarter of all economic activity in the province and is also the largest single sector, providing employment to 25% of the province’s workforce. The major mining activity in the province is centered on the coal and lignite industry. Mpumalanga contributes 83% of all coal produced in South Africa, making it the world’s third-largest coal-exporting region. Towns such as eMalahleni (Witbank) and Middelburg in the Nkangala District Municipality are at the centre of the coal-mining industry. Structure of the mining sector in Mpumalanga 2014 COAL AND LIGNITE 83.4% Mpumalanga’s coal-mining industry is developing as a significant attractor of both foreign and local direct investment in the province. A significant percentage of the province’s coal is exported to countries such as China, India, South Korea and Japan. AGRICULTURE About 14% of the province’s land area is natural grazing land which is used in the production of beef, mutton, poultry, dairy and wool. The Mbombela district in the Lowveld is South Africa’s second-biggest producer of citrus fruit, while more than half of South Africa’s soya bean crop is produced in Mpumalanga’s Highveld areas. The agriculture sector in Mpumalanga can be divided into two broad categories: • SUMMER CEREALS AND LEGUMES This consists of maize, soya, canola and sunflower that has – in the main – been cultivated in the Highveld region of the province. • TROPICAL, SUBTROPICAL AND CITRUS FRUIT, NUTS AND CANE SUGAR These are mainly cultivated in the Lowveld region of the Province. AGRICULTURE & HUNTING 58% FISH FARMS 0.5% FORESTRY & LOGGING 41.5% Mpumalanga is one of South Africa’s most productive and important agricultural regions and plays a key role in the export profile of South Africa, primarily in fruit and nuts. Structure of the agriculture sector in Mpumalanga 2014 10 000 000 The region exports over 10 million cartons of avocados annually. 1/4 About a quarter of SA’s tobacco crop is cultivated in Mpumalanga. R950-million Turnover from subtropical fruit, which employs about 13 000 people. 80% Mpumalanga generates 80% of South Africa’s energy. 4 Number of major pipeline networks that pass through Mpumalanga. 120-mill ton Mpumalanga supplies 80% of South Africa’s stainless-steel needs.

MANUFACTURING There are two primary pillars of the manufacturing sector in Mpumalanga, and these account for in excess of 75% of the output for this sector: • Fuel, petroleum and chemical products • Metal, machinery and appliances The fuel, petroleum and chemical products manufactured in Mpumalanga are essentially synthetic fuel and its byproducts, which are produced from coal in the Highveld region of the Province. The other major components of the manufacturing sector are the Ferro-Alloy, Steel and Stainless Steel industries based in eMalahleni (Witbank) and Middelburg in the Nkangala District Municipality. Agro-processing is centred primarily in the Lowveld region of Mpumalanga and it makes a valuable contribution to the provincial economy’s manufacturing sector. Agro-processing is centred around processing the vast amounts of tropical and subtropical fruit and nuts cultivated in the Lowveld. Mpumalanga has a diverse manufacturing sector that accounts for 15% of provincial GGP, in addition to an expanding retail sector. WOOD & WOOD PRODUCTS 6.2% FOOD, BEVERAGE & TOBACCO PRODUCTS 10.7% METAL, MACHINERY & APPLIANCES 25.5% OTHER MANUFACTURED PRODUCTS 7.0% Structure of the manufacturing sector in Mpumalanga 2014 FUEL, PETROLEUM & CHEMICAL PRODUCTS 50.7% Most of the nation’s power stations are located in Mpumalanga, and three previously mothballed power stations have recently been reopened. FORESTRY The forestry sector comprises logging, saw-milling, wood products, pulp and paper as well as specialised cellulose for global markets. Pulp, paper and specialised cellulose are the main exports, along with sawn lumber, wood chips and wattle extract. The industry is ideal for recycling initiatives. The forestry products sector continues to contribute about 1% to national GDP, with the Far East, Europe and the UK making up its major export markets. The export market for pulp and paper from South Africa remains strong and, buoyed by better margins, pulp production figures have been on the rise since 2007. Global paper giants Sappi, Mondi and SAFCOL have extensive plantations and mill operations in the province, which is home to Africa’s biggest integrated pulp and paper mill. Attractive opportunities exist for small-scale growers, contractors and sawmillers, while forested areas also lend themselves to beekeeping and honey-making. Mpumalanga’s forestry sector accounts for 12.3% of South Africa’s agricultural GDP. Mpumalanga has the ideal climate and topography for forests, with South Africa’s biggest sawmill and largest panel and board plant. TOURISM Mpumalanga boasts world-class parks and reserves, astonishing botanical gardens, rivers and lakes. Safaris are a major drawcard, and the Kruger National Park is the jewel in South Africa’s tourism crown, while subsectors such as business travel (including conference facilities), adventure, heritage and cultural tourism all hold huge growth potential. The casino industry in particular has enjoyed great growth and shows signs of further potential for additional investment. In addition to the establishment a Provincial Liberation Heritage Route, priority investment projects that have been highlighted include: • A cable car over a part of the Blyde River Canyon. • A cantilevered glass walkway at God’s Window. • An International Convention Centre (ICC) in the capital, Mbombela. South Africa’s third mostvisited province, Mpumalanga has a sophisticated and well-segmented tourism sector attracting both foreign and local investment interest. The world’s most luxurious private game lodges are located around Kruger. 70% 30 million 11% R40-billion 9 R2-billion The percentage of manufacturing jobs in food and forestry. The volume of water treated every day by local water authorities. The total land area covered by plantations or natural forests. . The annual value of the South African forestry industry. Number of scheduled flights departing KMIA on a daily basis. The value that Kruger brings to the South African national economy.