South African Business 2016 edition

Nkomazi Special Economic

Nkomazi Special Economic Zone The Nkomazi SEZ is strategically positioned in the border town of Komatipoort. This Multi-Sector SEZ is the axis of economic integration between the South African provinces of Mpumalanga, Gauteng and Limpopo and the independent states of Swaziland and Mozambique. SOUTH AFRICA Lydenburg Sabie Middelburg Belfast Mbombela eMalahleni JOHANNESBURG Carolina SWAZILAND MOZAMBIQUE Komatipoort / Ressano Garcia NKOMAZI SEZ MAPUTO The Nkomazi SEZ offers the investor a unique and incentivised base of operations on the Maputo Development Corridor running through the most highly industrialised and productive regions of Southern Africa. LOGISTICS Nkomazi SEZ offers numerous opportunities for the creation of bonded warehouses, a distribution centre, container yard, truck stops and petrol depot (with maintenance, fitment and repair facilities). FMCG exports from the major South African retailers destined for their growing number of Sub-Saharan Africa branches provides many opportunities within the logistics sector, as does an intermodal facility (road-rail-road and rail-to-rail) for transhipment of citrus and minerals for further transport to the Maputo Port. MINERALS AND ENERGY The mineral resources of Mpumalanga are varied and several of the biggest, most diversified mining companies have multiple operations in the province. Mpumalanga accounts for 83% of South Africa’s coal production and is the third-largest coalexporting region in the world. Opportunities for investment have been identified in mining services and mineral beneficiation. A natural gas pipeline, connecting the gas fields of southern Mozambique with the industrial south of Mpumalanga Province, transverses the Nkomazi SEZ and affords an investment opportunity for a gas-fired power plant for electricity generation. Other investment opportunities in this sector include phosphate for fertilizers, the production of ammonia and urea and the beneficiation of fluorspar for downstream agro-chemicals and fluorine production. AGRO-PROCESSING The Nkomazi SEZ is strongly focused on the agro-processing sector and the establishment of an agro-processing industrial park within the SEZ is leveraged off the existing large-scale citrus and sugar industries in the region. Opportunities for investment that are also present in food processing and packaging for the large retailers operating in South Africa expanding their presence in the East African market. Other identified investment opportunities ✈ Komatipoort Aerodrome Komatipoort Lebombo Dry Port N4 N4 Nkomazi SEZ R571 include lemon oil and lemon juice concentration plant, subtropical juice concentrate processors, as well as a fresh produce trade hub supplying the national fresh produce markets. AUTOMOTIVE The automotive sector has significant opportunities in terms of the distribution of vehicles, both imported as well as those that have been locally manufactured. These opportunities extend to the manufacture and distribution of automotive components and accessories. Exports of commercial vehicles into Africa are expected to show above-average growth over the next few years. An identified investment opportunity lies in a Vehicle Distribution Centre (VDC) for final vehicle management and control prior to regional distribution. Lebombo border post N4 SOUTH AFRICA MOZAMBIQUE 15% 100% 11 years 20% CCA 12i Lower Corporate Tax rate of 15% for companies locating to SEZ. Tax allowance for green and brownfi eld projects in Mpumalanga SEZ. New buildings can be depreciated at 20% (year 1), then 8% pa. Improvements to buildings can be depreciated at 20% per annum. Customs Controlled Area: VAT Exemption and duty free area. 12i tax incentive offers support for capital investment and training.

The Maputo Development Corridor (MDC) The MDC is South Africa’s leading Spatial Development Initiative (SDI) linking Mpumalanga, Gauteng Province and the Nkomazi Special Economic Zone with the deepwater Port of Maputo in fast-growing Mozambique. TOP EXPORTS Coal Macadamia Nuts Cane Sugar Ferro-alloys Manganese Wood Citrus Fruit The efficient corridor provides investors and exporters with good access to the export markets of South East Africa, the Indian Ocean Rim and Far East Asia. The Maputo Development Corridor comprises road, rail, special economic zone, border posts, port and terminal facilities. The corridor runs through the most highly industrialised and productive regions of Southern Africa. The Corridor has been extensively upgraded to international standards and links the industrial heartland of South Africa to its nearest port in Maputo, Mozambique, which is one of the fastest-growing countries in South East Africa. TOP EXPORT MARKETS 2014 1 - Mozambique R2.8 bn 2 - India R1.9 bn 3 - Netherlands R1.8 bn 4 - United States R1.7 bn 5 - Japan R1.3 bn 6 - Swaziland R1.2 bn 7 - Hong Kong R0.8 bn GAUTENG MPUMALANGA MOZAMBIQUE FOREIGN MARKETS Pretoria Joburg eMalahleni Mbombela Nkomazi SEZ Middleburg Komatipoort Lebombo Maputo Africa & Middle East Asia & Australasia Europe & the Americas EUROPE 3 559m AMERICAS 2 046m OCEANIA 80m ASIA 6 099m MPUMALANGA’S FOREIGN TRADE Mpumalanga has a strong industrial export base, a consequence of the abundant primary resources and the secondary-sector opportunities which have developed as a result. Mpumalanga has been well integrated into the global trading system for generations and enjoys strong, established relationships with numerous countries in Africa, Europe, Asia and the Americas and expanding South-South and BRICS trade. The vast range of commodities and products produced in the province provides for great opportunity for diversification of traded goods, as well as creating scope for attracting new trading partners. AFRICA 6 203m Mpumalanga’s Regional Export Markets SADC FREE TRADE AREA (FTA) • Provides for duty-free trade between 15 SADC members, excluding DRC, Angola and Seychelles. • All goods shipped under SADC Certificate of Origin receive duty-free status. • A growing market for over 280-million people. 16 14 12 10 8 6 4 2 0 Mpumalanga’s Export Growth EXPORTS IN R-BILLIONS 6.3 5.8 6.9 11.8 7.5 10.1 11.9 12.9 14 .1 17.9 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 TRILATERAL FREE TRADE AGREEMENT (T-FTA) • Negotiations are underway to establish a grand African FTA. • Will group the current COMESA, SADC and EAC blocs into one integrated market. • 26 countries with a combined population of nearly 700-million people.