Eastern Cape Business 2017 edition

SPECIAL FEATURE
renewable energy and aquaculture having built
their infrastructure and started trading. The skills
relevant to the automotive sector and the automotive
parts sector – huge elements of the Eastern
Cape economy – are transferable to renewable
energy manufacturing, or to ship-building.
Incentives include tax breaks from the South
African Revenue Service, subsidised interest rates
from the Industrial Development Corporation,
subsidies for employees earning below a certain
level and for training, incentives and grants from
the Department of Trade and Industry (dti) and
from national electricity utility Eskom. The SEZ is
also a Customs Controlled Area.
Within the dti’s Manufacturing Competitiveness
Enhancement Programme, there is a Green Energy
Efficiency Fund.
The national independent power suppliers’
programme, whereby private companies or consortiums
bid to build renewable energy plants,
has won international praise for its efficiency. The
Eastern Cape has been particularly attractive to
wind power producers. The Port of Ngqura’s ability
to receive the massive components of wind turbines
has been a boon to the project developers.
Coega IDZ hosts several solar and wind component
manufacturing facilities. Investors include
DCD Wind Towers and Electrawinds. ILB Helios
produces solar panels units at the ELIDZ.
Coega IDZ
The Coega IDZ is home to the gas-fired Dedisa
Peaking Power Plant and was named in 2016 as
the preferred site for a 1 000MW concession for a
Liquefied Natural Gas (LNG) plant. When a private
investor is found, Coega IDZ will have significant
new energy infrastructure.
Another potential game-changer is the possibility
that a manganese smelter could be built
at the IDZ. The Port of Port Elizabeth has for many
years exported manganese.
The recent announcement that the Port of
Ngqura will soon host a new liquid bulk handling
facility expands the perception that energy is becoming
a speciality for Coega. Transnet National
Ports Authority (TNPA) and Oiltanking Grindrod
Calulo have signed an agreement in this regard.
This will create a new tank farm for the Eastern
Cape when the lease for petroleum storage
facilities at the Port of Port Elizabeth expires.
In the 2015/16 period, the Coega Development
Corporation (which runs the IDZ) created 18 366
jobs through projects in the IDZ and its infrastructure
development programme elsewhere in the
province. Seventeen additional investors signed
up, valued at R26.9-billion. More than 96 000 jobs
have been created since the IDZ was launched.
The latest investment into the Coega IDZ is
from Beijing Automobile International Corporation
(BAIC), who will take a 65% stake in an R11-billion
joint venture with the Industrial Development
Corporation with the intention of producing 100
000 vehicles. First Automotive Works (FAW) has
already established a R600-million assembly plant
in Zone 2.
East London IDZ
The East London IDZ has a major dairy in Sundale,
a diamond cutting and polishing works in Matla
Diamond Works, and investors in steel, aquaculture
and solar panel manufacturing. It also has a strong
suite in logistics, with DHL Freight, UTi Logistics,
Milltrans and Bigfoot Express Freight all present in the
zone. But it is the presence of specialist logistics company,
Vehicle Delivery Service, which reveals the IDZ’s
strongest sector, automotive and automotive parts.
Within the IDZ is the Automotive Supplier
Park (ASP) which in turn is located in the Customs
Controlled Area within a 10km radius of Mercedes-
Benz South Africa, the East London Airport, the
highway and the Port of East London.
Feltex is represented by no fewer than six operations,
including Feltex Automotive Trim, Feltex
Fehrer (Mercedes-Benz seat pads and head rests)
and Feltex Trim and Caravelle Carpets.
Other automotive companies include RG BROSE
(doors), Boysen (exhaust systems), Automould,
TI Automotive Fuel Systems, Molan Pino
(polypropylene foam) and Yanfeng Automotive
Interiors.
15 EASTERN CAPE BUSINESS 2017