Despite the deteriorating local and global economic investment environment, which has resulted in most of South Africa’s special economic zones (SEZs) struggling to attract investment, Coega in Port Elizabeth is riding the investment wave.
The SEZ, which is operated by the Coega Development Corporation, has secured an additional 18 new investments valued at R2.6 billion, creating about 3 000 jobs during the 2018/19 financial year, against a target of R693 million.
Investments in aquaculture, which include an abalone farm and a land-based fish farming facility, represent a third of the total investment.
Other investments include metals (R760 million); energy (R362 million); manufacturing and recycling, automotive, chemical engineering and food and beverages (R580 million); two agroprocessing investments (R302 million); a commuter bus assembly plant (R130 million); biodegradable cleaning and projects (R140 million); and a pharmaceutical ingredient manufacturing plant (R76 million), as well as numerous other investments whose financial value is undisclosed.
The corporation’s marketing and corporate communications manager, Ayanda Vilakazi, told City Press: “On an international level, the Coega SEZ remains a preferred investment destination for Chinese foreign direct investment flows and new greenfield investments in Africa.
“Coega will have three operational Chinese investors, including Baic [the Beijing Automotive Industry Corporation], towards 2022.”
Vilakazi said the new investments would drive job creation in the Eastern Cape, a region with an unemployment rate of 32%, and help diversify the region’s economy, which is heavily reliant on the automotive industry.
The Coega SEZ celebrates its 40th anniversary this year and currently has 45 operating investor tenants. Investment projects in the pipeline are valued at R280 billion, with some estimated to commence next year.
Vilakazi says Coega has lived up to its vision of becoming a leading catalyst for championing socioeconomic growth.
“Our mission is to be a competitive investment location supported by value-added business services, which effectively enables socioeconomic development in the Eastern Cape and the rest of South Africa,” he said.
Demarcated into 14 zones that focus on automotive, chemicals, business process outsourcing, agroprocessing, metals, logistics, solutions, energy, trade and maritime, Coega offers a variety of lucrative incentives to potential investors.
Some of the incentives include provision of reduced municipal rates, production incentives, export promotion, tax and land incentives, automotive production and development programme and training. There is a customs control centre in the zone, which offers a suite of customs duty and VAT incentives for businesses operating on site. Coega also assists investors with visa applications and has slashed to 10 days the time to approve site development plans.
“All these contribute to making the Coega SEZ a preferred investment destination. We have won numerous awards, such as top performing public service organisation last year and the top investor award this year,” said Vilakazi.
The SEZ has an external services programme through which it provides project management services to government departments and assists in building schools, hospitals and other infrastructure projects.
“We extended our footprint to other regions in the continent by providing consultancy services to various organisations in Africa,” says Vilakazi.
Coega lists some of the reasons to invest in the SEZ:
. It has world-class infrastructure;
. It prides itself on good governance
. It is a connected zone with a rail link between itself, South Africa and neighbouring countries;
. It is integrated into Ngqura, Africa’s newest deep-water harbour;
. National and international connectivity for passengers and freight is provided by the nearbyPort Elizabeth International Airport; and
. It has strategic regional and international logistics.
Other African countries, such as Algeria, have visited the Coega SEZ to learn best practice. In his visit to the zone, former China vice-president Li Yuanchao said: “I have been to many developing countries and industrial development zones, Coega SEZ is one of the best.”
Former British high commissioner to South Africa Nigel Casey said: “I am pleased by the number of investors who have taken advantage of this amazing economic zone and made a great success of their investments.”
South Africa has 10 SEZs: Coega, Richards Bay, East London, Saldanha, Dube TradePort, OR Tambo, Maluti-a-Phofung, Musina/Makhado, Nkomazi and Atlantis.