Christopher Mashigo
IN highlighting the strategic importance of the Special Economic Zone (SEZ) programme, Dr Rob Davies – South African Minister for Trade and Industry, in an address in parliament emphasized SEZs as a “critical tool for attracting foreign direct investment, creating decent jobs, establishing new industrial centres as well as developing and improving infrastructure”.
For the Coega SEZ, drawing meaning to the statement is the ability to ensure the infrastructure on the ground translates to a significant impact in the lives of many workers currently employed at Coega.
The Coega SEZ’s key value proposition, amongst others, is the organisation’s ability to enable what it terms a “plug and play” environment. This the Coega Development Corporation (CDC) attains by ensuring the basic needs of both domestic and foreign direct investors are met.
The CDC, through government has over the years ensured that it provides world class and purpose-built infrastructure to suit investor needs.
As validation of the CDCs offering, an independent study found that over 93% of investors currently located in the Coega SEZ felt that Coega was the ideal location for industries. A further 84% of those companies invested in the Coega SEZ reported an increase in profitability.
Amongst the reasons given by investors for locating at Coega is the SEZs proximity to the Port of Ngqura. The modern multi-user deep-water harbour is a gateway to global markets and together with the Coega SEZ are catalysts for investment and local development.
As the preferred investment destination, the CDC in the current Financial Year 2017/18 unaudited year-to-date numbers is sitting comfortably on 15 new investors with a combined investment value of R526 million. The Coega SEZ currently has 42 operational investors worth a combined investment value of R7 billion.
The CDC is bolstered by the improved business sentiments in the country following the recently released Business Confidence Index (BCI) by the South African Chamber of Commerce and Industry.
It certainly would be amiss of us not to capitalise on the positiveness experienced in the country. As things stand the Coega SEZ has four projects under construction: BAIC (automotive sector), Osho Cement (metals sector), MM Engineering (Metals sector) and the Customs Control Area in Zone 1 (logistics sector). Thse are accumulatively valued at R12 billion.
Furthermore, the Coega SEZ, recently saw the coming online of six projects. These comprise Kenako Concrete (metals sector), Corromaster (packaging), National Ship Chandlers (food distribution), Sanitech (sanitation), Lension (chemicals) and Fincorp Trading (logistics) accumulatively valued at R196 million.
Following on the projects coming on stream is the more important task of ensuring bricks and mortar are converted to tangible job opportunities. There is a direct link between incentive programmes and stimulating investments into SEZs and the significant spinoffs for job creation. Even the minister in his address to parliament highlights the DTI incentive programme’s job-creating potential, and the importance of special economic zones.
At the Coega SEZ in the current financial year (FY) 2017/18, 9 441 construction jobs have been realised as well as 7 953 cumulative operational jobs as of quarter three. The operational jobs figures, when compared to previous FY numbers reveal an increase of 710 cumulative operational jobs.
What is even more pleasing is that, more than two-thirds (75%) of the staff employed by investors at the Coega SEZ are Previously Disadvantaged Individuals and come from the Nelson Mandela Bay and surrounding areas,
In the budget speech, MEC for Economic Development Environmental Affairs and Tourism in the Eastern Cape Sakhumzi Somyo congratulated the Coega SEZ, “for being unambiguous about their commitment to local beneficiation. This is in reference to the Coega SEZ enabling an environment where 78% of supplies are sourced locally”. The MEC’s remarks further highlighted the importance of stimulating the local economy through creating a network of local suppliers providing services to investors within SEZs.
• Christopher Mashigo is CDC Executive Manager Business Development