2021 EDITION

SOUTH AFRICAN
BUSINESS
THE GUIDE TO BUSINESS AND INVESTMENT
IN SOUTH AFRICA

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Coega fast-tracking
economic recovery
Coega’s expertise in Infrastructure Project Management will help South Africa fast-track
economic recovery amid the Covid-19 pandemic.
T
he Coega Development Corporation (CDC),
developer and operator of the number-one
Special Economic Zone (SEZ) on the African
continent, namely the Coega SEZ, provides
expertise in the fast and efficient delivery of minor and
mega complex infrastructure development projects
in South Africa and the rest of the African continent.
The CDC has a 20-year proven record in infrastruc-
ture development and facilities maintenance.
Cecilia Makiwane Hospital is a large,
provincial, government-funded hospi-
tal situated in the Mdantsane township
of East London, Eastern Cape.
“We can assist all government departments to
fast-track the implementation of their infrastructure
projects, amid the coronavirus pandemic challeng-
es, to stimulate the local economy, lift local SMMEs,
and create job opportunities.
“We are the infrastructure implementing agency
of choice in the country because of our cutting-
edge customised solutions, international best
practices and methodology. Coega has ISO-certified
systems and processes that guarantee
the effective delivery of the projects
within scope, time and budget. We
can even save our clients money through
our project accounting solutions. Our
record of unqualified audit opinion
by the Auditor General of South Africa
on our projects speak for itself,” said
Dr Ayanda Vilakazi, CDC’s Head of
Marketing, Brand and Communications.
Lusikisiki Village Clinic opened by
the President of South Africa, HE Cyril
Ramaphosa, in 2019.
The CDC’s Infrastruc ture Projec t
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services.
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Project Managem
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H.E. Cyrilcontact
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onexpert in Infrastructure Project
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information on the CDC’s Project Management
Mr.
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Chuma
Services, INFRASTRUCTURE
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please contact on:
on:
our expert
September 2019.
DEVELOPMENT
Ramaphosa,
in Infrastructure
17
Mr. Chuma Mbande on:
PROJECTS:
Project Management, La Mercy
Mr Chuma Mbande. Maths, Science
For more information on the CDC’s Project Management Services
andchuma.mbande@coega.co.za
Technology
Email:please contact our(MST) Academy
expert in in Project Management
Infrastructure •
KwaZulu-Natal.
Tel: Mr. Chuma Mbande
+27
Fax: +27
43 711 1600
43 721 0210
Coega
on: is an Infrastructure
E-mail:
E-mail: chuma.mbande@coega.co.za
chuma.mbande@coega.co.za
Implementing Agency.E-mail:
Telephone:
Telephone:+27
+274343711
7111600
1600 chuma.mbande@coega.co.za

•
BBBEE
BBBEE LEVEL
LEVEL 22 CONTRIBUTOR
CONTRIBUTOR
Fax: Telephone: +27 43 711 1600
PRETORIA721
Fax: +27
+27 43
43 721 0210
0210
OFFICE Fax: +27 43 721 0210
ISO
ISO9001:2015
9001:2015 ISO
ISO
ISO14001:2015
14001:2015 ISO
ISO20000-1:2011
20000-1:2011 ISO
ISO45001:2018
45001:2018
ISO27001:2013
27001:2013
PRETORIA
Address:OFFICE:
PRETORIA OFFICE:
145 Herbert Road, East Wood,
145
145Herbert
HerbertRoad,
Arcadia,
Pretoria,
Pretoria,
Road,East
Pretoria
0083
0083
EastWood, Arcadia,
0083Wood, Arcadia,
PRETORIA OFFICE: www.coega.co.za
www.coega.co.za
145 Herbert Road, East Wood, Arcadia, •
The Coega Development Corporation
Tel: +27 12
Telephone:
Telephone: 451
+27
+27 12 8300
12451
4518300
8300 Pretoria, 0083
Telephone: +27 12 451 8300
E-mail: chuma.mbande@coega.co.za
Telephone: +27 43 711 1600 •BBB
Fax: +27 43 721 0210 ISO 9001:201
 CONTENTS

CONTENTS
South African Business 2021 Edition

Introduction
Foreword 8
A unique guide to business and investment in South Africa.

Special features
An economic overview of South Africa 10
Building a more sustainable future while reducing debt will
require great skill from the country’s leaders.

Provinces of South Africa 16

A snapshot of South Africa’s nine provinces.

Building infrastructure is a
presidential priority 22
Projects worth R340-billion have been gazetted
for implementation.

The Maritime Economy offers blue

water opportunities 32
Contribution to GDP could rise to R177-billion by 2033.

Economic sectors
Agriculture 40
Berry production is up as exports rise.

Mining 44
Exploration is the next frontier.

Energy 56
Solar and wind projects are regularly coming onstream.

ICT 61
Data centres are booming.

Oil, gas and petrochemicals 62

Exploration for gas off the south-eastern coast is hotting up.

SOUTH AFRICAN BUSINESS 2021 4

 SABS - 75 Years of dedication to Quality Compliance
The South African Bureau of Standards supports the industrialisation effort of the dtic.
SABS has an established network of national, regional and international partners that
develop technical solutions adopted as South African National Standards (SANS), this
in return enables business and government to:
Improve the quality of products and services
Enhance competitiveness and access to markets
Ensure that procurement of products and services meet quality standards
Improve the delivery of services underpinned by best practice
and support policy and regulatory objectives

SABS provides services to assist the implementation of best practice solutions

• More than 7000 South African National Standards
• Laboratory Testing Services for a diverse range of Products
• Certification of Companies to Management System Standards
SABS_SA-Bus.Journal_09/2020

• Certification of Products and the Application of the SABS Mark Scheme

• Training of Management and Employees on Implementations of SANS
• Local Content Verification for South African manufacturing industry

SABS a Trusted Partner in Delivering Quality Assurance.

Contact SABS to establish support for your Standardisation,
Testing, Training and Certification Aspirations.
 CONTENTS

Water 66
Infrastructure spending will have to be consistently high.

Engineering 70
Many engineering groups are selling off assets.

Construction and property 72

Logistics property is strongly placed for growth.

Manufacturing 74
TFG plans to double manufacturing capacity..

Food and beverages 76

Starch mills are changing hands.

Automotive 78
The automotive sector makes up a third of
South Africa’s manufacturing capacity.

Transport and logistics 80

Decongestion of ports is a priority.

Tourism and events 82

The MICE sector faces special challenges.

Banking and financial services 84

Investors are getting behind fintech.

Development finance and SMME support 86

A new fund aims to make R5-billion available at a fair price.

References
Key sector contents 38
Overviews of the main economic sectors of South Africa.

Index 88
ABOUT THE COVER:
Sasol One at Sasolburg was established in
1950 and converted from coal gasification
in 2004. It now uses more efficient natural
gas in its production processes of products
such as ammonia, ammonium nitrate,
catalyst, ethylene, mining chemicals,
phenolics, solvents and wax. With more
than 25 000 employees, Sasol is a global
integrated chemicals and energy company
active in 33 countries.

SOUTH AFRICAN BUSINESS 2021 6

 FOCUS FOCUS

e reliability of forehead
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in workplaces, schools and www.nmisa.org/Pages/Temperature.aspx.
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FRICAN BUSINESS 2021

SOUTH AFRICAN BUSINESS 202156 56
 FOREWORD

South African Business

A unique guide to business and investment in South Africa.

W
elcome to the ninth edition of the South
African Business journal. First published in
Credits 2011, the publication has established itself
as the premier business and investment
guide to South Africa, supported by an e-book edition at
Publishing director: www.southafricanbusiness.co.za.
Chris Whales
Editor: John Young This issue has a focus on economic recovery plans which
Managing director: Clive During have been put in place to tackle the challenges thrown up
Online editor: Christoff Scholtz
by the global Covid-19 pandemic. National government’s
focus on infrastructure and the use of Special Economic
Designer: Simon Lewis
Zones is highlighted, together with a feature on the nascent
Production: Lizel Olivier maritime economy. Regular pages cover all the main
Ad sales: economic sectors of the South African economy and give
Gavin van der Merwe a snapshot of each of the country’s provincial economies.
Sam Oliver
Jeremy Petersen South African Business is complemented by nine regional
Gabriel Venter publications covering the business and investment
environment in each of South Africa’s provinces. The e-book
Vanessa Wallace
editions can be viewed online at www.globalafricanetwork.
Shiko Diala com. These unique titles are supported by a monthly
Administration & accounts: business e-newsletter with a circulation of over 23 000.
Charlene Steynberg In 2020, the inaugural African Business joined the Global
Kathy Wootton African Network stable of publications. ■
Printing: FA Print
Chris Whales
Publisher, Global Africa Network Media | Email: chris@gan.co.za

DISTRIBUTION
South African Business is distributed internationally on outgoing
and incoming trade missions, through trade and investment
agencies; to foreign offices in South Africa’s main trading
partners around the world; at top national and international
events; through the offices of foreign representatives in
South Africa; as well as nationally and regionally via chambers
of commerce, tourism offices, airport lounges, provincial
government departments, municipalities and companies.
Member of the Audit Bureau
of Circulations
PUBLISHED BY
Global Africa Network Media (Pty) Ltd
Company Registration No: 2004/004982/07
Directors: Clive During, Chris Whales
Physical address: 28 Main Road, Rondebosch 7700
Postal address: PO Box 292, Newlands 7701
Tel: +27 21 657 6200 | Fax: +27 21 674 6943
Email: info@gan.co.za | Website: www.gan.co.za
ISSN 2221-4194

COPYRIGHT | South African Business is an independent publication Town, SA Furniture Forum, SA Heavy Haul Association, SANRAL, SASOL,
published by Global Africa Network Media (Pty) Ltd. Full copyright to THEGIFT777/iStock, TNPA, Tongaat Hulett, Utopia_88/iStock.
the publication vests with Global Africa Network Media (Pty) Ltd. .
No part of the publication may be reproduced in any form without DISCLAIMER | While the publisher, Global Africa Network Media (Pty) Ltd,
the written permission of Global Africa Network Media (Pty) Ltd. has used all reasonable efforts to ensure that the information contained in
South African Business is accurate and up-to-date, the publishers make no
PHOTO CREDITS | Africamps at Ingwe, Amatola Water, AngloAmerican, representations as to the accuracy, quality, timeliness, or completeness of
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Map, De Beers Group, ELIDZ, Equites, 5M2T, Fortress Fund, Implats, loss or damage suffered as a result of the use of or any reliance placed on
Khobab Wind Farm, Nissan, Perdekraal East Wind Farm, Port of Cape such information.
SOUTH AFRICAN BUSINESS 2021 8

Early engagement with
the private sector is vital
Jason Lightfoot, Portfolio Manager at Futuregrowth, assesses the latest moves to
attract the private sector to invest in infrastructure.
Jason Lightfoot
BIOGRAPHY
Jason is the Portfolio Manager of the
flagship Futuregrowth Infrastructure
& Development Bond Fund, as well
as the Yield Enhanced ALBI bench-
marked range of portfolios. In addi-
tion, he plays a mentoring role with-
in the Credit team and is involved in
various aspects of risk assessment
within the investment process.
INTERVIEW
What is constraining infrastructure investment in South Africa?
The concern is that a lot of noise has been made previously around
government’s infrastructure plans which have in few instances
resulted in real opportunities for investors to play a role. Many of these
issues have been around policy certainty and also ensuring that such
projects actually reach a level of bankability for such investors to make
an investment that will offer a proper risk-adjusted return. Perhaps this
time is different with the recent engagement with the private sector.
Do you mean the Sustainable Infrastructure Development
Symposium of South Africa (SIDSSA)?
This is a step in the right direction. It crowds in potential private sector
investors in a much more coordinated manner and includes them in
assessing how these various initiatives can be funded.
Why is gross fixed capital formation an important benchmark?
This measure captures how much money as a proportion of total
economic activity is being invested in capital goods, such as
equipment, tools, transportation assets and electricity and various
measurable outputs of these. The extent of infrastructure spending
in an economy is reflected in the level of gross fixed capital formation
(GFCF) as a percentage of Gross Domestic Product (GDP) which is an
important precursor of economic growth.
What can be learnt from the Renewable Energy Independent
Power Producer Procurement Programme (REIPPPP)?
Before capital market players invest, they need to have confidence
that the policy environment is stable and that such potential
investments will offer sufficiently attractive risk-related returns. To a
great extent, the Renewable Energy Independent Power Producer
Procurement Programme (REIPPPP) met these criteria, enabling the
private sector to play an important role. REIPPPP is an important
success story.
Of the major infrastructure projects being discussed at the
moment, which are the most significant?
Energy generation remains of utmost importance in an environment
where a massive strain on the system remains and the launch of
Emergency Procurement round of up to 2000MW will address that. ■
9
41 SOUTH AFRICAN BUSINESS 2021
AN ECONOMIC OVERVIEW OF
SOUTH AFRICA
Building a more sustainable future while reducing debt will require
great skill from the country’s leaders.
By John Young
B
uild back better has become the new
catchphrase. There is a lot of building to
do for the South African economy after
two recessions, a decade of looting of state
resources and a health crisis that all but shut down
the economy for several months.
The Chief Executive O fficer of the
Johannesburg Stock Exchange, Leila Fourie,
wrote in June 2020 that she wants to “contribute
towards a better, fairer, more sustainable
world” (Business Day). As co-chair of the Global
Investors for Sustainable Development (GISD)
Alliance, a grouping of banks, bourses and asset
managers, Fourie has been working to promote
investment in Covid-19 bonds, the Sustainable
Development 500 fund and renewable energy.
This kind of thinking informs many of the plans
that were put forward by business, labour and
political parties as the Covid-19 lockdown served
to focus the minds of all South Africans about the
SOUTH AFRICAN BUSINESS 2021
need to plot a better way forward. The National
Economic Development and Labour Council
(Nedlac) came up with an agreement which
focussed on infrastructure investment, creating a
supportive policy environment and the promotion
of “strategic localisation” and exports. An umbrella
business body, Business for SA (B4SA), identified
12 initiatives which, if accompanied by policy
reforms, would boost the economy significantly.
The African National Congress (ANC) produced its
own economic recovery document.
Having consulted with all these bodies,
President Cyril Ramaphosa on 15 October
revealed government’s recovery plan. The
Economic Reconstruction and Recovery Plan
(EcoRRP) names infrastructure investment and
building up the country’s manufacturing base as
priorities. The plan intends to unlock R1-trillion in
private investment. Furthermore, a commitment
is made to improving the capability of the state
10

and to remove barriers to doing business or
investing in the country.
Soon afterwards, Finance Minister Tito
Mboweni announced the medium-term budget
policy statement where the most significant
promise related to reducing the state’s wage
bill. Mboweni is a former Reserve Bank Governor
and Labour Minister. The President is a former
miner and trade unionist. Both men have been
engaged for years in drafting the economic policy
of the ANC but it remains to be seen if they can
persuade the unions representing workers in the
public sector to accept a three-year freeze on
wage increases. This will be a major test because
South Africa’s debt to GDP ratio is high. The cost of
servicing debt is equal to nearly 14% of revenue.
A step that President Ramaphosa took in
July did not receive many headlines, but his
amendment of the regulations governing the
enquiry into state capture made a big difference
to the work of the National Prosecuting Authority
(NPA). Enabled by the amendment to work with
the evidence presented to the commission,
prosecutors quickly finalised cases and arrests
started happening. After a decade in which
it seemed that immunity was guaranteed for
corrupt officials and employees of state-owned
enterprises, the tide started to turn.
Prosecutions obviously do not provide
certainty against future corruption, but at least
the prospect of arrest might be a deterrent. One
of the biggest obstacles to economic recovery
is South Africa’s level of debt, and that is caused
largely by the state electricity utility, Eskom,
where corruption was rife for years.
The government’s directory lists 131 state-
owned entities but there are said to be about 700
altogether, at various levels of government. The
three biggest, all of which fall under the Department
of Public Enterprises, are Eskom, South African
Airways (SAA) and Transnet, with five large divisions
covering ports, railways and logistics. Eskom and
SAA are significant drains on the country’s finances
and getting control of all of the country’s SOEs is
another major priority.
Agriculture was one industry that saw
some positives during the Covid-19 lockdown.
Although sectors like wine suffered badly, a
11
SPECIAL FEATURE
reported increase in maize exports, as well as
greater international demand for citrus fruits and
pecan nuts, helped the industry expand by 15%
(StatsSA). Grain crops such as maize, wheat, barley
and soya beans are among the county’s most
important crops. Only rice is imported. Wine, corn
and sugar are other major exports.
Basing economic growth on a devaluing
currency is not always the best long-term method
of boosting economic growth, but high-value
agricultural exports and increased numbers of high-
spending international tourists hold some promise
for helping to get the South African economy back
on a growth path. Horticulture in particular is seen
as holding great potential not only for increased
earnings, but for creating jobs.
New economic sectors
Another new area that holds great potential for the
South African economy is the Oceans Economy.
South Africa has 3 000km of coastline and the
extent of the country’s territorial waters is greater
than its land size. And yet the country does not
have a merchant marine fleet and only scrapes
the surface in terms of the percentage of repair
and maintenance of boats and oilrigs which could
potentially bring work to its ports.
The introduction of renewable energy into the
South African energy market via the Renewable
Energy Independent Power Producer Procurement
Programme (REIPPPP) was successful but the
programme stalled.
Hopes were raised with the publication of
a new Integrated Resource Plan (IRP) because
investors crave certainty. The IRP is a road map
for South Africa’s electricity generation and the
previous administration seemed determined
to push for an expensive nuclear programme.
The latest plan confirms that the already hugely
successful drive for renewable energy will be
continued and expanded.
South Africa’s traditional strength in minerals
still holds good. Although gold mining is
declining in volumes (even while prices rise), the
major investment of Vedanta Zinc International
in a project in the Northern Cape and Sibanye-
SOUTH AFRICAN BUSINESS 2021
 SPECIAL FEATURE
New roads such as this link to the North West from Gauteng are important parts of infrastructural
development. Credit: SANRAL
Stillwater’s acquisition drive in the platinum group
metals (PGM) sector are significant economic
drivers. Coal and iron ore continue to be exported
in large volumes through the Richards Bay
Coal Terminal on the east coast and the Port of
Saldanha on the west coast.
Automotive manufacturing and automotive
components continue to thrive, with large
investments by most of the major marques and
increased exports a feature of the sector. There
has been inward investment in recent years, most
notably by the Beijing Automotive International
Corporation (BAIC) in the Coega Special Economic
Zone outside Port Elizabeth. The Tshwane
Automotive Special Economic Zone (TASEZ) has
been launched at Silverton in Pretoria.
A new SEZ has been formally declared in the
northern part of Limpopo, the Musina-Makhado
SEZ. The Namakwa SEZ in the Northern Cape
is awaiting its licence, as is the Tubatse SEZ in
eastern Limpopo.
Geography
South Africa’s location between the Atlantic and
Indian oceans ensures a generally temperate
climate. The 2 954km coastline stretches from the
SOUTH AFRICAN BUSINESS 2021
border with Namibia on the Atlantic to the border
with Mozambique in the east. The cold Benguela
current sweeps along the western coast while the
warm Indian Ocean ensures that the Mozambique/
Agulhas current is temperate.
South Africa’s coastal plain is separated from
the interior by several mountain ranges, most
notably the Drakensberg which runs down the
country’s eastern flank. Smaller ranges in the
south and west mark the distinction between the
fertile coastal strip and the dry interior known as
the Karoo.
The city of Johannesburg is located on the
continental divide, whereby water runs south of
the city towards the Atlantic Ocean while waters
to the north drain towards the north and east.
Johannesburg is 1 753m above sea-level.
Most of the country has summer rainfall but
the Western Cape, which has a Mediterranean
climate, receives its rain in winter. Droughts
are not uncommon and although the national
average is 464mm, most of the country receives
less than 500mm of rain every year. The Western
Cape experienced a severe drought which was
broken in 2018. The Orange and Vaal rivers play
important roles in water schemes and irrigation
and the Limpopo River defines the country’s
northern boundary. ■
12
 10 REASONS
WHY YOU SHOULD INVEST IN SOUTH AFRICA

01. 02.
HOT EMERGING MOST DIVERSIFIED
MARKET ECONOMY IN AFRICA
South Africa (SA) has the most industrialised economy in Africa.
Growing middle class, affluent consumer
It is the region’s principal manufacturing hub and a leading
base, excellent returns on investment.
services destination.

LARGEST PRESENCE OF MULTINATIONALS PROGRESSIVE

ON THE AFRICAN CONTINENT
SA is the location of choice of multinationals in Africa.
Global corporates reap the benefits of doing business in
SA, which has a supportive and growing ecosystem as a
hub for innovation, technology and fintech. 03. 04. CONSTITUTION
& INDEPENDENT
JUDICIARY
SA has a progressive Constitution and an independent judiciary. The
country has a mature and accessible legal system, providing certainty
and respect for the rule of law. It is ranked number one in Africa for the
protection of investments and minority investors.
FAVOURABLE ACCESS TO
GLOBAL MARKETS
The African Continental Free Trade Area will boost
intra-African trade and create a market of over one
06. ABUNDANT NATURAL

05.
billion people and a combined gross domestic product
(GDP) of USD2.2-trillion that will unlock industrial
RESOURCES
development. SA has several trade agreements in SA is endowed with an abundance of natural resources. It is the leading producer
place as an export platform into global markets. of platinum-group metals (PGMs) globally. Numerous listed mining companies
operate in SA, which also has world-renowned underground mining expertise.

08.
ADVANCED FINANCIAL SERVICES WORLD-CLASS
& BANKING SECTOR INFRASTRUCTURE

07.
SA has a sophisticated banking sector with a major
footprint in Africa. It is the continent’s financial hub,
with the JSE being Africa’s largest stock exchange by
market capitalisation.
AND LOGISTICS
A massive governmental investment programme in infrastructure development
has been under way for several years. SA has the largest air, ports and logistics
networks in Africa, and is ranked number one in Africa in the World Bank’s
Logistics Performance Index.

YOUNG, EAGER LABOUR FORCE

09. 10.
SA has a number of world-class universities and colleges
producing a skilled, talented and capable workforce. It EXCELLENT QUALITY
boasts a diversified skills set, emerging talent, a large pool OF LIFE
of prospective workers and government support for training SA offers a favourable cost of living, with a diversified cultural, cuisine and
and skills development. sports offering all year round and a world-renowned hospitality sector.

Page | 2
19 SOUTH AFRICAN BUSINESS 2020
Why Invest
in Space
OUR IMPACT is derived from our national capacity, experience
and expertise in space science and technology through six thematic focus areas:
• Earth Observation - SANSA collects, assimilates and disseminates
Earth observation data to support South Africa’s policy making,
economic growth and sustainable development initiatives. Earth
observation data is used for human settlement growth mapping,
infrastructure monitoring, as well as disaster and water resource
management. Earth observation satellite data contributes to
monitoring environmental variables in the water cycle such as
water quantity, quality, soil erosion and vegetative health which
ensures water safety and security for the country.
• Space Operations - SANSA provides global competitive space
operations and applications, tracking, telemetry and command
services while managing ground stations for international clients.
Space Operations provides world class launch support for space
missions (from Earth into our solar system) and ensures satellites
are continuously monitored when they are travelling over African
skies.
• Space Science - SANSA conducts cutting edge space science
research, development and magnetic technology innovation.
Space science research is vital for gaining a deeper understanding
of our space environment in order to protect essential
infrastructure such as power grids and communication and
navigation systems on Earth and in space. SANSA operates the
Space Weather Regional Warning Centre for Africa, providing
forecasts and warnings on space weather conditions. Extreme
space weather may impact technological systems such as
satellites, power grids, avionics and radio communication.
• Space Engineering – SANSA aims to provide access to state-of-
the-art satellite assembly, integration and testing services, as well
as satellite systems coordination and development, to ensure
an environment conducive to industrial participation in satellite
programmes.
• Human Capital Development - SANSA aims to advance human
capital development to grow the knowledge economy and
create awareness about opportunities in engineering, science and
technology. This is achieved through scarce skills development,
summer and winter schools, the supervision of MSc and PhD
students, and teaching at partner universities.
• Science Advancement and Public Engagement - SANSA
promotes science advancement and public engagement through
participation in national science awareness events and through
using the fascination of space to drive a greater uptake of studies
in science, maths, engineering and technology.
 SANSA monitors
the Earth’s magnetic
field and space weather
storms to assist in
protecting technology
SANSA on Earth and in space.
provides state-
of-the-art ground
station facilities and
services including
satellite tracking, launch
support, mission
control and space
navigation.

Satellite imagery
helps manage food
and water security as
well as natural disasters
on Earth like floods,
droughts and fires.

In a country faced with numerous challenges in
housing, crime, poverty and the provision of basic
necessities, you may ask why invest in space?
The answer is clear.
in space. Government, industry and academia also rely on space
data to deliver on their priorities through the creation of applied
knowledge, products and services.
SANSA provides value-added products and services that are utilised
in both space and non-space applications. Space information

Space investment is essential

enables everyday decision making at all levels of society. SANSA has
contributed towards goals within the National Development Plan

for economic sustainability

(NDP) and the goals of the Department of Science and Technology
(DST) by delivering products and services to its stakeholders and the

and development!
public.

South Africa’s next earth observation satellite is an example of one of

Without space applications we would not be able to mitigate these deliverables and is also one of the incredible opportunities to
disasters or effectively manage our resources such as water, food, land showcase the importance of investment in space science, engineering
and housing. Mobile phones, internet, GPS, ATMs, meteorological and technology and for South Africa to take its place in the global
forecasting and safe land and sea travel all rely on satellites positioned space arena.

@SANSA7 South African National Space Agency

South African National Space Agency
Enterprise Building, Mark Shuttleworth Street, Innovtion Hub, Pretoria, 0087
T: 012 844 0500 | F: 012 844 0396 | information@sansa.org.za | www.sansa.org.za
 SPECIAL FEATURE
Provinces of South Africa
A snapshot of South Africa’s nine provinces.
Eastern Cape
Capital: Bhisho
Main towns: Port Elizabeth, East
London, Uitenhage, Graaff-
Reinet, Mthatha, Grahamstown
(Makhanda)
Population: 6 916 200 (2015)
Area: 168 966km² (13.8%
of South Africa)
Premier:
Lubabalo Oscar Mabuyane (ANC)
Key sectors: Automotive,
agriculture, agri-processing,
forestry, finance, retail, tourism,
renewable energy.
Infrastructure: Coega Industrial
Development Zone, East London
Industrial Development Zone,
ports of East London, Port
Elizabeth and Ngqura, airports at
Port Elizabeth and East London.
Notable tourism assets: Addo
Elephant National Park, Mountain
Zebra National Park, Wild Coast,
Jeffreys Bay, National Arts Festival.
Provincial government website:
www.ecprov.gov.za
Eastern Cape Development
Corporation: www.ecdc.co.za
SOUTH
SOUTH AFRICAN BUSINESS 2021
AFRICAN BUSINESS 2020
Free State
Capital: Bloemfontein
Main towns: Welkom, Sasolburg,
Parys, Kroonstad
Population: 2 817 900 (2015)
Area: 129 825km² (10.6%
of South Africa)
Premier:
Sefora Hixsonia Ntombela (ANC)
Key sectors: Agriculture,
agri-processing, chemical
manufacturing, mining, transport
and logistics.
Infrastructure: Maluti-A-Phofung
Special Economic Zone, Bram
Fischer International Airport,
University of the Free State,
Central University of Technology,
N8 Corridor.
Notable tourism assets: Vaal
River, Gariep Dam, Golden Gate
Highlands National Park, Cherry
Festival, Mangaung African
Cultural Festival (Macufe).
Provincial government website:
www.freestateonline.fs.gov.za
Free State Development
Corporation: www.fdc.co.za
16
20
Gauteng
Capital: Johannesburg
Main towns: Tshwane
(including Pretoria), Ekurhuleni,
Vanderbijlpark, Roodepoort
Population: 13 200 300 (2015)
Area: 18 178km² (1.5%
of South Africa)
Premier:
David Makhura (ANC)
Key sectors: Financial and
banking, manufacturing, trade,
creative industries, media.
Infrastructure: OR Tambo
International Airport, Gautrain,
major universities and research
institutions, large convention
centres, FNB Stadium (Soccer City).
Notable tourism assets: Cradle of
Humankind, Apartheid Museum,
Constitution Hill, Magaliesberg,
Soweto tours, Dinokeng.
Provincial government website:
www.gauteng.gov.za
Gauteng Growth and
Development Agency:
www.ggda.co.za

KwaZulu-Natal
Capital: Pietermaritzburg
Main towns: Durban, Newcastle,
Ballito, Port Shepstone,
Empangeni, Ulundi
Population: 10 919 100 (2015)
Area: 125 755km² (7.7%
of South Africa)
Premier:
Sihle Zikalala (ANC)
Key sectors: Chemicals, dissolving
pulp manufacture, sugar, forestry,
automotive, textiles and footwear,
mining, oil and gas, logistics.
Infrastructure: King Shaka
International Airport, Dube TradePort,
Richards Bay Industrial Development
Zone, ports of Richards Bay and
Durban, Albert Luthuli International
Convention Centre Complex.
Notable tourism assets: Hluhluwe-
iMfolozi Park, the Drakensberg
mountains, iSimangilso Wetlands
Park, Durban beaches, South Coast,
Zulu cultural heritage, historical
battlefields.
Provincial government website:
www.kznonline.gov.za
Trade and Investment KwaZulu-
Natal: www.tikzn.co.za
Limpopo
Capital: Polokwane
Main towns: Musina,
Ba-Phalabora, Bela-Bela,
Steelpoort, Tzaneen, Thohoyandou
Population: 5 726 800 (2015)
Area: 125 755km² (10.2%
of South Africa)
Premier:
Chupu Stanley Mathabatha (ANC)
Key sectors: Mining, agriculture,
tourism, logistics.
Infrastructure: Musina-Makhado
Special Economic Zone, N1
highway and rail network, new
Medupi power station.
Notable tourism assets: Kruger
National Park, Mapungubwe
Heritage Site, Makapans Valley,
Marula Festival, Waterberg
Biosphere.
Provincial government website:
www.limpopo.gov.za
Limpopo Economic
Development Agency:
www.lieda.gov.za
21 17
SPECIALSPECIAL
FEATUREFEATURE
Mpumalanga
Capital: Mbombela
Main towns: Emalahleni,
Middelburg, Sabie, Lydenburg
Population: 4 283 900 (2015)
Area: 76 495km² (6.3%
of South Africa)
Premier:
Refilwe Mtshweni-Tsipane (ANC)
Key sectors: Agriculture, forestry,
mining, steel manufacturing,
petrochemicals, pulp and paper,
power generation, tourism.
Infrastructure: Nkomazi Special
Economic Zone, Mbombela
International Fresh Produce
Market, Maputo Development
Corridor, Kruger Mpumalanga
International Airport.
Notable tourism assets: Kruger
National Park, Blyde River Canyon,
Barberton Makhonjwa Mountains
(a UNESCO World Heritage Site).
Provincial government website:
www.mpumalanga.gov.za
Mpumalanga Economic Growth
Agency: www.mega.gov.za
SOUTH
SOUTH AFRICAN
AFRICAN BUSINESS
BUSINESS 2021
2020
 SPECIAL FEATURE
Northern Cape
Capital: Kimberley
Main towns: Douglas, Upington,
De Aar, Port Nolloth, Colesberg
Population: 1 185 600 (2015)
Area: 372 889km² (30.5%
of South Africa)
Premier:
Dr Zamani Saul (ANC)
Key sectors: Agriculture, mining,
renewable energy, astronomy.
Infrastructure: Upington Special
Economic Zone, Sol Plaatje
University, Vaalharts Irrigation
Scheme.
Notable tourism assets: Six
national parks including the
Kgalagadi Transfrontier Park,
Orange River, spring flower
displays, diamond routes.
Provincial government website:
www.northern-cape.gov.za
Department of Economic
Development and Tourism:
www.northern-cape.gov.za/dedat  Corporation: www.nwdc.co.za
SOUTH
SOUTH AFRICAN BUSINESS 2021
AFRICAN BUSINESS 2020
North West
Capital: Mahikeng
Main towns: Klerksdorp,
Rustenburg, Brits, Potchefstroom
Population: 3 707 000 (2015)
Area: 104 882km² (8.6%
of South Africa)
Premier: Professor Tebogo Job
Mokgoro (ANC)
Key sectors: Mining, agriculture,
agri-processing, automotive
components.
Infrastructure: Hartbeespoort
Dam, Pelindaba nuclear research
unit, North West University,
Bakwena Platinum Highway.
Notable tourism assets: Sun City,
Mmbatho Palms Hotel Casino
Convention Resort, Pilanesberg
National Park, 18 luxury lodges in
Madikwe Game Reserve.
Provincial government website:
www.nwpg.gov.za
North West Development
18
22
Western Cape
Capital: Cape Town
Main towns: Stellenbosch,
George, Plettenberg Bay, Beaufort
West, Oudtshoorn, Worcester,
Malmesbury
Population: 6 200 100 (2015)
Area: 129 462km² (10.6%
of South Africa)
Premier:
Alan Winde (DA)
Key sectors: Agriculture, agri-
processing, wine and grapes,
financial services, manufacturing,
tourism, oil and gas, boatbuilding.
Infrastructure: Ports of Cape
Town, Saldanha and Mossel Bay,
Mossgas oil-to-gas refinery, Cape
Town International Airport, Cape
Town International Convention
Centre, Koeberg nuclear power
station.
Notable tourism assets: Table
Mountain, Garden Route National
Park, Karoo National Park, West
Coast National Park, Kirstenbosch
Botanical Gardens, Cape Point,
V&A Waterfront, Plettenberg
Bay, Route 62, Zeitz Museum of
Contemporary Art.
Provincial government website:
www.westerncape.gov.za
Wesgro: www.wesgro.co.za
An ExtrAordinAry
BusinEss EvEnts dEstinAtion
northern Cape, south Africa
An award winning business and incentive destination, this ageless land offers
a seamless fusion of first world technologies and infrastructure with ancient
authentic cultures, dramatic natural beauty and awesome adventure. This is
the Northern Cape. Now come and experience it for yourself…

For more information do visit

w w w.experiecenor therncape.com
businessevents@experiencenor therncape.com

Northern Cape Tourism @NorthernCapeSA northerncapetourism northerncapesa

 FOCUS FOCUS

Sectoral strengths of
South African provinces
SECTORAL STRENGTHS OF
A wide variety of investments are available.
SOUTH AFRICA’S PROVINCES
Mpumalanga:
Gauteng: • Mining
• Financial and business services • Tourism
• Information and communications • Forestry, paper and paper
technology products, wood and wood
• Transport and logistics products
• Basic iron and steel, steel products Limpopo: • Agriculture and agro-
• Fabricated metal products • Mining processing
• Motor vehicles, parts and accessories • Fertilisers • Metal products
• Appliances • Tourism
• Machinery and equipment • Agriculture
• Chemical products, pharmaceuticals • Agro-processing
• Agro-processing • Energy, including
North West: renewables (solar)
• Mining
• Agriculture and agro-processing KwaZulu-Natal:
• Tourism • Transport and logistics
• Metal products • Tourism
• Machinery and equipment • Motor vehicles, parts and
• Renewable energy (solar) accessories
• Petrochemicals
• Aluminium
• Clothing and textiles
• Machinery and equipment
• Agriculture and agro-
Northern Cape: processing
• Mining • Forestry, pulp and paper,
• Agriculture and agro-processing wood and wood products
• Fisheries and aquaculture
• Renewable energy (solar, wind)
• Jewellery manufacturing

Eastern Cape:
Western Cape:
• Tourism • Motor vehicles, parts and
accessories
• Financial and business services
• Transport and logistics • Forestry, wood and wood products
• ICT • Clothing and textiles
Free State: • Pharmaceuticals
• Agriculture and agro-processing • Agriculture and agro-processing
• Fisheries and aquaculture • Leather and leather products
• Mining • Tourism
• Petrochemicals • Petrochemicals
• Basic iron and steel • Renewable energy (wind)
• Machinery and equipment
• Clothing and textiles • Tourism
• Renewable energy (solar, wind)

Source: Industrial Development Corporation (IDC); The Case for Investing in South Africa, Executive Summary
Source: Industrial Development Corporation (IDC)
(South African Investment Conference, 2018).
Page | 40

SOUTH AFRICAN BUSINESS 2021 20 23 SOUTH AFRICAN BUSINESS 2020

 PROFILE

Gert Sibande
District Municipality
A national leader in job creation through the EPWP programme.

GSDM cannot govern alone; the developmental agenda must be

Executive Mayor Councillor
Muzi Chirwa
determined by residents.
The impact of Covid-19 has put a huge strain on the economy.
Having been placed as a leading district in South Africa in terms
of job creation through the EPWP programme, GSDM commits to
grow this programme and to find more innovative ways to create
sustainable and dignified jobs. Further interventions are planned in
the agricultural and forestry sector, informal traders, construction,
manufacturing, mining and the tourism industry as we rejuvenate
our economy and the realise the economic freedom for our people.
Gert Sibande District Municipality is the largest of the three
districts in Mpumalanga Province at 31 841km², covering 40% of
the province’s land mass. According to Stats SA, Gert Sibande’s
population increased from 1 043 194 in 2011 to 1 135 409 people in
2016. This makes it the smallest district in population.
Name of Local Main Admin Area Population

G
ert Sibande District Municipality Location (km²) Size (2016)
Municipality received Chief Albert Luthuli Carolina 5 559 187 630
an unqualified audit
opinion from the Dipaleseng Balfour 2 616 45 232
Auditor-General for the 2018/19 Dr Pixley Isaka Ka Seme Volksrust 5 227 85 395
financial year for the second
consecutive year. Running a Govan Mbeki Secunda 2 955 340 091
clean municipality in terms Lekwa Standerton 4 585 123 419
of financial management and
governance has been a priority Mkhondo Piet Retief 4 882 189 036
for the current administration Msukaligwa Ermelo 6 017 164 608
since coming into office in 2016.
Gert Sibande District Vision
Municipality (GSDM) has a A community-driven district of excellence and development.
comprehensive and credible
Integrated Development Plan. Mission
The 2020/21 IDP document is To support and coordinate our local municipalities to provide
in line with the Municipal excellent services and development.
Systems Act which makes
community participation in Contact details
the affairs of the municipality a Tel: +27 17 801 7000
legal obligation. The munici- Email: records@gsibande.gov.za | Website: www@gsibande.gov.za
pality has been consultative Follow us on Facebook & Twitter @GertSibandeDM
and transparent in its approach.

21
105 SOUTH AFRICAN BUSINESS 2021
 SPECIAL FEATURE
Building infrastructure is a
presidential priority
Projects worth R340-billion have been gazetted for implementation.
Richards Bay SEZ.
T
he two central planks of the South African
government’s post-Covid rebuilding
programme are infrastructure and
industrialisation.
To promote and monitor the first priority, an
Investment and Infrastructure Office has been
created in the Presidency. It is headed by the
former Gauteng MEC for Economic Development,
Dr Kgosientso Ramokgopa. In 2020 national
government gazetted 51 priority infrastructure
projects, with a total investment value of more than
R340-billion.
Sectors targeted for intervention include energy,
housing, transport, water and sanitation, agriculture,
agro-processing and digital infrastructure. Some
of the “special projects” that fall outside sector
categories include:
• Rural pedestrian bridges and rural roads.
• Energ y and water s av ings on gover n -
ment buildings.
• Digitising of government information: 10 000
SOUTH AFRICAN BUSINESS 2021
young people will be employed to digitise
government information, including hospital
files and police dockets.
• Student accommodation.
• SA Connect Phase 1B, broadband expansion.
A reconstituted Council of the Presidential
Infrastructure Coordinating Commission met
for the first time in July 2020. With President
Cyril Ramaphosa in the chair, the commission
includes national ministers, provincial premiers,
mayors of big cities and representatives of the
South African Local Government Association.
Where the council intends doing things
differently is by paying close attention to:
• Preventing corruption through transparent
tender processes and strong due diligence.
• Community involvement in planning and
implementation.
• Emphasis on local employment and procurement
and targeted involvement of SMMEs.
• Blended financing through the Infrastructure
Fund to mobilise more resources from the
private sector, multilateral development banks
and development finance institutions.
A World Bank report has shown that a 10%
increase in infrastructure spending results in a
1% growth in GDP. A study carried out by KMPG
for the Gauteng Province found that spending
on infrastructure resulted in additional economic
activity worth R26-billion in the province and
created 92 000 direct jobs.
In the country ’s biggest province in
terms of economic activity, the Provincial
Government of Gauteng spent R30-billion on
infrastructure between 2013 and 2016. The
Gauteng Infrastructure Master Plan is expected
to account for expenditure of about R1.8-trillion
over a 15-year period.
22

Special Economic Zones
A key component of the strategy to boost the value
of the country’s products is to develop infrastructure
where manufacturing can take place, namely
Special Economic Zones (SEZs) and industrial parks.
Each province has been allocated SEZs that
play to regional strengths. Described as “major
catalytic projects” for the northern province of
Limpopo, the Musina-Makhado SEZ (MMSEZ), the
proposed Tubatse SEZ and several industrial parks
are central to the strategy of expanding Limpopo’s
manufacturing capacity.
As of February 2020, Shaanxi CEI Investment
Holdings had committed to a $5-billion investment
in a vanadium and titanium smelter project at
the MMSEZ and a further $1.1-billion had been
pledged from other sources. The first-phase focus
is on energy and metallurgical processes but agro-
processing, logistics and general manufacturing are
expected to follow.
In the Pretoria area, already home to several
Original Equipment Manufacturers (OEMs), the
Tshwane Automotive Special Economic Zone
(TASEZ) has been launched. It is a joint project of
the Gauteng Province, the Department of Trade,
Industry and Competition, and the City of Tshwane.
The implementing agent is the Coega Development
Corporation (CDC), the developer and operator of
the Coega Special Economic Zone (SEZ).
The Coega SEZ is at the Port of Ngqura near Port
Elizabeth and it too has an automotive component,
recently strengthened by the large investment of
the Beijing International Automobile Corporation
(BIAC). East London’s Industrial Development
Zone (ELIDZ) has many companies that sell to and
service the nearby Mercedes-Benz plant while both
coastal SEZs have a strong suite in logistics and are
planning expanded aquaculture parks.
Energy is a key infrastructural requirement for
the growth of any economy, and SEZs are playing
a role. The Coega SEZ has been named as the site
for one of two liquefied natural gas (LNG) plants to
be built (if partners can be found) in terms of the
national gas-to-power plan.
The Richards Bay Industrial Development
Zone (RBIDZ) in KwaZulu-Natal is the other site
23
SPECIAL FEATURE
Gauteng Premier David Makhura visited the Nissan
plant at Rosslyn in 2020.
designated for an LNG plant, with the capacity
planned for 2 000MW. RBIDZ is also the location
of a new biomass plant.
The OR Tambo SEZ in Gauteng underscores
Ekurhuleni’s strengths in manufacturing and
logistics. The OR Tambo SEZ has launched the
biggest food processing operation in the southern
hemisphere (and the world’s second-largest
refrigeration plant). With a special focus on export-
oriented value-added industry, the OR Tambo SEZ
leverages its connection to the country’s busiest
airport. The focus of this SEZ is on agro-processing,
jewellery manufacturing and mineral beneficiation
as well as the development of hydrogen fuel cell
technology. The SEZ is a subsidiary of the Gauteng
Growth and Development Agency (GGDA).
Two of the largest infrastructure projects in
South Africa’s history have unfortunately been
delayed and are running over budget. National utility
Eskom set out to build two huge power stations in
Mpumalanga (Kusile) and Limpopo (Medupi). Both
are near existing power stations and should have a
stable supply of coal.
Eskom committed to completing Medupi in
2020 and intends finishing Kusile by 2023. Medupi
will be able to feed 4 764MW into the South African
power grid when in full commission. Kusile will have
a capacity of 4 800MW and will be the fourth-largest
coal-fired power station in the world. It will also the
first in South Africa to use flue-gas desulphurisation
(FGD), a technology that removes oxides of sulphur,
such as sulphur dioxide, from exhaust flue gases. ■
SOUTH AFRICAN BUSINESS 2021
 FOCUS
Ready to get behind government’s
ambitious infrastructure programme
Jason Lightfoot, Portfolio Manager at Futuregrowth, explains how private capital
can be mobilised to support infrastructure projects.  
I
n a world in which the government and central
bank have several means available to stimulate
the economy, infrastructure spend is a powerful
anti-recessionary fiscal policy tool.
However, in South Africa economic growth has
been constrained by lower levels of investment in
infrastructure than in other developing economies,
which has been exacerbated by specific issues
such as ageing infrastructure and infrastructure
bottlenecks. The Covid-19 crisis and the fiscal
support needed to alleviate the damage done
to businesses and the most vulnerable citizens
as a result of the lockdown could also put the
government’s future infrastructure ambitions at risk.
The extent of infrastructure spending in an
economy is reflected in the level of gross fixed
capital formation (GFCF) as a percentage of
Gross Domestic Product (GDP). The measure
captures how much money as a proportion of
total economic activity is being invested in capital
goods, such as equipment, tools, transportation
assets and electricity and various measurable
outputs of these.
South Africa’s reported GFCF has been
historically low, with the exception of the build-up
to the FIFA World Cup in 2010. Latest statistics show
GFCF as a percentage of GDP was 18.19% in 2019,
which is considered far too low for a developing
economy. Several studies consider an acceptable
norm to be in the region of 30% to 35% of GDP.
South Africa’s GFCF ratio also has some way
to go before it will achieve the target in the
government’s National Development Plan of
30% by 2030. While assessing this, it is important
to note that a country’s current debt level does
have a bearing on its ability to fund infrastructure
initiatives – and South Africa’s government
debt burden doesn’t bode well for the country’s
infrastructure funding capacity.
SOUTH AFRICAN BUSINESS 2021 24
42
When you include guarantees to State-Owned
Enterprises (SOEs), the government’s debt-to-
GDP ratio is expected to rise to well above 100%
compared to the average emerging market level
of around 45%. A debt-to-GDP level of more than
twice as large as the average emerging market
means that the South African government will have
very little scope to fund large-scale infrastructure
and developmental initiatives and thus the burden
will fall elsewhere.
Although there are historical reasons for this high
debt-to-GDP burden, the government’s finances
have also been stretched by the social and
economic measures it has needed to put in place
to alleviate the economic fallout from Covid-19.
A fiscal rescue package of R500-billion will add
to the already high debt burden and economic
lockdowns have already resulted in lower levels of
revenue generation, putting the government in a
difficult position fiscally.
If the environment is right, private investors
are ready
Banks, as well institutional investors, are no
strangers to fulfilling a funding role but have
become more apprehensive about doing so,
given the government’s governance, financial and
operational SOE failures.
While the various developmental finance
institutions need to fulfil a specific role when it
comes to industrial policy, economic development
and providing credit-enhancing capital, capital
market players need to have confidence that
the policy environment will remain stable and
that potential investments will offer sufficiently
attractive risk-related returns.
To a great extent, the Renewable Energy
Independent Power Producer Procurement
 FOCUS

Programme (REIPPPP) met these criteria, enabling which have been traditionally underserviced, with
the private sector to play an important role, affordable access to broadband connectivity.
committing about R200-billion to the programme The infrastructure initiatives under con-
to date. REIPPPP is seen as an important success sideration could be important contributors to
story, particularly in respect of the impressive getting South Africa out of its current low-growth
implementation role that the Independent Power trap. Although the estimated R1.5-trillion needed
Producers Office played in that programme. to fund the projects over the next decade is a tall
Unfortunately, the success of this prog- ask, the private sector is ready to fund them as
ramme has not been emulated in other sectors long as they are well structured and managed,
and there hasn’t been a coordinated approach that investors are compensated for the risks that
to address the other necessary infrastructure they are taking and that they ultimately have
investments until now. That may change with the policy certainty.
Investment and Infrastructure Office set up by
President Cyril Ramaphosa. The government
gauged private sector investment appetite
recently when it presented various project
pitches for various sectors deemed a priority
to the broader market, as a precursor to
the inaugural Sustainable Infrastructure
Development Symposium of South
Africa (SIDSSA). Sectors the government
has identified as in need of infra-
structure investment include energy, digital
infrastructure, water and sanitation, human
settlement, agriculture and transport. Futuregrowth is an investor in the Khobab Wind Farm.
The government’s latest engagement
with the private sector is a step in the right Futuregrowth
direction. It crowds in potential private sector
investors in a much more coordinated manner Futuregrowth has been a long-standing
and includes them in assessing how these various institutional investment partner in infrastructure
initiatives can be funded. and developmental finance, funding projects for
It is encouraging that the government is close on 24 years. It manages the largest debt
engaging with capital market participants during fund of this nature in Sub-Saharan Africa, the
the conceptual stage of some of these projects Futuregrowth Infrastructure and Development
because it will allow concerns to be addressed Bond Fund, which has a market value of more
earlier and thereby potentially ensure a much than R15-billion. It has funded various transactions
higher success rate. over the last two decades to the benefit of all
South Africans – and will continue investing in
Breaking out of SA’s low-growth trap projects that provide the impetus the domestic
economy needs to lift its economic growth rate to
Although the range of projects is wide, there are sustainable levels in the future, while earning risk-
several significant ones that could change the adjusted returns. ■
South African landscape to the benefit of all. From
a digital perspective, infrastructure investment
in broadband fibre connectivity could provide
peri-urban (townships) and rural communities,

FUTUREGROWTH ASSET MANAGEMENT IS A LICENSED FINANCIAL SERVICES PROVIDER

43 SOUTH AFRICAN BUSINESS 2021

25 SOUTH AFRICAN BUSINESS 2021
 FOCUS
The game-changer:
Musina-Makhado
Special Economic Zone
Revitalising the Limpopo economy through industrialisation.
T
he Economic Reconstruction and Recov-
ery Plan outlines immediate actions to re-
build the national economy and to provide
jobs and relief to the South African people.
These actions include an aggressive infrastructure
programme, far-reaching reforms to increase our
competitiveness and inclusiveness, measures to
catalyse industrialisation, relief for vulnerable
households and individuals, and a public invest-
ment in employment programmes. This plan is a
response to a severe economic contraction unlike
any we have experienced in recent memory. South
Africa is not alone in experiencing an economic
crisis of this depth and extent. Unemployment has
risen across the world and nearly every economy
has shrunk. As President Cyril Ramaphosa has not-
ed, “It is true that the measures that were necessary
to delay the spread of the virus and prevent deaths
led to a sharp decline in economic activity.”
The strategic geographic location of the
Musina‐Makhado Special Economic Zone (MMSEZ)
and its close proximity to the main land‐based
route into SADC and the African continent,
together with supporting incentives and a good
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logistics backbone, will make it the location of
choice for investment in mineral beneficiation,
agro‐processing industries, manufacturing and
logistics. This will provide job opportunities to the
people of Limpopo province currently in need of
jobs and skills development. The establishment of
the metallurgical cluster in close proximity to the
source of raw materials, along with a logistics hub
in the SEZ with access to markets, presents unique
opportunities for mineral beneficiation, which is a
key priority of national government.
Genesis of the MMSEZ
Following the enactment of the Special Economic
Zones Act, the Limpopo provincial government
submitted a comprehensive proposal on strategic
areas for consideration to develop the province’s
economy through industrialisation to the
Department of Trade, Industry and Competition
(dtic). The dtic designated the MMSEZ, which has
become the flagship of the provincial government.
Subsequently, the Musina-Makhado State Owned
Company (SOC), a subsidiary of the Limpopo
Economic Development Agency was established.
This entity is tasked with the responsibility of
facilitating and managing the planning and
development of the MMSEZ.
MMSEZ business case
The essence behind the creation of the MMSEZ
is the establishment of a new industrial hub in
the Vhembe District Municipality, which forms
part of the Trans‐Limpopo Spatial Development
Initiative, situated at two locations, Makhado and
Musina, each with its own unique industrial focus.
The energy and metallurgical cluster (power plant,
26
24
 FOCUS

LEDET MEC Thabo Mokone, MMSEZ Executive

Manager: Investment Promotion Richard Zitha and
MMSEZ CEO Lehlogonolo Masoga.

steel plant, stainless steel plant, coking plant, pig

iron plant, ferromanganese plant, ferrochrome
plant, chrome plating, lime plant, ferromanganese,
silicon-manganese and calcium carbide plants and
vanadium-titanium magnetite plant) is located on
the Makhado side and the Northern Site in Musina
is focussing on general manufacturing, agro-
processing and logistics.
“ The MMSEZ has positioned itself as a
platform to revitalise the Limpopo economy chain. The beauty of the MMSEZ lies in the
through industrialisation. Our focus is to generate diversity of opportunities across sectors both at
much-needed base-load electricity, establish a the downstream and upstream with backward and
metallurgical complex, develop a manufacturing forward linkages. The North-South Corridor makes
hub, enhance agro-processing and to develop a the Musina-Makhado location a strategic passage
regional logistics centre. The close proximity of for trade between South Africa and the rest of the

Artistic Impression of the MMSEZ.

the Beit Bridge border post and the abundance of
mineral and agricultural resources gives the MMSEZ
a competitive advantage,” says Lehlogonolo
Masoga, MMSEZ Chief Executive Officer.
The MMSEZ SOC has another critical
responsibility of attracting and mobilising both
domestic and foreign direct investment in the
identified industrial activities across the value
SADC region and the African continent, further
given impetus by the Africa Continental Free Trade
Agreement. Limpopo Province has always enjoyed
a niche of being a gateway to the rest of Africa
as a home to one of the busiest ports of entry,
Beit Bridge Border Post. The development of the
MMSEZ becomes an ideal platform to cement this
strategic socio-economic position of the province.

27
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Agro-processing potential
Vhembe Region is the food basket of Limpopo
province as it is endowed with various agricultural
resources. some of which are sought after
in lucrative world markets. Exotic fruits and
vegetables are available in abundance, which
creates a viable potential for agro-processing of
value-added products for domestic consumption
and export markets. Food production has over
the years become a multi-billion industry that
requires the creativity of entrepreneurs to exploit.
Complemented by logistics support, the agro-
processing cluster of the MMSEZ is destined to
become a big success over the next few years.
Various opportunities exist within the agro-
processing cluster such as food processing,
fresh-produce handling, dry-fruits packaging,
food canning, timber processing, furniture
manufacturing, etc.
Manufacturing within the automotive sector
South Africa has established itself as the
powerhouse of the automotive industry in
Sub-Saharan Africa. Over 10% of the vehicles
manufactured in South Africa are supplied by
road via the Beit Bridge Border post to markets
to the north of South Africa in the SADC region.
This window of opportunity makes the MMSEZ
an ideal location for various opportunities across
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the automotive sector value chain such as vehicles
and components manufacturing, storage and
distribution hub, after-care products distribution
hub, tyre manufacturing and distribution hub,
etc. The manufacturing cluster of the MMSEZ will
provide a platform for various Original Equipment
Manufacturers to manufacture products in
the SEZ for both domestic consumption and
export markets in Africa and beyond. A strategic
opportunity exists for manufacturers of products
such as fertilisers, agro-chemicals, industrial
chemicals, steel fabrication, etc.
Sustainable development
The South African Constitution enjoins us to pursue
economic development in a sustainable manner
and preserve the environment for the benefit of
current and future generations. Section 24 states
that everyone has the right to an environment that
is not harmful to their health or well‐being and to
have the environment protected for the benefit of
present and future generations, through reasonable
legislative and other measures, that prevents
pollution and ecological degradation, promotes
conservation and secures ecologically sustainable
development and the use of natural resources
while promoting justifiable economic and social
development. This constitutional provision is
supported by the National Environmental Act
(NEMA) which provides that negative impacts on
the environment and on people’s environmental
rights must be anticipated and prevented, and
where they cannot be altogether prevented, are
minimised and remedied.
Our country aspires to be a sustainable,
economically prosperous and self‐reliant nation
state that safeguards its democracy by meeting
the fundamental human needs of its people,
managing its limited ecological resources
responsibly for current and future generations, and
by advancing efficient and effective integrated
planning and governance through national,
MEC of Limpopo Economic Development Environ-
ment and Tourism, Thabo Mokone (left) and MMSEZ
CEO Lehlogonolo Masoga at the launch of the MMSEZ
Corporate Identity. Credit: MMSEZ
28
26

Artistic Impression of the MMSEZ.
regional and global collaboration. Our application
for the environmental impact assessment
(EIA) was guided by the above fundamental
values, principles, directives and the entity’s
environmental, social and governance (ESG)
policy provisions. We recognise that sustainable
development and sustainable use and exploitation
of natural resources are at the core of the
protection of the environment.
The months of September and October 2020
were dedicated to a public consultation process
for the EIA application for the South site, energy
and metallurgical cluster. The outcome of the EIA
process indicated that the benefits of the MMSEZ
will potentially promote justifiable economic and
social development although a negative impact
upon the environment will become inevitable.
The ultimate goal of the EIA process is to protect
ecologically sensitive areas and support sustainable
development and the use of natural resources,
whilst promoting justifiable socio-economic
development in the location of the project. In our
endeavour to ensure the effective implementation
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FOCUS
of the mitigation and management actions,
an environmental management plan has been
developed to provide mitigation measures
necessary to ensure that the project is planned,
constructed, operated, and decommissioned in an
environmentally responsible manner.
The Draft EIA Report identified and assessed
all the potential impacts of the project as well
as the proposed mitigation measures and
management actions. Various specialist studies
have been conducted beyond the approved
EIA scoping report which included the aquatic
impact assessment, ecological impact assessment,
heritage impact assessment, palaeontology /
archaeology impact assessment, soil and land
capability assessment, visual impact assessment,
climate change assessment, air quality assessment,
socio-economic assessment, noise impact
assessment, health impact assessment, traffic
impact assessment, water assessment, high-level
energy study, economic analysis, biodiversity
study, biodiversity offset study, biodiversity offset
strategy, waste impact assessment, town-planning
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 FOCUS
impact assessment, tourism and food
security study, security of water study,
energy requirement study and energy
generation technology options.
Integrating SMMEs within
the SEZ
Special Economic Zones are
predisposed to attract foreign direct
investment which could translate into
blue-chip international enterprises
locating in the zone. Although it is a
good thing to attract international
companies to locate in the SEZ,
this should not happen at the
expense of local enterprises. Skills
and technology transfer forms an
integral part of the essence of the SEZ
phenomena. In the MMSEZ, SMME
promotion and integration is inherent
to the business model. An instrument
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Artistic Impression of the MMSEZ.
has been developed in the form of
an Enterprise Development Strategy
to mainstream SMMEs development
into the life cycle of the MMSEZ.
The strategy is supported by an
ambitious programme to develop
an SMME Incubation Centre as
a platform for entrepreneurship
excellence, creativity and skills and
technology localisation.
The MMSEZ is partnering with
the Department of Small Business
Development to roll out this magnif-
icent initiative. During the month
of October 2020, a Memorandum
of Agreement was concluded with
the Council for Scientific and Indust-
rial Research (CSIR) to collaborate
on suppor ting SMMEs in the Lehlogonolo Masoga
MMSEZ and ensuring technology has been a driving force
localisation through various initiatives behind the development
across sectors. of the MMSEZ.
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Developing small towns into cities

The MEC of Limpopo Economic

Development Environment and Tourism
(LEDET), Thabo Mokone, stated on the
occasion of the launch of the MMSEZ Investment opportunities outside the zone
Corporate Identity, “We are pleased that
finally the province has established a SEZ projects are by their nature catalytic. They
capable and agile entity seized with a stimulate growth and development which is felt
mandate to implement the MMSEZ. outside the delimited geographic space. In Musina
Our ambition is not just to build an and Makhado towns various stimulus packages
industrial park but rather to use the SEZ have been identified as investment opportunities
as a catalyst to unlock a plethora of other for the private sector outside the confinement of
economic opportunities, including the the SEZ spaces. Among such opportunities are
potential of realising a new Smart City in the new Musina Dam, High Speed Rail Project,
our province.” It is our anticipation that Manaledzi Mega Housing Project in Makhado,
the MMSEZ as a mega-industrial project Musina Airport, MMSEZ human settlement, private
will transform the spatial configuration of hospital, private schools and training centres, retail
the two towns of Musina and Makhado. property and hotels.
According to the external masterplan
report, the two towns requires an
investment of R133-billion in socio-
economic infrastructure such as roads,
rail, human settlement, schools, health
facilities, ICT infrastructure, airport,
electricity, water and sewerage.
Catalytic projects such as the envisaged
High-Speed Rail Project connecting Johannesburg
and Musina will add the much-desired impetus
of engendering the creation of a new smart city.
The province is currently developing a model
for a new smart city based on the principles of
smart economy, smart mobility, smart housing,
smart environment, smart governance, artificial
intelligence and the internet-of-things. With the
creation of opportunities for local people to earn a The launch of the MMSEZ Corporate Identity.
decent income, entrepreneurs to create wealth and
investment in socio-economic infrastructure, such It is for this reason, among others, that the
conditions will lay a solid base for the new smart Musina-Makhado Special Economic Zone is “a
city to take shape. world of game-changing opportunities”. ■

CONTACTS MR SHAVANA MUSHWANA MR RICHARD ZITHA

MUSINA-MAKHADO SEZ SOC
29 Market Street,
Polokwane,
Limpopo Province (RSA)
www.mmsez.co.za
Marketing and
Communication Manager
Tel: +27(0) 15 295 5120
Cell: +27 (0)66 173 8957
Shavana.Mushwana@lieda.co.z
Executive Manager:
Investment Promotion
Tel: +27(0) 15 295 5120
Cell: +27 (0)71 391 8188
Richard.Zitha@lieda.co.za

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 SPECIAL FEATURE
The Maritime Economy offers
blue water opportunities
Contribution to GDP could rise to R177-billion by 2033.
Richards Bay is the site of South Africa’s largest coal export terminal.
R
arely does a country have an opportunity
to start a new sector from scratch, let
alone two. When the Renewable Energy
Independent Power Producer Procurement
Programme (REIPPPP) began in 2011 to find new
sources of electricity, a strong new economic
sector came into being.
In eight years, investment totalling R209.4-billion
was committed to the energy programme by local
and foreign entities. If anything, the potential of the
Maritime Economy, sometimes called the Oceans or
the Blue Economy, is even greater.
The anticipated numbers are impressive. The
share of the Maritime Economy to South Africa’s
gross domestic product (GDP) will by 2033 grow by
upwards of 250% (and perhaps as much as 350%)
compared to its current value, to a figure between
R129-billion and R177-billion. A million new jobs are
expected to be created.
In every field South Africa either has existing
infrastructure or is in the process of creating or reviving
it: ship-building and repairs, oil rig maintenance, oil
and gas operations, port operations, logistics, marine
engineering and bunkering.
South Africa’s eight ports are run by the state-
owned group Transnet, which has a strategic plan for
SOUTH AFRICAN BUSINESS 2021
each port to focus on its strengths. Transnet spent
R2.5-billion on new port equipment in 2019/20.
On the west coast, Saldanha is the main
port for the export of iron ore. Large industrial
operations already exist and the Saldanha Bay
Industrial Development Zone (SBIDZ) is set to
become a hub for maritime repair activities and oil
rig maintenance and repair.
About 1 800km to the east and five degrees
further north, Richards Bay Coal Terminal (RBCT)
is South Africa’s primary export portal. Although
volumes dipped somewhat to 72.1-million tons
in 2019, the fact remains that the infrastructure
is in place to support expansion of aspects of the
Maritime Economy through the Richards Bay Special
Economic Zone (RBSEZ).
Sectors under investigation include alternative
energy generation and opportunities in the gas
sector. A feasibility study is being done on a gas-to-
power plant and a large liquid petroleum gas import
and storage terminal was recently built for Petredec
by Bidvest Tank Terminals.
Saldanha Bay can offload Very Large Crude
Carriers as can the Port of Durban, which is Africa’s
busiest port. Durban handled more than 81-million
tons of cargo in 2019, which included 2.84-million
32

TEUs (twenty-foot container equivalent). The
Durban Car Terminal handled 521 280 vehicles
(Africa Ports & Ships). Durban is responsible for
about 60% of the total volume of containers
handled by the country’s ports.
The Port of Durban is home to many maritime
companies. EBH SA has been in marine engineering
and ship repair since it began as Elgin Brown and
Hamer in 1878. Three South African shipbuilders
(SAS, Damen Shipyards Cape Town and Nautic
Africa) have agreed to pool resources on contracts
to become more competitive.
The KwaZulu Cruise Terminal (KCT) consortium
won the contract from TNPA to finance, build and
run the new Durban Cruise Terminal.
The Port of Cape Town has also launched a
dedicated cruise-ship terminal. A renewed focus
on ship repair through facilities such as the Sturrock
and Robinson drydocks is on the cards for the Port
of Cape Town, which has a diverse offering through
its Container Terminal, Multipurpose Terminal,
Liquid Bulk Terminal and Fresh Produce Terminal.
Drilling off the southern coast has revealed vast
resources in the Brulpadda field in the Southern
Outeniqua Basin. If some of this gas can be recovered,
the two SEZs on the Eastern Cape coast would
become critical to its utilisation. The Port of East
London is aligned to the East London Industrial
Development Zone while Port Elizabeth has two ports,
the city port being joined by the Port of Ngqura which
anchors the Coega Special Economic Zone.
Fishing
South Africa has 3 000km of coastline and the extent
of the country’s territorial waters is greater than its
land size. About half of the fish that South Africans
eat is caught locally, and almost all of that comes
from the waters off the Western Cape. The two most
popular types of fish are hake and sardines, which
are harvested by deep-sea trawlers.
The fishing industry earns R3.4-billion in foreign
earnings annually and employs 26 500 people
across 22 sectors, the main ones being deep-sea
trawling and aquaculture (JSE).
The aquaculture industry is currently small, but
since 2014 investment commitments of about
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SPECIAL FEATURE
R700-million have been made. The Coega Special
Economic Zone is planning a 440ha Aquaculture
Development Zone to accommodate new
projects. One possibility is to promote import
substitution, for example, with salmon, of which
South Africa currently imports more than 5 000
tons every year.
The allocation of commercial fishing rights in
12 sectors that was due to happen in 2020 has
been postponed to December 2021. It is likely
that the quotas of larger fishing companies will be
reduced in favour of small-scale fishing companies.
There have been several changes in ownership
in the fishing industry, most likely linked to the
upcoming determination of new fishing rights
in which black shareholding will be a factor. The
acquisition by black-controlled Sea Harvest Group
of Viking Fishing is part of a larger trend.
Tiger Brands has unbundled its 42% stake
in Oceana Group. Oceana holds the popular
pilchards brand Lucky Star, which enjoys 80% of
market share in South Africa, and has the highest
market value of fishing companies in South
Africa. The Oceana Group recently purchased
Foodcorp’s fishing rights and a US fishmeal and
oil company, Daybrook. ■
Work underway at Durban’s drydock facilities.
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Now more than ever before the Oceans Economy will be one of the key
pillars on which the South African economy of the future will be rebuilt.
The Ocean, or Oceans Economy,
is positioned within the South
African Government’s National
Development Plan (NDP) as a
key driver of economic activity and
growth which will help eliminate
widespread poverty and inequality
by 2030.
As Africa’s largest fishing company,
and home to the South Africa’s
iconic brand, Lucky Star, Oceana
is focused on protecting the
integrity of the country’s marine
ecosystems, promoting sustainable
employment opportunities, and
contributing to the country’s food
security.
Oceana believes that South Africa’s USA and markets fish-based
more than 3 000km of coastline
along a major international
strategic shipping route presents
the perfect platform for sustainable
and long-term usage of our oceans
and coastline for responsible
growth and development and
shared prosperity.
A sustainable oceans economy
incorporating both the traditional
and newer industries such as
fishing and maritime transport,
allied to newer sectors such as
marine tourism, renewable energy,
aquaculture and marine
biotechnology, have the potential
to meet the needs of all peoples,
particularly those who make up
rural coastal communities who
P O S I T I V E LY I M PAC T I N G L I V E S
have borne the brunt of poverty. The Oceans Economy was one of
seven targeted sectors, and listed
From humble beginnings in the
six priority areas including offshore
tiny West Coast fishing village of
Oil & Gas, Aquaculture, the
Lamberts Bay when the Lamberts
further development of Small
Bay Canning Company Ltd was
Harbours, Coastal and Marine
established in 1918, Oceana has
Tourism, Marine Transport and
over the course of the last century
Manufacturing & Marine
grown to be a leading global fish
Protection Services & Ocean
protein company and Africa’s
Governance.
largest fishing company. Oceana
is ranked among the top 5 most The fishing sector was not included
empowered companies on the as one of the key priority areas
Johannesburg Stock Exchange and under the Oceans Economy despite
listed on the Namibian Stock its significant socio-economic
Exchange as well. contribution which is estimated
at over R14 billion a year.
The Group operates in South
Africa, Namibia and the The fishing sector is far more
established than some of the newer
products in 46 countries maritime industries punted under
Operation Phakisa but this does
across the world.
not mean that fishing is not a key
The fishing industry estimates that contributor and enabler to
it accounts for 20 000 direct jobs national imperatives of economic
and a further 60 000 indirect jobs growth, job retention and creation,
across the economy in South and sustainable economic
Africa, where the Group continues development, particularly in
to drive economic empowerment,
real transformation and
environmental stewardship for
current as well as future
generations.
Government launched Operation
Phakisa (“hurry up” in Sesotho)
in mid-2014 to spur sustainable
economic growth across key areas
in a bid to address poverty,
inequality and unemployment.
coastal areas and communities
where unemployment and
underdevelopment are chronic
issues.
The commercial fishing sector,
of which Oceana is an important
stakeholder, makes a socio-
economic contribution of Rl4.3
billion per annum, employing in
excess of 20 000 people directly
and a further 60 000 indirectly,
and has an annual spend of over
Rl billion in developing and
supporting around 2 000 SMMEs
all across South Africa.
The sector is also noted for its
capital intensive nature and, as
such, lists fleet and processing
facilities valued at over R13,5
billion, with further capital
investments of R7,5 billion over
the last 15 years.
The sector furthermore can speak
to demonstrable transformation,
having moved from one of the
most untransformed sectors into
one of the most transformed.
Under Apartheid only 1% of
commercial fishing rights were
held by black South Africans,
but black ownership has grown
and has continued to rise, from
35% in 2004 to over 75% currently.
Oceana operates 11 factories
across the world and also manages
a fleet of 54 vessels and 8 cold
storage facilities.
The Oceana Group works hard
to empower communities and
contribute to environmental
sustainability throughout all the
communities in which the
company operates.
Oceana is also committed to
job security, investing in skills
development, and bringing new
technologies to bear to support
and uplift coastal communities.
The Group is working hard to
drive positive transformation
in fishing to ensure that the small
scale fishing sector participates
in and contributes towards the
broader economic development
of South Africa by creating better
job opportunities, shared
prosperity and enabling sustainable
development in coastal
communities.
While the commercial fishing
industry is well transformed in
terms of broad ownership, here
is still a need for greater
transformation at participation
levels.
Continuity through certainty and
long-term stability provides the
platform for significant further
growth and economic
development and it is imperative
that all stakeholders work together
with a unified sense of purpose.
A fully transformed commercial
fishing industry is key to unlocking
economic development in South
Africa because the fishing value
chain offers enormous
opportunities for inclusive growth
and employment and enterprise
development in coastal
communities.
At Oceana, we believe that
any company that is afforded
the right to fish must prove
their tangible commitment to
converting these rights into
broad-based social and
economic benefits.
This should at all times be done
in a sustainable and inclusive
manner. As such, the company
launched the Oceana
Empowerment Trust (OET) in
2006 to unlock and convert the
value of harvesting fishing rights
into shared, broad-based value
for eligible black South African
employees.
The OET has a 10% shareholding
in Oceana with a market value
of almost Rl-billion, making the
Trust the largest 100% black-owned
fishing entity in South Africa in
terms of ownership value.
As of September 2019, 2 447
beneficiaries had received over
R400 million through the Trust,
allowing them to become
financially empowered and active
participants in South Africa’s
formal economy.
The Oceana Group will also
continue to play its part in skills
development as it is vital for
South Africa and the greater
continent’s growth.
Oceana’s interventions are
premised on the fact that holistic
skills development is central to
enabling young people and women
in particular to be active economic
participants and not mere
bystanders.
Oceana recognises that the
development of the small scale
fishing sector and the enhancing
of skills in this area is paramount
to longer term success, to empower
individuals and communities to
participate to a greater degree in
the formal economy, but crucially,
also creating the opportunities
and platforms to support and
meet these ambitions.
Communities need to move
beyond just survival mode to a state
where they are empowered enough
to become agents of economic
change, where dignity is restored
and long-held dreams fulfilled.
I am confident that we have a
sustainability strategy that enables
us to convert fishing rights into
shared value and continue to
deliver social and environmental
dividends to society.
Areas of potential growth include
marine science, engineering,
vessel crewing, supply chain,
artisans, food safety and supply
of vessels and related equipment.
Oceana invested R28.3 million
in skills development in South
Africa and Namibia in 2019 and
offered leamerships, internships
and graduate programmes to
empower the youth.
A key part of the Oceana Group’s
strategy in terms of empowerment
and greater participation in the
Oceans Economy is the Oceana
Maritime Academy which will be
launched and fully operational
in the first quarter of 2021.
Oceana has launched this exciting
initiative with an initial R40
million capital investment and
will spend R35 million a year on
fishing sector skills and training
with a particular focus on small
scale fishers.
The state-of-the-art facility in the
Hout Bay harbour precinct is an
investment in the future of the
South African and international
fishing industry, being the only
academy in South Africa that
focuses exclusively on the needs
of the fishing industry, both small
scale and commercial.
Seeking to address the scarce and
critical skills shortage in the
industry, the Oceana Maritime
Academy will offer world-class,
accredited and industry relevant
maritime skills and training that
will provide the industry with new
talent while enabling small scale
fishers to fish more productively,
profitably and sustainably.
The Academy will draw attendees
from the local Hout Bay
community, the small scale fishing
sector from all over South Africa,
Oceana Group employees, as well Lucky Star provided the WCBDC
as anyone interested in a career with the building to be able to
in the fishing industry, and offer provide its services to the St Helena
training in a broad range of skills.
Bay community, resulting in the
This shared value initiative will WCBDC in 2019 assisting almost
not only strengthen the Oceana 200 entrepreneurs with a variety
business and the talent pipeline
of services.
pool for the entire industry, but
will help build a stronger, more Oceana recognises that the Small
prosperous and equitable country. and Medium-sized Enterprise
While Oceana’s strength lies in (SME) sector will be one of the
fishing, with its core business key drivers of economic growth
being the catching, procuring, and development and employment
processing, marketing and
in years to come and therefore is
distribution of canned fish,
fishmeal, fish oil, horse mackerel, an active enabler and supporter
hake, lobster & squid, the Group through initiatives such as interest-
has a diversified portfolio of free loans, training and
operations which extend to the infrastructure support, which
provision of refrigerated seek to unlock the inherent
warehouse facilities and logistical potential in this sector, particularly
support.
for rural coastal communities.
Oceana markets and sells close
to 300,000 tons of fish and fish At Oceana, we believe that
products in 46 countries in Africa, by working together, the
North America, Asia, Europe and glaring inequalities which so
Australia and as part of further blight South Africa’s beautiful
diversification in the Blue landscape, can be overcome
Economy, is seeking to move into
and we can create a country
longer term sustainable fish supply
in aquaculture. where opportunity, inclusivity
and prosperity for all can find
Oceana views the Oceans Economy
a home.
as a key driver of sustainable
economic growth, job creation
and food security, yet the Group
remains fully committed to
protecting the integrity of the
country’s marine ecosystems.
Yet fishing is but one way in which
the Oceana Group is seeking to
empower the communities in
which it operates.
Through the Group’s flagship
brand Lucky Star, the company
has partnered with the West
Coast Business Development
Centre (WCBDC) to assist aspirant
and existing business owners
in the small West Coast towns
of Laingville, Steenberg’s Cove,
Stompneusbaai, Velddrif and
Lamberts Bay.
 SPECIAL FEATURE

Main ports, controlled

and managed by
Facilities Key cargo/function Plans
Transnet National Ports
Authority

Slipways, quayside
facilities (Mossgas Industrial Development
Saldanha Jetty). Fabrication Iron ore. Zone. Oil and gas supply
facility (FerroMarine base and rig repair.
Africa).

SWL floating crane,

Enhance marineinvest
Promote drydock, engi-
two graving docks, General cargo,
Cape Town General cargo. neering
in marine capability for
fleet, improve
syncrolift. Cruise- containers, drydocking.
oil and gas
loading sector.
times.
ship terminal.

Two offshore moor-

ing points. Slipway.
Mossel Bay Fishing. Slipway upgrade.
PetroSA logistics
base.

Containers, dry and Expand rig repair. Serve

Ngqura Rig repair.
liquid bulk. Coega IDZ.

Removal of manganese
Port Container terminals, Vehicles, manganese,
to Ngqura, creation of
Elizabeth bunkering, slipway. general cargo.
leisure waterfront.

Serves East London IDZ.

Dry dock and repair
East London Vehicles and grain. Recent upgrades have
quay.
been done.

Ship repair. One

graving dock, several
floating docks. Three Improve access for
Vehicles and multi-
Durban repair quays. Private trucks, back-of-port.
cargo.
quayside facilities New storage areas.
(EBH and Dormac).
Cruise-ship terminal.

Richards Bay Coal Possible gas and

Terminal. Repair renewable energy hub.
Richards Bay Coal.
berth in small craft Service offshore oil and
harbour. Serves IDZ. gas sector.

4337 SOUTH AFRICAN

WESTERN BUSINESS2021
CAPEBUSINESS 2019
KEY SECTORS
Overviews of the main economic
sectors of South Africa

Agriculture 40
Mining 44
Energy 56
ICT 61
Oil and gas  62
Water 66
Engineering  70
Construction and property 72
Manufacturing  74
Food and beverages  76
Automotive  78
Transport and logistics  80
Tourism and events  82
Banking and financial services  84
Development finance and SMME support  86
 OVERVIEW

Agriculture
Berry production is up as exports rise.

T
he number of hectares of blueberries will rise over a five- SECTOR INSIGHT
year period by 136% in Limpopo and 102% in Mpumalanga, The University of Pretoria has
an agricultural economist has told the South African Berry joined an African alliance to
Producers’ Association (SABPA). tackle food security.
Nina Viljoen’s findings have big implications for employment and
exports, especially as blueberries are growing in popularity globally
as a so-called “superfood”. Wandile Sihlobo of Agbiz promotes the Another subsec tor to
idea of South Africa focussing on horticulture, partly because it is exper ience rapid expor t
so labour intensive. He cites blueberries, which need 2.64 workers growth is oranges. As a source
for every hectare planted. Signs are promising; gross value rose from of vitamin C, oranges grew
R15.8-million in 2008 to R1.25-billion in 2018 with the total area in popularity as the Covid-19
planted expanding four times. More than 70% of the blueberry crop pandemic spread. South Africa
is exported. is the world’s second-largest
The major production companies are Berryworld South Africa, citrus exporter, after Spain, and
United Exports and Haygrove SA, an affiliate of UK-based Haygro. the number 11 in the world
There is plenty of scope for berry exports to grow. Current annual in terms of production. Citrus
exports are at about 13 500t compared to over 200 000t for table exports earned South Africa
grapes and about 300 000t for apples (SABPA). Once South African about R20-billion in 2019.
producers pass muster with Chinese import authorities, volumes can By contrast, flower
be expected to grow quickly. growers were badly hit by
An application launched by Fedgroup Ventures gives investors a the effects of the global
chance to invest in blueberry bushes without getting soil on their shutdown. Normally, Europe
hands. Fedgroup Impact Farming expects investors to earn 10-15% accounts for 80% of exports
over an eight-year timeframe and also offers investments in beehives with the Americas and Japan
and solar panels. accounting for the balance.

SOUTH AFRICAN BUSINESS 2021 40

 OVERVIEW

Wool exports suffered too, although this was mostly related to significant proportions of the
China stopping imports due to a foot-and-mouth disease scare. nation’s sorghum, sunflower,
About 70% of South Africa’s export of this commodity are to China potatoes, groundnuts, dry beans,
in a normal year. and almost all of its cherries.
Avocado exports were worth about R4.3-billion in 2019, with South Africa is famous for
more than 1 000ha of new plantings taking place every year to try its fruit, of which 35% is citrus,
to meet growing demand. South Africa is among the top three 23% subtropical and nuts, 26%
countries exporting to Europe and the Chinese market is growing pome fruit, 11% stone fruit and
at a rapid rate. 9% table grapes. Most of South
Beef exports increased from 8 292 tons in 2001 to 31 888 tons in Africa’s citrus and subtropical
2018 with the largest areas of growth in Muslim countries. fruit comes from the eastern part
A record crop of 59 050 tons of in-shell macadamias was of Limpopo. There are about 3
achieved in 2019 and production was up by more than 2 500 tons 500 wine producers in South
over 2018. A less fruitful year is expected in 2020. Africa, with the majority located
Total South African agricultural exports reached R175-billion in in the Western Cape, where
2019 with about 40% going to other African countries and 25% to canola (pictured) is also grown.
Europe. The grain and fruit harvests in 2020 were good with the The Eastern Cape is the
maize return of 15.5-million tons the second-largest ever and fully largest livestock province.
38% better than the previous year’s figure. South Africa has a beef herd
The global shutdown threatened the agricultural products of 14-million. South Africa’s
that South Africa imports: rice and palm oil are 100% dependent m i l k p ro d u c e r s n o r m a l l y
and half of the maize that South Africans consume comes from produce about 3.3-billion
abroad. South Africa imports 80% of its fertiliser and 98% of its litres of milk every year (Milk
agri-chemicals. Producers Association).
The Faculty of Natural
and Agricultural Sciences
Variety and quality at the University of Pretoria
(UP) has joined an African Re-
While agriculture’s contribution to national GDP is variously given search Universities Alliance
in the range of 2.0-2.5%, the upstream and downstream links to programme together with
agriculture through processing and logistics mean that the real the University of Nairobi and
contribution is more like 15%. the University of Ghana. The
AgriSA states that the amount of agricultural land in South Africa Centre of Excellence for Food
in 2016 stood at 93.5-million hectares. This represents 76.3% of South Security that has been es-
Africa’s total land mass of 122.5-million hectares and about 3% less tablished intends to create a
than in 1994. network to find solutions to
A total of 70% of South Africa’s grain production is maize, which covers food security challenges in
60% of the cropping area of the country. KwaZulu-Natal and Mpumalanga Africa. The UP Department
produce sugar, but volumes are down. The Free State Province supplies of Plant and Soil Sciences is
working with Impilo Projects
to research aeroponics for de-
ONLINE RESOURCES ployment in urban areas. The
Agricultural Research Council: www.arc.agric.za faculty has a R13-million facil-
Grain SA: www.grainsa.co.za ity to grow plants in different
National Department of Agriculture, Forestry and Fisheries: conditions which mimic pos-
www.daff.gov.za sible future climate scenarios.
SA Table Grape Industry: www.satgi.co.za Potatoes are being grown in a
South African Berry Producers’ Association: www.berriesza.co.za first experimental phase. ■

41 SOUTH AFRICAN BUSINESS 2021

 INTERVIEW
Michael Brosnahan, CEO
BIOGRAPHY
Michael emigrated from the UK to
KwaZulu-Natal in South Africa in
1981 in order to take up the position
of Quality Assurance Manager with
the Frame Group. A chartered mem-
ber of the Textile Institute in South
Africa, he has managed several large
textile companies since then. Mooi
River Textiles was awarded Cotton
Spinner of the Year for three consec-
utive years under his leadership. He
was appointed CEO of Samil Natural
Fibres in Port Elizabeth in 2016.
SOUTH
SOUTH AFRICAN BUSINESS 2021
AFRICAN BUSINESS 2021
Crafters and knitters
are returning to their
passion
Michael Brosnahan, CEO of SAMIL, unpacks the effects of
the Covid-19 lockdown on the mohair industry.
With people at home during the Covid-19 lockdown, was there
greater demand from creative people?
Happily for SAMIL the crafters and knitters of the world took refuge in
their art, many of them returning to their passion, with time on their
hands. The demand for our hand knitting and crochet yarns increased
dramatically during the hard lockdown periods and this increase in
demand shows no signs of abating.
What were other effects of the pandemic?
Sadly, the effect on farmers and processors was quite devastating
financially, particularly in the months of April to June, when we were
unable to export our mohair tops. This obviously impacted all who are
employed in the industry by way of significantly reduced income. We
are very grateful for the assistance provided by the government via the
UIF TERS system which helped to reduce the impact.
How will the “new normal” affect the mohair industry?
Providing that South Africa and other countries do not return to a
hard lockdown situation, it should not have a further impact. Demand
for high-fashion goods will always be there and due to the reduction
in availability caused by the ongoing drought conditions in the Karoo
region, where most of the mohair is farmed, demand outstrips supply.
Is there a growing awareness of the importance of sustainability
among customers?
There is no doubt that the consumer of today makes purchase decisions
no longer merely on price alone, but also on their understanding of
the ethicality of the manufacturing process. They want to know that
the goods have not harmed the environment in any way. This concern
extends further to the welfare of the people producing the items and
the treatment of the animals.
The Responsible Mohair Standard is an established set of rules
drawn up by the global non-profit organisation, Textile Exchange.
These rules govern all aspects of the mohair industry, from the care of
the environment to the welfare of the animals and all the individuals
employed in the industry. ■
54
42
Sharing Africa’s
beauty with the
Sharing
worldAfrica’s beauty
with the world
SAMIL produces and processes
SAMIL produces
mohair, and processes
the noble fibre. mohair, the noble fibre.

S
S
outh African
outh Mohair
African Industries
Mohair Limited (SAMIL)
Industries Limited SAMIL Combing
SAMIL Combing focusses on and and isis committed
committedto to
is the link between
(SAMIL) is themohair
link producers,
between proces-
mohair processing only mohair.
processing mohair.
sorsproducers,
and consumers. Our vision
processors is to be an Our
and consumers. in- Through a strong support base
Trading:Through
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novative
vision South
is to beAfrican companySouth
an innovative specialising
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companies, partners
partners and agents,
and agents, SAMIL hasSAMIL established has
in the production
company andinprocessing
specialising of natural
the production fibres, as
and processing established
strong strong connections
connections throughout the throughout
world for the the
well
of as speciality
natural fibres, asspun
wellyarns.
as speciality spun yarns. world forand
purchase thesalepurchase and saleand
of raw materials of finished
raw materials
goods.
Mohair,
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fleece
fleeceof the Angora
of the Angoragoat, is: is:
goat, and finished
South goods. inSouth
Africa processes excessAfrica
of 80%processes
of the world’s in
• the noble fibre, known as the diamond fibre
• the noble fibre, known as the diamond fibre
excess production.
mohair of 80% of the world’
The s mohair
advantage of production.
having bothThe top-
• lustrous, resilient and offers exceptional colour
• lustrous, resilient and offers exceptional colour
advantage
making andof havingoperations
spinning both top-making
in Southand spinning
Africa, as well
reflection
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access to raw materialAfrica, as well
produced as access
within to raw
the company,
•• one
oneofofthe theworld’s
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beautifulsustainable
sustainable ismaterial produced within the company, is that SAMIL
that SAMIL is able to offer lots guaranteed from origin,
natural fibres is able to offer lots guaranteed from origin, a rare
natural fibres a rare luxury in today’s business environment.
• a symbol of luxury and exclusivity. luxury in today’s business environment.
• a symbol of luxury and exclusivity. Spinning and dyeing: SAMIL Spinning is a global
Spinning and dyeing: SAMIL Spinning is a global
manufacturer of outstanding quality mohair yarns,
African Expressions manufacturer of outstanding quality mohair yarns,
African Expressions producing a wide and exclusive range of mohair and
Our local brand African Expressions was born of the producing a wide and exclusive range of mohair
Our local brand African Expressions was born of the mohair blended fancy fancy
and fine-spun yarns inyarns both
desire to share Africa’s natural beauty with the rest and mohair blended and fine-spun
desire
of thetoworld.
share Africa’s
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our beauty
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SAMIL
SAMIL divisions
divisions Genetic research: The latest venture
Genetic research: venture underunderthe theSAMIL
SAMIL
Farming: SAMIL Farming,
Farming: Farming was was established
established with
with umbrella
umbrella isis the research project project calledcalled ANGELA
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Combing: SAMIL Natural Fibres
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leading processors. Unlike
Unlike many
many processing
processingplants
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Tel: +27 41 486 2430
Email: yarns@samil.co.za
Contact www.samil.co.za
Website: details
Tel: +27 41 486 2430
SOUTH AFRICAN BUSINESS 2021
Email: yarns@samil.co.za
Website: www.samil.co.za
 OVERVIEW

Mining
Exploration is the next frontier.

S
outh Africa is currently attracting just 1% of global SECTOR INSIGHT
spending on mining exploration, a figure that normally Good mineral prices kept
reaches R160-billion annually. Several industry leaders mining shares buoyant during
have expressed concern about the low level of exploration the lockdown.
activity but in 2020 they were joined by the Economic
Transformation Committee (ETC) of the African National Congress
(ANC), the country’s majority political party. The ETC sees African Rainbow Minerals
exploration as a way of broadening the scope of ownership within is currently operating just
the mining industry. three of its 10 plants in the
Gwede Mantashe, South Africa’s Minister of Mineral Resources ferroalloy sector, with the cost
and Energy, wants to see South Africa attracting at least 5% of of electricity the main reason
global exploration. For exploration to expand a reliable cadastre for reduced activity. ARM is
is required. A cadastre is a record of property boundaries and constructing a demonstration
ownership. The Council for Geoscience is working on this. Drone ferromanganese plant to test
technology could take the mapping process forward, allowing for alternative energy systems
more exploration at a lower cost. with the hope that costs can
I n his 2019/20 budget vote, M antashe noted that be significantly reduced.
about 4 000 permanent jobs would be created by the Th e C E O o f M i n e r a l s
recent investment of about R45-billion through projects Council SA, Roger Baxter, calls
such as Exxaro’s Belfast expansion (coal), Sasol’s coal mine the hurdles faced by mining
replacement programme and Vedanta Resources’ huge zinc companies tr ying to put
mine in the Northern Cape. alternative power projects in
Many mining companies want to start generating their own place, a “serious challenge”.
power, particularly in the light of unreliable supply from the In 2019 Minister Mantashe
national utility, Eskom. wrote to the National Energy

SOUTH AFRICAN BUSINESS 2021 44

 OVERVIEW

Regulator of South Africa (NERSA) granting a deviation from the AngloGold Ashanti was the
existing Integrated Resources Plan (IRP) to allow for the quick successor to the mining
licensing of generation facilities up to 10MW. company formed by Ernest
Coal giant Exxaro has disposed of its stake in Tronox Holdings Oppenheimer in 1917.
(mining and processing of titanium ore, zircon and other minerals) Harmony Gold’s acquisition
but in 2019 took full ownership of renewable energy company s t r a t e g y, i n c l u d i n g t h e
Cennergi, which owns two wind farms in the Eastern Cape. Indian purchase from AngloGold
company Tata Power held 50% of the company through a wholly- of Moab Khotsong mine in
owned subsidiary before the sale. 2017, will result in it being
Despite the global lockdown Exxaro expected earnings for the the country’s biggest gold
first six months of 2020 to be higher than the R3.2-billion earned in producer. With 350 000 new
2019. The weaker rand and record coal exports helped to balance ounces coming from Mponeng,
lower dollar prices achieved. it could produce an annual
Coal continues to be an important part of the South African total of 1.7-million ounces.
mining landscape, despite pressure to move to renewable A f r i m a t c o n t i n u e d to
resources. As Baxter points out, “In 2018 the sector employed almost expand its commodities
90 000 people (representing about 19% of total employment in the portfolio in 2020. Previously
mining sector), with an estimated 180 000 further people employed focussed on construction
as a result of coal mining activities.” materials, Afrimat bought
Gold Fields’ earnings for the half-year to June 2020 increased a 27.27% stake in a high-
four-fold because of a buoyant gold price. The August 2020 price grade anthracite mine in
for gold reached nearly $2 000. Analysts warned against reading Mpumalanga, Nkomati, and
too much into some of the more extreme rises in the value of gold followed this with the purchase
mining stocks (DRD Gold went up some 240% between January of Coza Mining, an iron ore
and July) because the underlying conditions for gold mining in and manganese company in
South Africa are tough. the Northern Cape. Afrimat’s
Implats (Impala Platinum) was expecting to report annual first foray into commodities
headline earnings five times better as a result of improved was also in that province, the
commodity prices. R322-million acquisition of the
Another company to report improved half-year results was Diro mine. In October 2020
Sibanye-Stillwater which increased volumes at its platinum group Afrimat applied for Nkomati
metals (PGM) operations and its gold mines in the first half of 2020. to be placed under business
Some production was lost due to the steps taken to deal with rescue because of the Covid-19
Covid-19 but, because of the inclusion of the Marikana operations lockdown but stated that it
(bought from Lonmin), South African PGM production actually believed the business could
increased by 5% year-on-year to 657 828 ounces. indeed be resuscitated.
Gold production within the group was also up after strikes
affected volumes in 2019. Production of 403 621 ounces was 17%
higher than the previous year’s figure. The group expects all of Diamonds
its South African operations to be running at optimal production
levels by the end of 2020. An ongoing project by De
The sale in 2020 by AngloGold Ashanti of its Mponeng mine Beers to convert its Musina
and Mine Waste Solutions to Harmony Gold for $300-million (about mine from an open-pit mine
R4.4-billion) marks the end of an era. Although the company’s to a vertical-shaft mine will
headquarters will continue to be in Johannesburg and it will be extend the life of mine of this
listed on the JSE, its mines are in Ghana, the Americas and Australia. northern Limpopo project

45 SOUTH AFRICAN BUSINESS 2021

 OVERVIEW

to 2045. Venetia Mine is by far the most important part of De Ambition. Menar Holdings,
Beers’ South African operation, accounting for 3.1-million of the which controls a majority
5.4-million carats recovered by the company from its six operations. share in Sitatunga, is mostly
Petra Diamonds has made it known that it will consider offers for invested in coal.
parts of its business or all of its operations. This follows a strategic The overwhelming
review where the issue of a R11.25-billion debt repayable in 2022 m a j o r i t y o f t h e w o r l d ’s
loomed large. The review began when the South African Covid-19 manganese comes from the
lockdown began. Most of the company’s major expenditure on Postmasburg and K alahari
expansion projects is behind it but reduced demand, even before regions of the Northern Cape.
the lockdown, has affected earnings. Revenue for the six months to Assmang has two manganese
December 2019 was down by 6%. Of the company’s three South mines in the province:
African mines Finsch (Northern Cape) and Cullinan (Gauteng) Nchwaning and Gloria.
generate 90% of output and 75% of revenue. The Northern Cape
In the Northern Cape, Ekapa Mining paid R300-million to buy produces more than 84% of
out Petra Diamonds from a JV. South Africa’s iron ore. The
province has two major iron
belts, from Postmasburg to
Zinc Hotazel, and running through
Sishen and Kathu. Sishen is the
When phase three is reached, the biggest new mining project most important iron-ore mine in
in South Africa will deliver 600 000 tons of zinc for Vedanta Zinc South Africa, where operations
International. include extraction and four
Located at Aggeneys in the Northern Cape near the border beneficiation plants.
with Namibia, the Gamsberg zinc project has so far attracted Kumba Iron Ore has the
$400-million in investment from the company and has started huge Sishen facility at Kathu
trucking product to the Port of Saldanha. Phase one of the open-pit and Kolomela. Assmang, a
operation will deliver an annual load of 250 000 tons of zinc. If it joint venture compr ising
proceeds to phase three, it will likely go underground. African Rainbow Minerals and
The Northern Cape Province is planning for a deep harbour at Assore, mines at Khumani.
Boegoebaai. Part of the strategy involves the creation of a commodities The company will spend
corridor linking the Upington Industrial Park with the port. R2.7-billion on upgrading its
In August 2020 Australian miner Orion announced it had raised Gloria mine.
$6.2-million in share capital towards its Prieska Zinc-Copper Project. South32 is active in the
Nor thern Cape: Hotazel
Manganese Mines is made
Iron ore and manganese up of two mines, Wessels
(underground) and Mamatwan
In 2019 Sitatunga Resources purchased the East Manganese (open cut), and the Metalloys
project on the Hotazel-K alahari ore belt from Southern manganese smelter. ■

ONLINE RESOURCES
Council for Geoscience: www.geoscience.org.za
Minerals Council South Africa: www.mineralscouncil.org.za
Mintek: www.mintek.co.za
National Department of Mineral Resources and Energy: www.dmr.gov.za

SOUTH AFRICAN BUSINESS 2021 46

COUNCIL FOR GEOSCIENCE
November 2020

The Council for Geoscience (CGS) is the national custodian responsible for the collection, compilation and
curation of all onshore and offshore geoscience data and information. The CGS aims to use this information
and knowledge to develop geoscience solutions to real-world challenges in South Africa.

GEOSCIENCE MAPPING ENGINEERING GEOLOGY

Geoscience mapping is the core AND GEOHAZARDS
function of the CGS and aims to As the custodian of the national
develop fundamental geoscience seismological network, the
knowledge using an integrated CGS monitors and maintains
and multidisciplinary approach a geohazard inventory for
as well as innovation that merges South Africa. This information
several onshore and offshore is primarily used in developing
geoscience themes such as effective and novel geohazard
geology, geotechnical studies, mitigation solutions for safe
geochemistry, geophysics and and judicious land use. Modern
economic geology for mineral artificial intelligence techniques
and energy resources and their are applied in subsidence
mineralising systems information mapping and seismic hazards
to boost sustainable exploration characterization.
for economic growth.

AFRICAN FOOTPRINT AND

WORLD CLASS FACILITIES
The geoscience functions are
supported by a multi-faceted
laboratory that performs a wide
range of analytical services
such as petrography, whole
rock geochemistry, petrophysics,
coal science and hydrochemistry.
The CGS also manages a
geoscience museum, library,
bookshop, and national core
repository which are used by
the scientific community and
the general public.
OTHER COLLABORATIONS
As the permanent secretariat
of the Organisation of African
Geological Surveys (OAGS), the
CGS has an impressive footprint
in the African continent where
various geoscience services
WATER AND ENVIRONMENT have been rendered in line with
global standards, international
The CGS carries out hydrogeological studies and aquifer policy and governance. The CGS
modelling and is also responsible for environmental geoscience also collaborates with various
research which aims to provide sustainable solutions to monitor academic institutions and science
and mitigate the impact of geology and mining activities on the councils around the world.
health of the environment including its inhabitants.

CGS AT WORK
• The CGS is undertaking integrated and multidisciplinary geoscience mapping programme across South Africa.
• Some of the recent projects include:
- Multidisciplinary geoenvironmental baseline investigations in the Southern Karoo for possible shale gas
development, which uncovered previously undefined groundwater aquifers.
- Regional soil geochemical sampling and detailed follow-up surveys, particularly within the Northern Cape,
North West and Mpumalanga provinces.
- Geothermal energy and carbon capture and storage research, which aims to expand the current renewable
energy mix of South Africa and decrease the carbon footprint.
- Ground stability and geotechnical assessments for infrastructure development in the Northern Cape and Free
State Provinces.

CONTACT US
Our head office is located at: 280 Pretoria Street, Pretoria, 0184 I @CGS_RSA I I I
Tel: +27 (0)12 841 1911 I Email: info@geoscience.org.za I Web: www.geoscience.org.za

Despite facing a tough economic
period, the mining sector continues to
play an important role in our economy
and still has the potential to make
a significant impact in the socio-
economic development of our country.
We trust the upswing experienced in
2019 will spill over into 2020 and reclaim
profitability in the industry. Pilanesberg
Platinum Mines is cautiously optimistic;
a productive 2020 will support the
continuation of our plans to expand
mining operations thus increasing our
staff component and benefitting the
communities in which we operate.
As a growing mine, we are proud that we
sustained production in a constrained
environment, ensuring continued
contribution towards the social and
economic development of our wider
community. As we enter a new decade,
I reminisce on our achievements. In
2019, we purposefully held ourselves
accountable to our core values of zero
harm, upliftment and innovation.
CREATING
LASTING
LEGACIES
By: Casper Badenhorst, Chief Operations Officer,
Pilanesberg Platinum Mines
Our specific focus on zero harm resulted
in no fatalities. In fact, because of our
commitment to the safety of our people,
we wrapped up this past decade with
over 5 million fatality-free shifts.
In addition, our efforts in uplifting
our female employees, has gained
some traction. Tebogo Metsileng was
nominated in the mining category for
the Women’s Lifestyle Award. Tebogo,
a Lab Technician, has been recognised
for her community service as a PPM
Wellness Team Member and for her
contribution as a Lab Technician.
She has also been recognised for
her motivation of the youth in her
community, making her a worthy
recipient of the 2019 Women Lifestyle
Award. This recognition will pave the
way for many women in this industry.
Furthermore, our commitment to reduce
our impact on the environment remains
a core focus.
We have taken innovative steps towards
decreasing our negative impact on the
environment, including the termination
of polystyrene packaging in our
canteens.
We will continuously strive to improve
the lives of our people, our immediate
communities; and protect the
environment, as we contribute to the
growth and transformation of this
sector. Over and above our oper-
ational accomplishments, I am proud
of what we have achieved in our
respective communities. Our top three
achievements include:
Supporting small businesses
In creating a meaningful impact in
our communities, we realised that
supporting small businesses is critical.
The ‘Community Crusher’ which started
as a non-profit project is now proving its
potential to be a fully-fledged business,
rendering a service to most of our
building projects.
Most importantly, 14 community
members are employed in this project,
of which 64% are women – securing
future female community leaders!
Furthermore, the ongoing support of
the relocated farmers is anchored in our
mission to train, develop skills and build
capacity of the small-scale subsistence
livestock keeper; and grow them to
become sustainable and independent
commercial farmers. To this end, a
professional Extension Offi cer has been
Officer
allocated to service and capacitate
them and all the basic farming support
infrastructure has been set up.
Educating the youth
Education is important for our youth,
who are the real bastions of tomorrow.
Maths and Science are key tools to
understand, analyse and impact local
communities. We assisted over 200
students with their studies through
a Saturday school programme. As a
result, the 2019 academic results have
improved signifi cantly from a pass
significantly
rate of 40% to 80% providing more
opportunities to these learners.
Enabling economic development in
communities
As part of our contribution to socio- “As a mine,
economic development in the Moses
Kotane Local Municipality and the
Bakgatla Ba Kgafela, our conviction is we are
that infrastructure interventions can play
a major role in enabling and catalysing
economic development. Consequent- constantly
ly, we have concluded construction of
Legkraal - Bofule paving and phase one
of the Motlhabe - Ngweding roads. This reminded
will enable village to village connectivity
and access, with subsequent boosting
of the economies of the aff ected areas.
affected that the
To secure a sustainable and productive
mine is not only about our employees’ future is a
jobs, but it is also about the impact that
these jobs and our operations have on
our people. As a mine, we are constantly legacy in
reminded that the future is a legacy in
the making and the best tomorrow for
all, relies on the crucial decisions we the making
make today.
and the best
tomorrow for
all, relies on
the crucial
decisions
we make
today“
Tel: 014 555 1800
 FOCUS
World-class zinc operation in
the heart of the Northern Cape
R5-billion investment by Vedanta Zinc International is a major catalyst for growth.
V
edanta Zinc International ( VZI) is a
grouping of zinc assets located in South
Africa and Namibia, owned by the sixth-
largest diversified resources company
in the world, Vedanta Limited. Vedanta Limited
recently invested R5-billion into VZI’s flagship,
Gamsberg open-pit and concentrator project in
the Northern Cape province, which is now fully
operational and was inaugurated in February 2019
by President Cyril Ramaphosa.
President Cyril Ramaphosa and Vedanta chairman
Anil Agarwal at the Gamsberg mine opening.
VZI’s operations include Black Mountain Mining
(Pty) Ltd (consisting of underground operations
Deeps and Swartberg as well as the flagship surface
operation, Gamsberg Project) located in South
Africa’s Northern Cape province and the Skorpion
Zinc Mine and refinery in Namibia’s //Kharas region.
VZI’s vision is to create an integrated, world-class
regional zinc complex with the values of Safety, Trust,
Entrepreneurship, Innovation, Excellence, Integrity,
Respect and Care at the core of their business.
As of March 2020, VZI employed more than
4 200 people (including business partners), of which
99% are South Africans: 80% are from the Northern
Cape and 60% from the Namakwa District.
SOUTH AFRICAN BUSINESS 2021
SOUTH AFRICAN BUSINESS 2021
VZI’s Gamsberg Phase I open-pit mine
represents $400-million worth of investment
into South Africa by the Vedanta Group. Life of
mine extension at other mines in the complex
($46-million), Gambserg Phase II ($350-million) and
a further $850-million worth of investment on a
possible Gamsberg Smelter-Refinery Complex are
potential future investments in the South African
mining sector. The smelter-refinery is subject to the
availability of power and support from government
to make the project economically viable.
Leveraging technology
Gamsberg has implemented a unique flotation
system, the Staged Flotation Reactors. They
break the conventional flotation paradigm into
individual, optimised reactors which drastically
reduce energy and air consumption. The footprint
in the plant gets reduced by around 50%,
operations become easier and maintenance costs
are lower. VZI is the first company in Africa to
adopt Staged Floatation Reactors.
Backfilling operations is an integral part of Black
Mountain. Underground mining creates voids
which need to be filled. This provides opportunities
for mining operations like Black Mountain to
dispose of waste material underground and
provide support and stability to the surrounding
rock mass.
<<<END OF PAGE ONE>>>>>>>>>>>
52
110
 FOCUS

The Gamsberg Nursery houses

379 different species and will
have a capacity of 129 000
plants after the upgrade.

R7.1-million were provided.

Biodiversity
The Succulent Karoo Biome is unique in its floral
diversity. Among the 36 global biodiversity
hotspots, the biome is home to at least 6 000
species of plants that have evolved over millennia.
VZI’s environmental specialists have worked closely
with a wide range of experts, including those from
the International Union for Conservation of Nature
(IUCN), to ensure the site’s necessary protection,
preservation and ultimate restoration.
The Gamsberg Nursery is derived from the
Environmental Management Plan (EMP) and the
requirements for the Integrated Flora Permit.
Since October 2019, there have been 12 000
plants grown with 379 different species. After
the upgrade, 129 000 plants will be housed in
the nursery.
Childcare and education
suppor t programmes
benefit more than 1 800
children at a cost of R6-
million per annum. Youth
and spor ts clubs are
supported. The total spend
on corporate social responsibility and community
work is over $14-million to FY2020.
During the Covid-19 lockdown period, many
outreaches were made throughout the region.
Items distributed included masks, hand sanitiser,
gloves, care packages, face shields, food and
clothing to areas within the Khai Ma and Nama
Khoi municipal areas. Visits were made to old-age
homes and disability care centres and schools. ■

Community commitment
VZI has joined hands with PinkDrive NPC, a
significant player in the gender-related cancer
sector, to bring critical screening to the Northern
Cape. The outreach programme is for the communi-
ties of Okiep, Nababeep, Bergsig, Pella and The outreach programme delivers groceries to
Pofadder. The campaign aims to create awareness, local communities and organisations.
provide education and render health-related
services to community members. Community
members are also provided with free screening
and testing for Covid-19.
In 2015, 12 new local businesses were created
and commercial opportunities to the value of

53
111 SOUTH AFRICAN BUSINESS 2021
 FOCUS
Showcasing Ivanhoe’s
education initiatives
Ensuring inclusive and equitable quality education.
I
vanhoe Mines places great value on the level of
host community acceptance and trust, which un-
derpins its social licence to operate. We strongly
believe in collaborative problem-solving and
employ a sustainability strategy that includes social
development goals, targets and projects in align-
ment with host country regulatory frameworks and
international frameworks such as the UN’s Sustain-
able Development Goals (SDGs).
Our sustainability strategy recognises the power
of education and aims to advance the objectives of
ensuring inclusive and equitable quality education
and promoting lifelong learning opportunities for
all (SDG 4). Ivanhoe has, accordingly, developed
and implemented various educational initiatives
across its three principal projects.
A case study at the Platreef Project
To enable access to education, and raise the quality
of education across all stages of the education
value chain (including the vulnerable in society), we
have invested numerous educational infrastructure
and support initiatives at our Platreef Project under
the first Social and Labour Plan (2015-2019):
The MiniChess programme at Motshitshi Primary
School has been a huge success for learners.
SOUTH AFRICAN BUSINESS 2021
• Investment into the development of the Lesedi
Centre and its staff capacity to support the Early
Childhood Development Function.
• U nder its scholarship programme, Platreef
supported 426 learners from underprivileged
families. Platreef further provided study assistance
to 79 employees, and external bursaries to 37
employees and host community members, also
partnering with universities in Canada and Japan
for post-graduate qualifications.
• Platreef established five E-learning venues with
support from the Department of Education, which
remain crucial during the Covid-19 pandemic to
maintain momentum for learners at beneficiary
schools. Expansion to four more schools is
planned for 2021.
• Platreef introduced the MiniChess programme at
the Motshitshi Primary School through the Entrust
Foundation. This resulted in a marked improve-
ment in numeracy and mathematical abilities,
spatial perspective development, critical/strategic
thinking development and mastery of English
mathematical terminology among learners.
• Infrastructure support (food garden, irrigation sys-
tem) was provided to the Thobela Disability Centre,
which caters for 30 young people of various ages.
• Free Wi-Fi access to the host communities has
enabled digital inclusion.
The phased development plan
Ivanhoe is investigating a phased development
plan for the Platreef Project, targeting significantly
lower initial capital, to accelerate first production
by using Shaft 1 as the mine’s initial production
shaft. This plan will focus on initially targeting the
development of mining zones accessible from
Shaft 1 and maximising the hoisting capacity of this
shaft, followed by expansions to the production rate
as outlined in the 2017 Definitive Feasibility Study.
www.ivanhoemines.com
54
Platreef-sponsored science laboratories help
bring the subject to life and make it fun.
55 SOUTH AFRICAN BUSINESS 2021
 OVERVIEW

Energy
Solar and wind projects are regularly coming onstream.

Credit: Abengoa

S
outh Africa’s acclaimed Renewable Energy Independent SECTOR INSIGHT
Power Producer Procurement Programme (REIPPPP) Training for a renewable future
attracted about R200-billion in committed investments, is a new priority.
mostly in solar and wind power, in just five years.
The early rounds of the independent power producers’
programme continue to produce regular dividends. In October Cape, but approximately 60% of
2020, another wind farm started commercial operations. the solar projects so far allocated
Located about 80km north-east of Ceres in the Witzenberg Local in the programme have been in
Municipality, the Paardekraal East Wind Farm is in the Western Cape. the Northern Cape, the nation’s
The 110MW project was constructed by the Concor and Conco sunniest province.
Consortium, Siemens Gamesa Renewable Energy supplied and Gas is also in the mix.
installed the wind turbines, the towers were built by GRI in Atlantis The Department of Energy is
and Mainstream Asset Management South Africa will manage the targeting the procurement
operations. of 3 126MW and intends
According to the Department of Energy, the REIPPPP by spending R64-billion on port,
2016 had created more than 30 000 jobs and benefited local pipeline, generation and
community development to the tune of R256-million. Figures transmission infrastructure at
released by the South African Wind Energy Association (SAWEA) three key ports, Richards Bay,
showed shareholding for local communities reached an Coega and Saldanha Bay.
estimated net income of R29.2-billion over the lifespan of the The most popular method
projects. Some 14 000 new jobs are expected to be created, relies on solar panels, namely
mostly in rural areas, and more than R30-billion has already solar photovoltaic (PV ). The
been spent on Black Economic Empowerment (BEE) in the other form of solar power
construction phase. (concentrated solar power, CSP)
The majority of wind projects have been allocated to the Eastern is effective and some projects

SOUTH AFRICAN BUSINESS 2021 56

 INTERVIEW INTERVIEW
INTERVIEW

Liquefied natural gas can Liquee

Liquefi
help South Africa reach its helpSoS
help
decarbonisation goals decar
decarbo
Aldworth Mbalati, CEO of DNG Energy, reveals how his company will offer a cleaner
Aldworth
Aldworth Mb
Mbalati
fuel stop for ships that travel along the South African coastline. fuelfuel
stopstop for s
for ships
What are the main advantages of liquefied natural gas (LNG)?
Liquefied natural gas is a cleaner and cheaper fuel alternative for the
energy market. The environmental, social and economic benefits will
help the country meet its targets in reducing greenhouse gas emissions,
drive economic growth and improve the lives of its citizens.

Transnet National Ports Authority recently gave permission for

Aldworth Mbalati, CEO
you to begin bunkering operations: how significant is that?
The promulgation of regulations by the International Maritime
Organisation (IMO) in January 2020 requiring all ships to use fuel that
has sulphur content of no more than 0.5% has put LNG to the fore
as a solution for decarbonising the marine industry. Finalisation of a
bunkering licence for DNG Energy at Coega gives us a go-ahead to
begin our integrated gas infrastructure for on-shore and off-shore LNG
logistics. We are building the first floating storage unit (FSU) Aldworth
for Africa
Aldworth Mbala
Mbalati, C
and the largest in the southern hemisphere. Our position at Coega
gives us an opportunity to optimise trade for the global marine industry
by offering a cleaner fuel stop for ships that pass through Algoa Bay,
estimated at 57 000 ships every year.

BIOGRAPHY What will be the impact of DNG Energy’s bunkering activities? BIOGRAPHY
BIOGRAPHY
We support government’s strategy to develop the Coega Industrial
Aldworth Mbalati started his en- Development Zone as a gas hub. Our operations will reduce the Aldworth
Aldworth
energy Mbalati Mbalati
start
trepreneurial journey as owner and trepreneurial
trepreneurial
costs of doing business, expand the marine economy by creating jobs, journeyjourne
as
CEO of Vutomi Properties in 2002. CEO of
developing skills and will also move South Africa closer to meeting CEO of Vutomi
Vutomi
its Pro
Properti
In 2005 he was involved at Bayethe climate change objectives. In 2005
In 2005 he was heinvolved
was invo
Investment Company, a company Investment
Investment Compa
Company, a
investing in coal and other energy Who do you see as your customers in the LNG space? investing investing in and
in coal coal ota
assets. Five years later, he expanded Our customers are global and local shipping companies, assets. assets.
intensive Five years
Five years later, la
he
into oil and gas exploration, pro- energy users, logistics companies, industrial and commercial operations,
intoand
into oil oil gas
and explor
gas e
duction and midstream activities the taxi industry and households. duction
duction and mids
and midstream
such as gas-to-power as the major such such as gas-to-pow
as gas-to-power as
shareholder and CEO of African What are the strengths of your team? shareholder
shareholder and andCEO
International Energy, Africa. He start- DNG Energy’s team has unity in vision, values and shared culture. The Energy,
International
International Energy
Afric
ed DNG Energy in 2013. He obtained working environment is steeped in a culture of hard workersedwho DNGedare
DNG
Energy Energy in 20
in 2013. H
rights and developed an LNG import focused on the value proposition needed by the market. To those
rightswho
rights and develope
and developed an
terminal in Mozambique. say it cannot be done, DNG Energy asks, “Why not?” ■ terminal
terminal in Mozamb
in Mozambique

57 SOUTH AFRICAN BUSINESS 2021

SOUTH AFRICAN BUSINESS 2021 36 SOUTH
SOUTH AFRICAN
AFRICAN B
BUSIN
 OVERVIEW

have been commissioned, but it is relatively expensive.

Projects such as Kathu Solar Park (100MW ), a
concentrated solar power project, and the Roggeveld
Wind Farm (147MW) are indicative of the large scale of
most of the energy generation that is being rolled out.
At Black Rock Mine solar power is being put to use on
a smaller scale. To light the intersections leading to
the mine, BEKA Schréder has installed solar-powered
streetlights.
All of Abengoa’s three plants in the Northern Cape
use CSP which reflects the sun’s rays during the day into
a molten salt storage system. The energy is then slowly
released during the night. The 205m tower that collects
the rays at the Khi Solar One site is one of the tallest
structures in South Africa.
Despite the emphasis on renewables in South
Africa’s latest integrated resources plan (IRP), South
Africa’s energy mix is still weighted towards coal.
Two huge new power stations, Kusile and Medupi,
are being built by Eskom and 1 000MW has been
allocated to private producers to build coal-powered
stations known as Thabametsi and Khanyisa. The IRP Credit: Perdekraal East Wind Farm
has attracted criticism for enabling an expansion of the
coal industry. Koeberg nuclear power station is due to
be decommissioned soon after 2045. Hulett. This company’s sugar
A new centre has been established at Wits Business School mills are producing between
to teach the new skills that are needed for new kinds of energy. 12MW and 14MW of power.
The Africa Energy Leadership Centre (AELC) is supported by the The company believes that the
Chemical Industries Education and Training Authority (CHIETA). national sugar industry could
Another body active in energy training is the Energy and Water generate between 700MW
Sector Education and Training Authority (EWSETA). and 900MW. The managing
Regulations in the energy sector are being keenly watched. director of South Africa’s other
The 2019 decision that power projects generating less than 10MW sugar major, Illovo Sugar SA,
do not have to get licences from national departments has given was quoted in the Sunday
hope to independent power producers and city governments Times in March 2020, saying,
across South Africa that a new era in energy policy has begun. “There are opportunities around
These smaller projects can go ahead (up to a total of 500MW) how do we sell power into
outside of the country’s IRP but the next step – allowing the grid, opportunities within
companies to sell any excess power they generate to the grid – the whole biofuel, bio-energy
will be a real game-changer. sphere.” Mamongae Mahlare
Mining companies such as Sibanye-Stillwater and Gold also said that the key to the
Fields have made it clear that they want to marshall renewable sugar industry’s future lay in
energy resources to power their own operations, to the diversifying into energy.
tune of 150MW and 40MW respectively, but clearance from Many of the same conditions
government is still needed. exist for Sappi’s wood and fibre
An example of the potential that lies within companies is Tongaat mills in Mpumalanga and

SOUTH AFRICAN BUSINESS 2021 58

 OVERVIEW
KwaZulu-Natal and all of the breweries making
beer across South Africa.
Discussions about feed-in tariffs will have
to be finalised before the huge potential of the
relevant sectors can be fulfilled with regard to
energy generation. If national utility Eskom is
broken into separate business units then the
likelihood of the tariff discussions taking place
will greatly increase.
Funding
Enel Green Power has adopted a new approach
to funding its renewable energy projects. Law
firm Norton Rose Fulbright has concluded a
R3.5-billion financing arrangement with Absa
and Nedbank which treats five wind farms to be
built by Enel as one project, resulting in better
terms. This is the first time such a method has
been adopted in Africa.
Investec intends listing a renewable energy
fund on the JSE, to be called Revego Africa
Energy. In addition, private banking clients of
Investec may now receive loans to fund the
installation of solar power in their homes, which
payment can be linked to the home loan.
The suppor t of two of South Africa’s
biggest institutional investors, the Industrial
Development Corporation (IDC) and the Public
Investment Corporation (PIC), has been crucial
in getting the renewable energy sector off
the ground. They have also played a role in
helping communities fund their participation in
community trusts.
Many partnerships between local and
international companies have been established.
ONLINE RESOURCES
IPP projects: www.ipp-projects.co.za
National Energy Regulator of South Africa: www.nersa.org.za
South African National Energy Development Institute: www.sanedi.org.za
South African Photovoltaic Industry Association: www.sapvia.co.za
South African Renewable Energy Council: www.sarec.org.za
South African Wind Energy Association: www.sawea.org.za
SOUTH AFRICAN BUSINESS 2021 60
South African partners are often local energy
companies and representatives of residents.
Typically, a community trust is established to
represent the interests of the local community.
Investment by black people into the
renewable energy programme is not limited to
community trusts. Pele Green Energy is engaged
with a photovoltaic plant at Touwsrivier in the
Western Cape as a shareholder and as a provider
of construction management services. Once the
facility starts generating power, Pele will operate
and maintain the plant.
Among the international investors
active are Enel Green Power (Italy), Scatec
Solar (Norway), Globeleq (UK), Mainstream
R e n e w a b l e Po w e r ( I r e l a n d ) , G e s t a m p
Renewable Energies and Abengoa (Spain),
Solar Capital (Phelan Energy Group, Ireland),
SunEdison (USA), ACWA Power (Saudi Arabia),
China Longyuan Power Group (China), Engie
(France), juwi Group (Germany) and Tata
Power of India. The last-named company
recently sold to partner Exxaro Resources its
50% stake in Cennergi, which owns two wind
farms in the Eastern Cape.
Partnerships with foreign utilities or power
companies are becoming more common,
in part because the competition is bringing
down the price which bidders are offering
to sell power. This makes it difficult for South
African firms to compete on their own. Many
foreign investors such as large national utilities
have strong reserves of cash and do not need
to borrow money.
The bank created by the five nations of
BRICS, the New Development Bank (NDB), has
made $180-million available to Eskom to help it
integrate power from renewable energy sources
to the national grid. ■
 OVERVIEW

ICT
Data centres are booming.

A
s South Africa joins the global trend towards online SECTOR INSIGHT
shopping and with the first networks rolling out 5G in Vodacom is rolling out 5G.
2020, data centres are going up all over the country.
Teraco stores data in Johannesburg, Durban and Cape
Town. A second 30MW site is under construction in Brackenfell
to complement the existing facility in Rondebosch (pictured).
Microsoft Azure has facilities in Cape Town and Johannesburg
and Amazon has two sites in Cape Town. Huawei Cloud Services
will use a partner company in Johannesburg to store its data.
Africa Data Centre (ADC), part of the Liquid Telecom Group, has
purchased a Tier IV data centre in Johannesburg, previously used
by Standard Bank.
A 2019 study by Microsoft found that the cloud ecosystem
will create around 112 000 new jobs in South Africa by 2022 Credit: Data Centre Map
(IT Web). The number of permanent employees of Amazon Web
Services reached 7 000 in October 2020. Acuity Consultants was Affiliate Centre of the World
quoted in 2019 as saying that software developers’ salaries had Economic Forum.
risen by 30% in a year (Business Times). The Small Enterprise
A new entrant to the South African market relies entirely Development Agency
on the cloud. Uniconta, an enterprise resource planning (ERP) (Seda) runs the SoftstartBTI
system for small and medium-sized businesses, opened its first IC T incubator in M idrand
offices in Cape Town in 2019, a precursor to plans to expand and Tuksnovation, a high-
elsewhere in Africa. tech incubator, at Pretoria
Cell C became South Africa’s third mobile operator in 2001, University. Several incentives
following MTN and Vodacom. Cell C was in the news early in relevant to companies and
2020 when it defaulted on interest payments on a loan and this educational bodies in the ICT
had an effect on the shares of Blue Label Telecoms, which owns sector are available from the
45% of the operator. When Cell C’s results were announced in Department of Trade, Industry
October 2020, reference was made to a turnaround strategy. and Competition (dtic).
Telkom, which became the country’s fourth operator in 2010, The Information
intends selling its cellphone towers and masts (estimated to be Technology Association (ITA)
worth about R12-billion) in order to invest in 5G. is the trade and employer
The Council for Scientific and Industrial Research (CSIR) in body of the I nfor mation
Pretoria will host a new body aimed at preparing South Africa Technology industry in South
for the Fourth Industrial Revolution (4IR), the South African Africa. The ITA represents
more than 200 companies
which supply information
ONLINE RESOURCES technology equipment,
systems, software and
Business Process Enabling SA: www.bpesa.org.za
Independent Communications Authority: www.icasa.org.za ser vices. Members include
Technology Innovation Agency: www.tia.org.za IBM, Microsoft SA, Siemens,
SAP and Axiz. ■

61 SOUTH AFRICAN BUSINESS 2021

 OVERVIEW

Oil, gas and petrochemicals

Exploration for gas off the south-eastern coast is hotting up.

SECTOR INSIGHT
Sasol is selling assets to
reduce debt.

International (South Africa) Ltd

(20%) and Main Street 1549
Proprietary Ltd (10%, of which
Africa Energy has a 49% stake).
Petroleum Agency South
Africa (PASA), which encourages
exploration and regulates the
oil and gas industry, has noted
the significance of international
oil companies committing to
exploration off South Africa’s
coast. Increased confidence by
such companies can only lead
to growth in the industry, and
with the massive gas finds in the
Rovuma Basin off Mozambique
in 2020, there are sure to be
more companies interested in
South Africa’s potential.
The Karoo Deep Drilling and Geo-environmental Baseline Project is Another drilling project – on
investigating the potential impact of shale gas drilling. land this time – was launched in
(Credit: Council for Geoscience) September 2020 in the Karoo.
The Council for Geoscience

T
(CGS) announced phase two
here was great excitement in the oil and gas sector when of the Karoo Deep Drilling and
Total and its joint venture partners announced in the 2019 Geo-environmental Baseline
that they had made a discovery at a site called Brulpadda, Project (KDD) in Beaufort West.
off the coast of Mossel Bay. The geoscientific research
The drilling was successful enough to warrant the return of the semi- project in the Karoo Basin is
submersible rig Deepsea Stavenger from Norway to South Africa and in aimed at developing a geo-
August 2020 the rig was in place to drill the nearby Luiperd prospect in environmental baseline model
Block 11B/12B. The block, in the Outeniqua Basin 175km off the southern with a focus on assessing
coast, covers an area of about 19 000km² in water depths of 200-1 800m. the potential environmental
In October 2020, Total announced that it made a second significant gas impacts of shale gas
condensate discovery on the Luiperd prospect. development in the Karoo.
Total E&P South Africa BV is the operator (45%) with partners A Gas Utilisation Master Plan
Qatar Petroleum International Upstream LLC (25%), CNR (GUMP) is being developed as a

SOUTH AFRICAN BUSINESS 2021 62

 OVERVIEW

part of national energy policy. Private companies are responding sites identified by the DoE
to this changed environment. Renergen, which owns rights to a for liquefied natural gas
field of liquified natural gas (LNG) in the Free State, has started (LNG) plants are Richards Bay
taking orders for its product from logistics companies. Bulk Hauliers (2 000MW ) and the Coega
International Transport (BHIT) has signed an agreement to take LNG Industrial Development Zone
to fuel 50 of its trucks, which should lead to lower operating and (1 000MW) in the Eastern Cape.
maintenance costs. South African Breweries is another client. This has the potential to turn
Delta Natural Gas (DNG) Energy announced in 2019 the rollout of the Richards Bay Industrial
400 natural gas refuelling sites across South Africa with a focus on the Development Zone (RBIDZ) and
taxi and logistics sectors. The major economic sectors using gas are its Eastern Cape counterpart
the metals sector and the chemical, pulp and paper sector. Brick and into energy hubs.
glass manufacturers are also big consumers. The Coega IDZ is also
Anadarko Petroleum, a US company, is investing $20-billion home to the country first gas-
to build a liquid natural gas (LNG) plant in Mozambique. The fired plant run by a private
projected spin-offs for the South African economy are estimated consortium, the Dedisa power
to top R7-billion. plant. A new gas turbine open
A new addition to South Africa’s pipeline network is a pipe to cycle power plant near Durban
get natural gas from Mozambique to Gauteng. SacOil’s R90-billion has been commissioned by
project will deliver gas to Johannesburg and nearby towns. Avon Peaking Power.
International chemicals and energy company Sasol has The South African oil industry
several large plants in Mpumalanga and the Free State. Sasol Gas generates annual sales of about
is one of the four Sasol operations at Secunda, supplying natural R365-billion and includes global
gas to Sasol Synfuels and buying Sasol Synfuels’ methane-rich giants such as Engen, BP, Shell,
pipeline gas. Total and Chevron.
Air Liquide Large Industries SA, a subsidiary of French company Most of the oil that feeds
Air Liquide, has purchased Sasol’s oxygen production site in Secunda the country’s four crude-oil
for R8.5-billion. The site, which contains 16 air separations units, will refineries is imported. The
continue to supply gas and oxygen to Sasol’s various plants in terms refineries are in Cape Town,
of a supply agreement. Sasol is selling a number of its assets in an Sasolburg and Durban (two).
effort to reduce debt. In addition to South Africa’s
Large quantities of oil are transported around the Cape of Good crude-oil refineries, natural-gas
Hope every year: 32.2% of West Africa’s oil and 23.7% of oil emanating conversion plant, coal-to-fuel
from the Middle East. Irrespective of market volatility, the long- and gas-to-liquid crude-oil
term prospects for shipping and oil and gas are strong enough for refineries, Sasol produces fuel
national government to pursue Operation Phakisa (which includes a from coal at its Secunda facility
strong maritime economy element) and for Transnet National Ports and PetroSA has the country’s
Authority to spend heavily on upgrading the nation’s ports. The Port only gas-to-liquid (GTL) facility
of Saldanha has a new open-access liquefied petroleum gas (LPG) at Mossel Bay.
plant run by Sunrise Energy. Getting fuel to the province
The Department of Trade, Industry and Competition (dtic) of Gauteng is the key mission of
has established a Gas Industrialisation Unit (GIU). The first two the new multi-purpose pipeline
(NMPP) which started delivering
fluids in 2012. The NMPP
ONLINE RESOURCES
terminals allow for greater
National Energy Regulator of South Africa: www.nersa.org.za flexibility in supply. Refined
Petroleum Agency SA: www.petroleumagencysa.com products such as jet fuel,
South African National Energy Association: www.sanea.org.za sulphur diesel and both kinds of
South African Petroleum Industry Association: www.sapia.co.za
octane petrol are carried. ■

63 SOUTH AFRICAN BUSINESS 2021

 FOCUS
A game-changer for
South African oil and gas
Light oil and gas condensate discoveries could be the start
of something big off the Southern Cape coast.
I
f the South African gas market is to take off and
thrive, significant drilling has to take place. As the
new CEO of Petroleum Agency SA, Dr Phindile
Masangane, describes the situation: “That would
be a game-changer for South Africa’s upstream oil
and gas industry.”
As it happens, a major discovery has been made
at a site south-east of Mossel Bay called Brulpadda.
Says Dr Masangane: “The recent discovery by Total
and its JV partners in Block 11B/12B (Brulpadda) is
the first giant step in that direction.”
Odfjell’s Deepsea Stavanger semi-submersible
oil rig relocated from Norway to South Africa
in June 2020 to start exploratory drilling. The
Luiperdpadda prospect where the rig is drilling
is the second of five prospects in the group. With
light oil and gas condensate having been found
in the Brulpadda well, it is possible that other
prospects will be found with this further drilling.
Africa Energy holds a 4.9% effective interest
in the Exploration Right for Block 11B/12B.
SOUTH AFRICAN BUSINESS 2021
SOUTH AFRICAN BUSINESS 2021
The Company owns 49% of the shares in Main
Street 1549 Proprietary Limited, which has a 10%
participating interest in the block. Total as operator
holds a 45% participating interest in Block 11B/12B,
while Qatar Petroleum (25%) and CNRI (20%) are
the other participants.
The exploration drilling in Block 11B/12B
is in deep waters similar to where the gigantic
Mozambique Rovuma Basin gas discoveries were
made in 2010. The drilling campaign has long-term
benefits to South Africa which include introducing
frontier deepwater (>1400m) exploration drilling,
building confidence and potentially shifting
petroleum exploration activities to private
international oil companies (IOCs), de-risking
deep-water acreage which is believed to be
prospective for large oil and gas resources. This will
encourage other IOCs to take risk in drilling deep-
water prospects, which could result in the country
discovering more oil and gas resources.
In June 2020, the Block 11B/12B joint venture
received the fast-track 3D seismic dataset
from Petroleum Geo-Services ASA for the
2 305km² 3D seismic programme completed
earlier in the year on the block. Initial
interpretive work has identified a number
of additional leads, including a potential
northern extension to the Luiperd Prospect.
When the Block 11B/12B JV receives
the fully-processed 3D dataset it will then
integrate the PGS data with the Polarcus
3D seismic data from 2019 in order to
mature previously identified leads into
prospects. “Further development of the
discovery is highly dependent on the
success of this further drilling,” comments
Dr Masangane. “Possible development
could see condensate being piped to the
PetroSA facility in Mossel Bay,” she adds, “but
these decisions are ultimately up to the
operator, Total and its partners.”
34
64

Petroleum Agency SA: promoting
and regulating exploration and production.
Petroleum Agency SA evaluates, promotes and
regulates oil and gas exploration as well as related
production activities in South Africa, in addition
to archiving all relevant geotechnical data. The
Agency acts as an advisor to the government and
carries out special projects at the request of the
Minister of Mineral Resources and Energy.
South Africa’s energy mix is changing to include
more gas through importing liquefied natural gas
(LNG), using shale gas if reserves prove commercial,
and developing infrastructure for the import of
LNG. Petroleum Agency SA plays an important
role in developing South Africa’s gas market by
attracting qualified and competent companies to
explore for gas. Another major focus is increasing
the inclusion of historically disadvantaged South
African-owned entities in the upstream industry.
Currently, natural gas supplies just 3% of South
Africa’s primary energy. A significant challenge
facing the development of a major gas market
is the dominance of coal. Opportunities for gas
lie in the realisation of South Africa’s National
Development Plan (NDP) and the Integrated
Resource Plan (IRP).
As custodian, Petroleum Agency SA ensures
that companies applying for gas rights are
PASA’S NEW CEO HAS A BACKGROUND IN ENERGY POLICY AND STRATEGY
Dr Phindile Masangane was appointed as the
CEO of the South African upstream oil and gas
regulatory authority, Petroleum Agency South
Africa, in May 2020. Before then, Dr Masangane
was an executive at the South African state-owned
energy company, CEF (SOC) Ltd, which is the
holding company of PASA.
Dr Masangane was responsible for
clean, renewable and alternative energy
projects. In partnership with private
companies, she led the development
of energy projects including the deal
structuring, project economic modelling
and financing on behalf of the CEF Group
of Companies. Her responsibilities included
supporting the national government
in developing energy policy and
regulations for diversifying the
65
FOCUS
vetted to make sure they are financially qualified
and technically capable, as well having a good
environmental track record. Oil and gas exploration
requires enormous capital outlay and can
represent a risk to workers, communities and the
environment. Applicants are therefore required to
prove their capabilities and safety record and must
carry insurance for environmental rehabilitation. ■
Contact details
Tel: +27 21 938 3500
Email: plu@petroleumagencysa.com
Website: www.petroleumagency.com
country’s energy mix. In 2019, Dr Masangane was
Head of Strategy for the CEF Group of Companies
where she led the development of the group’s
long-term strategic plan, Vision 2040+ as well as
the group’s gas strategy. From 2010 to 2013, she
was a partner and director at KPMG, responsible for
the Energy Advisory Division. She successfully
led the capital raising of $2-billion for
hydro and coal power plants expansion
programmes of the Zimbabwean power
utility, ZESA/ZPC.
An alumnus of three universities, Dr
Masangane has a BSc (mathematics
and chemistry) from the University of
Swaziland, a PhD in Chemistry from
Imperial College, London and an
MBA from the University of the
Witwatersrand. ■
SOUTH AFRICAN BUSINESS 2021
 OVERVIEW

Water
Infrastructure spending will have to be consistently high.

SECTOR INSIGHT
The National Cleaner
Production Centre South
Africa is finding ways to use
less water.

as a result of the transaction,

qualify as “Black Industrialist”
businesses in terms of the Black
Industrialist Policy (BIP) of the
Amatola Water. Department of Trade, Industry
and Competition (dtic).

T
The Western Cape, which
he National Department of Water and Sanitation has bore the brunt of a fierce
released a master plan in response to the severe droughts drought for several years, fares
that have affected the country in recent years. It calls well in terms of providing water
for annual investment for a decade of R3.3-billion in infrastructure and maintaining
infrastructure to achieve water security. This is a figure that can its wastewater treatments
only be achieved with the help of the private sector. plants. The Western Cape
In 2030 South African demand for water will be 17% Department of Agriculture
greater than supply. That is the verdict of the 2030 Water has launched a climate action
Resources Group, an international consor tium of private plan called Smart Agri which
companies, agencies and development banks that has includes doing studies on
established a South African chapter, the Strategic Water conservation agriculture.
Partners Network. When the long-term
The National Cleaner Production Centre South Africa (NCPC) drought was at its worst,
is the technical partner for the water use part of Phase 2 of the tourists to Cape Town were
Strategic Water Sector Cooperation between the governments encouraged to “Save like a
of Denmark and South Africa. NCPC, which runs the Industrial Local”. Together with a range
Water Efficiency project, has found that more efficient use of of technical and legislative
energy (a key focus area of its work) has also led to less water m e a s u re s, t h e c a m p a i gn
being used in production processes. to use less water worked
A strategic review led Aveng to dispose of Aveng Water and remarkably well.
Aveng Namibia Water in June 2019, together with a range of The drought also led
other businesses deemed to be non-core. The buyer was Infinity t o c re a t i v e t h i n k i n g b y
Partners, a 100% black-owned company jointly held by investor corporate South Africa. Old
E-Squared Investments and Suzie Nkambule, who was the MD of M u t u a l ’s l a rg e Pi n e l a n d s
Aveng Water up until the time it was sold. camp u s ( accommodat ing
Another sale in 2019 resulted in Inzalo Capital Holdings taking approximately 9 000 staff
a 60% stake in the water group of Sebata Group Holdings. The two members) is producing its own
companies affected are USC Metering and Amanzi Meters which, water by purifying wastewater.

SOUTH AFRICAN BUSINESS 2021 66

 OVERVIEW

of water through the removal

Technology and innovation of invasive plants.
Supplying water to
A plant that makes water from air was launched in 2019. Aqua Air households and businesses
Africa has established an atmospheric water-generation plant at has often been a task
Ga-Rankuwa near Pretoria and is producing about 10 000 litres beyond the capabilities
per day through a process that involves the condensation of of some of South Africa’s
water vapour into liquid. municipalities. The Municipal
Simpler technology is giving the pupils at a school Infrastructure Support
i n L i m p o p o a cc e ss to dr in k ing wa ter. Studen ts f rom Agenc y (MISA) falls under
the Universit y of Pretoria’s Depar tment of Geography, the National D epar tment
Geoinformatics and Meteorology have helped to build a net for Cooperative Governance
in the mountains where Tshiavha Primary School is located. and Traditional Affairs and
Fog is captured by a big net and channelled into tanks by will assist municipalities
a gutter running along the bottom of the net. About 2 500 to p l a n fo r, p rov i d e a n d
litres of water is captured per day which means that there is maintain infrastructure. The
enough to share among the villagers. first action of MISA was to
A new kind of water filtration system has been pioneered by commission 81 engineers
a water entrepreneur from the same province, a system which and town planners to get to
puts macadamia nut shells to use. The brainchild of Murendeni work in areas that need the
Mafumo, the idea was first put into action in 2018 and has been most help.
used in schools and rural communities by Kusini Water. Powered Another response to
by solar power, the purification system uses a carbon filter that the municipal problem is a
is made from macadamia nut shells. new national strategy which
The province of KwaZulu-Natal is tak ing a lead in gives a bigger role to well-
desalination technology. R ichards Bay has installed a resourced water boards
10-container desalination plant next to the municipal water such as Umgeni Water and
treatment plant at Alkanstrand. The first mobile sea water Sedibeng Water.
purification unit in South Africa, it comprises 10 containers In terms of the National
and is located adjacent to the water treatment plant at Water Resource Strategy,
Alkantstrand. It can deliver 10 megalitres of drinking water. In catchment area management
2018 JG Afrika and technology partner NuWater delivered a agencies have been established
R72-million desalination plant to South32’s Hillside aluminium to oversee water resource
smelter in the same town. management on a regional
In an attempt to reduce the amount of water sucked up by basis. The Imkomati-Usuthu
alien plants, Coca-Cola aims to recover nearly three-billion litres Catchment Management
Agency covers Mpumalanga,
parts of Limpopo and part of
ONLINE RESOURCES
the Kingdom of Swaziland.
National Cleaner Production Centre South Africa: www.ncpc.co.za Another example of a CMA is
National Department of Water and Sanitation: www.dwa.gov.za the Breede-Gouritz Catchment
South African Water Research Commission: www.wrc.org.za Management Agency in the
Water Institute of South Africa: www.wisa.org.za
Western Cape. ■

67 SOUTH AFRICAN BUSINESS 2021

 FOCUS
Gert Sibande Water
Quality Testing Laboratory
Improving water quality for citizens of the district.
T
he Gert Sibande Water Quality Test-
ing Laboratory is the only SANAS-
accredited, government-owned
facility in the Mpumalanga Prov-
ince. It is situated on the N17 corridor in
Ermelo, bounded by Ekurhuleni Metro of the
Gauteng Province to the west, Sedibeng District
Municipality of the Northern Free State to
the south-west, Ehlanzeni District Munici-
pality of Mpumalanga Province to the north-
east, N k angala Distric t Municipalit y to
the north (Mpumalanga Province), Amajuba
District Municipality to the south-east of
KZN and Swaziland to the east and, therefore,
easily accessible.
GSDM laboratory staff at the GSDM Water Quality Testing Laboratory led by Ms Victoria Tshabalala (centre).
SOUTH AFRICAN BUSINESS 2021
SOUTH AFRICAN BUSINESS 2021
The facility is evidence of Gert Sibande District
Municipality’s vision to be “A community-driven
district of excellence and development” and is in
line with the National Development Plan (NDP)’s
vision 2030 which is:
“To ensure that all South Africans have access to
clean running water in their homes.”
The centrality and the strategic location of
this facility ensures easy accessibility by all stake-
holders. Informed by the need to improve water
quality in the district, the laboratory was estab-
lished in 2011 to guarantee safe drinking water
provided to millions of citizens within the district
according to section 9 (1) of the Water Services Act
No. 108 of 1997.
68
106
 FOCUS

Mr Siyabonga Makhathini, the Senior Technician (Chemistry) at the ICP room in the GSDM laboratory.

The focus of the facility is on the following:
• Chemical analysis.
• Microbiological analysis.
• Physical analysis.
These services are available to all stakeholders
and customers including local municipalities
and industries. A pricelist is available on request.
Gert Sibande District Municipality prides itself
about this facility which meets the requirements of
the ISO/IEC 17025:2017. In addition, the Gert Sibande
Water Quality Testing Laboratory promotes water
quality and care for water in communities through
active involvement in awareness programmes
offered by local municipalities. It also promotes
careers in science by providing opportunities to
students in the form of in-service training.
The laboratory boasts of the provision and
delivery of superior laboratory services and aims to
promote and support the development of a culture
of scientific learning. The Gert Sibande Laboratory
regards its clients as valuable stakeholders whose
interests are a priority for the laboratory.
 
OFFICE HOURS
Monday to Thursday: 07h30-13h00; 13h30-16h30
Friday: 07h30 to 14h00.
Contact details
Address: Cnr N17 Bethal and Nelspan Roads,
Cassim Park. PO Box 1748, Ermelo, 2350.
Tel: +27 17 801 7143.
Email: laboratoryservices@gsibande.gov.za
Website: www.gsibande.gov.za
Facebook: @gertsibandedm
Twitter: @GertSibandeDM
GPS coordinates: S26 31’ 25.73” E29 58’ 19.25

69
107 SOUTH AFRICAN BUSINESS 2021
 OVERVIEW

Engineering
Many engineering groups are selling off assets.

SECTOR INSIGHT
A presidential infrastructure
office may breathe new life
into the sector.

Economic Development, Dr
Kgosientso Ramokgopa. In
2020, 51 infrastructure projects
with a total investment value
of more than R340-billion were
gazetted and hopes are high
that this initiative will provide
a boost for engineering firms.
A study carried out by
KMPG found that spending
A semi-portable crane from RGM Cranes. Credit: Betterect. on infrastructure resulted in
additional economic activity

A
worth R26-billion and created
veng’s disposal of non- core assets is t ypical of 92 000 direct jobs.
the activity of larger companies in the sector. The Marine repair and
company ’s website lists Aveng Trident Steel and engineering form a significant
Aveng ACS (Automotive Control Solution) as solid sector in the Western Cape and
businesses which will realise good value once a new owner KwaZulu-Natal, with established
is found and lists another eight businesses (in roads, rail, companies such as EBH South
civils and electrical) which the group sold in 2019. Africa offering comprehensive
With a renewed focus on infrastructure, resources and services. Both KwaZulu-Natal
mining solutions, Aveng’s main operating companies are ports are expanding (Durban has
now Moolmans in South Africa (contract mining and mining built a cruise-liner terminal and
services) and McConnell Dowell (engineering, construction Richards Bay is undertaking no
and maintenance) in Australasia, Southeast Asia and the fewer than 45 projects) and will
Middle East. continue to attract engineers.
Some of the big names such as Group Five, Basil Read Dormac, which is
and Esor are in business rescue. Others such as Murray & headquartered in the Bayhead
Roberts and WBHO rely heavily on offshore contracts for area of the Port of Durban,
revenue. Murray & Roberts has completed its transition from is best known for its marine
being a South African company focussing on contracting to a engineering but it offers
multinational engineering and construction group with a focus specialised services to the
on natural resources markets. sugar industry and provides
An Investment and Infrastructure Office has been created machinery for industrial giants
in the Presidency. It is headed by the former Gauteng MEC for like Toyota and Defy.

SOUTH AFRICAN BUSINESS 2021 70

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Sector news Training

Expansion at Betterect’s manufacturing plant in Krugersdorp has A study jointly commissioned

helped to push production to a monthly level of 650 tons of steel b y t h e Wa t e r R e s e a r c h
plate work. This has necessitated the installation of strong and Commission and the South
reliable cranes which have been provided by RGM Cranes for African Local Government
more than 30 years. Betterect specialises in mild and stainless Association (SALGA) found
steel fabrication, steel erection and corrosion protection. that the country’s four-in-a-
Betterect recently commissioned RGM Cranes to supply a million ratio of engineers is a
30-ton semi-portable crane and two 10-ton single-girder cranes. long way from the required
The smaller cranes lift items for the erection of semi-assembled 50-per-million. In 2015 there
or fully assembled tanks and skids in the workshop area. Most of were are 16 423 registered
the RGM cranes are on site at the Chamdor site but when a fuel professional engineers in
gantry was constructed at the airport on the island of St Helena, South Africa.
the two companies worked together there. One response at national
RGM is the South African agent and supplier for Turkish level was the importation
company Güralp. The Güralp hoist is sent to South Africa in kit of Cuban engineers. Several
form (the hoist, cabling and electrics) and RGM manufactures the par tnerships between the
girders and assembles the crane. public and private sectors are
A good sign for the engineering sector came in the news that trying to address the skills
the Boksburg site where DCD Rolling Stock used to make rail deficit. One example is the
wagons and fix locomotives is up and running again, courtesy of partnership that Wits’ National
TMH Africa, a part of the TMH Group, which has head offices in Aerospace Centre has with
Switzerland. Boeing and Airbus.
ELB Group’s Engineering Services division employs more than The Skills Development
1 000 people and the company is currently working full-time on Amendment Act is intended
the vast Gamsberg zinc project in the Northern Cape. Manganese, to improve the situation.
iron ore and coal are other mining sectors where ELB is active and Universities, universities of
it does work for Eskom (the national utility) and companies such technology and companies
Nestlé and Unilever. are increasing their focus on
The Renewable Energy Independent Power Producer the training of engineers.
Procurement Programme (REIPPPP) has created an entirely The Engineering Council
new industry in less than seven years, with investment of about of South Africa (ECSA) has a
R200-billion in solar parks and wind farms. This has created programme where trainees
many opportunities for engineers. can earn certificates in specific
disciplines from a range of
ONLINE RESOURCES institutions. The qualifications
are in line with the council’s
Consulting Engineers South Africa: www.cesa.co.za Exit Level outcomes. Six
Engineering Council of South Africa: www.ecsa.co.za
of South Africa’s biggest
National Department of Public Works: www.publicworks.gov.za
South African Consulting Engineering Firms: www.consultsa.co.za construction companies have
Southern African Institution of Civil Engineering: www.civils.org.za established a R1.25-billion
skills fund. ■

71 SOUTH AFRICAN BUSINESS 2021

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Construction and property

Logistics property is strongly placed for growth.

SECTOR INSIGHT
Cement and brick
manufacturers are hoping for
a quick recovery.

with more essential items

and greater convenience,
Credit: Equites
will be less vulnerable.

T
This is borne out by
he trend which saw logistics property growing as a the results announced by
sector because of the Amazons of the world needing Resilient in 2020. Of the
more space to store their products will speed up in company ’s 28 retail centres
the post-Covid world as more people work and order across South Africa, the
from home. ones that did best were the
The Economist focused in its 30 M ay 2020 issue on smaller, rural malls.
Prologis, Amazon’s biggest landlord. The American company The South African Council
has assets of $125-billion and 90km² of floor space, and spent of Shopping Centres calculates
$25-billion in 2019 in America and Europe. E-commerce now that the country has the sixth-
accounts for about 40% of its construction activity, whereas highest number of shopping
it was a fifth before the pandemic. malls in the world. R2-billion
A similar trend playing out in South Africa was noted by was recently spent on Menlyn
Nick Wilson in the Business Times (Sunday Times 5 July 2020). Park in Pretoria to expand it to
The logistics property sector had “boomed in recent years due 177 000m² of gross lettable
to the growth of e-commerce” but was likely to do even better space while the Gateway
because of Covid-19. About a third of Fortress’s R30-billion T h e a t re o f S h o p p i n g i n
portfolio is in the logistics sector and it signed contracts in Durban, South Africa’s second-
2020 with Takealot and a Netflix production company. biggest mall, recently spent
The clients of Equites, a company which focusses on R750-million.
logistics property, include Amazon, Super Group, HDL and The lockdown accelerated
DSV, a Danish transport and logistics company. Equites is the the trend for people to work
only specialist logistics property company listed on the JSE. In f ro m h o m e , a n d s o t h e
six years, its portfolio has grown from R1-billion to R15-billion. Office Proper ty sector will
There are more than 30 real estate investment trusts (REITs) come under pressure. Many
on the JSE and they generally deliver good value. companies will be reducing
FNB, which publishes a regular proper t y barometer, office space but, as Loos
has done an in-depth analysis of previous crises to help writes, “Improved technology
understand what may occur in the post-Covid proper ty has gradually been driving a
market. According to John Loos, a property strategist at FNB greater remote working trend
Commercial Property Finance, the most vulnerable sector is for some years. Covid-19 has
likely to be Retail Property. Smaller neighbourhood centres, merely sped this trend up.”

SOUTH AFRICAN BUSINESS 2021 72

 OVERVIEW

Industrial Proper ty will take a hit but is expected to

Credit: Fortress Reit Ltd
recover strongly while Residential Property is expected to be
the least at risk. Prices will likely go down, but people need
a place to live and the work-from-home trend will increase
the importance of residential property. Loos concludes that,
“In a few decades time, the composition of the proper ty
stock may look noticeably different to what it is today, the
key features being a smaller portion of the total being retail
and office property, and an even larger portion of the stock
being residential property than is currently the case.”
Statistics SA has found that the percentage of South
Africans living in flats has risen markedly. Whereas 26 out
of 100 approved plans in 2013 were for flats, this figure
reached 59 in 2016. Although the total number of people Covid-19. The comp any ’s
living in flats is still relatively small (5.4%), this figure will rise Ear thwor ks and M ater ials
as urbanisation increases. division delivers two-thirds
of its operating profit but
it is upbeat about its Roads
Construction rebuilding division winning contracts
in South Africa in the short
Job losses and business rescues have been recurring themes term. Tenders were entered
in the South African construction sector for some time. fo r R 2 2 - b i l l i o n w o r t h o f
The fact that some kind of recovery must happen after the road construction in the six
lockdown will give hope to all construction and construction months to March 2020.
material companies, and they will hope that increased order The Inner City Local Area
books will allow them to restart some of their facilities. Plan (LAP) for Durban has
Corobrick is a manufacturer of masonr y, pavers and b e e n d e v e l o p e d fo r t h e
concrete earth retaining systems. The company, which has its Strategic Planning unit of the
headquarters in Durban and employs 1 400 people, announced eThekwini Municipality by a
in 2020 that four of its 13 factories would be closing. Joint Venture called IPPU. A
PPC Cement suffered losses for the year ending 30 March major milestone was reached
2020 with cement demand significantly down from the in 2019 when the beachfront
previous year. The Covid-19 lockdown will have made the promenade extension
situation worse and a rights issue is likely to follow. reached the harbour. The
Road-building, renewable energy and affordable housing project began in early 2018
have proved good sectors for Raubex, which returned and cost R400-million.
good results in 2020, despite the lockdown occasioned by According to the organisers
of the 2019 KZN Construction
ONLINE RESOURCES Expo, infrastructure will attract
more than R200-billion in
Construction Industry Development Board: www.cidb.org.za investment over seven years
SA Institute of Architects: www.saia.org.za
and R35-billion will be spent
SA Reit Association: www.sareit.prowly.com
South African Property Owners Association: www.sapoa.org.za over 15 years at the Port
Waterfront development. ■

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Manufacturing
TFG plans to double manufacturing capacity.

T
FG, whose South African brands include TotalSports,
SECTOR INSIGHT
Markhams and Foschini, has a five-year plan to double its
manufacturing capacity. The furniture sector is finding
Having purchased Prestige Clothing Maitland and ways to grow.
Prestige Clothing Caledon in 2012 and spent R75-million on
expanding the factory in Caledon in 2017, TFG now plans to The furniture manufacturing
significantly increase the percentage of locally-made clothing sector earned R3.9-billion in
items from the current level of 35% to 55%. This expansion should exports in 2018 and contributed
lead to more jobs within the group, which expanded in 2020 with 1% to the country’s gross
the purchase of Jet from Edcon. domestic product (GDP).
The Manufacturing and Competitiveness Enhancement Employment across the sector
Programme (MCEP) of the Department of Trade, Industry and amounts to more than 26 000,
Competition (the dtic) has disbursed grants which have resulted in but that figure is markedly
230 000 jobs being “sustained”. Because of the Clothing and Textile down from a high of 80 000 in
Competitiveness Programme, that sector currently now employs the 1990s. Exposure to foreign
around 95 000 workers, contributing 8% to manufacturing GDP and imports and distance from
2.9% to overall GDP. In the leather sector 22 new factories have lucrative markets continue to
been opened, supporting 2 200 jobs. pose threats to the sector, but a
In the Western Cape, this revival is reflected in member group of manufacturers, buyers,
companies of the Cape Clothing and Textile Cluster hiring 35% more government and traders has set
staff in four years. About 23 600 people are employed in the province out to do something about it.
and exports from the Cape amounted in 2017 to R4.4-billion with A first Furniture Sector
sales up by 34% above inflation. Forum (pictured) was held

SOUTH AFRICAN BUSINESS 2021 74

 OVERVIEW

Johannesburg in 2019 where government incentives and ideas has re-branded as Generic
about how to reduce the cost of expensive machinery through and Biosimilar Medicines of
co-ownership and partnerships were shared. The forum was co- Southern Africa.
hosted by the South African Furniture Initiative (SAFI), Proudly The opening in May 2018
South African, PG Bison and the Department of Trade, Industry and of a R1-billion specialised
Competition. The second Forum took place in October 2020, with product facility at the Port
the support of Interior Design Professions (IID) and Trend-Forward. Elizabeth plant of Aspen
The dtic’s Agro Processing Support Scheme (APSS) includes Pharmacare will add 500 jobs
furniture manufacturing as a core sector for future growth and to the existing complement of
support. Other efforts to get government departments to buy locally 2 000 staff members.
were explained. Average employment per manufacturer is 13 people South Africa’s chemical
per facility which makes the sector well suited to expansion and to i n d u s t r y c o n t r i b u te s 5 %
measures requiring flexibility, but it can lead to manufacturers feeling to national gross domestic
isolated. The idea-sharing forum is one way of overcoming that. product and about 60% of
earnings are derived from
expor ts. The complexes
Contribution to GDP run by Sasol at Secunda
(Mpumalanga) and Sasolburg
Manufacturing’s contribution to South African GDP is 13%, less (Free State) underpin the
than half its contribution in the 1980s and a drop of about 11% national manufacturing
from the 1990s. In 2018, the real-term contribution to GDP was capacit y. Sasol Chemical
R386.8-billion (Stats SA). Industries makes about 60% of
The manufacturing sector employs the third most people of South South Africa’s polypropylene.
Africa’s economic sectors, about 1.7-million, after financial services and retail. AECI is one of S outh
Two of the manufacturing sectors that have achieved the best Africa’s biggest groups. The
results in recent years, automotive and food and beverages, are two principal divisions are AEL
featured separately. Food and beverages is the most significant, Mining Services (with a large
contributing 25% to total manufacturing activity. factory site at Modderfontein
The global surf ski market is worth about R220-million. n e a r J o h a n n e s b u rg ) a n d
According to Dale Granger of biznews, some 30-40% of that niche Chemical Ser vices, which
market belongs to South African manufacturers such as East has 20 separate companies.
London’s Fenn and Durban-based Revo and Carbonology. The Fo s k o r i s t h e c o u n t r y ’s
South African after whom the world’s first surf ski was named, Oscar only ver tically integrated
Chalupsky, is now CEO of Nelo Surf Skis in Portugal. A new surf ski phosphates producer.
sells for between $3 000 and $6 000. The by-products of the
South Africa’s pharmaceutical sector is worth approximately sugar and forestry processing
R20-billion annually. Although there are more than 200 p l a n t s o f K w a Zu l u - N a t a l
pharmaceutical firms in the countr y, large companies benefit the chemicals sector.
dominate, with Aspen (34%) and Adcock Ingram (25%) the key Illovo Sugar manufactures
players, followed by Sanofi, Pharmaplan and Cipla Medpro. The downstream products such
National Association of Pharmaceutical Manufacturers (NAPM) fur fural, fur fur yl, alcohol,
diacetyl and ethyl alcohol.
ONLINE RESOURCES Sappi makes 17% of the world’s
dissolving wood pulp. Two of
Chemical and Allied Industries’ Association: www.caia.co.za the companies three mills are
Manufacturing Circle: www.manufacturingcircle.co.za in South Africa, Ngodwana
South African Furniture Initiative: www.furnituresa.org.za (Mpumalanga) and Saiccor
South African Textile Federation: www.texfed.co.za (KwaZulu-Natal). ■

75 SOUTH AFRICAN BUSINESS 2021

 OVERVIEW

Food and beverages

Starch mills are changing hands.
SECTOR INSIGHT
South Africans love chicken
and hamburgers.

Two of the best-known large

companies in South Africa’s
food and beverages sector were
purchased by international

T
companies in 2019. PepsiCo
ongaat Hulett, best known as a sugar producer, is selling bought Pioneer Foods and
its starch business (with three milling plants in Gauteng Central Bottling Co of Israel made
and one in the Western Cape) to the KLL Group, a wholly- on offer on dairy company Clover.
owned subsidiary of Barloworld Logistics Africa. The Clover’s action in 2019
Germiston plant is pictured. in closing three small-town
The R5.3-billion transaction was in doubt because of concerns plants in rural areas illustrated
about the value of the business expressed by the buyer in the a less positive aspect of South
context of Covid-19 but the Competition Tribunal in July 2020 African manufacturing: the
approved the deal. inability of small municipalities
The top five fast-food companies in terms of outlets in 2019 were to adequately supply services
KFC (900), Steers (600), Debonairs (569), Wimpy (467) and Nando’s to companies. Clover moved
(340). McDonald’s, FishAways and King Pie were close together in the production to Port Elizabeth,
next three positions in a survey done by Business Tech. The survey Durban and Johannesburg.
found a total of 5 287 stores, which includes the somewhat vague Food and beverages makes
“over 200 stores” claimed by Chicken Licken. up 26% of the South African
Famous Brands owns Steers, Debonairs, Wimpy and FishAways, consumer products sector,
a typical scenario in the South African fast-food sector. The Spur just ahead of agro-business
Corporation has outlets in several segments including family (25%), diversified companies
diners, pizzerias, hamburger outlets and steak houses, including (23%) and sugar producers.
the Hussar Grill. Recent capital expenditure
Taste Holdings announced in 2020 that it was placing its in the industry has targeted
food business into voluntary liquidation after a failed attempt improving efficiency rather
to sell the Domino’s Pizza business. The Starbucks franchise than expansion of production.
was sold for R7-million. The food and beverages
More than half of the companies operating in the food sector employs about 230 000
and beverage sector in South Africa are in Gauteng, including people. Beverages accounts for
Nestlé, Tiger Brands, Pioneer Foods, RCL, AVI and Astral. There are just over 4% of all manufacturing
approximately 4 000 food processing companies in the province, sales while food is responsible
employing more than 100 000 people. for 13.5%. Within the sector,
beverages accounts for 24% of
ONLINE RESOURCES
sales. One quarter of the 37% of
Agricultural Research Council: www.arc.agric.za national GDP that is generated
FoodBev SETA: www.foodbev.co.za by agro-industries derives from
National Agricultural Marketing Council: www.namc.co.za agro-processing. ■

SOUTH AFRICAN BUSINESS 2021 76

 FOCUS
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77 SOUTH AFRICAN BUSINESS 2021

SOUTH AFRICAN BUSINESS 2021 108
 OVERVIEW

Automotive
The automotive sector makes up a third of South Africa’s manufacturing capacity.

SECTOR INSIGHT
Supplier parks and Special
Economic Zones are playing
to South Africa’s automotive
strength.

Foreign direct investment

(FDI) into South Africa from
seven of the eight Original
Equipment Manufacturers
(OEMs) totalled R7.3-billion
in 2019 and a further
commitment was made
of another R40-billion
investment over the next
five years. The component
The East London IDZ hosts a number of automotive companies. sector invested R3.5-billion

V
in 2019 (Automotive Industry
ehicle sales declined sharply in the Covid-19 lockdown Development Centre, AIDC).
period. For the year to September 2020, sales of passenger Long-term state support
vehicles went down by 34.4% and by a similar amount in of the industry through the
light commercial vehicles. Automotive Production and
Analysts will be closely watching consumer behaviour as Development Programme
economies open again to monitor the effects of working from home (APDP) is a major reason for
and the further growth of the ride-hailing trend. the continuing health of this
The manufacturing part of the automotive and components vital sector. The industry itself
sector is a vital part of South Africa’s manufacturing landscape. It is is looking to Africa for new
responsible for more than 112 000 jobs which translates to more than markets. By increasing total
450 000 jobs once the multiplier effect is taken into account. production numbers to one-
The South African automotive industry also accounts for: million vehicles, the sector will
• 30.1% of the country’s manufacturing output. become more viable.
• 6.9% of GDP (4.4% manufacturing, 2.5% retail). The National Department of
• 27.6% of value addition within domestic manufacturing. Trade, Industry and Competition
• exports to 151 countries, 74% to EU. (the dtic), working together
• exports in 2018 of vehicles and components of R201.7-billion, a with the National Association
record (and 15.5% of country total). of Automobile Manufacturers
• exports in 2019 of 387 125 vehicles achieved a new record of South Africa (NAAMSA) has
amount of R148-billion and components also set a new record set targets for 2035 to increase
of R53.7-billion. production to 1% of world
(National Association of Automobile Manufacturers of South Africa, volumes (which would mean
NAAMSA) 1.4-million more vehicles made

SOUTH AFRICAN BUSINESS 2021 78

 OVERVIEW

in SA), increasing local content and doubling employment and black- is funded by the municipality.
owned businesses in the sector. Together, these firms have
South Africa has three centres of automotive production: the about 17 000 employees.
Eastern Cape, Gauteng and KwaZulu-Natal. In the Eastern Cape, the Trade and I nvestment
OEMs are Volkswagen, Mercedes-Benz, Isuzu and Beijing Automobile KwaZulu-Natal (TIKZN) estimates
Investment Corporation (BAIC). Ford has an engine plant in Port that the province’s component
Elizabeth. automotive manufacturers
In KwaZulu-Natal Toyota has a large plant just south of Durban. enjoy a combined turnover
Although the manufacturers of loaders, dump trucks and haulers are approaching R10-billion.
not counted in the tally of South African OEMs, Bell Equipment, a The Tshwane Automotive
global leader in its field, runs a large manufacturing site in Richards Special Economic Zone (TASEZ)
Bay. Dezzi Equipment is based in Port Shepstone. In 2018 AIH is a project of the Gauteng
Logistics started assembling Mahindra and Bolero bakkies from kits Province, the Department of
imported from India on a site at the Dube TradePort. Pretoria is home Trade, Industry and Competition
to BMW, Nissan and Ford. (dtic) and the City of Tshwane.
All three centres are making use of targeted land allocation to The implementing agent
try to boost the sector through industrial parks or Special Economic is the Coega Development
Zones. The idea is to get economies of scale through grouping Corporation (CDC), the
companies which serve one another. Training becomes easier and developer and operator of the
costs can be reduced. Coega SEZ.
Chinese OEM BAIC is the first new entrant into the market to set The TASEZ, branded as
up within an SEZ. The planned investment in the Coega SEZ by BAIC “Africa’s First Automotive City”,
and its partners is R11-billion. BAIC expects to be building 50 000 has a mandate to promote
vehicles per year at its site at the Coega SEZ by 2022. economic participation for
Automotive component suppliers and downstream SMMEs and create employment
manufacturers such as electronics components, metal fabrication, in the region. Sectors
plastic moulding, precision machining and trim are expected to targeted include security,
take up opportunities in the Automotive Zone within the Coega IC T maintenance, facility
SEZ, as they do at the East London Industrial Development Zone maintenance, construction,
(ELIDZ). Companies in the ELIDZ which manufacture in support of automotive supply chain,
the Mercedes-Benz operation include Feltex Automotive Trim, TI marketing and advertising,
Automotive (brake and fuel pipes), Yanfeng Automotive Interiors, catering and events.
Linde+Wiemann (seat frames, recliners, metal surface treatment) B oth the N issan and
and Onelogix VDS, which is a logistics company that delivers BMW plants are expanding
motor vehicles. and Ford is investing in
In line with the policy of developing industrial economic Silver ton. An I ncubation
hubs, the Durban Automotive Supplier Park is being built at Illovo, Centre for SMMEs has been
south of Durban and near to the Toyota plant. The Dube TradePort launched at Nissan’s assembly
Corporation will manage the project, which covers 1 013ha. The plant in Rosslyn. The facility
Durban Automotive Cluster, which has 39 member companies, supports small enterprises
through subsidised rental
and mentorship and training.
ONLINE RESOURCES
Management of the centre
Automotive Industry Development Centre: www.aidc.co.za is done by the Automotive
Manufacturers: www.naacam.co.za Industry Development Centre,
National Association of Automotive Component and Allied a subsidiary of the Gauteng
National Association of Automobile Manufacturers of South Africa: Growth and Development
www.naamsa.co.za Agency (GGDA). ■

79 SOUTH AFRICAN BUSINESS 2021

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Transport and logistics

Decongestion of ports is a priority.

SECTOR INSIGHT
Airlink has signed partnerships
with two world-leaders.

they occur. One of the biggest

problems facing the South
African rail system is cable theft,
which leads to frequent delays
along the network.
Transnet Freight Rail (TFR)
has had a new CEO since
April 2020. Siza Mzimela, with
a background in airlines and
logistics, wants to divert road
freight to rail, which currently
Credit: South African Heavy Haul Association attracts just 20% of South
Africa’s general freight. One

G
of her goals is to find a South
etting freight through South Africa’s ports in a more African manufacturer who can
efficient manner has become an urgent priority. A Port of produce railway lines.
Durban Decongestion Task Team includes a broad range Transnet Freight Rail’s
of private and public sector organisations involved in the operations represent about
port. Through nine targeted workstreams the team is tackling the 80% of Africa’s rail infrastructure.
root causes of Bayhead congestion and is working on improving With 25 000 employees TFR has
coordination, planning, operations and cargo flows. specialist divisions for hauling
A mandatory automated truck booking system has been coal and iron ore together with
introduced at Durban Container Terminal Pier 1 and Pier 2, while the a general freight division which
Grindrod, FPT and Bulk Terminal depots have also piloted their own transports everything from
booking systems. grain to chemicals.
Although Transnet Port Terminals and Transnet Freight Rail are It is on these specialised
vital to the smooth running of the loading systems, private operators lines that TFR excels. A new
of storage facilities and trucking companies also need to synchronise record was set in 2019 when
their operations. In Cape Town, efforts to work on decongestion 375 wagons were hitched
include the City of Cape Town, the Cape Chamber of Commerce and to the Sishen-Saldanha train
Industry and the provincial government. that hauls iron ore from the
The 2020 Technical Conference of the South African Heavy Haul Northern Cape to a dedicated
Association tackled the issue of bringing smart technology to the terminal at Saldanha in the
railway system under the theme, “Smart, Resilient Railway Operations Western Cape. The total
& Infrastructure”. Smart systems can self-monitor and self-diagnose volume transported in 2019
railway conditions and then predict failures or problems before amounted to 58.4-million tons.

SOUTH AFRICAN BUSINESS 2021 80

 OVERVIEW

Coal tonnage reached 72mt in the same year and general freight African Maritime Safety
accounted for a further 85mt. Authority (SAMSA), the
Increasing the amount of general freight transported by rail South African National Roads
would not only bring down costs but it would also take the burden Agency Limited (Sanral) and
of thousands of heavy trucks off South Africa’s roads. the Passenger Rail Agency of
South Africa has 22 000km of railway lines and 747 000km of SA (PRASA).
roads, 325 019 heavy-load vehicles and the road freight industry
employs 65 000 drivers. The logistics and courier market is worth
R10-billion. There are 135 licensed airports in the country, 10 of Logistics
which have international status.
South Africa’s largest agricultural
company has signed an
Air agreement with Transnet to
partner in upgrading grain
Four airlines were still flying after the Covid-19 lockdown: Airlink, facilities at two ports. East
Mango, Cemair and FlySafair. The business rescue process was London and Durban will receive
applied to SAA, SA Express and Comair. R100-million revamps as part of
A R1.5-billion business rescue offer was made to Comair that a 15-year tender won by Afgri.
would enable it to restart in time for Christmas 2020. The offer entails Transnet is hoping that the
delisting from the JSE. Comair operates as a British Airways franchisee partnership will help it towards
on domestic routes and launched its own low-cost airline, kulula. reaching its goals in its road-to-
com, in 2001. rail strategy.
In October 2020, Airlink signed two deals in quick succession with The building of the Musina-
Qatar Airways and Emirates, giving customers single-ticket travel and Makhado Special Economic
one-stop baggage check-in. Zone (SEZ) will boost Limpopo’s
Airports Company South Africa (ACSA) owns and operates the role as a transport and logistics
country’s 10 biggest airports. The company also manages airports in hub. The Musina Intermodal
India and Brazil. Terminal is 15km from the busy
Ekurhuleni wants to leverage the location of South Africa’s Beit Bridge border crossing. It
biggest airport, OR Tambo International, into a major economic will boost efforts to move cargo
asset. OR Tambo International in Johannesburg caters for more than from road to rail.
21-million passengers annually. Cape Town International Airport The Maputo Development
recorded 10-million passengers in 2016, a figure that rose in 2019 to Cor r idor is Afr ica’s most
a shade under 11-million. King Shaka International Airport (KSIA) is advanced spatial development
north of Durban. initiative. Run by the Maputo
The South African Ministry of Transport has several agencies Development Corridor
and businesses reporting to it: Air Traffic and Navigation Services Logistics Initiative (MCLI),
Company, ACSA, National Transport Information System, Road the corridor runs from near
Accident Fund, South African Civil Aviation Authority, South Pretoria in Gauteng, to Maputo
in Mozambique.
The Harrismith Logistics
ONLINE RESOURCES
Hub at the Maluti-A-Phofung
Airlines Association of Southern Africa: www.aasa.za.net SEZ on the N3 is an inland
Airports Company South Africa: www.acsa.co.za port that can handle cargo
Road Freight Association of South Africa: www.rfa.co.za containers and shift cargo
South African Association of Freight Forwarders: www.saaff.org.za from road to rail, reducing
South African Heavy Haul Association: www.saheavyhaul.co.za congestion and costs. ■

81 SOUTH AFRICAN BUSINESS 2021

 OVERVIEW

Tourism and events

The MICE sector faces special challenges.

SECTOR INSIGHT
Tsogo Sun Hotels has
increased its stake in three
hotels post-lockdown.

The 16 units that comprise

the Buckler’s Africa Lodge by
BON Hotels on the banks of the
Crocodile River overlooking
the Kruger National Park has
halal certification. A coastal
option that allows for self-
catering is AfriCamps Boutique
Glamping site at Ingwe near
Plettenberg Bay. Situated on a
Credit: AfriCamps at Ingwe hilltop with great views of the
ocean and the Tsitsikamma

A
Mountains, the luxury tents
lthough all projections about the tourism sector and have fully-fitted kitchens.
its potential for growth and for job creation were short- Virtual tours have been
circuited by the Covid-19 pandemic, the fact remains that taken up by heritage operators
the sector can grow quickly and it is a good job creator. In such as Constitution Hill and
the short term, domestic tourism will be the focus but the potential Liliesleaf Farm and this option
of the sector, and South Africa’s riches in terms of what it can offer, is likely to grow as people in
remain significant. other countries seek out a
According to John Loos, a property strategist at FNB Commercial South African experience free
Property Finance, an overlooked factor in many analyses of the from any worries.
Covid-19 lockdown has been how technology has shown that some When the Marriott
business travel can be avoided altogether. Corporate travel budgets International hotel group
will be cut, and fewer physical conferences will be held, he predicts, closed three of its South African
which will put the meetings, incentives, conferences and events hotels during the Covid-19
(MICE) sector under even more pressure. lockdown, Tsogo Sun Hotels,
A relatively small market currently, but one with massive which owns a controlling stake
potential, is Muslim tourism. The Western Cape has already started in all three hotels, stepped up
doing research in its agricultural and tourism sectors and there is no its commitment by agreeing
doubt that with good marketing, South Africa could start gearing to bring them into its portfolio,
up for a growing number of Muslim tourists. The fact that most of keep them open and run them.
the country’s major cities have a proportion of Muslim residents and Tw o o f t h e a f fe c t e d
mosques are widely spread across the country means that travelling hotels were the Protea Hotel
around the country is easy. by M arriott Haz y view in

SOUTH AFRICAN BUSINESS 2021 82

 OVERVIEW

Mpumalanga and Durban’s Protea Hotel by Marriott Durban

Edward. The third hotel, the Mount Grace in the Magaliesberg, was
originally developed by the Brand family and was the sister hotel
to The Grace in Rosebank. Tsogo bought and restored The Grace
in 2015 and it currently operates as 54 on Bath. The Tsogo group
believes that demand for conferencing, weddings and shorter
family getaways will grow and that the Mount Grace, with its close
proximity to Johannesburg, is in a good position to respond to
those markets.
Tsogo Sun Holdings split its casino and hotel operations in 2019
in order to unlock value in the two sectors. With a market cap of
R25-billion, Tsogo is the country’s biggest hotel group. It has 36
hotels and three casinos in Gauteng. The hotel brands cover four
market segments, and they include a handful of stand-alone hotels
such as the Palazzo (at Montecasino) and the boutique hotel in
Rosebank. SunSquare, Southern Sun Hotels, Southern Sun Resorts, Credit: Buckler’s Africa Lodge
Garden Court and StayEasy are among the group’s brands.
The move by Marriott International into the South African of ground currently occupied
market was seen as significant, and it retains most of its by three car dealerships and
properties. In partnership with the Amdec Group, Marriott a roadwor thy station on
spent about R1-billion on the Marriott Hotel Melrose Arch and Christiaan Barnard Street. The
Marriott Executive Apartments Johannesburg Melrose Arch. Harbour Arch concept is based
Buying into Protea Hotels has also given Marriott access to on Johannesburg’s Melrose
other African countries. Arch, with seven tower blocks to
A three-billion-year-old micro-fossil found in the Makhonjwa be constructed on 200 000m²,
Mountains in Mpumalanga is thought to be the oldest sign of life roughly half the footprint of the
on the planet. The Makhonjwa Mountains were declared a World V&A Waterfront.
Heritage Site by UNESCO in 2018. Culture and heritage accounts for Peermont Hotels, Casinos
40% of world tourism and is one of the fastest-growing subsectors. and Resorts has added the
In Durban, a joint venture between MSA Cruises SA and Africa Emerald Resort & Casino to
Armada Consortium is spending R175-million on the financing‚ its portfolio of properties.
construction‚ maintenance and operation of a cruise terminal for a Peermont purchased the
25-year concession period. Vanderbijlpark property from US
The Port of Cape Town has launched its dedicated cruise-ship company Caesars Entertainment
terminal, and the area between the terminal and the Cape Town Corporation, which brings to 11
International Convention Centre is being developed as a multi-use the number of casino resorts it
precinct called the Yacht Club. runs on the subcontinent.
On the western edge of Cape Town’s Foreshore, an ambitious There are 711 745 people
plan envisages two new hotels, flats, retail space and offices rising out employed in the tourism
industr y nationally, with
road transport (29%), food
ONLINE RESOURCES
and beverages (20%) and
African Business Travel Association: www.abta.co.za accommodation (19%)
South African Golf Tourism Association: www.sagta.co.za absorbing the largest numbers.
South African National Parks: www.sanparks.co.za The sector contributes 9% to
South African Tourism: www.southafrica.net South Africa’s gross domestic
South African Tourism Services: www.satsa.com product (GDP). ■

83 SOUTH AFRICAN BUSINESS 2021

 OVERVIEW

Banking and
financial services
Investors are getting behind fintech.

N
aspers Foundry is one of several investment funds SECTOR INSIGHT
looking for opportunities in the financial sector.
Insurance technology is of particular interest, together PSG is selling a big stake
with credit services and payment systems. in Capitec Bank.
The appointment by mobile operator Vodacom of a new
Chief Financial Officer (CFO) in 2020 gave further insight into May 2020, investment holding
the growing link between the digital world and the world of company PSG announced that
finance. The new executive, Raisibe Morathi, was for 10 years it would reduce its holding in
CFO of Nedbank. Capitec Bank from 32% to 4%,
Morathi also served on the board of Sanlam, a giant in earning about R4-billion by
the South African financial sector. In 2019, Sanlam, which selling those shares.
has 20 319 South African employees, distributed R190-billion South Africa’s financial
between employees, shareholders, government and clients. services sector has expanded
Capital Appreciation, which is part-owned by the Public by the opening of several
Investment Corporation, is already invested in a software new stock exchanges.
developer, a credit card payment terminal provider and has Ph a r m a c e u t i c a l c o m p a ny
R500-million available for further investments. Aspen Pharmacare has taken a
African Rainbow Capital, with about 5%, has a stake in the second listing on A2X.
investment company and is the owner of TymeBank, which Of the four new exchanges,
received a banking licence in 2017. Equit y Express Secur ities
Tyme stands for Take Your Money Everywhere and refers to Exchange (EESE) trades in Black
the bank not having a branch network. Perhaps the lockdown Economic Empowerment
encouraged customers to think in digital terms because Tyme (BEE) while ZARX and 4AX
reported in October 2020 that it had 2.4-million customers, up are targeting companies
from 1.4-million at the end of March. A 400% increase in the that are not listed elsewhere.
use of services such as airtime and electricity purchases was ZARX has agricultural holding
also noted. companies lik e T WK and
Discovery Bank officially launched in March 2019 and is Senwes among its clients.
experiencing rapid growth with deposits of R3.7-billion. Discovery The JSE is the world’s 19th
Bank is applying the behavioural model it uses in its health biggest exchange and nearly
business to reward good financial behaviour. 400 companies are listed
Another relatively new bank is Capitec, which is steadily increasing on the JSE or AltX, the JSE-
its customer base by providing banking for business and owned exchange for smaller
individual customers in what it describes as a simple manner. In companies. ■

ONLINE RESOURCES
Financial Sector Conduct Authority: www.fsca.co.za
Insurance Institute of South Africa: www.iisa.co.za
South African Institute for Chartered Accountants: www.saica.co.za

SOUTH AFRICAN BUSINESS 2021 84

CPD
CONTiNUOUS PROFESSiONAL DEVELOPMENT

“ Attending CIGFARO Training

and webinars has allowed me to
earn CPD points while
participating in Technical
discussions to help improve my
professional capacity. This is a
great time to be associated with
a SAQA recognised Professional
Body. ”

Ms Zanele Malaza
(PGFO), CFO City of
Mbombela

CONTACT US:


 

 

 OVERVIEW

Development finance and

SMME support
A new fund aims to make R5-billion available at a fair price.

A
new fund for SMMEs was launched in 2020 with the
aim of providing capital at a fair price. Former SA Post SECTOR INSIGHT
Office CEO Mark Barnes, who previously worked in Futuregrowth has a focus
investment banking and private equity, is heading the on early stage start-ups.
Kisby Investment Fund. Partners in the fund are Arena Holdings
(media), 4AX Africa Exchange, 4AX Debt Services and Rainfin
(online credit). Barnes told Business Day that the fund would be local supplier development (or
compensated for the risk in supporting companies that have to procurement). Venetia Mine in
“hunt around in the overpriced debt market” by taking equity in northern Limpopo, a De Beers
the firm. Kisby is aiming for a R5-billion fund to support companies Group mine, has more than 50
in the R10-million to R1-billion revenue bracket. SMMEs enrolled in incubation
Funding is available for technology start-ups in many programmes and 34 locally-
forms but getting funding early in the process can be difficult owned companies are doing
because the concept is not proven. For asset management business with the mine.
company Futuregrowth, ring-fencing some funding for The National Department
allocation to early-stage development is a way of ensuring of Small Business Development
that potential is not overlooked. The company has put 10% of (DSBD) has several programmes
its development equity fund (or R280-million) into businesses to assist SMMEs and co-
such as payment devices ( Yoco), infrastructure platform operatives. The Small Enterprise
(Rubicon), fintech (LifeCheq) and an app for domestic workers Development Agency (Seda),
(SweepSouth). a subsidiary of the DSDB,
Data company 5M2T (5Minutes2Town) has started offering has 42 incubation centres in
sophisticated information about the township market. From how South Africa under its Seda
many spazas in Soweto have refrigeration units (4 700) to brand Technology Programme (STP).
loyalty, 5M2T covers 60 000 spazas, salons, barbers and other The National Department of
informal trade outlets an “in-market audit”. This allows for better Trade, Industry and Competition
ordering and planning for suppliers and logistics operators. (the dtic) is trying to stimulate
The Covid-19 lockdown had a severe impact on many small township and rural economies.
businesses. A survey conducted by risk finance company Business Programmes include the
Partners Limited found that 95% of SMME respondents thought they Enterprise Investment
would not survive without help. The company’s packages in response Programme (EIP).
included a Repayment Relief Programme and a Financial Assistance The South African SME
Programme capitalised at R100-million. Finance Association (SASFA) is a
Most big companies in South Africa have two main national, self-regulating body for
programmes to support SMMES: enterprise development (ED) and alternative finance companies. ■

ONLINE RESOURCES
National Department of Small Business Development: www.dsbd.gov.za
National Small Business Chamber: www.nsbc.org.za
Small Enterprise Development Agency: www.seda.co.za
South African SME Finance Association: www.sasfa.net

SOUTH AFRICAN BUSINESS 2021 86


Coega Development
Corporation
ga.co.zaPromoting small business as a way of sparking economic growth, creating jobs
and tackling inequality.
I
n championing socio-economic development,
the Coega Development Corporation (CDC)
d, Arcadia,places the interests of small businesses at the
centre of economic growth. Small business de-
velopment and support is crucial as a catalyst for
addressing poverty, unemployment and inequali-
ties in the society.
The National Development Plan 2030 encour-
ages Small, Medium and Micro Enterprise (SMME)
support through procurement and developing
black and female managers and professionals.
Between 2015 and 2020, SMME-procurement
spend achieved by the CDC was 29%. In 2019,
R461.77-million benefited small businesses in all
areas where the organisation has operations.
Contact details
Head Office: Coega SEZ Business Centre,
Corner Alcyon Road and Zibuko Street, Zone 1,
Coega SEZ, Port Elizabeth 6100
Tel: (RSA only): 08610 COEGA | 08610 26342
Tel: +27 41 403 0400 | Fax: +27 41 403 0401
Email: info@coega.co.za
Website: www.coega.co.za
Coega has offices in Pretoria, East London,
Cape Town and Durban.
FOCUS
BBBEE LEVEL 2 CONTRIBUTOR
ISO 9001:2015 ISO 14001:2015 ISO 45001:2018
The CDC has aISO 20000-1:2011
dedicated SMMEISO 27001:2013
Business
Unit that prioritises empowerment to unlock
www.coega.co.za
opportunities particularly in the built environment
such as infrastructure development and facilities
maintenance. “The billions of rands to be spent
on infrastructure development in the country to
revive our economy should also benefit SMMEs,”
says Dr Ayanda Vilakazi, CDC’s Head of Marketing,
Brand and Communications.
SMME participation on large contracts is
increasing, a sign of the success of the CDC’s SMME
development programme. Some highlights:
• SMME involvement in the construction of the four-
star Bluewater Bay Sunrise Hotel, Port Elizabeth.
• As of March 2020, 383 SMMEs benefited from
training, 178 CETA accredited.
• In 2019/20 CDC, SARS and CIDB held compliance
workshops for 652 SMMEs.
• 7 2 SMMEs successfully upgraded on CIDB
through CDC intervention and support.
A key organisational objective of the CDC is
to facilitate, promote and drive the inclusion of
SMMEs in procurement opportunities. The CDC is
also working at improving its B-BBEE status. The
organisation improved its B-BBEE status from level
4 in 2019 to level 2 in 2020. ■
87 SOUTH AFRICAN BUSINESS 2021
 INDEX

INDEX
Airlink............................................................................................................................................................................................IBC

Air Products............................................................................................................................................................................... 59

Chartered Institute of Government Finance Audit and Risk Officers (CIGFARO)...................... 85

Coega Development Corporation (CDC)....................................................................................................2-3, 87

Council for Geoscience (CGS)................................................................................................................................47-49

DNG Energy.............................................................................................................................................................................. 57

Futuregrowth Asset Management...............................................................................................................9, 24-25

Gert Sibande District Municipality.............................................................................................................21, 68-69

Musina-Makhado Special Economic Zone (MMSEZ)............................................................................26-31

Northern Cape Tourism Authority (NCTA)........................................................................................................... 19

Invest Durban ........................................................................................................................................................................IFC

Ivanhoe Mines..................................................................................................................................................................54-55

Kemtek.............................................................................................................................................................................77, OBC

National Metrology Institute of South Africa (NMISA)................................................................................... 7

Oceana..................................................................................................................................................................................34-36

Petroleum Agency SA.................................................................................................................................................64-65

Pilanesberg Platinum Mines...................................................................................................................................50-51

South African Bureau of Standards (SABS)............................................................................................................. 5

South African Mohair Industries Limited (SAMIL)....................................................................................42-43

South African National Space Agency (SANSA).......................................................................................14-15

Vedanta Zinc International......................................................................................................................................52-53

SOUTH AFRICAN BUSINESS 2021 88

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