Name and Location
Coega industrial development zone (IDZ), Eastern Cape, South Africa.

Client
Coega Development Corporation (CDC).

Project Description
The project is a multibillion-rand initiative, comprising an IDZ and a deep-water port at Port Elizabeth.

The initiative aims to position South Africa as a platform for global manufacturing and export through foreign and local investments.

Value
The IDZ has an overall pipeline of projects valued at about R140-billion.

Duration
Phased development of about 30 to 50 years.

Latest Developments
The CDC secured R1.84-billion in ten new investments in the 2013/14 financial year, becoming the first industrial development zone (IDZ) on the continent to attract a double-digit portfolio of investors in a 12-month period.

The corporation states in its integrated annual report that the results depict an organisation on a strong growth trajectory, delivering on its mandate to attract local and foreign direct investment to the Coega IDZ and driving socioeconomic development in Nelson Mandela Bay and the Eastern Cape.

The CDC’s self-generated revenue grew by 29% year-on-year to R383-million and, for the first time since its inception, self-generated revenue exceeded State funding by 12%.

Total revenue, which comprised State funding and self-generated income, increased from R673-million in 2012/13 to R725-million for the period under review, representing year-on-year growth of 8%.

Among the ten new investors were Smart South Africa and Qtech Moulding, , which invested R400-million and R23-million respectively in the automotive sector; Digistics and ID Logistics, which invested R20-million and R35-million respectively in the logistics sector; Afrox and Ulba Tantalum Africa, which invested R300-million and R200-million respectively in the in the chemicals sector and the No 1 Corporation, which invested R40-million in agroprocessing.

The IDZ’s renewable-energy sector, meanwhile, received a R127-million injection from the Powerway/Sungrow joint venture (JV) and a R666.6-million cash boost from the Powerway/JA Solar JV.

By the end of the 2013/14 financial year, the CDC had 25 operational investors with several other projects, valued at R3.3-billion, under construction in the IDZ, and was forecast to reach 30 operational investors by the end of the 2014/15 financial year.

In addition to the successes in investment promotion, the CDC contributed to job creation and skills development over the year, from which 16 131 individuals benefited directly and indirectly from employment as a result of Coega IDZ and other infrastructure projects.

The CDC also trained 14 441 people in critical skills needed for various industries, particularly artisans, and invested more than R17-million in community projects.

The organisation is forecast to increase its community social investment to R21-million in 2014/15, in line with its vision to be a catalyst for socioeconomic growth, says CDC marketing and communication head Dr Ayanda Vilakazi.

Meanwhile, small, medium-sized and microenterprise (SMME) development remained a strategic priority on the 2013/14 financial year agenda.

The CDC achieved a 37.9% SMME participation and involvement rate, and the value of SMME development projects awarded in the year under review was R76-million.

The CDC further entrenched itself during the year as an implementing agent for major construction projects in the province, with a portfolio of 74 infrastructure projects worth R4.7-billion in its external programmes division. 

According to CDC business development executive manager Christopher Mashigo, the CDC is operating within a new context, largely as a result of the enactment of the new Special Economic Zone (SEZ) Act and the end of a five-year rolling strategy in 2013/14.

Mashigo adds that the future growth of the IDZ will largely depend on allocations from the SEZ Fund and the work of the centralised SEZ investment promotion unit.

The CDC’s external services division will continue to be strengthened as it continues to pursue IDZ investments.

To date, the corporation has projects in negotiation stage that are valued at R8.1-billion and those under feasibility stand at R116.3-billion.

The total investment portfolio amounted to R151-billion as at March 2014 and was expected to reach R200-billion within the next two years.

Key Contracts and Suppliers
Operational investors:
Coega IDZ: Coega Concrete Product (construction); Dynamic Commodities (food processing); UTI Couriers (automotive); Cerebos (chemicals); EC Biomass (energy); PE Cold Storage (logistics); Digistics (agroprocessing); Accoustex (automotive); Electrawinds (energy); General Motors Pan African Distribution Centre (logistics); Innowind (renewable energy); Cape Concentrates (agroprocessing); Universal Wind (energy); Coega Dairy (agroprocessing); Kuehne and Nagel (automotive); AP Moeller South Africa (logistics) and Discovery Holdings (BPO).

Nelson Mandela Bay Logistics Park (NMBLP):
Faurecia (France); Rehau (Germany); Grupo Antolin (Spain); Benteler (Germany); Inergy (French); Hella (Germany); MSC (container depot); Inergy (manufacturing); Benteler (automotive).

Committed investors - not yet operational:
Agni Steel (metals); FAW (automotive); GDF Suez (energy); EAB (energy); Tyre Energy Extraction (energy); OSHO Cement (chemicals); Famous Brands (logistics); DCD Wind Towers (energy manufacturing); Afrisam (cement); Golden Era (packaging).

On Budget and on Time?
Yes.

Contact Details for Project Information
CDC head of marketing and communications Ayanda Vilakazi, tel +27 41 403 0400, fax +27 41 403 0401 or email Ayanda.Vilakazi@coega.co.za.