The operations of enterprises in the East London Industrial Development Zone have had a tremendous impact on the broader economy of the Eastern Cape Province.  This is according to a report released in 2016 by Statistics South Africa (Stats SA) which evaluated the ELIDZ’s impact on job creation, export oriented manufacturing and linkages with the local economy.  The report revealed that there were 3435 direct manufacturing and services jobs active in the zone.  This marked a 35% annualised growth compared to a report released in 2014 by Stats SA.
Additionally, enterprises in the ELIDZ had paid R521 million in salaries over a period of 12 months. 

This marked a 91.5% annualised growth compared to the 2014 figures. Speaking about this growth, ELIDZ Chief Operations Officer, Tembela Zweni attributed this growth to increased activity in the ELIDZ.  “During the period there were new manufacturers that became active on our platform, additionally, a number of investors that had already been in the zone increased their production capacity and diversified their customer base”, said Zweni.  He added that job creation was a vital component of the ELIDZ’s mandate.

One of the key highlights from the Statistics SA report is the extent of export oriented manufacturing in the zone.  “The Stats SA report revealed that 36% of the goods manufactured in the ELIDZ during the period of study were for the export market.

A sterling example of this type of manufacturer is Foxtec-Ikhwezi – one of the automotive component manufacturers in the zone.  The company exports 87% of their products to Germany and the United States of America.  Foxtec Ikhwezi recently celebrated 10 years of successful manufacturing in Zone 1F of the ELIDZ and produces aluminium struts for the automotive industry.  The company produces an average of 5 million struts per annum from their facility in the ELIDZ.

One of the key aspects of the ELIDZ mandate is to ensure that the activities in the ELIDZ have backward linkages to other players in the Eastern Cape economy.  The Stats SA report revealed some progress in this regard.  “The report revealed that R3.8 billion worth of manufacturing inputs for zone enterprises were sourced from the local economy.  This is 67% of the total inputs sourced and is indicative of the extent to which the ELIDZ zone activities impact on the broader provincial economy,” said Zweni.

Sundale Dairy, an agro-processing enterprise in the ELIDZ is one of those enterprises that believe in local sourcing and backward linkages with the local economy.  Sundale is a family owned business which was started in 1981 by husband and wife team, Neil and Sandra Rensburg with just a few cattle.  The business has since grown to become the biggest fresh dairy processing plant in the Eastern Cape and one of the most advanced of similar facilities in South Africa.  In July 2010, Sundale opened their R140million highly specialised dairy processing plant in the East London IDZ as part of their strategy to expand their market footprint.

The company, which is now run by Pierre van Rensburg, produces Yoghurt, Butter, Milk, Maas, dairy blend, juice and cheese from their facility in the ELIDZ.  Sundale produces 3 million litres of dairy products a month and sources milk from 14 farms in the Eastern Cape.

“While some of their suppliers are in the Buffalo City area, Sundale reaches farmers from as far as Port St Johns – this means that this facility in the ELIDZ is supporting job creation in Port St Johns,” said Zweni. Zweni was optimistic that the impact of the ELIDZ on the Eastern Cape economy would continue to grow in the next few years.  In just the last year the ELIDZ has signed on new investors with an investment value of just over R800 million and some of these investors were already busy with setting up their facilities in the zone.