The Coega Development Corporation (CDC) plans to start construction of Phase 1 of a R86-million agroprocessing multi-user facility in March at the Coega industrial development zone (IDZ) in Nelson Mandela Bay.

In a statement on Wednesday, the CDC said the agroprocessing multi-user facility was expected to enable small, medium-sized and micro enterprises (SMMEs) and larger more established companies to expand their processing and value-addition activities in the Eastern Cape.

The development would include three possible phases, creating a complex of about 30 000 m² when completed. The 7 800 m², Phase 1 facility, to be built on 7 ha of land in Zone 3 of the IDZ, would comprise smaller units of between 350 m² and 1 500 m² under one roof with shared communal infrastructure.

CDC head of marketing and communications Dr Ayanda Vilakazi believed the project would create significant advantages, particularly for SMME’s in agroprocessing, through the provision of shared infrastructure, adding that  funding for the project was sourced from the Department of Trade and Industry (DTI).

“The multipurpose facility is in line with the DTI’s Industrial Policy Action Plan. It is expected to lead to a substantial increase in investment in the agroprocessing and light industry arenas, which could result in increased production, job creation and diversification of the sector.

“Agroprocessing companies are, in general, high direct job creating entities with numerous up- and downstream employment opportunities. A good example is Dynamic Commodities in Zone 3 of the Coega IDZ which created 1 300 direct jobs using 3 500 m² of factory space,” highlighted Vilakazi.

Meanwhile, there had been interest in the Coega IDZ and Eastern Cape as an agroprocessing investment location, noted CDC agroprocessing business development manager Dr Keith du Plessis. “We are currently in talks with several domestic and international investors that have expressed interest.”

He noted that these prospective investors were involved in the processing of coffee, cereals, confectionaries, proteins and energy supplements, and animal feeds.  There had also been interest from companies in the biofuels sector.

Investment interest was driven by the drastic cost reductions offered by clustering and shared infrastructure, such as loading areas and information and communication technology, but also other economic and geographical advantages, Du Plessis stated.

“Enhanced integration into the supply chain, proximity to the deep-water container handling terminal of the Port of Ngqura for global exports and access to transport for just-in-time delivery to domestic markets is further driving investment interest in the Coega IDZ.”

Du Plessis added that the Coega IDZ was strategically located in the Western Region’s diverse agricultural economy which had 20 ideal agroprocessing products and crops such as citrus, deciduous fruits, dairy, vegetables, livestock, honeybush tea and aquaculture produce.

The CDC was already home to several operational agroprocessing ventures and food packaging, storage and logistics companies such as Coega Dairy, Famous Brands, PE Cold Storage, Vector Logistics, Digistics, ID Logistics and Dynamic Commodities.