A R1.3-billion fabrics manufacturing facility is to be built in Atlantis, in the Western Cape, creating 200 jobs.
Czech company, PEGAS Nonwovens, will build the plant and will train Atlantis residents in the Czech Republic.
Wesgro and Into SA announced the investment at a media conference in Cape Town on Wednesday. It marks the largest single manufacturing foreign direct investment that Wesgro and Into SA have secured since 2011. The investment decision comes after 18 months of negotiations and five due diligence reports.
The construction and installation of the new production line is scheduled to take 30 months. All raw materials used during operations will be sourced locally, while the machines used in the production will showcase state of the art German technology.
“The Western Cape was a natural choice for us when considering our African expansion,” said PEGAS Nonwovens CEO Franticek Rezac.
"Its world class infrastructure and access to the rest of the continent provided us an opportunity we could not pass on.”
Cape Town mayor Patricia de Lille said the investment will build on other developments in the growing Atlantis industrial area. She said there is great potential in the region as it had large tracts of City-owned land, a large labour pool and is strategically located on transport networks.
“This is an investment into the lives of the residents, who will gain greater skills and job opportunities,” she said.
In line with the city’s investment incentives, PEGAS would qualify for the exemption from application fees for land and building plans. Development facilitation fees would also be waived, while development applications would be fast-tracked. The land use application is expected to take three months, with the building plan approval taking five days.
“Once this area is declared a special economic zone (SEZ) by the national government, green technology companies will receive even more benefits, such as a 15% tax break.
“We are still working hard, together with the Department of Trade and Industry, the Western Cape government and Green-Cape, towards the designation of this SEZ so that even more green technology companies will be incentivised to do business here,” said De Lille.
She said getting the SEZ declaration had been a "very drawn-out process" and called on Trade and Industry Minister Dr Rob Davies to speed up the process.
Western Cape Premier Helen Zille, meanwhile, also welcomed the development.
“Major investments like PEGAS are a vote of confidence in the capable State we are building, backed by sound policies for ease of doing business. Our goal is to encourage investment with the least possible red tape.”
She said the Cape Investor Centre would be launched later this year as a one-stop shop for investors to complete local, provincial and national regulatory processes.
“We are also targeting R1-billion in economic savings and benefits by 2019 through our Red Tape Reduction Unit.”
The development follows an investment by Hisense in 2013 to open a R800-million plant in Atlantis, creating 1 000 jobs.