Comment and Analysis

Coega industrial zone is a thriving hub of jobs and investment

Ayanda Vilakazi

The Coega Development Corporation would like to address issues raised in the article "Still waiting for new jobs".

The Coega Development Corporation  would like to address issues raised in "Still waiting for new jobs" (Business, October 26 to November 1). Contrary to your report, the Coega industrial development zone has attracted large-scale investment in the first half of the current financial year. There have been three major investments at the development corporation since April:

  • A R634-million investment by AfriSam to establish a greenfield cement milling and blending plant in zone five of the development zone, creating 400 jobs in the construction phase and 90 jobs in the operation phase;  
  • The partnership of Famous Brands and the Coega Dairy Company will see the latter expanding its operations to supply cheese products to the group. A joint valued investment of R45-million will pour into the development zone. The dairy has created 40 permanent jobs. The joint venture is set to create 49 jobs in the new cheese company and five more in the existing dairy; and
  • APM Terminals invested R25-million in the first phase and R50-million for a full-service depot for shipping lines and cargo owners, creating 20 full-time jobs and space for about 15 seasonal workers. There will be opportunities for local service providers to benefit from the investment.

During the 2011-2012 financial year, seven new investors committed to the development zone and the Nelson Mandela Bay logistics park – more than the targeted number. They are GDF Suez (energy) with R2.7-billion, EAB (renewable energy) with R270-million, First Automobile Works with R600-million, DCD Dorbyl (energy components manufacturer) with R100-million, Tyre Energy Extraction (logistics) with R30-million, Osho Cement (metals) with R380-million and the Newco Cheese Factory (agro-processing) with R30-million.

The latest figures will only be available at the end of March, but 8898 jobs were created in the 2011-2012 financial year. Small, micro and medium enterprises got a 31% overall share of procurement. The development corporation trained 10826 people as part of its human capital development programme in the financial year. The corporation created 6875 construction jobs, 3484 permanent industrial development zone jobs and 44786 indirect jobs since inception. It has also trained 25586 people as part of its skills development programme.

Feasibility studies
The industrial development zone is home to 21 operational investors that have invested R1.2-billion, a further R7.5-billion is at the implementation phase and projects worth R8.1-billion are being negotiated. Projects worth R116.3-billion are the subject of feasibility studies. This number of investments over 13 years is a testament to delivery. They show the industrial development zone is a highly competitive offering.

Other investments are in the pipeline. Chinese vehicle manufacturer First Automobile Works will invest R600-million. The truck plant, the first phase of the company's development in the industrial development zone, is expected to produce 5 000 trucks annually. It is expected to create more than 1000 jobs initially and more when it starts production of an additional 30000 passenger vehicles annually during phase two.

Business process outsourcing is also growing as a result of Discovery Health situating its service centre in the development zone. Figures show a sustained rise from a staff complement of 60 when the centre opened to 336. It is expected to grow to 400 by the end of this year.

Coega remains South Africa's most successful industrial development zone. In 13 years, it has become one of the biggest drivers of the Eastern Cape's economy and job creation in the region. The development zone contributes an estimated 5.9% to provincial gross domestic product and 0.5% to the national GDP, a figure the Coega Development Corporation would like to enhance.

Ayanda Vilakazi is the Coega Development Corporation's head of marketing and communication

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