A R1,1-billion investment in the Coega industrial development zone (IDZ) — in the form of a chlorine refinery project and desalination plant — was announced on Tuesday.
Straits Chemicals, a joint South-East Asian and South African company, will run the project in the zone in the Port Elizabeth area, Coega chairperson Moss Ngoasheng told reporters in Johannesburg.
About 600 jobs are expected to be created during the project’s construction phase. At full production, the plant will provide about 250 jobs.
Straits director Eric Lim said an ethylene dichloride (EDC) plant is in the planning stages and will be budgeted for separately.
He said the water-desalination plant will partly supply the brine concentrate requirements of the refinery for the production of chlorine, and the EDC plant will use product from the chlorine refinery.
EDC is produced by reaction of ethylene and chlorine and is mainly used to produce vinyl chloride monomer, the major precursor for PVC.
”This demonstrates the excellent example of linking upstream and downstream industries as the Coega IDZ is designed to do,” Lim said.
He said discussions with Asian groups for the establishment of downstream operations are continuing, but he would not name them yet due to confidentiality.
Lim said black economic empowerment partners are involved in the project. He declined to name them, saying it is not the appropriate time.
It is also still being decided how much of the project the empowerment partners will own.
The manufacturing plant will produce a minimum of 200 tonnes of chlorine a day for export.
Once an environmental-impact assessment has taken place, the construction of the plant will start.
He said steps have been taken to start the assessment. Once it is completed, the rule of thumb is that construction takes between 18 and 24 months.
The reason Coega has been chosen as the site is that it is strategically located to serve the growing African markets, Lim said.
Ngoasheng said the investment is located in the Coega IDZ chemicals cluster and is in line with the South African government’s proposed sector-development strategy for the chemicals industry.
He said the announcement confirms the solid economic logic Coega is built on, and momentum is being gained in attracting interest and development in the zone.
Recently, a R1,6-billion Ferrostaal investment on a precision strip mill at Coega was announced. About five months ago, a Belgian investor outlined a R200-million high-end niche textiles investment.
Bicks Ndoni, the acting mayor of Nelson Mandela metropolitan municipality, which encompasses Port Elizabeth, said the city is ”extremely excited” about the investment.
”We believe the debate around whether Coega is happening or not is no longer there. Coega is happening,” he told reporters. ”We are extremely happy that more jobs are going to be created and we believe we are [moving] in the right direction.” — Sapa