M&G Focus on Special Economic Zones

Atlantis SEZ sets the pace for green technology power

The Atlantis Special Economic Zone is powering ahead with an all-inclusive strategy to build a strong power-producing plant, and at the same time it is applying innovative ways to minimise its impact on the environment.

Launched by President Cyril Ramaphosa in December 2018, the Atlantis SEZ is expected to attract R3.7-billion in investments over the next two decades. It is the biggest green technology project of its kind on the continent.

One of the aims of establishing the Atlantis SEZ, said Ramaphosa, was “to unlock the underlying economic value of existing and under-utilised infrastructure through the creation of a green tech manufacturing hub”.

The SEZ is set to create 3 000 jobs on its completion in 2030. Jarrod Lyons, CEO of the Atlantis SEZ company, said it has so far created between 600 and 700 jobs in the few years the project has been in operation.

“So we’re sitting at roughly between 600 and 700 jobs. We’ve got significant time and we are confident that the SEZ will create 3 000 direct jobs, especially if the REIPPP program demonstrates consistency around procurement and reaching financial clout. So the more we are able as a country to demonstrate that there is a large-scale renewable energy programme, which requires manufactured content to be manufactured locally, the easier I think I can say it will be to create those jobs,” said Lyons.

Lyons said in addition they want to see additional job creation, which they believe can be created by affording employment opportunities to people through small-scale, small-enterprise development, among other means.

“So, what the company is doing is we run enterprise development programmes, we run skill development programmes, which are all funded by the Western Cape government. But also, we go out and seek additional funding to fund these types of programmes,” he said.

The Renewable Energy Independent Power Producer Procurement Programme (REIPPP) is aimed at bringing additional megawatts onto the country’s electricity system through private sector investment in wind, biomass and small hydro, among others.

Lyons said the Atlantis SEZ company had already set out to reduce its impact on the environment, even before the COP 26 conference resolutions.

“We aim to have solar panels installed on every single rooftop of every single factory, and the solar panels will provide power to the tenants of our SEZ. We also hope to implement some battery storage technology or energy storage technology,” said Lyons.

He said the SEZ already has a water stewardship programme, which is currently being funded by the German government, and will “end up allowing us to determine the best way to reduce water loss in the park”. 

“What we aim to achieve is also to be a net zero water contributor. Essentially, what that means from our point of view is, the park as a whole will not consume more water than land and its geographical footprint in any given year,” he said.

“You would need to make sure that you have specific technologies in place to recycle as much water as possible. And the same goes for energy, right energy provision by renewables and storage in batteries,” Lyons added.

He said the SEZ, from a waste minimisation point of view, aims to implement projects like the Western Cape Industrial Symbiosis Programme.

The programme, which is funded by the City of Cape Town, “develops mutually profitable links between companies from all industrial sectors, so that under-utilised resources such as energy and water and materials from one company can be recovered, reprocessed and re-used by others. This strategy has several economic and environmental benefits.”

Lyons said the Western Cape provincial government — which has a shareholding in the SEZ company — provides operational funding to facilitate investments and run skills development programmes in the SEZ.

Lyons said the Atlantis SEZ has managed to raise R80-million from the Department of Trade and Industry’s SEZ fund. He said the money would only be used for infrastructure in the Atlanta SEZ such as construction of roads, street lighting, and water and energy utilities. He said these are amenities which investors must have before they locate themselves in a park. 

“So it’s essentially the shell of the park that we’re building for one of our zones. We are split up into three zones, but we’re only focusing our attention on the one zone for now.”
— Lucas Ledwaba, Mukurukuru Media

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Automotive sector powers Eastern Cape SEZs

The East London Industrial Development Zone (ELIDZ) SOC Ltd has netted new investors Ebor Automotive Systems and Auria Automotive Systems — and the expansion of TI Automotive Systems. 

Deputy Minister of Trade, Industry and Competition, Nomalungelo Gina, said the development was interesting in that the three investments are all within the automotive sector and are part of the 16 new investments attracted in the sector since 2018. 

“These investments translate into R3.327-billion worth of private sector investment, with a job creation potential of 2 078 new direct jobs in the Zone. These investors are now operating their facilities in the ELIDZ and have started producing components for the new Mercedes-Benz South Africa (MBSA) C-Class model,” said Gina.

Eastern Cape Premier Oscar Mabuyane said they have no doubt the investors will fulfil their commitment “because they have already created 751 new jobs within ELIDZ.”

“As a platform that is anchored on the auto sector, the ELIDZ is looking at deepening local content by localising the second and third tier car components that are not currently in South Africa. That is a bold, futuristic outlook that we need for our manufacturing sector, and as a shareholder we will support the ELIDZ to realise this strategic objective,” said Mabuyane in his state of the province address.  

Mabuyane said in the past year they have received two new investments from original equipment manufacturers (OEMs). 

“Isuzu invested R1.2-billion, effectively rescuing half of the jobs that were lost when General Motors de-invested in South Africa. Ford Motor Company, on the other hand, has committed to invest R600-million in their plant in Gqeberha for modernising and growing their local operations,” he said.

Mabuyane said the presence of the OEMs has contributed to the growth of automotive supplier networks, which stand at 118, providing more than 55 000 jobs in the province. 

He added that Hive Hydrogen SA chose the Coega SEZ as the location for a Green Hydrogen project that will be fully operational by 2026. 

“The project entails the construction of a R70-billion green ammonia plant, with its own dedicated green power supply. This is a game changer project for our province and the country as it will boost the Coega SEZ’s value proposition platform for sustainable investments.  

“The Coega SEZ has two more projects that will contribute a combined 824 new operational jobs to the economy. One of these investors is Seraphim Solar Cell Manufacturing company, which is investing R362-million into our province to increase the local content of its solar value chain,” Mabuyane said. The second investor is African Port Logistics and Infrastructure, which is investing R300-million in the agro-processing value chain. 

“These are real investments that will benefit the people of our province,” he said. 

Eastern Cape MEC for Economic Development, Environmental Affairs and Tourism, Mlungisi Mvoko, said at a recent event to mark the sod-turning at a carbon black production site at the Coega Special Economic Zone (SEZ) in Gqeberha that the provincial government’s long-term plan is to capacitate the Coega SEZ and the ELIDZ so they are more than just investment locations, but engines of economic growth and employment in the province.

“We shall continue with our giant leap forward to boost the existing potential of these entities to achieve sound industrial development for massive economic growth. By agreement, a targeted focus to achieve this multi-generational objective shall continuously bear its fruits from the foundations we lay today into the future,” he said. — Lucas Ledwaba, Mukurukuru Media

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Limpopo SEZ projects on course

A sod-turning ceremony on the North Site of the multi-million rand Musina-Makhado SEZ in Limpopo is scheduled to take place next month, marking a milestone in the project.

The Chinese-backed MMSEZ, which encompasses two sites, has its operations located in Artonvilla in Musina and Bokmakierie, 50 km south of Musina. 

MEC for the Limpopo Economic Development Environment and Tourism (LEDET) Thabo Mokone said during his recent budget vote speech that the environmental authorisation for the South Site of the Musina-Makhado SEZ has been issued.

Mokone further announced that the sod-turning ceremony of the North Site of the Musina-Makhado SEZ “will take place in May 2022”.

The proposed 1000MW solar plant is set to be one of the biggest solar energy plants in the world.

Lehlogonolo Masoga, Chief Executive of the Musina-Makhado Special Economic Zone Company, confirmed at a business showcase in Polokwane recently that the SEZ would be powered by solar energy.

“Environmentalists said no [to coal powered stations]. World leaders said no, [so we said instead], let’s reduce our carbon footprint and stop producing energy through coal. We have abandoned that part of the project. We are now focusing on solar,” Masoga stated. 

Steering away from the initial plan of having a coal-powered plant, the move to solar energy is projected to decrease greenhouse gas production by 20 metric tonnes per annum.

The use of this kind of renewable energy contributes not only to reducing the hazardous effects of climate change; the solar plant is also expected to produce cheap electricity. 

In his address to the nation last week, President Cyril Ramaphosa reiterated the importance of South Africa to heed the call of mitigating the extent of climate change.

He stated that the increasing frequency of extreme weather conditions was a tragic reminder of climate change. 

“We need to increase our investment in climate adaptation measures to better safeguard communities against the effects of climate change,” Ramaphosa said. 

In line with minimising negative environmental effects, the SEZ state-owned company has committed to upgrading high-efficiency and low-emission power generation technology to ultra-supercritical technology, reducing the number of fauna and flora to be relocated, retaining most of the affected protected trees, and integrating a water recycling system. 

Limpopo Premier Stan Mathabatha noted in his state of the province address in February that progress at the Fetakgomo Tubatse Special Economic Zone was at an advanced stage.

He emphasised the FTSEZ’s contribution to job creation, saying that the completion of the designation will contribute highly to employment creation.

“Already 21 companies, with a potential to invest R45-billion and create over 8 000 jobs have shown interest in the Fetakgomo-Tubatse SEZ,” Mathabatha said. 

The first phase of the FTSEZ, which covers 316 hectares, will incorporate the expansion of a previously existing industrial hub and focus on building a mining-input-supplier precinct.

Mathabatha declared that the environmental authorisation of the MMSEZ would unlock huge opportunities for the provincial economy. 

“In December 2021, the Musina-Makhado SEZ secured an investment commitment for the first phase of the energy generation project to install a multi-billion rand 1 000MW solar power plant to support the metallurgical complex,” Mathabatha said.

The Environmental Impact Assessment (EIA) report by EnviroXcellence Services allows for the clearing of limited vegetation for the construction and installation of bulk services infrastructure and fencing of the Southern Site of the MMSEZ.

Through the influence of stakeholder and public participation processes, the MMSEZ has reduced its development footprint from 8 000 hectares to about 3 500 hectares and has reduced the size of the power plant from 3 300MW to 1 320MW. 

The EIA Report notes that the initial supply of water to the Southern Site of the MMSEZ will rely on an agreement with the Zimbabwean Water Authority to supply water, which is also set to increase the supply capacity of the Nzhelele Dam.

The MMSEZ will receive supply by extracting groundwater at a rate of 18-million cubic metres a second to ensure sufficient water supply. 

The construction of the Musina Dam will act as a long-term solution to the area’s water woes, which will draw floodwater off the Limpopo River. 

Thousands of sustainable jobs will be created from the building of a coke plant and a 390MW waste-heat power plant, together with other factories, which include a steel plant and a metallurgical lime plant. 

MEC for Limpopo Economic Development Environment and Tourism (LEDET), Thabo Mokone said in his budget vote speech earlier this month that progress on SEZs in Limpopo was at pleasing levels.

“In support of the SEZ work, we are working with the Border Management Agency to implement the One-Stop Border Post in an attempt to reduce delays at the border gate. This initiative is meant to support easy access to the SADC export market and the SEZ will benefit from it,” Mokone said.
— Mokgadi Mogy Mashako, Mukurukuru Media

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Special Economic Zones bring hope to unemployed youth

Maakgoba Hlakudi, who hails from Mohlaletsi village in the Sekhukhune district, is excited at the potential of work opportunities that Limpopo’s Fetakgomo-Tubatse Special Economic Zone will bring to unemployed youths like her. 

Hlakudi, 23, who grew up with her parents using farming to supplement the household income, says that most of the people in her area are well versed in what kind of farming is best to run sustainably.

“For people my age, the idea of agricultural development can assist us in making money on a bigger scale than what is currently taking place in our communities,” said Hlakudi.

She highlighted the fact that most youth who have learnt the art of subsistence farming from older generations would benefit greatly from capacity-building programmes when they become available through the SEZ’s activities.

“It wouldn’t be that they are starting from scratch. We may have no education to back us, but we surely have the experience and will benefit from resources, backing and other forms of support,” Hlakudi added. 

Aubrey Malovhela from Nzhelele in the Vhembe district said that it was imperative that the youth understand and take advantage of the opportunities that the Musina Makhado SEZ offers. 

“I think the SEZ will bring infrastructure development and address the issue of unemployment, which is a real issue that the youth is facing at the moment,” said Malovhela.

“It’s important not only to look for jobs, but to also have an open mind in terms of applying ourselves as business people, with the goal of also employing others, and I believe through this mega project, most dreams of this nature can become a reality,” Malovhela said.

Chairperson of the South African Youth Council in Limpopo, Khomotso Mangwale, said that the potential of the mega projects offer a glimmer of hope to the youth in the province. 

He reiterated that if researched well enough, government could include the services of the youth to offer oversight and monitoring services.

“The SEZs can have a positive impact on the lives of unemployed youngsters in the province; they can benefit from skills development initiatives and small enterprises can take advantage of the opportunities created,” Mangwale said. 

Mangwale believes the youth can contribute in planning the industrialisation initiatives and act as agents against corruption in the SEZs.

Agri Limpopo CEO Diedre Carter said the designated SEZ area may promote national economic growth and exports by using support measures to attract foreign and domestic investments and technologies. 

“As Agri Limpopo we have no inherent problem with the establishment of SEZs; we see many potential advantages of having SEZs and see potential synergies between SEZs and the agricultural and agro-processing sectors,” Carter said. 

She said she looks forward to working together with the government in ensuring long-term access to water and an efficient environment to enable farmers to be competitive in the global market. 

“In fact, we have proposed that the MMSEZ could be turned into a viable and more sustainable agrarian SEZ, in which vast tracts of under-utilised and barren land could be turned into viable farming units, with a strong empowerment component and an emphasis on exports,” Carter said. 
— Mokgadi Mogy Mashako, Mukurukuru Media

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SEZ project to lead govt’s long-term economic development

Special Economic Zones (SEZs) can help the country overcome the economic slump brought about by the Covid-19 pandemic, as the government repositions itself for long-term industrial and economic development.

This is what Deputy Minister of Trade, Industry and Competition, Nomalungelo Gina, told a recent meeting of CEOs of the SEZs, adding that government needs more investments, more jobs and more GDP growth. 

“It is SEZs that can act as a flywheel to catalyse these efforts for the country,” Gina said.

There are currently 10 designated SEZ projects in the country, spread across seven provinces.

Gina said government is repositioning itself for a long-term industrial and economic development. She said the Special Economic Zones (SEZs) Programme is among the strategic interventions identified to achieve this.

The SEZs include specifically targeted economic activities, supported through special arrangements (which include laws, regulations, incentives) and systems that are different from those that apply in the rest of the country, she said.

“Special Economic Zones seek to create a sustainable environment for foreign and domestic direct investment and build sector-based industries, which will help the South African economy to develop its strategic industrial capabilities and industrial capabilities. The Special Economic Zone (SEZ) Programme serves as a key policy initiative underpinning spatially integrated industrial development, particularly in the context of unlocking or optimising South Africa’s comparative and competitive advantages,” she said.

Gina said the SEZ Programme has now entered a full implementation phase, with designated SEZs continuing to show positive progress in terms of the number of investors operating in the zones. 

Fikile Majola, also Deputy Minister in the Department of Trade, Industry and Competition, said in the 2020/21 annual report that by the end of that financial year the SEZ Programme had managed to attract 145 operational companies, with an estimated investment value of R20.2-billion, and a cumulative growth of R2.6-billion, since 2019/20.

“It furthermore attracted 83 secure but non-operational investors, with a reported investment value of approximately R38.5-billion capable of contributing about 8 078 additional direct jobs,” he said.

Majola addressed a sod-turning event to launch a carbon black production site at the Coega Special Economic Zone (SEZ) in Gqeberha this week. 

The carbon black project is a partnership between the DTIC, the Coega Development Corporation (CDC) and Orion Engineered Carbons (OEC) — a local producer of carbon black — and Transnet National Ports Authority (TNPA). Carbon black is mainly used as a reinforcing filler in tires and other rubber products; in plastics, paints, and inks, carbon black is used as a colour pigment.

Majola urged more businesses in the country to look out for these opportunities and take advantage to ensure positive spin-offs for economic recovery efforts. He commended all partners involved in the new initiative, saying their interventions not only made it possible to retain the 120 jobs, it revealed the economic potential of Orion Engineered Carbon project.”

He said the manufacturing sector contributes about 14% to the GDP and therefore this project will play a fair share in contributing to the country’s manufacturing and export sectors. 

“Furthermore, the fact that the construction of the storage facility and associated infrastructure will enable the creation of approximately 150 additional jobs (50 in the construction phase, and 100 jobs during the operational phase of the project) is highly appreciated. This is proof that coordinated efforts across the different spheres of government and the private sector can effectively realise the investment pipelines required,” Majola said. — Lucas Ledwaba, Mukurukuru Media