Special Economic Zones (SEZs)

The Eastern Cape is home to two special economic zones, Coega which is located in Nelson Mandela Bay and the East London IDZ, which is based in Buffalo City (East London).

These zones, which are intended as an economic tool, operate under the Special Economic Zones Act (Act No 16 of 2014) which enables the establishment and operation of an SEZ. This allows a SEZ implementation site to configure and apply the SEZ development tool in a variety of ways.

SEZ programming aims to identify develop and apply special arrangements and support systems – which include incentives, business support services, streamlined government approval processes and the construction of enabling infrastructure – to drive for a range of desirable developmental outcomes.

 

These include:

  • enhanced domestic and regional industrial demand
  • increased foreign direct investment
  • strategically strengthened export promotion to rapidly growing economies
  • a generally strengthened South African industrial base
  • the intentional promotion of a labour-absorbing industrialisation path.

 

Coega

Coega is a 11,500 hectare (ha) industrial complex which includes the transhipment port of Ngqura, offers a location for strategic investment with clear economic advantages.

It also includes the 216 ha Nelson Mandela Bay Logistics Park (NMBLP) in Uitenhage, an area which provides infrastructure and support services to the automotive manufacturing industry, thus reducing costs and improving suppliers’ competitiveness.

The Coega IDZ is demarcated into 14 zones, with the following sectors:

  • Metals/Metallurgical
  • Automotive
  • Business Process Outsourcing (BPO)
  • Chemicals
  • Agro-processing
  • Logistics
  • Trade solutions
  • Energy
  • Maritime

 

Now considered to be the most successful SEZ in Africa, the SEZ has 40 operational investments with a cumulative investment value of R6.996 billion. Another 22 investments are underway.

Investors include Beijing Automobile International Corporation’s (R11 billion) which has already begun site preparation of its 85,000 sqm manufacturing plant, the R3,5 billion 342 MW Dedisa Peaking Power station

Together with the wind farm, other investment spinoffs for other energy projects, include the gas to power plant, with an allocation of 1 000 MW and an estimated investment value of R25 billion. In addition, during the period under review, CDC concluded a MoU with Eskom to commence discussions to cooperate in the development of South Africa’s nuclear new build programme (NNBP), specifically to build local capacity through supplier development and localisation.

The metals and manufacturing sector of the Coega IDZ has grown in stature. The sector will soon roll out three new investment projects.

These include a R650 million manufacturing cement grinding plant, a R71 million ready mix concrete plant, and a R350 million Gas Cylinder Plant. Other major investors in the IDZ include a lighting plant, logistics operators, green energy companies and agro-processors. Similarly, an increasing number of shipping and logistics-related investments, including National Ship Chandlers, MSC SA and Vector Logistics

 

Coega Commercial Services offers the services to investors:

– Recruitment and selection, training and development, staff development services for investors in the IDZ, and social facilitation, through Coega Human Capital Solutions

– Business and leisure travel-related solutions (including accommodation and car hire) through Coega Corporate Travel providing seamless and cost effective travel management solutions. CCT hold an IATA accreditation, a seal of approval recognised worldwide

– Consulting services providing fully scalable suite of integrated management consultancy and turnkey solutions through Coega Business Solutions

– ICT services by Coega Telecoms enhancing the Coega IDZ telecommunications services

– Accommodation and conferencing at the Vulindlela Accommodation and Conference Centre.

 

The East London IDZ

The East London IDZ is home to 26 investors and includes the Science and Technology (STP) pilot park with established three incubators.

The Berlin industrial area on the N2 located near East London offers different land configuration and natural resource and connectivity potentials. The zone is interested in using this land to support emergent sectors of importance to the provincial economy, including renewable energy generation and manufacturing.

Due to the close proximity with Mercedes Benz South Africa (MBSA), the ELIDZ hosts a number of the MBSA component suppliers

Most recent investments include an approximately R80m in the pharmaceutical sector with potential, R590m in the ICT sector, R12m in the logistics sector with a potential of 38 jobs and R378m in the manufacturing sector.

Three incubators are now established at the ELIDZ STP.