The IDZs

Industrial Development Zones (IDZs) are purpose-built industrial estates geared for duty-free production for exports, and they play a hugely important part in South Africa’s macro-economic policy. They provide transport, logistics and business services tailored for export-oriented industries.

The Eastern Cape is leading the way. The province’s two IDZs, at Coega and East London, are far further down the line than any other IDZ in the country. Both have been granted operators’ permits, and investment is flowing in. Both are next to airports and seaports, and have direct road and rail links. Both IDZs are developing automotive production clusters linked to the strong and expanding industry already established in the Eastern Cape.

Through its IDZ programme, the national Department of Trade and Industry aims to generate sustainable local and foreign direct investment while creating jobs, encouraging skills and technology transfer, encouraging development of small, medium and micro-enterprises, and increasing foreign exchange earnings. The IDZs offer prime, reasonably priced industrial land with easy access to a harbour, airport, rail and road. Service costs are very competitive.

The Coega and East London IDZs offer sophisticated infrastructure; low land costs; easy access to skilled and competitively-priced labour; low energy costs; fast-track construction; compliance with international quality, health and environmental standards; and a clustering of industries for efficiency and to reduce costs.

Investors also benefit from direct cost savings and operational efficiencies. Each IDZ offers a central Customs Secured Area (CSA) that is deemed to be outside South Africa for customs purposes. This allows companies in the IDZs to import raw materials and inputs to be used for export goods, duty-free. Exports from the IDZs are VAT-free if goods and services are sourced from South African customs territory. The CSA is complemented by an adjacent industrial and services area for supplier industries.

Investors in the IDZs can also qualify for the range of national incentives from the Department of Trade & Industry, including the Strategic Investment Programme, the Small Medium Enterprise Development Programme, the Critical Infrastructure Facilitation Programme and the Skills Training Programme [link to …..].

The Coega Industrial Development Zone

The 11 000ha Coega, near Port Elizabeth, is South Africa’s largest IDZ. The multibillion-rand industrial park is adjacent to, Ngqura, the new dedicated deep-water port with purpose-built container, bulk and break-bulk terminals.

Coega is notching up success after success. In the past financial year alone, eight new investors signed up to take space in the zone. Investments total more than R40-billion and more than 15 000 jobs have been created. Investors include Alcan and SEA-ARK. A strategic Development Framework Plan for the Coega IDZ has been developed focusing on infrastructure development and facilities for the Core Development Area, which covers 6 500 hectares.

Coega is part of the Nelson Mandela Metro, home to a strong and diverse automotive cluster that includes original equipment manufacturers (OEMs) such as General Motors and Volkswagen. The more than 150 suppliers in the area include Goodyear, Bridgestone, Corning, Visteon, Hella, Faurecia, LUK and Johnson Controls. The OEMs and most of the suppliers serve both the local and export markets.

The IDZ and the metro offer many advantages for industries that locate here. One of the most important aspects is that it is mid-way between major markets of the east and west. Coega investors also have easy access to South Africa’s mineral reserves – and are at the centre of shipping routes for ore reserves from different parts of the world.

The Coega Development Corporation provides a one-stop investment service to assist investors with all aspects of setting up business in the zone.

The Coega IDZ focuses on the following sectors:

• Metals/Metallurgical: Ferro chrome; stainless steel; iron and steel slabs; aluminium beneficiation; and metals feb
• Textiles: Flax; wool and mohair, agro-processing
• Automotive: Automotive components; original equipment manufacturers
• Services: Business process outsourcing; call centres
• Chemicals: Organic (petrochemicals); inorganic (chlorine)
• Energy: Alternative energy sources (LNG)

Development of the first five zones is geared towards: light electronics and commercial; automotives; textiles and agro-processing; academic and training; services; and heavy to medium manufacturing.

Contact the COEGA IDZ:

Website: www.coega.co.za

Tel: +27 41 408 4800 / +27 41 507 9111
Fax: +27 41 408 4998
E-mail: contact.centre@coega.co.za

The East London IDZ

East London was South Africa’s first operational IDZ. With its bulk infrastructure finalised, the 430ha greenfields site is now a world-class industrial zone with 11 investors on site. Seven of these investors moved in during 2006/7. Together, they invested R395-million into their operations in the IDZ, bringing the value of investments since inception to R755-million in 2002, and creating 578 direct jobs, bringing the number of direct manufacturing jobs created in the zone so far to 1 118. That is apart from the thousands of construction-related jobs created during the development phase of the IDZ. New investors include Johnson Controls, Feltex and TI Automotive.

The IDZ is located alongside the original equipment manufacturer, DaimlerChrysler South Africa (DCSA). An exciting development at the IDZ was the commissioning and constructing of an automotive supplier park (ASP) – all in a record six months. Many of the new investors are located in the ASP, which streamlines operations and ensures just-in-time and just-in-sequence supplies to DCSA. The manufacturer is now producing the new C-Class Mercedes Benz model for export at the East London factory.

More than 100 fully serviced sites are ready to receive investors. Adequate supply of electricity, water and other related services ensure full steam operations for manufacturers that have already settled in the zone. They have easy access to key local and export markets and are able to enjoy on-time delivery of raw materials. Well positioned close to national road, rail and air networks, as well as the East London Port, the IDZ is strategically poised to provide a highly valuable investment offering to local and international investors.

The East London IDZ focuses on the following sectors:

• Automotives and components: The busy East London Port boasts a state-of-the-art motor vehicle terminal that can load or offload one vehicle every 30 seconds, and the area is building itself as an important hub for the automotive industry. The IDZ has identified a range of further for investors in this sector, including immobilisers, fuel injectors, light and instrument clusters, satellite tracking mechanisms, acoustic systems, plastic mouldings and paintings, door trim panels and centre consoles.
• Marine aquaculture: Established investors include Seatek, an abalone farm
• Agro-processing: Bio-fuels, food and timber processing
• Pharmaceuticals
• ICT and electronics, and business process outsourcing and offshoring

Contact the East London IDZ

Website: www.elidz.co.za
Phone: +27 43 702 8200
Fax: +27 43 736 6405
Email: info@elidz.co.za