The East London Industrial Development Zone (Elidz), which totals 430ha, is in full operational mode with 14 of its 15 announced investors operating - the highest number of operational investors for a single IDZ in South Africa.

With more than 100 fully serviced sites and R930-million in investments to date, the Elidz is going from strength to strength in encouraging export-oriented growth in the region.

The bulk of current investors are situated in the Automotive Supplier Park, the home for strategic automotive component manufacturers that are first-and second-tier suppliers to Mercedes-Benz.

The park is a key part of the Elidz's plans, in line with which it is currently building a vehicle storage centre for Mercedes-Benz as part of expanding its automotive value proposition.

Elidz chief executive Simphiwe Kondlo said: "The next step in this expansion is the attraction of an original equipment manufacturer to locate to the IDZ. The Elidz is talking to a number of possible investors."

Joachim Follmann, management board member for manufacturing at Mercedes-Benz, said the company received good support from the city when preparing for the introduction of the new C-Class: "This was imperative for our logistics concept with the Elidz. "

According to Follmann, Mercedes-Benz has been involved in discussions about the port's upgrade.

"Over the years we have extensively supported the IDZ, also because the majority of the investments there were as a direct result of our production initiatives."

Follmann explained that the decision to establish a storage facility for imported vehicles was based on two factors: as most of the space in the car terminal is used for the Mercedes-Benz C-Class cars before they are sent to the US, additional parking space was needed for imported vehicles; second, to optimise vehicle dispatching logistics, one dedicated parking area - where all service facilities were on one site, rather than multiple parking areas around East London - was preferred.

Follmann said improved infrastructure for road, rail and the port would help attract other businesses to the IDZ's successful concept.

"As a plant that is competing with other plants internationally, we have to find the most viable options for all elements of our production chain. Unfortunately, we are under severe pressure to reduce our logistics costs. We believe more support from the authorities in this area would certainly assist us immensely - especially in respect of the harbour cost structure, which is not sufficiently competitive compared to other countries. We are satisfied with our current levels of production on the C-Class.

"We have also successfully commenced production of the Mitsubishi Triton and our commercial vehicle and bus production lines are progressing very well," Follmann said.

"We have tremendous activity in the plant and have no further plans on new expansions at present."

With the value proposition for automotives tried and tested, Kondlo said the IDZ was looking at diversifying into other sectors.

Espadon Marine has been driving kob farming technology using recirculating systems, while Seatek has been running a pilot abalone farm for two years.

Wild Coast Abalone at Haga Haga is also in the process of expanding its farm in order to take advantage of the strong demand for abalone from Asia.

Further diversification of the Elidz has a number of positive implications for the local economy, primarily through private sector investment.

"In addition, other than the 4000 directly construction-related jobs created to date, the Elidz has created just over 800 manufacturing-related jobs, and this number is growing by the day," Kondlo said.

He said 79% of the components or products being manufactured in the Elidz are either exported directly to international destinations or indirectly through the export programme of Mercedes-Benz. "This [increases] the volumes going through the port. There is also the increasing revenue base on utilities that is going to the municipality every month from the tenants in the zone," Kondlo said.

The Elidz has recognised the huge challenge of attracting a greenfield foreign direct investment project. "A key feature of 2007/08 was the strategic shift that focuses on working through local companies in order to attract FDI. We believe local companies can best endorse the East London IDZ value proposition.

"This approach not only recognises the role of local companies as a conduit to FDI, but also opens the way for local businesses to benefit through, for instance, the establishment of joint ventures with foreign companies and increasing their access to global markets."