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Coega expects first tenants to sign next year
Posted on: Thursday, 02 December 2004. Article source: The Herald
With more than R38 billion worth of possible investment in the pipeline, Coega’s bosses are confident 2005 will see the industrial development zone (IDZ) sign up its first tenants.
About 58 investors across a range of industries, including warehousing and logistics, are looking at investing in the IDZ, said the Coega Development Corporation’s (CDC) executive manager of infrastructure development, Kelly Byrne.
About R20 billion of the potential investment is at what the CDC describes as a “hot” advanced feasibility or pre-feasibility stage, while the other R18 billion is still at a “cool” level.
Byrne said while some of these potential investments might not come to fruition, even if only 50 per cent signed up, this would be “significant”.
With almost all of the infrastructure in phase one of the project complete, investment promotion is now the CDC’s core business, but the largest single investment – the R12 billion aluminum smelter – remains elusive.
French-Canadian aluminum giant Alcan has promised a final decision of the much-anticipated plant in the last quarter of next year, after it has re-examined different technologies.
Although Alcan’s takeover of Pechiney and its decision to revisit the viability of the project had set the time frames back, Byrne and CDC chief executive Pepi Silinga, remained hopeful.
“We are getting optimistic vibes,” Byrne said of the talks on the deal taking place between Alcan and the department of trade and industry.
The CDC remained in regular contact with Alcan’s technical team and delegations from the company were still visiting Port Elizabeth. If a positive decision was made next year, Alcan would aim to produce their first metal by 2008, said Byrne.
Far from being disappointed at the delay on the smelter, Silinga said it would have been “a fatal flaw” if Coega had already secured such an “anchor” tenant as all the infrastructure would have been skewed to this investor’s needs.
“Instead it (the delay on the smelter) has forced us to look at (other) investors on their own, regardless of their size.
“Our prospects are focused on signing an investor in 2005,” he said. “The IDZ is open for business.”
Other major investments that are at an advanced stage include a R2,6-billion ferro-nickel plant, an electro manganese dioxide plant (R535m), a steel billet plant (R400-million), an aluminium capacitator (R400m) and textile investments (R260-million).
“A critical mass is building up and there are clear indications that pretty soon the supply of services (into the IDZ) will be demand driven,” Byrne said.
The metals and metallurgical area remains a top priority, with the CDC looking specifically at attracting investors in ferro-manganese, ferro-nickel and stainless steel sub-sectors.
Other priority sectors include downstream aluminium, tooling equipment, automotive components and textiles, specifically natural fibres such as wool, mohair and flax. Coega is also still in the running to become the new home for mature textile businesses in Italy and Portugal.
In the metals sector, Coega emerged as a more profitable processing location than other investment destinations such as China, Russia and Australia.
Spoornet, meanwhile, is due to complete a study on the viability of upgrading the line between Sishen and Coega by April next year.
With the new port due to welcome its first vessel in the last quarter of next year, the CDC needed to be ready to support the harbour with warehousing and logistics infrastructure.
The construction of the first office block will begin next year and the first tenants are likely to be freight forwarding companies and customs officials, said Byrne.
Light manufacturing investors in zone two of the IDZ include a plant building reefer containers and another company building modular homes, both fed by a strip mill in the zone.
Automotive component manufacturing would not be in competition with similar capacity-building in the Uitenhage-Despatch Development Initiative since most of this was downstream of Volkswagen while the Coega investment in this sector would look at feeding a range of car makers, said Silinga.
About 58 investors across a range of industries, including warehousing and logistics, are looking at investing in the IDZ, said the Coega Development Corporation’s (CDC) executive manager of infrastructure development, Kelly Byrne.
About R20 billion of the potential investment is at what the CDC describes as a “hot” advanced feasibility or pre-feasibility stage, while the other R18 billion is still at a “cool” level.
Byrne said while some of these potential investments might not come to fruition, even if only 50 per cent signed up, this would be “significant”.
With almost all of the infrastructure in phase one of the project complete, investment promotion is now the CDC’s core business, but the largest single investment – the R12 billion aluminum smelter – remains elusive.
French-Canadian aluminum giant Alcan has promised a final decision of the much-anticipated plant in the last quarter of next year, after it has re-examined different technologies.
Although Alcan’s takeover of Pechiney and its decision to revisit the viability of the project had set the time frames back, Byrne and CDC chief executive Pepi Silinga, remained hopeful.
“We are getting optimistic vibes,” Byrne said of the talks on the deal taking place between Alcan and the department of trade and industry.
The CDC remained in regular contact with Alcan’s technical team and delegations from the company were still visiting Port Elizabeth. If a positive decision was made next year, Alcan would aim to produce their first metal by 2008, said Byrne.
Far from being disappointed at the delay on the smelter, Silinga said it would have been “a fatal flaw” if Coega had already secured such an “anchor” tenant as all the infrastructure would have been skewed to this investor’s needs.
“Instead it (the delay on the smelter) has forced us to look at (other) investors on their own, regardless of their size.
“Our prospects are focused on signing an investor in 2005,” he said. “The IDZ is open for business.”
Other major investments that are at an advanced stage include a R2,6-billion ferro-nickel plant, an electro manganese dioxide plant (R535m), a steel billet plant (R400-million), an aluminium capacitator (R400m) and textile investments (R260-million).
“A critical mass is building up and there are clear indications that pretty soon the supply of services (into the IDZ) will be demand driven,” Byrne said.
The metals and metallurgical area remains a top priority, with the CDC looking specifically at attracting investors in ferro-manganese, ferro-nickel and stainless steel sub-sectors.
Other priority sectors include downstream aluminium, tooling equipment, automotive components and textiles, specifically natural fibres such as wool, mohair and flax. Coega is also still in the running to become the new home for mature textile businesses in Italy and Portugal.
In the metals sector, Coega emerged as a more profitable processing location than other investment destinations such as China, Russia and Australia.
Spoornet, meanwhile, is due to complete a study on the viability of upgrading the line between Sishen and Coega by April next year.
With the new port due to welcome its first vessel in the last quarter of next year, the CDC needed to be ready to support the harbour with warehousing and logistics infrastructure.
The construction of the first office block will begin next year and the first tenants are likely to be freight forwarding companies and customs officials, said Byrne.
Light manufacturing investors in zone two of the IDZ include a plant building reefer containers and another company building modular homes, both fed by a strip mill in the zone.
Automotive component manufacturing would not be in competition with similar capacity-building in the Uitenhage-Despatch Development Initiative since most of this was downstream of Volkswagen while the Coega investment in this sector would look at feeding a range of car makers, said Silinga.
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