A study assessing an investment promotion strategy for the Eastern Cape, commissioned by the Eastern Cape Development Corporation (ECDC) points, unsurprisingly, that the automotive industry and many sub-contracting opportunities into this sector “appears to be an obvious investment choice for the province, not least due to government’s long-term commitment to a continuation of the Motor Industry Development Programme (MIDP)”.

Sub-supplies into the automotive industry, it adds, “potentially reach very far into sectors” such as steel, stainless steel, casting, leather manufacturing, producers of up-market automotive parts like steering wheels made from a combination of stainless steel, leather and wood, and aluminium wheels and rims.

“The companies to target will be trans-nationals operating in this industry, typically operating out of the UK, Germany, the USA and Japan.”

The study also suggests that the emerging tourism industry and related hospitality infrastructure together with South Africa’s growing importance as a tourist destination offer “potential opportunities, particularly in the medium term.

“A focused development of integrated tourism products and related infrastructure will serve as a base for the promotion of foreign direct investment in this sector,” the study notes, adding that trans-nationals in this sector generally operate from countries from which the largest streams of tourists visit South Africa such as the UK and Germany.

Another “worthwhile” sector which has the possibility of attracting medium-sized investments is pharmaceuticals which may be able to leverage off the skills and development initiatives of some of the smaller bio-tech companies along the Garden Route.

“Given that the Eastern Cape is already home to the largest South African generics producer, this is important in that it demonstrates to potential investors from Indian and Brazil, for example, that location in the Eastern Cape may be worthwhile to them.

The corporation says that it is in the processing of researching the challenges and opportunities of the province’s ICT sector.

“The investment promotion strategy should therefore consider the specific locational advantages that the Eastern Cape offers – proximity to port and airport facilities and how they link to the major transportation hubs, and skills availability.”

With many of the “developmental effects” such as job creation and economic growth flowing from increased exports as well as FDI, the study concludes that: “it appears to be easier to grow exports from South Africa than to attract FDI”, which has been the focus of the ECDC.