Grant Adlam
Grant Adlam



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KwaZulu-Natal (KZN) Overview 2007- Grant Adlam

2007-07-19

Accordingly, growth and investment in the corridor between eThekwini and Umhlatuze is focusing primarily on development opportunities being presented as part of the La Mercy/ Dube Trade Port Development. The region will offer a first world infrastructure, along with a superior quality of life as it evident in the many residential complexes being built, together with a relatively low cost of living.
The node traverses the north coast through a number of municipalities, which are looking at creating opportunities for linking and strengthening the second and first economies. One such example is the possible development of the Isithebe Industrial Development Zone. The zone has much implication for manufacturing concerns who will be assured of effective transport to global clients. The zone will create much opportunity for employment and labour is available, which is a win for both the local communities and investors.
The KwaDukuza Municipality is already one of the fastest growing areas in the country. Stretching across the Umhlanga Ridge, Gateway and the La Lucia Office Estate, the area is recognised as South Africa's fastest-growing commercial and residential property development region. It is predicted that the Umhlanga region will be the new heart of the Durban Metro within a few years.
Another key development is Bridge City, which is set to be the catalyst for economic growth in the previously-disadvantaged areas of Inanda, Ntuzuma, KwaMashu and Phoenix. The development is being undertaken as a public private joint venture partnership with the eThekwini municipality and Tongaat Hulett Developments. Building on the success of the River Horse Valley industrial park, substantial interest has already been expressed by investors, particularly the banking sector. The new precinct plans include an extensive regional mixed use Town Centre covering 43 ha of shopping, entertainment, civic buildings, a hospital, magistrates' courts, mixed commercial, office and residential buildings, petrol filling stations and an inter-modal transport facility. The Lower Umfolozi Area (Richards Bay/ Empangeni) Richards Bay is one of the fastest growing industrial areas in the Province and the centre of operations for South Africa's aluminium industry. The region is also home to some of the biggest business
concerns in the country namely Foskor, Richards Bay Minerals, Bell Equipment, Bayside Aluminium and Richards Bay Coal Terminals. The Richards Bay Coal Terminal is instrumental in securing the country's position as the single-largest coal export terminal in the world and Richards Bay Minerals is the largest sand-mining and mineral-processing operation in the world. Tata Steel Tata Steel, rated as the most efficient steel producer in the world, started construction of its ZAR 670 million ferrochrome plant at Richards Bay in the Industrial evelopment Zone at Alton North Area in 2007. Ferrochrome is used in the manufacture of stainless steel and the plant's output will be exported to Tata Steel's existing customers, principally in Asia, Europe and the United States. Tata
Steel is the largest fully integrated chrome manufacturer in India, where its operations extend from chrome mining to beneficiation and the manufacture of ferrochrome for local and international markets. Managing Director of Tata Steel, Mr B Muthuraman, said that the high carbon ferrochrome plant would be "the cleanest in the world" with state-of-the-art production processes.The investment in the Ferrochrome plant well indicates Tata's confidence in South Africa. The plant follows its investments in other industries in the country, most notably the motor
vehicle and telecommunications sectors. Industrial Development Zone
The expansion plans for the Richards Bay Port and the further development
of the existing Industrial Development Zone will promote future growth in the Richards Bay region. The Zululand region is making huge strides in attracting both local and foreign investment. However, the success of the Industrial Development Zone (IDZ) depends on the sustained efficiency of the region's infrastructure. One of the downsides is the current lack of container handling facilities. The Municipality is hoping for buy in from the private sector and through a key marketing drive supported by the government, this could become an reality.
Boardwalk @ Inkwazi In order to accommodate the growing population in the area, Keystone Investments has been approved by the Photograph courtesy of Bell Equipment Umhlatuze Municipality Council todevelop a ZAR 340 million regional shopping mall. The proposed mall, the Boardwalk @ Inkwazi will boast about 65 000 square metres of shops and restaurants, which will place it among the top 20 largest shopping centres in South Africa. This development gives a good indication of the large consumer base, which is a consequence of the development in the region.

eThekwini -Msunduzi -Umgeni
Since the re-instatement of Msunduzi as the provincial capital, the city has done much to develop its self. The economy of the city has become more buoyant, which was confirmed by a 2005 study indicating a 50% growth in turnover by factories over the previous decade. The recent construction of Toyota's ZAR 4,5
million rand new forklift premises is an indication of the industrial growth occurring in the city. The growth in the economy as well as the shortage of affordable and middle-income homes provided the trigger for the development of a ZAR 2 billion eventual small town on a 500 ha site near Ashburton incorporating 4 000 free- standing housing units and a 1 000 unit retirement village. Even so there is much interest in Cato Ridge which is half way between Durban and Msunduzi. It is thought that Cato Ridge will become the "Midrand" of KwaZulu-Natal over the next decade. eThekwini Municipality is considering a number of plans from companies and groups. One plan proposes a housing
development on one side of the N3 from Pietermaritzburg to Durban, at Cato Ridge, and an industrial development on the other. eThekwini Mayor Obed Mlaba has also stated that Durban needs an inland dry port and that Cato Ridge is an ideal venue for such a development. The Umgeni local Municipality is also growing as a popular centre for light industrial activity and residential estates. Plans are afoot for a major development alongside the popular Midmar Dam.

Umhlatuze -Ulundi -Vryheid(P700) Corridor
The development of the Umhlatuze -Ulundi - Vryheid corridor will make a new link between the Richards Bay harbour and Gauteng. One focus has been tarring the road between Ulundi and the Cengeni Gate of Umfolozi Game Reserve. The new road opens a major development corridor in a large rural area to the west of the Hluhluwe- Umfolozi park covering several communities. The road not only improves the safety and the mobility of people but facilitates both eco-tourism and agricultural activities.
Lebombo SDI -Maputo
This corridor focuses primarily on developments along the southern and eastern sections of the Pongolapoort Dam. The overall aim is to improve tourism facilities along the new Spatial Development Initiatives (SDI) route to Mozambique, enhance large scale agricultural development as well as stimulate interest in other tourism investment opportunities related to the Greater St Lucia Wetland
Park. In the vicinity, the Lubombo Transfrontier Conservation Area includes South Africa, Swaziland and Mozambique. The Lubombo Tourism Route promoting this venture was launched by Tourism Ministers from the three countries during Tourism Indaba in May 2006 at Durban International Convention Centre.
Mkuze Airport The Mkuze Regional Airport is planned for the area. The construction and operation of the Mkuze Regional Airport is an investment that
will trigger other business opportunities in the area. The airport will create an opportunity for local businesses to benefit from the various secondary facilities that will be created in and around it. The Department of Environmental Affairs and Tourism has funded the project by ZAR 10 million for upgrading the runway. A Private Public Partnership is sought to construct the Airport Terminals. Port Shepstone-St Faiths -Ixopo The District Municipality of Ugu is fast approaching a boom time, if development in this node continues, especially in the tourism
sector. The corridor focuses primarily on developing a direct link between the Southern Drakensberg and the Coastal areas to expand the basket of tourist destinations and spending options. The demand from national retail and corporate tenants looking for space in the region is yet another indication that growth is occurring, with potential for more investment.
A recent trip to Portugal and Spain by Ugu District Municipality, the Hibiscus Coast Local Municipality and Trade and Investment KZN to build relationships with businesses and governemtn in these two countries was successful. One result is that the Portugese Company Construta do Tamega is planning to builds a multi-million rand Portugese village in the area for the World Cup 2010.
Margate Airport has recently received National status, a plus for tourists and business. Other projects planned for the region include the Port Shepstone Marina and beach front development and the Hibberdene small craft harbour.
Greytown- Msinga -Madadeni (Battlefields Route) This corridor will focus primarily on the route between Dundee and Greytown via Msinga, as a priority for the further development of the battlefields routes of the Province. Newcastle/ Madadeni is situated on the main connection route between Durban and Johannesburg. Traveling time to Johannesburg is approximately 3,5 hours; to Durban approximately 4 hours Analysis suggests that the past decade has seen rapid, growth in Newcastle of service and retail activities - such that Newcastle's position as Northern KwaZulu-Land's Service Hub is being increasingly recognised by both the private and public sectors.
Century Mall
Following from this growth, the ZAR 230m Century Mall, the largest shopping mall in northern KwaZulu-Natal, will be constructed on the main road entering Newcastle. The Mall will include cinemas, major fashion retailers, supermarkets, furniture and homeware stores, restaurants, fast-food outlets, coffee bars and an
entertainment area. The Mall is being developed by the EdisonCorporation and completion is expected in September 2008. The Century Mall would be situated adjacent to the newly built ZAR100 million Century Casino Spa and Hotel, also developed by the Edison Corporation. The new complex will replace the Monta
Vista Casino in Newcastle. The hotel includes a spa, conferencecentre, restaurants and a family entertainment centre. Business Confidence From the above sample of activities it is apparent that investor confidence into the region is high Investors from a number of countries with very strong trade and business links with South Africa in Africa, Europe, America, the Gulf and the Far East, have been forging business
deals, with a great deal of success. "Foreign direct investment into KwaZulu-Natal is increasing exponentially," said Zweli Mkhize, Provincial Minister for Finance
and Economic Development in his 2007/08 budget speech. Between 2000 and 2005 over ZAR 27-billion was invested in the Province by foreign companies.
Currently investment is in a variety of sectors, with the largest amounts being invested in the automotive sector, steel and metals (mainly aluminium), forestry and paper, property development and oil and gas sectors. FDI transactions which stand out during the 2004-05 period include a ZAR 3,4 billion investment by Toyota Motor Corporation of Japan; a ZAR 1,4 billion investment by the United Kingdom (UK)-
based Anglo American Plc in Mondi; a ZAR 900 million investment in the Merebank papermill by Anglo American Corporation; the ZAR 00 million investment by Cimpor a Portuguese company in Natal Portland Cement (NPC); and a ZAR 630 million investment by Shell/BP in the Sapref refinery.
Trade and Investment KwaZulu-Natal has been actively driving the promotion of investment opportunities as well as assessing new markets to be explored. The following are some of the projects that resulted from such visits:
Indian Apallo Tyres bought into Dunlop.
Indian UniPhos Group entered into a 50% joint venture with a KZN Black Economic Empowerment (BEE) company to set up a plastic manufacturing plant in Durban.
Belguim's Rovoplast has bought property in Eshowe with the intention of setting up a PVC manufacturing plant which would create 100 jobs.
Shanghai Haboa Chair, a Chinese company, entered into a
joint venture agreement with a BEE company to manufacture
FIFA accredited stadium seats in Pietermaritzburg. This company, with a 40% black economic empowerment component, would create 50 jobs. But all this activity has been overshadowed by the recent announcement of the ZAR 36.7 Billion investment in Standard Bank by China's IBC. The deal is the biggest foreign investment
in South Africa's history. The sale will see the world's biggest Bank buy 20% of Standard Bank. This purchase demonstrates an enormous amount of confidence to and commitment in South Africa as well as will inject foreign exchange into the country. Forex is much needed for the current account deficit, which has
been used to import capital equipment, goods and services. '"Besides the obvious advantages it suddenly feels as though South Africa is playing in a whole new and very exciting, ball game," said Azar Jamine, chief economist at Econometrix (quoted
in the Sunday Times October 28, 2007). The ball game has still to play itself out but in the meantime, South Africa stand's to gain much forward momentum.
Foreign Trade
The composition of South Africa's foreign trade is typical of an emerging economy, with exports being dominated by resources- based and relatively low value-added commodities and imports primarily by higher value-added goods. Among non-gold
merchandise exports, the top five categories are precious and semi-precious stones and precious metals, mineral products, vehicles and other transport equipment, machinery and mechanical appliances and electrical equipment, and base metals and articles thereof. Much of the growth in these categories,  particularly growth of vehicles and other transport equipment, has been linked to the preferential market access South Africa enjoys under the African Growth and Opportunity Act (AGOA).
KwaZulu-Natal's share of overall South African exports has remained constant over a 10-year period, at around 17 percent. Manufacturing and agriculture continue to be responsible for the top export products in the Province. However, there has been
constant growth in provincial exports, with ore, slag and ash, aluminium products and products from the iron and steel sector amounting to more than 49% of KwaZulu-Natal's exports, while there has been a decline in exports of wood pulp, waste and scrap paper. The top five import product categories comprise machinery and mechanical appliances, mineral products, chemicals, vehicles, and original motor vehicle components.
KwaZulu-Natal's top export destinations are the United States,China, Japan, India, the United Kingdom, the Netherlands and Germany. Exports from the Province are set to increase with the construction of the Airport and Dube TradePort.
A number of opportunities linked to a range of niche markets are also available in the KwaZulu-Natal. The need to develop the beneficiation of primary products in minerals, agriculture and fishing will add value to the economy. This push to beneficiate opens up many opportunities for emerging black entrepreneurs and investors alike.
Surprises Inside
In order to prosper, it is not only governments but companies and organizations that also need to have a vision for the future, develop an innovative culture to be  competitive and to invest in new technology and processes. As with any business in today's world it is important to be globally competitive. Peeling back the layers of KwaZulu-Natal's economy is a like opening a treasure chest of surprises. The deeper you delve into the chest the more wonders you find. It is not only the depth and a range of the companies underpinning the layers of the economy that dazzles,
but the distinctiveness of the products and services. A brief look at a few of the successful companies in the Province and the visions that they have adopted to drive themselves forward shows that much is being achieved. The successes range from the increasing evolution in vast corporates such as Illovo, Grinrod, Mondi, Pannar Seed, Tongaat Hulett or Unilever to expansion in smaller businesses as well as personal growth in the individuals who are achieving on national and international levels. A quick run through of some of the international companies and their visions for the future featured in the KwaZulu-Natal Top Business Portfolio highlights this succinctly. Illovo Sugar with its head office based in KwaZulu-Natal states that its first strategic intent is "to be the leading sugar and downstream products operation in Africa, an increasing global player and a world-
class organisation". It should therefore be no surprise that the global company has quantifiable evidence of growth and success. Illovo is a leading, global, low-cost sugar producer and a significant manufacturer of high-value downstream products. The group is Africa's biggest sugar producer and has extensive agricultural and manufacturing operations in six African countries involving own cane growing, sugar manufacturing, refining, packaging and distribution operations.
Grindrod, South Africa's leading shipping and logistics group again won the 2007 Marine Money International Listed Shipping Company of the Year Award at a gala function held in New York. Grindrod beat some 150 shipping companies listed throughout the world as ranked by Marine Money International, America's largest shipping finance publication. Ivan Clark, Grindrod CEO said "it is a feather in the cap for both Grindrod as a company and South Africa as a country that a South African based shipping group could beat the best in the world and to top it all it was great to win the award race for the 2nd consecutive year". It is not astonishing that part the
Company's vision reads, "to be a significant and profitable international

Enforce is a leading, outsourced company focused on delivering "That Much More" in the fields of innovative risk management to our core market sectors. The following examples of recent awards speak for themselves:
§ Best Service Provider South African Council of Shopping
Centres (SACSC) 2005;
§ KZN Service Provider of the Year South African Council of
Shopping Centres (SACSC) 2005; and
§ National Service Provider of the Year Old Mutual Properties
2004 & 2005.
We can try to follow in Siemen's footprints. The company vision reads, "A world of proven talent, delivering breakthough innovations, giving our customers a unique competitive edge, enabling societies to master their most vital challenges and creating sustainable value. Some of our company certainly do follow this  philosophy. Altech UEC won the "innovator of the Year award form Proudly South
Africa during 2007. Another winner with good foresight is the newly established, The Stables Winery who made history when their Pinotage Clariet Blanc de Noir won the certification as the KwaZulu-Natal's first Wine of Origin in 2006, a year after KwaZulu- Natal was recognised as a wine growing region by the South
African Wine Information Service (SAWIS). The Stables Wine Estate scooped a further historic first for the emerging KwaZulu- Natal wine industry by winning a medal at the South African Young Wine Awards for its 2007 Pinotage. In their attempts to go beyond the average, Morewood Engineering innovate approach is clearly channelled into economic creativity. The small Pietermaritzburg company produces highly sought after bicycles that are precision designed to be used in down hill racing internationally. Riders of the Morewood bikes include the present US champion Cole Bangert. The bikes are not mass produced and their South
African origin gives them a huge selling point in Europe. At present Morewood
sells only 5 % of the bikes produced in South Africa locally, the rest are exported.
Together with innovation goes creativity and one industry which require this
talent in excess is the clothing design. The KwaZulu-Natal fashion industry is
going strong. Based in Kloof, Amanda Laird Cherry is one of South Africa's
most established designers. Amanda studied at the Durban Institute of technology for 3 years. She is one of a handful of South African designers who has fused the development of her clothes with that of South Africa. Laird Cherry and her designs have been featured in Time magazine, Wallpaper, British Vogue, Trace New York and Norway's Sunday papers. Her products have been featured in numerous websites, including WGSN.
Another Award wining Durban designer Terrence Bray, has been a motivating force for South African fashion for some time. He has been featured in an array of magazines both local and international, with South African GQ Magazine voting him as "Most outstanding men's wear designer" at S A Fashion Week and British Vogue naming Bray the "South African label to buy". There are of course many other designers doing outstanding work.
KwaZulu-Natal also boasts some unique services. The Sharks board is only organisation of its kind in the world protecting beach users against sharks as well promoting the conservation of sharks. The KwaZulu-Natal Philharmonic Orchestra regarded as Africa's premier orchestra, is committed to the socio economic growth of the region through its outstanding performances and education programmes.
While KwaZulu-Natal may suffer a shortage of skills in many fields, the Province also offers some unique training schools. The South African Jockey Academy (SAJA) is the only institution in South Africa that offers an apprentice programme for young people eager to become professional jockeys. This well known and highly acclaimed worldwide sports academy is situated in Summerveld, outside of
Durban. Many international racing clubs look to SAJA for training of their apprentices as the quality of training is rated as one of the best in the world. The Christina Martin Cookery School based in Westville is ranked third in the World. The Central Drakensberg is home to the Drakensberg Boy's Choir School. The choir whose members age between nine and fifteen and are from various cultural backgrounds tours overseas every year and is internationally recognized as one
of the best in the world.
Transformation
Many of the companies operating in the region, are committed to ensuring that their business concerns are not only sustainable and profitable, but contribute to the overall well being of KwaZulu- Natal's environment, resources, people, and economic growth. Under these circumstances, an ongoing theme has to be that of
developing synergy between the more and less developed sectors of the local economy and between the public and private sectors. Intrinsic to growth in KwaZulu-Natal as in other regions of South Africa is Black Economic Empowerment (BEE). Many of KwaZulu- Natal's companies are growing stronger by forging BEE deals, which will strengthen and sustain their future growth.
The South African infrastructure company, Group Five has through BEE partnerships secured three major contracts in the Province. The Ilembe Consortium which is comprised of Group Five together with major shareholders WBHO and Total Facilities Management Corporation as well as a large group of KwaZulu- Natal empowered organisations are currently the developers for new Moses Mabdida
Stadium and the Dube Tradeport. The Chairman of the Ilembe Consortium, Vusi Mavimbela, commented on the Dube Tradeport saying that "The shareholders of Ilembe are honoured to be part of this momentous project, which will significantly contribute to the future economic development of the region and KwaZulu-
Natal in general". Group Five in partnership with Dredging International, has also been awarded a ZAR 1,8-billion contract to expand the Durban harbour.
NPC Cimpor is a KZN based manufacturer and distributor of cement products and a wholly owned subsidiary of Cimentos de Portugal SGPS S.A ("Cimpor"), a multinational cement group in Portugal. Recognising that BEE is a business imperative in South Africa have recently sold 26% of its shares. NPC Cimpor believes that its new partners share a like-mindedness and vision to grow

The Future
The Zulu word 'Shosholoza' means to push forward, endeavour or strive and it strikes a chord of recognition, and a sense of pride in most South African hearts. Very much similar to the actions that the people of KwaZulu-Natal are sharing, in their attempts to reach a vision of prosperity and opportunity. This is also a term used to describe another vision for South Africa, created in a study undertaken
by the South African Government in 2003.
"Shosholoza" envisages South Africa, by the end of the Second Decade of Freedom, as a diverse and tolerant society whose local economy is surging ahead like a sleek express train. The global economy is also booming, and multilateral institutions have brought stability to the world's most intractable political conflicts. High economic growth has brought millions of jobs and much greater participation in the robust economy. South Africa is well poised for a third decade of freedom,
and opportunity and prosperity". (Source: Towards a Ten Year Review). The desire to push forward is shared by Captain Salvatore Sarno, CEO of the Mediterranean Shipping Company who is also the Captain of Shosholoza, South Africa's yachting entry to the 2007 America's Cup. According to Captain Sarno, Shosholoza was built and entered as an "African dream, a dream started 4 years ago with the purpose
of showing the world the new face of South Africa after 10 years of non-racial democracy".
The team song can equally be applied to any one venturing into investing in KwaZulu-Natal's future: "We always work as one, pushing and pulling together. The sun has risen, we must go on forward together".


Grant Adlam
www.topbusiness.co.za




KwaZulu-Natal (KZN) Overview 2007- Grant Adlam

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