WRITTEN BY JACK SLATER

In a relatively short time, the CDC, as custodians of a major development project, has managed to build on significant achievements year-on-year. There are now a number of noteworthy investors – including major foreign direct investors – moving into the Coega IDZ, a purpose-built industrial area equipped with world-class infrastructure to attract and retain local and international investment.

Simunye. WORKING TOGETHER TO SUCCEED

In terms of timelines, from 1999 to 2002 the IDZ underwent a

formalization process which included rezoning, EIA’s and meeting

other regulatory requirements. At that point, what is now the

IDZ was an expanse of land that was not particularly suitable for

agricultural activity and fell outside of the old Nelson Mandela Bay

[Port Elizabeth] municipal boundaries and, as such, did not have any

municipal services in place. The construction phase ran from 2002-

2005 when the bulk municipal services were put in place.

The IDZ attracted its first investor (Dynamic Commodities) in

2007 and another five investors that year. It is reasonable then, that

the measurement of investment must be from the point of attraction

of the first investor. Since then, 22 investors have become operational

in the IDZ and a growing number of investors are in the pipeline. This

is in spite of several challenges, including the European debt crisis

and electricity shortages, delaying committed projects in the wake of

funding scarcities and reduced commitments from power suppliers.

The Coega IDZ’s development trajectory should not be evaluated

against the short time it has been operational, it should be measured

in decades, which was the instruction from the national department

of trade and industry (the dti) at the onset – to look 50-75 years into

the future and plan an industrial future for the Nelson Mandela Bay

Municipality. The CDC is already well on the way to achieving that

goal in the short time it has been operational.

The Coega IDZ is demarcated into 14 zones and is specifically

designed along the cluster model, linking related industries and their

supply chains in close proximity to one another to maximise efficiency

and minimise turnaround times. The Coega IDZ boasts the following

clusters:

• Commercial and logistics;

• Automotive and auto components;

• Light industry;

• Training/academic;

• Metals and metallurgy;

• Chemicals;

• Energy;

• Agro-processing (aquaculture, food packaging

and food processing);

• Mari-culture and coastal; and

• Airport and air logistics.

The IDZ attracted its first investor (Dynamic Commodities) in 2007 and another five investors that year.

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Currently, the Coega IDZ is home to 22 operational investors. A further R7.5-billion in investment is in the implementation stage. Projects in the negotiation stage are valued at R8.1-billion and those under feasibility account for R116.3-billion. Four investors are currently in the construction phase and it is likely that, by the end of 2014, the Coega IDZ will boast 27 operational investors with a number of additional investors under construction by that time.

Endeavour Magazine | 63

The Coega IDZ has world-class, purpose-built infrastructure to

suit every investor’s needs. When the IDZ was built, it was established

on the plug-and-play model to cut out long construction periods

and connectivity issues. As a result, once the investor has finished

construction of its own building, it’s all systems go.

Principle Business ActivitiesThe CDC’s principal mandate is to attract and retain investment

in the Coega IDZ but the CDC expanded its service offering in 2009

to a number of public sector clients, mainly government departments,

in an effort to both share its knowledge capital and drive socio-

economic development in the Eastern Cape, while simultaneously

diversifying income streams through project management fees.

This was possible since the CDC boasts one of the highest

concentrations of highly qualified and experienced staff in the

province and arguably ranks favourably with the best of the best in its

class nationally including a range of engineering professionals, project

managers and quantity surveyors. The Coega project was founded by

and continues to be managed by these specialists. The wealth of in-

house skills has resulted in it managing major infrastructure projects

on behalf of the Departments of Roads and Public Works, Education

and Health in the Eastern Cape

and the Department of Education

in KwaZulu-Natal, where it is able

to put specialist skills – and the

experience of establishing the

IDZ – into action across the two

provinces to ensure that critical

infrastructure is delivered to

communities.

The StaffThe CDC is a knowledge-

based professional service

organisation with its competitive

advantage dependent on the

dynamic capabilities of its human

capital. Consequently, talent

management is the primary focus

of its human capital strategy

hence the competency model

focuses on critical organisational

competencies necessary for

performance excellence.

A significant budget for

staff training and development

is set aside annually. The

purpose is to ensure that

the organisation continues

to develop its talent pool to

meet the required critical skills

and leadership competencies

to carry out and deliver the

strategy of the organisation.

Training programmes supported

include the development of

core technical skills, as well as

leadership and management

skills. In addition to individual

study programmes, the CDC

coordinates corporate employee

development programmes in

project management (PMBoK

and Prince 2). This enables staff

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and interns to attain their and targeted high potential employees to

participate in targeted executive training programmes.

The CDC also has a thriving intern programme which continues

to contribute positively towards skills development and employment

creation for unemployed talented graduates of the Eastern Cape,

thereby improving their chances of attaining employment in the

highly competitive labour market.

The CDC has built up a thriving corporate social investment (CSI)

programme dedicated to pursuing socio-economic transformation,

cognisant of the provincial and societal challenges which hamper

real development in the Eastern Cape. As a result, the CDC’s CSI

initiatives are geared to meet certain strategic shortfalls by focusing

on education, training and human development specifically.

The CustomersThe Coega IDZ already offers the best of the best and is South

Africa’s premier investment destination. This is built into the IDZ

offering, which is uniquely geared to ensure competitiveness and

quality – not only in terms of services but also infrastructure and

spatial planning to enhance IDZ investors’ competitiveness and

supply chain linkages and integration, while lowering the costs of

doing business and maximizing incentive support.

A significant budget for staff training and development is set aside annually. The purpose is to ensure that the organisation continues to develop its talent pool to meet the required critical skills and leadership competencies to carry out and deliver the strategy of the organisation.

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The IDZ offers these key features:• Clustering for synergy and supply chain integration;

• Facilitation of access to government incentives (local, provincial and national).

The suite of incentives includes but is not limited to one-time and/ or recurring grants for:

o Skills development;

o Export marketing (new market development);

o Job creation (national and provincial grants can be accessed concurrently);

o Foreign investment (compensated for the qualifying costs of moving new

machinery and equipment (excluding vehicles) from abroad);

o Investing/re-investing in productive assets; and

o Black business development.

• Customized solutions for investors, e.g. serviced sites, fit-for purpose buildings;

• The IDZ is served by two ports, and characterised by a close distance to the deep water

Port of Ngqura, which is in Zone 1 of the Coega IDZ;

• Facilities for skills development (with personnel to provide customised solutions);

• Custom-controlled areas;

• Environmental assistance (where applicable);

• Advanced infrastructure;

• Plug and play approach;

• Marketing and other value-added services; and

• ICT services base infrastructure: infrastructure which allows for the connectivity of voice /data/

internet and video services up to the tenants’ premises. Provision of shared broadband Internet

connectivity by Coega Communication. Primary (disk) and Secondary (backup) file based

storage provision.

2013/2014 And Beyond A number of investors are being courted in pursuit of the annual

target of signing eight new investors.

Also, lobbying for key priority projects remains an active part

of the CDC’s goals to attract major investment into the Coega IDZ.

These include:

1. An oil refinery, Project Mthombo, led by PetroSA;

2. Renewable energy projects; and

3. Combined Cycle Gas Turbine power station.

When Will The Current DCD Wind Tower Factory Project Be Completed?

The wind tower manufacturing facility is a joint initiative between

the DCD Group, the Industrial Development Corporation (IDC) and

the CDC. DCD Wind Towers officially started construction work

on its R300-million, 23 000m2 wind tower manufacturing facility in

March 2013. The macro-economic impact of the total investment

within IDZ will be R239-million for construction and operation,

The Coega IDZ already offers the best of the best and is South Africa’s premier investment destination. This is built into the IDZ offering, which is uniquely geared to ensure competitiveness and quality – not only in terms of services but also infrastructure and spatial planning to enhance IDZ investors’ competitiveness and supply chain linkages and integration, while lowering the costs of doing business and maximizing incentive support.

with the inclusion of the direct,

indirect and induced impact.

The impact on the Eastern Cape

Provincial GDP is 0.16 per cent

with the total number of jobs

created during the construction

and operational phases sitting

at 1951, of which 23 per cent

will be as a result of operational

activity. The benefits to the local

economy will penetrate beyond

the local skilled jobs and training

to include logistics opportunities

and additional value chain

opportunities, thus creating

a new industry in the Eastern

Cape. The facility is expected

to create close to 200 jobs, and

produce between 110 and 120

wind towers per year.

The developmental impacts

can be viewed in the context

of the enabling infrastructure

that unlocks the wind tower

manufacturing facility. This

is pivotal, particularly for the

Coega IDZ and the integrated

distribution channel (Ngqura

deep-water port, logistics, and

freight transport solutions) that

links to downstream industry

creation for enterprises and

service providers. The CDC

believes that DCD’s investment

will assist in complementing the

overall strategy of the national

government to diversify its

primary energy sources.

COEGA DEV CORP

0027 41 403 0400

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