Critical to industrial development in South Africa are designated Industrial Development Zones (IDZ).
These zones specialize in specific industries, clustering relevant businesses for synergy and supply chain integration. Tax benefits are enjoyed by both foreign and local stakeholders.
An IDZ is characterized by either being close to or including ports and airports, thus creating the platform to effectively expedite the export of manufactured products.
One of the first IDZ’s to be established in South Africa 12 years ago is the East London Industrial Development Zone (ELIDZ). Although a few early setbacks brought about cause for concern, perseverance resulted in the ELIDZ producing phenomenal results over the past 12 months.
In a 2014 media release ELIDZ revealed “In just the last 12 months, the ELIDZ during the 2012/13 financial year signed 8 new investments worth R1.02 billion ($112million) with a bulk of these being in the automotive sector as part of the opportunities linked to the W205 MBSA (Mercedes Benz South Africa) C-Class project.”
The report continues, “Investor confidence in the ELIDZ continues to grow…in a number of other sectors, such as renewable energy, agro-processing and aquaculture, where the Zone is becoming a destination of choice.”
Further broadening the scope of industrial development sees a new IDZ being established in Saldanha bay on the west coast of South Africa. This IDZ will become the service, maintenance, fabrication and supply hub for the booming African oil and gas sector.
A service fueled by the increasing number of oil rigs requiring maintenance, and their traffic flow passing from the west to the east coast of Africa.
The hope is that this new IDZ will learn from the short falls and successes of ELIDZ
Christopher Mashigo, Business Development Executive Manager for Coega Development Corporation (CDC) who runs ELIDZ said, “the CDC’s effort at the Coega IDZ have created over 50,000 jobs since inception, have 23 operational investors and boasts an investment portfolio in excess of R140bn ($13bn). Let’s hope the Saldanha IDZ can follow suite…just bigger, better and more quickly.”
Matthew Klynsmith earned a business administration diploma at CTI in Cape Town, South Africa. He now works at Strategic Options as an associate partner. To read more reports from Matthew Klynsmith, Go Here Now.
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