With 2013 in the bag, the Coega Development Corporation (CDC) is looking forward to an exciting 2014.
“2014 will bring more construction activity in the Coega Industrial Development Zone (IDZ), new investment and a series of corporate social investment (CSI) coups,” says Ayanda Vilakazi, CDC head of marketing and communications.
Coega’s business managers also say that despite challenges relating to the global economic climate and changes in funding models of IDZs to Special Economic Zones (SEZ), the immediate future looks rosy for Coega. A number of industries are about to take off as a series of new investors complete construction and move toward operation.
Major plants opening in the Coega IDZ this year include Chinese automotive giant, First Automobile Works (FAW) truck assembly plant, the DCD Wind Tower manufacture plant, and Air Products‘ air separation unit. Also firing on all cylinders this year is Agni Steels which is about to start production of its smelting and steel billet operations.
Automotive & Logistics
The automotive sector looks particularly exciting, with all eyes on FAW, says Gustav Meyer, CDC automotive business manager.
“Construction will wrap up soon at FAW and will be followed by the commissioning phase,” said Meyer. “Adding FAW to the bouquet of auto giants here means a new injection for the region particularly for artisans and other skilled workers to be employed at the region’s newest Original Equipment Manufacturer (OEM). FAW will have employed close to 1000 people at the conclusion of the final phases of construction.”
Meyer said the CDC is expecting some exciting developments in the automotive and logistics sector and is also hoping to conclude discussion with another OEM. He also confirmed that two international logistics companies have committed to establishing intermodal container depots at Coega.
“This will in essence mean three of the big five container terminal companies – inclusive of APM Terminals – will have operations at Coega.”
Meyer said other negotiations were still underway and that an announcement would be made in due course.
Plans for the expansion of UTI Sun Couriers and Digistics – both existing IDZ tenants – will commence in this year whilst construction on new 11000sqm cold storage facility for an investor in the IDZ will start in the first quarter of 2014.
Coega Dairy continues to grow from strength to strength, according to the CDC. The past year also saw the emergence of Coega Cheese, a partnership between Coega Dairy and Famous Brands.
“This was a very exciting development and clearly indicates the interface and supply chain links that can be created within the Coega IDZ,” said Dr Keith Du Plessis, CDC agro-processing business manager.
Coega Dairy is also using neighbouring investor, PE Cold Storage, to store its overflow of some products before it is distributed to suppliers, another indication of strong supply chain development within the Coega IDZ.
“Interest in the Coega IDZ as investment location by international and domestic agro-processing companies continues to grow and CDC is currently actively engaging a variety of potential investors in the areas of biofuel production and food processing from various field and horticultural crops,” Du Plessis said.
“Major strides have also been made in terms of CDC’s drive to establish an aquaculture development cluster within Zone 10 of the Coega IDZ. Approximately 300 hectares of land has been identified in Zone 10 and a three month feasibility study will commence in February 2014. All indications are that the aquaculture cluster could create up to 3000 direct jobs by 2020.”
Renewable and energy sector
DCD will be completing construction of their facility by early February and start manufacture of wind towers in the first quarter of this year. The 23 000m² factory will have the capacity to produce 110 wind towers a year. DCD recently announced that it has fixed contracts with wind energy company Vestas, German wind turbine maker Nordex and Siemens, with the aim of becoming a world class supplier competitive in the global market.
Coega is poised to make a major announcement regarding a solar power investor in the next few months, said business development manager Nkuli Mxenge-Mayende. “This will start to establish Coega as a major player in the renewables sector, considering DCD’s new facility and the wind power generation due to take place after the third and fourth round windows of the Renewable Energy Independent Power Producer Procurement Programme.”
GDF Suez has started to lay the groundwork for construction of its new R3.5-billion peaking power plant, Dedisa, the largest construction project at the Coega IDZ to date. The station will create about 1 000, mainly local, construction jobs and complement the city’s power supply.
Two air separation units are on the cards for Coega IDZ. Air Products is well underway with their plant and Afrox recently appointed a contractor and will start construction February employing over 300 people in construction phase. The Air Products plant will be commissioned in the third quarter of 2014.
Agni Steels South Africa’s plant is almost ready to kick into gear said business manager, Sadick Davids. “In three weeks’ time Agni will run a pilot production test, or even earlier, when an expert team of staff arrive from India. The staff will embark on a skills transfer initiative with the South African employees over the next two years.”
Agni already performed a successful test of the plant’s production capacity late last year and is raring to start its steel beneficiation activities, using scrap sourced from around Nelson Mandela Bay and the Eastern Cape.
Coega is set to train 150 apprenticeships and 800 learnerships in artisan skills under a new grant allocated to Coega via the Jobs Fund.
As investors become operational, Coega’s human capital services are instrumental in facilitating the employment process through its G2O recruiter system in collaboration with the Nelson Mandela Bay Municipality. “We get interest from all parts of South Africa and the recruitment pool has grown to over 266 000 people,” said Duncan Grenfell, CDC human capital services manager, adding that 50 000 jobs have been created to date with 4 000 alone in 2013.
“Many training and development opportunities are also being provided to ensure the skills base of Nelson Mandela Bay and the Eastern Cape is developed to meet the needs of these new investments.”
Grenfell believes the future is particularly rosy for the Coega IDZ. “As the new factories begin to commission and start producing products we will see more and more interest in the IDZ. The successes and returns for locating in the IDZ start to become evident, which attracts more investor attention, and so the wheel turns. Service providers and suppliers will be looking to work with tenants which in turn will stimulate the local economy.”
Coega’s CSI drive continues unabated. Coega invests over R9-million annually in 13 deserving causes directly impacting the lives of over 8 000 people and indirectly changing the course of history for their families.
Of the 13 initiatives, three form part of Coega’s flagship CSI projects. The first is the life-changing driver training programme, which sees young graduates and other beneficiaries taking their first steps to hitting the road and gaining access to job opportunities through their new skill. “Over 630 people have passed their driver’s licence during this financial year,” said Alf Settle, CDC driver training manager.
The maths and science programme offers learners a second chance at improving their maths and science performance, so they can gain university entry to become the engineers, scientists, doctors and inventors South Africa needs. “The Coega Maths and Science Academy will be extended into its second year with 100 new learners joining the project,” said Thandi Rayi, CDC CSI manager.
Coega is also deeply involved in establishing and contributing to scholarships and bursaries for study in the field of engineering.
“We will also be rolling out a metro-wide career guidance programme with the Department of Education, and will sign a memorandum of understanding soon. The Grade 10 and 11 curriculum, as part of the official life skills curriculum has been approved, and if the programme works, we will roll it out across the province,” said Meike Wetsch, CDC human capital services manager.
Once the environmental impact assessment (EIA) for the impending tank farm is completed Coega will see a R5.6-billion fuel storage facility being constructed across the Coega River, a massive facility, with the relocation of the manganese ore terminal and storage facility from Port Elizabeth following closely behind. Over 1500 people are expected to be involved in construction of each of these facilities. The Port of Ngqura also starts building its next phase of development.
“If you think that 2013 was a year for construction in the IDZ, 2014 looks to be just as busy, all of which bodes well for the local and provincial economy,” said Ayanda Vilakazi, CDC head of marketing and communications. These projects are in line with government policy in terms of infrastructure development in order to create jobs, especially for the youth, women, and persons with disabilities.