Economic Development, Environmental Affairs and Tourism, Honourable Mlungisi Mvoko, visited the Coega Development Corporation (Coega) in Gqeberha yesterday. The purpose of their visit was to assess the progress and readiness of the Orion Engineered Carbons (OEC) Tank Farm Project in Zone 7 of the Coega Special Economic Zone (SEZ). The site visit included a tour of the Coega SEZ Aquaculture Development Zone (ADZ) in Zone 10.
The OEC Oil Tank Farm Project entailed the development of two 18,000 m3 (cubic metre) tanks for the storage of carbon black feedstock oil, which is used in the manufacturing of tyres, amongst other high-performance applications. Each tank compromises 80 shell plates, totalling 19,2 metres in height and weighing a total mass of 289 tons per tank. In addition, a 5,4-kilometre pipeline from the Coega harbour to the new storage facility was constructed to facilitate the transportation of the heavy fuel oil from cargo vessels docked in the Port of Ngqura. An oil ship carrying 26,000 tons of black oil, equivalent to 26 million litres, arrived at the Port of Port Elizabeth last week, before proceeding to the Port of Ngqura for the hot commissioning of the OEC Tank Farm Project.
The OEC heavy fuel oil storage facility is nearing operationalisation. Because of OEC’s strategic position in the value chain, the project’s progress since its sod-turning on 22 April 2022, was closely inspected by the Honourable Deputy Minister of the dtic and the DEDEAT MEC, who were impressed by the progress that has been made so far. Had it not been for the interventions of the dtic, the Eastern Cape Provincial Government, and the collaboration and support of the parties involved, the region would have lost a project of economic value in 2022, leading to significant job losses. Coega, through support from the Department of Trade Industry and Competition, worked together with Orion Engineered Carbons South Africa (OEC SA) and Transnet National Ports Authority (TNPA) to provide OEC SA with a solution that was meant to keep its business sustainable. The solution saved approximately 7000 jobs in the automotive and tyre manufacturing industry. Moreover, saving the OEC in the province aligned very well with Coega’s vision of being the leading catalyst for championing of the socio-economic development, and broader government objectives as set out in the Economic Reconstruction and Recovery Plan (ERRP) and other government Policy Prescripts.
Deputy Minister Majola said “the project is very critical in the automotive sector, since OEC plays a vital role in the value chain.” That is why it was important for the dtic to fund the project to the tune of approximately R272 million. To date, 267 jobs have been created since construction started.
“The choice to move the OEC tanks and activities to the Coega SEZ precinct makes it abundantly evident how important SEZs are to the development of global value chains, especially in the manufacturing and automotive industries. The SEZ Programme is still a crucial component of the South African government’s efforts to draw in strategic direct investments that could provide the economy the boost it needs to resume sustained growth and development,” added Majola.
MEC Mvoko expressed his satisfaction with the development of both the OEC Tank Farm and the ADZ: “The ADZ infrastructure development was completed within budget and now the site is ready. Furthermore, when the dtic assisted with the OEC Project, we were thankful. We are hopeful that the OEC Project will live up to the gesture made by the dtic.”
These state-of-the-art OEC tanks were specifically designed to store carbon black feedstock oil, which is a crucial ingredient in the production of tyres and various high- performance applications. “Once operational, the OEC Oil Tank Farm Project will stimulate the entire value chain of the automotive sector,” said Coega Programme Manager, Ms. Maria van Zyl. OEC is a leading worldwide supplier of carbon black, which is a material with many industrial applications including the production of rubber tyres, inks, dyes, coatings, batteries, plastics, paints, and other applications. OEC imports raw materials from the United States of America, conducts high-value manufacturing in Nelson Mandela Bay, and exports high-grade carbon black.
Ms. Nomfundo Faltein, OEC Managing Director, expressed the company’s appreciation with the project’s progress and support from stakeholders involved. “On behalf of Orion, we would like to thank Coega through the support of the dtic and everyone involved in this project. The continued existence of Orion in South Africa supplying the rubber industries with carbon black, as well as maintaining the jobs in the supply chain, depend on this project,” said Faltein.
Furthermore, the visit by the Honourable Deputy Minister Majola also provided an opportunity to showcase the Coega ADZ, which received a substantial investment of R206 million from the Eastern Cape Provincial Economic Stimulus Fund for the development of enabling infrastructure, including road networks, stormwater and water reticulation systems, and electrical networks. As a result, the Coega ADZ has become an extremely attractive investment location for potential stakeholders.
During the site tour, Honourable Deputy Minister Majola and Honourable MEC Mvoko had the opportunity to witness the immense potential for growth and economic development in both the OEC Tank Farm Project and the Coega ADZ. Their visit underscored government’s steadfast commitment to supporting these ventures, which are vital for job creation, innovation, and prosperity in the Eastern Cape.
The visit served as a valuable affirmation of the progress made by Coega and its commitment to fostering economic growth. Moreover, Coega’s achievements signifies that the SEZ programme is delivering on its objectives of socio-economic development.
