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Foreign investors attracted to SEZs with infrastructure and support

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Foreign investors will put down roots in South Africa where there is appropriate infrastructure, support and incentives, says Dr Ayanda Vilakazi, Head of Marketing and Communications at the Coega Development Corporation (CDC).

He was responding to the R1,2 trillion investment drive being spearheaded by President Cyril Ramaphosa.

“Fortunately, the Coega story is well known to at least two of President Ramaphosa’s ‘special envoys on investment’.

“Both former minister of finance Trevor Manuel and former deputy minister of finance Mcebisi Jonas were instrumental in setting up the IDZ,” says Dr Vilakazi.

The Coega Special Economic Zone (SEZ), which is managed and marketed by the CDC, is one of the most successful investment zones in Africa.

“Coega gives President Ramaphosa’s team a strong case to make to potential investors wanting to establish themselves in the African market, in particular – although we are fully connected to the rest of the world as well.

“Despite the advances being made in improving port and other logistics and manufacturing-related infrastructure in a number of other African countries, South Africa remains a preferred investment destination,” says Vilakazi.

“Not least because Coega has set a global benchmark for well-designed and logistically fully integrated ‘plug and play’ SEZs.

“What we have found is that is not enough to have serviced and zoned land, ample power and data, and direct access to road, rail and shipping links.

“Investment decisions are also influenced by the support available to the families of very skilled management and staff. South Africa as a whole, and Nelson Mandela Bay in particular, offer a lifestyle, schools and medical support that is unmatched on the rest of the continent.

“Highly mobile individuals are happy to come to Nelson Mandela Bay because they can safely bring their families with them. Very few SEZs in the world offer that additional incentive.

“Coega has proven that if the right infrastructure is in place, and there is support to help investors cut through red tape then investors will heed the call of President Ramaphosa.

“With the incentives announced under the Special Economic Zone (SEZ) programme Coega is even more competitive globally,” he says.

The establishment of a Customs Control Area (CCA) in the logistics zone is attracting more interest from international and local investors, according to Vilakazi.

Due to open in June this year, the CCA will allow Coega to offer a suite of customs duty and VAT incentives for businesses located in Zone 1 and 2 of the SEZ.

Over the past 18 years the Coega SEZ has attracted 42 operational investors worth a combined investment value of R7 billion, and created 100 000 jobs.

This year alone the CDC projects worth nearly R12 billion are expected to come on stream. They include Osho Cement (R600 million); Beijing Automobile International Corporation (R11 billion); Hella (R53.3) and MM Engineering (R350 million).

Over 300 new jobs are being created in the process.

The BAIC automotive plant is the largest single investment in South Africa in the past 40 years.

“One of the biggest selling points is the existing investors. An independent survey by Muffin Consulting found that 84% of companies operating in the SEZ have experienced an increase in productivity, and over 90% described the Coega SEZ as the ideal location for companies wishing to grow.

“In fact, more than 60% have expanded their facilities since opening in the SEZ.

“The CDC therefore welcomes the initiative by President Ramaphosa to attract more investment to the country – we are ready, and willing, to play our part.”

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.