The Coega Industrial Development Zone (IDZ) is a hive of construction activity as new investors start laying the foundations for their developments, signalling the onset of major industrial activity within the IDZ.
On either side of the Coega IDZ section of the N2 coastal highway – linking Port Elizabeth from east to west – are major construction works by Chinese car and truck manufacturer First Automotive Works (FAW) and Africa’s leading quick service and casual dining restaurant franchisor, Famous Brands.
FAW is at the beginning stages of construction on its truck assembly plant in Zone 2 and Famous Brands’ distribution centre is taking shape in Zone 1. Beyond the N2 in the Coega IDZ, construction is taking place at Coega Cheese, Agni Steels and the Rehau Extension in the Nelson Mandela Bay Logistics Park (NMBLP). Wind turbine parts manufacturer, DCD, and industrial gas supplier Air Products will also start construction in the new financial year.
“Investor confidence in the Coega IDZ has shown significant growth with a total of six new investors committing to the Coega IDZ in the latter half of 2012,” said Ayanda Vilakazi, Coega Development Corporation (CDC) spokesperson. “The total overall investment value amounts to R1.7-billion set to be injected into the regional Eastern Cape economy in the 2012/13 financial year alone.”
Currently the Coega IDZ pipeline boasts R8-billion in investment at different stages of implementation/permitting and an overall pipeline of R140-billion.
“By the second quarter of the new financial year, the Coega IDZ will have commenced with construction to the approximate value of R700-million, with the current value of construction projects estimated at R350-million. This means a great amount of opportunity for local businesses and in turn, significant job creation prospects,” said Vilakazi.
The FAW investment has been hailed as a major coup for the city and is expected to boost the economy with its injection into the region of an investment worth more than R600-million. The first phase of construction, managed by appointed contractors WBHO Construction, is expected to generate approximately 500 permanent jobs with the plant’s initial annual output estimated at 5 000 trucks.
Famous Brands, which supplies inventory to leading franchise stores such as Debonairs Pizza, Steers, Wimpy and Mugg and Bean, are settling into construction at Zone 1 of the Coega IDZ. They are also involved in Coega Cheese, a joint venture with Coega Dairy, which will see the launch of a cheese factory to supply cheese to Famous Brands franchise stores in the Eastern Cape.
Famous Brands managing executive for logistics, Tony Stephens, said they are expecting their 2 400sq/m cold storage and distribution centre to be commissioned on June 1. “Our distribution centre will comprise of state of the art multi-temperature facilities, offices for the regional management and staff and a staging area for the distribution fleet,” said Stephens.
On their decision to invest in the Coega IDZ, Stephens said: “The demographics suit our store footprint. The easy access to the highway enables us to get en route quickly to franchisees in the north, as far as Mthata and East London, those in close proximity to Port Elizabeth and as far south as the Garden Route.”
FAW construction is on schedule with work on foundations, columns and other activities progressing well. Civils work is also on schedule and steel erection is expected to commence in mid-March. The construction project is due for completion by the end of fourth quarter of 2013.
The initial R280-million construction investment in the first phase (truck assembling) of the project, which takes place on 10 hectares, will see between about 500 jobs created during construction. Overall FAW will invest R600-million in all the phases on 40 hectares in the Coega IDZ through joint funding provided by FAW and China-Africa Fund.
Vilakazi said from the date of construction commencement in December 2012 to February 2013, 103 construction workers had been employed, with that number set to grow. The truck assembling facility is aiming for 5 000 units for export (70%) and the local market (30%).
“Training and recruitment of assembling workers for the first phase will commence shortly and total number is estimated at 280 workers. This number will increase as other subsequent phases to assemble light commercial and passenger vehicles come online. The number of permanent assembling workers, when all phases are completed, is estimated at 1000 workers,” said Vilakazi adding that all being well, and after installation of assembling equipment for trucks, the plant is expected to commence with production in February/March 2014.
The investor lease agreements signed in the current financial year include Air Products (R300-million), Famous Brands (R20-million), AfriSam (R634-million) and APM Terminals (R25-million) with a number set to convert by the final quarter of the 2012/13 financial year. The Coega IDZ is currently home to 21 operational investors and its investment promotion activities have led to it enabling the creation of 3 735 direct operational jobs and over 40 000 construction jobs.
Alan Straton
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