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Taking Stock – reflecting on progress and what lies ahead - published 3 Apr 2018

Thought Leadership Immediate Release

 

TAKING STOCK: Simlindele Manqina, CDC Corporate Communications & Stakeholder Manager outlines the organisations economic trajectory.

 

Taking Stock – reflecting on progress and what lies ahead

 

The year 2018, understood in some circles as the year of a “new dawn” marks seventeen years of the Coega Development Corporation (CDC) operations. Reflecting on the years spent navigating a turbulent economic environment, the country’s industrial development programme has recorded significant achievements coupled with some major advances over the years.

 

Equally, the introduction of the Special Economic Zone (SEZ) Act replacing the Industrial Development Zone (IDZ) regulations, which had been the tool that governed IDZs in South Africa, introduced another dimension, the concept of an integrated ecosystem.

 

The integrated ecosystem approach, initially explored by the Chinese in the early 1980s saw the establishment of the first Economic Development Area - Chinese reference to special economic zone (SEZ), some of the zones having achieved success, with the Tianjin Economic-Technical Development Area (TEDA) and the Shenzhen Economic Development Area being the most successful.

 

The adaptation of the concept into the SEZ act seeks to boost private investment (domestic and foreign) in labour intensive areas in order to stimulate job creation, competitiveness, skills and technology transfer as well as increasing exports of beneficiated products through the establishment of special economic zones.

 

The CDCs growth trajectory over the past five years has seen it diversify its core targeted sector approach and investment market target to incorporate the changing global landscape. This has seen the organisation surpassing the double-digit growth in new investments for three consecutive years.

 

Furthermore, the “Look East Approach” has resulted in the organisation expanding into the Asian market with commendable success acquiring two Fortune 500 companies in the automotive sector. This has led to a R600 million investment by First Automotive Works (FAW), a truck assembly plant. Another acquisition includes a R11 billion investment by BAIC a car manufacture, currently under construction in Zone 1 of the Coega SEZ.

 

This feat has contributed in propelling the SEZ into a new realm as an investment hot spot offering total investor solutions with purpose-built manufacturing including beneficiation of export goods, investment and local socioeconomic growth – skills development and job creation.

 

The work put in by the CDC in attracting domestic and foreign investors has received recognition from global shores including the Chinese Vice President Dr Li Yuanchao in his visit at the Coega SEZ: “I’ve been to many developing countries and industrial development zones; the Coega IDZ is by far the best of them all”.

 

Coega SEZ performance has seen it leading the pack in South Africa in attracting investors. Currently the SEZ has forty-two (42) operational investors worth a combined investment value of seven billion (R7 bill).

 

What lies ahead?

The affirmation of South Africa’s investment-grade credit rating and the revised outlook from negative to stable by Moody’s sets a new path for sustained efforts in building on existing domestic and foreign direct investment.

 

In the year 2018, the CDC is poignant with enthusiasm as it awaits the completion of investment projects valued in excess of R12 billion. The projects, which include, Osho Cement – R600 million; Customs Control Area (in the logistics sector); Beijing Automobile International Corporation (BAIC SA) – R11 billion; Hella (Automotive investment in the CDC Logistics Park) – R53.3 million and MM Engineering – R350 million.

 

In conclusion, as a state owned entity, the CDC is mindful of the competing priorities of the national fiscus. Appreciating the dwindling funding allocation over the years, the organisation has focused its efforts towards a long-term view of becoming self-sustainable. This has led to several efforts undertaken by the organisation in generating revenue separate from the funding allocation by the provincial government. As a result, for the first time since the CDC’s inception, the organisation exceeded the half-a-billion rand (R541,8 million) revenue mark in the last financial year.

 

Ends.

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