COEGA BUCKS THE TREND

CityPress - - Business - MAX MATAVIRE busi­ness@city­press.co.za

At a time in South Africa when busi­ness op­er­a­tions are strug­gling to keep and main­tain a healthy bal­ance sheet due to the tough eco­nomic en­vi­ron­ment, the Coega De­vel­op­ment Cor­po­ra­tion has posted im­pres­sive per­for­mance fig­ures for the 2016/17 fi­nan­cial year.

Coega, which is the op­er­a­tor of the Coega spe­cial eco­nomic zone (SEZ) in Port El­iz­a­beth, has re­ported a dou­ble-digit growth in new investment in the year un­der re­view, re­sult­ing in it be­ing lauded as the “best investment des­ti­na­tion in Africa”.

Its fi­nan­cial per­for­mance re­port re­leased this week shows that rev­enue gen­er­ated amounts to R532.77 mil­lion against a bud­get of R451.2 mil­lion. The cor­po­ra­tion also bagged 16 new in­vest­ments worth R11.69 bil­lion, de­scrib­ing the per­for­mance as “be­yond ex­pec­ta­tion”.

“Coega for the first time in 17 years hit half a bil­lion rand in rev­enue gen­er­ated. In­vestors in­creased from 36 to 40 within a year – a mile­stone given the tough cur­rent eco­nomic en­vi­ron­ment in South Africa,” says Coega chief fi­nan­cial of­fi­cer Lionel Billings.

Dur­ing the year un­der re­view, Coega spent R776 mil­lion on small, medium and mi­cro en­ter­prises (SMMEs), of which R17 mil­lion went to 11 SMMEs based in Nel­son Man­dela Bay. It cre­ated 16 500 jobs and 5 886 ben­e­fited from its train­ing and skills de­vel­op­ment pro­gramme.

“Of par­tic­u­lar in­ter­est, in line with Coega’s vi­sion of be­ing a cat­a­lyst for cham­pi­oning of so­cioe­co­nomic de­vel­op­ment in the Eastern Cape, and South Africa as a whole, is the num­ber of jobs cre­ated dur­ing the fi­nan­cial year un­der re­view,” said Coega’s head of mar­ket­ing, Ayanda Vi­lakazi.

“The cu­mu­la­tive jobs cre­ated since Coega’s in­cep­tion 17 years ago in­creased from 94 732 to 102 794. This in­cludes the 16 500 jobs cre­ated this fi­nan­cial year.”

Billings said train­ing and skills de­vel­op­ment were vi­tal com­po­nents of Coega’s strate­gic plan­ning pro­gramme, adding that this has the po­ten­tial to re­duce los­ing skills to other prov­inces and to con­trib­ute to the de­vel­op­ment of the Eastern Cape econ­omy.

“These re­sults,” said Billings, “show that Coega continues to be a pil­lar of hope in the Eastern Cape, and through its projects coun­try­wide, the im­pact has reached more than 6 mil­lion peo­ple.”

He said stake­hold­ers had also played a sig­nif­i­cant role in the achieve­ment of such re­sults, and that they as­sisted Coega to move closer to achiev­ing its 2020 Sus­tain­able Growth Strat­egy.

Vi­lakazi said a re­cent study by Muf­fin Con­sult­ing had re­vealed that:

84% of com­pa­nies that in­vested at the Coega SEZ re­ported an in­crease in prof­itabil­ity;

85% of in­vestors have in­creased their work­force since open­ing at the SEZ; and 62% of in­vestors have ex­panded their op­er­a­tions;

90% of op­er­a­tional in­vestors at the SEZ have de­scribed it and its lo­gis­tics park, where Volk­swa­gen SA is lo­cated, as “the ideal lo­ca­tion for in­dus­tries wish­ing to grow”.

The Chi­nese vice-pres­i­dent, Li Yuan­chao, on a re­cent visit to the Coega SEZ, said: “I have been to many de­vel­op­ing coun­tries and SEZs in the world – the Coega SEZ is by far the best of them all.”

The Tu­nisian am­bas­sador to South Africa, Nar­jes Dridi, lead­ing that coun­try’s busi­ness del­e­ga­tion in April this year, said: “Our ob­jec­tive is to learn and have a sense of ap­pre­ci­a­tion of all op­por­tu­ni­ties that re­late to the Coega SEZ.”

The pro­vi­sion of in­cen­tives also plays a ma­jor role in at­tract­ing new in­vestors to the Coega SEZ.

These in­clude ex­emp­tion of im­port du­ties on raw ma­te­ri­als, semi-fin­ished goods and cap­i­tal equip­ment, such as ma­chin­ery.

In ad­di­tion, no VAT is charged on goods im­ported, cap­i­tal equip­ment; land supplied for ei­ther sale, let­ting or any other agree­ment en­tered into; elec­tric­ity and wa­ter supplied; ser­vices ren­dered; or con­sult­ing ser­vices.

Vi­lakazi said: “The good per­for­mance can be at­trib­uted to good gov­er­nance and sheer de­ter­mi­na­tion, as well as strate­gic and vi­sion­ary di­rec­tion and lead­er­ship pro­vided by the Coega board, to­gether with the ex­ec­u­tive man­age­ment.”

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