Jobs boost as projects net R800m

Exciting wave of investments just the start of even greater future for ELIDZ

FIVE new projects worth an estimated R800-million will create 120 new jobs in the East London Industrial Development Zone (ELIDZ).

In an exclusive interview with the Daily Dispatch yesterday, CEO Simphiwe Kondlo said the projects were close to finalisation.

However, he said there was another much bigger wave of investment on the horizon, which was “very exciting”.

These investments were subject to negotiations and processes and he did not want to reveal much, but the total expected investment runs to more than R1.8-billion and will create 2 000 new jobs.

He said the ELIDZ was expecting the government to gazette implementation of the raft of Special Economic Zones (SEZ) incentives soon.

This will cut production costs by as much as 25% for at least 60% of the ELIDZ tenants and would make the zone internationally competitive and attractive.

Last year the government announced that the billion-rand OEM plant, designated for the ELIDZ, was going to the Coega IDZ in Nelson Mandela Bay and would be developed and run by China’s FAW corporation.

It was a blow, but the ELIDZ put on a brave face and accepted its fate.

Yesterday, Kondlo was beaming as he announced a raft of new investments and jobs coming to his park. These were a result of intense lobbying and preparation by the ELIDZ, he said.

This had placed the zone at the forefront of readiness to receive the benefits proscribed by the SEZ Act and, in September, the government gazette announced that the ELIDZ would be the first to be granted SEZ status.

Kondlo said they were awaiting a gazette notice which would allow ELIDZ tenants who qualified for the benefits to start accessing them.

Among the SEZ treats in store are:

● Zero VAT and import duties on raw materials;

● A 14 percentage point cut in company tax from 29% to 15%;

● Reduced employment taxes; and ● Training incentives. “We have been waiting for this second gazette since December and have been knocking on the door of the Department of Trade and Industries,” said Kondlo.

The department had given South Africa’s five IDZs until February 8 to comply with the SEZ regulations, “but we submitted our compliance plans in December”, said Kondlo.

It had taken 10 years of intense lobbying of government to reach this point, and Kondlo said: “The eastern half of the Eastern Cape needs this carrot.”

It had been a “miracle” that the 15-year-old ELIDZ, which lacked a deep-water port such as Coega’s, had been able to attract R7.3-billion in investments, and create 3 455 jobs.

He said four new projects close to being implemented at the ELIDZ were:

● A R12-million petroleum storage and distribution depot;

● A R240-million waste plant which recycled oils to create diesel fuel;

● A R54-million aquaculture plant which will produce cob; and

● Another R68-million investment in aquaculture.

These projects were signed up and in the final stages of feasibility studies or obtaining environmental authorisation.

Frötek, a plastic mould injection plant, is already running. It started with a R12-million investment and this is growing.

Yesterday, the Dispatch visited the hi-tech, spotless factory and handled a new, hot-off-the-press casing for the next DStv decoder.

GM Werner Bendisch said they had employed 26 staff but were expecting big growth, which would include 10 to 15 new jobs.

Kondlo said investments on the horizon included:

● A billion-rand plant to be owned by an “aquaculture group” with “lots of local players” which would farm and export an Australian species of cob back to Australia;

● A R500-million labour-intensive ICT electronics plant. Construction could start as soon as April, he said;

● A R200-million metal extraction recycling plant;

● A R100-million pharmaceutical and medical products plant which was expected to supply the provincial health department with items such as gloves and masks; and

● An automotive expansion plant for Yan Feng Interiors which already had contracts from Mercedes-Benz SA, but would produce items such as door panels and seats for other motor companies. —