OR Tambo SEZ puts Ekurhuleni ahead
It is desirable for investors looking to manufacture and export via air, road or rail
nitially, the proposed development of the then Johannesburg International Airport Industrial Development Zone (IDZ), as it was then referred to, provided for the development of 725 hectares. With the hosting of the FIFA World Cup 2010 and changes made to OR Tambo International in 2015, Gauteng IDZ concluded a lease agreement with Airports Company South Africa to develop 7.5 hectares of land located inside the property boundaries of OR Tambo International airport.
Due to land availability constraints around the airport and in Gauteng in general, the province, together with the department of trade and industry resolved that the development of the OR Tambo International Airport SEZ would be undertaken non-contiguously. This was a departure from the initial concept, where large contiguous land parcels were being set aside for the development of IDZS in the country.
With the introduction of the new SEZ Act, 16 of 2014, which necessitated that all existing IDZS transition to SEZS, the Gauteng IDZ was able to re-gazette three land parcels located in the eastern corridor of the province for development of its SEZ programme, these being the 7.5 hectares located inside the airport park precinct and identified in the initial phase of the IDZ development; 29 hectares located outside the airport park, but in proximity to the airport, and an additional 14 hectares located 30km away from the airport, adjacent to the Impala Platinum Refinery in Springs, Ekurhuleni.
These land parcels are all located in Ekurhuleni, in keeping with the establishment focus of the Gauteng IDZ, which is to contribute to the positioning of the Gauteng City Region through the promotion of industrial activities concentrated around OR Tambo International Airport and the eastern corridor of the province.
Industry focus and value proposition
The value proposition of the OR Tambo SEZ programme is centred around the service offering of OR Tambo International Airport. OR Tambo International remains the largest and busiest airport in Africa, with approximately 21-million passengers passing through it per annum — 3.7-million more than Cairo International Airport, the second largest on the continent.
OR Tambo is also the largest air cargo hub in Africa, handling 77% of South Africa’s air cargo volume, with a total of 387 277 tonnes. These attributes make the OR Tambo International Airport SEZ ideal for the manufacturing and export of products that move via airfreight (also defined as high value, light weight or low mass). These include perishables (such as fresh food and medicines), mineral products (such as jewellery and diamonds) and advanced component manufacturing (such as electronics).
In support of this value proposition, Gauteng IDZ’S investment drive is focused on attracting manufacturing companies that wish to export their products through OR Tambo International. The OR Tambo SEZ is also at the centre of the Ekurhuleni Aerotropolis, a 1 975 square kilometre urban development plan with OR Tambo International Airport at its heart.
Easy access to an extensive road and rail network (including the Gautrain, Africa’s first high speed train), makes the OR Tambo SEZ desirable for any investor looking to manufacture and export via air, road or rail.
Development Status
The focus of the OR Tambo SEZ development has been on the delivery of the 7.5-hectare land parcel, which is referred to as ORTIA Precinct 1. This is a greenfield development that commenced in 2016 with the development of the essential bulk infrastructure and enablement works.
Concurrent to this development process, the Gauteng IDZ also undertook an investment drive to secure a credible investment pipeline. In support of the goal to attract both domestic and foreign direct investment into South African SEZS, the Gauteng IDZ secured domestic investment for the development of the largest and most diverse ultra-fresh food facility of its kind in the southern hemisphere, and the second-largest refrigeration facility in the world.
Construction on the agro-processing facility, which was undertaken in partnership with a local premier food giant, the In2food Group, started in 2018 and was completed in April 2019. The factory, which is 22 735 square metres in size, will contribute to the creation of much-needed job opportunities in South Africa.
A projected 600 new job opportunities will be created through the new facility, with further job and economic opportunities across the country’s agricultural value chain also being sustained. This will give In2food — Woolworths’ largest fresh and prepared food supplier — the ability to expand its output in the food production industry in the country as well as globally.
Beyond food awaits the world of diamonds and gold
With delivery of the first phase of ORTIA Precinct 1 completed, Gauteng IDZ has turned its full attention to completion of the Jewellery Manufacturing Precinct (JMP), the second and final phase of ORTIA Precinct 1.
The JMP was conceptualised through stakeholder engagements with Airports Company South Africa (ACSA) early on, when the then Johannesburg International Airport was identified as a suitable location for the beneficiation and export of minerals. The concept, which was substantiated by detailed sector focused research, aims to not just respond to the imperatives of the SEZ programme — to increase the production and export of products from South Africa — but also contribute to the national beneficiation strategy of the country.
The research revealed that there are a number of constraints to beneficiation in the country, among others, the issue of productionrelated costs. Companies located in the SEZ specifically for export purposes can take advantage of the national SEZ incentives packaged to reduce production costs, thereby increasing the competitiveness of South African products for global consumption.
Beyond the issue of costs however is the critical need to revitalise the beneficiation industry through the establishment of a competitive mineral beneficiation cluster, as has been created, for example, in Dubai and India. In support of this, the JMP is a clustered environment that will make provision not only for manufacturers but also for relevant support agencies and service enterprises. These include the South African Diamond and Precious Metals Regulator and the State Diamond Trader, and they will operate within a modern and secure environment, with a gold refinery in close proximity.
Because it is situated at OR Tambo airport, which is a National Key Point, state of the art security is available. The Gauteng IDZ is working with ACSA and other key stakeholders to ensure that this safe, modern and globally competitive mineral precinct is open for business before the end of 2021.
Construction of the first element of the JMP, the Super Block, has already started and is targeted for completion by mid-2020. The Super Block will house the department of mineral resources’ agencies: logistics companies that offer services to the industry and other industry-related service providers.
Construction on the other buildings to house local and international jewellery and diamond companies will commence in 2020. By 2021, the precinct will be completed, bringing to a successful end the delivery of a concept and project that is critical for the survival of the industry in South Africa.
The role of SEZS in growing the South African Economy
While the focus of the SEZS is often on the end result of export, which is critical, there is also a broader role for the development of SEZS in the country. SEZS bring with them vital job opportunities, technological advancements and skills development. To date, development of the ORTIA Precinct 1 has created 604 direct construction jobs. More jobs will undoubtedly be created by the time ORTIA Precinct 1 and the other precincts are completed.
The operations of the In2food facility have confidently shown that South Africa can develop and operate a facility with world-class technological requirements in the fresh food packaging and processing industry. The same will happen with the Jewellery Manufacturing Precinct, where new technologies in the design and manufacturing of jewellery will be promoted. The Gauteng IDZ has ensured this occurs through the establishment of a skills programme, Design@50, which promotes the design and production of jewellery using Computer Automated Design (CAD) techniques. The programme, which started its operations in 2013, has so far already trained 88 students, who have been successfully absorbed in the market.
Gauteng IDZ continues to work with key stakeholders such as the Jewellery Council of South Africa to ensure that its skills programmes remain relevant and responsive to global technological advancements. As proof that the skills programme is reaping rewards, the programme’s various participants have, since its establishment, been recipients of various awards at Jewellex, the premier annual trade fair of the South African jewellery industry.
Enhancing 4IR technology uptake
Beyond the promotion of beneficiation in traditional industries, the Gauteng IDZ also promotes the rollout and uptake of fourth industrial revolution (4IR) solutions. A particular focus in this regard is the advancement of
Platinum Group Metals (PGM) beneficiation opportunities, given South Africa’s position as the world’s largest PGM producer.
The platinum fuel cell market is one that the country, through the department of science and technology’s Hydrogen South Africa initiative, has significantly invested in over the last decade. In support of the home grown technological solutions arising from this investment as well as global market opportunities emerging for uptake from the global hydrogen industrial revolution, Gauteng IDZ will be developing an SEZ focused on fuel cell beneficiation. The development of this sector-focused zone brings with it industrial processing opportunities that are linked to 4IR, including 3D printing solutions, among others.
Given its existing infrastructure such as a gas reticulation network, Gauteng remains the most competitive province to champion the positioning of the country and Africa as a hydrogen-solutions manufacturing destination on the continent. The Springs Precinct has been identified to springboard this technology into action and is ideally located, with close proximity to the necessary raw material input, infrastructure, skills and the business economy in Gauteng.
The multi-tier approach to SEZ development
With the competitive location of Gauteng as a major contributor to the country’s GDP, the sixth administration of the province has resolved that a multi-tier SEZ approach is the most suitable to accelerate the attraction and facilitation of manufacturing-focused investment in Gauteng.
The Gauteng Growth and Development Agency is poised to respond to this directive and has, with the support of the Gauteng IDZ and the Automotive Industry Development Centre, worked with the City of Tshwane to launch and develop the recently-opened Tshwane Automotive SEZ in Silverton, Pretoria.