North and South

Richard Zitha, executive responsible for MMSEZ investment promotion, made a presentation of the value proposition. The MMSEZ is among the biggest in the country in terms of landmass availability, divided into a North (Musina) and South (Makhado) site, each having a defined focus, which provides a good balance of heavy, medium and light industries, including logistics. The 8 000 hectare South site is primarily an energy and metallurgical hub and it includes a coal-fired power plant for own use. The following plants are envisioned: coking, stainless steel, high carbon ferrochrome, and a silicamanganese plant. As a Greenfield site it presents a huge opportunity for infrastructure development projects.

• The 3 500 hectare North site’s main focus will be on light and medium industries. The following are examples of investment opportunities around a logistics hub, warehousing and distribution, agro-processing, automotive, pharmaceutical and many others.

• Based on initial studies, upgrading the infrastructure on the northern and southern sites will require approximately R1.2-billion and R2.8-billion respectively.

• The Environmental Impact Assessment (EIA) for the northern site is approved and it is poised to proceed with critical infrastructure construction on or before June 2020.

Funding for infrastructure development will flow from the National SEZ Fund, the Limpopo provincial, treasury and various development finance institutions, including the IDC and DBSA. Leading the way, the provincial government has committed a significant amount of money for infrastructure development in the next financial year.

The entire concept is enabled by the SEZ Act, and the following SEZ incentives as defined by national treasury;

• 15% of corporate tax

• Building allowance and Tax Relief • Employment Tax Incentive

• Customs Control Area Tax Relief

• 12i Tax allowance which supports capital investment and training, and

• All other applicable incentives such as the black industrialist programme.

The roadmap:

• Early 2020: site clearance, perimeter fencing and access control to secure investments

• 2021: Commencement of civil works, internal roads and bulk services and ongoing investment roadshows. Investors can commence their own construction to meet top structure requirement.

Zitha said that the cross-border research was conducted to determine commodities that are crossing the Beit Bridge border, and the top 10 have been targeted as potential low-hanging investment opportunities that can be produced in the SEZ. This will bring the producers closer to the growing SADC market.

He said it is hoped that companies will interrogate the potential for relocating their operations to MMSEZ to be closer to their SADC markets by taking advantage of the investment and tax incentives.

Cross-border sectors identified include:

• Plant and equipment

• Oils, fuels and bitumen/cold asphalt • Tubes, pipes, chains and springs • Fertilizer blending

• Farm implements and assembly

• Wood processing, with discussions at an advanced stage by SAFCOL for the availability of timber

• Food processing

Both sites are designated, but only the South site has been gazetted. The process of gazetting the North site is underway and is preceded by this investment conference to measure investment interest.

Agreements were signed with Chinese investors to establish what will be known as a Bonded Trade City, which will enable upstream and downstream beneficiation of various agricultural products, such as cotton, avocado and timber into valueadded products for the export market.

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