The Eastern Cape’s strategic location on the south-eastern seaboard of South Africa places it at the centre of the shipping routes between the world’s major markets and producers in Europe and the US in the west, and Asia in the east. The new deep-water port at Ngqura and the two industrial development zones (IDZs) being developed at Coega and East London plug into this strategic advantage and place the Eastern Cape province at the forefront of South African efforts to become a more export-oriented country.

The national Department of Trade and Industry is fully supportive of the concept of the IDZ, which it defines as ‘a purpose-built industrial estate linked to an international sea or air port that leverages fixed direct investments in value-added and export-oriented manufacturing industries’. IDZs are intended to promote international competitiveness in the manufacturing sector and to encourage the beneficiation of locally available resources. IDZs are seen as the most dynamic and effective method of attracting foreign investment.

Port of Ngqura
The Ngqura Container Terminal (NCT) is part of the Coega IDZ. Transnet Port Terminals has spent more than R10-billion on the development of the container terminal, which received its first commercial shipment in October 2009.

The Port of Ngqura has an entrance channel depth of 18m and a basin depth of 16m. When complete, it will have a four-berth container terminal, a two-berth multipurpose terminal and a liquid bulk terminal with one berth.

Twenty-two rubber-tyred gantry cranes (imported from China) and six modern shipto- shore cranes mean that the NCT has the very latest in container-loading technology. Refrigerated cargo will be served by 1 680 reefer plug points and a web-based operating system will control the marine and rail aspects of loading and storing containers in the correct sequence.

The first stage of the 60 000-hectare facility’s lifespan will see it dealing with a capacity of 800 000 twenty-foot equivalent units (TEUs), but this capacity will be expanded to two million TEUs by the time it reaches its final stage. Ngqura will be the only port in South Africa capable of receiving new-generation vessels carrying up to 9 000 TEUs with a draft of 16.5m.

The first commercial vessel to dock at NCT was the MSC Catania, which had its cargo of 275 containers offloaded at a rate of 19 containers per hour.

Four rail lines are operational in the dock’s marshalling yard, with another five due to come on stream in March 2010. Construction of the main rail terminal and the main line linking the port to the interior were said by Transnet Port Terminals to be on course in October 2009. The new rail route will link NCT to the City Deep rail facility in southern Gauteng, via Beaconsfield. The line has a designed capacity of six 50-wagon trains per day.

Coega Industrial Development Zone
Located 20km east of Port Elizabeth within the Nelson Mandela Metropolitan Municipality, the Coega IDZ is a multibillion-rand industrial development complex that includes the new deep-water Port of Ngqura. Operated by the Coega Development Corporation (CDC), it is ideally positioned at the centre of the world’s main trade routes, equidistant from the American, European and the Pacific Rim regions.

It is also ideally situated for primary production, as it has access to South Africa’s mineral reserves, as well as being at the centre of shipping routes for global ore reserves. Long-term plans include the development of an international airport able to handle high-value freight as well as passengers.

The Nelson Mandela Bay metro is currently home to one of the most diverse auto clusters in the world, and includes automotive manufacturers General Motors SA and Volkswagen South Africa, as well as over 150 suppliers including Goodyear, Bridgestone South Africa, Corning Incorporated, Visteon South Africa, Hella Automotive South Africa, Faurecia, LuK and Johnson Controls. Key priority investment sectors currently pursued by the CDC include metals and metallurgy, textiles, automotive, services, chemicals and energy.

In October 2009, a memorandum of understanding was signed between PetroSA and the CDC that will result in the former building a R75-billion oil refinery at Coega. Project Mthombo will pave the way for the IDZ to become a petrochemical hub serving the Southern African region. The refinery is expected to produce 400 000 barrels of crude oil per day, provide about 18 500 permanent jobs and generate R1.5-billion in tax per annum. Construction on Project Mthombo will begin in mid-2011, with commissioning projected for late 2014.

Another major project that will not only boost the investment profile of the Coega IDZ but help sustain the facility is a power plant. In July 2009, the CDC called for bidders for a R32-billion gas-turbine power-generating plant that will ultimately supply the IDZ (and the national grid) with 3 200 megawatts.

For the 2008/09 financial year, six companies had committed to invest a total of R3.9-billion in the zone. Among them was General Motors SA, which is due to spend R250-million on a regional parts-distribution centre. Altogether, the Coega IDZ had received commitments valued at R49-billion by October 2009.

Other significant investors include Bosun Brick (precast concrete), Acoustex (vehicle trim), Dynamic Commodities (fruit processing), Sati (logistics), Cerebos (salt production), the Mediterranean Shipping Company (container depot), Straits Chemicals (desalination plant) and PE Cold Storage (cold storage).

East London Industrial Development Zone
Located in Buffalo City, the East London IDZ (ELIDZ) is a 430-hectare industrial park. As the country’s first operational IDZ, it came on stream in 2001. Situated just 2km from the airport and 5km from the Port of East London, the ELIDZ not only provides industrial land at highly competitive rates but also vital access to national and international sea, air, rail and road links. The project aims to promote economic growth in the region by offering investors in the field of industrial development, both foreign and local, a globally competitive combination of geographical position, infrastructure, services and labour.

Part of the ELIDZ, which has 100 serviced sites, is a 15-hectare automotive supplier park (ASP), the purpose of which is to create sustainable economic growth in the local automotive and manufacturing industry. The ASP is located in the Customs Controlled Area (CCA), within a 10km radius of DaimlerChrysler South Africa, the East London Airport, the highway and the East London harbour.

At a cost of R400-million, the ASP took less than six months to construct. The key advantage of the ASP is that suppliers are located in one area and are able to benefit from world-class facilities while the manufacturers benefit in terms of a secure supply of quality components. Existing tenants in the park include Feltex Automotive Trim, Feltex Fehrer, Eurofit, TI Automotive and Johnson Controls. In July 2008, Mercedes-Benz South Africa signed a lease for a facility to store its imported and export-bound cars.

The ELIDZ is supporting the establishment of an outsourced vehicle-assembly plant with the capacity to produce 50 000 units per year. The model would see several manufacturers, including those now importing fully assembled cars into South Africa, sharing facilities and taking advantage of the proximity of several automotive supply businesses within the IDZ.

By October 2009, the ELIDZ had 21 investors with a combined investment value of more than R1.15-billion. These range from construction (Murray & Roberts), tyre distribution (Aquarius Tyre), solar energy (Matla Solar Therma) and seafood (Espadon Marine).