Economy / 8 October 2014, 08:00am / Nompumelelo Magwaza
The newly launched Dube TradePort industrial development zone (IDZ) was expected to contribute about R5.6 billion to the country’s gross domestic product and create 150 225 jobs by 2060, President Jacob Zuma said in Durban yesterday.
The Dube TradePort is the country’s sixth designated IDZ, following those in Coega, East London, Richards Bay, OR Tambo International Airport and Saldanha Bay. It will be Africa’s first freight-orientated aerotropolis, and its proximity to King Shaka International Airport is an advantage.
Zuma said the Dube TradePort IDZ was backed by a 60-year master plan that would focus on turning the zone into a premier world-class investment and industrial hub.
His comments followed those of KwaZulu-Natal Premier Senzo Mchunu, who spoke about the prospects of a new city to be built around the IDZ in two to four years’ time.
Although he did not give full details, the new city concept was also mentioned by Economic Development MEC Mike Mabuyakhulu.
The Dube TradePort has already bagged about R900 million in investments from companies including Samsung, Bidvest and Emirates Sky Cargo, as well as Datacentrix.
Samsung previously unveiled its plans to invest R220m in a television and monitor factory scheduled to be in operation next month. The South Korean consumer electronics giant plans to invest over R1bn in the industrial zone eventually.
The main sectors that are expected to benefit from the IDZ incentives are electronics manufacturing and assembly, and aerospace and aviation-linked manufacturing. Another focus areas is agriculture and agro-processing, which includes the horticulture, aquaculture and floriculture sub-sectors.
Other industries that should benefit are medical and pharmaceutical production and distribution and the clothing and textile sector.
“All industrial development zones will automatically receive special economic zone status when the new Special Economic Zone Act comes into operation,” the president said.
Trade and Industry Minister Rob Davies said that in the past five years, the government had been looking critically at legislation to create special economic zones (SEZs).
Once this legislation was passed, those SEZs that met certain criteria would be eligible to benefit from VAT and customs duty exemptions, a section 12I tax allowance, a 15 percent corporate tax rate, a building tax allowance as well as employment tax incentives, Davies said.
Zuma said that by 2060, development growth around the Dube TradePort precinct should include upgraded roads, the extension of the cargo terminal, increased passenger volumes and the development of small- and medium-sized businesses in the region.
“This reflects our willingness to create partnerships between government, private sector and other social partners to work together towards a prosperous economy that benefits all citizens and residents,” Zuma said.
South Africa had three active IDZs that were now supporting about R5bn worth of investments, Davies said. These were the Coega, Richards Bay and East London zones.
Although new, the Saldanha Bay IDZ had already attracted 19 potential investors.
He said the OR Tambo IDZ had been proclaimed but the zone never took off.
Davies explained that there was a proposal from Ekurhuleni municipality, among other interested parties, to establish an aerotropolis in the OR Tambo IDZ, around OR Tambo International Airport.
The Richards Bay IDZ has had some struggles in attracting investors. Concerns about the viability of investments were exacerbated by the closure of BHP Billiton’s Bayside aluminium smelter, which resulted in jobs being shed.
However, Mabuyakhulu said the Richards Bay IDZ was negotiating a potential R12bn investment. “Of course we have been dealing with issues there, some of them around the suitability of the land and sensitivity of the eco-system in the whole of Richards Bay,” he said.
Regarding the closure of the BHP Billiton smelter, Mabuyakhulu said there were discussions about opening a new company that would continue with the work of the smelter.
“We have not lost out completely. We also see this as an opportunity to use the smelter complex for something else which is far bigger.”
This included prospects of an aviation components manufacturing company and other downstream investment opportunities, the MEC said.
So far this year, the Coega IDZ has attracted investments of R1.8bn while the East London IDZ has attracted over R500m.