Wesgro presentation by Jacyntha Maclennan : West Coast opportunities

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Wesgro presentation by Jacyntha Maclennan : West Coast opportunities

  1. 1. Jacyntha Maclennan (Head: Wesgro IQ) 28 February 2011 Accelerate Cape Town Members Meeting
  2. 2. Presentation Overview• Overview of Wesgro• Economic Output and Economic Growth• Trade and FDI• Saldanha Bay IDZ
  3. 3. About Wesgro • To attract and facilitate foreign and domestic direct investment into• Established by Law: the Western Cape; • To grow exports of products and services of the Western Cape – Western Cape Investment and MANDATE through the development of exporter capability, demand and market Trade Promotion Law Act 3 of access; and 1996 • To market the Western Cape as a competitive business destination• Compliance in terms of Treasury within national and international arenas Regulations/ PFMA/ MFMA • To fulfil our City and Provincial Government mandates of attracting• Reports to: and retaining direct investment, growing exports and marketing Cape Town and the Western Cape as a business destination globally; – MEC for Finance, Tourism and MISSION • To facilitate the link between business and government decision Economic Development makers• Financed by: • To provide service excellence in all our business support functions – Provincial Government of the Western Cape “To grow the economy through trade and investment – City of Cape Town VISION opportunities to benefit the people of the Western – Wesgro Members Cape”
  4. 4. Location of the Western Cape 6 District Municipalities 9 Provinces 1 Country
  5. 5. Western Cape Outperforms the National Economy GDP Growth per annum, 2000-2008 7 6 5 Growth (%) y-o-y 4 3 2 1 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: StatsSA, 2009 RSA Western Cape ***Regional GDP is released in November of the next year
  6. 6. Western Cape GGP by District GGP by Western Cape District, 2004-2009 200 180 160 140 Value(ZARbn) 120 100 80 60 40 20 0 2004 2005 2006 2007 2008 2009 City of Cape Town 142.22 150.58 159.82 170.32 177.01 175.27 West Coast 8.74 9.18 9.46 9.86 10.28 10.11 Cape Winelands 22.01 23.44 24.72 26.20 27.67 27.54 Overberg 5.34 5.76 6.05 6.43 6.82 6.85 Eden 13.49 14.51 15.41 16.38 17.18 17.23 Central Karoo 1.12 1.19 1.26 1.34 1.41 1.42 Source: Quantec, 2011
  7. 7. West Coast GGP GGP GROWTH: WEST COAST, 2005 - 2009 10 400 6.00% 10 200 5.00% 10 000 4.00% 9 800 3.00% GDP Growth (%) GDP (ZARm) 9 600 2.00% 9 400 1.00% 9 200 0.00% 9 000 -1.00% 8 800 -2.00% 8 600 -3.00% 2005 2006 2007 2008 2009 GDP 9 182 9 458 9 863 10 278 10 107 Growth 5.06% 3.00% 4.29% 4.21% -1.66% Source: Quantec, 2011
  8. 8. Western Cape GGP by Local Municipality Western Cape GGP by Local Municipality, 2004-2009 3500 3000 2500 Value (ZARm) 2000 1500 1000 500 0 2004 2005 2006 2007 2008 2009 Matzikama 1609.84 1646.20 1662.99 1705.37 1756.38 1701.64 Cederberg 867.05 905.51 906.56 930.27 960.31 929.30 Bergrivier 1228.12 1285.18 1300.85 1341.00 1375.11 1324.52 Saldanha Bay 2586.65 2738.26 2865.73 3004.60 3128.90 3096.70 Swartland 2370.99 2518.06 2624.29 2771.42 2930.39 2916.37 West Coast 77.41 88.80 97.31 110.61 126.93 138.40 Source: Quantec, 2011
  9. 9. Changing Composition of the Provincial Economy Breakdown of the Western Cape Economy – by sector 27.7 23.9 2000 2008 18.3 15.1 14.7 14.2% Share 10 9.3 8.6 8.6 4.6 4.8 4.9 4.5 4.2 3.3 1.6 1.5 0.2 0.7 Finance, Real Manufacturing Wholesale & Transport & General Agriculture, Community, Construction Electricity & Mining & estate & Retail trade; Communication government forestry & social and other Water Quarrying Business hotels & services fishing personal Services restaurants services Source: Quantec, 2010
  10. 10. West Coast GGP by Sector Breakdown of West Coast GGP, 2009 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Source: Quantec, 2011
  11. 11. West Coast Sector Growth WEST COAST GDP GROWTH BY SECTOR, 2005 - 2009 SECTOR 2005 2006 2007 2008 2009 Agriculture, forestry and fishing 1.95% -9.08% -1.84% 5.54% -8.01% Community, social and personal services 3.42% 3.05% 3.04% 2.46% 1.27% Construction 12.59% 10.84% 14.13% 8.81% 8.36% Electricity, gas and water -0.60% -4.22% -3.44% -5.90% -6.91% Finance, insurance, real estate and business services 10.97% 15.15% 12.79% 14.12% 6.79% General government 3.21% 1.77% 2.39% 3.30% 2.33% Manufacturing 1.12% 3.30% 1.90% -1.60% -11.44% Mining and quarrying 98.54% 88.74% 94.49% 89.40% 145.41% Transport, storage and communication 8.83% 4.41% 5.61% 3.03% 0.58% Wholesale and retail trade, catering and accommodation 8.73% 4.95% 4.08% -0.07% -4.25% Source: Quantec, 2011
  12. 12. Western Cape Trade Western Cape Trade, 2005-2009 200 000 150 000 100 000 Value (ZARm) 50 000 0 -50 000 -100 000 -150 000 2005 2006 2007 2008 2009 Exports 35 968 993 259 38 123 424 708 47 987 649 929 59 817 460 759 51 931 174 654 Imports 68 457 675 465 102 584 326 215 124 487 787 851 171 116 557 795 116 714 250 805 Trade balance -32 488 682 206 -64 460 901 507 -76 500 137 922 -111 299 097 036 -64 783 076 151 Source: Quantec, 2010
  13. 13. Western Cape Exports by District, 2007-2009 45 000 40 000 35 000 30 000 25 000 Value (ZARm) 20 000 15 000 10 000 5 000 - City of Cape Town West Coast Cape Winelands Overberg Eden Central Karoo 2007 35 827 407 722 3 180 760 491 6 843 070 730 1 002 562 988 1 132 415 542 1 432 456 2008 41 546 614 331 7 203 974 145 9 304 367 013 1 178 551 587 583 424 524 529 159 2009 36 773 814 853 3 564 569 905 10 064 773 226 1 117 525 606 409 157 833 1 333 231 Source: Quantec, 2010
  14. 14. West Coast Trade West Coast Trade, 2005 - 2009 4 500 4 000 3 500 Value (ZARm) 3 000 2 500 2 000 1 500 1 000 500 - -500 -1 000 2005 2006 2007 2008 2009 Total Exports 3 817 038 053 798 474 613 760 042 629 1 754 251 061 3 564 569 905 Total Imports 634 513 218 955 796 298 1 101 872 439 1 712 413 672 1 016 787 716 Trade Balance 3 182 524 835 -157 321 685 -341 829 810 41 837 389 2 547 782 189 Source: Quantec, 2010
  15. 15. West Coast Trade by product TOP 10 WEST COAST EXPORTS, 2009 TOP 10 WEST COAST IMPORTS, 2009 VALUE VALUE GROWTH GROWTH PRODUCT 2009 PRODUCT 2009 (2008 -2009) (2008 -2009) (ZARm) (ZARm)Flat-rolled iron/steel 888.8 -49.33% Iron ores and concentrates, roasted iron pyrites 312.7 -59.09%Hot-rolled products, iron/steel 689.7 -20.61% Hot-rolled products, iron/steel 120.6 5652.55%Citrus fruit, fresh or dried 362.9 -7.08% Carbon electrodes, brushes and electrical items 68.4 -27.08%Grape wines, alcoholic grape must 310.1 -16.91% Fruit and vegetable juices, not fermented or spirited 59.3 74.00% Retort carbon, coke or semi-coke of coal,Fruit and vegetable juices, not fermented or spirited 297.7 1.09% 50.5 -63.52% lignite,peatApples, pears and quinces, fresh 230.4 -13.87% Metal-rolling mills and rolls thereof 39.0 -52.58% Refractory cements, mortars, concretes exceptNiobium tantalum vanadium zirconium ores 115.4 -77.83% 35.9 21.57% graphiteBuilders joinery and carpentry, of wood 94.8 -12.40% Coal, briquettes, ovoids made from coal 25.7 -83.46%Locust beans, seaweed, sugar beet, cane, for food 84.9 -60.65% Tomatoes prepared, preserved, not in vinegar 24.5 117.17%Flour of meat, fish or offal for animal feed 77.9 -40.19% Organo-sulphur compounds 20.1 44.71%TOTAL 3,564.5 103.20% TOTAL 1,016.7 -40.62% Source: Quantec, 2011
  16. 16. Western Cape Share of South African Exports Western Cape share of South African Exports Product Value 2009 ZAR % Share 2008 % Share 2009 Tobacco and manufactured tobacco substitutes 1 293 539 155 72.9% 85.3% Vegetable plaiting materials, vegetable products 4 773 933 65.9% 83.4% Fish, crustaceans, molluscs, aquatic invertebrate 2 647 065 098 81.2% 82.9% Photographic or cinematographic goods 199 940 512 82.0% 81.6% Meat, fish and seafood food preparations 268 067 029 70.9% 80.7% Edible fruit, nuts, peel of citrus fruit, melons 10 614 498 626 79.0% 78.0% Beverages, spirits and vinegar 6 677 640 496 78.6% 77.7% Bird skin, feathers, artificial flowers, human hair 19 937 130 74.5% 69.5% Vegetable, fruit, nut, food preparations 2 186 641 708 70.5% 66.5% Knitted or crocheted fabric 18 823 193 46.2% 56.4% Lac, gums, resins, vegetable saps and extracts 17 272 873 52.3% 55.7% Edible vegetables and certain roots and tubers 220 901 353 49.8% 53.1% Source: Quantec, 2010
  17. 17. West Coast Share of Western Cape Exports West Coast Share of Western Cape Exports Product Value 2009 ZAR % Share 2009 Dolomite 284 406 100.0% Niobium tantalum vanadium zirconium ores, concentrates 115 479 024 100.0% Ores and concentrates, nes 57 615 523 100.0% Granulated slag (slag sand) from iron & steel industry 32 121 100.0% Pig iron and spiegeleisen in primary forms 40 668 206 100.0% Waste, scale, dross, slag of iron or steel industry 46 829 639 99.9% Hot-rolled products, iron/steel, width>600mm, not clad 689 728 433 99.7% Flat-rolled iron/steel, >600mm, clad, plated or coated 888 820 331 99.6% Flat-rolled iron/steel, >600mm, not clad, plated, etc 30 185 352 97.6% Builders joinery and carpentry, of wood 94 830 069 92.9% Flour etc of meat, fish or offal for animal feed 77 912 657 86.8% Manioc, rrowroot, salep etc, fresh, dried, sago pith 2 716 332 84.0% Locust beans, seaweed, sugar beet, cane, for food 84 928 575 53.3% Animal products nes, dead animals (non-food) 2 303 290 46.5% Candles, tapers and the like 2 781 942 44.7% Fruits nes, fresh 64 109 805 42.7% Source: Quantec, 2011
  18. 18. West Coast Share of Western Cape Exports West Coast Share of Western Cape Exports Product Value 2009 ZAR % Share 2009 Animal and vegetable fats or oils, hydrogenated only 1 502 356 42.1% Amino-resins, pheonolic resins, polyurethanes, primary 123 113 41.5% Fruit and vegetable juices, not fermented or spirited 297 792 297 35.3% Onions, shallots, garlic, leeks, etc. fresh or chilled 10 492 474 21.8% Articles of iron or steel nes 8 308 396 21.4% Scent, toilet sprays, puffs and pads for cosmetics 56 262 20.3% Cabbage, cauliflower, kohlrabi & kale, fresh, chilled 2 013 297 19.5% Wheat or meslin flour 1 217 587 17.4% Cutlery nes, cleavers, mincers, office, toilet items 151 239 16.6% Machine tools for wood, cork, bone, hard plastics, etc 351 898 15.3% Fixed veg fat, oil, fractions, not chemically modified 686 830 12.8% Vegetables nes, fresh or chilled 5 963 201 12.3% Raw hides and skins of bovine, equine animals 260 374 10.5% Machinery to sort, screen, wash, etc mineral products 2 248 779 10.1% Citrus fruit, fresh or dried 362 946 833 9.2% Source: Quantec, 2011
  19. 19. Top Sources of FDI into the Western Cape Jan 2009-Sep 2010 25.00% 20.00% 15.00%Share (%) 10.00% 5.00% 0.00% United Japan Germany Ireland UK Taiwan France Netherlands Australia Switzerland Mauritius India Russia States % Projects 8.57% 8.57% 5.71% 20.00% 20.00% 2.86% 11.43% 5.71% 2.86% 5.71% 2.86% 2.86% 2.86% % Capex 16.73% 15.91% 13.92% 4.17% 3.49% 1.12% 0.89% 0.80% 0.79% 0.65% 0.45% 0.27% 0.07% Source: FDI Intelligence, 2010
  20. 20. Breakdown of FDI into the Western Cape 60.0% Jan 2009 - Sep 2010 50.0% 40.0%Share (%) 30.0% 20.0% 10.0% 0.0% Industrial Alternative/ Business Communica Consumer Financial Food & Hotels & Machinery, Software & Transportat Renewable Beverages Healthcare Metals Textiles Services tions Products Services Tobacco Tourism Equipment IT services ion energy & Tools % Capex 24.3% 0.3% 2.5% 54.9% 1.4% 1.5% 1.3% 2.7% 0.2% 0.5% 0.1% 5.6% 0.9% 3.7% % Projects 5.7% 2.9% 17.1% 8.6% 2.9% 5.7% 2.9% 2.9% 2.9% 5.7% 2.9% 31.4% 2.9% 5.7% Source: FDI Intelligence, 2010
  21. 21. FDI into the Western Cape Location Determinants for FDI into the Western Cape* Proximity to Domestic markets or Market customers Growth 23% Potential 48% Skilled workforce availability Natural 9% Resources 4% Presence of Industry Regulations or Suppliers or Cluster / business JV Partners Critical Mass climate 6% 4% 6% Source: FDI Intelligence, 2010 * Based on company surveys
  22. 22. Key objectives of an IDZ• Key objectives: • Position South African-based manufacturing industries to meet the challenges of globalization; • Attract advanced foreign production & technology methods in order to gain experience in global manufacturing & production networks through attracting foreign direct investment (FDI); • Develop linkages between local & international-based industries; • Provide world class infrastructure & proximity to international ports to offer low cost & efficient logistics services; and • Provide services to overcome administrative hurdles for investors securing permits required for their operations.
  23. 23. IDZ Pre-Feasibility and Feasibility Study• Wesgro mandated by Province in early 2009 to investigate the establishment of an IDZ in SBM• Pre-Feasibility Study concluded in October 2009• Study focussed on economic and technical issues & identified potential in 5 clusters: • A Renewable Energy production and manufacturing cluster; • A Land-Based Dry Dock, Floating Dry Dock and Oil supply base/hub for the Oil and Gas cluster and a Maritime Ship Building and Repair cluster; • A Steel and Minerals Production & Manufacturing cluster• Constraints in Water, Energy, Environment & Land identified• Based on Pre-Feasibility Study, Provincial & National funding sought to fully investigate IDZ potential• Study must work closely & integrate with SBM, DTI , the DEA&DP EMF and SDF processes & policies• Study will be quality assured and expertly reviewed• Business Plan also to be delivered – if Study accepted by Government
  24. 24. IDZ Feasibility Study – Study Structure into the Future Governance by Steering Committee Internal Review of processes & findings by Project Phase One Phase TwoContinuous project management of time, quality & costs, Feasibility & Business Plan ActivitiesRegulatory input (e.g. EMF), Stakeholder Management & Team , External Review by Peer Group • International Scoping • Workforce Study Consultation, Legal compliance checks, Land Issues, • Environmental Analysis • Financial Modelling • Technical Analysis • Economic Modelling • Land Analysis • Operator Modelling Communications & Marketing Options Analysis SB IDZ “Blue Print” Valuation & Sensitivity Analysis IDZ Business Model Economic Model IDZ Operating Model Integrated Business Plan Operations Plan to investment decision in Start-Up Strategy/Operations Plan from “Start-Up to Operating Vehicle “
  25. 25. Thank you | Dankie | Enkosi

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