NW Province Republic of South Africa: A Land of Tourism, Trade and Investment Opportunities


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NW Province Republic of South Africa: A Land of Tourism, Trade and Investment Opportunities

Hosted by Darky Africa - Commissioner of Development Planning, NW Province

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NW Province Republic of South Africa: A Land of Tourism, Trade and Investment Opportunities

  2. 2. CONTENTS NWP Quick Facts Summary of the NWP Advantage Economic Profile and Industry North West Tourism Why North West Province a. Easy Access to Markets and Gateway to Africa b. Market and Product Potential c. Market Entry Model d. Tourism Product Attractive Investment Opportunities NWDC Investor Support
  3. 3.  Bordering Botswana, the NWP is ideally positioned to access the 14 countries comprising the Southern African Development Community (SADC) as well as the islands off Africa's east coast, and even the Gulf States and India. the NWPs well developed road and rail links provide the platform and infrastructure for ground transportation deep into sub-Saharan Africa.  The SADC FTA signed in August 2008 provides access to a market of over 250 MILLION CONSUMERS  Future FTA with SADC,COMESA & EAC will provide access to a market of over 700 MILLION CONSUMERS  NWP offers easily available skills and distribution channels imperative for commercial ventures into Africa.  NWP plays a significant role in the supply of energy, relief aid, transport and communications to the continent.  NWP is well positioned to be used as a shared services hub for companies’ African operations, especially for Sub-Saharan countries. WHY NORTH WEST PROVINCE? : EASY ACCESS TO MARKETS AND GATE WAY TO AFRICA                    CONGO SOUTH AFRICA DEMOCRATIC REPUBLIC OF CONGO KENYA TANZANIA ANGLOA NAMIBIA BOTSWANA ZAMBIA ZIMBABWE MALAWI RWANDA BURUNDI GATEWAY TO AFRICA NW
  4. 4. 25 Relative sectoral strengths & investment opportunities (IDC) Western Cape: •Tourism •Agro-processing •Biotechnology •Petrochemicals •Clothing and textiles •Fishing Northern Cape: •Agro-processing •Transport & storage •Mining & beneficiation •Tourism North West: •Mining & beneficiation •Leather products •Livestock & meat products •Tourism Limpopo: •Food processing •Agri-business •Mining •Fertilisers & pesticides •Energy Mpumalanga: •Mining (coal) •Forestry •Agriculture & horticulture •Food processing •Petrochemicals •Tourism Gauteng: •Financial & business services •Information & comms. technologies •Pharmaceuticals •Auto assembly & components •Food processing & beverages •Chemicals & pharmaceuticals •Machinery & appliances •Mining •Tourism (leisure & business) Free State: •Agriculture •Food processing •Petrochemicals •Machinery & equipment •Mining & beneficiation Eastern Cape: •Agriculture and forestry •Aquaculture •Automotive •Clothing and textiles •Leather and leather products KwaZulu-Natal: •Aluminium prod & conversion •Auto assembly & components •Petrochemicals •Wood and wood products •Engineering & metal works •Clothing & textiles •Agriculture & livestock •Tourism
  5. 5. North West Province Economic Sectors Agriculture Mining Manufactur ing Electricity Constructio n Trade Transport Finance Community Services National Total 2.6 9.3 12.4 2.8 4 16 9.1 21.5 22.5 North West Province 2.7 41.2 4.5 1.7 2.2 10.3 6.5 11.1 19.8 Bojanala Platinum DM 0.9 57.5 4.2 1.2 1.8 9.4 5.7 9.6 9.7 0 10 20 30 40 50 60 70 GrossValue Added byRegion (GVA-R)Broad EconomicSectors (Sector'sshareof regional total (%))2012
  6. 6. WHY NORTH WEST PROVINCE? : MARKET AND PRODUCT POTENTIAL SOUTH AFRICAN TRADE AGREEMENTS  South Africa – European Union (EU) Trade, Development and Co-operation Agreement (TDCA)  Southern African Development Community (SADC) FTA  Southern African Customs Union (SACU) – India Preferential Trade Agreement (PTA)  Southern African Customs Union (SACU) - European Free Trade Association (EFTA) FTA  Africa Growth and Opportunity Act (AGOA)  SACU – Southern Common Market (Mercosur) Preferential Trade Agreement  BRICS multilateral 2010 North West University •Team of PhD researchers •Intellectual Property •Model Development Decision Support Model •Assesses the commercial and political risks of doing business in all countries •Market potential of the various product groups for the remaining countries are assessed by analyzing the growth of imports of a given product and related import market size •Examines the accessibility of each market (barriers to entry and the degree of market concentration) Identification of Export market Potential •Priorities export promotion activities •Potential export markets based on the strength of South Africa’s current exports to the identified markets, the potential market’s market size, market growth and import market accessibility. • DEMAND FOR 5500 SA PRODUCTS IDENTIFIED NORTH WEST ADVANTAGE Location Advantage Market Access Advantage Resource Base Advantage Production Cost Advantage
  7. 7. ` MODES OF ENTRY EXPORTING CONTRACTUAL AGREEMENT JOINT VENTURE ACQUISITION GREENFIELD INVESTMENT RISK Low Low Moderate High High RETURN Low Low Moderate High High CONTROL Moderate Low Moderate High High INTEGRATION Negligible Negligible Low Moderate High WHY NORTH WEST PROVINCE? : PREFERED MARKET ENTRY MODEL Given the Province’s close proximity to SADC, competitive advantage in key sectors and huge market potential in SADC, the preferred entry models for foreign companies in the NWP would be Joint Venture or Greenfield investment
  8. 8. WHY NORTH WEST PROVINCE? : RATIONALE FOR MARKET ENTRY MODEL LOCAL FIRM’S RESOURCES  Imitating capabilities  Older technology and know-how  Country-specific marketing expertise  Country specific organization skills MNE’S RESOURCES  Innovative capabilities  Advanced technology and know-how  Industry-specific marketing expertise  Organization structure and systems  Local expertise - marketing, government relations, etc  Access to partner’s local knowledge  Reduction of concern about overpayment  Both parties have some performance incentives  Significant control over operation  Both partners contribute hard-to-measure inputs  Large expected mutual gains in the long-run JV
  9. 9. ATTRACTIVE INVESTMENT OPPORTUNITITES INFRASTRUCTURE PROJECTS PROJECT DESCRIPTION PROJECT MOTIVATION Various construction and infrastructure projects required to unlock economic potential PROPOSED LOCATION • Province Wide SIP 4: Unlocking the economic opportunities in NWP • Acceleration of investments in road, rail, bulk water, water treatment and transmission infrastructure • Enabling reliable supply and basic service delivery • Facilitate development of mining, agricultural activities and tourism opportunities • Open up beneficiation opportunities in mining and agriculture in the North West Province The construction sector plays a pivotal role in the development of the provinces infrastructure, which is necessary to create an enabling environment for economic growth and development. Currently the NWP offers investment opportunities relating to road, rail and air transport, bulk water and electricity transmission infrastructure
  10. 10. PROJECT DESCRIPTION PROJECT MOTIVATION Establishment of the Cattle Beneficiation Industrial Park, including industrial and commercial facilities that dedicated for production and business services to attract new businesses, by providing integrated infrastructure in one location and providing localized environmental controls that are specific to the needs of the industrial area. • Support the beneficiation of cattle through a world class economy of scale abattoir, meat processing and packaging plant and cold storage facilities • Support the beneficiation of cattle hides through an economy of tannery, leather furniture manufacturing plant, leather footwear manufacturing plant, etc 70% of the value of NWP live animal and animal products exports during 2009 comprised live animals, and only 14% of the value of NWP exports comprised meat and edible meat products. This represents a significant beneficiation opportunity for the NWP, given that 13% of SA’s cattle herd is located in NWP, with beef cattle comprising 60% of the NWP livestock output. PROPOSED LOCATION • Dr. Ruth S Mompati District ATTRACTIVE INVESTMENT OPPORTUNITITES AGRO PROCESSING
  11. 11. PROJECT DESCRIPTION PROJECT MOTIVATION Establishment and development of the Small Scale Maize Milling Industry to facilitate the entry of small scale maize millers to the NWP rural areas where they are expected to be competitive, given that high logistics and transport costs raise the price of basic food and maize products. PROPOSED LOCATION • Dr. Ngaka Modiri Molema District A third of South Africa’s maize is grown in the NWP. Maize is allocated to various consumption categories in SA with 50% used for human consumption, 40% for animal feed and 10% for Bio-fuels etc. There is currently a surplus of maize production estimated at 4 million tons. This intervention thus aims to also sustainably reduce the current high cost of basic milled products, which would contribute to poverty reduction in the NWP. ATTRACTIVE INVESTMENT OPPORTUNITITES AGRO PROCESSING
  12. 12. PROJECT DESCRIPTION PROJECT MOTIVATION Development of a Metal fabrication, Capital and Transport Equipment sector development zone through the facilitation of general and specific industrial infrastructure, technical workforce and business support services to manufacture: • Metal fabricated components, • Machinery and equipment, • Other transport equipment, • Electrical machinery and apparatus, PROPOSED LOCATION • Dr. Keneth Kaunda District • Bojanala Platinum District The Metal fabrication, Capital and Transport Equipment cluster of sectors is vital to economic development as they produce products, applications and services that are used throughout the NWP and SA economy in infrastructure programmes, general construction, engineering, mining, packaging and automotives. The aim is thus to strategically position the NWP to develop industrial capacity and capability to leverage off the National Infrastructure capital expenditure programme as well as the growth in Renewable Energy and Energy Efficiency equipment manufacturing. Current opportunities include manufacturing to supply: • Public infrastructure and beneficiation chains through components/systems designated for local procurement • White goods industry, which is being repositioned for growth • Solar Water Heaters ATTRACTIVE INVESTMENT OPPORTUNITITES METAL FABRICATION
  13. 13. ATTRACTIVE INVESTMENT OPPORTUNITITES AUTOMOTIVE COMPONENTS PROJECT DESCRIPTION PROJECT MOTIVATION Establishment of an automotive component sector development zone for supply to local, regional and international markets. The DTI indicates that the policy shift from the Motor Industry Development Programme (MIDP) to the Automotive Production Development Programme (APDP) in 2013 serves to unlock various opportunities for vehicle Original Equipment Manufacturers (OEMs) as well component OEMs PROPOSED LOCATION • Bojanala Platinum District The APDP has key objectives to: • Raise vehicle production volumes to 1,2 million vehicles per annum by 2020 • Substantially diversify and deepen the components supply chain To achieve this, there will need to be ongoing increases in minimum plant volume thresholds and vehicle OEMs will need to work closely with existing and new component OEMs to identify areas where greater economies of scale in component sourcing and/or value chain development will be possible. This presents an opportunity to grow the component supply base through the expansion of the existing NWP Brits automotive component hub for both Original Equipment and aftermarket component manufacturing.
  14. 14. PROJECT DESCRIPTION PROJECT MOTIVATION Establishment of a platinum beneficiation sector development zone to support the technology development, pilot production, testing and commercialization of hydrogen production, Platinum Group Metals (PGM) catalysis components and fuel cell components PROPOSED LOCATION • Bojanala Platinum District Increasing global energy requirements necessitate the identification and development of environmentally friendly renewable energy. The North West University is currently leading in this field. Establishing the Platinum beneficiation sector development zone through the facilitation of general and specific research and industrial infrastructure, technical workforce and business support service to support the technology development, pilot production and testing, commercialization and manufacturing of: • Hydrogen production and storage components, sub assemblies and complete systems; • PGM catalysis components, sub assemblies and complete systems; • Niche application Fuel Cell components, sub assemblies and complete systems to address regional development challenges ATTRACTIVE INVESTMENT OPPORTUNITITES PLATINUM BENEFICIATION
  15. 15. ATTRACTIVE INVESTMENT OPPORTUNITITES PLASTICS AND CHEMICALS PROJECT DESCRIPTION PROJECT MOTIVATION Establishment of the Plastics and Chemicals sector development zone through the facilitation of general and specific industrial infrastructure, technical workforce and business support services to manufacture high value added and fast growing branded plastics and chemical products for the local, regional and other international export markets. PROPOSED LOCATION • Dr. Kenneth Kaunda District According to research undertaken by the DTI on the Plastics sector, SA enjoys a supply of polypropylene (PP) and polyvinylchloride (PVC) that exceeds current domestic demand. As a result, the bulk of these raw materials are exported in an un- beneficiated state and the beneficiation thereof has tremendous potential to create substantial industry growth and employment opportunities. Chemical products have also been identified as the basic inputs to several industries operating in the NWP. There exists a market opportunity to broaden existing chemical product manufacturing and to promote the introduction of new chemical product manufacturing including the incubation of SMME chemical product manufacturing.
  16. 16. PROJECT DESCRIPTION PROJECT MOTIVATION Renewable energy projects present the greatest potential for industrial development facilitation via NWPG and therefore projects surrounding these opportunities have been presented as sector based projects under: • Metal Fabrication, Capital and Transport Equipment sector development zone • Platinum beneficiation sector development zone PROPOSED LOCATION • Province wide Four key renewable energy sources and associated economic opportunities, that hold the greatest application potential and competitive strength, have been identified for the NWP including: • Cogeneration, due to the large number of smelters and substantial industrial processing plants (however utility returns and project cost present a barrier) • Fuel cells in terms of renewable energy applications and localized manufacture, which would also increase demand for PGMs (however the current challenge is to develop a market for fuel cells) • The development of the Energy Service Company industry, to facilitate and increase the roll-out of energy efficiency and the implementation of renewable energy technologies in the NWP • The application of solar photovoltaic for electricity generation in addition to Solar Water Heaters (SWH) ATTRACTIVE INVESTMENT OPPORTUNITITES RENEWABLE ENERGY
  17. 17. PROJECT DESCRIPTION PROJECT MOTIVATION Although SA has an abundance of RE resources available, the applicability of these for the NWP depend on a number of factors, and consequently not all are equally viable for the NWP. RE sources that were identified to hold the most potential and a competitive strength for the NWP are: • Solar energy (Photovoltaics (PV) as well as Solar Water Heaters (SWH), • Municipal solid waste, • Hydrogen and fuel cell technologies, • Biomass, and • Energy Efficiency (EE). PROPOSED LOCATION • Province wide The Renewable Energy (RE) strategy of the North West Province (NWP) was developed in response to a need for the NWP to participate meaningfully within the RE sector of South Africa. The Premier of the NWP, Hon Thandi Modise, has consequently made a declaration that NWP will develop a provincial RE strategy to provide guidance to stakeholders and assign roles and responsibilities for the development and production of RE in a sustainable manner across the NWP..The RE strategy aims to: • Improve the NWP’s environment; • Reduce its contribution to climate change; • Alleviate energy poverty; • Promote economic development; • Facilitate job creation; and • Develop the NWP green economy. ATTRACTIVE INVESTMENT OPPORTUNITITES RENEWABLE ENERGY
  18. 18. N18 (from Vryburg) N18 (from Botswana) Cape-Cairo Rail corridor MAFIKENG INTERNATION AIRPORT HUB
  19. 19. MAFIKENG INTERNATION AIRPORT HUB Manufacturing and export hub • Leather processing • Tiles manufacturing • High Tech Manufactured Central Business services • Duty free zone • Banking • Retail and Shopping • Restaurant • Convention Centre • Business Processing Outsourcing • Hotels • Office Park • Car Park Multimodal Transport System • Airport Development and Management • Airplane repair and maintenance services • Aviation Academy • Cargo Freight Management • International entry for non scheduled cargo air services • Rail and road network system • Passenger flight services 20
  20. 20. MAFIKENG INTERNATION AIRPORT HUB Agro processing Industrial Park • Packaging of vegetables and oils • Production of bio-fuels • Meat and fish processing • Packaging of fruits and fresh flowers Logistics Hub • Bonded Warehousing • Container Park Facilities • Cold Room Storage Facilities (perishable goods) • Livestock • Peace missions logistics services station • Inner road and rail network 21
  21. 21. NORTH WEST PROVINCE TOURISM :PROFILE . NW OFFERS:  Some of the finest game reserves  Cultural sights  Archaeological treasures  Adrenalin adventures  World class entertainment resorts HERITAGE DESTINATION OF SOUTH AFRICA THIS IS WHERE:  Our great human journey began.  Wild possibilities intoxicate the senses.  Game is wandering freely  Great birds own the wide open skies
  22. 22. NORTH WEST PROVINCE TOURISM : 7 MAJOR ICONS Mahikeng Capital City Taung Heritage Site Pilanesburg National Park Vredefort Dome Heritage Site Madikwe Game Reserve Hartbeespoort Dam Sun City and Lost City
  23. 23. SECTOR PROJECT NAME PROJECT DESCRIPTION EST VALUE (R mil) CURRENT STATUS AGRI BUSINESS MEAT PROCESSING PLANT Primary/Secondary Beef Production Agro Processing. Mechanized Feedlot and Development of Abattoir. The focus of the business will be to run a feedlot, an abattoir and a meat processing plant on the farm. PROJECT LOCATION: Bojanala Platinum District Municipality, Rietvlei outside Rustenburg. PROJECT CAPACITY: The aim is to initially slaughter 450 to 500 cattle per month, 500 sheep and 300 goats per month. Due to the fact that the business has export orders already, it is intended to build up to 14000 sheep and up to 4000 goats per month. R75 Million Feasibility Study and Business Plan Completed and Available LUCERN PELLET PLANT Set up of Manufacturing Facility for Pelletizing of Lucerne in Bojanala Region. The project entails the establishment and running of a Lucerne Pellet Plant PROJECT LOCATION: Bojanala Platinum District Municipality , Mamogaleskraal, outside the town of Brits in the North West Province of South Africa. PROJECT CAPACITY: The raw material beneficiation model also offers an integration with land reform beneficiaries based on an out grower scheme who will supply the pellet plant with the required Lucerne and maize crop R25 Million Business Plan Complete and Available EGG BROILER PLANT Establishment of an egg laying project plant. PROJECT LOCATION: Bojanala Platinum District Municipality , farm BS27 Boekenhoutfontein 13 kilometres from Rustenburg. PROJECT CAPACITY: The project will start with two houses of layers that will accommodate 26000 hens each. It is envisaged that this capacity will be expanded in the near future. It is intend producing 93,600,000 eggs to realize R73,008,000 in five years. In terms of water and electricity the farm is sufficiently supplied to handle more demand. There are 4 good boreholes. R12.4 Million GREEN FIELD: NEW PROJECT (business plan being developed) Basket of Investment Opportunities
  24. 24. SECTOR PROJECT NAME PROJECT DESCRIPTION EST VALUE (R mil) CURRENT STATUS MINING MANUFACTURI NG OF CONVEYOR 100% Black Owned and Managed Company Specializing in the manufacturing of high quality conveyor belt rollers for mining, manufacturing, power generation and other industries PROJECT LOCATION: Bojanala Platinum District Municipality , NWDC Industrial Complex. Tlhabane, Rustenburg. PROJECT CAPACITY: Conveyor design works, fabrication of conveyor engineering structure, supply and maintenance of motors, gear box, etc. the current machinery has a capacity to produce 500 troughs/rollers a day, 2500 a week and 10 000 a month R11.5 Million Business Plan Complete and Available AND MANUFACTURING SLATE BENEFICIATION PROJECT This is a Slate mining and beneficiation project, which is operational looking for investment regarding new mechanization to capacitate the project for new markets PROJECT LOCATION: Bojanala Platinum District Municipality , Koster PROJECT CAPACITY: The project currently employs 20 people and has the potential to employ more if the capital investment goes through. R5 Million Due diligence Complete and Available Business Plan Complete and Available Other Investment Opportunities
  25. 25. NWDC VALUE ADD SERVICES  Facilitating joint venture and equity partnerships  Providing information on financing options and investment incentives  Providing advice on feasibility studies and business plans  Assisting investors to obtain work and business permits  Providing assistance in obtaining suitable factory space  Assisting existing firms to expand and re-invest  Assisting companies to find export markets for their products  Advisory services to improve company growth and performance  Competitiveness improvement support  Advice on productivity and process improvement