Investment target within reach; global players committed to South Africa
Pretoria, 3 March 2022. Minister of Trade, Industries and Competition, Mr Ebrahim Patel, announced that the fourth South African investment conference will be held in Johannesburg on 24th March.
It is expected it will take the country close to achieving the investment target set by president Cyril Ramaphosa in 2018. The president had committed to raising R1.2 trillion in investments in five years.
Two-thirds of that target was reached at the first three investment conferences. At last year’s conference R774 billion in investment pledges were made.
The actual implementation rate of the investment commitments has been significant: of the 152 projects announced previously, 45 have been completed and a further 57 are currently under construction. Some 40% of the investment commitments have already been expended.
“These are the emerging green shoots in the local economy which are encouraging to growth prospects. Most encouraging though is the gradual but steady realignment of supply chains across the globe which were disrupted at the height of the pandemic. And in a few months ahead, South Africa will unveil several manufacturing investments that will help to accelerate economic growth,” said Mr Patel.
Speaking in support of the investment conference was Anglo Head of Strategy and Programmes, Mr Wimpie Pienaar. Anglo which in 2018 committed over R100 billion worth of investments into the local economy over a five-year period, announced that it would commission an underground diamond mining operation at its flagship Venetia mine. “Our project to extend the lifecycle of Venetia Mine will finally come to bear in 2023. We have made significant progress in that regard and will also be making new pledges at the conference scheduled for the 24th March 2022.”
While praising government for progress made in deregulating the telecoms sector, Director Corporate Affairs at Naspers South Africa, Ms Helen Ndlovu, called on government to speed up the process to auction broadband spectrum saying it will help catalyse economic growth. “Technology and digitisation can assist small, medium and micro-enterprises (SMMEs) in accessing markets which is why Naspers is currently focused on growth of SMMEs in this regard. Accordingly, we have launched a R1.4 billion investment vehicle for early-stage tech companies and we have thus far made available R400 million to seven local companies.”
These and other investments made, cover a wide range – automotive, medical, food, industrial, construction and more. Some examples:
- Aspen: The company made a pledge of R3.4 billion at the 2018 investment conference. It has now been fully executed and provided Africa with its first significant vaccine manufacturing capability (for the J&J vaccine). An estimated 160 million doses have already been produced. It also built Africa’s first anaesthetic production facility, producing propofol under the brand name Diprivan, for the domestic and export markets.
- Mercedes Benz: The company pledged R10 billion during the 2018 investment conference. An additional R3 billion was added subsequently when the scope of the investment project was widened. This resulted in the local production of the new C-Class sedan from June 2021. It is now produced in three locations: Buffalo City in South Africa, Bremen in Germany and Beijing in China. The South African C-Class is exported to over 100 countries. This added some 600 new direct jobs with a further 2 000 in the value chain.
- VM Automotive: In 2019 VM Automotive announced a R426 million investment in a component plant in Buffalo City. It is a 100% black-owned company and is a supplier for the C-class Mercedes.
- Toyota: In 2019 Toyota South Africa announced a R2.43 billion investment (subsequently increased) to produce a new generation model. The Corolla Cross is the first generation of commercial-scale hybrid electric vehicle to come off a South African assembly line – in October 2021. It is being exported to more than 40 countries across Africa. South Africa is one of six global locations for its production. The others are: Thailand, Taiwan, Brazil, Japan, North America and China.
- P&G: In 2018 P&G announced a R300 million expansion to its facility in Kempton Park to introduce two additional plant lines. It has been in production since late 2019 and created 90 jobs. The products are exported into the neighbouring SADC countries. P&G made a further investment pledge of R250 million at the 2020 investment conference to expand its manufacturing facility and warehouse.
- In2Foods: In 2018 In2Foods announced an investment of R241 million. Located in the OR Tambo SEZ, it is a fresh food facility which is described as the largest in the southern hemisphere and the second largest CO2 refrigeration facility in the world. It created 600 jobs. It produces 2 000 litres of soup and 10 000 pancakes per hour. The company is increasing its exports through OR Tambo International and is the largest supplier for Woolworths of fresh and prepared foods.
- Dr Oetker: In 2020 this German company announced a R200 million investment in a new food manufacturing plant in Selby, Johannesburg. Now completed, creating 80 new jobs, it expanded capacity for frozen pizzas and ready-made meals for major retail chains.
- Bidvest: In 2018 Bidvest announced a R1billion investment in an LPG storage facility in Richards Bay. This has been completed.
A number of additional investments are ready to be officially launched in the next four months, some this month:
- Sappi: Expansion of its Saiccor Mill, announced in 2018, to the tune of R7,7 billion. Capacity for dissolved pulp will be expanded by 110 000 tons to 890 000.
- Corobrik: Announced in 2019, this investment of R800 million is to build a state-of-the-art brick manufacturing facility. Capacity will be expanded to 100 million bricks a year; current production is 50 million.
- Isuzu: Launch of the of R1.2 billion plant for the D-Max bakkie in Gqeberha.
- Renergen: Completion of the first phase of the R 700 million investment, announced in 2019, to produce liquid helium and liquefied natural gas. Commercial operations will start next month.
- Sandvik Mining: Announced in 2020 – a R287 million expansion of the remanufacturing and warehouse facility in Kempton Park.
- Dimension Data: A R875 million data centre in Johannesburg, announced in 2020.
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