The proposed IDZ, which would create about 12 000 jobs and generate R11.2-billion a year for the economy, would be a hub for national and foreign direct investment, boosting export-oriented manufacturing industries in the region.

The Saldanha Bay IDZ steering committee is a partnership between all three spheres of government and is represented by the DTI, the provincial Department of Economic Development and Tourism, the provincial Treasury, the provincial Department of Environmental Affairs and Development Planning, the Western Cape Investment and Trade Promotion Agency (Wesgro) and the Saldanha Bay municipality.

The operational team, chaired by Wesgro, received a mandate from the agency’s board of directors to proceed with the registration of a wholly owned subsidiary company called the Saldanha Bay IDZ licensing company, which would be the legal vehicle through which the application for IDZ status is sought.

Winde said in a statement that to complete the application process, the operational team incorporated public comment and was now finalising the business case.

A feasibility study concentrated on potential industrial clusters identified in a 2009 prefeasibility study. These included a renewable energy production and manufacturing cluster, an oil supply/base hub servicing the oil and gas industry and a maritime ship-building and repair cluster, as well as steel and minerals production and manufacturing cluster.

The study suggested that after 25 years, an IDZ in Saldanha Bay would generate a minimum yearly return of R11.2-billion for the economy and would create 12 000 sustainable jobs. However, under the best scenario, it was expected to generate a yearly economic return of R31.6-billion and sustain 29 000 jobs. It was also found that there was sufficient non environmentally sensitive land on which the development could be undertaken, the statement read.

The Western Cape government initiated the process of creating an IDZ in Saldanha Bay in 2008 to catalyse economic development in the province.

“In light of the benefits that an IDZ will bring, we are moving with a sense of urgency to conclude the processes required to set it up….we are engaging serious players in the economy who have expressed an interest in what the IDZ will offer…. and are pleased with this latest step in the process, as it brings us closer to getting national Cabinet ratification by the end of the year,” Winde said.

Source http://www.engineeringnews.co.za

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The town would fit well with government’s intention to decentralise industrial development to economically underdeveloped parts of the country. It has a population size of about 77800 and one of the country’s largest and deepest ports.

Department of trade & industry (DTI) director-general Lionel October says government could decide to designate Saldanha as an IDZ under existing legislation if new legislation is not in force yet. The new special economic zone (SEZ) bill may take another year before it is passed into law.

When the bill was announced, government acknowledged that existing IDZ s were chosen on the basis of policy decisions, rather than with any substantive economic rationale.

October was at pains to emphasise that new IDZ s would be declared only if their long-term economic viability could be proved. Setting up an IDZ requires a significant investment in infrastructure, which government will need to ensure does not go to waste.

The Western Cape Investment & Trade Promotion Agency (Wesgro), an agency of the provincial government, was tasked with the feasibility study for the Saldanha Bay IDZ, which was completed in October.

However, it has been criticised for failing to address concerns about employment.

Economist at the Stellenbosch School of Public Leadership Management & Planning, and a member of the Langebaan Ratepayers Association, Johan Ackron says the need to address unemployment on the West Coast is obvious. But he says the skills profile of people in the area does not necessarily fit what will be required in the construction of an IDZ.

The feasibility study, says Ackron, has not said how it will employ local unskilled labour instead of importing skills from elsewhere.

He has also questioned the state’s reason for choosing Saldanha Bay. In addition he says existing research does not demonstrate why businesses would relocate their operations to Saldanha Bay.

The association is not opposed to an IDZ in principle but it wants government to provide justification for it, to avoid the creation of a white elephant.

“Our concern is whether bringing an IDZ to Saldanha represents the best use of public money for this area.”

Head of Wesgro IQ Jacyntha Maclennan says the agency is incorporating comments from the public participation process into its final report. It is also compiling a detailed business plan for the IDZ, which will be submitted to the DTI . This will include specific references for each of the proposed industries.

Once the DTI is satisfied with the application , it will have to be approved by cabinet .

If it does go ahead, the study says the Saldanha region could experience growth of between 86% and 233% over a 25- year period.

It says there is a strong business case for an IDZ, and lists five areas of development (see graphic). Mineral beneficiation has been incorporated into the plan, in keeping with government’s strategy to develop downstream, job-creating industries, using natural resources.

The study has also considered funding, and says that for every R1 invested by government, the private sector would spend R4. In addition, it found that for every R1 spent by government, it would recoup an average return of 30c.

Private-sector funding, it says, would be required in most sectors.

Based on medium levels of investment, the study shows that foreign direct investment over 25 years would amount to about R18,5bn. Employment, it states, would climb to about 6670 direct jobs over the 25-year period.

It estimates that the IDZ could contribute annually between R11,2bn and R31,6bn to the national economy.

However, its success will depend on government’s willingness to provide incentives for business. If not, Saldanha Bay’s IDZ might face the same uphill battles as the Coega IDZ

source http://www.fm.co.za

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Thomas Nieszner, CEO, Europe, Middle East and Africa, DHL Global Forwarding said: “Africa is one of the fastest growing regions in DHL’s network. Partnering with the continent’s key institutions and organizations to create logistics and service hubs such as this one with MOGS is how we leverage the growth opportunities here as well as add value at the same time. Logistics is a key element of the OSC and it is exciting to become a strategic partner at an early stage, where we can be involved in the development of Saldanha’s air, sea and ground infrastructure.”

MOGS, part of the Royal Bafokeng Holdings Group, opened its Saldanha office in Langebaan last May. It aims to provide bespoke facilities, infrastructure and land to the major oil companies and MNCs at Saldanha in a multi-phased, multi-site development. This will include expanding the Oilfield Services Air Logistics Hub serving West, Central & Southern African offshore oil and gas fields.

Errol Gregor, CEO, South Africa’s Mining Oil and Gas Services, said: “With DHL as our strategic partner in logistics, we are confident we will achieve our ambition to be the preferred partner for world energy companies in oil and gas services. MOGS has considerable experience designing and building oil and gas sector infrastructure with planned facilities in Luanda and Nigeria to service the west coast. By leveraging our combined strengths and capabilities, DHL and MOGS can work towards making Saldanha a one-stop shop for the offshore energy industry in Africa.”

Source http://www.starafrica.com

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Speaking at the official launch of the flagship project, held on the sidelines of the COP 17 international climate talks in Durban, on Thursday night, Lennon said the launch signalled the power utility’s commitment to renewable energy and its commitment to do “a lot more renewables in the future”.

He indicated that the commercial process for the project would come to an end in early 2012, and that this bidding process would be “fair, transparent and competitive”. Upon conclusion, the utility aims to start construction of the project “as soon as possible”.

“The launch today signals that we have now reached financial close on this project, which means we are ‘all systems go’,” Lennon said.

Investors in the project include the African Development Bank (AfDB), French development agency Agence Francaise Development (AFD), the European Investment Bank, the German-based development bank KfW and the World Bank, with the funding anchored through the Clean Technology Fund.

Eskom did not reveal the total funding requirements of the project, but as previously reported, $265-million has been secured from the AfDB, $100-million from the CTF, with $700-million received for the noncoal-related funding arising from Eskom’s $3.75-billion World Bank loan, and €100-million secured through a credit facility agreement between Eskom and the AFD in August.

Public Enterprises Minister Malusi Gigaba said the wind project marked the transition, and a shift of attitude, to a new era for Eskom and the country in the renewables space.

He urged that the shift to renewable energy “must not be dramatic” in order to ensure optimal electricity generation, adding that all stakeholders must provide government with the patience and space to do its work.

“The shift to renewable energy must be purposeful and decisive.”

The Sere wind farm is being built on a 7 400 ha site near Vredendal in the Western Cape, a region with wind capacity estimated to be well over 10 000 MW.

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Financial director Thomas Schaal said I-WEC would be the first wind turbine manufacturer in South Africa.

At this stage, I-WEC had a single mould to produce rotor blades for 2.5 MW wind turbines. Schaal told Engineering News Online that the mould should be able to produce about 50 sets of rotor blades a year when full production capacity was reached in 2013.

The first blade would take about one month to produce and would be used as a test blade. During this period, a number of equipment and material suppliers would be present to give input in the process, I-WEC facilities and planning engineer Simon Graaffsaid.

The first blade would be tested to confirm that I-WEC’s processes were robust and able to produce rotor blades with the ability to withstand the strain they would experience when in use. After the first test blade, Graaff estimated that a single blade would take about two weeks to manufacture from start to finish.

I-WEC said that the design of its wind turbine had been bought under licence from Aerodyne, a German engineering company specialising in the design of large-scale wind turbines.

“Aerodyne is one of the leading companies in the wind energy market worldwide with a share in the biggest market, China, of more that 65% and more that 13 000 turbines running worldwide based on their design,” said I-WEC MD Dr Michael Kast.

DCD-Dorbyl, an investor in I-WEC, would be a close partner in the manufacture and assembly of the remainder of the components for the wind turbines.

Schaal said companies in the DCD-Dorbyl group would manufacture the turbine tower, the flanges to bolt the forward tower segments together and would assist in the assembly of the turbine nacelle. DCD-Dorbyl group companies would also be involved in transport and erection of the completed turbines. The entire process would, however, be under the umbrella of I-WEC, which would act as project managers. “With DCD-Dorbyl, our shareholder . . . we certainly have a perfect fit,” Schaal said.

Initially, the local content of I-WEC wind turbines would be about 60% as components such as the gearbox and castings would need to be imported until there was sufficient capacity in South Africa to produce these. However, Schaal anticipated that ultimately the local content would rise to 85%.

The cost of a turbine produced at the I-WEC facility, including transport, foundation costs and erection on site, was in the order of R15-million to R17-million per megawatt.

Currently, the company had an order of six wind turbines for ArcelorMittal’s Saldanha steel plant, where the first complete I-WEC wind turbine would be installed in March. I-WEC would also be involved in management of the Saldanha wind farm.

Schaal also stressed that job creation and skills development were key features of I-WEC’s philosophy. The company employs about 30 people, but it would be recruiting another 75 to 100 staff members in the next two years. If it achieves its aim of producing 200 wind turbines a year, I-WEC would create a total of 400 direct jobs, something it hoped would happen in a four- to five-year timeframe.

Graaff said that I-WEC would likely be moving its blade production facility from the Cape Town harbour to Saldanha at the end of 2012, or the beginning of 2013, where the production capacity could potentially be increased.

A property in Saldanha had already been procured and I-WEC’s existing staff training facility was already situated in the neighbouring town of Vredenburg in anticipation of this move.

source engineeringnews.co.za

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The managing director of Kayagas, George Tatham, told Parliament’s select committee on economic development that almost the whole consignment due on November 9 had already been sold, including to the company’s competitors.

“We hope by Friday it will all have been sold,” Tatham added after the briefing.

“It resolves the situation, at least in the Western Cape. It will carry us until the end of November, to the critical point when the refineries are going to be up,” he added.

The country is in the midst of an LPG shortage, caused by the simultaneous closure of three refineries.

PetroSA and SAPREF are in the midst of unplanned shutdowns while ENREF has been forced by a fire to bring forward a scheduled closure for maintenance.

The department of energy welcomed Tatham’s announcement.

“It is a big plus. It will take the Western Cape out of the equation on shortages at least,” said deputy director general for hydrocarbons and energy planning, Tseliso Maqubela.

The department told the committee at the moment importing more LPG was the only answer to the chronic shortages seen this very winter, as local refineries lacked the capacity to meet growing demand.

“In the short term we need to be looking at unlocking some facility for importing,” Maqubela said.

“Existing infrastructure cannot meet the demand. What we are seeing is that the refineries are inundated.

“There is a need for import infrastructure and therefore port authorities are going to need to come to the LPG party. Port authorities generally are risk averse, particularly when it comes to LPG facilities.”

Tatham underscored this, saying bringing gas through Saldanha had become possible purely because of a high level change of staff at port authority headquarters in Durban.

“The new port captain is much more progressive. He has put up an import facility there,” he said.

This would enable a constant flow of 4 000-ton shipments through the West Coast port next winter.

This adds a fourth point of entry to the existing but inadequate facilities at Durban, Port Elizabeth and Richards Bay.

Tatham urged more importing, arguing that local production could never meet demand, especially if the latter followed international trends to increase three- or fourfold.

“Ultimately imports are going to have to cover demand.”

The department told MPs that it firmly believed that there was a need and possibility to increase refinery capacity but that this was hampered by, among other things, doubt being cast on its pronouncements.

“There is a lot of second-guessing of policy pronouncements and it’s not helping the economy. It leads to a lot of delays in decision-making.”

The automobile industry said unpredictable shortages in the Eastern Cape had caused severe disruptions in the production of catalytic converters, and was threatening investment.

“Multi-national companies ask how they can invest when there is no security of supply and say they would rather go to other countries, for instance China, where there is no such as threat,” said General Motors’ Shibishi Maruatona, representing the National Association of Automobile Manufacturers of South Africa.

Maruatona asked that competition rules be relaxed to allow LPG to share more information to take some of the surprise element out of shortages.

The deputy commissioner of the Competition Commission, Tembinkosi Bonakele, said the industry had been given certain exemptions until 2015 but this had not always provided the expected relief.

News source iol.co.za

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The ‘Local Procurement Accord’ emerged following consultations held under the New Growth Path, which itself aims to bolster the domestic manufacturing sector in support of a larger goal to ensure the creation of five-million new jobs by 2020.

Economic Development Minister Ebrahim Patel, who signed the accord on behalf of government along with his Cabinet colleagues Pravin Gordhan, Dr Rob Davies andDipuo Peters, indicated that an immediate objective was to leverage public procurement in line with the amended Preferential Procurement Policy Framework Act (PPFA), which would come into force from December 7.

The regulations provide for the specific designation of sectors and products that should be procured locally by government departments, provincial and municipal governments and State-owned companies and agencies.

FIRST DESIGNATIONS

Davies indicated that it had canvassed the initial list of designated products with stakeholders and that the first designations would cover the public procurement of buses, power pylons, railway rolling stock, some pharmaceuticals, set-top boxes, clothing, textiles and leather footwear and certain food and canning products.

A standard was being established to govern whether or not a product could be considered to be local, and Davies stressed that the definition related to local production and not to the ownership of the supplying organisation.

Gordhan said that the accord could also be viewed as a ‘stimulus package’, as it should boost local demand at a time when South Africa’s main trading partners were experiencing a slowdown in growth. He said that the “cooperative” deal could stimulate demand from manufacturers, bolster production and help to create jobs.

The cooperative elements of the deal related to the voluntary commitments made under the accord by business and labour to increase local procurement, including the possibility of setting sector- or product-specific targets, where feasible.

NO BLANK CHEQUE

But Congress of South African Trade Unions general-secretary Zwelinzima Vavistressed that the “milestone” accord was not about holding domestic consumers to ransom, to be “milked” by uncompetitive local suppliers.

““This does not represent a desire to sign blank cheque,” Vavi added, arguing that it was premised on supporting competitive manufacturers that could help reverse the deindustrialisation and job losses of the South African economy.

Gordhan added that the changes to the PPFA should give life to the buy-local push, but added that there would also be a strong focus on combating fraud and corruption and on ensuring value for money, particularly given the tightening fiscal balance. He lamented the fact that there had been instances in which products, such as computers, retailing for R9 999.99, were being sold to government at closer to R19 999.99.

Davies added that efforts would be made to ensure that local suppliers did not seek to profiteer and indicated that monitoring systems would be designed to both establish better visibility of what goods and services were being procured from local sources, and also to avoid inflated prices being charged to government.

A joint monitoring and evaluation committee, comprising senior representatives from each constituency, would also be set up. The first meeting would be held by June 2012 and regular progress reports would be prepared.

Davies said the aim was to replicate the success of the recent antiretroviral procurement process, whereby government was able to finalise a deal that resulted in higher levels of localisation at a lower price.

Business Unity South Africa CEO Nomaxabiso Majokweni described the accord as another “tool” available to help support transformation, adding that business would be interrogating their own supply chains to assess buy-local opportunities.

She added that companies would be encouraged to intensify their efforts to “intentionally” source South African-produced goods and services. It emerge that the lead would be taken by members of Business Leadership South Africa, whose 84 members include the largest listed, multinational and State-owned companies operating in South Africa.

The business and labour signatories to the accord also committed to sourcing stationery, office equipment and promotional items such as T-shirts and hats from local suppliers.

An implementation ‘road map’ would be developed to address priority sectors and products, as well as sequencing, actioning and monitoring.

Business would host a workshop before November 30 to inform suppliers of the first designated products, where strategies to upscale local procurement would be discussed. A South African Diversity Development Conference would be hosted by April 30, 2012, and talks on further support for local procurement from the retail sector would begin in February next year.

News source engineeringnews.co.za

“If the government wants to promote growth then they must support the local economy, in my opinion they don’t practice what they preach. The local community (the people who live in the municipality) are not supported by the municipalities. Municipalities are supporting big business rather than its local economy, and in some cases procuring goods 100′s of kilometres from its own municipality. Municipalities sit up and listen to your government, support your locally owned business they support you by living in the area and paying taxes, that keeps the municipality ticking.”

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The mould, which arrived by ship from China, will be used to manufacture 50-m long rotor blades – exceeding the span of an Airbus wing.

At 2.5-MW, I-WEC’s turbines would be nearly double the size and capacity of the 1.3-MW turbines currently in use in South Africa. About 70% of the turbines’ components will be manufactured locally.

I-WEC said production of its first turbine would start immediately in order to erect the final product in Saldanha in early 2012.

A welcomed project for South Africa’s embattled manufacturing sector, the R100-million investment would create between 70 and 100 direct jobs in the Western Cape, in the next two years.

At project peak, and depending on market conditions, about 400 direct jobs could be created in the next five years.

I-WEC spokesperson and financial manager Thomas Schaal said the investment enabled the company to significantly contribute to the local economy, through the establishment of a local turbine manufacturing facility.

“The company will deliver on creating sustainable jobs and skills development contributing to the growth and development of the renewable energy sector in South Africa and Africa,” said Schaal.

Since its inception in 2009, I-WEC has created 30 direct jobs comprising 15 jobs for previously disadvantaged technicians, who have received specialised training in rotor blade manufacture.

It has 15 employees at its Table Bay Harbour office, including engineers and administrative staff.

I-WEC obtained its licence from the German renewable energy company Aerodyn. South African heavy engineering company DCD-Dorbyl is a majority stakeholder in I-WEC.

News source engineeringnews.co.za

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Monday saw the release of the Saldanha Bay Industrial Development Zone (IDZ) feasibility study, whose aim was to investigate the viability of establishing an IDZ programme in Saldanha Bay, so as to inform the final decision-making by the Saldanha Bay Municipality and the Western Cape Provincial Government on whether to apply for designation of an IDZ programme by the Department of Trade and Industry (dti) at Saldanha Bay.

Saldanha Bay has long been acknowledged as an important resource for the sustainable growth and development of the west coast region with the development of the deep-water port and the neighbouring industrial areas in the 1970s. Its economy is based on the manufacturing, agricultural, fishing, tourism and harbour industries.

According to Alan Winde, MEC for Finance, Economic Development & Tourism for the Western Cape, a number of jobs will be created over a 25 year period due to the establishment of the IDZ.

“Operational contributions to employment will climb steadily from zero to around 4,240 direct on-site jobs, amounting to 16% of the Saldanha Bay current employment, and 11,975 total direct, indirect and induced jobs, approximately 0.1% of the country’s current total formal employment,” he said.

The draft paper will be open for comment until the end of November, following which a decision with regards to the application for designation of the IDZ will be made.

source businesslive.co.za

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