Tasez

Tasez

Infrastructure vital for SEZs to flourish

All the promise held by Special Economic Zones will come to naught if they don’t have all the hard, and soft, infrastructure that they need. However, South Africa’s unique situation in terms of how we have responded to power outages presents an opportunity for private sector to fill this need, writes Andile Sangweni, executive for infrastructure at the Tshwane Automotive Special Economic Zone. When one considers infrastructure, our minds automatically jump to thoughts of water, electricity, roads, drains, rail, and internet. These are all vital when it comes to setting up any area to be developed, such as a housing complex or a specially zoned industrial park. In fact, the plethora of cars on our roads bear testimony to how vital it is to plan when establishing new business or living areas. These are, indeed, vitally important. The stark reality of just how necessary they have been brought home all too often this year with innumerable power outages, as Eskom battles to keep the lights on amid failing equipment. Water, too, is an essential and we are being made aware of how much we need it as the threat of taps running dry looms large amid a persistent lack of rainfall over the past six years and a large backlog of infrastructure maintenance. In fact, easily 40% of our water is lost to leaks – the equivalent of R10 billion a year. When it rains, our storm drains can’t handle the influx of water and roads flood. Transnet has also been under the whip, with a recent strike causing companies such as Sasol to declare a force majeure as they could not transport goods from port to port. While that strike has ended, it shows just how much our economy relies on infrastructure. Skills development At the same time, we need what one may consider soft infrastructure. Skills and knowledge, networking opportunities, as well as shared experiences, too, are needed for SEZs to provide a contribution to the economy and create jobs while also rebuilding South Africa’s manufacturing sector. This may seem a bit of a chicken and egg situation. However, skills will follow infrastructure once a zone is ready to sign its first tenant. With an anchor company in place, others in the supply chain will see the benefit of working in close proximity with either clients or suppliers and will establish facilities. This concept is at the core of an SEZ’s purpose. It eliminates geographical boundaries while also offering attractive tax rates, 15%, to companies that set up business in these regions. This has a snowballing effect, with one company’s establishment being an encouragement to other businesses. In turn, a community will be established to house workers, which will be followed by healthcare facilities, schools, and malls – all of which will exist to service the SEZ. In this way, local economies are grown, and jobs created. The softer infrastructure of schools, police stations, hospitals and even libraries benefit all who live and work in and around the zone. Opportunities SEZs offer great economic benefits to those countries that establish them correctly. Locally, we have 11 designated SEZs across Limpopo, KwaZulu-Natal, Eastern Cape, Mpumalanga, Free State, and Gauteng. These areas are attractive to international investors, such as car makers, and increase exports, develop skills, reduce the logistical burden on our roads and railways, and enhance our country’s industrial capabilities. This is in keeping with the spirit of the Special Economic Zones Act, which states that SEZs must result in the creation of decent work and other economic and social benefits, which includes increasing economic participation of smaller companies as well as transferring skills and technology. The trick, however, will be when it comes to enabling more industrial zones as South Africa is battling to maintain the infrastructure it has, let a long develop further areas of land. Here, the private sector can play an important part, just as it has with helping South African communities and businesses survive loadshedding. We are seeing increased interest from businesses small and large and people in renewable energy: solar panels and batteries to power homes, for example. Government cannot solve our socio-economic dilemmas alone, it needs each of us to play our part, and we all can. From hawkers who direct traffic when the lights are out to initiatives such as Discovery Insure, in partnership with Dial direct and the City of Johannesburg, with their Pothole Patrol. These teams literally go around filling holes in the road that are reported to it through an app. Then there are the OUTsurance points people, a more organised method to keep vehicles flowing when there is no power. There are many examples of South Africans standing shoulder to shoulder to help build this wonderful country, and develop it into what it can be, allowing for equitable growth for all. Providing infrastructure for SEZs should be no different, public private partnerships can be used to significant effect here as well, which will lead to immense benefits for our country as a whole.

Bheka Zulu: Get into the zone

Special Economic Zones fill a vital role in our economy, giving tax-incentivised infrastructure facilities to a particular sector vertical that allows them to network, build relationships, grow scale and – ultimately – bolster the local economy, writes Tshwane Automotive Special Economic Zone CEO Dr Bheka Zulu. That South Africa’s economy is in the doldrums is nothing new, as it is expected to grow a mere 2.1% this year, dropping drastically from the 4.9% recorded in 2021. Over the next three years, Statistics South Africa anticipates gains of, on average, 1.8%. These rates are not nearly enough to help the country grow jobs and create opportunities for small, micro, and medium enterprises to be the driving force that they can be and bolster the South African economy so that it is equitable and helps close the gap between those who have, and those who are floundering in poverty. This is where the Special Economic Zones (SEZs) come in, as they offer an attractive proposition for a business to establish itself in an area that will see the local community benefit from its investment through the creation of jobs for the surrounding communities. At the same time, the hubs are a virtuous cycle because they enable one company to build a relationship with another, thus creating a chain of network and upskilling opportunities that lead to more business development. Locally, we are blessed with a legislative framework that allows those who operate in the SEZs to benefit from a reduced corporate tax rate of 15%, in addition to a 10% allowance when it comes to the cost of new buildings owned by company that quality. In addition, the tax rebate also applies to improvements to buildings. Growth zones The United Nations Conference on Trade and Development (UNCTAD), in its 2019 report on SEZs, reminds us that such zones, also known as freeports, date back many centuries to a time when traders used to move cargo from ships to sell items inland or re-export with next to no local authority involvement. These have since been replaced with modern establishments, generally located next to seaports or hubs or – in our case – close to one of the automotive production hubs in South Africa. The modern version started appearing in the 60s and really took off in the 80s. SEZs have proven to, over time, be a safe port for businesses, adapting and changing as the environment shifted. In fact, UNCTAD points out that the 2008/2009 global financial crisis, which brough many economies to their knees, hardly resulted in a dip for the zones. COVID-19 and the resultant lockdowns to curb the spread of the virus have also proven to be a catalyst for internal production as the world continues to reel from the shortage of items that typically get transported to countries across the ocean, such as electronic chips and timber. The report states that there are currently nearly 5,400 SEZs, about a fifth of which were established in the past five years, with another 500 to come in the next few years. In South Africa, there are 11 designated SEZs, in Limpopo, KwaZulu-Natal, Eastern Cape, Mpumalanga, Free State, and Gauteng. These zones pull in international investment as, for example, auto manufacturers see the benefit of being in a region that allow them to have a close geographical link to other companies in its supply chain. They also increase exports, help develop skills, reduce the logistical burden on the roads and railways, and enhance our country’s industrial capabilities. This is in keeping with the spirit of the Special Economic Zone Act, which states that the SEZs must result in the creation of decent work and other economic and social benefits, which includes increasing economic participation of smaller companies as well as transferring skills and technology. Industrial development is a natural, and positive, consequence of SEZs as other companies move closer to where the action, so to say, is happening. This results in other developments, such as housing and shopping malls, which requires infrastructure in form of water pipes and electricity. Given our unique power situation, this – as well as housing needs – presents an opportunity for the private sector to invest in housing projects run off solar power: a truly brilliant solution to the electricity challenge, while also helping meet the United Nations’ Sustainable Development Goal of Net Zero by 2050. SEZs represents a fantastic opportunity for equitable growth across the country, and we remain committed to ensuring that the Tshwane Automotive Special Economic Zone continues to be an attractive destination for not only vehicle manufactures, but also those who operate in vertical and horizontal sectors, supplying parts and other items to international companies who make cars, bakkies, and trucks. It does this by providing state-of-the-art facilities to connect all in the value chain to each other, seamlessly. Together, we can reach our vision of creating thousands of job opportunities and bringing more people into the employment fold. Growth zones The United Nations Conference on Trade and Development (UNCTAD), in its 2019 report on SEZs, reminds us that such zones, also known as freeports, date back many centuries to a time when traders used to move cargo from ships to sell items inland or re-export with next to no local authority involvement. These have since been replaced with modern establishments, generally located next to seaports or hubs or – in our case – close to one of the automotive production hubs in South Africa. The modern version started appearing in the 60s and really took off in the 80s. CEO of the TASEZ, Dr Bheka Zulu SEZs have proven to, over time, be a safe port for businesses, adapting and changing as the environment shifted. In fact, UNCTAD points out that the 2008/2009 global financial crisis, which brough many economies to their knees, hardly resulted in a dip for the zones. COVID-19 and the resultant lockdowns to curb the spread of the virus have also proven to be a catalyst for

Keeping an eye on the investment

Government and the private sector have invested more than R8-billion in TASEZ to support South Africa’s automotive manufacturing capacity. The recent oversight visit by representatives from the dtic, the national and provincial departments of Treasury and the Gauteng Department of Economic Development demonstrates TASEZ’s importance as one of the key implementors of government’s industrial development policies. Some of the significant achievements of TASEZ during itsconstruction phase included: The creation of more than 5 000 job opportunities in phase 1 Over 2 000 direct job opportunities created in theoperational phase Over R1-billion procurement spent on 214 local small,medium and micro enterprises (SMMEs) More than 300 SMMEs benefitted from accredited trainingprogrammes Procurement spent on SMMEs, with TASEZ’s assistance,resulted in the improvement in Construction Industry Development Board (cidb) grading.

SEZs focus

Special economic zones (SEZs) have become one of the major subjects of interest in both developing and developed countries, identified as one of the most effective ways to drive industrial development. The vision of Fetakgomo-Tubatse SEZ (FTSEZ), which will be based in the Sekhukhune District in Limpopo, is to be the global centre of excellence for sustainable solutions in green energy manufacturing, agro-processing and mineral beneficiation. Limpopo is one of the global leaders in the production of platinum, which is used mainly in industrial, medical and electronic products. FTSEZ Project Executive Mr Solly Kgopong says one of the key focus areas of the SEZ is to become a significant producer of hydrogen and other clean energy technologies. The hydrogen economy is a game-changer, he says, particularly in the efforts to re-industrialise the provincial economy. “For FTSEZ, this will provide demand for mining inputs supplies and the opportunity for large-scale industrialisation for mining inputs and beneficiation of mining outputs,” he added Africa’s first automotive city, TASEZ, is changing the face of South Africa’s manufacturing industry, accelerating economic reform, encouraging investment in the industry and, most importantly, creating jobs. Located in the City of Tshwane, TASEZ is a multi-billion rand project covering over 200 hectares. It is a crucial special economic zone that fits seamlessly into the priorities of the South African Economic Reconstruction and Recovery Plan, according to TASEZ Business Development and Investment Promotion Mr Msokoli Ntombana. “TASEZ plays a catalytic role in extending economic participation across the Tshwane region, opening up multiple opportunities for small, medium and micro enterprises and co-operatives,” he said.

New CFO at the helm

Ms Hlabatau has been tasked with ensuring TASEZ’s financial sustainability. The Tshwane Automotive Special Economic Zone (TASEZ) is thrilled to announce the appointment of chartered accountant Ms Rebecca Hlabatau as the organisation’s new chief financial officer (CFO). Ms Hlabatau, who has 20 years’ experience in senior management in the public sector, brings a wealth of skills to TASEZ from her outstanding track record of working in the health, transport and legal professional services industry. She will provide TASEZ with strong financial leadership, ensuring a stable base on which it carries out its important role as a catalyst for employment, transformation, socio-economic development and industry growth. Ms Hlabatau brings her own experience of the transport sector as she was previously the CFO of the Cross Border Road Transport Agency (C-BRTA), a national public entity responsible for the regulation and facilitation of road transport cross border operations in the Southern African Development Community (SADC) region. She was previously the CFO of Legal Aid South Africa, a national public entity with a network of six provincial offices and 64 local offices located across the country, with a staff complement of 2 700 and a budget of R2- billion. Ms Hlabatau holds a number of degrees and diplomas, including a post graduate diploma in accounting science (CTA) from the University of South Africa (UNISA), graduating from the flagship Management Advancement Programme (MAP) at the Wits Business School, completing an International Financial Reporting Standards certificate from the University of the Witwatersrand, and reading for an honours in accounting science from UNISA. She is also a qualified chartered accountant, holding the globally recognised CA(SA). As TASEZ continues to grow and expand its impact on the automotive sector, Ms Hlabatau will be there to provide a steady hand on TASEZ’s financial helm.

Tasez appoints new CEO

Captain Bheka Zulu to steer TASEZ’s mettle in rebuilding SA’s manufacturing capacity. The Board of the Tshwane Automotive Special Economic Zone (TASEZ) has appointed Captain Bheka Zulu as the new Chief Executive Officer (CEO) with effect from August 2022. Captain Zulu says he is encouraged by the performance and achievements of TASEZ. “The organisation has been able to attract interest from notable players in the automotive industry which has resulted in positive socio-economic spin-offs,” he says. TASEZ is a joint project between the Department of Trade, Industry and Competition, the Gauteng Provincial Government and the City of Tshwane. Its mandate is to support the development of the South African automotive manufacturing industry. Captain Zulu was the CEO at a Durban-based ocean economy shipping company and a board member at the South African Maritime Safety Authority. He is also a part-time lecturer at the Durban University of Technology’s Maritime Studies Department and is a PhD candidate focusing on the ocean economy. As the new CEO, Captain Zulu is tasked with the overall responsibility of positioning TASEZ as a leading investment hub for automotive manufacturing in South Africa. In addition to its successful initiatives in the automotive sector, TASEZ has also shown its strength in good governance and financial management, receiving successive clean audits from the Auditor-General for 2020/2021 and 2021/2022.

MORE SUPPORT NEEDED TO DRIVE WOMEN INTO THE CORE ECONOMY

The importance of women in the South African economy cannot be understated. They have a critical role to play that is not simply limited to their contribution to the gross domestic product (GDP) but in creating jobs and growing the country’s production capacity. There is no doubt that the number of women-owned businesses in South Africa has increased over the past few years. However, much more still needs to be done as South Africa strives towards inclusive economic growth. The United Nations Entity for Gender Equality and the Empowerment of Women, also known as UN Women, identifies women – particularly those in the rural areas – as key agents for achieving the transformational economic changes required for sustainable development. It is befitting that both the public and private sectors create opportunities for women-owned businesses. If South Africa, as an active proponent of inclusive economic growth, is to establish itself on a growth path, a concerted effort is needed to include the contributions of women. They are among the most resourceful entrepreneurs in South Africa and beyond; they are stronger and nimbler in living their entrepreneurial dreams. To quote the former United States first lady, Michelle Obama: “There’s no limit to what we, as women, can accomplish.”

Ensure Good Corporate Governance

TASEZ has become one of the significant players in the special economic zone ecosystem, led by Lionel October. The Board comprises members from key partners including the dtic, Gauteng Provincial Government, City of Tshwane and Ford Motor Company of Southern Africa. For the second year running, TASEZ has received clean audits from the Auditor-General. This is as a direct result of effective strategic guidance and sound corporate governance provided by the Board. As one of the key implementors of government’s industrial development policies, TASEZ plays a critical role in the broader special economic zone ecosystem. This is evident in the company’s mettle to attract automotive investments. As at the end of 2021/2022 financial year, about R3.41 billion was in by 12 investors. These investments will provide a great opportunity for South Africa to achieve real and meaningful industrialisation, especially in the automotive industry. More than 600 direct job opportunities have been created for the residents of Mamelodi, Nellmapius and Eersterust. Additional 1 400 (jobs opportunities) are expected to be created in the current financial year. One of the critical objectives of TASEZ is to increase investment and support the development of SA’s automotive manufacturing industry.

Prime Propositioning

With over 162.6 hectares, the TASEZ offers direct and ready linkages to regional and international markets, making exports easy to Southern African Development Community