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

THE NORTH WEST PROVINCE OF SOUTH AFRICA –

A LAND OF TOURISM, TRADE AND INVESTMENT OPPORTUNITIES

CONTENTSNWP 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

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

DEMOCRATICREPUBLIC OF

CONGO

KENYA

TANZANIA

ANGLOA

NAMIBIA

BOTSWANA

ZAMBIA

ZIMBABWE

MALAWI

RWANDA

BURUNDI

GATEWAY TO AFRICA

NW

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

North West Province Economic Sectors

Agriculture MiningManufactur

ing ElectricityConstructio

n Trade Transport FinanceCommunity

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

Gross Value Added by Region (GVA-R) Broad Economic Sectors (Sector's share of regional total (%)) 2012

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 Expor

t mark

et Poten

tial

•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

` 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

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

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


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


AGRO PROCESSING


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.


AGRO PROCESSING


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


METAL FABRICATION


AUTOMOTIVE COMPONENTS


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.


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


PLATINUM BENEFICIATION


PLASTICS AND CHEMICALS


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.


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)


RENEWABLE ENERGY


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.


RENEWABLE ENERGY

N18(from

Vryburg)

N18(from

Botswana)

Cape-Cairo Rail corridor

MAFIKENG INTERNATION AIRPORT HUB

20


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

21


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

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

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

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 PlantPROJECT 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

SECTOR PROJECT NAME

PROJECT DESCRIPTION EST VALUE (R mil)

CURRENT STATUS

MINING

MANUFACTURING 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 industriesPROJECT 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

ANDMANUFACTURING

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 marketsPROJECT 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 AvailableBusiness Plan Complete and Available

Other Investment Opportunities

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

THANK YOUDANKIE

KE A LEBOGA

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

Business

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