R21bn investment progress for Saldanha Bay IDZ

Sladanha revised SBIDZ

THE Saldanha Bay Industrial Development Zone has to date attracted more than R21 billion worth of private investments.

The Zone’s CEO Kaashifah Beukes provides updates on the progress so far of this long-term initiative.

Background

THE Saldanha Bay Industrial Development Zone Licencing Company SOC Ltd (SBIDZ-LC), South Africa’s first and only Special Economic Zone (SEZ) located within a port, is a new, open 356ha space catering specifically to the oil and gas, maritime fabrication, marine repair, logistics and related support services.

Situated in the largest and deepest natural port in the southern hemisphere, it operates as a Freeport offering streamlined customs processes and bespoke facilities and services to its tenants and operators.

The SBIDZ, is designated as a Customs Controlled Area (CCA) and Freeport, allows for duty and VAT-free entry of any foreign goods intended for re-export. This means we can ensure ease of operations for zone users and enable them to import, store and manufacture goods (including processing, cleaning and repair) without being bound by various time and economic restrictions.

The SBIDZ is the single largest project the government has embarked upon in the Western Cape and is the “most significant area of spatial development potential within the West Coast district”.

Our aim over the next 25 years is to create a vibrant hub of opportunity, job creation and sustainable growth utilising the special economic zone (SEZ) legislation as a catalyst.

Cooperation with major stakeholders.

We work with many organisations, businesses and institutions operationally and strategically.

We are immensely appreciative of the support given over the years by the Department of Trade, Industry and Competition and the Department of Economic Development and Tourism in the Western Cape. Their support in the establishment of the zone has really been part of our success in turning around an undeveloped area into a world-class operation.

The Saldanha Bay Municipality (SBM) and Transnet National Ports Authority (TNPA) are also quite critical to the zone’s investment attraction potential and sustainable regional economic development impact.

The SBM and SBIDZ-LC have launched several new developments recently, which included the SME Co-Lab Centre. A shared workspace for the Saldanha Bay business community, the Centre provides offices, meeting rooms, free Wi-Fi, printing facilities and access to laptops. The Centre also offers access to networking sessions with relevant public and private sector stakeholders and partners. The Co-Lab has attracted more than 1 500 SMME visits and engagements since it opened.

Also, our SBIDZ skills programmes have created over 1 800 individual training opportunities over the last four years. Enterprise development has completed a first-of-its-kind Oil & Gas SMME Readiness Assessment.

Various projects to upgrade bulk and transportation infrastructure were completed over the last few years.

As the port is TNPA’s responsibility and domain, the SBIDZ symbiotic relationship ensure that what is offered to investors and stakeholders is aligned with the plans and projects of the TNPA.

Attractions and benefits of the SBIDZ.

There are several.

Western Cape is an established hub for boat and shipbuilding. More than 80% of the country’s total ships, boats and other floating structures come from here, and approximately 70% of boat building companies are located in the region.

The region is the petroleum trading node for the country. The ports in the Western Cape handle 59% of SA’s total petroleum product exports and 47% of SA’s total petroleum product imports.

It is ideally situated to service East and West African sea traffic and provide a linkage point for African and international markets. It is perfectly placed to accommodate and service a wide range of vessels.

We have a solid maritime regulatory and policy framework in place to drive the development and efficient management of the industry. The African Continental Free Trade Area (AfCFTA) agreement makes this increasingly important.

Then there is our Innovation Campus. We asked ourselves: “How do we create a thriving, inclusive and resilient maritime and energy industry?”

Our research showed that the successful oil, gas and maritime SEZs encouraged research, development, and innovation (RD&I) capabilities. Clusters that drive innovation have cutting-edge knowledge centres that create and seize opportunities and do so with sustainability and inclusivity in mind always.

These thriving SEZs are able to rapidly respond to shifting global trends and continue to find new ways to solve industry problems and remain globally competitive.

Economic growth and job creation is only sustainable if it is competitive, and although innovation increases competitiveness, it is only sustainable and effective when it is collaborative. So, the SBIDZ Innovation Campus is a substantial value add to the SBIDZ, our stakeholders, and the energy and maritime industry at large.

To make it work, we shall need active involvement from government, industry, academia and the community in an ongoing collaboration and co-creation approach.

Investor response

To date, we have attracted more than R21 billion worth of private investments into the zone, with a total of 2 900 jobs created over the past five years.

During the 2020/21 financial year, we completed construction on the first investment project—a specialised corrosion protection facility.

We are currently in the process of constructing an additional two investment projects involving specialised manufacturing and fabrication, as well as partial assembly and manufacturing of components which are currently being imported into South Africa.

In addition, we completed construction on the Access Complex Building—a 5ha state-of-the-art commercial office facility that started taking in tenants in September 2020.

The SBIDZ has a robust investor pipeline that continues to grow in manufacturing and export facilities, and new-build port infrastructure. Several private investors have undertaken, at their own cost, bankable feasibility studies that demonstrate demand for vessel fabrication, maintenance, recycling and equipment servicing.

For example, the Saldehco Offshore Supply Base in the Port of Saldanha Bay is an investment that has made good progress. Construction of the facility is currently underway. The facility will offer internationally competitive services to vessels passing along our coastline, and projects looking to undertake surveys, exploration and production activity on the West African Coastal Area.

The common-user Project Leasing Facility (PLF) is another development by the SBIDZ that already delivers value in assisting with strategic government energy projects and meeting a business need. The 12ha facility accommodates projects with a duration shorter than 24 months and assists logistics companies and project managers with an easy-to-access facility near the port infrastructure when handling equipment and goods in or out of the port and zone.

The PLF currently provides temporary storage to tenants for wind blades, nacelles and tower sections to support the national Renewable Energy IPP Programme (REIPPP). We expect more projects related to REIPPP to be rolled out in 2021.

Both facilities support investment in the SBIDZ and have received significant backing from the Department of Trade, Industry and Competition (DTIC).

 

Future plans.

For the immediate future our focus will be:

  • achieving commercial self-sustainability to increase the value it will create for shareholders and stakeholders of the Zone;
  • investing in and establish catalytic infrastructure and facilities that will unlock local and regional productivity and employment;
  • improving the readiness of the local community and industry to leverage Zone-related opportunities that will result in competitive local and regional value chains for the marine and energy services industry being built; and
  • deepening and expanding our partnerships with business, government and society that ensures the SBIDZ remains the definition of an inclusive and transformative strategic

Two strategic projects to actively de-risk, enable and create the conditions for continued and increased investment into the Zone have commenced.

First, in partnership with the Transnet National Ports Authority (TNPA), we have embarked on a Marine Infrastructure Cost-Benefit Analysis (CBA) as the pre-feasibility study to bring in additional quaysides into the Port. This is to be completed soon. The study will assess the various options available in terms of marine infrastructure development at the Port of Saldanha against cost, technical demands, and market demand from the marine services sector. This infrastructure will provide sorely needed capacity for vessel builders, repairers, recyclers, equipment manufacturers, and many more – essentially all activities in the marine manufacturing and maintenance space.

Concurrently, and as a complementary initiative to the CBA, the SBIDZ-LC has initiated the Environmental Impact Assessment (EIA) for the marine infrastructure, which aims to be completed by the second quarter of 2022. This EIA aims to secure the relevant environmental authorisations required to de-risk investment into the marine infrastructure when it goes out to market eventually.

 

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