As South Africa prepares to host its 4th Investment Conference later this month, Minister Ebrahim Patel has hailed this key event as a boon to the country’s target of netting R1.2 trillion in investment.
“President Cyril Ramaphosa in 2018 committed to raising over R1.2 trillion worth of investments over a five-year period, and hosted three annual Investment Conferences, at which he set out the policy context and reforms, and the private sector provided feedback and made pledges to invest.
“Pledges received in the first three Investment Conferences amounted to roughly 64% of the five-year Investment Mobilisation Drive target of R1.2 trillion,” said the Trade, Industry and Competition Minister at a briefing on Monday.
Patel said at the third Investment Conference, pledges of about R774 billion had been made.
Of the 152 investment announcements made previously, 45 projects have already been completed (meaning that the construction of the facility has been completed, or where it involves new machinery or equipment, these have been procured and installed; or that production has started).
A further 57 projects are currently under construction.
Some 15 projects are either progressing slowly or have been put on hold due to the impact of the pandemic or economic factors, the Minister said.
“As of February 2022, those firms who have completed their reporting have advised that R314 billion (40.6%) of the committed investment pledges have been expended.”
Companies back investment drive
Takalani Netshitenzhe, the Chief Officer: External Affairs from Vodacom, said four years ago at the first Investment Conference, the company pledged to invest R50 billion on fibre and mobile networks over a period of five years.
“We are living up to our pledge,” she said.
Naspers Director of Cooperate Affairs, Helen Ndlovu, said they are committed to this year’s Investment Conference as a means of continuing to help promote South Arica as an attractive investment destination, re-establishing confidence in the economy, and driving sustainable and inclusive growth as a proudly South African company.
Ndlovu said as a proudly South African business that has grown into a global consumer internet group and one of the largest technology investors in the world, they recognise the value of investment in unlocking the potential of South African companies and the role of these companies in creating jobs, stimulating growth and encouraging investor confidence.
“As Naspers, we have seen first-hand what the right investment, business support and partnerships can do in growing tech start-ups and also what the requisite digital skills training, opportunities and experience can do for young graduates entering the workplace.
“We have seen great progress but also recognise that there is a lot more work to be done by all stakeholders. It is for these reasons that Naspers is again a proud sponsor of the South Africa Investment Conference.”
She said they believe that as the economy reopens, there will be growing recognition of South Africa as a world-class investment destination, one with solid infrastructure, a young, hard-working and talented population, and an investment destination that has the potential to be a leader in driving technological innovation across Africa and beyond.
“During the first Investment Conference in 2018, we pledged R4.6 billion in investing in new technology start-ups and in growing our existing South Africa businesses.”
Patel highlighted pledges from other companies as follows:
Aspen: The company made a pledge of R3.4 billion at the 2018 Investment Conference that has now been fully executed and has provided Africa with much of its first vaccine manufacturing capability (for the J&J vaccine), with an estimated 160 million doses that have been produced in South Africa.
The company has also built Africa’s first anaesthetic production facility, producing propofol under the brand name Diprivan, for the domestic market and exports.
Mercedes Benz: The company pledged R10 billion during the 2018 Investment Conference. An additional R3 billion was added to this total amount subsequently when the scope of the investment project was widened.
This investment resulted in the local production of the new C-Class sedan from June 2021. The new C-class will be produced in three locations globally: Buffalo City in South Africa, Bremen in Germany and Beijing in China.
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The C-Class vehicle made in South Africa will be exported to over 100 countries.
“We have been advised that the investment will add approximately 597 new direct jobs, with a further 2 000 in the value chain,” said Patel.
V M Automotive: In 2019, VM Automotive announced an investment of R426 million in a component plant in East London. VM Automotive is a 100% black-owned company that will form part of the suppliers to the C-Class Mercedes.
Toyota: At the 2019 Investment Conference, Toyota South Africa announced a R2.43 billion investment (subsequently increased) to produce a new generation model that will also have a hybrid vehicle variant.
The Corolla Cross is the first generation of commercial-scale hybrid electric vehicle to come off the South African Assembly line on 26 October 2021. The Cross will be exported to more than 40 countries across Africa.
South Africa is one of six global locations for the production of the Corolla Cross. The other locations are Thailand, Taiwan, Brazil, Japan, North America and China. More than 600 parts in the new vehicle will be produced locally.
P&G: In 2018, P&G made an announcement of R300 million to expand their facility in Kempton Park to introduce two additional plant lines. The new facility 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 SAIC to expand their manufacturing facility and the warehouse.
In2Foods: In 2018, In2Foods announced an investment of R241 million. Located in the OR Tambo SEZ, In2Foods has built a state-of-the-art 2 2700m2 fresh food facility, which is described as the largest in the Southern Hemisphere and the second largest CO2 refrigeration facility in the world. This has created 600 jobs.
The new facility will producing 2 000 litres of soup and 10 000 pancakes per hour. In2Foods will increase the export of fresh products from OR Tambo International and is the largest supplier to Woolworths of fresh and prepared foods.
Dr Oetker: In 2020, German company Dr Oetker announced a R200 million investment in a new food manufacturing plant in Selby, Johannesburg. The new plant has been completed, creating 80 new jobs and expanding capacity at Dr Oetker for frozen pizzas and ready-made meals supplying to major retail chains.
Bidvest: In 2018, Bidvest announced a R1 billion investment in a LPG storage facility in Richards Bay. The 22 600 ton LPG storage facility has been commissioned and is the region’s largest import terminal.
Other investments close to completion
A number of additional investments are ready to be officially launched in the next four months, some by March 2022.
Sappi: Expansion of Sappi Saiccor Mill was announced in 2018 for R7.7 billion. Capacity for dissolved pulp will be expanded by 110 000 tons to 890 000 tpa.
Corobrik: In 2019, the company announced an investment of R800 million to build a state-of-the-art brick manufacturing facility. Capacity will be expanded to 100 million bricks a year (currently producing 50 million bricks at the Carltonvillie, Driefontein plant).
Isuzu: The company launched a R1.2 billion plant for the D-Max bakkie in Gqeberha.
Renergen: The company has completed phase 1 of the R700 million investment announced in 2019. Commercial operations in Virginia, Free State, will start in April 2022 to produce liquid helium and liquefied natural gas.
Sandvik Miniing: It announced in 2020 a R287 million expansion of its remanufacturing and warehouse facility in Kempton Park.
Dimension Data: A R875 million Data Centre in Johannesburg was announced in 2020.
Patel said preparations for the fourth South African Investment Conference (SAIC), are well underway. The conference will be held in Johannesburg on 24 March.
Of significance, this year’s conference is happening as the country emerges from the COVID-19 pandemic. Despite this, government remains optimistic that a strong partnership with private sector will help galvanise economic growth.