wesgro presentation by jacyntha maclennan : west coast opportunities

Accelerate Cape Town Members Meeting

Jacyntha Maclennan (Head: Wesgro IQ) 28 February 2011

Presentation Overview

• Overview of Wesgro

• Economic Output and Economic Growth

• Trade and FDI

• Saldanha Bay IDZ

About Wesgro

• Established by Law:

– Western Cape Investment and

Trade Promotion Law Act 3 of

1996

• Compliance in terms of Treasury

Regulations/ PFMA/ MFMA

• Reports to:

– MEC for Finance, Tourism and

Economic Development

• Financed by:

– Provincial Government of the

Western Cape

– City of Cape Town

– Wesgro Members

MANDATE

MISSION

VISION

• To attract and facilitate foreign and domestic direct investment into

the Western Cape;

• To grow exports of products and services of the Western Cape

through the development of exporter capability, demand and market

access; and

• To market the Western Cape as a competitive business destination

within national and international arenas

• To fulfil our City and Provincial Government mandates of attracting

and retaining direct investment, growing exports and marketing Cape

Town and the Western Cape as a business destination globally;

• To facilitate the link between business and government decision

makers

• To provide service excellence in all our business support functions

“To grow the economy through trade and investment

opportunities to benefit the people of the Western

Cape”

Location of the Western Cape

9 Provinces

6 District Municipalities

1 Country

Western Cape Outperforms the National Economy

0

1

2

3

4

5

6

7

2000 2001 2002 2003 2004 2005 2006 2007 2008

GDP Growth per annum, 2000-2008

RSA Western Cape

Gro

wth

(%

) y

-o-y

Source: StatsSA, 2009

***Regional GDP is released in November of the next year

2004 2005 2006 2007 2008 2009

City of Cape Town 142.22 150.58 159.82 170.32 177.01 175.27

West Coast 8.74 9.18 9.46 9.86 10.28 10.11

Cape Winelands 22.01 23.44 24.72 26.20 27.67 27.54

Overberg 5.34 5.76 6.05 6.43 6.82 6.85

Eden 13.49 14.51 15.41 16.38 17.18 17.23

Central Karoo 1.12 1.19 1.26 1.34 1.41 1.42

0

20

40

60

80

100

120

140

160

180

200

Va

lue

(ZA

Rb

n)

GGP by Western Cape District, 2004-2009

Western Cape GGP by District

Source: Quantec, 2011

West Coast GGP


2005 2006 2007 2008 2009

GDP 9 182 9 458 9 863 10 278 10 107

Growth 5.06% 3.00% 4.29% 4.21% -1.66%

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

8 600

8 800

9 000

9 200

9 400

9 600

9 800

10 000

10 200

10 400

GD

P G

row

th (

%)

GD

P (

ZA

Rm

)

GGP GROWTH: WEST COAST, 2005 - 2009

Western Cape GGP by Local Municipality


2004 2005 2006 2007 2008 2009

Matzikama 1609.84 1646.20 1662.99 1705.37 1756.38 1701.64

Cederberg 867.05 905.51 906.56 930.27 960.31 929.30

Bergrivier 1228.12 1285.18 1300.85 1341.00 1375.11 1324.52

Saldanha Bay 2586.65 2738.26 2865.73 3004.60 3128.90 3096.70

Swartland 2370.99 2518.06 2624.29 2771.42 2930.39 2916.37

West Coast 77.41 88.80 97.31 110.61 126.93 138.40

0

500

1000

1500

2000

2500

3000

3500

Va

lue

(Z

AR

m)

Western Cape GGP by Local Municipality, 2004-2009

Changing Composition of the Provincial Economy

23.9

18.3

14.7

9.310

4.6 4.9

3.3

1.6

0.2

27.7

15.114.2

8.6 8.6

4.8 4.5 4.2

1.50.7

Finance, Real

estate &

Business

Services

Manufacturing Wholesale &

Retail trade;

hotels &

restaurants

Transport &

Communication

General

government

services

Agriculture,

forestry &

fishing

Community,

social and other

personal

services

Construction Electricity &

Water

Mining &

Quarrying

Breakdown of the Western Cape Economy – by sector

2000 2008

% S

ha

re


West Coast GGP by Sector


0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Breakdown of West Coast GGP, 2009

WEST COAST GDP GROWTH BY SECTOR, 2005 - 2009

SECTOR 2005 2006 2007 2008 2009

Agriculture, forestry and fishing 1.95% -9.08% -1.84% 5.54% -8.01%

Community, social and personal services 3.42% 3.05% 3.04% 2.46% 1.27%

Construction 12.59% 10.84% 14.13% 8.81% 8.36%

Electricity, gas and water -0.60% -4.22% -3.44% -5.90% -6.91%

Finance, insurance, real estate and business services 10.97% 15.15% 12.79% 14.12% 6.79%

General government 3.21% 1.77% 2.39% 3.30% 2.33%

Manufacturing 1.12% 3.30% 1.90% -1.60% -11.44%

Mining and quarrying 98.54% 88.74% 94.49% 89.40% 145.41%

Transport, storage and communication 8.83% 4.41% 5.61% 3.03% 0.58%

Wholesale and retail trade, catering and accommodation 8.73% 4.95% 4.08% -0.07% -4.25%

West Coast Sector Growth


Western Cape Trade

2005 2006 2007 2008 2009

Exports 35 968 993 259 38 123 424 708 47 987 649 929 59 817 460 759 51 931 174 654

Imports 68 457 675 465 102 584 326 215 124 487 787 851 171 116 557 795 116 714 250 805

Trade balance -32 488 682 206 -64 460 901 507 -76 500 137 922 -111 299 097 036 -64 783 076 151

-150 000

-100 000

-50 000

0

50 000

100 000

150 000

200 000

Va

lue

(Z

AR

m)

Western Cape Trade, 2005-2009


Western Cape Exports by District, 2007-2009


City of Cape Town West Coast Cape Winelands Overberg Eden Central Karoo

2007 35 827 407 722 3 180 760 491 6 843 070 730 1 002 562 988 1 132 415 542 1 432 456

2008 41 546 614 331 7 203 974 145 9 304 367 013 1 178 551 587 583 424 524 529 159

2009 36 773 814 853 3 564 569 905 10 064 773 226 1 117 525 606 409 157 833 1 333 231

-

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

Va

lue

(Z

AR

m)

West Coast Trade


2005 2006 2007 2008 2009

Total Exports 3 817 038 053 798 474 613 760 042 629 1 754 251 061 3 564 569 905

Total Imports 634 513 218 955 796 298 1 101 872 439 1 712 413 672 1 016 787 716

Trade Balance 3 182 524 835 -157 321 685 -341 829 810 41 837 389 2 547 782 189

-1 000

-500

-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

Va

lue

(Z

AR

m)

West Coast Trade, 2005 - 2009

TOP 10 WEST COAST EXPORTS, 2009 TOP 10 WEST COAST IMPORTS, 2009

PRODUCT

VALUE

2009

(ZARm)

GROWTH

(2008 -2009)PRODUCT

VALUE

2009

(ZARm)

GROWTH

(2008 -2009)

Flat-rolled iron/steel 888.8 -49.33% Iron ores and concentrates, roasted iron pyrites 312.7 -59.09%

Hot-rolled products, iron/steel 689.7 -20.61% Hot-rolled products, iron/steel 120.6 5652.55%

Citrus fruit, fresh or dried 362.9 -7.08% Carbon electrodes, brushes and electrical items 68.4 -27.08%

Grape wines, alcoholic grape must 310.1 -16.91% Fruit and vegetable juices, not fermented or spirited 59.3 74.00%

Fruit and vegetable juices, not fermented or spirited 297.7 1.09%Retort carbon, coke or semi-coke of coal,

lignite,peat50.5 -63.52%

Apples, pears and quinces, fresh 230.4 -13.87% Metal-rolling mills and rolls thereof 39.0 -52.58%

Niobium tantalum vanadium zirconium ores 115.4 -77.83%Refractory cements, mortars, concretes except

graphite35.9 21.57%

Builders joinery and carpentry, of wood 94.8 -12.40% Coal, briquettes, ovoids made from coal 25.7 -83.46%

Locust beans, seaweed, sugar beet, cane, for food 84.9 -60.65% Tomatoes prepared, preserved, not in vinegar 24.5 117.17%

Flour of meat, fish or offal for animal feed 77.9 -40.19% Organo-sulphur compounds 20.1 44.71%

TOTAL 3,564.5 103.20% TOTAL 1,016.7 -40.62%

West Coast Trade by product


Western Cape share of South African Exports

Product Value 2009 ZAR % Share 2008 % Share 2009

Tobacco and manufactured tobacco substitutes 1 293 539 155 72.9% 85.3%

Vegetable plaiting materials, vegetable products 4 773 933 65.9% 83.4%

Fish, crustaceans, molluscs, aquatic invertebrate 2 647 065 098 81.2% 82.9%

Photographic or cinematographic goods 199 940 512 82.0% 81.6%

Meat, fish and seafood food preparations 268 067 029 70.9% 80.7%

Edible fruit, nuts, peel of citrus fruit, melons 10 614 498 626 79.0% 78.0%

Beverages, spirits and vinegar 6 677 640 496 78.6% 77.7%

Bird skin, feathers, artificial flowers, human hair 19 937 130 74.5% 69.5%

Vegetable, fruit, nut, food preparations 2 186 641 708 70.5% 66.5%

Knitted or crocheted fabric 18 823 193 46.2% 56.4%

Lac, gums, resins, vegetable saps and extracts 17 272 873 52.3% 55.7%

Edible vegetables and certain roots and tubers 220 901 353 49.8% 53.1%

Western Cape Share of South African Exports


West Coast Share of Western Cape Exports

Product Value 2009 ZAR % Share 2009

Dolomite 284 406 100.0%

Niobium tantalum vanadium zirconium ores, concentrates 115 479 024 100.0%

Ores and concentrates, nes 57 615 523 100.0%

Granulated slag (slag sand) from iron & steel industry 32 121 100.0%

Pig iron and spiegeleisen in primary forms 40 668 206 100.0%

Waste, scale, dross, slag of iron or steel industry 46 829 639 99.9%

Hot-rolled products, iron/steel, width>600mm, not clad 689 728 433 99.7%

Flat-rolled iron/steel, >600mm, clad, plated or coated 888 820 331 99.6%

Flat-rolled iron/steel, >600mm, not clad, plated, etc 30 185 352 97.6%

Builders joinery and carpentry, of wood 94 830 069 92.9%

Flour etc of meat, fish or offal for animal feed 77 912 657 86.8%

Manioc, rrowroot, salep etc, fresh, dried, sago pith 2 716 332 84.0%

Locust beans, seaweed, sugar beet, cane, for food 84 928 575 53.3%

Animal products nes, dead animals (non-food) 2 303 290 46.5%

Candles, tapers and the like 2 781 942 44.7%

Fruits nes, fresh 64 109 805 42.7%




Product Value 2009 ZAR % Share 2009

Animal and vegetable fats or oils, hydrogenated only 1 502 356 42.1%

Amino-resins, pheonolic resins, polyurethanes, primary 123 113 41.5%

Fruit and vegetable juices, not fermented or spirited 297 792 297 35.3%

Onions, shallots, garlic, leeks, etc. fresh or chilled 10 492 474 21.8%

Articles of iron or steel nes 8 308 396 21.4%

Scent, toilet sprays, puffs and pads for cosmetics 56 262 20.3%

Cabbage, cauliflower, kohlrabi & kale, fresh, chilled 2 013 297 19.5%

Wheat or meslin flour 1 217 587 17.4%

Cutlery nes, cleavers, mincers, office, toilet items 151 239 16.6%

Machine tools for wood, cork, bone, hard plastics, etc 351 898 15.3%

Fixed veg fat, oil, fractions, not chemically modified 686 830 12.8%

Vegetables nes, fresh or chilled 5 963 201 12.3%

Raw hides and skins of bovine, equine animals 260 374 10.5%

Machinery to sort, screen, wash, etc mineral products 2 248 779 10.1%

Citrus fruit, fresh or dried 362 946 833 9.2%



Top Sources of FDI into the Western Cape

Source: FDI Intelligence, 2010

Japan Germany IrelandUnited

StatesUK Taiwan France Netherlands Australia Switzerland Mauritius India Russia

% Projects 8.57% 8.57% 5.71% 20.00% 20.00% 2.86% 11.43% 5.71% 2.86% 5.71% 2.86% 2.86% 2.86%

% Capex 16.73% 15.91% 13.92% 4.17% 3.49% 1.12% 0.89% 0.80% 0.79% 0.65% 0.45% 0.27% 0.07%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Sh

are

(%

)

Jan 2009-Sep 2010

Alternative/

Renewable

energy

BeveragesBusiness

Services

Communica

tions

Consumer

Products

Financial

Services

Food &

TobaccoHealthcare

Hotels &

Tourism

Industrial

Machinery,

Equipment

& Tools

MetalsSoftware &

IT servicesTextiles

Transportat

ion

% Capex 24.3% 0.3% 2.5% 54.9% 1.4% 1.5% 1.3% 2.7% 0.2% 0.5% 0.1% 5.6% 0.9% 3.7%

% Projects 5.7% 2.9% 17.1% 8.6% 2.9% 5.7% 2.9% 2.9% 2.9% 5.7% 2.9% 31.4% 2.9% 5.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Sh

are

(%

)

Jan 2009 - Sep 2010

Breakdown of FDI into the Western Cape


FDI into the Western Cape

Domestic

Market

Growth

Potential

48%

Proximity to

markets or

customers

23%

Skilled

workforce

availability

9%

Presence of

Suppliers or

JV Partners

6%

Regulations or

business

climate

6%

Industry

Cluster /

Critical Mass

4%

Natural

Resources

4%

Location Determinants for FDI into the Western Cape*


* Based on company surveys

• Key objectives:

• Position South African-based manufacturing industries to meet the challenges of

globalization;

• Attract advanced foreign production & technology methods in order to gain experience

in global manufacturing & production networks through attracting foreign direct

investment (FDI);

• Develop linkages between local & international-based industries;

• Provide world class infrastructure & proximity to international ports to offer low cost

& efficient logistics services; and

• Provide services to overcome administrative hurdles for investors securing permits

required for their operations.

Key objectives of an IDZ

• Wesgro mandated by Province in early 2009 to investigate the establishment of an IDZ in SBM

• Pre-Feasibility Study concluded in October 2009

• Study focussed on economic and technical issues & identified potential in 5 clusters:

• A Renewable Energy production and manufacturing cluster;

• A Land-Based Dry Dock, Floating Dry Dock and Oil supply base/hub for the Oil and Gas cluster and a

Maritime Ship Building and Repair cluster;

• A Steel and Minerals Production & Manufacturing cluster

• Constraints inWater, Energy, Environment & Land identified

• Based on Pre-Feasibility Study, Provincial & National funding sought to fully investigate IDZ potential

• Study must work closely & integrate with SBM, DTI , the DEA&DP EMF and SDF processes & policies

• Study will be quality assured and expertly reviewed

• Business Plan also to be delivered – if Study accepted by Government

IDZ Pre-Feasibility and Feasibility Study

IDZ Feasibility Study – Study Structure into the Future

Feasibility & Business Plan Activities

Phase One

• International Scoping• Environmental Analysis• Technical Analysis• Land Analysis

Phase Two

• Workforce Study• Financial Modelling• Economic Modelling• Operator Modelling

Internal Review of processes & findings by Project

Team

, External Review by Peer G

roup

Continuous project m

anagem

ent of time, quality & costs,

Regulatory input (e.g. EMF), Stakeholder M

anagem

ent &

Consultation, Legal compliance checks, Land Issues,

Communications & M

arketing

Options Analysis

SB IDZ “Blue Print”

Integrated Business Plan

IDZ Operating ModelEconomic ModelIDZ Business Model

Valuation & Sensitivity Analysis

Operations Plan to investment decision in Start-Up

Strategy/Operations Plan from “Start-Up to Operating Vehicle “

Governance by Steering Committee

Thank you | Dankie | Enkosi

wesgro presentation by jacyntha maclennan : west coast opportunities

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