Richards Bay Industrial Development Zone

The African Ports and Harbours Show 2015 Tuesday 30 June 2015

Sandton Convention Centre

ECONOMIC COMPARATIVE ADVANTAGES

Richards Bay

IDZ

Metals beneficiation

Aluminium

Titanium

Iron ore

Agro-processing

Pulp, Horticulture &

meat production

Port optimization

- Containerization, -Ship building &

repair

- Oil & Gas

Renewable energy

- Solar

- Fuel cells

- Biomass

ICT

- Techno-parks -Innovation Hub

2

Existing Land Portfolio

Phase 1A 62Ha

Phase 1F 110Ha

Phase 1D 65Ha

Total 237Ha

3

LIFESTYLE QUALITY

4

50-YEAR MASTER PLANNING

Environmental constraints, Irreplaceable agricultural land,

Topography, Built-up areas, Time-Distance to Port

50-YEAR MASTER PLANNING

ASSESSMENT OUTCOME: OPPORTUNITY

ZONE 4: HIGHEST DEVELOPMENT POTENTIAL

Macro Site 3 Site 4 Site 5 Site 6 Site 7 Site 9 Site 17 Site 1D Site 1E

Total Impact on GDP (million

R per annum)13,255 23,546 9,602 8,007 16,054 2,904 2,527 919 82

Direct employment

opportunities (number of

employment opportunities)

19,084 34,033 13,507 11,930 62,676 11,131 10,655 2,044 152

Total employment

opportunities (direct, indirect

and induced); (number of

employment opportunities)

62,544 111,152 45,082 38,549 111,002 19,945 18,520 5,242 455

Impact on low-income

households (million R per

annum)

144 255 104 87 184 33 29 11 1

Impact on total household

income (million R per annum)6,723 11,936 4,868 4,066 8,561 1,547 1,362 521 42

MACRO-ECONOMIC ASSESSMENT OUTCOME:

OPPORTUNITY ZONE 4

IDENTIFIED EXPANSION AREAS

10-YEAR HEADLINE DEVELOPMENT

PROGRAMME

Performance Indicator 2013 -2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Phase 1A: Completion of Engineering

Infrastructure

Phase 1F: Completion of Engineering Design

and EIA Approvals

Phase 1F: Completion of Engineering

Infrastructure

Phase 2A: Negotiations with land owners on

the sale of land parcels for expansion &

signing of options agreements

Phase 2A: Submission of application for the

subdivision of Agricultural Land(Act 70 of 70)

Phase 2A: Valuation of properties for

expansion

Phase 2A: Undertake specialist studies to

support EIA applications and EIA

Phase 2A: Submission of PDA Applications

for Development Approval

Phase 2A: Land Acquisition

Phase 2A: Bulk Infrastructure: Water,

Electricity, Sewer, Roads, N2 Interchange

Phase 2A: Internal Infrastructure: Water,

Electricity, Sewer, Roads

WHY RICHARDS BAY?Comparative advantages – Appeal, resonance & strengths

Developed Economic Infrastructure

Strong Geo-economic location

Human capital base

Qualified workforce

Environment and lifestyle

Agricultural & Mineral endowments

• Aesthetic mixed-use urban infrastructure

• Good standard of living for expatriate personnel

• Pleasing Urban-rural integration

• Balanced sustainable development-mix

• Titanium & Aluminium– beneficiation into

component manufacturing AVIATION

• Forestry – timber & pulp development

• Fresh produce – food processing

• Diverse population offering young and trainable

workforce

• Multi-lingual workforce

• Reputable tertiary institutions

• Diverse & well established heavy industrial base

• Purpose-built industrial infrastructure

• Deep-water port & multimodal capability

• Gas, fibre-optics, electrical & logistics network

COMMITTED (SIGNED) INVESTORS

Investor Investment

Value

Number of Jobs Type of Investment Land

Uptake

Nyanza Light Metals R 4,5 billion 300 direct and 800 construction

jobs

Manufacturing of Titanium

dioxide pigment

65 Ha

Oasis Group R 40 million 30 direct jobs and 60 jobs during

constructionWaste oil recycling

1 Ha

Phaka Sangle R 20 million 30 direct jobs and 60 jobs during

construction

Manufacturing of solar

water heaters

1Ha

SPS Manufacturing R 300 million 87 direct jobs and 110

construction jobs

PVC Pipe Manufacturing 3Ha

uMuthi Power R 2 billion 70 direct jobs and 260

construction jobs

Renewable Energy Plant 12Ha

Pro Star Export Paint R16 million 50 direct jobs and 50 construction

jobs

Paint manufacturing 2ha

INVESTMENT VALUE =R6,81B PERMANENT JOBS= 517 CONSTRUCTION JOBS= 1340

BOARD APPROVED INVESTORS (not yet signed)

Investor Investment

Value

Number of Jobs Type of Investment Land

Uptake

Mthonjeni R 105 million 42 direct jobs and 150

construction jobs

Aluminium beneficiation 2Ha

Eagle Pride Power R1,7 billion 500 direct jobs and 150

construction jobs

Energy storage systems 10ha

INVESTMENT VALUE =R1,8 B PERMANENT JOBS= 542 CONSTRUCTION JOBS= 300

INVESTOR ATTRACTIONExpected to commence operations in 2015/16

Investor Investment

Value

Number of Jobs Type of Investment Timeframe

SPS Manufacturing R 300 million 87 direct jobs

110 construction jobs

PVC Pipe Manufacturing Construction by

May 2015

Pro Star Export Paint R16 million 50 direct jobs

50 construction jobs

Paint manufacturing Construction by

September 2015

RB Energy Services R20 million 20 direct jobs and 25

construction jobs

Logistics

Construction by

December 2015

Phaka Sangle R 20 million 30 direct jobs

60 construction jobs

Manufacturing of solar water

heaters

Construction by

December 2015

16

HIGH IMPACT PROJECTS ON PIPELINE

• RBIDZ in discussion with various parties about installing

>800 MW gas-to-power plants in Richards Bay

• Establishment of Metals Hub at Bayside

• Establishment of at Techno Park RBIDZ site

• RBIDZ in discussion with largest steel manufacturer in China

and ranked 3rd in the world

• Oil and gas pursuits

• Establishment of Agro- processing facility 17

18

DEPARTMENT OF TRADE AND INDUSTRY INCENTIVES

CLUSTER INCENTIVE SCHEME

SEZ SPECIFIC • 15 % Corporate income tax – Income Tax Act

• Building Allowance

• Job Incentive (Applies only to youth outside SEZ)

• VAT Timing benefit in CCA only

• RBIDZ Base Rate R 5,50/m²/month (vacant developed land)

BROADENING

PARTICIPATION

• Black Business Supplier Development

Programme (BBSDP)

• Co-operative Incentive Scheme (CIS)

• Incubator Support Programme (ISP)

COMPETITIVENESS

INVESTMENT

• Sector Specific Assistance Scheme (SSAS)

• Export Marketing & Investment Assistance (EMIA)

• Capital Projects Feasibility Programme (CPFP)

MANUFACTURING

INVESTMENT

• Enterprise Investment Programme (EIP)

• 12i Tax Incentive

• Automotive Incentive Scheme (AIS)

• People-carrier Automotive Investment Scheme (P-AIS)

INFRASTRUCTURE

INVESTMENT

• Critical Infrastructure Programme (CIP)

• IDZs (SEZ)

RENEWABLE ENERGY PROJECTS

19

60 MW biomass Plant

Approved by Board

R2 billion project

Project at Feasibility stage

2 Projects Proposed for

gas to power

Potential to produce in

excess of 800 MW

Both projects at

feasibility stages

R20 million

project

Approved by

Board

Expected

construction this

FY

R1.7 billion project

Approved by Board

Project at Feasibility stage

KEY MARITIME OPPORTUNITY AREAS

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• Container handling terminal

• Bayside security of tenure – Metals Hub

• Oil & Gas

• Boat building

• Ship building & repairs yard

• Liquefied Natural Gas terminal & pipeline network

• Gas-to-Power facilities

RECENT HIGHLIGHTS

21

• RB Energy Services (Lovemore Bros.) commenced operations in Phase 1A – R 20 million.

• Signed R4.8 billion potential locators to date – includes total investment signed during 2014/15

financial year equating to R 320 million.

• Further projects to the value of ~ R3.5 billion approved by the Board of Directors.

• 66% of the Engineering Infrastructure in Phase 1A completed.

• Created >1700 construction jobs up to 30 March 2015.

• Obtained provincial Cabinet approval for the 50 year Master Plan

• Secured R272 million from the dti via the SEZ Funding Application process.

• Obtained Clean Audit Report.

• Improved to Level 2 BBB-EE Contributor.

• ISO 9001:2008 Accreditation

• Capital Projects spend to date exceeds R250 million

PROPOSED MASORINI STEEL AND IRON PLANT ( PLANT OVERVIEW)

22

• 5 mtpa plant to be implemented in two phases

- Phase 1: 5mtpa

- Phase 2 2mtpa flat products mainly

• Future plans for coke ovens, Cold Roil Coil and galvanizing

• Integrated plant from raw material to distribution

• Importance of controlling entire value chain to keep costs down

• Investment Value – Estimated at USD 5 Billion (R60 billion) for the steel plant excluding

downstream industrial park

• Up to 3000 ha required for the steel plant and industrial park

Permanent jobs on implementation and temporary jobs during construction

Construction (3 yrs) : 10 000

Operations : 4-5 000

Significant job creation potential

======

TOTAL : 15 000

PROPOSED MASORINI STEEL AND IRON

PLANT ( KEY PRODUCTS)

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PHASE 1 - Long Products

Hot Rolled Coil (HRC)Metallic (Galvanised) Coil

(HOG)

Organically

Coated/Pre

painted ( Coil)

PHASE 2- Flat Products

Rod for wire drawing Structural Sections

OPERATION PHAKISA

OIL AND GAS

24

OPERATION PHAKISAMARINE MANUFACTURE AND REPAIR

25

Australian Marine

Complex

• Constructed by State

• Common user facility

• Floating dock

• Deep water port

• 5 wharves

• 40 ha sealed laydown

and construction area

• 27,600 jobs

• Maritime

• Fabrication

• Technology

Oil & GAS AND SHIPYARDS

26

Mexico Dubai

DubaiIndonesia

OPERATION PHAKISA

MARINE MANUFACTURE AND REPAIR

27

Overview of

Atlântico Sul

Shipyard Brazil

• 162 ha

• 13 ha sheltered area

• 400 x 73 x 12 dry

dock

• 730 m outfitting quay

• 680 m rig building &

repair quay

OIL & GAS AND SHIPYARD

BRICS example

Brazil

• 30, 000 jobs over 2 years for 4 new shipyards to

service oil and gas http://riotimesonline.com/brazil-news/rio-business/new-brazilian-shipyards-to-generate-

30000-jobs/

• Building about 370 ships, including 14 oil rigs

and 28 drill ships

• Similar drilling conditions to South Africa

28

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SIGNING OF M.O.U

Richards Bay IDZ &

Mfolozi Technical Vocational Education Training

Objectives of M.O.U.

• Collaboration in skills development synergies

• Partnership in Youth training -technical & trade programmes- tradesmen and artisans

• Identify & develop skills set needed by potential locators

• Optimize growth for eligible candidates for further training and/or apprenticeship, incubation & work placement

• Develop curricula for scarce skills required by industry

EMPLOYMENT CREATION

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17 Permanent Jobs (Feb 2015) 1717 Construction Jobs (Feb 2015)

Beneficiation of resources and stimulate economic growth will be the output of the value chain.

Vision“To be the preferred special economic zone for quality investments whilst delivering value

to our stakeholders.”

Mission

“We utilize the competitive advantage of the Richards Bay area to attract sustainable investments that

stimulate economic growth, job creation, beneficiation of resources and the empowerment of people.”

MISSION & VISION

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THANK YOU