theewaterskloof municipality local economic ......theewaterskloof led strategy, 2009 2 forward...

Theewaterskloof Municipality

LOCAL ECONOMIC DEVELOPMENT STRATEGY

July 2009

Theewaterskloof LED Strategy, 2009 2

Forward

Municipalities are well positioned and equipped to mobilise stakeholders

around a common vision aimed at growing the local economy.

Theewaterskloof Municipality is ready to step into its leadership role and

facilitate a movement committed to growing the local economy. We are a

poor Municipality and if we don’t grow we will not be able to meet the needs

of our residents.

This local economic development strategy provides the framework through which growth can be

stimulated. It has been made possible thanks to the input and expertise of a range of local stakeholders -

individuals, businesses, government, NGOs and communities - in the area. It is a practical example of the

national “Walk Together” scenario detailed in the recent Dinokeng scenarios. The leadership of

Theewaterskloof is committed to facilitating this cooperative working relationship and making our

municipality a sustainable and functional place to work and live for everyone who resides in the area.

We look forward to working with you all to implement the strategy and make Theewaterskloof the

premier destination to live, work and visit.

Alderman Chris Punt

Executive Mayor, Theewaterskloof

August 2009

Message from the Municipal Manager

In its IDP, the Municipal vision is to ‘position and transform the Theewaterskloof

Municipality to be a competitive developmental local authority’. Consequently,

local economic development is one of Council’s top priorities.

This strategy is the first step to realising our vision. The second and more important

step is implementing the strategy. The role of local government is to facilitate

economic development. We cannot drive the economy: that is the job of our

partners in the private sector. Therefore, in launching this strategy, we commit ourselves to a partnership

with all the other economic actors in Theewaterskloof. Together we will work to unlock growth and

investment in the area. Our contribution to this will be to become the experts on what resources

government has available to support local economies, to help you access this support and to unblock the

current obstacles that inhibit investment and economic growth in the area. A second role we will play is to

work alongside our partners in the private sector to broaden participation in the local economy.

I have every confidence in our success. I look forward to an ongoing partnership with the Western Cape

Province, Overberg District, the DBSA, our private sector partners and organisations working in our

communities as we implement this strategy.

Our collective success will be measured by the level of growth in the area, the number of people in

employment and the financial viability of the Municipality.

Finally, I would like to thank all the people who have made this strategy possible, especially my LED team,

Mr Honey Gxoiyia, Mr Jan Visage and Ms Joanna Dibden.

Mr Stan Wallace

Municipal Manager


Executive Summary

i. What is Local Economic Development? Economic development is about increasing the opportunities for people to enhance their quality of life by participation in the production and consumption processes of the economy. Both economic growth and economic inclusion are embodied in the term economic development. Local Economic Development, or LED, is a locally driven process by which government, business, communities and labour work collectively to stimulate and transform the economy and create new job opportunities. The purpose of LED is to build the economic competitiveness of a local area to improve its economic future and the quality of life for all. As economies are not static, part of LED is about enhancing the community’s ability to adapt to, and cope with, changing economic conditions. ii. The Problem In order to meet its existing infrastructure backlogs and maintenance requirements, Theewaterskloof needs between R60 and R72 million in capital funding per annum for the next ten years. With the current rates base, this would incur a deficit of R50 million on the operating account by 2016. Initial modelling suggests the local economy would need to grow by at least 5% per annum for the Municipality to be in a position to service the loans and remain financially viable in 2016. This target is unlikely to be achieved given the global and national recessions. Therefore, the Municipality needs to find ways to use its infrastructure demands to stimulate the local economy by drawing on National Government’s stimulus package. Therefore, the Theewaterskloof Municipality has prioritised LED and has captured its vision in the 2008 IDP as “Positioning and transforming the Theewaterskloof Municipality to be a competitive developmental local authority.” iii. Economic Overview Demographics Theewaterskloof has a population of between 90,000 and 110,000 people. It is the largest local authority in the Overberg District. The District has the third fastest growing population after Johannesburg and Tshwane. The largest employer is the agricultural sector. It attracts many work seekers from the Eastern Cape during the season. Workers commute from the area into Cape Town, Somerset West, Bellville, Stellenbosch and Overstrand to work. Most managers in the area who are not farmers reside in either Somerset West or Overstrand and commute into Theewaterskloof. Using a narrow definition of unemployment, estimates range between 18.6% (2001) and 14% (2007). These figures increase significantly to 38% (2007) when using the broad definition. The area also has a large number of people on social grants (9,886 people). About 10% of households report having no income at all. Theewaterskloof has the lowest educational levels in the District, with 32% of those residents over the age of 14 classified as illiterate. Economic sectors Agricultural production generates 36.5% of the local economy, making this the predominant sector. The area is the largest apple growing region in the country, the second largest pear growing area and a significant player in the viticulture, grain, sheep and dairy industries. The sector has outperformed the national agricultural sector, but remains below the national GDP rate.

Agriculture’s importance is further emphasized by the contribution of agri-processing within the local manufacturing sector. The manufacturing sector, as a whole, accounts for 12.5% of the local economy. It has also been in decline. There is also a growing tourism sector captured in the wholesale & retail trade, catering & accommodation sector, which contributed R203.6 million or 13.9% of the local economy. This sector has grown at around 5% p.a. in the last couple of years. Access to services The state of water and sanitation bulk infrastructure is critical in Theewaterskloof Municipality. The Water Purification Works require upgrading throughout the area. Grabouw is currently running on full capacity. Similar backlogs exist for sanitation. All five of the Municipal sewerage treatment works require upgrades. Electricity is an issue across the nation, with power shortages and concerns that no new development will be allowed. The Theewaterskloof Municipality supplies electricity to the towns of Villiersdorp, Greyton and Riversonderend. Eskom provides electricity to the rest. The Municipality has made progress with refuse and solid waste disposal although there are still some management challenges. There is no master plan for roads and streets, and work is done on an ad hoc basis. iv. Economic Advantages and Disadvantages of the Area Competitive advantages are those aspects of the local economy which are unique and offer a distinctive economic advantage over other localities. Below is a table that lists the main advantages and disadvantages of the area.

Advantages (comparative and competitive)

Disadvantages

� Excellent climate � Fertile soil ideal for pome fruit and

sauvignon blanc grapes � Top apple producing area in the

country � Conservation asset base including

Kogelberg Biosphere Reserve, Cape Nature reserves and other conservancies

� Theewaterskloof and Eikenhof dams � Hot springs � Proximity to Cape Town,

Stellenbosch and Hermanus � Proximity to the N2 � Labour availability � Elgin’s growing brand � History of artisan skills � Presence of three FET training

institutions – ELF, OTC and Boland College

� Strong agricultural associations � Number and scale of value adding

firms in the region � Existing tourism sector � Number of skilled business people

� Infrastructure constraints � Constraints in the bulk services infrastructure

capacity. This is one of the biggest blockages to economic growth, especially in Caledon and Grabouw, and one of the biggest barriers to the retention of disposable income in the local economy.

� The high level of unemployment in the area � High level of imports into the local economy

such as packaging materials, fertiliser and supplies. This increases the costs

� Lack of interest by local labour in working in the agricultural sector

� Leakage out of the local economy as most households with disposable income travel outside the municipal area into Cape Town to access education and retail facilities. While no figures are available to quantify the lost income from this exodus, we know it is significant, given the scale of the local economy

� The lack of value-for-money housing stock in the area

� Labour productivity is below that of competitors


(largely in the agricultural sector) who understand complex global markets and are able to innovate

� Surrounded by growing economies � Relatively low crime � Relatively cheap land and services

� The lack of a clear spatial growth strategy

� The poor quality of the local education

system especially for those in English medium

secondary schools

� The poor signage on the N2 and lack of

clearly defined and signposted routes

identified that divert people off the N2

v. The Vision The vision for the Theewaterskloof economy is a prosperous economy that will sustain the natural environment and agricultural character of the area, create opportunities and meet the needs of all residents and enable a financially viable Municipality. vi. The Proposed Turn-around Strategy This vision will be achieved through five inter-related strategic thrusts as reflected in the diagram below:

Sustainability The sustainability sector will be a key sector driving growth in the wake of the recession. Theewaterskloof is positioning itself to harness this new opportunity by becoming a leader in sustainable practices and creating an attractive investment environment. Sustainability will be the golden threat that runs through every aspect of the LED strategy. A set of five actions have been prioritised, namely:

• Develop both a spatial and an environmental management plan that promotes sustainability and growth,

• Adopt a sustainable energy strategy and plan, • Reduce waste through a coordinated waste strategy, • Establish a wind farm and • Establish one of the first green campuses and offer courses linked to sustainable practices and

building. Agriculture Agriculture is the backbone of the economy. The sector has a key role to play in ensuring the nation’s food security and in providing employment. The sector strategy therefore focuses on retaining the

investment and renewing the sector to increase its global competitiveness. The eleven key interventions identified include:

• Retain the rates rebate to the sector, • Market agriculture as a career opportunity for young people as part of addressing the aging skills

base in the sector, • Job Centre to better match supply and demand to reduce the number of unemployed and assist

management of people flooding into the area, • Promote local produce and products and facilitate procurement of local products by government, • Support retention of forest activities in the area, • Address farm worker housing challenges including off-farm worker housing solutions, innovative

on-farm worker housing solutions and temporary accommodation solutions for seasonal workers, • Develop a support unit to fast track government approvals, • Improve the sustainability practices in the production process as part of positioning the sector

globally, • Undertake research into new cultivars and breeds to retain the sector’s global competitiveness, • Support development of emerging farmers and • Support diversification.

Tourism Despite the impact of the global recession, 2010 presents an opportunity for South African tourism and the sector is seen as a driver of growth in the short-term. A cluster of complementary projects has been proposed. Collectively, they will leap-frog the sector’s growth. The proposed projects are:

• Set up a tourism forum to coordinate activities across all the towns, • Develop a municipal-wide tourism strategy, • Destination branding, marketing and signage to promote the area, • Vintage rail project – this was identified as a catalytic project which could be used to brand and

market the route and the festival, • Develop a Theewaterskloof Route – a meander (road and cycle) or country stroll linked to agri-

tourism and biodiversity. This would link the different areas while retaining the current individual strengths. Set up a collective which could be the nucleus for driving the sector.

• Launch a regional festival, possibly a harvest festival, which attracts people to the area, runs over a few days and profiles the offerings of each of the towns and

• Cycling route and community project – Theewaterskloof is a recognised mountain biking destination and will be the site of the Cape Epic. Building on this, it is proposed that the area develops a cycling route, based on the French experiences, which would enable cycling enthusiasts to cycle safely through the area over a number of days. This requires developing a route and cycling trails, as well as appropriate accommodation facilities. Using this as the catalyst, a parallel project aimed at reducing the carbon footprint is a community bicycle project centred on cycling clubs that encourage young people to cycle around the area.

Light Industry Manufacturing has been in decline, yet opportunities to grow the sector exist in Theewaterskloof. It has recently attracted the clothing sector and it is hoped the area will become a destination for green industries. Promoting these sectors together with a focus on retaining the existing agro-processing activities will form the core of this intervention.

• Create public-private facilitation capacity and

• Provide bulk infrastructure to unlock industrial potential.


Human Capital Developing the human capital base is critical to turning the economy around and strengthening the area’s vulnerability in recessions. This has several components:

• Focus on Early Childhood Development (ECD) and providing early childhood education facilities for all children under six years,

• Focus on secondary schooling. A partnership between residents, the Municipality and the Department of Education is needed to develop a strategy to meet the secondary schooling needs of residents and to ensure that every school has access to quality teachers.

• Developing the skills base through training linked to market needs and job opportunities. The new merged ELF is a key partner in this strategy along with Boland College, the Department of Labour, the various Setas and the private sector. The area will focus on agricultural, artisan, tourism and social services skills training.

• Set up job centres to improve access to employment in each town. These will link work seekers with available opportunities and also identify training opportunities and needs.

• Finally, there is a recognition that many people will need to create their own work if the targets in the vision are to be met. Identifying opportunities for SMMEs, and supporting and assisting these entrepreneurs and businesses develop is a priority.

Getting the Basics Right Ensuring Municipal capacity to provide bulk services infrastructure and services is key to the success of the strategy and lies at the heart of the Municipality’s role. vii. Town-based Implementation of the Strategy Grabouw In Grabouw, residents identified priorities as part of the broader sustainable communities programme. The town will adopt a four-pronged LED strategy. A focus on creating a model sustainable town through sustainable building practices, new technologies in bulk service provision and a focus on creating a residential node will all be part of the LED programme In respect of agriculture, the focus in Grabouw will be on renewing the sector through replanting of old orchards combined with the development of an innovative financial scheme to finance this investment, to be developed in partnership with DBSA; a focus on farm worker housing solutions both on- and off-farm; and the development of a labour strategy that manages the seasonality of work, promotes the use of local labour and raises the profile of agriculture as a career amongst the youth. The development of the Elgin tourism brand and product offerings was identified as a driver of growth in the Valley. Key interventions included the development of a facility on Eikenhof Dam, the development of the railway station, the development of a route and a market. Finally, the development of Grabouw as a centre for further education and skills training in selected trades was seen as another driver of growth. Villiersdorp In Villiersdorp, residents opted to focus on farm worker housing, tourism and “getting the basics right” as detailed below. The key challenge in the agricultural sector is addressing the housing needs of farm workers, in particular the provision of off-farm worker housing.

The second area focuses on developing tourism through developing and agreeing on a brand and positioning, building on the municipal-wide project and then working to promote this. Key issues to be addressed include signage, town entrances, the main road, the nature garden and the convening of an annual event. Within this new brand, the development of the Dam needs attention – through participating in the spatial plan and also using State land to broaden the offerings on the Dam. Finally, Villiersdorp will work with the Municipality to get the basics right with regard to both planning and infrastructure. Greyton Greyton residents opted to focus on tourism and human capital as the two focus areas of their LED programme. As part of enabling this, there is a need to get the basics right with respect to basic services. The tourism focus will build on and strengthen the area’s existing brand and reputation. To distinguish Greyton and its neighbouring Genadendal from other areas, a focus on cultural tourism is proposed with plans to host music festivals, art shows and cultural history tours in the area. Linked to the tourism focus, residents identified the need to develop arts-based education across all the schools and to focus on hospitality training for school leavers. Greyton is attracting people who are looking for a relaxed but sophisticated lifestyle. It could become a Franschhoek but for one constraint: the lack of a good high school. Addressing this will unlock further economic growth. Finally, the Municipality needs to focus on:

• Storm water infrastructure to control localised flooding and • Waste management - both an overarching strategy and the creation of infrastructure capacity.

Genadendal Genadendal, like Greyton, opted for a focus on tourism and human capital, with the addition of agriculture. The allocation and management of Genadendal’s communal land remains a big issue and a constraint to growth. Therefore, the residents prioritised:

• Finalising the land transformation programme and • Developing a small-holder farming programme.

Together, these will unlock the land value in the area. The second focus was on tourism linked to the Greyton focus on a cultural centre. Here the priority would be to develop Genadendal as a living museum and to increase product offerings (for example the existing school-based drama and music focus and the potential for home stays). In the past, Genadendal was regarded as one of the country’s premier sites of learning. While the school has continued to produce good results, it is a far cry from its historic reputation. Therefore, the human capital focus will be on restoring Genadendal’s status as a centre of learning, in particular learning in the performing arts. In addition, as with many of the other towns, the human capital focus will also include a focus on ECD. Botrivier The focus of the LED strategy in Botriver will be on tourism, light industry and getting the basics right.


Botrivier is home to the oldest rail station outside of Cape Town. The focus of the tourism will, therefore, be on the rail links with Elgin, combined with a wagon and cycle route into Greyton. Once in the town, the offering would focus on agri-tourism products such as wine-tasting and fruit picking. Botrivier has major industrial development potential as outlined in the Botriver Growth study. The release of this land will unlock economic activity in the area and create opportunities for sustainability-type businesses. None of the above is possible unless the water shortages and other bulk infrastructure issues that constrain development are addressed. Caledon Caledon residents and businesses agreed to focus on making the town one of the residential nodes, agriculture and tourism. The first focus will be on unlocking residential land with a view to increasing resident volumes and stemming the outflow of capital from the area. The second will be on supporting industry trends in efficient use of natural resources. Renewing the agricultural sector through creative financial schemes will be a key priority along with addressing farm worker housing. The third focus area will be on unlocking tourism by improving the gateways, developing the town centre and the road link to Overstrand and, lastly, increasing the product offerings – the new golf course, the flight park, a beer and bread festival and the rail link. Riversonderend Riversonderend LED programme will focus on sustainability and tourism. Developing alternative energy will be the focus of the Riversonderend LED programme, with plans to partner with the private sector to pilot a wind farm in the area. With tourism the consistent focus across all the areas, Riversonderend will also focus on branding, gateways and the development of new trails and routes. viii. Institutional Arrangements Everyone has a role in the LED strategy as a consumer, business person or resident. The strategy will be coordinated and monitored by a multi-stakeholder LED forum that meets quarterly. In addition, specific roles have been identified for the key role players. The Municipality will focus on:

• Developing a shared vision and providing strategic leadership , • Bulk infrastructure provision, • Information and knowledge management, • Marketing and • Project facilitation capacity.

The private sector is the primary driver of the economy and creator of jobs. In this strategy, sector-based organisations are called on to champion interventions and business leaders are needed to identify on-going opportunities and the actions needed to unlock them. NGOs will be called on to provide bridges into the economy for unskilled and unemployed residents and emerging businesses, and to hold government accountable. ix. Risks A number of risks have been identified along with strategies to mitigate the impact of these risks, namely: • Taking time to ensure political will and buy-in, • Being flexible enough to adapt to global/ national changes, • Creating space for innovation to break the land redistribution impasse, • Institutionalising the strategy to limit the impacts of changes in political leadership and instability, • Ensuring that the right capacity and resources are secured, • Facilitating inter-government collaboration as part of harnessing all available resources and capacity

and • Planning for sustainability by allowing the time to build stakeholder awareness and participation. x. Contact Details For more information on the strategy contact Joanna Dibden on 028-214 3300 or at [email protected]


Table of Contents

Forward ..................................................................................................................................................................... 2 Message from the Municipal Manager....................................................................................................................... 2 Executive Summary.................................................................................................................................................... 3 Table of Contents ...................................................................................................................................................... 7 1 Introduction ....................................................................................................................................................... 8 2 The Process........................................................................................................................................................ 8 3 is Local Economic Development ......................................................................................................................... 8 4 The Problem ...................................................................................................................................................... 8 5 Theewaterskloof Economic Overview ................................................................................................................ 9

5.1 Locating Theewaterskloof in its Regional Context..................................................................................... 9 5.2 Overview of Towns .................................................................................................................................. 9 5.3 Demographics ........................................................................................................................................ 10 5.4 Natural resource management................................................................................................................ 11 5.5 Economic Sectors.................................................................................................................................... 11

5.5.1 Agriculture ......................................................................................................................................... 12 5.5.2 Manufacturing ................................................................................................................................... 12 5.5.3 Wholesale and retail trade, catering and accommodation sector ........................................................ 13 5.5.4 Transport ........................................................................................................................................... 13 5.5.5 Finance, real estate and business services ........................................................................................... 13 5.5.6 Construction ...................................................................................................................................... 13 5.5.7 Services sector.................................................................................................................................... 13

5.6 Access to Services ................................................................................................................................... 14 6 Economic Advantages and Disadvantages of Theewaterskloof ......................................................................... 14 7 The Vision........................................................................................................................................................ 15 8 The Proposed Turn-around Strategy ................................................................................................................ 15

8.1 Sustainability .......................................................................................................................................... 15 8.2 Agriculture ............................................................................................................................................. 16 8.3 Tourism .................................................................................................................................................. 17 8.4 Light Industry ......................................................................................................................................... 18 8.5 Human Capital ....................................................................................................................................... 18 8.6 Getting the basics right........................................................................................................................... 19

9 Town-Based Implementation of Strategy ......................................................................................................... 19 9.1 Grabouw ................................................................................................................................................ 20

9.1.1 Overview ........................................................................................................................................... 20 9.1.2 Strategy ............................................................................................................................................. 20

9.2 Villiersdorp ............................................................................................................................................. 20 9.2.1 Overview ........................................................................................................................................... 20 9.2.2 Strategy ............................................................................................................................................. 21

9.3 Greyton .................................................................................................................................................. 21 9.3.1 Overview ........................................................................................................................................... 21 9.3.2 Strategy ............................................................................................................................................. 21

9.4 Genadendal ............................................................................................................................................ 22 9.4.1 Overview ........................................................................................................................................... 22 9.4.2 Strategy ............................................................................................................................................. 22

9.5 Botrivier.................................................................................................................................................. 22 9.5.1 Overview ........................................................................................................................................... 22 9.5.2 Strategy ............................................................................................................................................. 22

9.6 Caledon.................................................................................................................................................. 23 9.6.1 Overview ........................................................................................................................................... 23 9.6.2 Strategy ............................................................................................................................................. 23

9.7 Riversonderend ...................................................................................................................................... 23 9.7.1 Overview ........................................................................................................................................... 23 9.7.2 Strategy ............................................................................................................................................. 23

10 Institutional Arrangements and Roles and Responsibilities........................................................................... 24

10.1 Municipal Role ........................................................................................................................................24 10.1.1 Strategic leadership and a clear vision.............................................................................................24 10.1.2 Bulk infrastructure provision ...........................................................................................................24 10.1.3 Information and knowledge management ......................................................................................24 10.1.4 Marketing ......................................................................................................................................24 10.1.5 Project facilitation capacity .............................................................................................................24

10.2 Private Sector Role ..................................................................................................................................24 10.3 NGO Role ...............................................................................................................................................24

11 Communicating the Strategy .......................................................................................................................24 12 Risks ............................................................................................................................................................24 13 Contact details ............................................................................................................................................25 Annexure 1: List of Consultative Meetings ...............................................................................................................26


1 Introduction

This document presents the Theewaterskloof Municipal-wide LED strategy. The document is a draft prepared as a basis for consultation. It is the summary of various consultative processes that have been undertaken... The document begins with this introduction. A brief overview of the process follows. Section Three defines local economic development. Section Four sketches the problem and why a strategy is needed. Section Five provides an overview of the local economy. A summary of the economic advantages and disadvantages of doing business in Theewaterskloof follows in Section Six. Section Seven outlines the vision for the strategy. The details of the turn-around strategy are presented in Section Eight. Section Nine provides an overview of the town-based LED priorities. Section Ten discusses the institutional arrangements for implementing the strategy and the roles and responsibilities of different stakeholders. Section Eleven talks about the importance of communication. Section Twelve outlines the risks. The report concludes in Section Thirteen with contact details for the Municipal LED officer. Annexure One records a list of consultative meetings held during the preparation of this report.

2 The Process

Developing a local economic development (LED) strategy and plan for Theewaterskloof (TWK) Municipality was identified as the top priority in the last Municipal IDP. In pursuit of this target, the Municipality has engaged local stakeholders around their vision for the local economy. The process has been an intensive one that has spanned the last few months. It has included a desk top review; interviews with many of the key economic actors, both in the Municipal area and in the broader Cape Town Region; and engagements with relevant public sector bodies. In addition, sector meetings with the agricultural, tourism and community development sectors have been held. In each of these meetings, participants discussed the strengths, weaknesses, opportunities and constraints affecting the sector; competitive positioning and ideas to grow the sector. Recognising that economic networks are a combination of sector and town-based processes, joint consultations have been undertaken. These have taken place in Grabouw, as part of the broader sustainable communities’ initiative and Villiersdorp - a pilot site for the LED town-based consultations. Ward committees, sectors and key economic leaders have participated in these processes. Similar town-based processes are planned, but have not been undertaken as yet, in the remaining towns. However, inputs have been gathered from meetings linked to the review of the Spatial Development Framework and from interviews with key economic actors conducted as part of the DBSA LED Initiative (LEDI). A full list of meetings and consultations is attached as Annexure One. Many economic actors and residents have participated in discussions and debates. This is the first report to come out of the process. Its purpose is to: • Consolidate the inputs and ideas gathered so far, • Provide direction to the Theewaterskloof Municipality on its role, corporate strategy for economic

development and priority focus areas and • Provide a springboard for further town-based consultations in Botrivier, Greyton, Genadendal,

Caledon and Riversonderend so that town-based LED strategies linked to the Municipal-wide strategy can be finalised.

3 is Local Economic Development1

Economic development is about increasing the opportunities for people to enhance their quality of life by participation in the production and consumption processes of the economy. Both economic growth and economic inclusion are embodied in the term economic development. Local economic development, or LED, is a locally driven process by which government, business, communities and labour work collectively to stimulate and transform the economy and create new job opportunities. The purpose of LED is to build the economic competitiveness of a local area to improve its economic future and the quality of life for all. LED is not industrial policy, SMME promotion or regional planning, even though all of these make important contributions to LED. LED is also not community development or one specific project or programme. Rather, it is an approach that includes the sum total of the individual and collective contributions of a broad spectrum of local area actors to identify and build on opportunities and/or address economic development constraints. LED focuses on creating qualities which make an area attractive to business. This includes ensuring there is good reliable infrastructure, having access to business development services and training for workers, ensuring the efficiency of the local administration and strengthening the general attitude towards business. As economies are not static, part of LED is about enhancing the community’s ability to adapt to, and cope with, changing economic conditions.

4 The Problem

While our study indicates significant local strengths and opportunities, a key challenge is the immediate funding required to enable the area to take advantage of the development opportunities in the longer term. Specifically, the development of infrastructure which is necessary for longer term economic development requires a level of current capital investment that is not readily available. In order to meet its existing infrastructure backlogs and maintenance requirements, Theewaterskloof needs between R60 and R72 million in capital funding per annum for the next ten years. With the current rates base, this would incur a deficit of R50 million on the operating account by 2016, as reflected in the graph below.

Surplus/shortfall on services

-60

-50

-40

-30

-20

-10

-

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

R m

illion

Source: PDG, Theewaterskloof Financial Viability, 2008 prepared for DBSA

1 Adapted from UN-Habitat and GTZ definitions


Initial modelling suggests the local economy would need to grow by at least 5% per annum for the Municipality to be in a position to service the loans and remain financially viable in 2016. A similar growth rate is needed to halve unemployment. The official unemployment rate (using the broader definition) is just under 40%. Local estimates of out-of-season unemployment are even higher. There is extensive poverty in the area, with 20% of households registered as indigent. Also, disparities between the first and second economies are large. These challenges can only be addressed if the economic growth rate is substantially faster than it is at present. Achieving the required growth rate in the context of the global economic crisis and recession is unlikely. Globally, infrastructure spending is being used to stimulate local economies. Nationally, government has introduced a wage subsidy plus various infrastructure allocations to boost the economy. This presents an opportunity for Theewaterskloof, given the infrastructure needs in the area, to both stimulate the local economy and address some of the pressing backlogs. An ability to demonstrate institutional capacity to plan, spend and manage quality projects will be key to accessing this funding. In addition, despite the global economic downturn and the sluggish performance of many sectors, the assessment of Theewaterskloof economic potential is positive if the area is supported in capitalizing on its very real local economic development potential. The area has historically been a stagnant pool surrounded by thriving economies. This is despite its significant comparative advantages – its natural endowments, its population growth and the consequent potential to expand its local rates base, its proximity to Cape Town, its relative political stability, and its strong base of local organisations and social capital. The key is using these comparative advantages to the maximum and, where possible, turning these opportunities, such as the natural endowments, into competitive advantages. There are definite signs that this change is underway.

5 Theewaterskloof Economic Overview2

Theewaterskloof is just outside of Cape Town along the transport corridor running east towards the Garden Route. The area is defined by the municipal boundary. The national N2 road connects many of the towns: namely Caledon, seat of the Municipality’s headquarters; Grabouw; Botrivier and Riviersonderend. Other main urban areas are Villiersdorp, Greyton and Genadendal. The latter is the oldest mission station in South Africa.

2 Adapted from Western Cape Treasury SEP-LG, “Overview of Cape Town Region Competitiveness and Priority Sectors”, Robinson, Boulle and Crankshaw.

Theewaterskloof is not a defined economic region. Instead it is a collection of towns with links into different regional economies namely Cape Town, Worcester and Overberg. The proposed tourism focus motivated later in this document provides some of the glue to begin to develop a defined Theewaterskloof identify and strengthen economic linkages between the towns in the Municipal area.

5.1 Locating Theewaterskloof in its Regional Context

The Theewaterskloof Municipality is the largest local authority in the Overberg District, embracing the City of Cape Town on its western boundary and sharing the eastern coastline with the Overstrand Municipality. It is the most populous municipality in the Overberg District (44% of the total district population). Its economic activity, as measured by Gross Regional Product, accounts for 41% of the broader District economy. Caledon is the District government service centre, being home to the district/ regional offices of the Department of Social Development, the Department of Education and the Department of Home Affairs. There is also talk of the Department of Health moving its regional centre to Caledon. Beyond the District, the local economy is a small player connected into the larger economy of the Cape Town functional region. The functional region includes the City of Cape Town, Swartland, Saldanha, Drakenstein, Stellenbosch, Overstrand and Theewaterskloof. It accounts for 1.1% of the GDP of this broader area. Workers commute into Cape Town, Somerset West, Bellville, Stellenbosch and the Overstrand for work. Most managers in the area reside in either Somerset West or Overstrand and commute into Theewaterskloof. Many of the farmers in the area send their children to school in Paarl, Somerset West or Stellenbosch. Retail centres are Worcester, Paarl or Somerset West. The main destination of the fruit from the area is Cape Town harbour. Grain goes to either Caledon or one of the mills in Swartland and then on to Johannesburg. The beverage sector produce is either trucked up to Johannesburg or exported via Cape Town harbour. The availability of job opportunities during the picking and pruning seasons on the farms has attracted migrant workers from the Eastern Cape. Consequently, many of the Black African people living in the area have strong links back to the Eastern Cape. There is a small in-migration of retirees into Theewaterskloof. Many of these are young retirees making a lifestyle choice. They have links into Cape Town and other parts of South Africa.

5.2 Overview of Towns

Grabouw is the Municipality’s town in closest proximity to Cape Town, and is the Municipality’s largest economic centre. Grabouw and the broader Elgin Valley are an agricultural area and home to the bulk of the apple and pear farming and the fruit and beverage manufacturing. It hosts three of the largest apple packing houses – Two-a-day, Kromco and Valley Packers, the first of Appletiser’s manufacturing plants and Elgin fruit juices. There is also a growing viticulture industry in the area. The area is well known for its cut flowers and gardens. In addition to agriculture, the area is becoming a well known tourism destination with two famous farm stalls (Orchards and Peregrine), the Eikenhof Dam, several farm-based facilities, the annual open gardens festival, the MTO forestry plantations and various conservancies. To the northeast of Grabouw are Vyeboom and Villiersdorp, both apple and pear growing areas, with some viticulture. The area is probably best known for the Theewaterskloof Dam which supplies Cape Town with its water and serves as a significant water sport and recreational destination.


Heading east along the N2, Caledon is home to the Municipal headquarters, an agricultural service centre and the location of choice for most regional government services in the area. Two economic landmarks in the town are SAB Masters’ largest malting plant in the Southern Hemisphere to which almost 100% of the barley produce is delivered, and the Caledon Casino and hot springs, a popular destination for passing tourists and visitors. The surrounding farmlands grow barley, canola and wheat, and there is some dairy activity. Greyton, to the northeast of Caledon, is largely a tourist destination and lifestyle living destination. The surrounding area is farmlands, largely producing deciduous fruit. Genadendal, just before Greyton, is an old Moravian mission station and small settlement with large tracts of communal land. Botrivier’s economy is mainly tourism-based with some manufacturing and potential for future expansion of its light manufacturing. Riviersonderend is the north-eastern edge of the Municipal boundary and the last town you pass through on the N2 before entering Swellendam Municipal area. It is a small farming village on the N2 Garden Route. Dry land farming dominates in the area. The local economy in Theewaterskloof has been nearly stagnant, with a growth rate of only 2.1% per annum over the last 10 years. This is largely due to the downturn in the global agricultural market over the period. Since 2004, this has improved slightly to between 3% and 4% per annum. (2006 data) This growth falls short of what is needed to meet service delivery backlogs, sustain the finances of the local Municipality, reduce unemployment and make Theewaterskloof an attractive area for investment. The global and national recessions are likely to impact on this upswing. However, the good performance of pome fruit sector and South African wines will mitigate the declines in other sectors.

5.3 Demographics

Theewaterskloof has a population of between 90,000 and 110,000 people. Formal population estimates vary between 86 719 (Community Survey 2007) and 103 281 (Centre for Actual Research, 2005). Informal estimates from the Municipality are even higher at around 110 000 people. The Overberg District population is one of the fastest-growing populations in the country after Johannesburg and Tshwane. Between 1996 and 2001, the population more than doubled. More recent growth has been just under 3% per annum. The bulk of this growth is absorbed by the Theewaterskloof and Overstrand Municipal areas which are both gateways for people migrating from the Eastern Cape into the Western Cape in search of work. This growth is reflected in the bulge in the population of 21 – 34 year olds, especially men. The largest employer is the agricultural sector. The bulk of workers in this sector are unskilled or semi-skilled. In recent years, farmers have struggled to find labour in season. Consequently they have, for the first time in 10 years, opened many of the on-farm hostels and bussed in workers from the Eastern Cape. In addition, many farmers rely on Labour Brokers to meet their labour needs. This is despite the high levels of unemployment and the in-migration of work-seekers. There is, clearly, a need to better match supply and demand for labour. It also highlights the need to educate young people to the potential of the sector and promote agriculture as a career option. Using the narrow definition of unemployment, estimates range between 18.6% (2001 census) and 14% (CS,2007) but increase significantly when using the broad definition to 38% (CS, 2007). About 10% of households report having no income either from employment or grants.

Many of the workers who are recruited into the area during the season relocate into the informal settlement rather than returning to the Eastern Cape at the end of the season. This places strain on the existing infrastructure development and increases pressure for more housing.

Source: SEP-LG, 2006

Total number of recipients Type of grant

VDorp Vboom CaleD RivierS Gdal Gbouw GreyT Botriver

Old age pension 288 88 451 207 267 939 110 159

Disability grant 257 69 304 223 154 1096 63 103

Foster care grant 89 12 61 44 33 192 13 16

Child support grant 766 119 739 425 395 2159 126 302

Other 27 4 12 7 1 55 3 6

Total no. of grants paid

1427 292 1567 906 850 4441 315 586

Total no. of recipients receiving one or more grant

1363 281 1513 847 819 4198 296 569


Theewaterskloof has lower educational attainment levels than any other municipality in the Overberg District. Thirty-two per cent of people over 14 are classified as illiterate WCED, 2005), 79% of the workforce have not completed their secondary schooling and 27% have less than a grade 7 Theewaterskloof has a large number of people receiving some or other form of grant. As the table below reflects, some people receive more than one grant, for example a disability or old age grant and a child support grant. The largest number of recipients is in Grabouw followed by Caledon and then Villiersdorp.

5.4 Natural resource management

Theewaterskloof is well endowed with natural resources. It encompasses the water catchment areas for, and is home to, both the Eikenhof Dam and the Theewaterskloof Dam. It falls within the Cape Floristic Region, backs onto the Kogelberg Biosphere, a world heritage site, and is home to 7 provincial nature reserves, 3 municipal reserves and 9 private conservancies/ reserves. The best known reserves are the Hottentots Holland, Groenland, Villiersdorp, Greyton and Caledon reserves. Finally, Caledon is the site of one of the most renowned hot springs in the Western Cape. The area receives a good average annual rainfall. The soil in much of the area is arable with significant land being cultivated, shown in yellow in the map below. The green depicts the conservation areas.

Source: Urban Dynamics, 2005 Theewaterskloof is regarded as the premier location for pome fruit production. It is the country’s largest apple producing area and its third-largest pear producing area. Together with the abutting municipal areas, it is a significant contributor to grain production, especially in barley. The area is regarded as one of the new first grade sites for growing sauvignon blanc grapes. Finally, there is also a small forestry area, which the Forestry Exit Reversal plans of the Western Cape recommend be retained. This natural resource base provides a platform to both retain and renew the agricultural sector and to expand the conservation and related tourism in the area

5.5 Economic Sectors

Agricultural production generates 36.5% of the local economy, making this the predominant sector. Its importance is further emphasized by the contribution of agri-processing within the local manufacturing sector. The manufacturing sector, as a whole, accounts for 12.5% of the local economy. There is also a growing tourism sector captured in the wholesale & retail trade, catering & accommodation sector, which contributed R203.6 million or 13.9% of the local economy. (See table below). Table 1: Theewaterskloof Sectoral Contribution to GDPR, 1995, 2000 and 2005

Source: Robinson, 2007

If we break down the economic activity by town, using the RSC levy database which captures turnover, then Grabouw is the biggest economic centre followed by Caledon and then Villiersdorp.

Economic turnover by town (RSC levy 2006)

Caledon32%

Greyton1%

Riversonderend3%

Grabouw & Botrivier

50%

Villiersdorp14%

In the following sections we provide an overview of the various economic sectors.

1995 2000 2005 Share Avg Growth Avg Growth Avg Growth

Rmn Rmn Rmn 2005 (%) 1995-2005 2000-2005 2004-2005

Agriculture, forestry & fishing 421.81 481.67 535.00 36.47 2.41 2.12 4.47

Mining 0.00 0.00 0.00 0.00

Manufacturing 204.47 188.63 182.82 12.46 -1.11 -0.62 1.68

Electricity & water 17.57 19.17 20.85 1.42 1.73 1.70 2.08

Construction 40.40 41.14 51.14 3.49 2.39 4.45 6.06

Wholesale & retail trade; catering & accomm 121.88 158.67 203.58 13.88 5.26 5.11 6.07

Transport & communication 56.90 82.09 105.90 7.22 6.41 5.22 3.41

Financial & business services 114.20 130.53 174.11 11.87 4.31 5.93 4.21

CSP services 68.86 72.02 74.57 5.08 0.80 0.70 3.25

General government services 160.03 136.93 140.02 9.54 -1.33 0.45 3.46

Theewaterskloof Bay total GDPR 1196.13 1298.99 1467.07 100.00 2.06 2.46 3.43


5.5.1 Agriculture

The Theewaterskloof economy is dominated by agriculture – both primary production and manufacturing. The sector is well organised with various produce-based organisations. The pome fruit producers are organised in the Elgin-Grabouw-Villiersdorp-Vyeboom Farmers’ Association with an office based in Grabouw. The wine farmers are part of a wine guild, and the wheat and barley farmers are organised under the Grain Association of South Africa. There is also a separate barley association, a dairy association and an emerging farmers’ group called the Small Farmers’ Association. The area is the largest apple growing region in the country, with nearly 10 000 hectares under cultivation and over 10 million trees. The bulk of the local apple harvest (40%) is exported, while the remainder is marketed locally as fresh, processed or dried fruit. Two-a-day and Kromco, two of the largest pack houses in the apple industry, are both located in Grabouw, the heart of the apple growing area. The main apple export destinations are the United Kingdom, northern Europe, Asia and West Africa. The African market is seen as a major growth market in the future. Globally, South Africa competes with China, USA, Turkey, Iran, Europe, India, Chile, Argentina, Brazil and Japan in the apple market. The municipal area is also the second largest pear producing area with over 2 000 hectares under cultivation and over 2.2 million trees. About equal quantities are exported or processed, while 20 per cent is sold in the local market or dried. The largest pear export market is northern Europe, followed by the UK and then Russia. South Africa’s competitors in the global pear market include China, Europe, USA, Argentina and Korea. (Deciduous Fruit Producers’ Trust, 2006) Interestingly, as the impact of climate change becomes apparent, the area is becoming known as one of the premier areas for sauvignon blanc vineyards. This has resulted in an emerging and growing viticulture sector in the Theewaterskloof local economy. While grapes are grown in the area, there is currently minimal local processing and cellar capacity. Theewaterskloof and its neighbouring Municipal areas are also one of the larger barley producing regions and a significant grain producing area. The local grain industry traditionally produced staple food for the human consumption market and feed for the livestock industry. Any surpluses that were produced were exported into the international market. Since the deregulation of the market in 1997, there has been downward pressure on product prices, linked to import parity pricing, to levels where costs of production exceed gross income. This has placed the industry under severe threat. Fortunately, global shortages, impacted on by the bio-fuel sector, have turned this around with record prices being recorded in 2007 &

2008. While this is positive for the farming sector, it will place increased pressure on consumer prices for staple foods. Other agricultural activities in the area include merino sheep, other deciduous fruit, dairy farming, vegetables and flowers. Forestry activities also play a major role in the local economy, although by international standards the plantations are small to medium in size (Western Cape Provincial Treasury, 2006). Nationally, the agricultural sector has been a stagnant performer, growing at around 3% below annual GDP growth. In the last 10 years, the Theewaterskloof agricultural sector has out-performed the national agricultural sector growth despite the slump in the forestry, pome, grain and wine markets globally. This is testament to the business skill and entrepreneurial acumen in the area. Within agriculture, many of the larger farms have shortened the value chain by internalising several functions that were previously outsourced, such as storage, packing and transport. This has enabled farmers to reduce costs and increase margins in a competitive market. Some farmers have diversified their crops. There are also some opportunities for small growers and firms in new markets such as the organic and essential oils markets. Grabouw is home to one of the first organic apple and pear farms, which is now a leader in a growing national and international market. Land ownership in the area remains largely white, with a few exceptions such as the Thandi Farm, Klipfontein Trust, the Aan die Dam project and, most recently, the Elandsrivier Farming Company. The Department of Agriculture has set a target to transform ownership in the sector to 30% black-owned. Meeting this target will be a challenge. Global markets are changing with the current food shortages and anticipated recession. The sector’s global performance is likely to improve. Nationally, the importance of the sector is widely recognised and policy makers are calling for increased support for the sector. The biggest challenges in the agricultural sector are water (concerning both quality and general access), labour supply and farm worker housing in the villages. Further, improvements in the sector will require increasing landowners’ confidence and, thereby, their willingness to invest in activities necessary for renewal (including introducing new cultivars and undertaking on-going research and development to improve yields and the efficiency of processes). It will also require the requisite capacity to support any re-investment. This includes nursery capacity, a current challenge in the pome fruit sector. In addition, there are opportunities to diversify the income stream of farmers by expanding the agro-tourism base in the area. Tour guides reported significant interest in the few tours of working farming operations on offer. Given the area’s competitive advantages, retaining and renewing investment in the agricultural sector will be the backbone of the economic strategy for the area. However, in the short to medium term, growth in the sector is not going to outperform national GDP growth. Therefore, while it will remain the backbone of the local economy, agriculture is unlikely to drive up local economic growth rates to the levels needed to address the area’s broader economic development challenges. 5.5.2 Manufacturing

Both nationally and in Theewaterskloof, manufacturing has been in decline. Manufacturing in the area is largely agri-processing (90% of turnover). Beverages account for 41% of the manufacturing sector with


well-known fruit juice brands and Appletiser located in the Grabouw-Elgin Valley and SAB’s largest malt processing plant in the southern hemisphere located in Caledon. A further 37% of the area’s manufacturing is classified as processed and canned fruit and vegetables. This sector, together with the fresh fruit industry, accounts for the bulk of the exports out of the area. Despite the slow growth in the sector, opportunities exist for niche market value-adding, as demonstrated by the success of value-adding businesses like the bottled fruit syrups produced by the Feast-De-Renaissance business. There are opportunities to identify other similar high-end niche markets to add value to the raw produce. Clothing is a new sector entering the market, taking advantage of the availability of labour, easy access to Cape Town and cheap light-industrial premises in the area. Another light-industry opportunity in Theewaterskloof is the renewable energy and sustainability sector. This sector begs further attention. It is experiencing significant global market growth and requires local locations. With the Grabouw Sustainability Project success there are opportunities to develop the sector. With the support of the DBSA, the Municipality is exploring a range of alternative technologies and related opportunities. Business is also prioritising the resource sector. For example, SAB Maltsters is working on recycling its waste water to reduce the pressure on the bulk infrastructure. While demand for light industrial land is highest in Grabouw, limited capacity might force developments into the neighbouring Botrivier which has targeted light industrial investment as part of the town’s growth plans. 5.5.3 Wholesale and retail trade, catering and accommodation sector

The wholesale & retail trade, catering & accommodation sector has been one of the fastest growing sectors in the area. Most of this growth has been concentrated around the local tourism industry. The retail sector is very dependent on the agricultural sector, in so far as much of the local money in circulation is earned from this sector. While growth locally has generally mirrored national growth (with some peaks and troughs), the current resident volumes combined with the lack of serviced land available for development are major constraints on the development of the potential in this sector. However, the anticipated upturn in the agricultural economy and Theewaterskloof’s proximity to Cape Town and Overstrand (both of which are nearing capacity), presents an opportunity. This, combined with the Municipality’s plans to expand its bulk infrastructure, creates potential to expand the rates base and create the conditions for sector growth. While nationally the tourism sector has not performed so well, it has played a pivotal role in driving the neighbouring Overstrand and the Cape Town economies. In more recent years, the sector has also been a driver of the local economy with growth, at over 5% since 2005, outperforming the national sector. This is reflected in the increased activity in the sector. In the last year, nine new accommodation businesses, eight new restaurants and 18 tour or support services businesses have been set up. In addition, some of the longer-established concerns report excellent growth in the sector. The bulk of the growth is centred around Elgin. With rising fuel prices, it is generally felt that the area is well placed to compete for the Cape Town market. Most of the Theewaterskloof is within an easy commute of Cape Town and the Municipality is exposed to commuters in the region with the N2 passing through Grabouw, Caledon and Riversonderend. There is potential to expand this market even further with niche branding targeting the sports markets. Theewaterskloof is already known for its excellent canoeing and water sports, its mountain biking trails, hiking trails and outdoor team-building facilities. The decision by both the Cape Odyssey and the Cape Epic to locate the bulk of the race in the area is testament to this, and has provided valuable exposure and publicity for the area.

Institutionally, tourism associations exist in Greyton, Elgin Valley, Villiersdorp, Caledon and Riversonderend. Business chambers and associations operate in Greyton, Grabouw, Caledon and Villiersdorp. There is potential to stimulate tourism activity within the locality, linked in particular to the agriculture sector. A clear tourism development strategy needs to be developed linked into the broader vision for Theewaterskloof. Linked to tourism is the gaming sector. Caledon is home to one of the five casinos in the Western Cape. The casino is at the top end of the smaller town casinos with just under a million visitors each year (2006 figures). There are plans to expand the business with the addition of 460 residential units and a golf course, both of which are aimed at growing the current business. 5.5.4 Transport

The transport sector has also been a growth driver. Again this can be attributed to the general upturn in the sector and to the location of several freight transport businesses and Gaffley’s public transport in the area. 5.5.5 Finance, real estate and business services

The business services sector has been a steady growth driver in the local economy and deserves to be encouraged. The growth can largely be attributed to the upturn in the property market and the large agricultural service industry. There is, however, some talk of elements of this relocating to Stellenbosch due to challenges related to attracting managers into the area and in particular housing them. In both Grabouw and Caledon, there is a shortage of middle income housing stock. This has driven house prices up and is a disincentive to locating in the area. This sector requires a critical mass to consolidate and, if secured, is likely to continue to drive growth in the area. 5.5.6 Construction

The construction sector has grown steadily, notching over 6% growth between 2004 and 2005. Growth in the sector has also out-performed the national GDP averages, both in the local economy and the adjacent Overstrand and Cape Town economies. Traditionally, Theewaterskloof has been known for its artisan pool drawn from both Genadendal and Grabouw. The presence of the Overberg Training College which provides construction-related training, the established carpentry business in the area and the ready pool of labour make it an ideal site for construction businesses to locate and from which to source workers. Interestingly, the bulk of the construction activity in the area, using 2006 data, is in the electrical contracting arena, suggesting that there is a large amount of electrical sub-contracting based in the area. The sector is, however, not without its challenges. A combination of an ageing skills base and a lack of available land for development in Theewaterskloof has, and will continue to limit the sector’s performance locally. In view of this constraint, plans to expand the Overberg Training Centre and to release additional land for development should unlock this sector’s potential in coming years. 5.5.7 Services sector

Traditionally, both government and social services have been a mainstay of the local economy and have shadowed national growth. While the sector has declined in recent years, the marketing of Caledon as a regional services hub is likely to turn this around and to see a continued role for the sector in the local


growth strategy. In addition, improved relations with local NGOs is likely to see a greater investment from them in the area and an expansion in the community services sector. Over and above the public sector services, Theewaterskloof has an active further education and training sector with a private FET college, the Elgin Learning Foundation and NGO training providers such as Overberg Training College. This sector is likely to grow with the planned amalgamation of the two colleges to launch Elgin Learning Foundation.

5.6 Access to Services

The state of water and sanitation bulk infrastructure is critical in Theewaterskloof Municipality. The Water Purification Works require upgrading throughout the area. Grabouw is currently running on full capacity. Similar backlogs exist for sanitation. All five of the Municipal sewerage treatment works require upgrades. Electricity is an issue across the nation, with power shortages and concerns that no new development will be allowed. The Theewaterskloof Municipality supplies electricity to the towns of Villiersdorp, Greyton and Riversonderend. Eskom provides electricity to the rest. The Municipality has made progress with refuse and solid waste disposal although there are still some management challenges. There is no master plan for roads and streets: work is done on an ad hoc basis. While roads in the area are generally fairly good, maintenance capacity is a challenge. Storm water management capacity is not adequate, especially in Greyton. Additionally, the Hemel-en-Aarde link road to the Overstrand needs to be upgraded. This will further open up markets in the Overstrand and also contribute positively to the tourism potential of the area. The planned toll on the N2 is likely to have a negative impact on the local economy, both in terms of the ability of businesses to attract people off the freeway and in terms of road freight moving in and out of the area. Collectively the bulk infrastructure provision and maintenance bill is estimated at R185 million. Addressing this backlog is a top priority. Moving from bulk capacity to service provision, the table below indicates that good progress has been made in recent years, but there are also some challenges remaining. As the table below demonstrates, service levels in Theewaterskloof have improved dramatically in the last 7 years. The biggest challenges remain housing and, linked to housing, access to toilet facilities.

Service area 2001 % of pop

2007 % of pop

Informal dwellings 18.3% 9.9%

No proper toilet facility 18.6% 9.1%

No refuse removal 1.8% 1%

No access to piped water 0.9% 1%

Source: Community Survey, 2007 Theewaterskloof offers a good quality of life. It has low levels of crime, is easily accessible and is attracting new younger business blood. Health services in the area are scattered, with one hospital in Caledon. While school-based education is a challenge in some towns, the area has two private primary schools, Greyton House in Greyton, Applewood Primary in Grabouw and an excellent public secondary school in Caledon. The Municipality has recognised that superior school-based education is critical to the area’s long-term competitive positioning. Theewaterskloof is serviced by Boland FET College and the Elgin Learning Foundation, a private FET college and the Overberg Training Centre (soon to be merged with

the ELF). These provide a basis for building Theewaterskloof as a centre of education, which, in itself, will be a catalyst for economic growth.

6 Economic Advantages and Disadvantages of Theewaterskloof

Competitive advantages are those aspects of the local economy which are unique and offer a distinctive economic advantage over other localities – in the case of Theewaterskloof, for example, being the leading apple producing area is a competitive advantage. Often competitive advantages are built on comparative advantages, namely those advantages which give the region an advantage over other regions but are not unique. An example of a comparative advantage is the good climate and fertile soil in the area. Competitive disadvantages are those aspects which act as economic disincentives because they increase the cost of doing business or present barriers to entry. The lack of adequate middle income housing stock is an example of a disadvantage in Theewaterskloof. Below is a table that lists the main advantages and disadvantages of the area

Advantages (comparative and competitive)

Disadvantages

� Excellent climate � Fertile soil ideal for pome fruit and

sauvignon blanc grapes � Top apple producing area in the

country � Conservation asset base including

Kogelberg Biosphere Reserve, Cape Nature reserves and other conservancies

� Theewaterskloof and Eikenhof dams � Hot springs � Proximity to Cape Town,

Stellenbosch and Hermanus � Proximity to the N2 � Labour availability � Elgin’s growing brand � History of artisan skills � Presence of three FET training

institutions – ELF, OTC and Boland College

� Strong agricultural associations � Number and scale of value adding

firms in the region � Existing tourism sector � Number of skilled business people

(largely in the agricultural sector) who understand complex global markets and are able to innovate

� Surrounded by growing economies � Relatively low crime � Relatively cheap land and services

� Infrastructure constraints � Constraints in the bulk services infrastructure

capacity. This is one of the biggest blockages to economic growth, especially in Caledon and Grabouw, and one of the biggest barriers to the retention of disposable income in the local economy.

� The high level of unemployment in the area � High level of imports into the local economy

such as packaging materials, fertiliser and supplies. This increases the costs

� Lack of interest by local labour in working in the agricultural sector

� Leakage out of the local economy as most households with disposable income travel outside the municipal area into Cape Town to access education and retail facilities. While no figures are available to quantify the lost income from this exodus, we know it is significant, given the scale of the local economy

� The lack of value-for-money housing stock in the area

� Labour productivity is below that of competitors

� The lack of a clear spatial growth strategy

� The poor quality of the local education

system especially for those in English medium

secondary schools

� The poor signage on the N2 and lack of

clearly defined and signposted routes

identified that divert people off the N2


The key advantages that differentiate Theewaterskloof from its competitors are its climate, fertile soil and strong agricultural sector. Theewaterskloof is a cooler climate than neighbouring Stellenbosch or Overstrand and its soil conditions are more favourable. In the context of climate change this is a real competitive advantage. A comparative advantage is its proximity to water resources, although allocations would need to be revisited for this to be a competitive advantage. Theewaterskloof does not have a competitive advantage in respect of tourism, but it does have a range of comparative advantages including its vibrant and diversified agricultural sector, its dams and hot springs and a diversity of experiences from a Greyton village to sailing on the Theewaterskloof Dam to its wine, flowers and apple agri-tourism offerings. Neighbouring Overstrand is an established coastal destination with some wine farms, while Stellenbosch is an established wine route and cultural tourism destination. If bulk service capacity is addressed and more land released for residential and industrial development, the area would have an advantage in respect of cost and service charges.

7 The Vision

The IDP captures the Municipal vision as “Positioning and Transforming the Theewaterskloof Municipality to be a Competitive Developmental Local Authority” The economic vision for the area builds on this and captures a multi-stakeholder vision for the economic development of the area, namely:

VISION A prosperous economy that:

Sustains the natural environment and agricultural character of the area; Creates opportunities and meets the needs of all residents; and

Enables a financially viable Municipality. This vision will be measured using the following indicators:

• Theewaterskloof’s national sustainability ranking, • Increase in GDP to match that of the national economy and • Increase in employment with a target of 80% of households earning an income and at least half of

these earning above the indigent level.

8 The Proposed Turn-around Strategy

It is proposed that this vision is implemented through five inter-related strategic thrusts as outlined in the diagram below.

Sustainability will be the golden thread that runs through everything. It will influence the way work is undertaken, how services are delivered, the focus of new product offerings, local branding and the scorecard for the area. The economy will be driven by three inter-related thrusts. The first is agriculture and agri-processing. This is the current backbone of the economy. The sector needs to be retained to provide the base of the economy, and renewed to remain globally competitive. The second thrust is the tourism sector. This will focus on niche markets in the outdoor adventure market and agri-tourism. This sector is seen as a growth driver of the economy. The third thrust provides the base to attract new investment, innovation and diversification to the economy through the provision of incentives and land for light industrial activities, such as the newly established clothing manufacturing factory in Caledon. This will focus on both value-adding to agricultural produce and the renewable energy and sustainability sector. The growth of all three focal sectors depends on building a cohesive and integrated community. This demands that all sectors include a focus on education, training and worker development. It also involves assisting emerging entrepreneurs develop and grow their businesses. Providing an essential foundation for all five focus areas is a focus on getting the basics right, in particular addressing the infrastructure backlogs and spatial planning needs in the area. Key initiatives have been identified within each sector through the consultative workshops.

8.1 Sustainability

As the global recession lifts, the green and sustainable sectors are likely to drive growth globally. As part of positioning the area to be a sector leader in South Africa and through this attract new investment, sustainability will be the golden threat that runs through everything. It will guide how the strategy and work of the various stakeholders is undertaken. A set of three actions will be prioritised that are cross cutting themes. These actions will be the collective responsibility of all actors in the economic turn-around


strategy. In addition, two projects have been identified. Progress will be monitored using the carbon footprint and resource use per capita in the area. The focus on sustainability is not unique: there is a dedicated team working on energy issues in the City of Cape Town and there are plans to develop a sustainability centre in Kleinmond. Theewaterskloof’s advantages are:

• Its partnership with DBSA and the adoption of the sustainability framework by Council, • The bulk infrastructure needs offering opportunities to introduce more sustainable technologies

almost immediately and • The presence of large multi-national corporates who have global commitments to make their

businesses more sustainable. The proposed actions are: A. Spatial and environmental management plans that promote both sustainability and growth Demarcating a growth node/ corridor within the Municipal area which can attract adequate resident volumes to boost the services and retail sector and retain income in the local economy. Spatially, a growth corridor is proposed along the N2 with Grabouw as the priority node for residential and business activity, supported by Caledon as a secondary residential node and Botriver as a secondary industrial/ business node as depicted in the map below. Responsibility: Municipality Champion: Jan Visagie

B. Sustainable energy strategy and action plan Introducing energy efficiency measures in all new buildings and infrastructure through education, new by-laws and incentives, and promoting alternative energy sources including a wind farm in the area Responsibility: Municipality Champion: Johan Gelderblom in partnership with Conrad van Heerden C. Reducing waste generation Reducing waste through education, encouraging re-use, recycling and composting. On farms this can also be linked to energy production using bio-digesters. Responsibility: Municipality Champion: Conrad van Heerden and Johan Gelderbloem The projects identified are: D. Wind farm Developing alternative off-grid clean energy using wind power through partnering with the private sector.

Responsibility: Municipality and DBSA Sustainable Communities Champion: Jan Visagie and Ben Schoeman E. Green campus Developing the new learning centre as a green campus with a focus on green construction methods and training Responsibility: ELF and OTC Champion: Christo de Coning

8.2 Agriculture

Agriculture is the backbone of the economy. It is also a defining characteristic of the area and part of the competitive positioning of the local economy. Finally, with the new national and global emphasis on food security, the sector has an important role to play in the local, regional and national economy. The sector strategy, therefore, focuses on retaining the current investment. This requires addressing farmers’ concerns. A number of projects were identified to do this. They are listed below, starting with the project that is easiest to implement and ending with the project which will require the longest to implement. Each project includes the details of the responsible institution and champions of the projects. Retain rates rebate to the agricultural sector. Currently agricultural properties are only required to pay 25% of the rates. This is part of the Municipality’s support to the sector and has assisted farmers to keep costs down, particularly in lean years. Responsibility: Municipality Champion: Jan Visagie, Stephen Jacobs

A. Marketing of agriculture as a career opportunity for young people to ensure the on-going

success of the sector. With a declining interest from young people in the agricultural sector, a partnership between the sector and the Sector Training Authority (SETA) is needed to expose young people to the possible career options and the opportunities for growth and advancement in these professions.


Responsible: private sector responsibility linked to the SETA Champions: James Rawbone –Viljoen, Deon Kleynhans (Agri-Mega), Elizabeth Daniels (DOA), (EGVV to mobilize champions) B. Job Centre offering job matching, searches and training (see human capital section below)

C. Promotion of local produce and products and procurement of local products by government Develop a database of available products in the area and encourage government departments to procure locally, for example local trees for greening projects, local fruit for feeding schemes, etc. Responsible: TWK Municipality and Province Champions: Joanna Dibden (TWK) D. Support to retain forestry activities in the area Forestry plantations such as around the Steenbras and Eikenhof dams were initially targeted for exit programmes by government. With the high timber prices, these areas are still profitable and add to the tourism offering of the area. An advocacy programme in support of forestry is proposed. Responsible: Grabouw Sustainability Forum Champions: Johan Gelderblom (TWK) E. Off-farm farm worker housing and creative on-farm housing solutions are needed to stabilise

farm-based labour. Addressing the housing needs of farm workers was identified as the number one priority in the agricultural sector. Different solutions to the housing needs of farm workers have been proposed – some linked to developing existing on-farm housing settlements and making them more sustainable, and others linked to providing opportunities for farmers to partner with the State to develop housing in allocated residential areas for farm workers. Responsibility: Municipal and Provincial responsibility with active involvement and support from the private sector. Champions: TWK housing manager, James Rawbone- Viljoen, Bertus Mong, Charl van Rooyen, Hendryk Schoeman, Peter Beukes, Victor Treu

The Agriculture sector strategy also focuses on renewing the sector to increase its competitiveness globally. This requires a different set of actions as detailed below. F. Develop a support unit to fast track government approvals One of the biggest constraints facing farmers is navigating government approval processes and red tape. This includes planning approvals, turn around on EIAs and unlocking government resources for BEE projects. Tapping government support, where it exists, for struggling businesses in the current economic climate is another service the unit could offer. Responsible: TWK Municipality Champions: Jan Visage and Joanna Dibden (TWK) G. Improve sustainability practices in the production process and also in farm management. With pressure on our natural resource base, reduction of inputs is becoming more and more important in all businesses. With agriculture as the dominant business activity in the area, the sector needs to pioneer new practices that reduce the use of water and energy and that minimise waste.

Responsibility: EGVV, Wine Guild, Grain Association and Dairy Association Champions: James Rawbone- Viljoen

H. Undertake research to identify and test new cultivars in the pome and viticulture sectors to ensure the industry remains competitive. Continuous research into new cultivars that address market needs and also the changing climatic conditions is part of what keeps an industry at the cutting edge. This work is an integral part of all the industry bodies in the agricultural sector. Strengthening this work through partnerships between the State and private sector will benefit the industry.

Responsibility: DoA and Elsenberg in partnership with the industry Champions: Toni Xaba I. Emerging farmer development Historically emerging farmer programmes have not done well, largely due to the limited programme of support. There is a need for increased coordination between the spheres of government to ensure comprehensive and seamless support is provided to emerging farmers. This needs to be coupled with a programme on land redistribution. Government has set a target for transforming the sector through land redistribution. In Theewaterskloof, a more proactive programme is needed if the targets are to be met. Research has been commissioned into the possibilities by the Department of Agriculture, but this now needs to be translated into a programme of action. Responsibility: Government and farmers Champions: DoA in partnership with EGVV

J. Diversification support A programme that marries agriculture with agri-tourism is needed as part of diversifying the income stream to farmers and also as part of strengthening the tourism offering of the area. This requires support around approvals for tourism units on farms, festivals such as a harvest festival and forging links between farmers and tourism associations. Responsible: EGVV and other farmers associations Champions: Kevin King and tourism associations

8.3 Tourism

Although the global recession has had a negative impact on the sector, 2010 presents a unique opportunity for South Africa. Theewaterskloof’s close proximity to Cape Town makes it an attractive local tourism destination. Therefore tourism is seen as a driver of growth in the short-term. The region is surrounded by three established destinations Cape Town, Overstrand and Stellenbosch and will be able to tap into these existing markets. The area offers a country experience which is not being offered by Cape Town. It is also not offered by most of the products in Overstrand (with the exception of Stanford), but is offered in Stellenbosch. Theewaterskloof’s advantage is that it is less urbanized and, with the vintage rail project, will offer a unique experience. Collectively, the cluster of projects proposed below will leap-frog the sector’s growth. The proposed projects are: A. Tourism forum Creation of a tourism forum as a platform for coordinated action between the various town- based tourism associations and other key players, such as the wine guild.

Responsible: Theewaterskloof Municipality Champions: Joanna Dibden (TWK) and town-based tourism associations


B. Tourism strategy Develop a municipal-wide tourism strategy that provides a common vision and focus for the sector and also guides investment decisions. Responsible: Theewaterskloof Municipality Champions: Joanna Dibden (TWK), LEDI programme coordinator and Theewaterskloof town-based tourism associations C. Destination brand, marketing and signage Develop a destination brand and marketing plan for the entire area, along with a signage strategy and action plan. This will require discussion and agreement on a common brand, identification of strategic sites for placement of signs and an advocacy to secure local, provincial and national government permission to erect the signs.

Responsible: Theewaterskloof Tourism Associations Champions: Theewaterskloof Tourism Associations and LEDI programme coordinator D. Vintage rail project This was identified as a catalytic project which could be used to brand and market the area and kick start the route project. Elgin station has been identified as a possible launch site for the development of such a project focused on heritage and rail history and then linked to a tourism route.

Responsible: Molteno Brothers in partnership with the Municipality and tourism association Champion: Charles Morgan and LEDI progamme coordinator

E. Development of a Theewaterskloof Route Develop a meander (road and cycle) or country stroll linked to agri-tourism and biodiversity. This would link the different areas while retaining the current individual strengths. It is proposed to set up a collective which could be the nucleus for developing a Municipal-wide brand and marketing plan, provide opportunities to develop new products and provide opportunities for inclusion. Clearly, any route would need to be branded to make it stand out from existing routes such as Route 62. It would also need to be properly marketed and managed.

Responsible: Tourism associations (TA) and Municipality Champions: Sharon Moore and LEDI programme coordinator F. Regional festival Establish an annual festival, (possibly a harvest festival) run over a few days which profiles the offerings of each of the towns and brings large numbers of people into the area. The timing and focus of this would need to be carefully selected and funding to market the event secured.

Responsible: TA in partnership with the Municipality Champions: Champions to be identified in the next phase. G. Cycling route and community project K. Theewaterskloof is a recognised mountain biking destination and will be the site of the Cape Epic.

Building on this, it is proposed that the area develops a cycling route, based on the French experiences, which would enable cycling enthusiasts to cycle safely through the area over a number of days. This requires developing a route and cycling trails, as well as appropriate accommodation facilities. Using this as the catalyst, a parallel project aimed at reducing the carbon footprint is a community bicycle project centred on cycling clubs that encourage young people to cycle around the area.

Responsible: Municipality, Sustainability Forum, Tourism Forum, ELF & DBSA Champions: Joanna Dibden, Veronica Jacobs

8.4 Light Industry

Caledon clothing firm Manufacturing has been in decline, yet opportunities to grow the sector exist in Theewaterskloof. It has recently attracted the clothing sector and it is hoped the area will become a destination for green industries. Promoting these sectors together with a focus on retaining the existing agri-processing activities will form the core of this intervention. The Municipality has already begun to plan for increased activity with the Botrivier growth model. This identifies Botrivier as a future site for light industrial expansion. In addition, opportunities will be identified in other towns through the spatial planning review process. Two actions are proposed to unlock this potential. A. PPP capacity A key action planned to unlock the potential of the area is to establish private-public interface capacity within the Municipality. The new capacity will focus on attracting investment and fast tracking the required approvals for investments that can complement the sustainability and tourism focuses. Responsible: TWK, DBSA Champion: Stan Wallace and Joanna Dibden

B. Infrastructure A second key action is to address the bulk infrastructure capacity in the area. This is dealt with in more detail in Section 8.6. Responsible: TWK, DBSA Champion: Joanna Dibden, Jan Visagie, Conrad van Heerden

8.5 Human Capital

Theewaterskloof has very low literacy levels. Increasingly, businesses are looking for higher skilled staff. Developing the human capital base is critical to turning the economy around and strengthening the area’s resilience in recessions. The area has a comparative advantage in having three colleges operating compared to none in Overstrand, and the focus on higher end skills in Stellenbosch. Focusing on human capital is about building on the existing capacity and making the area a premier destination for education and skills training, particularly in agriculture, tourism and the trades. The programme has several components, including:


A. Education Education starts with pre-school which is now widely recognised as the key to unlocking children’s development potential. There are several farm-based crèches, many without qualified teachers. ELF is contracted to train ECD practitioners. These efforts now need to be coordinated into a Municipal-wide ECD programme that provides quality ECD services to every young child under seven. This will be a partnership between farmers, schools, ELF and the Department of Social Development. The Municipality will assist with facilities for crèches in the towns and informal settlements.

Responsible: Dept of Education, ELF Champion: Elgin Learning Foundation, Nicky Hartzenberg B. Secondary Schooling Primary schooling in the area is well serviced but there are challenges at secondary level. Consequently, many of those with resources send their children to school outside the area. A partnership between residents, the Municipality, the Department of Education is needed to develop a strategy to meet the secondary schooling needs of residents and to ensure every school has access to quality teachers. Ideas here include linking schools through the internet to share lessons and resources.

Responsible: Department of Education Champion: Champions to be identified in the next phase C. Skills Developing the skills base through training linked to market needs and job opportunities. This should include doing a skills audit in the area. The newly merged ELF is a key partner in this strategy along with Boland College, the Department of Labour, the various Setas and the private sector. The area will focus on agricultural, artisan, tourism and social services skills training.

Responsible: OTC and ELF Champions: Malcolm Abrahams and Mark Walker D. Job centres to improve access to employment Establish a job centre service that better matches supply of labour with demand for labour. This will increase household incomes, allow for longer term opportunities and link with training to equip workers to meet the changing needs of the labour market. Hopefully, better management will lead to fuller use of local labour and help reduce the seasonal labour demand spikes. The centre should also explore creative transport links between towns to allow workers to move between towns to work.

Responsible: NGO, Dept of Labour, Municipality and private sector Champions: Christo de Coning (ELF), Malcolm Abrahams (OTC) and Kim Cadle (GBF)

E. SMME Support There is recognition that many people will need to create their own work if the targets in the vision are to be met. Identifying opportunities for SMMEs and supporting and assisting these entrepreneurs and business develop is a priority.

Responsible: ELF and the Municipality (with support of Red Door and Die Plek Plan) Champions: Naym Daniels (ELF) and Joanna Dibden (TWK)

F. Development forum Establish a development forum to coordinate development efforts in the area. Responsible: ELF in partnership with town managers Champions: Naym Daniels (ELF) and town managers

G. EPWP programmes To upscale the expanded public works programme to address infrastructure backlogs in the area, as well as extend the work opportunities for seasonal labour out of the season. This will be achieved through applying for the wage incentives and also by aligning Municipal capital projects with the seasonality strategy (see agricultural sector). Responsible: TWK Municipality Champion: Conrad van Heerden

8.6 Getting the basics right

Most of the proposals for growth detailed above rely on the Municipality delivering on its core business, namely: bulk services infrastructure and the delivery of services. Despite being at the core of the Municipality’s work, getting the basics right has been included in the strategy since without it, the strategy will fail. Actions include improved billing systems, reduction of service backlogs and implementation of innovative solutions to expand the bulk capacity to facilitate the planned economic expansion. All the solutions will need to align with the commitment to sustainability detailed in intervention one. Responsible: TWK Municipality Champion: Conrad van Heerden

Theewaterskloof Dam, Villiersdorp

9 Town-Based Implementation of Strategy

In Section Eight a sector-based strategy is outlined. In this section, the sector strategies are married with a town-based focus to provide some initial ideas for each town-based LED strategy. In Villiersdorp and Grabouw, these ideas have been tested and adopted by stakeholders and the strategy is ready for implementation. In the other towns, the ideas need to be further refined and prioritised before each town strategy is finalised. February 2010 has been set aside for this process.


9.1 Grabouw

9.1.1 Overview

The Grabouw/Elgin district is the first town in the Municipal area when driving from Cape Town along the N2. It borders on the Kogelberg Biosphere reserve and the Hottentots Holland reserve. These provide excellent opportunities for adventure-based sports such as cycling. It has various conservation areas around it. The Eikenhof Dam is in the town.

The town is well known for its apples, open gardens and is increasingly becoming known as a tourist and wine buying region. It has two popular farm stalls that attract passing visitors, Orchards and Peregrine. There are also several farm-based attractions in the surrounding areas. The Elgin tourism association is established and has a recognised brand. It is complemented by the emerging wine industry and established wine guild.

It is the largest apple growing area and produces about 60% of South Africa’s export apple crop. It is also the third largest pear growing area. The valley is renowned for cultivating fresh chrysanthemums, roses and proteas. In addition to primary production, the area is also home to several agri-processing firms including Appletiser and Elgin Fruit Juices. It also has an established transport industry, with both Bosman’s freight carriers and Gaffleys’ Buses located in the town.

The area is also home to two adult training centres: Elgin Learning Foundation, a private FET college, which provides training in agriculture and the social sector and has an SMME support unit; and Overberg Training Centre which focuses on construction training.

In the Growth Potential of Small Towns Study, conducted by Van der Merwe in 2004, Grabouw is classified as an agricultural service centre and an apple town. It is regarded as a town with high human needs and medium development potential, using a scale of very low to very high. Residents and the DBSA both disagree with the medium potential ranking and believe the town has high growth potential.

The area has recently received a boost, being one of six pilot sustainable community sites initiated by the DBSA. The Sustainable Development Framework (SDF) for Elgin-Grabouw, developed as part of this initiative, provides a sustainable spatial vision and supporting strategies for the town.

The influx of people into the informal settlements is one of the biggest challenges for the town. The second economy operating in these informal settlement areas is survivalist in nature and often very alienated from the formal sector.

9.1.2 Strategy

In Grabouw, residents identified priorities as part of the broader sustainable communities programme. Within this, the specific economic interventions were: Sustainability thread Two programmes that weave the sustainability thread through the LED programme were identified. The first focused on making Grabouw a model sustainable town through promoting sustainable resource use in all new construction, exploring alternative systems of bulk service provision, minimising waste production, encouraging food security and building awareness of sustainability issues. The second programme focuses on making Grabouw a residential node and concentrating development in the node in line with the broader spatial programme. Champion: TWK Municipality and DBSA team with support from GSF and ELF

Agriculture In respect of agriculture, the focus on Grabouw will be on renewing the sector through replanting of old orchards combined with the development of an innovative financial scheme to finance this investment, to be developed in partnership with DBSA; a focus on farm worker housing solutions both on- and off-farm; and the development of a labour strategy that manages the seasonality of work while, at the same time, promoting local labour and promotes agriculture as a career amongst the youth. Champion: EGVV in partnership with DBSA LEDI, TWK Municipality Housing and LED Sections and Dept of Agriculture Tourism The development of the Elgin tourism brand and a set of product offerings were identified as a driver of growth in the Valley. Key interventions included the development of a facility on Eikenhof Dam, the development of the railway station, the development of a route and a market. Champions: Elgin Tourism Office, Charles Morgan, DBSA team and Joanna Dibden (TWK) Human Capital The development of Grabouw as a centre for further education and skills training in selected trades was seen as another driver of growth. To develop this, the two existing colleges, ELF and OTC will merge and expand their course offerings, making Grabouw a premier learning centre for entrepreneurship, construction, agriculture and crafts. In addition, the municipal-wide focus on ECD will be implemented in Grabouw. Champions: Malcolm Abrahams (OTC) and Elgin Learning Foundation

9.2 Villiersdorp

Entrance to Villiersdorp town centre 9.2.1 Overview

Villiersdorp is situated between the N1 and the N2. To the north-west of the town lies Franschhoek, a thriving tourist destination and to the south-east lies Grabouw, the economic hub of the Municipal area. To Villiersdorp’s east lies Worcester, the gateway to the northern N1. The town is well known for its major landmark, the Theewaterskloof Dam, and its agricultural activity. Villiersdorp is part of both the Theewaterskloof Dam and the Elandskloof Dam catchment areas situated behind the Groenland and Hottentots Holland mountain ranges and at the foot of the Blokkop Peak. In the Growth Potential of Small Towns Study, conducted by Van der Merwe in 2004, Villiersdorp is classified as an agricultural service centre known for its fruit and mountains. It is regarded as a town with high human needs and low development potential, using a scale of very low to very high.


The most well known landmark in the area is the Theewaterskloof Dam. The Dam is surrounded by District Municipal accommodation, holiday homes, a golf estate and various farms. Visitors to the dam come largely to enjoy various forms of sport – largely boating and golf. Residents complained about the absence of an attractive accessible picnic site and recreational facilities for people without their own equipment. Agriculture is the primary economic activity. This is reflected in the primary agricultural sector and in the wholesale trade sector where many of the pack houses and the co-op fall. The dominant products are deciduous fruits. There is an industrial area which is home to three pack houses: Betko, Uie Verpakkers and Arbeidsvreugd. Growth in the vegetable packaging industry has been driven by the Cape’s population growth. In order to provide a twelve month supply, vegetables are bought in from Limpopo to be packaged for local supermarkets. Also located in the industrial area are: transport companies (i.e. Trans-African Fruit Suppliers, Mark’s Fresh Produce), suppliers of building materials (Build-It); engineering firms (Dave K Engineering, Nolan Engineering); auto mechanics (Venter’s Maine-Auto and Andrino Motors, amongst others); wire products (Overberg Wire); a bakery and a décor supplier (Brown’s Décor). Tourism is just beginning to take off in the area with a tourism bureau set up this year. The second economy is small as out of season there is limited money in the area. This impacts on established businesses such as the taxi industry and home-based businesses such as spaza shops. The bulk of home-based businesses are clothing or food and, of course, the shebeens. There aren’t many craft-related businesses in the area. A sewing project was started with support from an external donor, but it is no longer functional. Elgin Learning Foundation (ELF) SMME unit facilitated a workshop to identify local economic opportunities. Arising out of this, 10 businesses are being mentored by ELF to operate in the clothing, waste recycling, crèche, driving school and spaza shop markets. 9.2.2 Strategy

In Villiersdorp residents opted to focus on farm worker housing, tourism and getting the basics right, as detailed below. Agriculture The key challenge in the agricultural sector is addressing the housing needs of farm workers, in particular the provision of off-farm worker housing. There are two possible sites: one identified by the Municipality is a piece of land next to Betko. The second potential site is the land that the Municipality wants to sell between the school and the nature garden. The farms have expressed an interest in partnering to develop off-farm housing and assisting with top-up funding and technical expertise. Champion: Hendryk Schoeman (EGVV), Joanna Dibden (TWK), Deon Kruse (TWK) Tourism The first project focuses on developing tourism through developing and agreeing on a brand and positioning, building on the municipal-wide project, and then working to promote this. Key issues to be addressed include signage, town entrances, the main road, the nature garden and the convening of an annual event. Champion: Joanna Dibden (TWK), Marijtie Willemse (Tourism Association), Ben Klindt (Tourism Association) The second project focuses on developing the TWK Dam. This will include engaging with the process of developing a Spatial Development Framework for the Dam, being led by the Department of Environment and Planning. The focus will be on developing the tourism potential of the dam while retaining its country

feel. In addition, the Municipality will engage with the Department of Public Works to try and secure their land on the dam for a transaction that could cross subsidise some of the other proposed initiatives. Champion: Leon Deacon (Tourism Association) and Jan Visagie (TWK) Getting the basics right The first focus will be on spatial planning. This will link in with the current review of the spatial plan and will engage with the planners to ensure: • The issue of zoning is appropriately dealt with, • Opportunities for tourism-related second dwellings are created in the agricultural sector, • The main road and parking are resolved and • The location of the taxi rank is agreed and taxis are moved to the new location. Champion: Edwin Marthinus (TWK), Donovan Loesh (Business Chambers) The second focus area will be infrastructure development. This task team will engage with the business, agricultural and government sectors to ensure that there is ongoing communication and planning around water catchment, quality and allocation; the quality of the roads (particularly the Van der Stel, Vyeboom- Botrivier road immediately and Villiersdorp to Greyton Roads); and stable electricity supplies. It will also explore opportunities for alternative green technologies. Champion: Edwin Marthinus (TWK), Conrad van Heerden (TWK), Donovan Loesh (Business Chambers)

9.3 Greyton

9.3.1 Overview

On entering Greyton one is immediately reminded of an Old English Village. This beautiful small town is nestled at the foot of the Riviersonderend Mountains with the Riviersonderend River on its boundary and surrounded by mountains. It is a both a lifestyle and tourism destination, while the surrounding areas are farmlands. The hotels, lodges, B&B's, are all of an exceptionally high standard. Visitors can choose between a stay in the town or on a working farm. All this, together with Greyton's coffee shops, restaurants, art galleries etc., invites you to stay with a difference. In the Growth Potential of Small Towns Study Greyton is classified as a retirement and holiday home base known for its village character. It is regarded as a town with low human needs and low development potential. Residents and the Municipality disagree with the classification and feel the town has development potential, although within its current spatial limits. 9.3.2 Strategy

Greyton residents opted to focus on tourism and human capital as the two focus areas of their LED programme. As part of enabling this, there is a need to get the basics right. Tourism The tourism focus will build on and strengthen the area’s existing brand and reputation. To distinguish Greyton and its neighbouring Genadendal from other areas, a focus on cultural tourism is proposed with plans to host music festivals, art shows and cultural history tours in the areas. To succeed it is important that:

• The character and heritage of the area is retained through proper planning to protect the area’s tourism attractiveness,

• The river pollution is addressed and • The possibility of extending the boundaries of the Greyton Nature Reserve is investigated.


Champion: Tourism association Human Capital Development Greyton is attracting people looking for a different lifestyle and could become a Franschhoek, but for one constraint: the lack of a good high school. Addressing this will unlock further economic growth. Therefore, residents have identified educational excellence and the development of a good high school as a priority. Linked to the tourism focus residents identified the need to develop arts-based education across all the schools and also focus on hospitality training for school leavers. Champion: Residents Association Getting the basics right The Municipality needs to focus on:

• Storm water infrastructure to control localised flooding and • Waste management, both an overarching strategy and the creation of infrastructure capacity.

Champion: Municipality

9.4 Genadendal

9.4.1 Overview

Genadendal, or 'Valley of Grace', was established by the Moravian Church in the mid-1700s and is the oldest mission station in South Africa. The economy of the town is dominated by 'development' projects, mostly driven by local development organizations, as well as small-scale agricultural production and subsistence gardening.

Much of the workforce relies on the surrounding fruit farms for employment, which contributes to the seasonality of the local economy. Genadendal is located alongside Greyton, 32km off the N2 and 140km from Cape Town with the Riviersonderend Mountains to the north.

In the Growth Potential of Small Towns Study Genadendal is described as an historic mission station with residential and tourism opportunities. It is regarded as a town with medium human needs and low development potential. 9.4.2 Strategy

Genadendal, like Greyton, opted for a focus on tourism and human capital, with the addition of agriculture. Agriculture: The allocation and management of Genadendal’s communal land remains a big issue and is a constraint to growth. Therefore, the residents prioritised:

• Finalising the land transformation programme and • Developing a small holder farming programme.

Together these will unlock the land value in the area. Champion: Transformation committee, Municipal planners, Dept of Land Affairs and Dept of Agriculture Tourism The second focus was on tourism linked to the Greyton focus on a cultural centre. Here, the priority would be to develop Genadendal as a living museum and increase product offerings, including the existing school-based drama and music focus and home stays. Another possible project could be restoring many of

the old houses in the area. Other issues include developing the gateways into the town and upgrading the camping site. Champion: Tourism association and the teacher at the school who runs the performing arts Human Capital In the past Genadendal was regarded as one of the country’s premier sites of learning. While the school has continued to produce good results, it is a far cry from its historic reputation. Therefore, the human capital focus will be on restoring Genadendal’s status as a centre of learning, in particular learning in the performing arts. Links with the historic schools project will aid in this regard. As with many of the other towns, the human capital focus will also include a focus on ECD. Champion: Ward 2 forum and school

9.5 Botrivier

9.5.1 Overview

The small village of Botrivier is situated en route to Hermanus and Caledon, at the eastern slopes of the Houw Hoek Mountains. The Botriver hotel is the landmark in the town. The area is known for its vineyards and wine farms, with the well known Beaumont Farm situated in the town. There is a growing tourism market linked to agri-tourism and wine tasting. In the Growth Potential of Small Towns Study, Botrivier is classified as an agricultural service centre with medium human needs and low to very low development potential. The Municipality, in its growth study, disagrees and has identified the town as an area with possibilities for light industrial development. 9.5.2 Strategy

The focus of the LED strategy in Botriver will be on tourism, light industry and getting the basics right. Tourism Botrivier is home to the oldest rail station outside of Cape Town. The focus of the tourism will, therefore, be on the rail links with Elgin combined with a wagon and cycle route into Greyton. Once in the town, the offering would focus on agri-tourism products such as wine-tasting and fruit picking. Champion: Planned tourism association Light industrial Botrivier has major industrial development potential as outlined in the Botriver Growth study. The release of this land will unlock economic activity in the area and create opportunities for sustainability type businesses. Champion: Jan Visage, Municipal Planner Getting the basics right None of the above is possible unless the water shortages and other bulk infrastructure issues that constrain development are addressed.


Champion: Conrad van Heerden, Municipal engineer

9.6 Caledon

9.6.1 Overview

Moving along the N2, 110km east of Cape Town is the town of Caledon. The town owes its situation to the presence of hot water springs which were the catalyst for the initial growth of the town which was later named after its Governor, the Earl of Caledon. Caledon is a government service centre, as well as a significant agricultural service centre. The Municipal head offices are located in the town along with the regional offices for the Departments of Education, Social Development and Home Affairs. Caledon is the centre of a broader agricultural region which produces barley, wheat and wool. Overberg-Agri, which provides services and support to the farming sector, has its head office located in Caledon. It is also home to the Southern Associated Maltsters which is the only malt producer for the South African lager beer industry and is the largest in the southern hemisphere. While tourism in the town is limited, Caledon does have two large tourism attractions: the hot springs and Caledon Casino. The latter is one of five middle-sized casinos in South Africa. Events include the Canola Festival, Caledon Wild Flower Show and the Caledon Christmas Festival. There is a small tourism association. In the Growth Potential of Small Towns Study, Caledon is classified an agricultural service centre known for its casino and hot springs. It is regarded as a town with low human needs and medium development potential. A key challenge in Caledon is the shortage of middle income housing stock. Consequently many of the managers working in the town reside outside the area. 9.6.2 Strategy

Caledon residents and businesses agreed to focus on making the town one of the residential nodes and on supporting agriculture and tourism. Sustainability The first focus under the sustainability banner will be on unlocking residential land with a view to increasing resident volumes and stemming the outflow of capital from the area. The second will be on supporting industry trends in efficient use of natural resources (for example, organic food production and waste water usage) in partnership with the private sector e.g. SAB Maltsters. Champion: Municipality in partnership with SAB and Overberg Agri. Agriculture Renewing the sector through creative financial schemes will be the first priority and the second will be addressing farm worker housing. Champion: Overberg Agri and Farmers’ Associations Tourism The third focus area will be on unlocking tourism through: • Upgrade and improve gateways to the town,

• Improve the town centre with a landscaping project in Hoop Street and Plein Street and, possibly, make Donkin Street a pedestrian street,

• Design the market square and think about how this could become more vibrant and linked into a tourism initiative. Also addressing lack of public toilet facilities and possible linkages to planned pedestrian street,

• Developing the casino offerings, • Tarring the Hemel-en-Aarde Road, • Re-introducing the beer and bread festival, • Developing the craft offerings available at the casino, • Publicising the flight park and • Further investigation of the tourism potential of the train station as part of a steam train stop-over

initiative. Champion: Local tourism association

9.7 Riversonderend

9.7.1 Overview

Riviersonderend is situated on the N2, approximately 160km from Cape Town. Riviersonderend offers beautiful mountain and river scenery, a nine-hole golf course and sightings of South Africa's national bird, the blue crane.

In the Growth Potential of Small Towns Study, Riversonderend is classified as an agricultural service centre with medium human needs and low to very low development potential. 9.7.2 Strategy

Riversonderend LED programme will focus on sustainability and tourism. Sustainability Developing alternative energy will be the focus of the Riversonderend LED programme with plans to partner with the private sector to pilot a wind farm in the area. Linked to this will be a focus on minimising waste and water consumption, making it a model resource use town. Champion: Municipality Tourism With tourism the consistent focus across all the areas, Riversonderend will also focus on tourism and will capitalise on its location on the main arterial route (N2) between Southern Cape and Cape Town and use this to attract people into the area. As with other areas, the gateways need attention along with signage and the development of routes. Kleinberg provides excellent potential as a conservation area with opportunities for trails and mountain bike rides. Champion: Municipality in partnership with the Ward Committee


10 Institutional Arrangements and Roles and Responsibilities

A multi-stakeholder LED forum that meets quarterly is proposed to coordinate and monitor the LED strategy. This forum would include town-based representatives, sector representatives and government representatives. The meetings will focus on unlocking blockages and adapting the strategy to address changing conditions. The LED office will be responsible for convening the LED forum. Town- or sector-based task teams will not be supported by the Municipality due to its limited capacity. Instead, they will be the responsibility of the private and NGO sectors. In addition, an annual meeting with the top CEOs in the area is proposed at which the plan is presented, progress reported and challenges discussed and unlocked. This meeting will be hosted by the Municipal Manager and Mayor. To assist the functioning of these two forums, this section details the roles and responsibilities of the different stakeholders.

10.1 Municipal Role

The Municipality has defined its role as an enabler, facilitator and regulator of economic development. In order for local government to play its role successfully, individual and institutional capacity within local government structures must be strengthened. This needs to include capacity to drive a programme and to lobby Directorates to play their role, administrative capacity to ensure the right systems are in place and capacity to mobilise the support of external agencies. There is currently only one person in the LED unit. This unit will need to be strengthened for the Municipality to fulfil its facilitation role. The Municipality will focus on: 10.1.1 Strategic leadership and a clear vision

The failure of the local Municipality to have a clear vision and strategy for the area, supported by clear policy and planning frameworks, has contributed to the sluggish economic performance of Theewaterskloof to date. Facilitating the development of a multi-stakeholder vision that is spatially located and rooted in the sectors is, therefore, the first priority. 10.1.2 Bulk infrastructure provision

The second priority is provision of bulk infrastructure in the growth nodes identified. This will unlock private sector investment in these areas. 10.1.3 Information and knowledge management

The Municipality lacks critical information pertaining to the local economy, land use management, bulk infrastructure capacity and backlogs, all of which should underpin a growth and development strategy for the region. This has meant that the Municipality is unable to strategically guide investment within the region. The third priority, therefore, focuses on gathering and analysis of data to better inform planning. This information will be useful for both public and private sector planning. 10.1.4 Marketing

Theewaterskloof does not have a coordinated marketing strategy. The Municipality needs to drive the development of a brand. In addition, it has a role to play coordinating actors to develop a joint marketing plan.

10.1.5 Project facilitation capacity

The fifth priority for the Municipality is developing the facilitation capacity to work with investors and facilitating projects in the area. This could include unlocking land, addressing bulk infrastructure constraints, fast-tracking planning approvals and leveraging funding. Projects identified for support would need to be aligned with the vision and strategic focus areas. Addressing these shortcomings would significantly enhance the Municipality’s role in supporting and enabling economic development within the locality.

10.2 Private Sector Role

The private sector is the primary driver of the economy and creator of jobs. While the role of business in LED is widely recognised, there is a tendency to only focus on business associations and the formal sector. Key business leaders in the area who often do not attend association gatherings have a critical role to play. So too do those at the other end of the business spectrum, namely business people in the informal sector. They are all important investors and entrepreneurs. In this strategy, sector-based organisations are called on to champion interventions and business leaders are needed to identify on-going opportunities and actions needed to unlock these.

10.3 NGO Role

NGOs represent the voices of the marginalised and provide bridges into the economy for unskilled and unemployed residents and emerging businesses. This includes, but is not limited to, providing skills-based training, employment intermediation services and an entrepreneurship development programme. To play these roles effectively, the sector needs to be organised, coordinated and resourced.

11 Communicating the Strategy

The success of the strategy depends, in part, on the level of public awareness created and on the success of the team’s communication efforts. This must include raising awareness around the key issues, providing information and guidance to stakeholders, mobilising support for the strategy and developing momentum to for the programmes developed. The sector meetings and task teams established were the first step in the communication effort. The second step is the town-based processes which Grabouw and Villiersdorp have completed. The development of an LED Charter, specific policies and programmatic business plans are all necessary further steps. These will be supported by political champions from the Council, business and communities who will mobilise support and popularise the strategy. Finally, a media campaign, including the production of accessible, clear communiqués targeted at all the different stakeholders, is proposed. This should include monthly updates to stakeholders of progress on the plan and discussion of any obstacles encountered.

12 Risks

A number of risks have been identified along with strategies to mitigate the impact of these risks. They are:

• Political will. The strategy requires buy-in from government, businesses, communities and unions. Failure to mobilise the political will of any of the stakeholder groups will negatively impact on the roll-out of the strategy. The process of finalising the strategy is key and provides the platform for ensuring buy-in.

• Global/ national changes: A sound strategy and political will are, however, not enough: equally

important is the provincial, national and global context. Changes in global and national growth rates,


in the price of oil, in the structure of the economy or in the skills requirements of growth sectors will have an impact on the strategy. This demands a robust and flexible strategy able to cope with changing circumstances.

• Land policy: The current land redistribution policy has not adequately addressed the issue of land

ownership and use in Drakenstein. An emerging farmer class has not been created and the few emerging farming experiences have been largely marked by failure. There needs to be greater emphasis on innovation regarding labour tenants, and effective resource assistance.

• Political instability/lack of continuity: This is a low risk as the area has been characterised by relative political stability. In addition, the commitment to inclusivity across the political spectrum and the involvement of the full Council in the development of strategies for the Municipality is conducive to investor confidence. Despite this track record, the local government elections in 2010 may result in changes in elected representatives. New leaders will need to be informed and trained in the strategy. This may result in delays and/or changes to the plan. It is, therefore, important that the strategy is institutionalised and does not rely on individuals or personalities.

• Resource constraints: Constraints on timing, budget, skills and capacity to roll out the plan will

compromise its success. Ensuring that the right capacity and resources are secured in time needs to be prioritised.

• Inter-government collaboration: As Theewaterskloof is not an economic island, the strategy is

premised on collaboration between the various spheres of government – the Municipality, the District, the Province and National Government. Involvement of all the spheres in the LED process is key to facilitating this collaboration.

• Pressure for success: Ensuring the effective participation of poor and marginalised people takes time and money, but gives high returns in the shape of smoother longer-term decision-making and roll-out. Often political imperatives do not allow for the necessary investment in time and resources with the result that quick fix strategies are not sustainable, especially in the context of markets. The LED strategy, therefore, needs to have a medium-term horizon.

13 Contact details

For more information about LED in Theewaterskloof contact Joanna Dibden the LED officer at 028--214 3300 or [email protected] .

Document compiled by: Jacqui Boulle, NB Ideas Layout, design and printing by: Spectrum Print Date: 31 July 2009


Annexure 1: List of Consultative Meetings

Interviews Riaan Phiefer – Overberg Agri Riaan Els – Chairperson, Caledon Business Chamber Donnovan Loesch – Villiersdorp Business chamber Vuyo Kraqua – Taxi chair in Villiersdorp Mariejie Willemse – Tourism in Villiersdorp Ben Klint, Villiersdorp Co-op John Roberts – DWAF Mark LeKay – Department of Economic Development and Tourism John Jacobs – Riversonderend Community Trust and Harold Jacobs - FCR Kim Cadle and Greyton Business Forum Derek Crabtree – Ward Committee forum Greyton and property agent in Greyton Dora van de Berg – Mfala Design BEE firm Malcolm Abrahams – OTC Mark Walker – ELF Rudi Coetzee - Casino John Senslund – SAB Maltsters Wayne Lewis – Spar Riversonderend Carin Malan - EGVV Simon Nicks – CNdV Chris Martens- Cape Nature Inge Kotze - BWI Gerard Swart – Urban Dynamics Japie Groenewald- Betko Paul Cluver Nick Segal Mark Drewell – 3 Laws Capital South Africa (Pty)Limited SDF Initial Workshops Grabouw Riversonderend Greyton Genadendal Botrivier Caledon Sector Meetings Tourism sector Agricultural sector Community development sector Town-based Meetings Villiersdorp sector meetings Villiersdorp ward committee meetings Villiersdorp Summit Greyton/Genadendal town based meetings Riviersonderend town based meetings Caledon town based meetings Botriver town based meetings

LED Initiative Meetings Caledon LED Initiative gap analysis workshop Caledon top business leaders economic modelling workshop

theewaterskloof municipality local economic ......theewaterskloof led strategy, 2009 2 forward...

Documents