The Western Cape is the place to invest in

The Western Cape, particularly Cape Town, has been given the status of a first-class cosmopolitan city much in the same ranks as many bustling international cities.

But that is not enough to visit the place. Some of the reasons why people come to the Western Cape is because of its unparalleled beauty, its balmy hot summer days, its beaches and getaway holiday locations, the variety of entertainment, its mixed bag of cultural experiences, its restaurants, its many wine farms and of course, for conducting business.

From an investment point of view, anyone interested in doing business in any region looks first at infrastructure. In the Western Cape, this is appealing because the transport systems, electricity, information and communication technology (ICT) and security to name a few are modern and well developed.

As with all the other provinces, the Western Cape has its own investment and trade promotion agency, Wesgro. This is essentially the first port of call for investors seeking to expand or start a business in this province.

And, because the province is noted as having a broad sector base which has a direct impact on economic growth, the Western Cape is therefore ripe with attractive investments.

The areas that show promise are tourism, infrastructure (airports and train stations), energy, jewellery, fibre optics, aquaculture and refrigeration, manufacturing, agriculture and financial services. However, only a few of these will be explored in this article.

Like many other provincial investment promotion agencies, Wesgro’s key objectives are:

• to properly market economic potential in various sectors that show promise from a local and international perspective; and

• to gather momentum and make the province that much more appealing to new investors.

Tourism

Tourism is one of the fastest growing sectors in the Western Cape and provides employment and many diverse services within the industry.

The Western Cape is one of the most popular tourist destinations from a national and international perspective. It has been reported by the SouthAfrica.info website that our international guests make up 50% of all tourists and the province itself contributes to about 24% of the tourism market.

Manufacturing

The province’s gross domestic product has largely been supported by big players in manufacturing of food processing, textiles, clothing, furniture, petrochemicals, plastics and the printing and publishing industry.

However, areas that are showing significant growth potential seem to be in medical equipment and telecommunications. The latter will create a platform for greater economic growth in a variety of other sectors.

ICT

The ICT sector is a thriving industry and is an important tool with which to support and empower small, medium and micro enterprises (SMMEs).

Last year, during the tough economic climate, it was reported in the media that there was an urgent need to support SMMEs to become fully functional and independent entities that had a better chance of creating employment during the tough times.

One such entity, the Cape Information Technology Initiative (CITI), is a non-profit organisation and the first ICT cluster development body in the country. It aims to “stimulate and support the growth, promotion and transformation of the ICT cluster in the Western Cape (in collaboration with government, business, academia and other stakeholders.)”

CITI supports projects that have potential to grow and is driven to develop ICT startups and supports existing ICT businesses, but also addresses issues around skills shortages and skills development.

The Bandwidth Barn (BWB), a subsidiary of CITI, started off as a “business incubator” but has since risen to the status of “business accelerator”.

It began as an ICT incubator in 2000 and is now widely recognised as the most successful information technology incubator in South Africa, and has morphed into a fully fledged business accelerator.

Since 2000, the BWB and CITI have conducted numerous programmes, including the very successful SMME incubation programmes and enterprise development projects such as Launchpad (later renamed VeloCITI), My Mentor, My Business Group, Youth in IT, VIP Graduate Programme, Women in ICT; and the latest business skills development initiative of the BWB, the Accel Enterprise Development Programme (Women in ICT; and My Business Group).

CITI aims to help develop, support and promote the ICT cluster in the province and has made considerable inroads by hosting a number of talks, round tables and updates within the industry over the last few years.

This organisation is supported and funded by the Western Cape Provincial Government and the City of Cape Town, and has a variety of funders and sponsorships. Interested investors should approach the organisation or the provincial government for further information.

Film

Over the last 10 years or so, the South African film industry has grown from strength to strength, particularly in the Western Cape, and is now recognised as an international competitor.

Millions of rands have been invested in the industry and in turn, it has been a significant contributor to the economy of the province.

The industry has put Cape Town on the map of international film-making, making the industry globally competitive due to attractive locations, low production costs as well as an attractive exchange rate.

The industry also spills over into the hotel accommodation sector, transportation and catering companies.

In early March this year, Alderman Felicity Purchase, mayoral committee member for Economic Development and Tourism, said that investment in the industry has provided “a tremendous return on the City’s ongoing investment in Cape Town’s infrastructure, and positioning Cape Town and Western Cape as a globally competitive industry destination”.

Financial services

The City of Cape Town is recognised as the second largest financial services hub in the country, the foundation for which is due to the strong presence of the insurance sector that over time has grown to include other services such as specialised finances, professional, business, property and personal services.

Other newer branches of specialised financial services are making their way to the Cape. This has been largely influenced by a couple of factors – branch setup and the attractive location of the Western Cape.

Land and sea

Agriculture in the Western Cape has grown quite significantly over the last few years and has become a vital contributor to export, amounting to between 50% and 60%.

Export-quality produce such as apples, table grapes, peaches, oranges and olives are grown and harvested here.

The Cape is also well known for its wine industry and has been able to take ninth place in the international market for volume of production.

High-quality wool and ostrich meat are also exported and are found to be more favourable due to fairly competitive export prices in comparison to international export standards.

Commercial fishing in the province is controlled by stringent commercial restrictions. Three-quarters of commercial fishing takes place in the Western Province.

The kind of fresh seafood found in these waters are quite varied: snoek, Cape lobster, abalone, calamari, octopus, oysters and mussels are among some of the most caught fresh seafood.

For more information visit:

www.wesgro.co.za

www.capetown.gov.za