Land of plenty

Wednesday, 26 May 2010 08:57

KwaZulu-Natal is known as the industrial hub of the country, but also has a vast array of other areas of interest for potential investors

From a tourist perspective, there are a variety of reasons why tourists find KwaZulu-Natal an appealing destination: One major drawcard is the fact that it has two natural wonders with World Heritage Site status: the Drakensberg Mountains (uKhahlamba) and the iSimangaliso (formerly St. Lucia) Wetlands Park.

However, tourists also are drawn to the region because of its subtropical climate, its sunny shores, its mix of cultures, its cuisine, entertainment and, of course, its friendly and hospitable citizens.

In fact, the tourism sector of the province contributes significantly to job creation and is worth about R20 million.

Investors interested in investing in the tourism industry have a variety of subsectors from which to choose: game lodges, hotels, casinos, cruises, cultural villages, craft routes and nature reserves.

Investment projects that currently are under way include:

• The construction of another five casino and entertainment arenas;

• The development of the eMakhosini Valley and the eMakhosini Park, a cultural conservancy project;

• In the Port Shepstone area, the development of its marina;

• Increased tourism through the development of tourist facilities of hot springs in the Lilani and Shu Shu areas;

• Investment in Mkhambathini Game Reserve;

• A tourism centre in the Mnweni Valley in the Drakensberg area; and

• The Lubombo Spatial Development Initiative, which consists of eastern Swaziland, southern Mozambique and northern KZN.

The unspoilt natural beauty of this region has seen a large influx of tourists in recent years and offers investors excellent opportunities in either game farms, hotels, lodges and entertainment.

Before now, logistically speaking, the infrastructure did not allow for growth in the tourism market, but that has since begun to change with the creation of a main tourism road and a few secondary roads.

More than R600m has already been earmarked for new roads, tourism facilities and the upgrading of the national access route.

However, not only is KZN an attractive tourist destination, it also has become very appealing to investors. While it is true that the financial crisis did stunt economic growth in the country, in KZN the sectors that have largely contributed to the province’s economy – regardless of the situation – are manufacturing, agriculture, forestry, business services and financial services.

Agriculture is another sector that contributes significantly to the provincial economy. Because of the climate and good quality soil, tropical produce such as pineapples, avocados, citrus, bananas, mangoes, melons, litchis and granadillas are grown and harvested. Other produce such as potatoes; nut varieties such as pecan, cashew, macadamia; and dry and soya beans are grown in the province.

Cattle farming, sheep farming and pig farming are considered also to harness great investment potential. Milk produce and beef products are of top quality, while sheep farming is mainly for wool and mutton.

While pig farming is not as huge, the areas in which these farms are situated are ideal for pig farming.

Agri-processing by definition is the transition of raw materials into proper selling products: wood into furniture, sugar into biofuels, herbs into essential oils and medicines, and tree pulp into paper.

Forestry, pulp and paper

Half of South Africa’s timber production comes from KZN’s timber plantations.

The majority of timber output comes from hardwoods such as eucalyptus and softwood such as pine.

Mondi and Sappi, the two largest timber processing manufacturing companies, have their operations set in KZN. Mondi produces 600 tonnes of paper a day and 400 000 tonnes a year of wood-free paper. Sappi generates 110 000 tonnes of paper a year and 600 000 tonnes of pulp on an annual basis.

International interest in the pulp and paper manufacturing industry has seen an Indian joint venture investment consisting of a R710-million injection into the pulp and paper sector.

Manufacturing

KZN is responsible for a third of the country’s manufactured products and takes the form of steelworks, breweries, dairies, chemical processing and automotive parts.

Approximately a fifth of the province’s citizens are employed in the manufacturing sector. The subsectors of manufacturing that contribute to the economy are: paper, chemicals and petrochemicals, clothing and textiles, and food and beverage.

The chemicals subsector is huge with investment potential, as polymer resins and ethanol are in demand.

ICT

Information and communication technology (ICT) has become one of the fastest growing sectors in the country and in KZN, the sector has been noted as having large
investment potential in a number of areas:

• Call centres;

• Transport and logistics;

• The film industry;

• Automotive industry; and

• ICT training and skills.

Last year, Seacom – the high-capacity fibre optic 1 280bps undersea system that runs for 15 000 kilometres along the eastern seaboard – was installed and now provides the country with equal and open access to affordable bandwidth.

Automotive

The automotive industry, a huge part of the industrial sector within the province, contributes 6% to the economy of KZN and employs a large number of its people.

The areas of growth come from car sales, automotive parts and services.

Despite the huge drop in car sales last year, the industry currently is seeing growth and it is expected that sales will once again reach the peak levels experienced previously.

Investing in KZN is made far simpler through avenues such as the African Development Bank, Industrial Development Corporation and Foreign Investment Grants; and through Trade and Investment KZN – an agency promoting business growth in a variety of ways.

Areas with potential growth in which investment is encouraged are:

• Security (surveillance);

• Research and development in genetics;

• Environmental studies; and

• Agriculture.

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