COEGA DEVELOPMENT CORPORATION
Generic Stakeholder Presentation Feb- May 2019 Index
1 Coega Overview
2 SEZ Investment Levels & Impact
3 Value Proposition
4 Inclusive Community Project (CSR)
8 Index
1 Coega Overview
2 SEZ Investment Levels & Impact
3 Value Proposition
4 Inclusive Community Project (CSR)
8 Corporate Video (8 minutes)
https://www.youtube.com/watch?v=0Y5Go1uBDiU Ownership & Control Vision, Mission & Values Strategic Objectives & Performance Strategic Objectives 2015-2020 PTD 2018/19 Performance vs Adjusted 5yr Target 2019/20 Overall Organisational Performance for the 2017/18 YTD Performance 2018/19 vs Annual Target Internal Capacity to Deliver Coega Brand Architecture Coega’s Client Experience ISO Certified to Enable Delivery CDC certified in the following Standards • ISO 9 001: Quality Management • ISO 14 001: Environmental Management • ISO 15 498: Records Management • SANS 16 001: HIV & AIDS • OHSAS 18 001: Occupation Health & Safety Currently pursuing certification in the following standards • ISO 20 000: IT Service Management • ISO 28 000: • ISO 27 000: Supply Chain Security Information Management • ISO 50 001: • ISO 31 000: Energy Management Risk Management Awards of Excellence 2014 - 2019
South Africa’s Investor of the Year: DTI’s Annual SA Premier 2019 Business Awards 2019 Top Employer in SA: Public 2019, 2018, 2016, Sector 2015 & 2014 Top Performing Public Service 2018, 2016 & 2014 Organisation in SA Top Women Awards: Top Gender Empowered Public 2018 Service Organisation Best Provider of Service to 2018, 2017 & 2014 Exporters
Best International Trade 2017 Marketing Specialist in Africa Top Job Creation Public Sector 2016 Organisation in SA Best Supporter of the 2030 2016 Vision in South Africa
Legends of Empowerment & 2016 Transformation in SA Top Empowered: Public Service 2015 Organisation in SA Top Public Sector Organisation in Infrastructure Development in 2014 SA
Index
1 Coega Overview
2 SEZ Investment Levels & Impact
3 Value Proposition
4 Inclusive Community Project (CSR)
8 Fully Integrated Location with Modern Infrastructure Special Economic Zone (9003 Ha) Deepwater Port (780 000 TEU: 2015 Est.)
Automotive Supplier Park (182 Ha) Port City (180 000 TEU: 2015 Est.)
Most Developed and No.1 SEZ in Sub-Saharan Africa What Sets Coega Apart • Only Metro in SA with two ports • 2.6 million TEU capacity (PE & Ngqura) • Served by major shipping lines & car carriers (90% of EC capacity) • CCA facilities: 70% saving on surety bond • Labour & SHEQ Services In-house • Power grid: Dual feed for redundancy • ICT Network: Dual feed for redundancy • Localisation of manufactured goods • Established procurement & distribution lines • One Stop Shop facilities in place Investment Focus Sectors Driving Growth & Investment: Current Status* as at Feb 2019 43 Operational investors 18 International companies SEZ & NMBLP 25 Home-grown companies R11.579 bn private sector investment * Actuals with BAIC Phase 1 as at 1/11/2018 R3.6 bn top-structures for investors R9.53 bn foreign direct investment * Actuals with BAIC Phase 1 as at 1/11/2018 8 210 Operational jobs 19 402 Jobs have been created in the SEZ 11 192 Construction jobs 2 x Customs Controlled Areas (zone 1 & 2) Over 92 583 people trained since inception 2 x planned Customs Controlled Areas (5 & 7) Contribution to fiscal revenue FY 2014/15: Local economic development: • R1.6 bn in national taxes • 69% of companies located at Coega SEZ • R1.38 bn in balance of payments source 70% or more of their inputs locally • R2.2 bn impact on households Contribution to fiscal revenue FY 2014/15: • Impact to Eastern Cape GDP R3.9 bn Demographics & transformation: • male to female ratio is 50:44 w/ 69% of *Actuals with BAIC Phase 1 as at 1/11/2018 employees from affirmable groups. • 64% of all employees at firm level are youth. 43 SEZ Investors as at February 2019 SEZ Investors - Country of Origin
http://www.coega.co.za/DataRepository/Documents/99Yo71g3O7zCP42xu72qrGhWg.pdf Past 4 Years 2014/5 – 2017/8 Spotlight on Automotive Sector Spotlight on Energy Sector Stakeholder Support & Endorsement Supported by V.P. – People’s Republic of China
TOP Performing SEZ in SA – 2015, 2016 & 2018
Coega Wins Top Performance Award. (left to right) Coega CEO - Pepi Silinga; MEC for EC Economic Development - Sakhumzi Somyo, Environmental Affairs & Tourism; Premier of the Eastern Cape - Phumulo Masualle ; and Vice President of the People’s Republic of China - Dr LI Yuanchao. “I’ve been to many developing countries and industrial development zones, the Coega IDZ is by far the best of them all” - Dr LI Yuanchao, Vice President of the People’s Republic of China in his visit to Coega SEZ in 2016 Endorsed by Global Investors BAIC Group in 2016 Recommended by the DG of dti - Lionel October
CDC CONGRATULATED ON ITS HARD WORK: Lionel October – DG DTI visited the Coega SEZ on 8 December 2016 where he congratulated the Coega SEZ on an effectively well run SEZ . “Coega is a flagship programme we are very proud of. It’s effectively the best functioning and most successful SEZ in the country and also has world class management and corporate governance,” says Lionel October, Director General of the Department of Trade and Industry. Trust in Coega – Coega Dairy Trust in Coega – 342MW Dedisa Peaking Power Plant Bunkering Services Take Off at Algoa Bay
South African Marine Fuels (SAMF) Bunkering Services Take Off at Algoa Bay
South African Marine Fuels (SAMF)
The Founders Mrs. Siyamthanda Maya (BTech)MBA Founder Investor Shareholder Managing Director South African Marine Fuels (Pty) Ltd Special Projects: BAIC SA R11bn Investment BAIC SA CKD Plant in Zone 1
• Phase 1: 50,000 units; • Full capacity: 100,000 units (5 years); • 800 - 1,500 operational jobs; • 4,000 direct jobs at peak • 10,600 indirect jobs (impact to EC); • Development of New Supplier Base; • 60% Exports and 40% Local • R11bn investment (04/05/2016) • Phase 1: R4,5 bn • Phase 2: R6,5 bn • Sod Turning: 30 August 2016 • Milestone Celebrations: 24 July 2018 Models launched in South Africa – X25 & D20
Generosity BAIC SA Overview May 2015 – July 2018
http://baic.coega.co.za/
Generosity
3D Concept Shop-floor July 2018 BAIC SA SMME opportunities created by Coega
• CDC managed the platform preparation of BAIC Site
Twelve (12) SMMEs benefited
R44.1 million Index
1 Coega Overview
2 SEZ Investment Levels & Impact
3 Value Proposition
4 Inclusive Community Project (CSR)
8 Top 9 Reasons to Invest in Coega 1. World class infrastructure 2. Easy access to air, sea and road network (over night cargo flight from major airports) 3. Integrated logistics services 4. Speed of delivery and flexibility for mega and minor projects 5. One stop shop for investor related services 6. Incentives framework 7. Injection of scarce skills into the local market 8. Nelson Mandela Metro city lifestyle (Home of Nelson Mandela) 9. Visionary leadership & corporate governance systems in place S12R Gazetted
http://www.coega.co.za/files/NationalTreasurySEZ2018.pdf
Lionel Billings meeting with SARS Customs & Excise Beyers & Customs Strategy and Legal Policy Libepe Trust in Coega – 342MW Dedisa Peaking Power Plant
CDC CFO, Lionel Billings, Sars Customs & Excise acting chief officer, Beyers Theron, and Sars Customs Strategy and Legal Policy group executive, Coffet Libepe Trust in Coega – 342MW Dedisa Peaking Power Plant
Section 12R of the Income Tax Act (“s12R”) sets out criteria to be met before benefiting from tax-related incentives provided to SEZs. These included, inter-alia: • The company is incorporated in S.A. or is a company effectively managed in South Africa • The company carries on business in a SEZ, designated by the Minister of Trade and Industry by notice in a Gazette • The company operates from a fixed base situated within that SEZ
• No < 90% of the incomeCDC CFO, ofLionelthat Billings,company Sars Customsis derived & Excise actingfrom the chief officer, Beyers Theron, and Sars Customs business carried onStrategywithin andthat Legal SEZPolicy group executive, Coffet Libepe Trust in Coega – 342MW Dedisa Peaking Power Plant
• The company does not engage in certain manufacturing activities, including those related to the production of alcohol, tobacco products, weapons and ammunition or bio-fuels whose process of manufacture negatively impacts on food security in South Africa. • No more than 20% of the deductible expenditure incurred or 20% of the income received by the entity may be derived from transactions between connected persons who are residents. CDC CFO, Lionel Billings, Sars Customs & Excise acting chief officer, Beyers Theron, and Sars Customs Strategy and Legal Policy group executive, Coffet Libepe Coega SEZ Area – 9 003 Ha Strategic Geographic Position
Gateway to African and Global markets Serviced by 2 Ports: Port Elizabeth & Ngqura Gateway to Africa Product Differentiation – Feeder Routes Rail CDC to Ports Routes Proximity to successful export and manufacturing hub Breaking Down Barriers to Trade • Remove the barriers of global trade.
• Global trade barriers is segmented into two parts, tariffs (incentive related), and non- tariff barriers (logistics and supply chain related).
• African barriers to trade centre around quality of infrastructure with regards to roads, ports and related services
• Below are the 9 pillars that the CDC has to focus on in order to strength the trade corridor ex South Africa 498.01
317.02 Contact Details of Sector Specialists CHANGING THE FACE OF THE EASTERN CAPE THROUGH STRATEGIC PROJECTS: R280 billion Project Mthombo Project Name Project Mthombo Project Description Crude Oil Refinery processing crude oil into final fuel products. Location Coega Special Economic Zone (SEZ) / Zone 11 Implementing Agents PetroSA/CEF/DoE
Private Sector USD 6 billion Investment Project Schedule Feasibility: Completion Dec 2020 Front end engineering: Duration 14 months Construction: Duration 3-4 years Start of operations 2025. Project Readiness • Pre-Feasibility: completed • Available land and supporting infrastructure Incentives & Funding • Applicable SEZ incentives Available Economic Impact • Macro-Economics: • R94.6 bn per annum operational costs; • 83% of economic impact to the EC; • Household income in the EC rise R1.8 bn pa; • 5.5% pa economic growth for the EC; • Spin-offs from the localisation - R20 bn • Construction Direct jobs – 7,000 Indirect jobs – 14,000 • Operational Direct Jobs – 1,000 Indirect jobs – 4,000 Aquaculture Projects: Coega Abalone Farm 1
Project Name Coega Abalone Farm 1
Project Land-based cultivation of abalone Description (Haliotis midae) Location Coega Special Economic Zone (SEZ) / Zone 10 / 33° 46' 39'' S; 25° 43' 22'' E Implementing Mamjoli Marine Enterprise and Abalone / Agents CDC Private Sector R 500 million - Including seawater and Investment basic infrastructure which will be shared Required with farm 2 Project 18 Months from kick off to Start of Production Schedule - October 2020 Project • Land-based Aquaculture Environmental Readiness Impact Assessment (EIA) received – February 2018 • Marine Pipeline Servitude EIA expected – Q4 2019/20 Incentives • From the dti – Aquaculture Development And Funding & Enhancement Programme Available • Applicable SEZ incentives Economic • 420 Operational Permanent Jobs Impact • 100 Jobs During Construction Aquaculture Projects: Coega Abalone Farm 2
Project Name Coega Abalone Farm 2
Project Land-based cultivation of abalone Description (Haliotis midae) Location Coega Special Economic Zone (SEZ) / Zone 10 / 33° 46' 39'' S; 25° 43' 22'' E Implementing Taconic Abalone Agents Private Sector R 200 million - shared infrastructure Investment Required Project 18 Months from kick off to Start of Production Schedule - October 2020 Project • Land-based Aquaculture Environmental Readiness Impact Assessment (EIA) received – February 2018 • Marine Pipeline Servitude EIA expected – Q4 2019/20 Incentives • From the dti – Aquaculture Development And Funding & Enhancement Programme Available • Applicable SEZ incentives Economic • 280 Operational Permanent Jobs Impact • 100 Jobs During Construction Agro-Processing Projects: Grain Milling
Project Name Grain Milling initiatives
Project Grain Milling initiatives to address the Description challenges of food security and local economic development Location Coega Special Economic Zone (SEZ) / Zone 3 Implementing NewCo Milling Agents Private Sector R 600 million Investment Required Project 18 Months from kick off to Start of Production Schedule - October 2020 Project • Zone 3 of Coega SEZ fully serviced Readiness • Business Plan developed
Incentives Applicable dti and SEZ incentives And Funding Available Economic • 160 Operational Permanent Jobs Impact • 100 Jobs During Construction Agro-Processing Projects: New Hope Animal Feed
Project Name New Hope – Animal Feed Production Plant
Project Animal feed production plant supply cattle Description feed to dairy farms in the region as well as for export. Location Coega Special Economic Zone (SEZ) / Zone 3 Implementing New Hope (Chengdu, China) Agents Private Sector R 150 million Investment Required Project Start construction mid 2020; Start production Schedule mid 2021 Project Project Feasibility and finalisation linked to Readiness new project being rolled out in Alberton, Gauteng
Incentives Applicable dti and SEZ incentives And Funding Available Economic • 100 Operational Permanent Jobs Impact • 100 Jobs During Construction Bankable Projects: SAMRT Stainless Steel Thin Strip Mill 1/2
Project SAMRT Stainless Steel Thin Strip Mill. Name Location Stainless Steel Thin Strip Mill (SSTSM) project to be built in Zone 2 of the COEGA Special Economic Development Zone Implementin Coega Development Corporation and SAMRT g Agent
Investment R 620 million Required
Project 22 Months from kick off to Start of Production Schedule (SOP)
Production At full operation the plant will produce 9,000 Capacity tons/year Precision Strip.
Revenue Annual sales revenue in excess of R 500 million Potential Bankable Projects: SAMRT Stainless Steel Thin Strip Mill 2/2 Project Market study and Bankable Business Plan have been Readiness completed. Due Diligence done
Incentives • From Dti – AIS or Automotive Incentive Scheme. And • Currently in final discussions with IDC, PIC and FMO Funding regarding funding. Available • 50% of funding has been secured via IDC.
Responsible Coega SEZ, SAMRT Institutions
Job • 130 Operational Permanent Jobs (with ramp up). Creation • 600 Jobs During Construction • Downstream jobs are estimated at 5,000 Energy Project: Coega Gas to Power
Project Name Coega Gas to Power
Project Advancing Readiness 3,000 MW Description Gas-to-Power Project – power generation Location Coega Special Economic Zone (SEZ) / Zone 10 and Zone 13 Implementing Coega Development Corporation (CDC) Agents Private Sector • R 40 billion for gas-to-power facility Investment Required Project Based on the draft Integrated Resource Plan Schedule of 2018, gas project planned be added to the grid in the year 2026.
Project • Site Readiness Readiness • EIA studies • Technical and engineering studies • Local content manufacture & service provision • Coordinated ancillary infrastructure development & logistics. • Harnessing ancillary SMME opportunities
Incentives And • Applicable SEZ incentives Funding Available Energy Project : Solar Rooftop
Project Name Coega Solar Rooftop
Project Development of solar roof mounted power generation Description system on Coega buildings Location Coega Special Economic Zone (SEZ)
Implementing Private Developer Agents Private Sector R 950 million Investment (Various scenarios) Required Project Project development will occur over the financial year Schedule 2019/20
Project Roof Assessments (roof conditions, roof area, Readiness supporting structure and roof description)
Incentives And • Carbon footprint reduction Incentives Funding • Applicable SEZ incentives Available Bankable Projects: Renewable Energy Components
Project Name Renewable Energy Component Manufacturing – Readiness Study Location Coega Industrial Development Zone (IDZ)
Implementing Coega Development Corporation (CDC) Agent The Department of Energy’s (DoE) Renewable Energy Independent Power Producer Procurement Programme Project (REIPPPP), with over 40% local content requirements, Rationale has seen the Eastern Cape establish a wind hub over the last three bid rounds. This includes over 17 projects (1,509 MW). According to this trend, it follows that an EC location is the most prudent location for a wind Blade manufacturing facility. Project Value • RE Component Manufacturing Facility estimated at R 310 million. • The estimated costs for the Feasibility study are at R 1.5 million. Project Estimation of 3 years, including the signing of a lease Schedule agreement. Bankable Projects: Aluminium Sulphate
Size Of Local Consumption is 50,000 t/a (on a 100% solids Market basis) worth R 90 million. Local production on a regional basis as well as imports (11,000 tpa in 2011). Used as coagulant in water and effluent treatment as well as paper production.
Capacity Current SA plants 8 – 30,000 tpa as solid (supplied regionally as 50% solution). The Eastern Cape can look at 15 – 20,000 tpa which is in line for other plants.
Raw Material Aluminium Sulphate is made from aluminium sources such as aluminium dross (waste) from foundries. The other feedstock is sulphuric acid that is widely available in SA. The Eastern Cape and Western Cape is a potential source for competitive feedstock.
Jobs Estimated jobs 30 – 50
Market • Global trade exceeded $ 385 million Potential • Average growth: 2 – 3% p.a Bankable Projects: Luctose
Size Of Local Total consumption is 11,300 t/a, all imported at Market a cost of R 130 million (2011). Used for lactulose production, as well as mild sugar in baby formulas and coffee whiteners.
Capacity Typical plant sizes are 40 – 80,000 tpa. SA can look at 30 – 40,000 tpa which is close to new global plants.
Raw Material Lactose is made from milk processing, in particular whey produced in cheese manufacturing. The Eastern Cape is a major potential source for competitive feedstock.
Jobs Estimated jobs 100 – 150
Market • Global trade exceeded $ 2 billion Potential • Average growth: 3-5% p.a. Bankable Projects: Soda Ash
Capex 600 million
Capacity SA can look at 600,000 tpa which is close to new global plants.
Raw Material Salt/ Brine available Lime supply
Jobs Estimated jobs 250
Market Potential • Global trade exceeded $ 2 billion • Average growth: 3 – 5% p.a. Bankable Projects: Coega Stainless Steel Smelter Project Name Lamergyre Alloys Limited - Coega Stainless steel Smelter
Project Description A greenfield stainless Steel Smelter plant of 6.5 million tons per annum fully vertically and horizontally integrated Location Coega Special Economic Zone (SEZ) / Zone 12 33°43'7.47"S ; 25°41'37.54"E Implementing Lamergyre Stainless Steel and consortium partners Agents Private Sector $ 12.9 billion 85% FDi Investment Required Project Schedule • BFS completion- 31/12/2019 • Start foundations- 1/6/2020 • First Phase 2 output- 1/12/2021 • Last Phase 2 handover- 1/6/2023 Project Readiness • Business Plan • Financial Forecast • Offshore OEM’s will fund at least 85% • Funding Model by Stakeholder - Done • Offtake discussion held and in progress • 80% export; 20% new tertiary processing
Incentives And • From the dti Applicable SEZ incentives Funding Available Economic Impact • Planning – 200 people • Design – 200 people • Construction > 30,000 people • Operations: 4,500 plus 20,800 = 25,300 External Project Management Services Project Management Services Project Management - Clients Project Management Services Project Management Services Cecilia Makiwane Hospital – EC (Completed) La Mercy School – KZN (Completed) Rygersdal - Cape Town Small Harbours and the Robben Island project EC DoE and KZN DoE projects Index
1 Coega Overview
2 SEZ Investment Levels & Impact
3 Value Proposition
4 Inclusive Community Project (CSR)
8 Corporate Social Responsibility
The CDC’s CSI Focus Areas are as follows: • Rural Development • Job Creation • Education and Skills Development • Health • Crime • Sport • Corruption Corporate Social Responsibility – FAW Partnership
August 2017: FAW SA and CDC donated 400 pairs of shoes to poor school children at Coega Primary School. Corporate Social Responsibility – FAW Partnership VILLAGE Corporate Social Responsibility MATHS AND SCIENCE • Target - Grade 12
HCS Mobile Labour Office Facilities THANK YOU