Saldanha Development Zone Pre-Feasibility Analysis - Final Report _OCTOBER 2009 Saldanha Development Zone PrePrePre-Pre ---FeasibilityFeasibility Analysis FINAL REPORT: October 2002002009200 999 DEMACON Market Studies PO BOX 289 Strand, Cape Town 7140 Tell: +27 21 853 6895 Cell: +27 83 324 7363 E-mail: [email protected] www.demacon.co.za i Saldanha Development Zone Pre-Feasibility Analysis - Final Report _OCTOBER 2009 Demacon is a member of SOUTH AFRICAN COUNCIL OF SHOPPING CENTRES (SACSC) SOUTH AFRICAN PROPERTY OWNERS ASSOCIATION (SAPOA) The information contained in this report has been compiled with the utmost care and accuracy within the parameters specified in this document. Any decision based on the contents of this report is, however, the sole responsibility of the decision maker. Enquiries : Milinda Brink +27 021 853 6895 (t) +27 021 853 6895 (f) +27 083 324 7363 [email protected] www.demacon.co.za ii Saldanha Development Zone Pre-Feasibility Analysis - Final Report _OCTOBER 2009 TABLE OF CONTENT PAGE NUMBER EXECUTIVE SUMMARY ......................................................................................................... Í CHAPTER 1 INTRODUCTION ................................................................................................. 1 1.1 PURPOSE OF STUDY ....................................................................................................... 1 1.2 STUDY AREA DELINEATION............................................................................................. 1 1.3 STRUCTURE OF REPORT ................................................................................................ 2 CHAPTER 2 IDZ PROFILING AND DEVELOPMENT ZONE LOCATION ASSESSMENT ...... 4 2.1 INTRODUCTION ................................................................................................................ 4 2.2 DEFINING CORRIDORS / NODES / PRECINCTS .............................................................. 4 2.3 CONCEPT OF AN INDUSTRIAL CORRIDOR ..................................................................... 7 2.4 CONCEPT OF INDUSTRIAL DEVELOPMENT ZONES (IDZ) ............................................. 8 2.5 CONCEPT OF INDUSTRIAL PARKS ................................................................................ 13 2.6 CURRENT THINKING OF DTI IN TERMS IF IDZ S ............................................................ 15 2.7 STUDY AREA IN CONTEXT ............................................................................................. 19 2.8 SYNTHESIS ..................................................................................................................... 22 CHAPTER 3 SALDANHA ECONOMIC PROFILE ................................................................ 24 3.1 INTRODUCTION .............................................................................................................. 24 3.2 REFERENCE FRAMEWORK ........................................................................................... 25 3.3 MACROECONOMIC OVERVIEW ..................................................................................... 26 3.4 LOCAL ECONOMIC TRENDS .......................................................................................... 28 3.5 SYNTHESIS ..................................................................................................................... 39 CHAPTER 4 LOCAL MARKET PROFILE ............................................................................. 40 4.1 INTRODUCTION .............................................................................................................. 40 4.2 MARKET AREA DEMOGRAPHICS .................................................................................. 40 4.3 SYNTHESIS ..................................................................................................................... 46 CHAPTER 5 INDUSTRIAL MARKET ANALYSIS ................................................................. 47 5.1 INTRODUCTION .............................................................................................................. 47 5.2 CORE INDUSTRIES WITHIN THE SALDANHA BAY MUNICIPAL AREA .......................... 48 5.3 KEY SECTORS/ANCHORS, DOWNSTREAM OPPORTUNTIES AND INDUSTRIAL CLUSTER IDENTIFICATION ............................................................................................ 53 5.4 IMPORTANCE OF INDUSTRIAL CLUSTERS .................................................................. 92 5.5 INDUSTRIAL DEVELOPMENT IMPACT ON TOURISM ................................................... 93 5.6 INDUSTRIAL BUILDING PLANS PASSED AND BUILDINGS COMPLETED .................... 95 5.7 INDUSTRIAL LOCATIONAL FACTOR ANALYSIS ............................................................ 96 5.8 INDUSTRIAL NET SPACE DEMAND MODELLING ........................................................ 100 5.9 CONCLUDING REMARKS AND RECOMMENDATIONS ................................................ 104 5.10 CLUSTER/ SECTOR PRIORITIES FOR THE SALDANHA BAY MUNICIPALITY ............ 108 iii Saldanha Development Zone Pre-Feasibility Analysis - Final Report _OCTOBER 2009 5.11 SYNTHESIS ................................................................................................................... 109 CHAPTER 6 PHYSICAL ENVIRONMENT ASSESSMENT ................................................. 110 6.1 INTRODUCTION ............................................................................................................ 110 6.2 SPATIAL ANALYSIS AND IMPLICATIONS ..................................................................... 110 6.3 INFRASTRUCTURE ....................................................................................................... 121 6.4 INFRASTRUCTURE – SALDANHA MUNICIPAL PERSPECTIVE ................................... 141 6.5 ENVIRONMENTAL ISSUES AND ANALYSIS ................................................................. 149 6.6 DEVELOPMENT PERSPECTIVE: OPPORTUNTIES AND CONSTRAINTS ................... 155 CHAPTER 7 BEST PRACTICE ANALYSIS: CASE STUDIES ............................................ 157 7.1 INTRODUCTION ............................................................................................................ 157 7.2 INTERNATIONAL EXPERIENCE ................................................................................... 158 7.3 LOCAL EXPERIENCE .................................................................................................... 184 7.4 SWOT ANALYSIS ........................................................................................................... 201 7.5 CHECKLIST FOR AN IDZ ............................................................................................... 204 7.6 PRACTICAL INDICATORS FOR DEVELOPING THE SALDANHA IDZ ........................... 206 7.7 IMPERATIVES FOR ESTABLISHING AN IDZ IN SALDANHA ........................................ 208 7.8 DEVELOPMENT FINANCE / INCENTIVES .................................................................... 211 7.9 SYNTHESIS ................................................................................................................... 216 CHAPTER 8 PRE-FEASIBILITY ASSESSMENT ON THE ESTABLISHMENT OF AN IDZ 218 8.1 INTRODUCTION ............................................................................................................ 218 8.2 SALDANHA DEVELOPMENT ZONE STRUCTURES AND LAYOUT .............................. 218 8.3 COSTING ....................................................................................................................... 222 8.4 ECONOMIC IMPACT ASSESSMENT ............................................................................. 226 8.5 SYNTHESIS ................................................................................................................... 231 CHAPTER 9 RECOMMENDATIONS AND WAY FORWARD .............................................. 233 9.1 INTRODUCTION ............................................................................................................ 233 9.2 HOW DOES A REGION GO ABOUT DEVELOPING AN IDZ ........................................... 233 9.3 CRITICAL SUCCESS FACTORS AND GUIDELINES ..................................................... 234 9.4 DEVELOPMENT PHASING ............................................................................................ 240 9.5 RECOMMENDATIONS AND WAY FORWARD .............................................................. 241 9.6 SYNTHESIS ................................................................................................................... 243 LIST OF REFERENCES ......................................................................................................... 245 ANNEXURES A, B, C ............................................................................................................ 249 iv Saldanha Development Zone Pre-Feasibility Analysis - Final Report _OCTOBER 2009 EXECUTIVE SUMMARY 1 SECTION ONE: INTRODUCTION Demacon Market Studies , Bigen Africa Services and Plan Associates were commissioned by WESGRO (on behalf of the Department of Economic Development and Tourism ) to undertake the task of conducting an Economic and Technical Pre-feasibility Study for an Industrial Development Zone (IDZ) within the proposed Saldanha Industrial Area (i.e. “corridor” as indicated by the SDF ). The pre-feasibility study will investigate the potential to stimulate further industrial and business activities as well as to link these and current activities to the benefits of the proposed