How Coega is boosting the local economy

10 October 2017 by Nosihle Shelembe

Located in the Nelson Mandela Bay Metropolitan Municipality, the Coega Industrial Development Zone (Coega IDZ) is a world class infrastructure which provides the integration of services and industries with the rest of the African Continent and the World.

The Coega IDZ is one of several efforts by government to create economic development and growth opportunities for the people of the Eastern Cape.

Developed and managed by the Coega Development Corporation (CDC), the Coega IDZ aims to drive local and foreign direct investments in export-oriented industries, positioning South Africa as the hub for Southern African trade.

Additionally, the Coega IDZ offers global competitiveness through tax incentives, rebates and a duty-free zone.

The 11 000 hectares of land is divided into different zones and boasts power stations, a road, water, telecommunications as well as rail network.

According to Coega’s Business Development Manager Vuyokazi Gwabeni, the value of private sector investment in the 2016/2017 was R6.996 billion.

Gwabeni says the CDC and the Nelson Mandela Bay Logistics Park (NMBLP) has managed to attract 40 operational investors, of which 24 are South African companies.

The NMBLP provides infrastructure and services to the automotive manufacturing industry. It forms part of the achievements in the IDZ as it is managed by the CDC.

At the end of the 2016/17 financial year, the CDC had created over 7 243 operational jobs within the Coega SEZ.

Creating job opportunities

Chinese Company, FAW, has been operating in the IDZ since 2014.

During the construction period, FAW South Africa created 300 work opportunities for the local community and since its formal production 240 permanent jobs were created.

About 90% percent of the employees working at the plant are South African.

FAW Vehicle Manufacture SA Assistant CEO and Plant Manager PE Louis Liu, speaking through a translator, says the main products produced at the plant range from medium to extra heavy vehicles, they include tractors, tippers, cement mixers and construction vehicles.

“Our total investment for the project was 80 million US dollars and the accumulated production in the plant has been over 3000 trucks. Our products have been accepted gradually by our customers in South Africa. They are also sold to other African countries,” Liu says.

Located in Zone 4, is the call centre for Discovery Health Medical Scheme. Walking through the open plan office one could feel the energy of the young people at this centre.

The call centre, which started with a team of 50 call centre agents in July 2011, has grown its team to about 1000 people.

“Our call centre makes up about 60% to 70% of our workforce but we also have a collection’s team which is responsible for the collection of premiums, correspondent’s team and business teams as well as relationship teams,” says Discovery Service Executive Ernie van Staden.

Discovery‘s capital investment for the facility was about R20 million.

Employees at the call centre have no excuses for not being physically fit as their building has been fitted with a gym.

Furthermore, they can get massages, do their nails and hair at a beauty salon which is also located in their offices.

Van Staden say the company is in the process of recruiting 140 people over the course of the next four months.

Some of the sectors that can be found in the largest IDZ in Southern Africa include, among others, chemicals, logistics, automotive sectors, services, agro processing and energy.

Gwabeni says in the 2016/2017 financial year, the Coega managed to achieve 38% SMME participation in the IDZ.

“We trained about 6 697 people and to date we created 9 626 construction jobs in the IDZ. Since 1999 we have create 102 794 jobs and 92 583 people have been trained since inception,” she says.

Moreover, 16 investors were secured with a total value of R11. 685 billion in the 2016/2017 financial year.

The state owned entity also has a youth development programme for learners who were not successful in passing Maths and Science in their Grade 12.

A total of 48 learners were trained and completed the Maths and Science programme in 2016/2017 financial year.

Other CSR programmes that are implemented and funded by the CDC includes a driver training programme, bursary scheme for chemical engineering post-graduates, an internship programme as well as a youth leadership development programme.

A social-economic impact study that was done on the organisation by Muffin Consulting showed that 66% of staff that were employed were from previously disadvantaged individuals.

A total of 69% of companies increased their workforce in the IDZ which is an indication that businesses in the Special Economic Zone have a likelihood to succeed.

The findings of the study are supported by the Coega’s recognition for its dedication to job creation initiatives and excellent services to export orientated investors.

The entity was recently awarded two award certificates, mainly the IDC Job creation and Best Provider of Service to Exporters at the Exporters awards which was held in Port Elizabeth.