Two Coega investor projects, with a combined investment value of R700 million, were commissioned by the Ministers of Trade and Industry, Dr Rob Davies, and Energy, Dikobe Ben Martins recently.
The Agni Steels and DCD Wind Towers commissioning comes ahead of the start of major production at both facilities later this month and the promulgation of new legislation on Special Economic Zones (SEZ).
Amendments to the SEZ Bill were passed through the National Council of Provinces and the bill is currently awaiting State President Jacob Zuma’s signature, Davies said.
Both Ministers welcomed the advances in the energy and metals sectors in a first of its kind visit to the Coega industrial development zone (IDZ).
Agni Steels SA started operating in March 2014 and has invested R400 million in the first of its kind steel mill in the Eastern Cape
Minister Davies said he was pleased to note the “serious traction the Coega IDZ was generating” attracting companies that will generate energy and inputs into renewable energy and local metals beneficiation. “These are welcome development in terms of this particular IDZ,” said Davies.
“We look forward to these projects achieving success and those in the pipeline coming on stream in the near future – we are pleased to see there has been significant progress at Coega.”
Minister Davies said the combined Port of Ngqura and Coega IDZ public investment amounted to R6.19 billion and that Coega had realised a return on investment of R2.2 billion. The minister however said he was confident that the investment would be recovered as Coega has already signed 23 investors with an investment value of R11.3 billion.
Energy Minister Martins lauded the work of the Eastern Cape in helping to build the nationwide energy imperatives and requirements.
“The Coega IDZ has built the requisite momentum to sustain the projects initiated – projects which span the value chain and constitute a generation project in the realisation of the national Integrated Resource Plan,” Martins said highlighting the Dedisa Peaking Power Plant, DCD Wind Towers and new Coega investor Powerway photo voltic manufacturers.
DCD Wind Towers started with their initial process qualifications in March 2014 at the 23 000 m² wind tower manufacturing facility in Zone 3 of the Coega IDZ, which is almost complete in under 11 months, a record time for a facility of this nature. The facility is expected to create close to 200 jobs, and produce between 110 and 120 wind towers per year.
DCD Marketing Manager for Energy Henk Schoeman said 65% of wind turbine parts could either be manufactured or assembled in South Africa and that the DCD Group had initially invested R85 million in exploring the renewable energy market feasibility – an investment which resulted in the R300 million Coega plant.
“The tower is the first part of this business. We have shown we can do this, now we are looking forward to growing business within a winning environment in South Africa,” said Schoeman confirming that DCD has already signed contacts with Vestas and Nordex for Round 2 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPP) and has contracts lined up for Round 3.
DCD created over 250 jobs during the construction phase, with more than 90% of the workers coming from the Nelson Mandela Bay region. The factory is anticipated to create close to 200 operational jobs.
Agni Steels SA started operating in March 2014 and has invested R400 million in the first of its kind steel mill in the Eastern Cape. The company has completed pilots and test runs with success, ahead of plans to fire up the furnaces on a permanent basis. Once on, the plant will run 24 hours a day, seven days a week in three shifts and employ 300 people.
DCD Wind Towers started with their initial process qualifications in March 2014 at the 23 000 m² wind tower manufacturing facility in Zone 3 of the Coega IDZ
The project will benefit from the Minerals Beneficiation Bill of 2011, which incentivises local beneficiation of scrap metal in particular, with Davies saying there is a shortage of specialised steel products which were formerly produced in South Africa but are now imported and that Agni Steels would contribute to reversing this trend.
The high-tech smelting facility will produce mild steel billets from scrap metal. During the first phase of the project the plant will produce steel billets for export to India and other African countries thereby enhancing local beneficiation.
A second and third phase is also planned, with the second phase set to double production, said Dhiroshan Moodley, co-owner of the local operation. “We will create 300 jobs in the first phase and this will build up to 800 in the third phase where we will double our initial investment when we will incorporate a fully automated rolling mill to further beneficiate the mild steel billets by producing various steel end products.”
Ayanda Vilakazi, Coega Development Corporation (CDC) head of marketing and communications said the ministers’ visit was welcome and highlighted the good work being done by the CDC in terms of attracting investment.
“The fact that two ministers took time out of their schedules to mark the commissioning of two catalytic projects indicates the national commitment, not only to manufacture and industrialisation, but also to the Coega IDZ and its role as a driver of economic growth in the province,” said Vilakazi.