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Offshore gas finds could transform the Eastern Cape energy landscape

Wind tower blades arriving at the Port of Ngqura. Image: Keith Arkins via Eastern Cape Business 2020

Although the Eastern Cape is making a name for itself as the home of wind power, solar energy and related manufacturing are making a bid for a place in the sun. Scatec Solar has commissioned a plant in Burgersdorp. The 75 MW plant has panels mounted on single axes, enabling them to track the sun and optimise electricity generation by a further 20%.

A solar tracking system manufacturer based in Port Elizabeth has achieved a rare level of certification at its purpose-built climate test chamber. PiA Solar has won several contracts for large solar farms in the national Renewable Energy Independent Power Producer
Procurement Programme (REIPPPP).

The East London Industrial Development Zone (ELIDZ) is home to renewable energy manufacturing facilities such as the ILB Helios Solar Panel Assembly.

If recent offshore gas finds in the Southern Outeniqua Basin (Brulpadda) prove as rich as first indications suggest, and if companies can find the money to extract it, the potential to transform the Eastern Cape is enormous. Both the Coega SEZ and the East London IDZ are geared for maritime services and the value chain of the oil and gas sector is complicated and long.

Another possible gamechanger is the decision by national government to name the Coega SEZ as the potential site for a 1 000 MW Liquefied Natural Gas (LNG) plant. The value to the regional economy of the project is estimated at R25-billion. A 342 MW gas-fired power plant (Dedisa) has started operating at Coega, and there are plans to expand this sector.

The Eastern Cape is now home to 15 wind farms. More than half the wind farm projects so far approved in the REIPPPP have been allocated to the province. The Kouga area west of Jeffreys Bay and the Cookhouse/Bedford area about 95 km north-west of Makhanda (Grahamstown) represent two wind power hubs, with a collective capacity of 1 185 MW.

South Africa’s National Development Plan (NDP) requires 20 000 MW of renewable energy by 2030 and wind power technology, together with solar photovoltaic, are the two primary methods of reaching that target.

One of the unfortunate side effects of the refusal by national utility Eskom to buy renewable power for two years was the closing down and auctioning off of a wind tower manufacturing plant in the Eastern Cape. DCD Wind Towers was a joint venture between the DCD Group and the Industrial Development Corporation (IDC) at Coega.

The South African Wind Energy Association (SAWEA) has issued a Commitment Statement which noted that the REIPPPP has a “built-in demand for local procurement”, not only offering business opportunities to local companies, but also incentivising the industry to identify and support emerging entrepreneurs.

The rollout of renewable energy has met some resistance in South Africa from constituencies as diverse as coal-truck drivers and advocates of nuclear power. In response, renewable energy advocates cite not just investment figures, but they note how much good work has been done in communities.

Figures released by SAWEA showed shareholding for local communities reached an estimated net income of R29.2-billion over the lifespan of the projects. Some 14 000 new jobs are expected to be created, mostly in rural areas, and more than R30-billion has already been spent on Black Economic Empowerment (BEE) in the construction phase.

Part of the SAWEA Commitment Statement reads, “Our aim over time is to transform and indigenise leadership at all levels in the South African Renewable Energy sector.”

The average lead time in the projects that have so far been approved in the province is two years, with local content averaging out at about 47%. When the projects are complete, R142.9-billion will have been spent on procurement, R65.7-billion of which will be local.

Wind projects in the province include Globeleq’s 138 MW Jeffreys Bay facility, the 140 MW Cookhouse project (African Clean Energy Developments) and two run by Cennergi at Tsitsikamma (94 MW) and Bedford (134 MW). Resources company Exxaro recently bought out the Indian partner with which it initially partnered to create Cennergi, Tata Power. There are several other projects with capacities ranging from 20 MW to 97 MW.

POWERX has signed up with AKM Foods to supply power to all the KFC outlets in Nelson Mandela Bay. POWERX trades in renewable energy through licences granted to it by the national energy regulatory authority, NERSA. By aggregating power purchases, the company is able to mitigate risk in a way that an individual purchaser may not be able to. POWERX now supplies over 40 national and local customers in Nelson Mandela Bay and its aim is to expand the customer base.

The support of two of South Africa’s biggest institutional investors, the Industrial Development Corporation (IDC) and the Public Investment Corporation (PIC), has been crucial in getting the renewable energy sector off the ground. They have also played a role in helping communities fund their participation in community trusts. According to Business Day, the PIC has so far invested in 16 unlisted projects and its total investment stands at R11-billion. The IDC’s 24 projects are valued at R14-billion and will contribute 1 100 MW to the national power grid.

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Joburg Indaba: Modernisation in Mining, 24th February, online

Modernisation in Mining

Digital transformation * 4IR * Technology Innovation
24 February 2021, online

The Joburg Indaba team is pleased to announce its first online discussion for 2021, Modernisation in Mining, to be held on the morning of 24th February.

This is a timely and critical discussion of increasing importance to the mining industry. Not only is modernisation of the mining industry beneficial for productivity and operational efficiency, but it also improves safety and the health of employees, increases sustainability and extends the life of mine.

Covid-19 has accelerated the drive to implement 4IR technologies in mining, such as IoT, AI, analytics and automation. However, questions remain regarding the implications for employees, the challenges of reskilling the workforce, which technologies to use and timeframes for implementation and ROI.

All of these issues and more will be discussed at the Modernisation in Mining online discussion, taking place on the morning of 24 February 2021. Chaired by Bernard Swanepoel, the session will include the results of the recent survey conducted by PwC and the Minerals Council of South Africa on the impact of 4IR technologies on mining.

This will be followed by a discussion with senior representatives from both mining companies and major technology suppliers, who will discuss the potential of new technologies to deliver tangible benefits as well as progress being made by mining companies on modernisation initiatives and how they are tackling the redeployment/re-skilling of their workforce.

Sponsored by PwC, Modernisation in Mining is one of the ongoing discussions held by the Joburg Indaba team throughout the year.

For more information and to register, please go to: https://www.joburgindaba.com/other-indabas/modernisation-in-mining

For sponsorship opportunities, please contact Stuart Alderson-Smith:
sponsorship@resources4africa.com

Sponsors of Modernisation in Mining: PwC

“by the industry for the industry”

Mining Industry Partners of the Joburg Indaba include:
African Rainbow Minerals, Anglo American, Exxaro Resources, Harmony Gold Mining Company Limited, Implats, Menar, Minerals Council South Africa, Sasol Mining, Seriti Coal, Sibanye-Stillwater, South32, Vedanta Zinc International.

Sponsors of the Joburg Indaba include:
Lead Sponsor – PwC
Corporate Partner Sponsor – Accenture
Premium Sponsors – African Sun Mining, DRA Global, Fraser Alexander, IsoMetrix, OIM Consulting, Weir Minerals
Networking Sponsors – Deloitte, SRK Consulting, Worley

Student accommodation is a growing subsector

The University of Fort Hare is the site of a huge student housing project (above). The second phase of the student village will cost R400-million. Student accommodation specialists STAG African will create a student centre and postgraduate options, having delivered 610 beds in the first phase.

When the project is complete, the university will have the highest ratio of beds to students in South Africa, with a total of 2 047 beds. The project is jointly funded by the European Union, the National Department of Higher Education and Training and the Development Bank of Southern Africa.

STAG African is responding to a national (and continental) trend because one of the fastest-growing segments of the property market is student accommodation. Ambitions to keep making tertiary education more accessible to a broader range of students has been successful since South Africa became a democracy in 1994 and this has created a need for accommodation. The Department of Higher Education and Training estimates that there is a need across South Africa for 250 000 beds for university students.

These factors apply to the province’s other universities such as Nelson Mandela (Port Elizabeth and George), Rhodes (Grahamstown) and Walter Sisulu (four campuses including Mthatha and East London), together with all the TVET colleges.

Fort Hare University recently completed a library building in East London that also serves the students of Walter Sisulu University and UNISA. Construction company GVK-Siya Zama faced some challenges on a constricted site, but delivered basement parking and four levels of offices, boardrooms, study areas and a canteen. The library is on three levels.

The same company was active on the project to rebuild Woodridge College after that institution was devastated by fire in 2016. Another project that required the demolition of buildings was at David Livingstone High School in Port Elizabeth. This R64-million project created a new double-story classroom block, kitchen and dining hall.

Housing

Coastal properties almost always attract a premium, but a new trend towards “semigration” is further boosting prices. Semigration refers to families who live in towns like Knysna or George but the bread-winner commutes to Johannesburg. Towns such as St Francis Bay, Jeffreys Bay and Port Alfred are now becoming the sites of primary residences, instead of being exclusively holiday destinations.

A major stimulant in the housing sector is government. In 2019 the Eastern Cape Provincial Government claimed to have built 500 000 houses in the term of office of the administration that started in 2014.

A new housing development in the rural area of Keiskammahoek attracted funding of R25-million from the Eastern Cape Provincial Department of Human Settlements. Aimed at destitute families, the first phase was conducted in the settlement of Masincedane, and the project will ultimately cater to 1 255 beneficiaries.

Large-scale housing projects often demand unique lighting requirements. The Buffalo City Metropolitan Municipality called in large-area lighting specialists Maritz Electrical for the lighting of its informal settlements. The introduction of LED lighting on 20 meter masts will provide a measure of security and maximise energy efficiency.

A remarkable transformation has taken place in downtown Port Elizabeth. The old “Sanlam” building, which used to house one of the country’s most notorious security branch torturers, has been converted into social housing. Together with two other buildings (Mumford House and the Old Mill Building) the area has been named the Steve Biko precinct in honour of the Black Consciousness leader and will offer a heritage aspect in the form of a museum. The room in which Biko was tortured has been preserved as a historical site.

The Qhama Social Housing Institute offers accommodation from R1 200 per month and is targeted at the “missing middle”, people who can’t afford a bond and who don’t qualify for an RDP house. These people are entitled to a housing subsidy.

Transformative development

One of the largest malls to be constructed in South Africa in the new century has made a big impact on the western edge of Port Elizabeth. With 250 shops, an ice rink and cinemas, the R2-billion Baywest Mall is the first part of what will become the 320 ha Baywest City Precinct on the N2. The giant development spurred a R300-million upgrade at Greenacres, the city’s first big mall development which attracted shoppers away from the central business district (CBD) in 1981.

The Mandela Bay Development Agency (MBDA) has transformed the Old Tramway building (left) at the entrance to the Baakens Valley. The MBDA not only moved into new offices in the renovated building but is letting it out as an events venue. Other retail property developments have happened in the valley (including a popular brewery), drawing attention to the potential of Port Elizabeth’s green lung to be even more useful in future.

The Baakens River Valley is one of Port Elizabeth’s hidden gems and the MBDA has commissioned studies on how the valley might best be utilised for leisure and new housing without compromising its unique natural features.

A scheme to restructure the yacht basin in the harbour is planned. A key blockage is the location of manganese storage dumps on the edge of King’s Beach. When those are moved to the Port of Ngqura, the marina development can go ahead.

Online resources

The X-factor in wood chippers

WP CHIPPER HIRE & SALES trading as Africa Biomass Company (ABC) is a wood chipping company that provides wood recycling services, supplying biomass according to specification.

ABC is one of the best go-to wood chipper equipment sales and services agents.

Wood chipper services

  • Agricultural: orchard / vineyard recycling and mulch spreading
  • Biomass for generation of heat or electricity
  • Site clearing and preparation
  • River rehabilitation in riparian zones
  • Workshop, field services, parts and spares
  • Operator training services: SETA-certified
  • Manufacturing workshop

The X-factor in wood chippers

ABC is the authorised dealer for Bandit wood chippers in Africa. Bandit combines first-world technology and experience with third-world functionality. This makes Bandit the only logical choice for wood chippers in Africa, which are now fitted on SABS-approved trailers.

BANDIT – Experience the best of both worlds

First-world technology and quality combined with African simplicity. The main woodchipper unit is manufactured by Bandit Industries, Inc. with 35-plus years’ experience in innovation and international research. These units are shipped to South Africa where they are fitted onto

SABS-approved roadworthy trailers built at Africa Biomass Company in Worcester, South Africa. Engine-powered woodchippers are fitted with Tier 3, South African standard, diesel or petrol engines, depending on the woodchippers’ specification or clients’ preference. Electric and PTO options are also available in various Bandit models.

The add-ons are specifically handpicked to give you the best set-up and will provide you with a well-balanced woodchipper that will outperform most other chippers in Africa.

www.abc.co.za

ABC understands wood recycling

With a comprehensive understanding of the operational challenges of wood recycling in South Africa, ABC has established state-of-the-art facilities to service, repair and rebuild wood chipper equipment of any brand and size. ABC’s facilities are operated by a remarkable team of very experienced and suitably qualified engineers, technicians and artisans.

An equally remarkable team of field-service technicians deliver repairs, maintenance and parts to clients’ sites to optimise uptime and efficiency.

The most experienced wood chips producer in Africa

Dimensional wood chips are produced by the removal of alien invasive trees in riparian zones, previously deemed as impossible. ABC, however, now has the knowledge and technology to get the job done.

These wood chips are then used in agri-industrial applications as a greener alternative to coal for either heat or electricity production.

Geographical footprint

ABC is located in Worcester (Western Cape), Kirkwood (Eastern Cape), Nelspruit (Mpumalanga) and Upington (Northern Cape).

We operate in all nine provinces in South Africa and also across the borders into Sub-Saharan Africa, including Namibia, Botswana, Zimbabwe, Mozambique, Zambia, Malawi, Tanzania, Kenya and Nigeria.

www.abc.co.za

H.E. Cyril Ramaphosa, President of South Africa confirmed for Mining Indaba Virtual

London: Investing in African Mining Indaba (Mining Indaba), part of Hyve Group Plc is honoured to announce that His Excellency, Cyril Ramaphosa, President of South Africa has confirmed to deliver the presidential keynote address at the upcoming Mining Indaba Virtual.

Following last year’s announcements, H.E. Cyril Ramaphosa will be joining the already confirmed president of the Democratic Republic of Congo (DRC), His Excellency, Félix Tshisekedi and H.E. Julius Maada Bio, president of Sierra Leone, at Mining Indaba Virtual which will be held next month, 2-3 February 2021.

10 months ago, the World Health Organisation declared a global pandemic, in which South Africa had been praised for its hard lockdowns ensuring the virus was contained. Almost all industries were disrupted and shutdown, including the mining operations within the country, excluding those supplying coal to power generator, Eskom.

As the world starts to recover from the global pandemic, the South African Chamber of Commerce and Industry (SACCI) remarks on the government’s well-thought-out plan to gradually reopen particular economic sectors, whilst continuing to diminish the Covid-19 virus. The mining industry was one of the first to reopen, as it represents 8% of the country’s GDP and up to 60% of South Africa’s exports. Many of the large mining operators helped combat the virus by developing their own health and safety regimes and working closely with the government to transform facilities to help with control the rise of the Covid-19 rates.

This coupled with the South African National Development Plan (NDP), the industry will help rebuild a capable and developmental state, the booming natural resources sector will be the key driver in the Covid-19 recovery, whilst achieving elimination of poverty and reduction of inequality through significant job creation. As a result, the industry will essentially play a critical role in the economic recovery and prosperity in the global transition.

Mining Indaba Virtual geared towards helping the industry build resilience and regrowth, whilst adopting a new mindset. H.E. Cyril Ramaphosa will take to the online stage to discuss South Africa, the mining economy and the way forward for the country, including opportunities for international investment in gold and PGMS, progress on the country’s response to the global pandemic and ultimately provide an update on South Africa’s power generation and supporting independent generation for mining operators.

Registration for the Mining Indaba Virtual has now opened, the event is free to attend.  For more information about the programme, visit the website here.

Infrared thermometers for 2021

The National Metrology Institute of South Africa, (NMISA) is contracted by the government to maintain South Africa’s National Measurement Standards and ensure they remain internationally equivalent. Reliable measurements for testing is not foremost in the minds of South African citizens. However, the Covid-19 pandemic has brought the measurement of temperature into our daily lives. Most citizens have had their forehead temperature measured employing a non-contact, infrared thermometer as a preliminary Covid-19 screening intervention.

Clinically speaking, if a person’s core temperature is around 37°C, it would be considered normal and the person healthy and Covid-19 asymptomatic. However, a core temperature measurement result of 38°C or higher, would be considered an indicator of possible Covid-19 infection.

A body infrared thermometer is an optoelectronic instrument that is capable of non-contact infrared temperature measurement when placed at a certain distance from the subject’s body surface. Most of the body infrared thermometers can display the body core temperature inferred from the skin temperature they measure. However, the accuracy of the IR thermometer is significant and what matters.

If the measurement is higher than the person’s actual temperature, there is a risk that time, effort and medical resources will be wasted until the test result comes back negative. These resources could have been better spent on an infected person. Cases of Covid-19 infection could go undetected and a potentially infected person sent back into society where they could infect others.

Infrared thermometers have an optical lens, just like a video camera, but instead of an optical detector on the inside, they have a thermopile which converts the infra-red radiation into electrical energy. The thermopile gets hotter as it absorbs more and more infrared energy. The electrical output can then be translated into the temperature of the object.

Where can you go if you doubt the outcome of your Covid-19 screening based on your forehead temperature?
Kindly visit the NMISA website and social media pages, where we share ample information.

Reinstated alcohol ban will have dire consequences for SA wine industry

The South African wine industry is concerned about the dire consequences that yet another alcohol ban will hold for wine-related businesses.

This follows an announcement by President Ramaphosa on 28 December 2020 that the country would revert back to alert level 3, which prohibits the domestic sale of alcohol for on- and off-consumption until 15 January 2021.

“We share the President’s concern over the sudden and severe spike in positive Covid-19 cases and related deaths and understand the need for drastic measures to address it, but we are disappointed and deeply concerned by the blanket approach with regard to alcohol trade that government has taken yet again to curb the spread,” says Vinpro MD Rico Basson.

The previous two bans had a devastating impact on the wine industry with a loss of more than R7.5 billion in sales revenue, significant job losses and a number of wineries and tourism facilities being forced to shut their doors. As a result the industry now has more than 250 million litres of uncontracted wine, with the 2021 harvest to commence within the next two weeks, which will place further strain on businesses’ already dire financial position. This situation, combined with the third ban will do untold economic damage to the wine sector and the 290 000 livelihoods it supports.

The wine industry proactively implemented preventative measures to protect employees and visitors to farms and the 533 wineries. Wine farms are now getting the short end of the stick during the peak tourism season because of the blanket policy approach, the behaviour of the general public and non-compliance with Covid-19 regulations.

“Many lessons have been learned from lockdown level 5 and 4, including that the restriction of legal trade of alcohol fuels the growth of the illicit market. Because this illicit market is outside the regulatory reach of government and operates uncontrolled, it leads to devastating consequences from a health and economic perspective,” Basson says.

“We submitted proposals which included alternative interventions, as opposed to an outright ban, to mitigate risks and formally engage with government. It is unfortunate that these proposals did not find their way into the final regulations to ensure a differentiated approach. We truly believe limitations on wine sales can be imposed in a less damaging manner that would alleviate the impact on the healthcare system and decrease transmission, while still helping to preserve livelihoods.”

According to Basson it is positive to note that the transport and export of wine can continue, as well as storage and safekeeping.

Vinpro, together with the rest of the alcohol industry urge government to be transparent about the state of the health system over the next 14 days to enable an earliest possible review of the ban on retail and on-consumption sales. “We also call on government to enforce regulations to the teeth as it certainly does not help to impose harsh restrictions every time our healthcare system is in crisis, while regulations are not enforced.

“We advise every wine-related business to do their part and work together now to help flatten the curve, so that we can resume trade after 15 January 2021. We also ask everyone out there to please download the Covid Alert SA app, as well as make use of the hotline to report any violation of the regulations on 0800 014 856. We will continue to engage with government on what needs to be done to save lives and livelihoods as we work together to beat Covid-19. Let’s be part of the solution,” Basson says.

The Western Cape’s agricultural export basket is growing

Aerbotics’ Yield Estimation Package for citrus, which was launched in 2019, gives reports on fruit size and colour distribution ahead of the harvest season and projections on yield. (Credit: Aerobotics)

Of the 37 trade agreements facilitated in 2019/20 by Wesgro, the Western Cape’s tourism, trade and investment promotion agency, 25 were in agro-processing and agribusiness and a further three were in the fast-moving consumer goods (FMCG) sector. The total value of these agreements was R3.08-billion and 973 jobs were added to the Western Cape economy.

Examples included a deal in Germany for Cape Dried Fruit Packers (R350-million), in Ethiopia for Good Harvest Market (R700-million), in Ghana for M’hudi Wines (R4-million) and the R200-million contract that Southern Right Foods signed in Mozambique. The last-named company trades as Walker Bay Spice and also exports to Australia, Bahrain, Belgium, Botswana, Dubai, Ghana, Luxembourg, Malaysia, Namibia, the Netherlands, Qatar and the UK.

Total South African agricultural exports reached R175-billion in 2019 with about 40% going to other African countries and 25% to Europe. Fresh fruit accounted for about R50-billion.

Seven of the top 10 exports from the province are agricultural or agro-processed products. As Wesgro notes, the Western Cape is responsible for:

  • Almost half of South Africa’s agribusiness exports.
  • About 70% of South Africa’s beverages exports.
  • About 85% of South Africa’s fisheries exports.

Berries are a growing subsector and two-thirds of production occurs in the Western Cape. More than 70% of the crop is exported and the major production companies are Berryworld South Africa, United Exports and Haygrove SA, an affiliate of UK-based Haygro. Berries thrive between George and Swellendam and sales of chippers have grown because blueberries have to be vigorously pruned.

There is plenty of scope for exports to grow. Current annual exports are 13 500t compared to over 200 000t for table grapes and about 300 000t for apples (South African Berry Producers’ Association). Once producers pass muster with Chinese import authorities, volumes can be expected to grow.

Another subsector to experience rapid export growth is oranges. As a source of vitamin C, oranges grew in popularity as the Covid-19 pandemic spread. South Africa is the world’s second-largest citrus exporter, after Spain, and the number 11 in the world in terms of production. Citrus exports earned South Africa about R20-billion in 2019.

Assessed independently from the country, the Western Cape is the world’s fifth-largest exporter of citrus fruits as it is responsible for 62% of the nation’s volumes. Oranges are the province’s number one citrus export (54% in 2017) and soft citrus (19%) is growing steadily. Europe remains the most important market but Asia and Oceana markets grew from 34% in 2008 to 42% in 2017. The top five countries are the Netherlands, the UK, Russia, the UAE and China.

By contrast, flower growers were badly hit by the effects of the global shutdown. The Western Cape has a strong fynbos sector. Normally, Europe accounts for 80% of exports. National beef exports increased from 8 292 tons in 2001 to 31 888 tons in 2018 with the largest areas of growth in Muslim countries. The Western Cape contributes 15% of national beef output.

The Covid-19 lockdown had a big impact on wine exports and not only because a liquor-export ban was in place for five weeks. Logistics at the Port of Cape Town were reduced to a crawl and with fresh fruit and vital supplies taking priority, wine exporters were at the back of the queue.

Within South Africa, a sophisticated logistics chain can get fruit from harvest to consumer in 40 days (Freight, Logistics and Warehousing). A digital system is to be introduced by the Perishable Products Export Control Board (PPECB) which, along with e-certification launched by the Department of Agriculture, Land Reform and Rural Development, should enhance efficiencies. The Fresh Produce Exporters’ Forum (FPEF) and the Department of Science and Innovation are exploring improved packing and cold-storage methods.

South African winemakers are aiming for better quality instead of greater volumes. Which is not to say that volume is being ignored. Wine exports to Angola and China have doubled. In the four years to 2017, wine exports to China reached 18.2-million litres, an increase of 109%. Wesgro and WOSA (Wines of South Africa) are cooperating on the Chinese market.

A 2006 agreement, the SADC Economic Partnership Agreement, gives produce from the region full or partial exemption from duties on exports into the EU. The three biggest markets by value and volume are the UK, Germany and the Netherlands. The UK is likely to sign a similar agreement, post-Brexit.

South Africa produces about 4% of the world’s wine. The wine industry contributes R36-billion to the country’s gross domestic product (GDP) and employs nearly 290 000 people.

Vinpro is the wine industry organisation which represents 2 500 South African wine grape producers, wineries and wine-related businesses. There are over 3 500 wine producers in South Africa, with the large majority located in the Western Cape.

Agri-tech exports

The Western Cape is not just a leader in products that grow in the ground, but it is also a world leader in products that hover above the ground. Drone and data specialist Aerobotics has more than 900 clients in 18 countries who have signed up for orchard monitoring, yield and harvest projections and pest and disease management. The drones can also be deployed to pick out individual trees that are classified as “problem trees”.

Aerbotics’ Yield Estimation Package for citrus, which was launched in 2019, gives reports on fruit size and colour distribution ahead of the harvest season and projections on yield.

The Cape Town-based company, which featured in an article in the Arena Holdings publication Food Basket in 2020, was founded in 2004 as a drone manufacturer and evolved into a data provider.

Another digital innovation for exporters was launched in September 2020 in the form of the Cape Export Network. CEN, a joint initiative of the Western Cape Provincial Government, Wesgro and Wines of South Africa (WoSA), is a platform that connects wine producers, buyers and importers.

Wine industry relieved about latest regulations

The South African wine industry is relieved about the latest Covid-19 regulations, according to which wineries may continue to sell wine during licenced trading hours throughout the week.

“We are grateful for the unchanged trading hours for the sale of alcohol for on-consumption as well as the special mention of registered wineries and wine farms which may continue to offer tastings and wine sales to the public for off-site consumption over weekends,” Rico Basson, Vinpro MD says. “This at a time when the wine sector remains under severe financial pressure and is slowly recovering from the adverse effect of the ban on exports and restricted trade earlier this year.

“We believe that the implementation of a more focused approach and targeted interventions in certain hotspot areas will prove to be more effective in curbing the spread of Covid-19, while preserving livelihoods and keeping the economy going,” Basson says.

According to him, these outcomes are aligned with continuous consultation between Vinpro and the respective national government departments and the Western Cape government, as well as a proposal Vinpro made to the Minister of Health, Dr Zweli Mkhize, during a consultative session in George on 13 November, highlighting the industry’s vital economic contribution and the crucial role of wine tourism as part of the broader wine and agricultural sectors.

“We share the President’s concern about the new wave of infections, and pledge to do our part in fighting Covid-19,” Basson says. Vinpro made an urgent appeal to individuals and businesses in the sector to do their utmost to implement preventative measures.

“It is our responsibility to keep our people safe and healthy and to give momentum to the economy, while still strictly enforcing the existing safety protocols. Let’s promote safe and responsible production, trade, marketing and consumption together,” he says.

A regional overview of the Western Cape

Park Inn by Radisson Newlands is one of the group’s six hotels in Cape Town.

By John Young, Western Cape Business 2021 edition

Cape Town’s status as “Africa’s Tech Capital” gives the city-region the basis for leadership in a range of other sectors such as asset management, financial services, business process outsourcing and others.

Neighbouring Stellenbosch is advancing its reputation for technological innovation and the output of the region’s four universities and six TVET colleges ensures that the tech sector has the necessary human capital.

There are 22 active incubators and accelerators in the region which provide networking and marketing opportunities and links to funders and markets. The City of Cape Town has installed 848 km of fibre-optic cable and the sector supports more than 40 000 jobs with established brands such as Amazon and Panasonic coexisting with startups such as Luno, Yoco, Jumo and SweepSouth. Cape Town hosts more than half of all startups in South Africa.

The Western Cape is one of nine provinces of the Republic of South Africa. South African provinces do not have the kinds of powers enjoyed by states in federal entities such as the US or Nigeria. Health, education and traffic have traditionally been the biggest components of provincial authority. The priority list of the Western Cape Provincial Government, however, includes energy and transport.

The province and the City of Cape Town are lobbying national government for a greater role for municipalities in the generation and distribution of energy. The potential of renewable energy is being realised through the national independent power producer programme and there is a strong lobby to build a gas-to-energy plant in the province. The new Special Economic Zone for Green Technology in Atlantis is attracting investment in renewable technologies.

Siemens wind towers manufactured at the GRI factory in the Atlantis Greentech SEZ.

In 2018 the City of Cape Town launched a resilience assessment, the first step in a larger process. The Rockefeller Foundation chose the city as one of 100 around the world in which programmes would be tested to improve the ability of the city to withstand shocks such as severe droughts. The city wants to expand the lessons it learnt in the period of water shortage into other areas such as energy generation and energy efficiency.

The Western Cape Provincial Government is also investing in resilience. A market intelligence report covering energy, renewable energy, water and waste was created by Green Cape to map the assets and challenges in these areas.

In addition to trying to attract green investment into the province, the province is working for improved regulations related to small-scale embedded generation (SSEG). The City of Cape Town also wants to be able to rent out its infrastructure to a power producer who can supply a user via that infrastructure. This is known as “wheeling”. A start was made with the Darling wind farm, but more work needs to be done on the legislative framework.

Much of this work is done by a unit called the Sustainability Energy Markets within the Energy Directorate. Another area of focus for this group is to investigate energy use by low-income households.

The Western Cape is lobbying hard for Saldanha Bay to be a site for a gas-to-power plant. If a gas plant is built at Saldanha, then it could be a catalyst for the use of gas in many other sectors such as manufacturing and residential.

The Cape Peninsula University of Technology’s Energy Institute is a leader in research in the field of electricity. The South African Renewable Energy Technology Centre (SARETEC) on the Bellville campus of CPUT offers courses such as Wind Turbine Service Technician and Solar Photovoltaic Service Technician and various short courses such as Bolting Joint Technology.

The Centre for Renewable and Sustainable Energy Studies is at the University of Stellenbosch and the University of Cape Town has the Energy Research Centre. The University of the Western Cape is doing research on the possibilities of hydrogen as an energy source.

Ease of doing business

In similar vein to the argument for greater involvement in energy issues, Premier Alan Winde has argued that the control of the railways that serve greater Cape Town should be more localised. He cites a deal signed in the city of George between the national and provincial transport ministers to improve the system as an example of the kind of cooperation which is needed.

Energy and transport are keys to being able to do business, and that is the focus of another provincial initiative, the Red Tape Reduction Unit. Successful at a provincial level, the plan is to now set up similar units at municipal level.

Covid-19 created serious backlogs at the Port of Cape Town but the problems predated the health crisis. In December 2019, the Western Cape Department of Economic Development and Tourism (DEDAT) convened a meeting for every kind of port user, from exporters to logistics companies and for the various divisions of Transnet, the tax authority and the City of Cape Town.

The Port of Cape Town (Photo: Transnet National Ports Authority)

In 2019 the Port of Cape Town received 510 ships at the Container Terminal but it could have had many more if turnaround times were better. All parties are working together to find a solution, which will include better coordination of delivery schedules and more cranes. Cranes able to work in high winds are being tested.

Tourism challenges

The hospitality sector suffered a huge blow from the effects of the Covid-19 global lockdown.

As travel slowly picks up, hotel groups, lodges and bed-and-breakfasts are starting to attract inter-provincial travellers. In time, international travel will follow but what of the meetings, incentives, conferences and exhibitions (MICE) sector?

The economic impact on gross geographic product of the Cape Town International Convention Centre alone in 2018/19 was R4.5-billion (Cape Town Central City Improvement District). Wesgro’s Convention Bureau signed 52 events or conferences in the course of 2019/20 but of course most, if not all, of these events will not take place.

The Radisson Hotel Group has come up with “Hybrid Solutions” as a response to the “new normal”. Incorporating Hybrid Rooms and Hybrid Meetings, the idea is to offer virtual participation options and hybrid formats for small local gatherings, while also broadcasting to remote attendees and satellite locations. Hotels will offer teams to set up the equipment. Park Inn by Radisson Newlands (pictured above) is one of the group’s six hotels in Cape Town.

Investment

The province has a dedicated investment agency, Wesgro. The Investment Promotion Unit of Wesgro has been working with various regions within the Western Cape to attract investment and accelerate exports. Seminars have been held in the Cape Winelands, the West Coast and the Garden Route.

In 2019/20, the biggest investments were in renewable energy and manufacturing. Other important sectors are: Agro-processing, aviation, business services, education and training, financial services, real estate, ICT, light manufacturing, oil and gas, timber, tourism, waste beneficiation and clean energy.

Encouraging investment in Cape Town has been recognised as something that needs a full-time office and a strategy. Invest Cape Town is an agency of the city that works to create the best possible conditions to attract investors. Areas of focus include broadband access, energy security, the reduction of red tape and improving air access to the city.

Economy

Finance, business services and real estate combined contribute 28% to the gross domestic product (GDP) of the Western Cape. The financial services and insurance sector are key components of the economy. Many of South Africa’s biggest companies have their headquarters in Cape Town. Asset management and venture capital companies have been growing steadily.

Although agriculture only accounts for 4.3% of GDP on its own, the sector is responsible for the fruit and vegetables that contribute to agro-processing which accounts for nearly 40% of the province’s export basket. (Agro-processing accounts for 8.1% of GDP.) Citrus, wine, apples and pears, grapes, fruit juice, fruit and nuts and tobacco all appear in the top 10 of the province’s exports.

Seventy percent of South Africa’s beverage exports come from the Western Cape. Grapes and wine sales to Europe remain strong, but the Chinese market is becoming increasingly important.

The province has a diverse manufacturing sector ranging from textiles, clothing, footwear and furniture to coke and refined petroleum products. Excluding agro-processing, other manufacturing makes up 6.9% of GDP.

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