Recently Finweek journalist James Styan challenged the idea that that the proposed Mthombo refinery would be suitable for the Coega Industrial Development Zone (IDZ). He described it as the Eastern Cape’s “White Elephant” with a loose pun on the idea that it would be constructed close to the Addo Elephant National Park.
Ayanda Vilakazi, Head of Marketing and Communication for the Coega Development Corporation (CDC) challenged the article arguing that Coega has been a success story. While he doesn’t address the issues raised by Styan in his letter, the feedback from Vilakazi does suggest that government is getting some things right here from an economic perspective. We are not sure what to make of the invite to the Mail Guardian team, but we have none the less forwarded the invite on to our colleagues.
The letter is published in full below:
The Coega Development Corporation note’s with interest your article on October 25 titled: “E Cape’s Massive White Elephant” in FinWeek.
The CDC has long tried to shirk the image of being a white elephant, something it has successfully achieved with sustained and growing investor commitment over the past three years in particular. Therefore to have the phrase ‘white elephant’ attached to us again, albeit in relation to Mthombo, sets us back unnecessarily, especially coupled with a very old image of the Port of Ngqura. We appreciate your commitment to analysing the feasibility of Mthombo, but at the same time would like to provide a balanced perspective.
There have been three major investments at the CDC since April 2012:
- The first is a R634-million investment by AfriSam Pty Ltd to establish a greenfield cementitious mixing and blending plant in Zone 5 of the Coega IDZ. The investment will see the creation of 400 jobs in construction phase and 90 jobs in operation phase.
- Secondly a partnership between Famous Brands with the Coega Dairy will see Coega Dairy Company expanding its operations to supply cheese products to the group (which supplies inter alia Steers and Debonairs). A joint valued investment of R45-million will pour into the Coega IDZ as a result. To date the Coega Dairy has created 40 permanent jobs.
- The third major investment comes from APM Terminals which has invested R25-million in first phase and R50-million in total for a full-service depot to meet the needs of shipping lines and cargo owners. Twenty full-time jobs will be created and space for approximately 15 seasonal workers on short-term contracts. There would also be a series of opportunities open for local service providers, and SMEs in particular, to benefit from the investment through various contracts.
During the 2011/12 financial year seven new investors committed to the Coega IDZ and the Nelson Mandela Bay Logistics Park (NMBLP) – a figure greater than the targeted number of investors.
- GDF Suez (Energy) R2.7 billion
- EAB (Renewable energy) R270 million
- FAW (Automotive) R600 million
- DCD Dorbyl (Energy – Component Manufacturer) R100 million
- Tyre Energy Extraction (Logistics) R30 million
- OSHO Cement (Metals) R380 million
Article source: http://finweek.com/2012/11/10/coega-is-no-white-elephant/