Transcript Investment Seminar

Investment Seminar
South African Investment Promotion
Seminar In Beijing
17 April 2014
Table of Contents
1.0 Special Economic Zone
1.1 Highlights of Government Policies
1.2 Status of the SEZ Implementation Processes
1.3 Targeted Investors for the SEZs
1.4 Key Elements of the SEZs
1.5 Planned SEZs in South Africa
2.0 Energy Policy and Opportunities In South Africa
2.1 Comprehensive Energy Policy
2.2 The South African Electricity Consumption
2.3 The South African Electricity Generation
2.4 Renewable Energy Opportunities
2.5 Objectives of Government on Energy Plan
3.0 Automotive Industry: Policy and Opportunities
3.1 The South African Automotive Manufacturing Hubs
3.2 The East London IDZ
3.3 The Rosslyn Supplier Park-Gauteng
3.4 The Rosslyn Supplier Park-Gauteng
3.5 Local Content Requirements
3.6 The South African Automotive Profile
3.7 Exports to Sub-Saharan Africa
3.Distribution Channels In Africa
1.1 Highlights of Government Policies
Key Policies
National
Development Plan
New Growth Plan
Industrial Policy:
IPAP
Integrated
Energy Plan
Individual
Policies:
IRP, SEZs,
Automotive
etc.
Economic Development Policies Focuses
on:
i.Creation of 5 million decent jobs by 2020
ii.Promoting a globally competitive economy that
produces and trades with the rest of the world in
innovative & value added products & services
iii.SEZs were identified as one of the tools that
could effectively be used to advance the
government’s objective of industrialisation;
iv.Regionally spread industrial development
v.Beneficiation of own minerals and natural
resources
1.2 Status of the SEZ Implementation Processes
SEZ Bill was in
parliament Aug
2013
SEZ Policy
Done
SEZ Strategy
Done
Supplier
Development (In
Progress)
Skills
Development (In
Progress)
Feasibility
Studies for New
SEZs is in
Progress
SEZ Incentives
Done
SEZ
Regulations In
progress
SEZ Fund Done
1.3 Targeted Investors for the SEZs
a) Manufacturing enterprises;
b) Internationally Traded Services;
c) International trade and distribution
d) Primarily export oriented
1.4 Key Elements of SEZs
•Transitional
Arrangements of the
IDZs
•Minister
•SEZ Board
•SEZ Secretariat
•M&E
•SEZ Administration
•New SEZs
•Investments
•Jobs
•Exports
•SEZ Incentives,
•SEZ Infrastructure
•Skills
•R&D
•Supplier
Development
Programmes
SEZ
Governance
& Institutional
Arrangements
SEZ Support
Measures
SEZ Targets
Value
Proposition
•SEZ Marketing
•SEZ One Stop Shop
•SEZ Incentives
•Location
•Resources
1.5 Planned SEZs in South Africa
All Sphere of Government
Government Planned SEZs
•10 government SEZ Planned opportunities in all 9 provinces identified
and feasibility studies are in progress;
•We expecting 60% FDIs + 40% Domestic
Investments
•There are still opportunities for Private
Public Partnership (PPP) for SEZs.
2.O Energy Policy and
Opportunities In South Africa
2.1 Comprehensive Energy Policy
Key Policy Objectives
SECURITY
OF SUPPLY
WATER
MININISE COST
OF ENERGY
CONSTRAINTS
Environment
Sustainability
Social
Development
EMISSIONS
ACCESS TO
CAPS
ENERGY
Economic
Development
DIVERSIFY
LOCALISATION
& TECHNOLOGY
TRANSFER
SUPPLY
ENERGY
EFFICIENCY
South Africa is currently developing
comprehensive Energy Policy which will :
i. Provide an energy roadmap for the
country;
ii. Guides the development of energy
policies and regulations;
iii. Guides the selection of appropriate
technology to meet energy demand ,
iv. Guides the investment and development
of energy infrastructure in South Africa,
and;
v. Provides alternative energy strategies for
the sector.
vi. Eskom is part of Southern African Power
Pool, a group of utilities in the region
aiming to create a common market for
electricity in the region
2.2 The South African Electricity Consumption
Electricity Consumption
2.70%
Overview
i.Eskom has a current nominal installed
capacity of 44,175MW
8.10%
ii.Government addressing electricity supply
issues with Eskom and Independent Power
Producers (“IPPs”)
11.40%
40.90%
iii.Electricity generation dominated by stateowned power company Eskom, which
currently produces over 96.7% of the power
used in the country
36.80%
Industrial Segment
Residential Segment
Commercial
Transportation
Others
iv.South Africa needs over 45,600 MW new
generation capacity by 2030
2.3 The South African Electricity Generation
Electricity Generation
5.70%
1.20%
0.50%
Transmission and distribution
0.10%
I.Currently, the transmission of electricity in South Africa
is undertaken by Eskom
II.The company has over 28,000 km of transmission lines
spanning the entire country
III.Electricity distribution is the final stage in the delivery
of electricity to end users, currently undertaken by
Eskom, together with 187 municipalities
IV.Municipalities account for 40% of the total electricity
sales and 60% of the customer base
92.60%
Coal
Nuclear Power
Pumped
Hydroelectric
Gas Turbine
2.4 Renewables Energy Opportunities
(IRP Determinant)
MW allocation in
accordance with
the
Determination
MW capacity
allocated in the
First Bid
Submission Phase
Onshore wind
1 850.0 MW
634.0 MW
562.5 MW
653.5 MW
Solar photovoltaic
1 450.0 MW
631.5 MW
417.1 MW
401.4 MW
200.0 MW
150.0 MW
50.0 MW
0.0 MW
Small hydro (≤ 10MW)
75.0 MW
0.0 MW
14.3 MW
60.7 MW
Landfill gas
25.0 MW
0.0 MW
0.0 MW
25.0 MW
Biomass
12.5 MW
0.0 MW
0.0 MW
12.5 MW
Biogas
12.5 MW
0.0 MW
0.0 MW
12.5 MW
3 625.0 MW
1 415.5 MW
1 043.9 MW
1 165.6 MW
Technology
Concentrated solar power
Total
MW capacity
allocated in the
Second Bid
Submission Phase
MW capacity for
allocation in future
Bid Submission
Phases
2.5 Objectives of Government on the Energy Plan
The South Africa Government remains committed to:
i.Ensure security of energy supply;
ii.Diversification of the energy mix that includes clean and renewable resources to meet the needs of our fast
growing economy, without compromising our commitment to access clean, sustainable and affordable energy;
iii.Promotion of energy efficiency across the energy value chain;
iv.Regional integration and support for regional projects, and
v.Commitment to the UN secretary General call for sustainable energy for all, doubling energy efficiency and
doubling the deployment of renewable energy.
3.0 Automotive Industry: Policy and
Opportunities
3.1 The SA Automotive Manufacturing Hubs
Automotive hubs in South Africa
Automotive Production in SA
Ford (Pretoria)


Ranger
Bantam
Nissan/Renault (Pretoria)


NP200/300
Sandero
BMW (Pretoria)

BMW 3 series
Toyota (Durban)



Hilux
Corolla
Fortuner
Mercedes Benz (East London)

C class
GM (Port Elizabeth)


Chevrolet Utility
Isuzu
VW(Uitenhage)


Polo
Polo Vivo
FAW (Coega)
3.2 East London IDZ
An established automotive investment solution
1.
World Class Automotive Supplier Park (ASP)
i.
16ha of Industrial facilities, 20ha expansion in progress
ii.
Home to global Suppliers (Johnson Controls, Otto Fuchs etc)
iii.
East London IDZ ASP – world-class infrastructure for OEMs and
Multi-Level Car Terminal
component manufacturers
iv.
Numerous second-tier component manufacturers supplying MercedesBenz are located in the EL IDZ
2. ASP Tugger Route
i.
Comprises a vein through the centre of the ASP linking all suppliers to
the “milk-run”
ii.
speedy and accurate just-in-time and just-in-sequence supply to
Mercedes-Benz SA
iii.
Shared logistics service reduces operation costs
Facilitated by renowned Logistics Service Provider (LSP) UTI
iv.
Mercedes-Benz are located in the EL IDZ
3. Secured, State of the Art Vehicle Storage Centre (VSC)
Streamlines the processing of incoming and outgoing vehicles
2,500 covered and 1,154 open bays
4. Competent Skills Pool
5. Science & Technology Park
6. Complete Investor Pre and Post Settlement Support
Containerisation
3.3 Rosslyn Supplier Park - Gauteng
Business Support Services
SHARED FACILITIES
i.
The Central Hub incorporates offices for service providers
ii.
4-star graded conference centre with full conferencing facilities
iii.
Central Canteen coffee shop fast food outlet and ATM
iv.
Medical Centre to service the tenants of the ASP on a shared
service basis.
ICT
i.
Centre of Excellence
ii.
Shared funding and resourcing
iii.
Economies of scale
iv.
Customer service orientation
v.
Governance & risk management
vi.
Business Continuity & Disaster recovery
vii.
Enabling ASP to be a “technology-aware” park
viii.
Modular design to allow customers to “slot in”
3.4 Rosslyn Supplier Park -Gauteng
Logistics Optimisation
i.Common logistic centre operated by an independent
service provider - Comprises warehouse of over
34,000m2
and
serves
ASP
tenants
and
other
automotive customers.
ii.Three logistic service providers based at ASP provide a wide range of local and international logistic
services;
iii.Centrally located container depot - Able to handle all
the inbound and outbound container traffic of the park.
3.5 Local Content Requirements
65%: % of total material cost
Electrical / Electronic
•Harnesses
•Starter motors
•Alternators
•Wiper systems
•HVAC
Body
15%
6%
19%
35%: true local material plus value add as % of total material cost
Exterior
•Glass
•Paint
•Bumpers
•Mirrors
5%
•Bonnets
•Bootlids
•Sideframes
•Doors
10%
3%
Interior
23%
•Cockpit
•Seats
•Door
panels
•Carpets
7%
Chassis and Drive-train
33%
•Engines
•Auto catalysts
•Drive shafts
•Brakes
14%
3.6 The South African Automotive Profile
The South African Automotive Profile
800000
720000
700000
650000
600000
500000
400000
300000
200000
100000
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Production
Sales
Imports
Exports
3.7 Exports to Sub-Saharan Africa
Supported by trade Agreements
Trade Agreements in Africa
Source: Ernst & Young’s 2011 Africa attractiveness survey
3.8 Distribution Channels In Africa
Thank You