Foreign direct investment into KwaZulu-Natal is increasing exponentially, with more than R27 billion invested in South Africa’s second- largest economic hub between 2000 and 2005 alone, Finance MEC Zweli Mkhize said in his budget speech in Pietermaritzburg yesterday.
He highlighted the successes of KZN in luring foreign investment, promoting economic development and fostering the growth of the small and medium enterprises (SME) sector in delivering the province’s R43.5 billion budget.
Foreign companies have invested in several sectors, with the largest amounts in the automotive sector, steel and metals, forestry and paper, property development and the oil and gas sectors. “Foreign investment transactions which stand out during the 2004-2005 period include a R3.4 billion investment by Toyota Motor Corporation of Japan, a R1.4 billion investment by the UK-based Anglo American Plc in Mondi, a R900 million investment in the Merebank paper mill by Anglo American Corporation, the R800 million investment by a Portuguese company in Natal Portland Cement, and a R630 million investment by Shell/BP in the Sapref refinery.
“Our province will intensify efforts to attract investors as well as encourage companies to set up their headquarters in KwaZulu-Natal,” said Mkhize.
He said the provincial development finance agency Ithala had to date approved small business loans totalling R478 million for 465 enterprises in agricultural, manufacturing, services, construction, energy, tourism and other sectors.
“Through the finance provided to SMEs, Ithala facilitated the creation of 3 552 job opportunities.
In this budget, we are allocating a total of R1.3 billion over three years to Ithala for the purposes of financing and mentoring small businesses (R665 million) and co-operatives (R635 million).”
It was recommended that a minimum of R50 million be reserved for youth-owned enterprises, and a similar amount be allocated for women.
According to Ithala records, a total of R169.6 million has already been approved to fund co-operatives, contributing to the creation of more than 7 000 jobs in KZN.
A move praised by the Durban Chamber of Commerce and Industry was Mkhize’s announcement of a process now under way to align trade and investment activities under Trade and Investment KwaZulu-Natal (TIKZN).
He said this was aimed at avoiding municipalities going abroad to compete against each other instead of collectively working for a unified province.
“A new board of TIKZN has been constituted to have all municipalities co-operate under a common investment promotion agency,” he said.
TIKZN had been actively driving the promotion of investment opportunities as well as assessing new markets for KZN, and had led several delegations made up of government and local business overseas, mainly to the Middle East and Asia.
Mkhize said these trade missions had resulted in several foreign investment projects, including India’s Apollo Tyres buying Durban-based Dunlop Tyres; Indian company Tata Steel building a manufacturing plant in Richards Bay; India’s UniPhos Group entering into a joint venture with a KZN black empowerment company to set up a plastic manufacturing plant in Durban; Belgium’s Rovoplast buying property in Eshowe to set up a PVC manufacturing plant; and a Chinese company, Shanghai Haboa Chair, entering into a joint venture agreement to manufacture Fifa-accredited stadium seats in Pietermaritzburg.
According to information supplied by the KZN Treasury, TIKZN had facilitated R609 million of investments in the province by December last year, and the organisation forecasts the figure to increase by R100 million by the end of this month.
It also showed that 22 projects worth R5.2 billion and being facilitated by TIKZN were being negotiated.
Besides investment through Ithala, the province had set up with the private sector the Growth and SME funds.
The Growth Fund had secured commitments amounting to R1 billion from the Development Bank of Southern Africa, Sanlam, Standard Bank, Commerczbank and the Infrastructure Finance Corporation of South Africa.