Building projects in the Coega Industrial Development Zone (IDZ) have injected over R1.2 billion into the Nelson Mandela Bay construction industry over the past two quarters.

Six major construction projects are currently underway in the Coega IDZ including erection of:

• Chinese car and truck manufacturer First Automobile Works’ (FAW) plant
• Famous Brands’ cold storage plant
• DCD Group’s wind tower manufacturing plant
• the addition of Coega Cheese onto the Coega Dairy outfit
• Agni Steels’ R400 million smelter facility
• Rehau’s extension in the Nelson Mandela Bay Logistics Park (NMBLP).

Industrial gas companyAir Products South Africa is also about to begin construction of its R300 million state-of-the-art air separation unit in Zone 3 inJuly, bringing the total number of projects being built to seven.

“The global economic climate is still not stable, yet investment continues to flow into the Coega IDZ and is literally taking root in the construction projects underway,” says Ayanda Vilakazi, Coega Development Corporation (CDC) head of marketing and communications.

“We currently have 20 operational investors, and once these seven construction projects are complete, we will be up to 27 operational investors by mid-2014.”

Vilakazi said the activity meantmajor spin-offs not only for lead contractors, but also subcontractors, suppliers and the whole built environment supply chain. “At a time when there is industry malaise at a national level, the Coega IDZ is experiencing a construction boom to the value of R1.2 billion.

“The unaudited results for the 2012/13 financial year also show that construction jobsin the Coega IDZ and the NMBLP for April 2012 to March 2013 amount to 1 722 and investor jobs created are at about 856 – meaning just over 2 500 jobs created directly through activity in the Coega IDZ,” says Vilakazi, adding that it was through these major investments that the CDC was delivering on its mandate to create jobs.

Famous Brands

The Famous Brands project is near completion and the company wasgiven access to the warehouse portion in the first week of May,allowingits service provider to start with racking on the warehouse floor.

“Everything is on track, with timeframes tight but on target to be met. The project is still well within original time, cost and quality parameters set, despite loss of a number of days due to inclement weather, mainly wind and rain,” explainsBruno Ponzi, CDC senior project manager for infrastructure development.

The company, which owns the likes of Steers and Debonairs, was also given access to the ground floor of the office block portion, with the balance of the building due for imminent hand over. Once delivered, Famous Brands will become the newest operational tenant in the Coega IDZ.

Vilakazistates Famous Brands was a prime example of the short conversion times investors experience from the point of signing a lease with the CDC tofull operation.

“The turnaround times are much quicker now than they were a couple of years ago and we are able to construct buildings for investors relatively quickly, meaning that they move to operational phase within about a year of signing, depending on the size of the project,” explains Vilakazi.

“This has implications for investors’ bottom dollar as they are able to start productionrelatively quickly.”

A partnership between Famous Brands and Coega Dairy has also seen the dairy expanding its operations to supply cheese products to the group in a project dubbed ‘Coega Cheese’,with a joint valued investment of R45 million pouring into the Coega IDZ as a result.

FAW

In addition, says Vilakazi, the construction activity is creating needed jobs in the city, particularly on the FAW site, with the R200 million FAWconstruction project well underway. To date, about 304 construction jobs have been created on its site, a number that grows week to week. In total the construction phase will see about 2 000 jobs generated over the year-long duration. In the operation phase of the truck assembling plant,a further 280 jobs will also be created.

According to Arnie van Jaarsveldt, WBHO Construction Eastern Cape managing director and lead contractor on the FAW project, the highlight of the construction will be its architectural finesse. Van Jaarsveldt highlights thatEastern Cape Architects Studio d’Arc wanted to make a statement with the Chinese automotive giants’ building in Zone 2 of the IDZ.

“Its prime position on the N2 means it will get heightened attention. FAW management loved Studio d’Arc’s unique design on the office and reception area, particularly the exceptional use of concrete, so that’s set to be the highlight of the building,” explains Van Jaarsveldt.

“Otherwise, we are working hard to keep to a strict timetable, and you will see the column is almost completed and some initial top structures going up over the factory portion. With a long way to go, the skeleton is definitely taking shape.”

Van Jaarsveldt says construction is on track for completion at the end of December 2013, adding that there is significant collaboration between the Chinese engineers and their South African counterparts – a coup for skills development and mentorship.

Agni steels

AgniSteels is also wrapping construction of its R400 million steel plant in Zone 6 of the 11 500 ha IDZ. Agni Steels will operate in a high-tech smelting facility to produce mild steel billets from scrap metal. The plant at Coega will use 10 000 t of scrap metal in Phase 1 and 20 000 Phase 2.

DCD Group

DCD Group is also in the early phases of its R300 million wind tower manufacture factory, which, when completed, is expected to employ 168 workers, and produce between 110 and 120 wind towers annually.

“Coega is boldly delivering on our jobs promise through the attraction of investments,” says Vilakazi.

 

Investors	Number	Comment
Operational	20	Coega Concrete Product, Dynamic Commodities (SA), UTI Couriers (SA), Cerebos (SA), MSC, PE Cold Storage (SA), Digistics (SA), Electrawinds, General Motors Parts and Accessories Distribution Centre, Cape Concentrate, Universal Wind, Coega Dairy, AP Moeller South Africa, Discovery Holdings NMBLP: First tier suppliers: Faurecia (French), Rehau (German), Grupo Antolin (Spain), Benteler (German) and Inergy (French) Logistics: Kuehne and Nagel (Germany), one importer (Hella, Germany) and four South African linked service providers to the automotive sector are also located in the central hub of the NMBLP, bringing the total tenants to 11 companies
Investors under construction	6	First Automobile Works (FAW, China), Famous Brands (SA), Coega Cheese (SA), Agni Steels (India), Rehau (Germany) Extension in NMBLP, DCD (SA)
Investors due to start construction [pending construction company appointments	1	Air Products SA
Investors in process of completing an environmental impact assessment	3	AfriSam (SA), AMG (China), Casa Steel (SA)
Signed term sheets	5	TBA when lease agreements are signed
Pipeline information	Projects in negotiation stage are valued at R8.1 billion and those under feasibility account for R116.3 billion.