Small firms benefit from Coega zone

13 coega story 300x199 Small firms benefit from Coega zone

Small business contractors working on one of the multi-million rand projects in the Coega IDZ near Port Elizabeth.

The multi-million rand projects currently under way at the Industrial Development Zone (IDZ) at Coega near Port Elizabeth are set to benefit small business owners as new investments are realised.

The Coega IDZ is one of the industrial hubs strategically located near airports and sea ports, forming part of the new Specialised Economic Zones (SEZs) strategy.

SEZs are widely used internationally to develop target-specific industries in the hope of attracting investment and stimulate growth in certain sectors.

The Coega Development Corporation (CDC), the operator of the Coega IDZ, is expecting an exciting year, with a number of new investors completing construction and moving towards operations.

Some of the large plants opening in the Coega IDZ include the R600-million Chinese automotive giant First Automobile Works (FAW) truck assembly plant, the DCD wind tower manufacturing plant, the Air Products air separation unit, and the Agri Steels smelting operation.

These multi-million rand projects will be undertaken by large companies, but will also benefit small businesses, since there will be opportunities for subcontracting.

Ayanda Vilakazi, CDC’s communications manager, says the CDC is aware over the past year, it has assisted over 300 small businesses.

Vilakazi says the CDC is not only the operator of the 11 000-hectare IDZ, but also an agent of transformation and socio-economic change.

To assist small businesses, the CDC has started the Small Enterprise Development Pro-gramme (SEDP), that aims to empower small businesses.

“The SEDP aims to ensure that startup businesses do not remain emerging businesses forever, but that they grow,” says Vilakazi.

The CDC has created a database for small businesses. It then evaluates the credentials of every small business and provides support in the form of basic business training and developing basic business management tools. This is done through its Small Enterprise Development Unit and the Coega Human Capital Solution.

More than 100 small business have already been assisted in developing basic business tools such as business plans, accounting clean-up, marketing plans, and brand and website development.

After the relevant training is done, the CDC then identifies business opportunities within the IDZ that are suitable for tenders by these small businesses.

Those who complete projects in time and according to the stipulated work specifications graduate to a higher level, that allows them to tender for larger projects.

Since 2011, the SEDP increased target from 30% to 50%.
This year, the CDC hopes to create 1 200 employable small businesses in its IDZ and to graduate 108 to a higher level – that of established businesses.

In the last financial year, of its R500 million road construction programme, the CDC allocated R312 million to small and medium-sized businesses. “This shows how committed we are to small business growth,” says Vilakazi.

However, some small businesses say they are not happy with the CDC’s commitment to assist them in playing a role in the IDZ. Litemba Singaphi, president of the Black Business Forum, a body that represents township businesses, says that Coega is accessible to them, but that there were a few implementation problems.

Vilakazi refuted claims that the CDC was not implementing the 35% procurement policy in favour of small businesses.

Sectors investing in Coega include automotive and logistics, agro-processing, renewable energy, power generation, chemicals and metals. A R5.6 billion fuel storage project is also in the pipeline at the IDZ.

“If you think 2013 was a year of construction at the Coega IDZ, 2014 looks to be even busier,” says Vilakazi.

Ayanda Vilakazi, feature

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