The Atlantis SEZ (ASEZ) is part of the City of Cape Town’s initiative taken in 2011 to establish a greentech manufacturing hub in Atlantis. The ASEZ is somewhat unique amongst other SEZ’s in the country as it wasn’t set up as a greenfield site, but is rather located in a productive industrial hub, which was established back in the 1970’s.
ASEZ is the result of six years of collaborative effort between the City of Cape Town, the Western Cape Government and the National Department of Trade and Industry (the DTI). Situated 40km from Cape Town, the ASEZ capitalises on being located in an established manufacturing and commercial hub, as well benefiting from the province’s already flourishing renewable energy and green technology sector. The hub has already attracted its first large greentech investor, Gestamp Renewable Industries (GRI). A steel wind tower manufacturer, GRI has already invested R475 million and is in full-scale production.
The South African greentech manufacturing market is worth at least R30 billion; with a growing greentech market in the neighbouring countries. South Africa has opportunities in energy, waste, agriculture, transport and other sectors and is a great entry point for the SADC market.
Atlantis is an ideal location and is development ready. 93 hectares of industrial-zoned City of Cape Town land is available for leasing to investors. Bulk infrastructure is in place and Atlantis has new public transport, shipping links and fibre connectivity. It is also close to major ports, roads, universities and greentech markets.
Investors have access to extensive investment support through the One Stop Shop for investor support and the rest of the investor support ecosystem, which includes InvestSA, GreenCape, the City of Cape Town, and Wesgro. Together the ecosystem provides information and advocacy support; market intelligence; facilitated access to permits and licenses, planning and development approvals; and skills training.
The level of support is illustrated by the ASEZ’s comprehensive website – potential investors can apply online for board approval by filling in a simple user-friendly questionnaire which removes unnecessary red tape whilst speeding up the entire process.
Gazetted as a business enterprise
“Since being declared a business enterprise late last year, this means that the ASEZCo can legally enter into development contracts with investors and entrepreneurs, offering a turnkey service of building a facility to the business’ own specifications” explained CEO Pierre Voges. “Contracts are always leasehold for a period of up to 20 years but have the flexibility of allowing an enterprise to either make use of the full development facilities of the ASEZ or if they prefer, leasing the land and services from the ASEZ and appointing their own developer from whom they would lease the premises. While the former is a less viable alternative to the ASEZ, ‘half a loaf is better than no loaf’.
“The structure of the SEZ Act of 2014, allows individual SEZ’s to apply for certain tax exemptions and we have made such an application to National Treasury. When granted, investors and tenants can access these attractive incentives in the form of tax relief and allowances, employment tax incentives, fast-tracked development approvals, fee exemptions and subsidies. Typical of the incentives is a reduction of corporate tax from 27% to 15% for a period of 10 years” said Voges.
There is an attractive, wide-ranging skills base to recruit from with 5 universities and many more colleges in the province, and a large range of unskilled, semi-skilled, technical and professional candidates.
Development dichotomy
With such a plethora of benefits and advantages, including growing South African and African markets for greentech, a well-located and development-ready infrastructure, strong support base and existing relationships for investors to tap into and a range of financial and community incentives for investors and tenants, why then is the ASEZ and other IDZs and SEZs not bursting at the seams?
The country’s stagnant economy is a major issue that has affected all business activity and the SEZ community is no different.
On the one hand, the SEZ’s and IDZ’s were specifically established to incentivise and kick start local and international investors, yet on the other hand, Government policies which restrict business activities, deter would-be investors who find a more welcoming climate in other countries.
As documented in Gerbrandt van Heerden’s article in the Daily Friend 17 February 2022, points out, high taxes, high labour rates and punitive regulations act as a deterrent to investment.
The World Economic Forum’s Global Competitive Index places RSA at number 101 of 141 countries, hiring & firing practices – 129/141, wage determination – 134/141 and time to start a business at 129/141.
SA does not appear very competitive in attracting foreign investment, with excessive bureaucratic red tape, B-BBEE and AA requirements, high levels of taxation, security issues, employment limitations on foreign personnel etc. Against this backdrop, what are the ASEZ and other SEZs / IDZ’s able to offer that would mitigate some of the perceived short comings? Despite the laudable initiatives and hard work of Provincial and local government department and agencies to advance investment coupled with creative ideas that remove red tape, implementing measures to unshackle the economy is the only way to see the SEZ’s develop their full and intended potential.
