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Address by KwaZulu-Natal MEC for Economic Development, Tourism and Environmental Affairs, Mr Sihle Zikalala during the Induction of the Richards Bay Industrial Development Zone Board in Richards Bay

28 NOVEMBER 2017

Chairperson of Richards Bay Industrial Development Zone, Mr Mel Clark;
Esteemed Members of RBIDZ Board;
The Head of Department, Ms Pumla Ncapayi;
Members of the Senior Management;
RBIDZ Executive Management;
Ladies and Gentlemen;
Allow me to greet you all.

It gives us great pleasure to take this opportunity to welcome everyone attending this meeting.

Significantly, we wish to welcome the new Board Members that are taking the baton forward from the outgoing board and unreservedly thank them for their willingness to executing the mandate of the Department by ensuring that the IDZ delivers on its strategic goals.

There is no doubt that without the latter’s commitment our vision would not have been realised. The economic sector is not an easy one to change as it is influenced by many factors. However, our vigour to succeed will never be deterred by such. One thing we want to stress is that as government we shall strive to demonstrate continuation and adherence to the same vision that drives our country which translates to goals and objectives of being the drivers of change.

Looking back at where we come from since RBIDZ was incepted in 2002, we can proudly declare that we have come a long way and it should also be noted that this organisation attained its permanent Industrial Development Zone operator’s permit in 2010. This is the time that there was a sense of stability and dense progression of the RBIDZ. We acknowledge the whole mandate behind the inception of the Special Economic Zones which are administered by the Special Economic Zones Act, 2014 (Act No. 16 of 2014).
This Act contained a transitional provision which deemed every existing industrial development zone, such as the RBIDZ, to be a Special Economic Zone. The RBIDZ is thus deemed to be an SEZ Operator in terms of the Special Economic Zones Act.

The success of the SEZs to live up to the content of their mandate rests on the installation of strategic infrastructure that is convenient for diverse business operations, inclusive of the easy movement of raw production materials and finished goods to target market destinations. Foreign direct investors want reliable trade facilities to be able to compete at regional and global stages which in turn results in the creation of decent jobs and the emergent of new industrial centres.

It is consequently precise to say that the SEZ Programme is an important tool towards our economic development goals and tightening our efforts of radically transforming our economy. Through the SEZ programme, our government is cognisant of the fact that it can never drive this course in isolation – hence the role of the private sector and communities becomes imperative. This therefore requires joint planning and collaboration to maximize the desired goals. We are fortunate that in this province we are blessed with developmental structures such as the KwaZulu-Natal Economic Council and Growth Coalition that serve as avenues for various stakeholders and role players in the province’s economy to cross pollinate strategic ideas to grow our economy.

Ladies and gentlemen, as we are all aware, the RBIDZ is guided by its mandate and goals that are linked to the strategic government policy approach initiative which is expressed in the form of the National Development Plan (NDP) from which our Provincial Growth Development Plan (PGDP) is derived.
 
The RBIDZ’s strategic location in the port proximity is unique and a strategic enabler to create a substantial value proposition to targeted sectors such as metals beneficiation, renewable energy, ICT, agro-processing and marine industry development. More importantly the declaration of this area as one of the country’s gas hubs has elevated the profile of the role and function of this entity.

There is a huge sense of responsibility in each institution that is tasked by the government to deliver on economic growth. We are pleased that the RBIDZ has embraced its assignment with considerable success which we have no doubt would add value to the quality of life in all surrounding communities and the province as a whole.

But, this points to the quality of the organisation’s leadership which is enhanced by equally capable members of the board that have to share the vision, mission, values and strategic direction of the organisation. It is, therefore, the expectation of all of us that the new board will not only maintain the delivery standards that have been achieved by their predecessors but will exceed them. This indeed would depend on the new incumbents fully comprehending the task at hand.

1)     Effective Governance & Administration:-
The RBIDZ has articulated its mandate clearly whilst adhering to the high standards of execution. We are delighted that this organisation has upheld basic tenets of good corporate governance having achieved Clean Audits for the past six years. This achievement was as a result of commitment, guidance and adherence to all performance regulatory legislations. It is expected that the new Board will continue to attain positive results which are founded on good governance, focused leadership, ethical bearing, risk administration and of course adherence to procedures and compliance parameters that guide all administrative and operational processes.

2)     Delivering on the 50 Year Master Plan:-
There is no substitute for achieving set targets and RBIDZ has endeavoured to deliver on its mandate which included the successful creation of suitable space for industrial development. Amongst other things, the acquisition of 220 hectors of land distributed in pockets between Phase 1A which has been fully developed and awaiting locators to resume construction upon concluding all compliant processes, is indicative of an organisation steeped in the habit of meeting its founding commitments. This is further highlighted by the on-going infrastructure development at Phase 1F.

We therefore owe this to the outgoing Board and matured collaboration with the organisation’s management which has further made it possible to gain support from other social partners in the region especially the municipality, business and local communities. It is for this reason that amongst positive developments we could proudly enlist the:

•    R300 million PVC-O pipe manufacturing company that is operational;
•    Heavy logistics company which has resumed construction of a warehouse;
•    Construction of the Techno-park Administration Building;
•    R53 million Medway Road upgrade by the RBIDZ that we all witnessed earlier today;
•    Commencement of infrastructure development in Phase 1F;
•    Attainment of licence for both Phase 1A & Phase1F to operate as a Customs Control Area (CCA), and
•    Healthy investment pipeline, with signed investments estimated at R10 billion.

3)     Acquisition of Land:-
The keen appetite for development exhibited by RBIDZ has resulted in it running out of land since most of its land in the estates has been allocated to various investors. It is therefore the responsibility of this Board to seek for alternative ways to acquire more land.
This therefore calls for innovative thinking that should include casting the net wider beyond the confines of the City of uMhlathuze to include neighbouring areas such as Umfolozi Local Municipality with close proximity to this industrial hub.

4)     Investment Promotion & Attraction:-
One of the fundamental functions of this entity is to attract investors in a bid to facilitate economic growth crucial for socio-economic transformation. It is comforting to note that considerable groundwork has been laid with a suit of Memoranda of Understanding (MOUs) having been signed and relationships built with various targeted stakeholders and countries. This covers different sectors of the economy with potential to trigger massive business and employment opportunities whilst influencing butterfly effect in other subsectors such as retail.

Of course, this is the responsibility of the Board that all efforts are driven to ensure that the functionality of the RBIDZ makes it a vehicle of choice to bring about tangible change in the socio-economic profile of this part of our province. This entity should capitalise on its distinctive advantages that position it as a prime destination and gateway to world markets. The close proximity to the deep water port on the African continent, access to advanced road and rail networks, a prospective gas line, near-by mining industries and geographical closeness to Gauteng markets should make the Board’s work less challenging.

5)     Black Industrialists Programme & SMME Development:-
The Black Industrialists Programme is one of government’s initiatives to accelerate inclusivity through diverse sectors of the economy. In KwaZulu-Natal we have therefore embraced this programme with practicality and RBIDZ would be one of the centres to activate the integration of black entrepreneurs into the first economy.

The government has called upon the private sector to collaborate and work with us to ensure meaningful transformation in the key manufacturing sectors of the economy. In line with our policy of radical economic transformation, we have to ensure that key policies considerations are aligned to the Black Industrialist Policy in order to enable meaningful transformation. It stands to reason that this year we signed a R1 billion collaborative agreement with the national government to help promote black industrialists.

The Richards Bay Industrial Development Zone together with Dube Trade Port, mainly because of their status as SEZs were recently assigned to drive the Black Industrialist Programme and it therefore incumbent upon this Board to steer the organisation towards successful implementation of this initiative. This entity has been active in providing adequate training to SMMEs and more than twenty (20) contractors for instance have been trained and 75% were linked to black youth and 54% black women owned business operations. Some 60% of the contractors trained have done work for the RBIDZ – either directly or sub-contracted by established enterprises in order to meet Contract Participation Goals.

We need to reiterate that it is still a long journey before we can fully realise our vision of transformation in our economy. In this journey we have to ensure that young people are on board since leaving them stranded immersed in poverty could ferment destructive public discontent. It is young people and women that should be primary beneficiaries of radical economic transformation. While we acknowledge the fact that local people get temporary employment during construction, we must not rest but thrive for the total economic liberation of our people. This implies the promotion of an entrepreneurial culture as opposed to job seeking which contributes minimal to industrial growth.

6)     One Stop Shop:-
Over the past few years, in conjunction with various social partners, we have been working on the establishment of an integrated service oriented facility that would be a port of call for potential investors seeking a diverse suit of support services to make informed decisions relating to starting new or expanding existing business operations. Officially unveiled by President Zuma two weeks ago, this One Stop Shop, operating under the auspices of InvestSA would serve as the nerve centre for integrated investment and business information for both domestic and international traders considering settling in the province. We are therefore optimistic this would make the work of the RBIDZ and other investment promoting organisations at local and provincial level easier.

This heralds a new era with respect to foreign direct investments as it would reduce both regulatory inefficiencies and red tape for potential investors. Whilst based in Durban, the One Stop Shop facility would have a satellite office within the RBIDZ.

We are, therefore, confident that the incoming Board would also guide and play an oversight role in ensuring the success of this important service. It would be expected of the Board in partnership with other role players in the province’s economy, to ensure that this province doesn’t become the reference point for a dysfunctional One Stop Shop as this would undermine all the efforts we have made towards the acquisition of this facility.

Ladies and gentlemen, one of the most important developments over the past two terms of office under the leadership of President JG Zuma has been the development of economic zones. Various sectors of the economy get stimulated each time a major foreign direct investment is made into the Zone and KwaZulu-Natal is no exception.  Some of the lauded positive spill-overs of foreign direct investments are the transfer of skills, employment creation and socio-economic development in general.

The success and longevity of the Special Economic Zones as catalysts for the attraction of direct foreign investments would depend in the main in the effective operation of the One Stop Shop. With RBIDZ having been tagged with SEZ status, it would require a symbiotic linkage with the One Stop Shop for complementary relations with the operators who would be the critical link to draw potential investors to various business opportunities in this area.

Conclusion

Once again, we wish to reiterate our unwavering confidence as the Provincial Government of KwaZulu-Natal in the collective leadership of the new Board and executive management of the RBIDZ. Equally, we would like to thank the sterling work performed by the outgoing Board. The success in the execution of the entity’s mandate will be determined by the level of co-operation, trust and professional conduct exhibited by the Board and management. This is notwithstanding the realities of running a modern and complex organisation where areas of differences will periodically surface. However, these shouldn’t be allowed to degenerate into personal tensions that cloud your judgement and adversely affect the functioning of the organisation.

Differences of opinion and style in the process of steering the organisation forward should be regarded as organisational strength that enriches the entity. We are looking for constructive blending and complementary integration of such experiences for the benefit of the organisation. The positive thing is that you could draw some inspiration and advice from some members that will continue serving this organisation, including the Chairperson, Mr Mel Clark who will be an ideal reference for new incumbents for proper orientation and induction into the rigours of this strategic organisation.    

It would be irresponsible of me as the representative of the shareholder, the Provincial Government of KwaZulu-Natal to not reiterate our heartfelt appreciation of the work of the departing Board. These men and women have laid a solid foundation to serve as a practical springboard to take RBIDZ to the greater heights with respect to transforming this region into a model of industrialisation.

I therefore welcome the new Board and wish you fruitful deliberations in this strategy session aimed at setting the tone for the subsequent financial years. You must know that on your collective shoulders rests the aspirations of our people who, for a long time, have been at the periphery of the mainstream economy. On your collective shoulders you bear the burden of ensuring accelerated and inclusive economic growth. On your shoulders rests the hope of our people for economic distribution. This is your mission as the Board and we have no doubt that, given your individual track records in various spheres of human development, you will live up to the challenge that has been placed on your shoulders. There is no time to waste. Let us knuckle down and do the work that our people expect of us.

I thank you,

Mr Sihle Zikalala, MPL
MEC for Economic Development, Tourism & Environmental Affairs