By Francois Fouche
After having set a target to raise investments worth R1.2 trillion in five years, South Africa’s President Cyril Ramaphosa hosted the third installment of the South African Investment Conference on 18 November 2020.
Investment pledges of R109 billion were unveiled at the 3rd South African Investment Conference yesterday. This increases the total value of commitments made since 2018 to R773 billion. And the total over the last three years amounted to more than 60% of the R1.2-trillion target set by the Presidency.
Companies that announced pledges included:
- Afrimat, which would invest R300-million in an iron-ore project in the Northern Cape.
- Anglo African Metals, which would be investing R280-million in titanium beneficiation in Gauteng.
- Equites and Sandvik, which pledged R287-million to expand their domestic operations.
- Ivanhoe Mines, which would be investing a further R730-million in the Platreef project, in Limpopo.
- Lactalis, which will invest R100-million in a powdered milk manufacturing facility.
- Mapochs announced it will invest R100-million to re-establish a vanadium mine in Limpopo.
- Dairy group Sundale would invest a further R101-million in cheese and dairy production in the Western Cape.
- Homesek announced R500-million in dairy sector investments in the Free State.
- Sail Ferroalloys would be investing R562-million to produce ferrochrome in Mpumalanga.
- Bradley Aviation pledged R244-million for aeronautical manufacturing in Gauteng.
- Fuchs will invest R260-million to expand its lubricants operation in Gauteng.
- Sasol announced that it would invest a minimum of R5.4-billion to produce clean fuels at its Secunda operation in Mpumalanga.
- Clariter said it would invest R222-million in a waste-plastic-to-oil facility in Eastern Cape.
- P&G announced a diaper manufacturing expansion worth R260-million for Gauteng.
- Dr. Oetker pledged R200-million for the expansion of its ready-made meals production facilities.
- Frimax Foods announced a R380-million expansion of its snacks and potato chips manufacturing operations.
- PepsiCo would invest R5.5-billion to expand the manufacturing capacity across its Pioneer Foods operations.
- Unica was investing R250-million in steel manufacturing in Gauteng.
- United Heavy Industries pledged R350-million to establish a steel bar manufacturing facility in KwaZulu-Natal.
- Dangold Packaging would invest R830-million in a beverage-can plant.
- Scaw was investing a further R250-million into its steel operation in Gauteng.
- SA Steel Mills announced an investment of R1.5-billion for a steel manufacturing plant in Gauteng.
- PG Bison would invest R1.98-billion to expand their board manufacturing plants.
- Sonae Arauco would invest R200-million to expand a paper manufacturing line in Mpumalanga.
- Supavut pledged R150-million for an automotive component investment in Gauteng.
- Metair would invest R1.1-billion in automotive component manufacturing in KwaZulu-Natal, Eastern Cape and Gauteng.
- SEW Eurodrive was investing R200-million in Gauteng.
- Amdec group would invest R2-billion in the Harbour Arch Development in the Western Cape.
- Divercity announced a R1.2-billion mixed-use property development for Gauteng.
- Thukela Lifestyle Resorts would invest R1.4-billion in KwaZulu-Natal.
- Provenance pledged R100-million for a film studio and innovation hub in KwaZulu-Natal.
- Robert Jurgens Construction Management would invest R8.4-billion in various property developments, including a new hospital in KwaZulu-Natal.
- Blythedale Coastal Estate pledged R800-million for a lifestyle property development in KwaZulu-Natal.
- Port Shepstone Property Developments would invest R550-million in an intermodal transport facility and a shopping mall in KwaZulu-Natal.
- Really Epic Dog announce a R200-million investment in the Homestead luxury game lodge in KwaZulu-Natal.
- Akani Properties pledged R1.2-billion for property developments in the North West, Gauteng and Mpumalanga.
- Telkom announced that it would be investing R8-billion to expand its telecommunications infrastructure.
- Teraco would invest R4.4-billion in data-centre infrastructure in Gauteng.
- Google would land a R2.2-billion fibre optic submarine cable in the Western Cape.
- NTT pledged R875-million for the expansion of data centres in Gauteng.
- Capita would invest R530-million in the business process outsourcing sector in the Western Cape.
- Mnambithi Group pledged R1.3-billion for a multipurpose bulk liquid storage terminal in the Port of Durban.
- Sola Group announced R400-million for the renewables sector across the country.
- Solar Africa pledged R170-million to support large industrial consumers in Gauteng.
- Giant Flag Consortium announced a R184-million eco-tourism development for the Eastern Cape.
- New Development Bank would invest R32-billion to support infrastructure across South Africa.
- Old Mutual pledged R3.6-billion to support infrastructure development.
- Sanlam said it would make funding of R7.25-billion available for small and medium-sized enterprises and infrastructure projects.
- Industrial Development Corporation would invest a further R8-billion.
- Belgian Chamber of Southern Africa said that Belgium firms would be investing R1.5-billion in South Africa.
Prior to combined investment pledges worth R664 billion across 102 projects had been made by domestic & foreign investors.
To date, R172 billion of that committed amount has been invested. 21 projects, representing about 10% of the total commitments, had been delayed or placed on hold as a result of the COVID-19 pandemic.
Is it enough?
Short answer is: “NO”.
SA needs more investment. Much more. And more transparency re the projects.
This is a good start, but for jobs growth to take place we need multiples more of the current pledges.
SA needs to aim for at least a 25% level of gross fixed capital formation as % of GDP. Last year (2019) SA sat at more than 18%.
Francois Fouche is the Director at Growth Giagnostics (in collaboration with the North-West University Business School).