Coega and the surrounding areas are blessed with a Mediterranean climate that cultivates a diverse agricultural economy, producing over 20 different products and crops. These include citrus and deciduous fruits, dairy, poultry, vegetables, ostrich products, wool and mohair, to name a few.

The investor opportunities with an excellent return are in processing and distribution.

Over 15 000 hectares of land is under citrus production, accounting for approximately 26% of South Africa’s production. With 6kg an average local consumption per capita in SA, the region’s citrus is largely export oriented.

Close proximity to both ports, with cold storage facilities at the Port Elizabeth port, enhances the integration of supply chain and also keeps local transportation costs to a minimum.

This provides the ideal opportunity for citrus processing, canning and juicing plants. Other opportunities are then created from the citrus by-products such as peel essential oils; pectin, frozen pulp cells and cattle feed pellets.

Further, the region has over 800 milk producers that account for an estimated 20% of SA milk production. Here the opportunities include the processing of Ultra High Temperature (UHT) milk, milk powder and cheese.

Sheep production provides the platform for the processing of wool and mohair.

In 1988 there were 2,9 million angora goats which produced 12,2 million kilograms of mohair. There are now an estimated one million angora goats producing 4, 2 million kilograms of mohair.

Port Elizabeth markets 67% of the South African wool clip and 39% of mohair produced

With the Coega IDZ’s close proximity, network infrastructure, understanding of local knowledge and easy to markets – a whole host of Agro processing investment opportunities become evident.

Key competitive advantages at a glance

• Readily available raw materials (citrus, milk, deciduous fruit, ostrich meat & beef etc) within 20km – minimises local transport costs and provides long term supply.
• Processing sites within the region’s distribution hub – servicing major food retailers operating in the Eastern Cape and the Garden Route.
• Logistics system enhances integration of supply chain. Port with cold storage within 20km radius of the processing plant, makes the Coega IDZ site suitable for exports. South Africa’s major consumer centres - Johannesburg, Cape Town and Durban easily reached overnight.
• Serviced and competitively priced land. Zone 3 in the Coega IDZ has established roads; sewerage, water, power and other utilities to the boundaries of sites (if the company takes the build, plant and operate option). The price for land only is estimated between R3.00 to R5.00 per m² per month. Projects with high socio-economic impacts receive favourable rates.
• Readily available processing facilities on flexible lease terms for companies who reduce the initial capital outlay by leasing readily available processing facility (generic warehouse type buildings). Rental is estimated at a competitive rate of ±R25.00 to R35.00 per m² per month. Projects with high socio-economic impacts receive favourable rates;
• Locating to the Coega IDZ could mean operating in a VAT free and duty free environment under Customs Controlled Area (CCA) and/or bonded warehouse regimes. Companies that dominantly import and process for exports could access tax benefits. Additionally, VAT and duty for productive machinery and equipment used in the local production process can also be suspended, regardless of the market serviced.
• Further, companies relocating new production machinery and equipment to South Africa can also qualify for the Foreign Investment Grant. The amount is the lowest of the following:
  1. R10 million.
  2. 15% of US$4 million of qualifying machinery and equipment (mainly new).
  3. Actual relocation costs.

• Companies could also benefit from a cash grant under the Enterprise Investment Programme calculated as 15% – 30% of the qualifying investment (capped at R200 million) on a regressive scale over two years. This programme is meant to improve the company’ cash flow in the first 3 years of operation.

For further investor information as well as current projects and testimonials please contact our sector head: Mr Christopher Mashigo

Business Development Manager Agro-processing Sector.

Email: christopher.mashigo@coega.co.za

Telephone: +27 41 403 0400

Fax: + 27 41 403 0401