Photo credit: Viking Ocean Cruises, Photo by Philip Wilson

By John Young

Two of the most important ports in South Africa are at the heart of KwaZulu-Natal’s central position in the nation’s transport and logistics network. As the second-biggest contributor (16%) to national gross domestic product (GDP) after Gauteng and a major manufacturer and exporter of goods, the KwaZulu-Natal province lends itself to potential investments in many spheres.

A national focus on trying to develop the country’s maritime potential is playing to KwaZulu-Natal’s strengths.

KwaZulu-Natal province has a long coastline that stretches from Port Edward in the south to the Kosi Bay Nature Reserve in the north. The province’s contact with the sea has brought obvious benefits: fishing, fine beaches enjoyed by millions of tourists, and two great ports – the Port of Durban and Richards Bay. These ports export vast quantities of minerals (mostly through Richards Bay) and manufactured goods (Durban) and serve as an important conduit for imports of all sorts. The Richards Bay Coal Terminal exports coal while the Port of Durban is the busiest port in Africa.

However, planners want to increase the economic benefits that the ocean can bring. An Oceans Economy Review Workshop has come up with a range of sub-sectors that can help grow the provincial economy and invite local and foreign direct investment:

  • marine transport and manufacturing
  • offshore oil and gas exploration
  • aquaculture
  • marine protection and ocean governance
  • small harbours
  • coastal and marine tourism.

Strategies to grow the Oceans Economy dovetail with plans to boost the capacity of the ports at Durban and Richards Bay and to explore for gas and oil in the Indian Ocean.

Ship-building and ship repairs is an existing industry, but it is currently not very big. If oil rigs were to start visiting the KZN coastline on a regular basis, this industry will grow exponentially.

The Oceans Economy is one of the focus areas that has been chosen by national government to be part of Operation Phakisa, a focused, goal-driven attempt to jump-start a specific economic sector. Overall, Phakisa intends creating a million jobs by 2033 and injecting R177-billion into national GDP.

The decision to build a cruise-ship terminal at the Port of Durban is a good example of the kind of decision that dovetails with the vision for an Oceans Economy.

Another big potential growth area in KwaZulu-Natal is energy. Several licences have been granted for off-shore exploration and the hope exists that something will be found – the vast gas fields off the coast of Mozambique are close.

The King Shaka International Airport (with its own trade port and industrial development zone called the Dube TradePort) is another of the province’s logistics key points, which has the potential to boost the regional economy in several sectors, particularly agricultural export and tourism.

An aerial view of Dube TradePort near King Shaka International Airport in Durban, KwaZulu-Natal.

The province’s other zone is the Richards Bay Industrial Development Zone (RBIDZ). In recent years, investments into the RBIDZ have included: a titanium plant (R4.5-billion); a biomass plant (R2-billion); a pipe manufacturing plant (R300-million); paint manufacturing (R16-million); and logistics services (R20-million).

In the base-metals and metal-products sectors, giant companies such as BHP Billiton, Hulamin, Arcelor Mittal and Assmang have a big presence in the province. Steel, iron and aluminium account for nearly a third of exports followed by metal products. The third sector making a big contribution is the automotive and automotive components sector, with about 18%. Chemicals is the other major export driver.

Toyota and Bell Equipment play a vital role in the automotive sector while the Engen Oil Refinery, paper and packaging group Mondi and dissolving pulp manufacturer Sappi are among other strategically important entities in the provincial economy. Sappi’s export of dissolving pulp makes it a world leader in its field.

Although the forestry and paper sector and the sugar sector are grounded in the agricultural sector, the leading companies’ processing plants and downstream beneficiation also make them major components of the manufacturing sector and big contributors to the province’s export basket.

In addition, Tongaat-Hulett is a major property company and Illovo is a continental leader in sugar production.

Tourism

Tourism plays a vital role in the economy of the region, with the conference and events sector supported by excellent facilities. The jewel in the crown is the huge Albert Luthuli International Convention Centre Complex which hosts the annual Tourism Indaba.

The province’s excellent climate lends itself to every kind of outdoor pursuit and its excellent beaches are always popular. Big sports events are regularly hosted in KwaZulu-Natal which has become something of a home to mass participation events such as the Comrades Marathon and Dusi Canoe race. The province has excellent game and nature reserves.

Isimangaliso Wetland Park is a World Heritage Site and helps to fund 80 small businesses associated with its business as a tourist site.

New international direct flights have been announced by King Shaka International Airport, including a direct flight to London with British Airways.

Related: Massive investments in tourism are paying off

Geography

The mixed topography of the province allows for varied agriculture, animal husbandry and horticulture. The lowland area along the Indian Ocean coastline is made up of subtropical thickets and Afromontane Forest. High humidity is experienced, especially in the far north and this is a summer rainfall area. The centrally located Midlands is on a grassland plateau among rolling hills. Temperatures generally get colder in the far west and northern reaches of the province.

The mountainous area in the west – the Drakensberg – comprises solid walls of basalt and is the source of the region’s many strongly running rivers. Regular and heavy winter snowfalls support tourist enterprises. The Lubombo mountains in the north are granite formations that run in parallel.

The Drakensberg Mountain Range

Plans for Durban

Six years ago, the eThekwini Municipality adopted a densification strategy which entails careful planning along three main urban corridors which connect to the city centre. Land-use management along these corridors will encourage diverse investments while at the same time introducing an Integrated Rapid Public Transport Network (IRPTN).

An Inner City Local Area Plan (LAP) for Durban has been developed that aims to make the inner city of Durban “Africa’s leading, most vibrant, liveable, walkable City Centre”.

Developed for the Strategic Planning unit of the eThekwini Municipality by a Joint Venture called IPPU, the LAP is based on four main principles:

  • The connected city: tackling the legacy of the disconnected city of apartheid, the plan promotes the integration of different modes of transport (bus, taxi, pedestrian, rail, etc).
    The walkable city: the aim is for residents to be five minutes’ walk from public transport, shops, schools and healthcare facilities. A good variety of residential accommodation is key.
  • Land use intensity: the plan proposes that land use approvals be more flexible, allowing for more variety and greater density. The plan cites an example of art gallery at street level, with offices above and accommodation on top. If more people live in an area, then shops become more viable and it is easier to provide bulk services.
  • Starting with small projects and finding ways of championing the development of the inner city.

The IPPU Joint Venture comprises Iliso, TPI, PMSA, UrbanEcon including Cox Architecture, Urban Solutions, Urban Earth, Jo Lees and Joe Kitching.

The Point Waterfront Development is a major project that is in the process of transforming what was an under-utilised and somewhat rundown part of the city into a vibrant, multi-use precinct.

An artist’s impression of the Point Waterfront development when completed.

Some projections put the total potential investment value of the project at R40-billion and the number of permanent jobs to be created at 6 750. It is an ambitious plan that links the city’s beach promenade and the harbour. It offers a property use mix of office space, retail shops, residential dwellings and leisure options. The 55 ha site has already seen significant investment. A cruise terminal in the harbour backing on to the Point has been approved.

Other major projects in the inner city include:

The Warwick Junction transport interchange which has received road upgrades but could be an even greater enabler of trade.

The Centrum Government Precinct which will formalise the relationship between buildings such as the International Convention Centre and a related hotel, the library, council chambers and the redevelopment of Gugu Dlamini Park.

Explore opportunities in these in other projects, go to: Invest Durban

Regions

KwaZulu-Natal has 11 district municipalities, the most of any province in South Africa. In economic terms, the province offers diverse opportunities.

Southern region

This area is the province’s most populous. The city of Durban has experienced booms in sectors such as automotive, ICT, film and call centres. Major investments are taking place at the Port of Durban and there is a possibility that the old airport south of the city becomes another port, if the money can be found to dig it up and let the sea in. Durban’s conference facilities are well utilised, but many opportunities still exist in chemicals and industrial chemicals, food and beverages, infrastructure development and tourism. Further south, plans are in place to upgrade Margate’s airport and Port Shepstone’s beachfront.

Western region

Also known as the Midlands, this is a fertile agricultural region, producing sugar cane, fruit, animal products, forestry and dairy products. Pietermaritzburg is the provincial capital and home to a major aluminium producer along with several manufacturing concerns, including textiles, furniture, leather goods and food. The city has good transport links along the N3 national highway, excellent schools and a lively arts scene. The Midlands Meander is a popular tourist destination.

Eastern region

Although most of this area is very rural, Richards Bay is one of the country’s industrial hotspots because of its coal terminal and port and aluminium smelters. The Richards Bay Industrial Development Zone (RBIDZ) is a major economic node in itself: the 62-hectare first phase is almost fully subscribed with the investment value of the two phases (some having already been secured for phase two) at R6.8-billion. Mining is an important sector in this region. The other major urban centre is Empangeni which has several educational institutions. The newly completed King Shaka International Airport is kick-starting massive new investment in the area. The iLembe District Municipality is particularly active in seeking out new investors.

Learn more, go to Enterprise iLembe Economic Development Agency
Northern region

The economic powerhouse is Newcastle in the north-west: coal-mining, steel processing and manufacturing are major activities. Some old coal mines are being reopened by new coal companies to cater for the country’s power stations’ demand for the fuel. Game farms, trout fishing and hiking are part of an attractive package for tourists, and Zululand is a popular destination for cultural experiences. The whole region is rich in Anglo-Boer War history.


Are you interested in business or investment opportunities in KwaZulu-Natal? 

Contact us to discuss your objectives, explore opportunities with Invest Durban, or read more about the business and investment environment of the region in the 2019/20 edition of KwaZulu-Natal Business.