A strong business case for investing in Durban
The continent’s busiest port serves a city with excellent infrastructure and a varied and sophisticated economy while excellent schools, superb beaches, a warm climate and well-organised sports, leisure and cultural programmes contribute to making the east-coast city a destination of choice for investors.
A modern fibre optic network enables good telecommunications and the Dube TradePort at King Shaka International Airport supports imports and exports. The University of KwaZulu-Natal is a well-established institution and several campuses of Technical and Vocational Education and Training (TVET) colleges also contribute to a skilled potential workforce.
The city is also a leading tourism destination and the Inkosi Albert Luthuli International Convention Centre Complex in the heart of Durban is at the core of a strong Meetings, Incentives, Conferences and Events (MICE) sector. The manufacturing sector is varied, ranging from an oil refinery and a large automotive manufacturing plant to chemicals and textiles.
Invest Durban is a collaboration between the private sector and the eThekwini Municipality which offers assistance to potential investors and actively promotes the city. It works together with organisations such as the Durban Chamber of Commerce and Industry and Trade and Investment KwaZulu-Natal (TIKZN).
The thrust of Durban’s proposition to attract investors can be put into two broad categories:
- Catalytic Projects, which have the potential to shift the socio-economic landscape and trigger a series of investments across several sectors
- Key Sectors, which receive the focus of planners in a variety of ways, including the creation of Special Purpose Vehicles (SPVs), clusters and the development of value chains to promote new ventures and investment opportunities.
Durban is working on a number of large-scale projects that have the potential to make a regional impact. The location of these projects is vital. They must either be on national trade routes or they should help to break down the old apartheid living/working dynamics. Projects are selected for their scale in terms of job creation, investment size and potential revenue creation. Ideally, the projects should include a combination of functions (retail, commercial and housing, for example) and they should fit in with the UN’s Sustainable Development Goals.
The Point Waterfront Development fits very well into the category of a catalytic project. Some projections put the potential investment value at R40-billion and the number of permanent jobs to be created at 6 750. It is an ambitious plan that is already linking 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 proposed cruise terminal in the harbour backing on to the Point will dovetail well with the new atmosphere of the precinct.
Other major projects include:
- the Warwick Junction transport interchange which has already received road upgrades but could be an even greater enabler of trade;
- the Centrum Government Precinct which would formalise the relationship between buildings such as the International Convention Centre (and extensions) and a related hotel, the library, council chambers and the redevelopment of Gugu Dlamini Park;
- the Cornubia integrated human settlement development north of Durban, on 1 300 ha, a partnership between Tongaat Hulett Development, the human settlement departments at national and provincial level and eThekwini municipality;
- Dube TradePort, the multi-modal facility at King Shaka International Airport.
Durban already has a very diverse economic landscape, within which there are some large-scale enterprises. Cooperation between the public and private sectors is illustrated by the large number of cluster initiatives which aim to draw to together experience and expertise from commerce and industry, labour organisations, government and academia.
Research aims to find out how best to grow particular economic sectors, and in-depth discussions are held about how to develop and grow value chains. The mineral and agricultural wealth of KwaZulu-Natal is mostly consumed or exported in its raw state – much more could be done to add wealth through processing.
The three broad focus categories are manufacturing, services and the green economy. Some of these initiatives play to the existing strengths of the regional economy, some seek to exploit newer avenues as in the emphasis on the environment and a growing interest in the Oceans Economy.
Under manufacturing, the following clusters or programmes are active:
- KZN Clothing and Textile Cluster (KZN CTC)
- Durban Automotive Cluster (DAC)
- Durban Chemical Cluster (DCC)
- eThekwini Maritime Cluster (EMC)
- KZN Furniture Incubator
- Agro-processing (Edamame Development Programme)
In services the focus areas are Business Processing Outsourcing (BPO) and ICT. The SmartXchange is an SPV to develop skills in the ICT sector and to help small businesses to get started, 50 of which are already using the service. The creation of a more skilled workforce and a larger number of ICT companies will create a smarter province, which will make it more attractive to investors.
- a variety of projects linking tourism, environmental clean-ups and alien eradication, recycling and job creation
- eThekwini Waste Materials Recovery Industry Development Cluster (USE-IT).
There are various other broader programmes which have their own goals, but there will be positive spin-offs for the targeted sectors. These schemes include the drive to increase local content, boosting metal fabrication across sectors, the promotion of black industrialists, promoting exports and the over-arching eThekwini Industrial Development Policy Action Plan.