Expansions sign of confidence by Coega investors

INVESTORS in Coega are embarking on several plant expansions.

Companies like cold chain logistics facilitators Digistics Digital Logistics, Coega Dairy and UTi Distribution had started with plans to expand within the industrial development zone, Coega Development Corporation marketing and communication head Ayanda Vilakazi said.

UTi Distribution, which has about 89 employees, is building a bigger warehouse for its operations. The new building is expected to be valued at about R30- million, with completion due later this year.

UTi Distribution branch manager for distribution Danie Gerber said part of the rationale behind the expansion was that the company had built a strong relationship with Coega over the past five years. "I also believe the growth point in the Eastern Cape will be the Coega IDZ."

Another logistics investor due to expand is Digistics Digital Logistics, which has exclusive distribution contracts to supply fast food companies KFC and McDonald's. Construction of their new, larger warehouse facility is due to start at the end of this week.

Other investors were planning expansion programmes as an integral part of their long-term strategic planning, Vilakazi said.

"Two of Coega's significant foreign investors, First Automotive Works (FAW) and Agni Steels South Africa, are planning expansion programmes in the near future, an indication of the investors' confidence in Coega IDZ."

Agni Steels SA has positioned itself to ramp up production the moment the demand for its steel billet or other steel applications exceeds demand. Its expansion would include space for an extra furnace on its production line.

Both FAW and DCD Wind Towers have earmarked neighbouring sites in the Coega IDZ as potential areas for phase two of their developments. For FAW this means the possible establishment of a 30000- per-annum passenger car assembly plant and for DCD possible contracts in round three of the Energy Department's Renewable Energy Independent Power Producers Programme (REIPPP).

"Powerway, which is about to open its doors in the Coega IDZ, also has its eye on an adjacent piece of land for its phase two of production," Vilakazi said. This follows an announcement last week that the CDC had secured a R127-million investment from the Powerway/Sungrow joint venture in addition to the R666-million Powerway/JA Solar joint venture signed last year.

To date, there are 28 investors either operational or in the construction phase in the Coega IDZ, with an investment pipeline of R151-billion.

More than 50000 jobs have been created since its inception. - Business Reporter