Revenue up, record number of investors signed
THE Eastern Cape’s flagship economic driver, the Coega Development Corporation (CDC), has seen a 15% increase in self-generated revenue and attracted a record number of investors to the Nelson Mandela Bay region.
The CDC has increased revenue generated from the company’s own activities from R383.5-million in the previous financial year to R441.8-million in the 2014-15 financial year – the last of its five-year strategy cycle.
The company’s profitability has also gone up by a marked 33% on the previous financial year.
This comes as government grant funding continues to decline. The CDC aims to become completely self-funded by the end of its next five-year period.
The company’s self-generated revenue is 18% higher than the previous year, despite a 63% decline in government funding and 5% increase in expenditure.
CDC chief financial officer Bongeka Jojo said plans to become independent of government funding were gaining momentum.
“The efforts of the company to build a revenue base which will see the company weaned off dependence from grant funding are starting to pay off,” she said.
“The ratio of revenue generated to grant funding has improved to 3.6 times [up from 1.1 times in the previous financial year].
“The investment of R176million in non-current assets, bringing the total value to R4.9-billion, gives the company an excellent base from which future revenue generating efforts can be launched.
“The company’s intention to achieve operational break-even point within the next strategy cycle is pursued and built from this platform.”
The CDC has pulled a record 19 investors, with a total value of R1.88-billion, and created nearly 15 000 direct jobs in 2014-15.
As the government and business fast track Operation Phakisa-driven initiatives to unlock the blue economy – for which the Eastern Cape is well poised with its three ports – more investors are expected to flock to the province and Bay’s shores.
As Coega will remain a state entity for a few more years, it is set to increase job opportunities.
The latest Quarterly Labour Force Survey, released at the end of last month, showed that 34.3% of working-age residents in the region were unemployed.
Nelson Mandela Bay mayor Danny Jordaan boasted earlier this year that investor confidence in the troubled municipality had picked up, as evidenced by billions of rands of investment pumped into the Bay by its anchor industry, the automotive sector.
In the year under review, a total of 14 765 jobs were created, bringing total jobs created since its inception to 62 142, with more than 8 000 people having undergone training.
Small business owners’ slice of the pie rose by 31%.
Nelson Mandela Business Chamber chief executive Kevin Hustler, who represents more than 800 businesses in the city, has hailed the organisation and silenced naysayers claiming the Coega IDZ to be a white elephant.
“The CDC has, through its Human Capital Solutions, provided skills training, labour absorption forecasting and SMME development that directly benefit the community of Nelson Mandela Bay,” Hustler said.
“Most of the jobs at Coega have been filled by people from the Nelson Mandela Bay region, including those living in Motherwell, Uitenhage and the northern areas.
“It is a contractual requirement of investors to make use of local employment wherever the particular skills set required for a job can be met locally.”
The CDC’s highlights for the year under review include the opening of the R600-million FAW truck assembly plant and the R3.5-billion Dedisa peaking power station.