Value of collaboration evident in Transnet and Ford investments

At about the same time as the Nelson Mandela Bay metro council was approving an incentive to support and secure a R486m investment by Clover SA in the Bay last week, the North West government was scrambling to reverse the same company’s decision to close SA’s biggest cheese factory.

Clover is moving their cheese factory to eThekwini in KwaZulu-Natal, where the company has found the municipality “more supportive”.

Ongoing poor service delivery in Lichtenburg — frequent water and electricity disruptions and pothole-ridden roads — have made it impossible for Clover SA to continue their operations there.

While the details of Clover SA’s R486m investment in the Bay are not yet clear, what is evident is that the municipality’s offer of a 40% discount on rates and services helped to secure their decision to expand here.

And similarly, the rental subsidy incentives offered to Formex and Dastile Wealth Insure have helped to secure their investments of R70m and R11.25m respectively — bringing about 200 new jobs with them.

Sadly, for Lichtenburg and the affected workers and their families, the North West government’s intervention is likely too little, too late.

As with General Motors’ withdrawal from SA in 2017 and Bridgestone’s closure of their Gqeberha plant in 2020, once a company has done its due diligence and weighed up the options in light of business sustainability, these disinvestment or relocation decisions are made and implemented swiftly, in a boardroom on the other side of the world.

These decisions are made against the backdrop of global economic conditions, with many of the factors influencing the decision out of the control of local authorities — but in other respects, local and provincial governments do hold the power in their hands.

It is those factors that we can control at a local level that we need to focus on — the factors that make it conducive to do business here, the pull factors that attract and, crucially, retain investment rather than pushing it away as poor service delivery did in Lichtenburg.

The Business Chamber therefore applauds the metro’s initiative in securing new investment into the Bay, with its revised incentives policy also enabling a R168m investment in a new facility by food services company Bidcorp.

Together with some 16 new investments, totalling more than R750m, in Coega since 2020, these new developments signal another positive for the metro — further diversifying our economy into other sectors such as agro-processing, food services, maritime and logistics, renewable energy, business process outsourcing and entrepreneurship.

New investment into the metro is good for all of us, government, business, civil society, residents — increasing the rates and services income base, employing more people (who in turn buy or rent property, pay rates, spend their income with local businesses and so on), reducing poverty, contributing to skills development, just for starters.

Hence our view that we need to have a shared vision for driving economic growth in the Bay, a forward-thinking and solutions-orientated approach where business, government and other key stakeholders work together to both attract and retain investment.

For this, we need an active business community, a collaborative approach from all stakeholders and a commitment to rolling up all our sleeves to make a positive difference in addressing the challenges facing our city.

This can happen on many levels.

A great illustration of the value of stakeholders finding alignment in their interests and working together to find solutions is Ford SA’s recent R15.8bn investment to expand and modernise its Pretoria plant.

That investment in turn will have positive spin-offs for the company’s engine plant in the Bay and Ford’s inbound and outbound logistics will now be channelled exclusively through the city’s port-rail linkages, made possible by the R18bn Gauteng-Eastern Cape rail corridor in development by Transnet Freight Rail.

Securing the Ford investment and upgrading of the rail corridor took alignment and collaboration — involving Ford, Transnet, the Coega and Tshwane special economic zones, and three tiers of government — and it will benefit multiple players, large and small, across diverse sectors and value chains.

Similarly, securing the move of Transnet National Ports Authority’s headquarters to Coega came from a collaborative effort of multiple role players, and brings multiple benefits.

On a smaller local scale, collaboration to address our metro’s water crisis has seen the Chamber team up with the municipality and the Department of Education to launch an Adopt-a-School programme.

Several Business Chamber members have already stepped up to adopt some of the 100 highest water-using schools, accounting for 10% of the metro’s daily water consumption, to assist them to reduce their consumption by repairing infrastructure and installing water-saving technologies.

Local businesses are also stepping up to assist with road maintenance and pothole repairs, and with solutions to secure electricity infrastructure and supply — benefiting not only the municipality and the participating businesses, but surrounding businesses and residents too.

That’s what we mean by alignment and the value of collaboration.

We’ll be talking about some more successes of “business in action” in upcoming columns, because by working together, everybody wins, and we all benefit.

By Denise van Huyssteen, CEO of the Nelson Mandela Bay Business Chamber