INLSA
Durban 050312Minster Rob Davies at SAFAL with the Chairman Manu ChandariaPic Terry Haywood
Trade and Industry Minister Rob Davies has hailed the foreign investment of R1 billion into the new Safal Steel coating plant in Cato Ridge, near Durban.
Davies officially opened the facility last week and said it was a “sizable and significant investment” into the local manufacturing sector. He said it went beyond just the steel roofing industry and presented a huge opportunity to support the development of the automotive and white goods (appliances) manufacturing sectors.
The plant has been operational for just over a year and was a foreign direct investment from its Mauritius-based major shareholders Safal Group. Japanese firms Marubeni Itochi and Nippon Steel Holding each own 7 percent of the project, while 26 percent has been earmarked for a black economic empowerment deal.
“Safal Steel’s investment is timely, especially in light of the government’s massive infrastructure development programme over the next several years, announced by president Jacob Zuma in his state of the nation address,” Davies said.
“This investment will support the government’s infrastructure development programme with locally produced material. It’s a remarkable investment by a company headquartered in Mauritius and with operations in 16 countries in Africa. It contributes to regional economic integration,” he added.
“Too often we just import goods that we need… but this is the kind of investment that we want and support as government. The Department of Trade and Industry has allocated R39 million in tax incentives for this project. We have allocated R30m through the enterprise development programme, of which about R22m has already been used. A further R9m came from the critical infrastructure programme of the Industrial Development Corporation,” he said.
The R1bn investment in Safal Steel represented a vote of confidence in the local manufacturing sector and had created 370 direct jobs. The 30 000 m2 plant was reaching its full capacity of producing 150 000 tons of coated steel annually and had the capacity to double that.
Safal Steel CEO Ronnie Graham said the state-of-the-art metal coating plant was one of the biggest foreign direct investments in KZN in recent years and one of the biggest private sector driven construction projects in the province.
“Safal is the only manufacturer of aluminium zinc coated steel in South Africa. Up to 60 percent of our products are for the domestic market, while the rest is exported. The product is mainly used in the roofing industry, but, as the minister mentioned, there are opportunities for growth in the automotive and ‘white goods’ or appliance manufacturing industry,” he said.
Meanwhile, Davies also announced that projects, with an investment value of R21.7bn, had been approved in the past 15 months as part of the government’s major tax incentive schemes for business. The initiative, in terms of Section 12I of the Income Tax Act, offers tax incentives to business that bolster manufacturing through major investments in the country.
“The 13 projects are in greenfield and expansion manufacturing… Six of the projects will commence commercial production between March and August, three in 2013 and the rest in 2014.
“An amount of R4.5bn in additional tax allowances has been granted to the approved projects,” he said.
“These approved projects are all within the priority sectors identified in the Industrial Policy Action Plan; eight are in the chemical sector, one in the agro processing sector, two in the paper and pulp sector and two in the bio-fuel sector.
“In addition to encouraging investment and employment in the manufacturing sector, the Section 12I incentive also aims to encourage greater energy efficiency in the manufacturing sector as well as to strengthen the industrial skills base,” said Davies.
Of the 13 projects Davies announced just one was in KZN. This was the expansion of the SA Calcium Carbide production facility in Newcastle to the tune of R105m.
