Partnership Project conclave at the Taj Palace, New Delhi, India
10 October 2006
Programme directors, Mr PG Shankar of Tata Motors Ltd
His Excellency Mr OM Mpofu
Zimbabwe's Minister of Industry and International Trade
Cabinet Ministers present here
Your Excellencies
Ambassadors
Colleagues from various African countries
Captains of the industry from both African countries and India
Distinguished guests
Ladies and gentlemen
I bring you warm greetings from South Africa's Northern most province,
Limpopo.
The province covers 124 000 square kilometres (km�), about 10% of South
Africa's surface area. It has a population of 4,9 million. It is bounded to the
south by Gauteng, and to the west, north and east by Botswana, Zimbabwe and
Mozambique. It is for this reason that we have dubbed the province the
heartland of southern Africa and a gateway into the rest of Africa. Limpopo's
capital, Polokwane, lies just 300 kilometres (km) north of South Africa's main
markets in the Johannesburg-Pretoria industrial complex, and 200 kilometres
south of the province's border with Zimbabwe. Limpopo is close enough to
service South Africa's main markets, and well positioned for export.
Ten reasons why you should invest in Limpopo:
1. access to Africa's markets
2. developed infrastructure connecting Limpopo to the entire Southern African
Development Community (SADC) region and the world
3. excellent investment opportunities and a business friendly environment
4. top-rate telecommunication systems
5. well-developed trade support facilities
6. transparent and fair trading
7. government policies that ensure political and economic stability
8. competitive investment incentives
9. unskilled, semi-skilled and yet committed labour force
10. unsurpassed quality of life.
Limpopo's economic overview
Limpopo contributes 6,5% to the national economy. Mining, manufacturing,
general government services and finance, real estate and business services are
the dominant economic sectors in Limpopo, accounting for approximately 60% of
the province's gross domestic product (GDP).
The structure of the economy has changed little over the last decade,
although the mining sector has become more prominent.
Limpopo is home to some 10,5% of South Africa's population, according to
2005 estimates.
There are immediate investment opportunities in the following:
* mining-coal, iron ore and platinum (the province controls the largest coal
and platinum reserves in the country)
* Information and Communications Technology (ICT) - two Indian companies, Tata
and Satyam Computers, are already doing business in the province
* construction - big projects in the pipeline include the construction of the
Polokwane International Convention Centre, a five-star hotel, stadium for
Federation International Football Association (FIFA) World Cup 2010 games, and
numerous roads and low-cost housing projects
* energy - the building of Matimba power station
* pharmaceuticals � a dire need for affordable generic drugs in the
province.
International trade
Limpopo has experienced relatively strong growth in international trade in
recent years, with exports climbing from 3,9 billion during 2001, to
approximately R7 billion in 2003.
The European Union and specifically the United Kingdom, Netherlands, Germany
and France remain Limpopo's most important trading partners. Trade with North
America, particularly the United States of America, remains strong. Key markets
in Asia continue to be Japan, China, Taiwan and Indonesia.
Limpopo's largest trading partners in Africa are Zimbabwe, Mozambique,
Zambia and Tanzania.
Trade with Latin America is relatively small. In the Middle East, Israel and
Turkey are Limpopo's key markets.
Limpopo's main exports emanate from the primary mining and agriculture
industries, some manufactured products, and arts and crafts.
Fixed capital investment
According to the research undertaken by our trade and investment promotion
agency, Trade and Investment Limpopo (TIL) through their Investment Tracking
System, Limpopo has attracted approximately R4,1 billion in fixed capital
investment during 2004. These investments went mainly into the tourism, mining,
and real estate and property development sectors. Limpopo continues to attract
investment in its major competitive sectors, with tourism accounting for 57,4%
of investment, followed by mining with 35,7%. Agribusiness is still lagging
behind at a low 0,1% of the total fixed capital investment. Golf and wildlife
estate developments account for a large proportion of foreign direct investment
into the province.
Doing business in Limpopo
Limpopo's strategic location: Easy access to African markets
Limpopo borders on South African commercial and industrial heartland in
Gauteng Province and key SADC nations, thus providing easy access to South
African and African markets.
The markets are linked by the N1 highway and adjacent main rail lines that
bisect Limpopo. Covering 124 000 km� about 10% of South Africa's surface area
and with a population of 4,9 million, Limpopo is bounded to the south by
Gauteng province, and to the west, north and east by Botswana, Zimbabwe and
Mozambique.
Limpopo's capital, Polokwane, lies 300 kilometres north of South Africa's
main markets in the Johannesburg-Pretoria industrial complex, and 200
kilometres south of the province's border with Zimbabwe.
An emerging African hub
Limpopo is upgrading Polokwane International Airport (PIA), enabling it to
handle the biggest, fully laden aircraft and to develop into a major cargo hub
serving sub-Saharan markets and Europe. In addition, Limpopo is planning to
develop an Industrial Development Zone (IDZ) around the airport, creating
opportunities for exporters who add value to the province's raw materials.
Access to world markets
The upgrading of Maputo port in the neighbouring Mozambique means that
Limpopo-based exporters and importers can use the facility with growing
confidence. Maputo is much closer to Limpopo than more distant South African
ports where congestion often hampers trade.
Limpopo exporters estimate they will save about one third of their
transportation costs by using the facility. Linked to Limpopo by road and rail,
Maputo port is situated 300 and 400 km from the main mining and agricultural
centres of the province. The traditional port of Durban, for example, is 1 000
kilometres from these areas.
Infrastructure overview
Few locations, particularly in South Africa, could offer a climate or family
environment that comes close to that of Limpopo away from the congestion of
other major centres.
There are more than 4 000 educational institutions in the province. These
include several agricultural, technical, teacher training and nursing colleges,
a university of technology and two academic universities. Several provincial
high schools qualify among the top 100 schools as per Matric/Grade 12/School
leaving examinations each year.
Extensive health services are available throughout the province. Hospitals
with modern equipment and specialist staff are found in all the larger centres
and also in some smaller towns.
Modern and spacious shopping centres provide for all consumer needs, both
for regular and for luxury items. The banking, insurance and legal
infrastructure is also extensive.
Roads and rail
The modern N1 highway and national main rail lines bisect Limpopo from south
to north. This provides investors with direct access to South Africa's
industrial and commercial heartland in the Gauteng province to the south, and
SADC to the north.
Sea ports
Neighbouring Mozambique's decision to commercialise the port of Maputo, as I
have alluded to earlier, means that Limpopo-based exporters and importers can
use the facility with growing confidence.
With an international consortium now investing an initial US$70 million to
upgrade the Maputo port, Limpopo exporters estimate savings of about one third
of their current transportation costs by using the facility.
Airports
Limpopo has an international airport and two modern regional airports.
Polokwane International Airport in Limpopo's capital city is being developed
into a major cargo hub serving sub-Saharan Africa and as an alternative to
South Africa's main airport in neighbouring Gauteng province. With strong
financial support from the Limpopo Provincial Government, PIA aims to obtain in
the near future, a full Category 9 international licence, enabling it to handle
the biggest, fully laden aircraft.
The provincial government is also supporting the development of an
Industrial Development Zone (IDZ) around the airport, creating opportunities
for exporters who add value to Limpopo's raw materials.
FIFA World Cup 2010
The provincial capital city, Polokwane, has been awarded the FIFA World Cup
2010 Host City status. This has opened a number of opportunities for the
province. The city is in the process of constructing a world-class stadium
which will be in line with the specifications of FIFA.
Other spin-offs include the construction of the Polokwane International
Convention Centre. Along side the convention centre, a five star hotel will
also be established.
Growth sectors
An economic development strategy, the Provincial Growth and Development
Strategy (PGDS), has pinpointed the following major sectors to enhance
development in the province:
1. agriculture and agro-processing
2. manufacturing
3. mining
4. tourism.
Agri-business
Limpopo was established for growth, and we are poised to create growth for
investors too. Thank you to a near miraculous climate, with rainfalls in excess
of 1 000mm per annum in some areas, there are two harvesting seasons here.
Agriculturally speaking, Limpopo is the food basket of South Africa - 75% of
the country's mangoes, 65% of its papayas, 25% of its citrus, bananas and
litchis, 60% of its avocadoes, 67% of tomatoes and a whopping 285 000 tons of
potatoes are grown here. Other crops include coffee, nuts, guavas, a
bourgeoning sisal industry, maize, cotton, tobacco and timber in addition to
staples such as sunflowers, maize, wheat and table grapes. Cattle and game
farming are thriving.
Agriculture has also stimulated the ancillary development of a growing range
of processed products, such as fruit juice and concentrates. Considerable
opportunity exists in the areas of processing and packaging, as well as the
export of beef, pork, chicken and eggs, as well as fruit and vegetables.
The Limpopo Provincial Government is also facilitating development of new
types of farming and further value-added processing of products as diverse as
sugar, soya, essential oils, catfish and goats.
The provincial government is also planning to establish a fresh produce
market near Polokwane International Airport and the N1 highway to service the
sub-regional markets of Botswana, Mozambique and Zimbabwe.
Manufacturing
With its wealth of mineral and agricultural resources, its sophisticated
infrastructure and its proximity to growing consumer markets in the rest of the
sub-continent, the Limpopo province offers many investment opportunities in the
manufacturing sector.
These opportunities range from tanning, the cultivation of fruit and
vegetables, the processing of meat, the manufacturing and utilisation of
magnesium oxide, cement, lime-based products, and granite. Seven economic
development clusters have been identified for immediate expansion, and abundant
factory space and sound support infrastructure are already in place. These
development clusters are Waterberg, Vhembe, Mopani, Capricorn and
Sekhukhune.
Mining and minerals
Discover how deep we will dig to help your mining enterprise!
During 2003, total sales of primary minerals amounted to R13,3 billion,
making us the country's third largest contributor. Interest is developing in
Limpopo's mineral riches and has reached unprecedented levels, with 396
prospecting and mining licences having been issued in 2002. Limpopo has no less
than 136 operating mines, producing nine percent of South Africa's income from
minerals.
Our mineral wealth remains unexploited!
80% of the earth's geological history is represented within Limpopo's
borders. Resources include three types of precious metals and stones, 12 types
of ferrous and base metals, and 23 types of industrial minerals, according to
the Council for Geoscience.
Diamonds, gold and platinum group metals make up Limpopo's wealth of
precious metals and stones. Ferrous and base metals include antimony, chromium,
copper, iron, lead, manganese, nickel, silicon, tin, vanadium and zinc.
Industrial minerals include amosite, andalusite, coal, gemstones, granite,
graphite, gypsum, limestone, mica, magnesite, phosphate and vermiculite.
The vast wealth bodes well, not only for mining itself, but for related
opportunities as well. There are unlimited opportunities for the manufacturing
and supply of amongst others, tools, uniforms, machinery and plant
equipment.
Tourism
The combination of authentic African experiences, diverse indigenous
cultural heritage and sophisticated first world infrastructures and service
levels, makes Limpopo a paradise for tourism and related hospitality
investments.
Yet eco-tourism remains a largely untapped investment arena!
The biggest draw card in South Africa's provinces, is the proliferation of
game reserves and Limpopo is home of the world's greatest concentration of
national parks. Apart from the Kruger National Park, of which 80% sits within
our borders, there are 53 state-owned nature conservancies which are to be
commercialised, all located within the famed Golden Horseshoe, with potential
for local and foreign investment in terms of ownership and concessionary
activity.
Well established as an eco-tourism destination, Limpopo offers numerous
opportunities for the development of nature based tourism with strong appeal to
international tourists.
There remains plenty of opportunity for the independent hospitality provider
interested in opening a smaller game lodge, bed and breakfast, restaurant,
etc.
We are most happy to assist investors of any size in identifying appropriate
opportunities.
I thank you.
Issued by: Office of the Premier, Limpopo Provincial Government
10 October 2006
