1. AFRICAN RENAISSANCE NEVILLE MATJIE ACTING CHIEF EXECUTIVE neville@tikzn.co.za 24 MAY 2018

2. TIKZN Mandate TIKZN Act 5 of 2010 States that the mandate is to:
Identify, develop, market and promote investment opportunities in the Province to international and domestic investors
Develop the export capacity of the Province
Develop the export market of the Province
Forster trade and investment within the Province
Develop a Provincial Investment and Export plan; and
Keep and maintain a database of opportunities within the Province in such a manner as to benefit all sectors of the economy

3. Strategy Considerations
National Policies
(NDP, IPAP2, Growth Path)
Provincial
Provincial Growth Development Strategy and Plan
EDTEA Corporate Strategy
TIKZN Corporate Strategy
Annual Performance Plan (APP)
Key Legislation
governing TIKZN
TIKZN Act .
PFMA
PPPFA
BBBEE Act, etc.
KZN Export Strategy
KZN Investment Strategy

4. Priority Sectors For Development And Investment
ICT and Business Process Outsourcing (BPO)
Maritime
Green Economy
Tourism Infrastructure
Manufacturing
Agriculture and agro-processing

5. KEY PERFORMANCE IMPEDIMENTS TO MANUFACTURING
Subdued Economic Growth
Water Crisis (Drought)
Government Debt and Fiscal restraints
SA’s Credit Rating and Inflation
Slow Economic Recovery in Euro Zone
Trade barriers in key leading markets
High Unemployment Rate, Input & poor productivity levels
Political Uncertainty – policy direction
Overly Bureaucratic Approval Processes

6. Unemployment Estimates
Source: Stats SA: 2018

8. Economic Outlook
KZN’S GDP contribution translates to 16% of the national output
Over the ten-year period, the economy of the province had been driven largely by the manufacturing and finance sectors, as well as the wholesale & retail trade subsector. Transport also contributed significantly to the economy of KZN
Unemployment rate in KZN is estimated at 22.3%, compared to the national average of 26.7%
The NDP has set a target for the country to create 11 million jobs by KZN has committed to create 2.1 million of those jobs within the province through its Provincial Growth and Development Plan (PGDP)
This plan ensures a firm focus on investing in strategic infrastructure that unlocks economic opportunities and creates jobs

9. ANNUAL TRADE
54%
20%

10. KZN TOP 10 PRODUCTS OF EXPORTS

11. KZN TOP 10 EXPORTS DESTINATION MARKETS, 2017 (BILLIONS)``
KZN TOP 10 EXPORTS DESTINATION MARKETS, 2017 (BILLIONS)
NETHERLANDS
R 6.9
GERMANY
R 4.3
R 13.8
R 5.6
R 9.0 UK
USA
CHINA
R 6.2
JAPAN
INDIA
R 8.7
R 2.6
BOTSWANA
R 6.8
NAMIBIA
R 4.8
MOZAMBIQUE

12. KZN TOP 10 EXPORTS DESTINATION MARKETS, 2017 (BILLIONS)``
KZN TOP 10 EXPORTS DESTINATION MARKETS, 2017 (BILLIONS)
ZAMBIA
R3.3
TANZANIA
R1.1
KENYA
R 1.1
ANGOLA
R1.5
MOZAMBIQUE
R2.6
NAMIBIA
R6.8
SWAZILAND
R2.9
BOTSWANA
R4.8
ZIMBABWE
R3.2
LESOTHO
R1.5

13. SA TOP 10 DESTINATIONS MARKETS
SA TO THE WORLD (EXPORTS)
SA TO THE WORLD (IMPORTS)
2017
BILLIONS
China
R 115.6
R 203.0
United States
R 88.7
Germany
R 127.4
R 83.8
R 72.8
Namibia
R 47.5
India
R 52.2
Botswana
R 51.2
Japan
R 37.7
R 55.5
United Kingdom
R 33.3
R 46.3
Saudi Arabia
R 51.1
R 55.3
Italy
R 29.6
Mozambique
R 38.9
Thailand
R 33.2
Belgium
R 33.0
France
R 27.9
The structure of South Africa’s and KwaZulu-Natal’s trade is gradually changing
Trading partners are changing positions, with the influence of the East being felt here
In 2009, China unseated Germany to be the world’s largest exporting nation
The same year, China became South Africa’s largest trading partner
Source: Quantec (2017), online databases

14. SA Provinces GDP (nominal) compared to Other Countries
Perspective matters. A lot. Recent provincial economic data published by Stats SA take on a fresh light when they’re ranked against other countries.
Gauteng is South Africa’s economic powerhouse. The province contributed just over a third to South Africa’s economic output in 2016, according to provincial gross domestic product (GDP) figures.1 In runner-up positions were KwaZulu-Natal and Western Cape, the second and third largest economies. Northern Cape, the least populous province, contributed just 2% to national GDP, making it the smallest provincial economy.
How do the provinces square up against other countries?
In 2016, Gauteng’s economy was roughly the same size as that of North Africa’s Morocco, if we use nominal GDP figures as a comparison .2 KwaZulu-Natal produced a level of economic output that was similar to that of Tanzania. Northern Cape has an economy that was roughly on par with that of Bermuda.

15. Roughly is the key word here
Roughly is the key word here. There are different ways to compare economic activity across nations, and many factors to keep in mind when doing so. Figures can differ according to the method used to produce estimates, and nominal GDP figures in US dollars (used here) can change significantly over time due to shifting exchange rates.
How do the provinces measure up on the African continent?
If Gauteng suddenly decided to split off and become its own nation, it would find itself in the top 10. In 2016, its economy was the seventh largest in Africa, surpassing heavyweights such as Kenya and Tanzania. KwaZulu-Natal was ranked in twelfth place, larger than the economies of Ghana and Tunisia.
Western Cape was in sixteenth spot, generating about the same level of economic activity as the Democratic Republic of the Congo (DRC)
Source: StatsSA 2018

17. The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.

18. Business Economic Shift
Alphabet – subsidiary company Google

19. James Manyika, of the McKinsey Global Institute, points out:
Tough Reality
James Manyika, of the McKinsey Global Institute, points out:
In the old days, companies with large revenues and global footprints almost always had lots of assets and employees
But digital companies with huge market valuations and market shares typically have few assets
In 1990 the top three carmakers in Detroit between them had nominal revenues of $250 billion, a market capitalisation of $36 billion and 1.2m employees
In 2014 the top three companies in Silicon Valley had revenues of $247 billion and a market capitalisation of over $1 trillion but just 137,000 employees

20. Technology Evolution

21. Technology Evolution

22. Technology evolution

23. 4IR Impact in Manufacturing Sector
Manufacturing sector is on the cusp of the 4th industrial revolution (4IR), bringing with it new technologies and techniques that will change the products, processes and supply chains involved in every aspect of industry
Benefits of 4IR technology adoption for manufacturing, smarter supply chain processes, smarter production and smarter products
This technology ushers-in greater connectivity that will allow manufacturers to maintain their competitive to respond flexibly and quickly to customers’ requirements
Manufacturing is the sector that offers great potential for job creation, respectable pay levels
4IR will take jobs in other sub-sectors, but on the other hand it will generate numerous jobs in the service sector
Sectors that will be mostly affected by 4IR, automotive, ICT and Steel

24. MANUFACTURING
KwaZulu-Natal’s manufacturing sector is the second largest in South Africa and produces nearly a third of the country’s manufactured exports.

25. Manufacturing Opportunities
LARGEST INDUSTRIES
Automobiles & components
Pulp & paper products
Chemicals & Petrochemicals
Food & beverages
The mining sector includes:
Titanium dioxide, zircon, iron, steel and ferroalloys

26. Manufacturing Opportunities
PLASTICS
KZN produces 1/3 of SA’s plastic needs using tons of polymer
More than 50% of converted polymer is used for packaging
Plastic remains a cost effective product
CHEMICALS
Industrial Chemicals comprise a third of gross output
Petroleum and coal products are 30%
Rubber & plastics make up the difference
The industry is well developed with several large plants and 2 oil refineries

27. Manufacturing Opportunities
FABRICATED METAL PRODUCTS & MACHINERY
Employs over 7000 people in vehicle manufacture and over in vehicle retail
Toyota is the key role player and is a major contributor to the KZN Automotive Industry
Bell Equipment and Dezzi remaining as our anchor in the Capital Equipment industry
Other investment opportunities include:
Aluminium conversion and fabrication
Resource beneficiation and value addition
Electronics and Engineering
Chemical and petro-chemicals
Wood products

28. Manufacturing Opportunities
RICHARDS BAY INDUSTRIAL DEVELOPMENT ZONE
Purpose built and secure industrial estate on the KZN’s NORTH-EASTERN COAST
Special Economic Zone which aims to encourage international competitiveness through WORLD CLASS INFRASTRUCUTURE
Tailored for the manufacturing for goods and he production of services to boost:
Beneficiation
Electronics
Economic growth
Development of skills and employment

29. Conclusion Customized information on the KwaZulu-Natal investments
Packaged sector opportunities and project information, taking account of 4IR and Export development
Review of the KwaZulu-Natal Export and Investment attraction Strategy and Innovation Strategy
Facilitation of international targeted outreach programmes in support of the KZN Route Development Strategy
Source additional funding support for Business retention and expansion support and product offering
Create manufacturing capability for black owned Youth and Women owned companies in order to meet the Localisation and industrialisation mandate

30. Thank you