1. Fibre Innovation Hub Rapid Assessment and Strategic Plan —Martin Nicol, ODA STRATEGIC SESSION BETWEEN THE EASTERN CAPE NATURAL FIBRE CLUSTER PROJECT STEERING COMMITTEE ( NFC PSC) & DEPARTMENT OF ECONOMIC DEVELOPMENT & ENVIRONMENTAL AFFAIRS ECDC BOARDROOM, EAST LONDON, 14 April 2011

2. Context for the Presentation (do not show this slide) STRATEGIC SESSION BETWEEN THE EASTERN CAPE NATURAL FIBRE CLUSTER PROJECT STEERING COMMITTEE ( NFC PSC) & DEPARTMENT OF ECONOMIC DEVELOPMENT & ENVIRONMENTAL AFFAIRS TO BE HELD IN EAST LONDON ON 10 MARCH 2011 AT 09H00 AT ECDC BOARDROOM Welcome (CEO, ECDC), 15 mins Apologies (Ken Bern, ECDC), 5 mins Introduction / Background: Natural Fibre Cluster (Ken Bern, ECDC), 20 mins Fibre Innovation Hub Rapid Assessment and Strategic Plan (Martin Nicol, ODA), 30 mins Progress to date – Development of the Cashmere Industry (Sunshine Blouw, CSIR), 20 mins – Bast Fibre Processing & Industry Development Support (Sunshine Blouw, CSIR), 20 mins – Wool & Mohair SME Development Support (Sunshine Blouw, CSIR), 20 mins – Research & Development towards Establishment of Agave Complex Pilot (Greg Gordon, Anton Botha & Jerome Andrew, CSIR), 60 mins (20 mins each) – Pineapple Beneficiation Programme (Anthony Albers, NNIP), 30 mins – Technical Support to Development of Small/Medium Garment Manufacturing Enterprises (Sunshine Blouw, CSIR), 20 mins

3. Project Objective “The aim of the Cacadu Fibre Innovation Hub is straightforward: to create more jobs in the region using the rich variety of natural fibres produced locally as raw material inputs.” – Cacadu District Municipality (2010) Fibre Innovation Hub Rapid Assessment & Strategic Plan - “Final Report”, report prepared by ODA 22 June 2010, pp.176., Reference: 5/2/4/24

4. 2010 Assessment: ODA’s main recommendations for the Natural Fibre Custer (do not show this slide here – these are conclusions given at the end) 1.To separate the ‘research’ tasks from the ‘business development tasks’ and to make new business development, leading to jobs, the focus, supported by research. 2.To appoint a Cluster co-ordinator to act as a “champion” who could help the working groups in the different areas to find a practical way forward in each case. 3.To redefine the role of the steering committee so that it will oversee progress and intervene when progress is not made according to plans, but leave the implementation details to the working groups (which will each include the private sector). 4.To learn lessons from the last 2 and more years – why the NNIP has been successful in the Pineapple sector, and how the other sectors can learn from its example.

5. ODA’s Brief – March – June 2010 Came from the Cacadu District Municipality Was to undertake a rapid assessment of the Cacadu Fibre Innovation Hub – Review the state of current projects linked to the proposed hub. – Present recommendations for the next phase of the project. – Build upon the considerable work already done on the fibre innovation hub concept. March – June 2010

6. Future EC Fibre Hub PSC: DEDEA ECDoA DoA CDM CSIR ECDC EU/DBSA/IDC The dti, DoA ARC-IIC PROGRAMMES Industrial Dev. Projects – Working Groups [#04 – Feb 2009] v The scope of the assessment CSIR / CDM Fibre Innovation Hub Project, Contract for Funding (signed September 2008) Project managed by the CSIR Project overseen by a multi-stakeholder Project Steering Committee (PSC)

7. Future EC Fibre Hub PSC: DEDEA ECDoA DoA CDM CSIR ECDC EU/DBSA/IDC The dti, DoA ARC-IIC PROGRAMMES Industrial Dev. Projects – Working Groups [#04 – Feb 2009] Fibre Innovation Hub – Organisational Framework 2009 Assessment The Fibre Innovation Hub is WIDER than the assessment

8. CSIR / CDM Contract strengths 1.Provided space for research to ‘find out the way’ – emphasis on the need for innovation 2.Gave a clear leadership role to the CSIR – a recognised, expert institution. 3.Was inclusive – recognised the need for role players beyond the CDM and the need for partnerships.

9. CSIR / CDM Contract weaknesses 1.Had a research, not a business emphasis; commercial considerations secondary. 2.CSIR was “both player and referee” 3.PSC comprised busy people with other work commitments

10. Contract Strengths and Weaknesses Strengths 1.Provided space for research to ‘find out the way’ – emphasis on the need for innovation 2.Gave a clear leadership role to the CSIR – a recognised, expert institution. 3.Was inclusive – recognised the need for role players beyond the CDM and the need for partnerships. Weaknesses 1.Had a research, not a business emphasis; commercial considerations secondary. 2.CSIR was “both player and referee” 3.PSC comprised busy people with other work commitments

11. Time Issues The initial funding contribution by CDM was R1.5 million – paid in the 2008/09 financial year The project had a three-year term. Provision made for CDM to contribute R1.5-m a year, if concrete projects were put forward. (3-year potential CDM total of R4.5-m) Sept- 08 Sept- 11 2008/92009/102010/112011/12 Mar- 10 Assessment Other Funders (for wider EC natural fibre projects) CSIR DEDEA / Province (via the ECDC) Departments of Agriculture / ARC

12. Research Phase of the Assessment CSIR ECDC CDM NNIP NMMU – Regional Innovation Forum – Applied Design Mohair SA Wool SA Slight Contact: AIDC SAWGA Rhodes Agave Nectar SA

13. Initial Conclusions Researchers had not been “lucky”. Several setbacks, beyond the control of the project Very few new jobs Agave Distillers closed (core of Agave complex) Pineapples re-directed away from textiles Misunderstandings on mohair delayed integration with earlier LM initiatives BUT – one outstanding example: Pineapples / NNIP Strongly directed strategy, well-supported by government (ECDC) Production links from farmers to factory – (inc black farmers) Innovative research leading to innovative business plans Lesson: Need to use the whole resource – no waste, process residues.

14. Workshop CSIR said the report was too bleak – the potential is still there for fibres to play a catalytic role in the economies of the Eastern Cape There is a need for a fibre hub “entity” to be formed – but this needs a ‘champion’, a person with enthusiasm and inspiration to co-ordinate and drive activities. Workshop pointed to the need for projects to be driven by commercial viability, supported by research ( need for a revised structure). Don’t focus only on ‘fibre’ but on the full use of the whole natural resource.

15. Recommendations taken forwards 1.To separate the ‘research’ tasks from the ‘business development tasks’ and to make new business development, leading to jobs, the focus, supported by research. 2.To appoint a Cluster co-ordinator to act as a “champion” who could help the working groups in the different areas to find a practical way forward in each case. 3.To redefine the role of the steering committee so that it will oversee progress and intervene when progress is not made according to plans, but leave the implementation details to the working groups (which will each include the private sector). 4.To learn lessons from the last 2 and more years – why the NNIP has been successful in the Pineapple sector, and how the other sectors can learn from its example.