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Date : 21/08/2006
Source: The Presidency
Title: Mlambo-Ngcuka: Ground Breaking Ceremony of Tata High Carbon Ferrochrome Plant


  Address delivered by the Deputy President, Ms Phumzile Mlambo-Ngcuka, at the ground breaking ceremony of Tata high carbon ferrochrome plant project, Alton North, Richards Bay

Minister in the Presidency, Dr Essop Pahad, Premier of KwaZulu-Natal, Dr S’busiso Ndebele, MEC for Economic Affairs and leader of Government,Dr. Zweli Mkhize,
MEC for Agriculture and Environmental Affairs,Professor Gabriel Ndabandaba, Chairperson of Tata International, Mr Syamal Gupta,
Managing Director of Tata Africa Holdings, Mr Raman Dhawan,
Managing Director of Tata Steel Ltd, Mr B. Muthuraman,
Deputy Managing Director Tata Steel, Mr Tridibsh Mukherjee,
Managing Director of Tata Motors, Mr Paralkar, Distinguished guests,
Ladies and gentlemen,

Introduction – South Africa’s economic conditions and objectives

This is an important occasion, for the community of Richards Bay, the province of KwaZulu-Natal and indeed the whole of South Africa (SA). We have built economic and political stability and because our economic house is in order, we can now reap the rewards of foreign direct investment (FDI), in the form of this venture and many others, including the other important Tata investment in the Second Network Operator (SNO).

The relationship with Tata has deepened. We also appreciate that Tata Steel is planning to invest in coal and manganese mines in South Africa. The ferrochrome plant is of course very significant as it is well located in an Industrial Development Zone, and will assist to attract further investments. In addition it advances our mineral beneficiation policy, direct and indirect jobs.

Our key objectives as government are to halve poverty and unemployment, by 2014. To do this we have to raise the rate of economic growth to at least 6 percent of Gross Domestic Product per annum by 2010. If we do not accelerate economic growth, we will not address the challenge of the second economy soonest; and if we do not address the challenge of the second economy, we will deny the deserving millions of our people who must benefit materially from our democracy. The benefit of a growing economy must be shared for our democracy to survive, otherwise the peace we all enjoy is only borrowed.

Welcome Tata’s investment and the role of Tata in South Africa

It is for these reasons that today we welcome and celebrate this major injection to our economy by Tata to the tune of R650 million rands to open its high carbon ferrochrome plant in our country. We believe this will hugely benefit our economy and contribute towards our economic objectives of growing the economy and creating jobs that are so desperately needed by our people.

The commitment that has been shown by Tata in our country is impressive. I cannot forget the words of Tata Group Chairperson, Mr Ratan Tata at the official launch of Tata Motors in South Africa in December 2004, when he said: “The arrival of our cars in South Africa is a fulfilment of a desire I have held since I first came here. Our countries can do much together and we are focusing seriously on our presence here – we will not take away but will add to South Africa.” We indeed see the Tata car everywhere in SA, it is one of the brands that is most affordable to our emerging working class and middle class

We greatly appreciate the commitment to SA and hope that such relations will grow from strength to strength. Besides Mr Tata’s role as an investor of note in our country, Mr Ratan Tata continues to play a significant role at the level of being our esteemed member of our International Investment Council (ICC), where his input is both welcome and highly valued. The big presence and involvement of Tata Group in our country is a vote of confidence in our democracy. The philosophy of Tata with regard to investing in the improvement of lives of people is one I hope SA corporates will emulate and I also know this is a wish shared by the Tata group, including my very good colleague here Mr Gupta.

South Africa/India economic and political relations

India is a key partner for South Africa. Our countries are both members of a tri-lateral agreement with Brazil, the India-Brazil-South Africa (IBSA) tri-lateral agreement, since 2003. Our political and economic relations are sound and are based on mutual respect and concern for each other’s development. At a bi-lateral level, our objective is to strengthen and deepen economic linkages through strong business and governmental co-operation between the two countries. Such good relations can only have true meaning if we co–operate in action.

South Africa/India agreements and trade relations

Total trade between SA and India in 2005 saw a considerable increase from 2004. Exports increased by 100 percent, while imports increased by 55 percent, making India our 13th largest trading partner, both in terms of exports and imports. Total trade, therefore, increased by 75 percent. The underlying reason for this increase can be attributed to growing awareness in South Africa about opportunities in India, as well as Indian awareness about opportunities in South Africa.

India is among the top 10 investing countries in South Africa, with investments estimated to the value of R10 billion. Tata Motors is the 6th largest investor company in South Africa. The amount is estimated at R9 billion, and therefore, makes up most of the Indian investment in South Africa. The Tata Group has diversified investments in South Africa in the iron and steel, motor vehicles and soon the hotel industry.

We also hope that this show of confidence by Tata will lead other Indian companies to look positively towards opportunities that exist in South Africa for future investments, and that South African companies will reciprocate by looking at opportunities that exist in India for investment. This will go a long way in further developing and strengthening the relations between our two countries. There are initiatives already pointing us in the right directions.

For example:

* The India/South Africa Chief Executive Officers’ (CEOs) forum has been established and is gaining momentum.
* South African companies such as Airports Company of South Africa (ACSA) and the South African Airways (SAA) have concluded major deals in India, contributing towards infrastructure development in India.
* There are several companies and government agencies which are eyeing India as a source of skills in various areas, we believe that today’s model of skills exchange is modern and inclusive and benefits everyone.
* Tata has recently taken 15 young women for training in their different facilities in India, to give them experiential learning in areas of their choice, including the hospitality and engineering industries. This is a big boost for the government’s Joint Initiative for Priority Skills Acquisition for South Africa (JIPSA). Tata kindly offered to pay all the expenses for these trainees. A total of 50 trainers will go through these programmes. As we speak we are exploring setting up a training school for technical skills relevant to the Accelerated and Shared Growth Initiative for South Africa (AsgiSA), also with Tata. That is how supportive Tata has been. I wish more SA companies could behave in the same manner.

Amongst the sectors crucial for AsgiSA are tourism, business process outsourcing (BPO), agriculture, biofuels and mineral beneficiation. The ferrochrome investment that we are witnessing today falls directly within the ambit of goals of AsgiSA as it is mineral beneficiation which will contribute towards accelerating our growth and retain jobs in SA.

The SNO is also an investment that is welcomed by all industries in SA as it creates a competitive environment in telecommunications, which will assist in reducing the cost of telephony as well as giving consumers a wider choice. Lower telephone costs are critical for the success of our BPO sector & job creation especially for young people.

The information and communications technology (ICT) industry is also crucial for the development of mother tongue literacy and adult basic education and training (ABET), which will bring millions of our people out of the misery of illiteracy.

There are indeed many synergies between our countries and today’s event is one big demonstration of these possibilities. As a major supplier of chrome, SA’s best interests are best served when we add value to our chrome. We get to retain jobs, attract technology and expertise. We take FDI to higher levels. That is why today there is a great mineral beneficiation in KwaZulu-Natal.

Conclusion – role of municipalities

In conclusion, I would like to take this opportunity to urge the Richards Bay community to ensure that it works together to increase its competitiveness. To make Richards Bay a place that more and more international investors such as Tata should feel welcome to invest in. It has been demonstrated that Richards Bay has significant competitive advantage, and it has an industrial developmental zone, it has a port and the country’s only coal export terminal and more. However, more can be done to enhance competitiveness.

You can do this by ensuring that the municipality excels, such that the town is globally known and positioned as an industrial town. Richards Bay has a huge potential for ever greater growth. You can create an environment that will create shared economic sustainability of the town. Richards Bay in everyway. A town like Richards Bay must strive to eradicate the so called second economy and grinding poverty.

The town council should work with companies to create community amenities and activities that enhance the life of the town’s citizens.

Small towns battle to secure high level skills and personnel, because of the availability of basic and high quality amenities such as schools, healthcare facilities, recreational activities a night life and other lifestyle activities. To attract investment, Richards Bay must address all these challenges.

Many of these services can be initiated by municipalities in public-private partnerships (PPP) or by better enabling private sector initiatives. The issues of service delivery and ensuring that there is access to water, electricity and other basic services to residents of your town cannot be compromised. Attracting and sustaining investments is an important task for local, provincial and national government and all spheres need to co–operate. Our private sector has a duty to invest in growing a shared economy, and in particular, investing in skills development.

I have the honour of unveiling this Tata high ferrochrome plant plaque in preparation for the work that is about to begin. I look forward to the future when the plant has been completed and this area is a thriving area of business and many people have benefited through jobs created.

I thank you.

Issued by: The Presidency
21 August 2006

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