FREE DAILY EMAIL

Date : 10/10/2006
Source: Limpopo Provincial Government
Title: Moloto: India-Africa Partnership Project


Speech by Limpopo Premier Sello Moloto at the India-Africa Partnership Project conclave at the Taj Palace, New Delhi, India

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
 

SPONSORED BY

Advanced