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KZN: Nomusa Dube-Ncube, Address by the Leader of Government Business and out-going KZN MEC for EDTEA, during her visit to SAPPI on R6.5 billion Expansion and Investment Program (17/11/20)

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KZN: Nomusa Dube-Ncube, Address by the Leader of Government Business and out-going KZN MEC for EDTEA, during her visit to SAPPI on R6.5 billion Expansion and Investment Program (17/11/20)

Outgoing KZN EDTEA MEC Nomusa Dube-Ncube

17th November 2020

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Programme Director –

EThekwini Deputy Mayor, Cllr Belinda Scott

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Chair of the Board of Trade & Investment KZN Ina Cronje;

Mr Alex Thiel, CEO SAPPI Southern Africa

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Captains of Industry

CEO of Trade and Investment KZN – Neville Matjie

CEOs of entities and management

All categories of staff at SAPPI and all spheres of government

Representatives of municipalities

Contractors

Honoured Guests;

Members of the media

Good Morning

First and foremost, I wish to express my appreciation to the management and all categories of staff at Sappi. Thank you for hosting us and for the tour.

I know that the past few months have been extremely difficult following the outbreak of Covid-19.

I recall that on March 5, after the debate of the State of the Province, we had a meeting at the Royal Showground with Special Advisors and senior management in the office of Health Minister Dr Zweli Mkhize. We also met with the Minister himself.

This was the first official meeting in the province to discuss the outbreak of Covid-19.

One of the issues that we discussed extensively was the impact of COVID-19 on big business. We also discussed the negative impact on all pogrammes aimed at speeding up socio-economic development in this province.

We further discussed the possibility of the postponement of international events such as the World Football Summit. This had been scheduled to take place from the 16 to the 18 March.

Indeed, KZN was the first province to announce the postponement of international events. These are events that could have helped in terms of stimulating tourism – our greatest source of revenue and job creation.

We had also been preparing for the construction of plants of companies representing different sectors of our economy. Most of these companies were located in our economic zones of Dube Trade Port and Richards Bay. Others were located in different parts of the province.

Sadly, on March 25, SAPPI - the world’s largest manufacturer of dissolving wood pulp had to announce the expansion of its Saiccor Mill.

As we gather today, I wish to convey a message of appreciation from the Premier Sihle Zikalala and the entire KZN Government to SAPPI management, the staff, key stakeholders and surrounding communities.

We thank all of you and contractors for the excellent dedication towards the completion of this important project.

The R6, 5 billion invested towards the expansion of SAICCOR Mill is changing the face of this province forever. There is a groundswell of optimism across the province.

As I indicated, the past 8 months have been extremely difficult. But through your determination you have managed to pull this off. We are therefore here to salute all role-players who have been involved in this important international project.

We acknowledge the importance of SAPPI as a global player as you operations in more than 20 countries in Southern Africa, Europe and North America.

We note with appreciation the fact that across all three regions - SAPPI operations have begun to produce and deliver to customers.

We further note that SAPPI has increased health and safety systems and procedures at all its operations. We thank you for working with all spheres of government in this regard.

Programme Director, what we also appreciate more is that wood pulp products are used mainly by converters to create viscose fibre for fashionable clothing and textiles. This is one sector that we are focusing on as the KZN government.

As the province we steaming ahead with our plans to establish Amajuba Clothing and Textile Special Economic Zone. We are grateful for the support from Minister Ebrahim Patel.

This sector is not only labour absorbing sector but presents endless opportunities for women, youth and people with disability.

DTI has more than R4.9 billion in incentives for enterprises owned by these members of society.

We are assisting them to access this funding which is available under the Clothing and Textile Competitiveness Programme.

We want to increase the number of small enterprises that are receiving support from the department. Currently, we have about 76 Clothing & Textile Small Enterprises that are being assisted. And we want to increase this number.

Programme Director, coming back to this plant, our view is that apart from strengthening our status as a leading producer and exporter of wood and pulp products, the importance of the expansion of this mill lies in the fact that KwaZulu-Natal Provincial Government has a plan of reconstruction and transformation of our economy.

The forestry industry will contribute significantly to the economic growth of the province by the planting of trees and the processing of these trees for the export market.

This investment on its own, will strengthen other sectors such as wood chip export, transport and logistics.

Critically, we acknowledge the fact that this investment will ensure that forestry is one of the province's largest employers, absorbing more than 40 000 people of the total 2.8 million labour force.

I have been informed that the industry pays approximately R600 million per annum to staff, and it is estimated that 250 000 people in the province are in some way dependent on the industry.

If timber processing were to be added to the above figures, the total impact on employment in the province could be doubled.

Our focus as the department is to ensure that small growers are supported and given opportunities. For our part as the department, we have Black Industrialist Programme championed by the KZN Growth Fund.

More than R400m has been invested towards Black Industrialist led projects.  This co-funding has unlocked Black Industrialist project value of approximately R790m, mainly in the manufacturing sector.

This funding support has massive socio-economic benefits and helps to unlock industrial potential whilst radically changing the pattern of ownership and control.

We want to increase the number of small growers in KZN from the current figure of around 10 000 to more than that. We also want to ensure that with the support from the department, small growers have access to more than 14 000 hectares of land for timber plantation and processing.

In this regard, we want to partner with organizations such as SA Wattle Growers Union, Forests Project, Khulanathi Scheme in order to support new small growers.

In all of this, SAPPI remains a key stakeholder.

Programme Director, as government we commit to work with SAPPI to provide a focused support programme for SMMEs as they “offer the greatest untapped potential for growth, employment and fundamental economic transformation.

It is estimated that SMMEs contribute close to 60% of both Gross Domestic Product (GDP) and employment in the country.

KwaZulu-Natal SMMEs are clustered in various sectors and chief amongst these are Clothing and textiles, agriculture, agro-processing, construction, transport amongst others.

Stats SA estimates show that KwaZulu-Natal accounts for about 15% of informal businesses in the country after Gauteng (28.6%) and Limpopo (16.5%).

As of 2019, a total of 2 692 461 people were employed in both the formal and informal sectors in KwaZulu-Natal. The informal sector constituted a total of 494 955, that is, 18% of the total employment in the province.

Ladies and Gentlemen, I am highlighting these figures, just to contextualize the importance of this expansion project in terms of job creation.  We were excited during the early stages of this investment when we were informed that at the peak of this expansion project, there would be between 2,500 and 2,800 contractors on site at any one time.

As I conclude, I wish to point out that we remain inspired by the goodwill and fortitude of our people.

 In “Long Walk to Freedom”, founding President Nelson Mandela says this about South Africans: “My country is rich in minerals and gems that lie beneath its soil, but I have always known that its greatest wealth is its people, finer and truer than the purest diamonds.”

Like the ancient Chinese Philosopher, Confucius, Nelson Mandela encourages to overcome our setbacks when he reminds us that “the greatest glory in living lies not in never falling, but in rising every time we fall”

Today, Madiba would point out that this is our moment as a nation to unite and act decisively to rebuild and transform our economy so that it can better serve all our people and make them believe again the democratic experiment.

And we fully agree with Honourable President Ramaphosa who will address the SA Investment Conference tomorrow that it can never be business as usual.

 

We must embrace the new normal.

 

Our great nation must, “rebuild, repair and restore our country.”

Understanding the enormity of our challenges and the need to act now to implement the reconstruction and transformation plan, we wish to assure the people of this province that we are on course to use this SA Investment Conference to make a “rupture with the past” and achieve “fundamental and lasting change” that will deliver a South Africa which is truly united, non-racial, non-sexist, equal and prosperous.

 

In conclusion, our message to SAPPI is very clear.

Please be our partner on our journey to restoring the dignity and hope of our people.

Let Us Grow KwaZulu-Natal and our Country Together!

I thank you.

 

 

 

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