Coega projects ‘to come on line soon’

Posted On Monday, 06 June 2005 02:00 Published by eProp Commercial Property News
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MANAGEMENT of the Coega industrial development zone near Port Elizabeth says it expects three to four of the 70 projects it has attracted to come to fruition "very soon".

 

Property-Housing-ResidentialThis follows Coega’s lengthy negotiations with Alcan of Canada to construct a $2bn aluminium smelter in the zone and its announcement of its first investment last month. Belgian textile producer Sander announced it would be putting up a R200m plant that would employ about 1200 people.

Coega Development Corporation CEO Pepi Silinga said at the weekend "5% (of the 70 projects) should materialise in 18 months".

This is the strongest signal yet that an announcement on Alcan’s proposed investment will be made soon. While Silinga would not be drawn on how close Alcan was to deciding, others close to the corporation said an announcement on a large further investment at Coega would be made in the next three months.

But one commentator said this could happen within the next three weeks.

Negotiations on the smelter have been protracted, and were prolonged by French group Pechiney, which originally looked at putting up an aluminium smelter before being taken over by the Canadian company.

Alcan said if a smelter was to be built at Coega, it would use a different technology to that proposed by Pechiney. A feasibility study is under way.

Silinga said it was not surprising negotiations had been lengthy, considering the R13,6bn investment by Alcan would be the second-largest by a foreign company in SA — dwarfed only by Barclay’ R33bn bid for Absa.

Russia’s SUAL has also expressed interest in constructing an aluminium smelter and there has been talk of a $5bn stainless steel plant being built at the zone.

Coega said it was in negotiations regarding the construction of a R320m rolling steel mill that would employ about 150 people in the first phase of the mill’s development.

Of the 70 projects lined up by Coega, 30% were expected to come to fruition in three years time and 40% in five years.

Silinga also defended Coega’s business model.

He said the zone offered preferential tariffs to goods being exported from the area. Coega has been criticised for offering preferential tariffs in an environment where lower tariffs are already granted through various trade agreements.

He said investing in Coega would still see investors saving "hundreds of millions (of rand)" in tariff duties".

Coega was a "one-stop shop" — providing a broad range of services to foreign investors, said the Coega CEO.

Last modified on Thursday, 26 June 2014 09:52

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