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The Amajuba District Municipality

The Amajuba District Municipality. Amajuba District Municipality Quick stats : Population 500 000 Local Municipalities and percentage population : Newcastle 72% Dannhauser 21% eMadlangeni 7% Percentage of the population urbanised : 57% Age Profile : < 14 years 31.5%

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The Amajuba District Municipality

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  1. The Amajuba District Municipality

  2. Amajuba District Municipality Quick stats: Population 500 000 Local Municipalitiesand percentage population: Newcastle 72% Dannhauser 21% eMadlangeni 7% Percentage of the population urbanised: 57% Age Profile: < 14 years 31.5% 15 – 34% 37.4% 35 – 64% 26.4% Over 65 4.7% Unemployment Levels: 61.5% (2005)

  3. Population Distribution within the District

  4. Newcastle Municipality Quick stats Population 413 000 Height above sea level 1200m Average rainfall 900mm Climate - Average Winter 20°C Summer 28° Major industries: Steel : Mittal Steel which was build in 1970 with Japanese and German expertise. Chemical: Synthetic rubber : Karbochem Chrome chemicals : Bayer Sillicon Technology Cement: Natal Portland Cement Engineering : Dorbyl Diamond cutting : Newcastle Diamond Cutting Granite tile : Baracuda Clothing & textile : 120 Companies majority from the far east

  5. Major Reasons For Factories Relocating To Our District Municipality LOCALITY Midway between Durban and Johannesburg - the 2 largest cities in South Africa. Access to the 2 major ports in South Africa which facilitate import and exports. Main railway line and national road.

  6. Cost of Doing Business • Independent survey has shown that Newcastle Municipality has the lowest municipal cost structure of all the municipalities in South Africa for the following services :- • Electricity • Property tax • Refuse removal • Labour Force • We have a well qualified labour force that have been exposed to the manufacturing industry for many years. Labour cost is also lower than in the city areas.

  7. Property Prices and Rentals Vacant industrial land sells for US 5/m² Vacant residential land sells for US 15/m² Building cost for industrial buildings amount to US 500/m² Whilst rentals varies between US 1-2/m² Living Environment We have more than 100 schools in our municipality of which some are world renowned. The Newcastle High School band has participated for the last 3 years in the Dubai Shopping festival. They are the only non proffesional band that are annually invited by the Dubai Government to take part in the festivities. We have all the major shopping centres well developed business district, 2 provincial and one private hospital. Medical facilities are excellent whilst all the major financial institutions are represented in our city.

  8. Investment Opportunities • Agro-processing • Dairy products • Fisheries and aquaculture • Established fisheries: hake, sole and monk. • Freshwater aquaculture: mussels, oysters, and trout • Mariculture: abalone, prawns, salmon, marine finfish • Floriculture • Traditional: roses, carnations, crysants • Indigenous: proteas, fynbos, bulbs • Fruit and vegetables processing plants • Deciduous, citrus, subtropical, indigenous and canned • Juices • Fruit-based and sparkling • Vegetable juice development • Chilled concentrate development • Meat processing • Tannery • Wine production

  9. Investment Opportunities • Automotives • Air-conditioner compressors • Aluminum castings • Automotive components for after-market • Brake parts and radiators • Catalytic converters, silencers and exhaust pipes • Foundries and mini steel mills • New generation manifolds • Paint • Plastic materials • Stitched leather • Tool and die shops • Tyres

  10. Investment Opportunities Chemicals and Allied Industries • Fine and specialty chemicals • Agro-chemicals • Household products • Inorganic chemicals • Manganese, chrome, titanium, aluminium fluoride • Organic chemicals • Aromatics, food acids, sorbates, flavours • Pharmaceuticals • Generic and Ethical drugs • Pharmaceutical R&D and clinical trials

  11. Investment Opportunities Clothing, Textiles, Leather and Footwear • Cotton spinning, weaving and knitting • Large-scale manufacturing of industrial textiles using polyester • Manufacturing of synthetic textiles for the apparel sector • Middle- to high-end apparel wear, with opportunities to expand into the US and European markets • Production of cellulose textiles such as rayon and viscose • Wool and mohair production offers downstream opportunities for yarns, knitwear and fabric

  12. Clothing Industry Garments • Suits, trousers and jackets (export advantage) in wool and worsted garments • Shirts and blouses (formal and casual) • Denim apparel • General apparel • Babies wear, children’s wear • Blankets • Access to first world countries via AGOA and EU agreements

  13. Textile industry Opportunities exist for : Fibre production • Spining and weaving • Knitting • Non-wovens • Carpet production • Fabric coating • Braiding and netting Investment opportunities will become more viable with the proposed free-trade agreement with the USA

  14. Footwear & leather industry This sector has undergone changes in the past number of years and has been characterised by a move to specialise. Our province has a comparative advantage in that much of the tanning extract used by the industry is produced locally from wattle bark which trees are grown in our province Approximately 60% of the domestic footwear industry is located in our province. • Domestic use - clothing - footwear - personal items (handbags, wallets, key holders) • Industrial use - car seats - furniture - saddlery - others Under AGOA South Africa footwear enjoys duty free access to the US market

  15. Aluminium Industry The world’s largest aluminium smelter is in our province and opportunities exist in the following areas : • Plate and sheets • Drawn and rolled tubing • Forgings • Bars and rods • Wire • Extruded shapes and profiles • Castings, engine blocks etc.

  16. Chemical Industry The end product and specialty niche tend to be of lower volumes and higher value added. Some opportunities exist for : • Paints, lacquers and varnishes • Agricultural chemicals (fertilizers, fungicides, pesticides and weed killers) • Industrial chemicals (textiles, automotive metals, mining building industry) • Consumer chemicals (food, beverage, cosmetics, detergents, soaps etc.) • Plastic conversions (film and tape extrusion, blow moulding, extrusion coating, profile extrusion) • Water treatment chemicals

  17. Tourism industry The buoyant tourism industry in our province has a variety of business opportunities : • Hunting and game farms • Tour guide services • Tour operating businesses • Conference centres • Travel agencies • Restaurants etc. • 2010 Soccer World Cup

  18. Aquaculture The climate in the province is suitable for several varieties of fish and Shrimp as it is warm with temperatures ranging between 15° to 30 ° Celcius and a variety of water resources with plentiful water (coast rivers, public dams, farm dams, ponds and estuaries). Opportunities exist for: • Trout • Catfish • Tilapia • Shrimp; and • Ornamental fishes like goldfish and Koi Carp

  19. Agriculture & Horticulture Our province’s temperate climate and reliable rainfall makes the province ideal for agricultural development. Opportunities have been identified in the following sectors : • Cashew nuts • Tea plantations • Agri processing • Sub-tropical fruits and vegetables • Cut flowers, foilage and herbs • Organic vegetables

  20. Skills Development Opportunities • Hydroponics, climate controlled environment • Tanning • Potato production and processing • Soya production using no till method • Soya processing to achieve consumable products • Packaging and compliance of export fruit and veg • Drying of vegetables and preserves • Processing of Kenaf for industrial use • Waste recycling • Skills across the entire Textile industry

  21. Investment Incentives Focus on : • Enterprise Investment programme • Foreign Investment Grant (FIG)

  22. Enterprise Investment Programme Objective : Aims to reduce investment cost for small and medium investors Access criteria : It is available to local and foreign firms investing not more than R100 million in land, buildings, plant and equipment in new projects or expansion of existing projects. Legal entities as well as close corporations engaged in qualifying manufacturing, high value agricultural projects and agro-processing, aqua-culture, bio-technology, tourism, information technology and communication, recycling, culture industry and business service may apply Description : The incentive package provides for : • An investment grant for two years • An approved qualifying assets calculated as follows : An additional investment grant is payable in the 3rd year if the ratio of human resource remuneration expressed in terms of manufacturing cost is more than 30% The above incentives are paid in cash by the government and is also tax- exempted.

  23. Foreign investment grant (FIG) Objective : To promote foreign investment Access criteria : Will be available to foreign shareholders with a foreign shareholding of A minimum of 50% in the project. • Qualifying – max grant R3 mil • May not exceed 15% of value of machinery from overseas • Maximum two phases over 2 years • Legal entity registered in South Africa • New machinery and equipment only, acquired overseas • Machinery must be new technology • Qualifying expenditure – Freight, key personnel, travel costs, commissioning personnel, landing clearing and inland transport cost Description : To assist foreign companies investing in new machinery and equipment in South Africa to relocate to South Africa.

  24. Business Incentive Scheme for New Business • ELECTRICITY • 20% Discount off the standard tariff for the duration of the incentive period. • No charge on basic service connection, but the developer is liable for the cost of providing and installing cables and council owned equipment on the consumers’ premises. • The developer can sign an agreement with the Council to pay off the cost for the installation of cables, substation and other council owned equipment on the consumers’ premises. • WATER • (i) No charge on connections. • SEWERAGE • (i) No charge in respect of normal tariffs for the duration of the incentive period. • (ii) No charge in respect of connections. • (iii) The developer/operator will be liable for all charges relating to industrial effluent.

  25. Business Incentive Scheme for New Business REFUSE REMOVAL Monthly tariff waived for duration of the incentive period. BUILDING PLANS Refund of “Building Plan Approval” fee. RATES 100% Rebate for new business on land and improvements in the first year, decreasing by 33⅓% per annum thereafter.

  26. Thank you

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