East London IDZ woos investors

24 March 2003

The South African government has given the East London Development Zone Corporation a license to operate on the West bank of the Buffalo River, in the Buffalo City metropole. There are a number of other IDZ’s in South Africa, including IDZs at Coega (outside Port Elizabeth), Richards Bay, and Johannesburg International Airport. So far only the ELIDZ and Coega have received government permits to operate an IDZ.

The idea behind the IDZ is to encourage export investment by providing a duty free customs secure area and associated industrial park, manned by full time customs officials, next to good quality transport infrastructure (port and airport), allowing duty free imports and VAT-free purchases of SA goods, and combine with major investment incentives.

The ELIDZ comprises 1,500 hectares of prime land located next to the port, the N2, and next to the airport. 20 hectares is already serviced and 2 manufacturers are already committed to development.

The next phase of the development will provide a further 300 hectares, including a 250 hectare duty free area for exporters. The customs secure area will open for business in mid 2004, paid for by R100m ($12.5m) in local government funding for the next financial year.

The SA and Eastern Cape governments are committed to providing funding for major infrastructure improvements, including the creation of the office park, the building of an access road, the upgrading and complete electrification of the EL – Gauteng railway line and an extension of the port at East London. East London is the only river port in SA and already has the most sophisticated car terminal in the country. The idea is to position East London as a major automotive hub port.

Funding for these infrastructure upgrades has all been agreed in principle by the South African government and will be announced in detail at the end of April 2003.

Taking into consideration the long lead times for new investment projects, the East London IDZ is beginning its marketing process now with a view to moving the first major businesses into the IDZ in mid 2004.

Source: EL Industrial Development Zone