South Africa’s Special Economic Zones (SEZs) are key to the country’s international investment drive, President Cyril Ramaphosa said at the opening of the Mara Group’s hi-tech smartphone manufacturing plant in Durban on Thursday.
Hailing the investment in Dube TradePort SEZ, which is located within a developing ‘aerotropolis’ around King Shaka International Airport and the burgeoning KZN North Coast, Ramaphosa said it was a great moment in SA’s drive to be a producer of advanced goods.
“Dube TradePort provides valuable insight into how a SEZ should work in real life. It enables us to appreciate the immense transformative potential of these zones for our economy…. SEZs are important instruments to attract both domestic and international investment, building targeted industrial capabilities and establishing new industrial hubs,” he said.
The president pointed out the growth of China’s highly successful Shenzhen Economic Zone, which was established back in 1978.
“Shenzhen was a lazy village port back then and today it is a metropolis…. We are fortunate that we have established a SEZ here [Dube TradePort] in an existing metro, where all the facilities and capabilities are in place. And it is here that Mara has found fertile ground to establish this factory,” notes Ramaphosa.
He says that KZN’s Dube TradePort SEZ is one of the top investment opportunities in SA, with R3.2 billion in private sector investment and 12 000 job opportunities created in its first phase.
The figure Ramaphosa mentioned did not include the Mara Group’s $100 million (R1.5 billion) expected investment into its new Mara Phone factory – touted to be SA’s first fully-fledged smartphone manufacturing plant. The plant is located within the first phase of the SEZ.
Mara Group CEO Ashish Thakkar told Moneyweb earlier this week that the pan-African investment firm has already invested more than half of its planned capital commitment into the Durban plant.
This venture effectively pushes private sector investment in Dube TradePort to the R4-billion mark. It was officially designated one of SA’s new Industrial Development Zones in 2014. The zones are now referred to as SEZs.
Other longer established zones, which also provide various tax and government incentives to largely manufacturing-focused businesses, include Coega SEZ in Port Elizabeth, as well as the East London and Richards Bay SEZs. Together with Dube TradePort, other newer SEZs include Atlantis and Saldanha Bay in the Western Cape. The government is eyeing further SEZs, such as the long-planned one near OR Tambo International Airport.
Meanwhile, Ramaphosa said during the Mara Phone plant launch that he is looking forward to the second phase of Dube TradePort, which involves “a large focus on electronics and a range of aeronautical services”. According to KZN government officials, the second phase of the SEZ is anticipated to attract some R18 billion in investment that will also include the pharmaceutical sector.
Moneyweb understands that the Mara Group is looking at Dube TradePort’s second phase to expand its operations and fulfil its R1.5 billion commitment to invest in SA. The SEZ also includes Korean electronics giant Samsung, which is also eyeing the second phase to expand its operations, that currently include the manufacture of LED televisions and monitors.
Thakkar first announced plans to invest $100 million in setting up the Mara Phone’s plant in the country during Ramaphosa’s SA Investment Conference in Sandton in October 2018. Earlier in the year, the president had set an ambitious target to attract over R1 trillion in new investment over five years, to turn SA’s flagging economy around.
At the inaugural SA Investment Conference in 2018, Ramaphosa revealed 31 investment commitments to SA by various companies, totalling some R300 billion. The Mara Group, which has operations in several countries including Dubai, Rwanda and Mauritius, was one of those commitments.
“We have delivered on our commitment to open a smartphone factory in SA,” Thakkar said on Thursday. “This represents the Mara Group’s first foray into the country and the first fully-fledged smartphone manufacturing plant that will produce high quality but affordable smartphones locally….”
He tells Moneyweb that the plant has the capacity to manufacture around 10 000 Mara Phones a day. “So far we have invested more than $50 million of our $100 million commitment to this venture in SA. The balance will be invested as the plant ups capacity based on demand.”
Thakkar says that currently two Mara Phone models are being manufactured at the group’s new plants in Durban and Kigali, Rwanda. The Mara X will retail for around R2 999 in SA, while the Mara Z will come in at R3 999.
Listen to Thakkar’s interview with Nompu Siziba on the SAfm Market Update with Moneyweb here:
“We plan to sell Mara Phones via all the major telecoms operators, as well as several retailers and banks. However, we also have our own online sales channel and plan to open our own Mara Phone Experience stores countrywide,” he adds.
Mara Group has secured financial backing from Standard Bank and the Industrial Development Corporation to set up the Mara Phone venture in SA.