Sectors and Industry

The Eastern Cape has a lot to offer. Not only does it have the infrastructure, but it also offers variety when it comes to its thriving sectors and industry.

Agriculture and Agro-processing:

With its hectares of fertile land, the Eastern Cape’s economical core has always been agriculture. However, because of underdevelopment in the former homelands (in the former Transkei, at least 25,000 hectares can be irrigated); government has put in place strategic plans to expand the land in these areas. Great strides are being made in drawing farmers, mostly subsistence farmers, into commercial farming.

The Province further boasts with its livestock – more than in any other province in the country: 21% of South Africa’s cattle; 28% of its sheep, and 46% of its goats. Just about any crop can be grown in the rich soils and climate, making this ideal for crop farmers or livestock farming.

The Province is not only a world-class producer of wool and mohair, but also a major producer of chicory, pineapples, tomatoes, citrus fruit, deciduous fruit and tea.

Other sub-sectors that can be explored include: crops, livestock, dairy, and food processing.

Forestry and Wood Products:

As the Province with the third largest area under commercial plantations, the Eastern Cape has a great potential for expansion. It is after all the only province in the country with another 100 000 ha suitable for commercial forestry plantations. Currently, 170 000 ha are commercial forestry plantations, and 130 000 ha are indigenous natural forests.

The South African government has approved the 10- to 15 –year Forestry and Timber Expansion Project aimed at developing 100 000 hectares of new forests in the east of the Province.

Other opportunities in this sector includes: building joinery; production of charcoal from small wattle plantations; community forestry; improved wood quality; increase forestry area; indigenous plantations; new hardwood plantations; paper and pulp mills; treated poles; and wood-chipping plants.

Fisheries and Aquaculture:

Having an 800 km coastline means that the Province has huge potential when it comes to fisheries and aquaculture. Currently, the Province provides most of the country’s squid, as well as a good amount of its hake, south coast rock lobster and various linefish species.

Other opportunities include: mariculture (abalone, finfish, and oysters); inland aquaculture; fisheries (red-eye herring fishery, by-catch usage, canning, experimental fisheries, fresh exports and game fishing).

Minerals 

The Province has few mineral deposits, but there are opportunities in the Coega IDZ for metal production and processing of imported or South African ores.

Other opportunities include: clay; coals; construction material; diamonds; electrolytic manganese dioxide; glass beads; jewellery; kaolin; silica; stone quarrying; and titanium.

Automotives and Components:

Known as the ‘Detroit of Africa’, the motor industry is the biggest contributor to the Province’s and South Africa’s GDP. DaimlerChrysler, Delta Corporation (formerly General Motors) and Volkswagen are all vehicle assemblers based in the Eastern Cape. Ford engines are also produced here, with some 150 component suppliers operating from the Province.

This industry is of great importance as half of the country’s passenger vehicles are manufactured in the Province, which also provides 51% of the country’s vehicle exports.

Other opportunities include: alloy wheels; automotive component cluster; automotive supplier park; automotive tooling; automotive training institute; catalytic converters; engines and engine parts; glass; lamps; new component manufacturing; new vehicle manufacturing; radiators; specialised vehicles; and tyres.

Metals and Engineering:

The metals and engineering industry has a strong base in East London and Port Elizabeth, centred on the automotive industry. Both the Coega- and East London IDZs have opportunities to develop downstream metals and engineering industries.

Other opportunities include: copper bio-leaching; downstream aluminium products; industrial machinery; integrated stainless steel plants; machine tools; and marine repair and engineering.

Textiles and Clothing:

The textiles and clothing industries emerged from a rapid restructuring in the 1990s. Textile exports grew at 5.9% a year in real value from 1996 to 2001, standing at R2.3 billion in 2001.

However, facing tough competition from Far Eastern countries in low-cost clothing production, the principal opportunities in this sector lie in the development of niche markets for products with strong local and international demand.

Other opportunities include: integrated mixed fibre textile mills; clothing clusters; higher-value fashion clothing; industrial textiles; integration with fashion and design; and textile training institutes.

Furniture:

The Eastern Cape has a large forestry base, offering great investment opportunities as well as the potential for further development. Because of its history in furniture production, the Province also has a strong skills set in this sector.

Other opportunities include: knock-down furniture components; handcrafted furniture; furniture manufacturers; furniture clusters; and improved furniture design.

Leather and Leather Goods:

Having the most livestock in the country compliments this sector, and the tanning of bovine, sheep and exotic leather continues to be strong.  The growth of a new export-driven industry, auto leather seat production illustrates the potential for high-value leather products. Footwear, leather clothing and leather products all have high potential for export growth into the USA and the European Union.

Other opportunities include: auto leather off-cuts; auto leather; dorper sheep skins; exotic leathers; expanding existing tanneries; fashion footwear and leather goods; increase supply and quality of hides; and small-scale homeland tanneries.

Wool and Mohair:

The Province is a leading world producer of high-quality merino wool and mohair luxury fibres. A significant proportion of the Province’s wool and mohair is exported unprocessed or semi-processed and the sector has very good expansion potential. More than 150 years in wool and mohair has given the Province valuable expertise in farming, technology, training, production and marketing.

Other opportunities include: high-value fashion knitwear; integrating design with production; natural/synthetic fibre mixes; production networks; wool and mohair yarns; and worsted cloth and garments.

Pharmaceuticals:

The pharmaceuticals industry in the Province includes the largest producer of generic drugs in South Africa. Long-term opportunities exist in the manufacture of generic drugs, in supply of the public health sector and in exports.

Other opportunities include: HIV/Aids medicines; generic medicines; indigenous medicines; and raw materials.

Plastics:

Plastic manufacturing is small but highly diversified, and is one of the fastest-growing developing sectors in South Africa. The country’s plastic products industry had sales of R12 billion in 2001.

Other opportunities include: agriculture; automotive plastics; construction and building; packaging; plastics cluster; plastic tools; and recycling.

Arts and Crafts:

A pioneer in this field, the Province’s arts and crafts sector provides a livelihood to a substantial number of people in the Eastern Cape. This sector is large, but underdeveloped. However, the Eastern Cape Development Corporation believes that the Eastern Cape has the potential to become one of the top crafting regions in South Africa, and the world. There are unlimited opportunities in building links with more established industries, such as furniture making and automotives.

Tourism:

Branded as the ‘adventure province’, the tourism sector has great potential and is already seen as one of the Eastern Cape’s main economic drivers. The Province has become a major eco-tourism destination, although the Province is still largely undiscovered. 

Construction:

Growth in construction in the Province shows a steady increase over the years. In 2004 it stood at 8.8%, 2005 at 10.1% and in 2006 it stood at 11.3%. This growth is a reflection of increased public spending on infrastructure and high levels of private sector investment.

Electronics and ICT:

This sector shows significant development possibilities. Telecommunications access and computer literacy are increasing, and the quality of the Province’s new information technology graduates is excellent.

Other opportunities include: automotive electronics; consumer electronics; IT hardware; IT training; machine tools; software development; technology incubator; and telecommunications.

* Information sourced: Eastern Cape Development Corporation www.ecdc.co.za