Despite the difficult economic climate ELIDZ faced in the last financial year, the organisation managed to attract six new investors with an investment value of R958 million, exceeding the target of R500 million set for the year. Even more remarkable is the fact that the ELIDZ opened 12 new factories last year, which are now operational and creating much needed economic activity in our province. The companies that were operationalised in 2021/22 have already made private sector investments of R3.27 billion in plant and machinery. These new investors have committed to creating 2078 new jobs over the next two years and have already begun to improve employment levels in the zone.
On Thursday, 1 December 2022, the East London Industrial Development Zone SOC Ltd (ELIDZ) recently held its 2021/22 Annual General Meeting (AGM), at the ELIDZ Conference Centre, to inter alia, report on the organisation’s performance for the period 2021/2022 and announce the outcome of the audit process conducted by the Auditor General of South Africa (AGSA).
In his address, Simphiwe Kondlo, Chief Executive Officer of ELIDZ, provided a detailed account of the performance of the organisation in the year under review, saying that despite all the challenges the organisation faced last year, it weathered the storm and came out on top in the end.
“The 2021/22 financial year has seen continuing instability in the global economy, and this has created a challenging operating landscape for the ELIDZ. This has been further exacerbated by geo-political tensions that have affected global trade and increased security concerns in various economic sectors,” said Kondlo.
Moreover, increased protectionist economic policies in leading global economies have prompted the deepening of global divisions and growth in the localisation of economies.”
Kondlo also mentioned that the challenges in global supply chains of various sectors which disrupted the operations of various multi-nationals, including those that are on the ELIDZ’s platform, added further pressure to an already distressed manufacturing sector.
“New investment into manufacturing and global value chains remained at low levels and there was a decline in greenfield investment projects globally,” added Kondlo.
Kondlo also mentioned that this AGM is special in that it marks 20 years of the ELIDZ’s designation as an IDZ in 2002, while it also marks 15 years since the organisation was issued with an operating permit as the first operational IDZ in South Africa.
Below is a summary of the ELIDZ’s performance highlights from the 2021/22 financial year:
- The number of manufacturing and service jobs grew by 33% year on year from 3945 to 5270. This being the highest year on year growth the ELIDZ has seen since inception and is an indication that the ELIDZ is recovering from the initial impact of COVID-19 on productivity in the zone.
- We recorded an expansion and growth of existing tenants into new markets. This gives confidence and credence to the ELIDZ’s value proposition. In this regard the ELIDZ saw the launch of a new sliced cheese processing facility, being a partnership between Sundale and Schreiber, in November 2021.
- In the Aquaculture sector, the Kingfish pilot project was successfully implemented, leading to the start of commercialisation and expansion. We celebrate this development as a forward movement in our quest to achieve diversity of investment sectors.
- As at the end of the 2021/22 financial year, there was a 53% growth in industrial turnover of zone enterprises owing to the operationalisation of the new factories in the zone.
- Moreover, export-oriented production by ELIDZ enterprises grew by 127% year-on-year compared to the prior year owing to the growth in the automotive sector.
- On the construction front, the ELIDZ ‘s expenditure for the 2021/22 financial year R177 million.
- The ELIDZ set out to sub-contract 30% of sub-contractable construction work to designated groups for all tenders above R30 million and exceeded this target and 55% of sub-contractable work went to designated groups.
- Moreover, 89% of contracts awarded by the ELIDZ went to local companies.
- The ELIDZ’s Science and Technology Park continued to prioritise innovation support and incubation, with 250 beneficiaries being trained through the programme.
- In partnership with CISCO, the ELIDZ launched the CISCO EDGE Centre. This is an ICT incubator meant to develop SMMEs in this sector and speed up their entry into the digital market space resulting in the creation of new jobs for the local economy. This programme continues to offer SMMEs state of the art technology and infrastructure training programmes.
- 34% growth in gross income for ELIDZ services whilst also limiting the vacancy rate of existing investment property to just 1,46% for 2021/22.
- ELIDZ achieved a 7th consecutive unqualified audit opinion with no findings.
In his opening remarks, the Chairperson of the ELIDZ Board, Professor Mlungisi Makalima, highlighted that the meeting was a special item on the ELIDZ’s calendar, which allowed the organisation to fulfil its responsibility to account for its performance during the previous financial year.
“It was a difficult year, coming as it did hot on the hills of the disruptions brought about by COVID-19 and despite these challenges, the ELIDZ applied itself well” said Makalima.
He also congratulated the ELIDZ on its own revenue generating performance which has consistently shown an upward trajectory.
Speaking on behalf of the Department of Economic Development, Environmental Affairs and Tourism (DEDEAT), Ronel de Bruin had this to say: “Having looked at the performance of ELIDZ, one cannot overlook the fact that the investment target growth has almost doubled from the previous financial year.”
De Bruin further noted that “the possibility of expanding the footprint of ELIDZ operations to Ntabozuko is just another sign of growth and once approved, the department looks forward to working together with the relevant stakeholders”.
“ELIDZ continues on a path of sustained increase in revenue generation which will ultimately lead to weaning off the entity on its dependence on funding from DEDEAT,” said De Bruin.
“A clean audit does not come without hard work and assurance of compliance in all areas. I thus want to take this opportunity, on behalf of Honourable MEC Mlungisi Mvoko, to recognise this achievement and the fact that this could only be attained by a collective effort between top management, the support staff, and a functional internal audit committee,” concluded De Bruin.
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