INVESTING IN SOUTH AFRICA'S CHEMICALS AND ADVANCED MATERIALS INDUSTRY - SOUTH AFRICA - INVESTSA
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
South
Africa
Factsheet
2020
Investing in South Africa’s Chemicals
and Advanced Materials Industry
Chemicals and Advanced South Africa’s chemicals market by category, 2017
Materials in South Africa 25%
> South Africa is home to Africa’s most advanced and Commodity chemicals
largest chemicals sector, valued at approximately Agricultural chemicals
US$25bn. It is estimated to be four times and thirteen 1% Speciality chemicals
64% Other
times larger than the chemicals markets of Nigeria and 11%
Egypt, respectively.
> South Africa’s chemicals industry is highly mature
and diverse, spanning fuel and plastics fabrication to
pharmaceuticals, and supplies a wide range of industries.
South Africa’s chemicals market
> According to the Chemical and Allied Industries
value (US$bn), 2013-22f
Association, the sector provides input to 23% of the 28.1
27.1
country’s total manufacturing gross value. 25.1
26.1
23.3 24.3
> In 2018, the chemicals (organic and inorganic chemicals, 22.6
20.7 20.7
19
as well as plastics) sector exported close to U$4bn
US$ bn
in products. Plastics accounted for 37%, inorganic
chemicals for 35% and organic chemicals for 29% of
the sector’s export earnings. 2013 2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f
> The sector is dominated by a few integrated, local and
international manufacturing companies, of which the 20
largest account for close to 90% of the sector’s revenue.
US$25bn US$4bn
chemicals market in annual exports
Why Rising demand for
invest? biodegradable materials 2.6% p.a
agricultural
South Africans use about two billion output growth
single-use plastic bags a year. Close to 90% to 2025
of these bags are conventional petroleum-based
plastic bags. Due to the rise in environmental Rising demand for
Availability of awareness, an increasing number of retailers have agro-chemicals in Africa
raw materials committed to reduce or fully phase out the use
In order to keep up with population
South Africa has close to of single-use plastic bags in the next few
growth, agricultural output has to
10 billion tonnes of proven coal years and offer biodegradable bags.
increase in Africa. The FAO and OECD
reserves, among the largest in the This will lead to an substantial increase
expect agricultural output to grow
world. Given its leading expertise in demand for biodegradable
by 2.6% per annum in the next
in coal-to-liquid technology, the materials.
decade, driving demand for agro-
country’s coal deposits 2bn chemicals such as fertilisers
present key inputs for the plastic bags and pesticides.
chemicals industry. sold per
Emerging year
7 th
material capabilities
600+
largest coal South Africa has developed
producer in advanced capabilities for the production Integrated
the world of emerging materials including advanced value chain local
carbon materials. The world market South Africa offers a companies
for advanced carbon materials is fully integrated value chain
US$23bn expected to record a compounded that includes the production
global advanced annual growth rate (CAGR) of of raw materials, intermediate
carbon material 11.5% between 2019 products and final
market by and 2024. chemical products.
2024
Where to invest?
> A large number of chemicals companies and related manufacturing activities, including explosives and
fertilisers, are clustered in the Vaal Triangle (near Johannesburg). This includes the cities of Vereeniging,
Vanderbijlpark (both in southern Gauteng) and Sasolburg (in northern Free State). Further activities are along the
coal-rich Vaal River valley, stretching from northern Free State to southern Gauteng and western Mpumalanga.
> Other hubs of chemical manufacturing are in areas where the products are consumed, e.g. in the mining and
farming regions or in urban areas, such as Johannesburg, Durban and Cape Town, with large manufacturing
and consumer industries.
> Specialised clusters include the Durban Chemicals Cluster and the Mandela Bay Composite Cluster.
The Durban Chemicals Cluster is public-private partnership between the local chemical manufacturing
sector and eThekwini Municipality. The Mandela Bay Composite Cluster is an industry-led advanced
manufacturing cluster, focusing on composites for various industries.
LIMPOPO
GAUTENG
Pretoria MPUMALANGA
Johannesburg Witbank
NORTH Ermelo
Vanderbijlpark/
WEST Vereeniging Secunda
Sasolburg
Vryheid
Kimberley FREE STATE KWAZULU Richards Bay
-NATAL
Verulam
Durban
NORTHERN CAPE
Durban
Chemicals
Cluster
EASTERN CAPE
WESTERN CAPE Mandela
Bay
Cape Town Composite
Mossel Bay
Cluster
i n t h e world: 1 st in
t Rese
Larges l-to-liqu
id 2008
l’s c o a a div archers :
Saso c unda is ision from
in S e chem of Sou AEL
plant l t ,
est coa pion ical grou
h Afric
the larg an
e f a c t ion plan
t the w eered an p AECI,
liq u orld’ d
orld. s firs patente
in the w pyro t d
tech commer
n
dryin ic spray cial
g pla
nt.What support exists?
> Given the sector’s strong linkages to the overall economy through the provision of key inputs, the South African
government is committed to creating an enabling environment for both local and international investors in the sector.
Financial Assistance Skills Development Chemical Incubators Innovation Support
and Incentives and Research Chemical incubators Innovation support
The 12i Tax Incentive Programmes provide support to is available through
is designed to support The Chemical Industries start-up companies programmes such as
Greenfield investments Education & Training including support the Support Programme
(i.e. new industrial projects Authority (CHIETA) services, assistance with for Industrial Innovation
that utilise only new and facilitates skills business plans, provision (SPII), the Technology
unused manufacturing development in the of physical space, and Human Resource
assets), as well as chemical industries coaching and technical for Industry Programme
Brownfield investments sector. A number expertise. Incubators (THRIP) and the SEDA
(i.e. expansions or of universities offer have been set up in Port Technology Programme
upgrades of existing industry-related Bachelor Elizabeth, East London, (STP).
industrial projects). The and Master programmes. Durban, Krugersdorp and
incentive offers support The CSIR has a strong Thembisa.
for both capital investment research focus on
and training. nanostructured and
advanced materials, bio-
manufacturing and metal
processing.
What are the opportunities?
> South African industries remain dependent on chemicals imports. Local manufacturing of key chemicals and advanced
materials will help to reduce this dependency and improve the competitiveness of South Africa’s chemicals industry.
Key opportunities include:
• Manufacturing of organic, mineral or chemical • Manufacturing of polypropylene and polyvinyl
fertilisers and nitrogen compounds chloride beneficiation
• Manufacturing of polymers including polyethylene • Manufacturing of composite materials, including
used in packaging, bags and injection moulding bio-composites
applications
• Manufacturing of titanium oxide pigments
• Manufacturing of painting and coating
• Manufacturing of speciality and fine chemicals
(including for automotive industry)
• Manufacturing of primary polyacetals/polyethers
• Manufacturing of organic surface active agents
• Manufacturing of nitrites and nitrates
• Manufacturing of biodegradable materials
• Manufacturing of bio-composites • Manufacturing of carbon fibres
• Manufacturing of prepared binders for foundry • Manufacturing of engineering plastics – polyamides
moulds or cores • Fluorspar beneficiation for production of fluorochemicals
• Manufacturing of proteins and peptones • Silica sand beneficiation for production of fibre glassHow to invest?
Opportunity Go Investment Investment
identification ahead preparation execution
Conduct • Decide on geographic • Acquire/lease site,
1 feasibility study location most suitable rent office space
for your product for investment • Apply for municipal
or service • Consult property services (e.g. water,
Location specialists, real estate electricity)
identification agents to identify
2 Evaluate
suitable sites for
outcome of
operations
feasibility study
• Conduct site visits of
suitable locations
3 Take investment
decision
• Consult with HR/ • Conduct interviews,
4 Decide on recruitment agencies
about staff requirements
hire staff
investment • Apply for work permits
strategy in order • Determine immigration for expatriate staff
to best align Resourcing requirements • Open a bank account
to the market requirements • Determine funding • Apply for finance
opportunity (HR, capital, model (e.g. self-funding,
• Set-up IT infrastructure/
finance, IT) debt, equity)
systems
• Consult with IT
systems providers
• Determine corporate • Register company
structure • Apply for licenses
• Determine licensing and and permits
permit requirements • Apply for National
Compliance • Consult with labour Level Incentives
and legal affairs lawyers Schemes, Skills
and Other Support
Investor testimonials
• Consult with InvestSA
to identify eligibility Programmes
for incentives, skills
and other support
initiatives
InvestSA ready to assistKey contacts for more information
InvestSA
+27 861 843 384
Investsa@thedti.gov.za
http://www.investsa.gov.za/
the dti
contactus@thedti.gov.za
http://www.thedti.gov.za/
Rashmee Ragaven
Director: Advanced Manufacturing
Invest South Africa
Department of Trade and Industry
+27 (0)12 394 5929
RRagaven@thedti.gov.za
Reitumetse Mphooso
Assistant Director: Composites, Plastics, Chemicals, Medical
Invest South Africa
Department of Trade and Industry
+27 (0)12 394 5047
RMphooso@thedti.gov.za
Information sources
American Institute of Chemical Engineers, 2015; BusinessTech, 2019; BMI, various years;
Chemical and Allied Industries Association, various years; Chemical Industries Education &
Training Authority, 2017; the dti, various years; Engineering News, various years; MarketLine,
2018; Mordor Intelligence, 2019; OECD/FAO, 2016; Statista, various years; StatsSA, various
years; TimesLive, 2017; TradeMap, 2019; Who Owns Whom, various years Research partner |You can also read
