Agriculture, Economic Development and Tourism

(1) Whether the Skills Centre will be closing; if so, (a) what are the relevant details and

CHIETA funded the setup cost of the skills centre and the agreement was for Freeport Saldanha to fund operational costs of the skills centre. Freeport Saldanha is undergoing an operational realignment to enhance efficiency and financial sustainability. As part of this process, non-core activities, including the Skills Centre, are being restructured. Rather than closing, the Skills Centre will transition to a partner-led model with key stakeholders such as the Saldanha Municipality, CHIETA, NBI, YES and DEDaT to ensure continuity and minimize disruptions. A structured transition plan is expected to be finalized by June 2025.

(b) what are the reasons for its closure.

Freeport Saldanha does not have the funds to give operational effect to the skills centre. If a suitable entity is not found to take over the operational costs the centre, the centre may indeed close. (Freeport to confirm) Rather than closing, the Skills Centre will transition to a partner-led model with key stakeholders such as the Saldanha Municipality, CHIETA, NBI, YES and DEDaT to ensure continuity and minimize disruptions. A structured transition plan is expected to be finalized by June 2025.

(2) What alternative measures does the entity have in place to fulfil its skills development commitments under the Growth for Jobs (G4J) Strategy.

The Department has committed to engage with external suitable stakeholders that will be willing to take over the operational costs of the skills centre.  (Freeport to input further)

To uphold its skills development commitments, Freeport Saldanha is working with strategic partners to sustain and enhance workforce development initiatives. This collaboration will ensure that skills training continues in alignment with regional economic growth objectives and the G4J Strategy.

(3) During the visit to the Atlantis Special Economic Zone (SEZ), it was noted that a company operating in the zone is not compliant with broad-based black economic empowerment (BBBEE) requirements, how is it possible for a certain non-BBBEE-compliant company, whose name has been furnished to his Department for the purpose of his reply, to operate in the SEZ;

Although the SEZ Act does not require that companies be BBBEE compliant to locate in an SEZ, these conditions are applied when considering access to the associated incentives. The company in question has no access to these incentives.

When the Atlantis SEZ was designated as a SEZ for Green Technologies the option was provided for existing industries in Atlantis to submit their credentials as a green technology company. Those that met the criteria, as applied by the DTIC, were gazetted as part of the Atlantis SEZ, even though they were located on privately owned land (often referred to as the legacy investors). The Atlantis SEZ Company thus has no direct control or influence over these companies even though they are in the SEZ. However, should these companies wish to access any of the SEZ incentives, they would require endorsement of the Atlantis SEZ Company. Through that process the ASEZ Co would be able to negotiate “control” over certain aspects of the company reporting.

Since establishment of the ASEZ Company, any new investment into the zone undergoes rigorous due diligence processes with several aspects being considered such as the enterprise activities, business sustainability, Greentech aspects with a key element being the potential investor’s social investment and job creation commitments.

At this stage, neither the company in question, nor any others of the legacy investors have accessed any of the SEZ incentives.

It should also be noted that the Atlantis SEZ management were, until recently, under the impression from SARS that the SEZ corporate tax incentive was available to companies locating in the SEZ. Subsequent correspondence and communication from National Treasury (in the last two weeks) have made it clear this is (possibly) not the case. From engagements between the Atlantis SEZ and other SEZs, it has emerged that the SEZ tax incentives are not currently available to any of the SEZs in the country. Only the original IDZ’s and one new SEZ have been designated for the Tax Incentives, namely:

• Coega Special Economic Zone
• Dube Tradeport Special Economic Zone
• East London Special Economic Zone
• Maluti-a-Phofung Special Economic Zone
• Richards Bay Special Economic Zone
• Saldanha Bay Special Economic Zone

4 (a) what investment is this company bringing to the province’s economy, (b) what is the (i) value and (ii) nature of this investment,

The company has historically invested more than R60 million of its own money into plant and equipment. The company is purely an export focused company and 90% (approx.) of total turnover comes from exports. It is a major contributor to the local economy. Total turnover varies currently between R150m – R300m, and it forecasts exponential growth from 2026 onwards.

4. (c) what local economic contributions is this company making to the Atlantis community

The company is highly innovative, especially in the space of water technology and solutions. It provides innovative solutions to environmental challenges in water industry. For example, they offer solutions to improve water treatment in hypersaline situations with modular and energy efficient solutions. They also manage energy load requirements with Thermal energy management. Their R&D (at own cost) has seen new business areas emerging. Considerable new export growth is expected, and the ASEZ Co will be working with the company to support this.

4 (d) what benefits is the company receiving from operating in the Atlantis SEZ?

With the support of the Atlantis SEZ, the company has contributed to the certification of two local welders in Atlantis to achieve their Red Seal certificate. The ASEZ Co will continue to work with the company to support skilling and staff development and to grow its business.