Page 36 - IDC

8 CITY PRESS, 26 FEBRUARY, 2017

business LIMPOPO IN

NUMBERS

R6.6bn

impopo grows more tomatoes than any other place in the southern
hemisphere – that includes South America where tomatoes originate. THE AMOUNT OF FUNDING
The province grows two thirds of the tomatoes in South Africa as well
as three quarters of the country’s mangoes and 60% of the avocados. APPROVED BY THE IDC IN
It also has a number of game reserves all ripe for development and a LIMPOPO IN THE 2015/16
Lwealth of mineral riches to be unearthed. FINANCIAL YEAR
Paradoxically, a shopper in Polokwane is more than
likely paying more for that fruit than a shopper in
Gauteng, says Limpopo regional manager of the
Industrial Development Corporation (IDC)
Kgampi Bapela. A R205m
This is because some of these agricultural
products move from Limpopo – where they PROJECT IN
are grown – to Gauteng, where the products THE FUNDING APPROVED
are packaged and brought back to Limpopo PARTNERSHIP FOR FEMALE-EMPOWERED
through grocery chain stores. BUSINESSES IN THE 2015/16
“It means Polokwane residents, for WITH THE
example, are buying their fruit and FINANCIAL YEAR
vegetables less fresh because though they
come from their own back yard, the produce IDC
travels all the way to Johannesburg or
Tshwane and back,” says Bapela. 7.5%
The IDC’s solution is to foster beneficial
platforms in Limpopo, which enjoys significant IS THE PERCENTAGE OF THE
business opportunities for entrepreneurs with an interest
in mining, agriculture and tourism, among others. TOTAL ECONOMIC ACTIVITY
He explains that despite so many tomatoes being grown in the province “up to 30% THAT LIMPOPO ACCOUNTS
of those tomatoes are thrown away every year because of grading issues”.
This is despite the demand in Europe for dehydrated products. This is where the IDC FOR IN THE COUNTRY
comes in – it identifies potential market gaps and, where entrepreneurs present good
business plans, it can help fund and nurture those businesses.
Similar opportunities are available in the frozen vegetables space and though a few 87.3%
multinationals are playing in that space, they also only cater for domestic or household
markets. Here there’s a chance for exporting a locally manufactured product.
Bapela says the corporation primarily targets entrepreneurs who are already THE PERCENTAGE OF
manufacturing to check if there is capacity for them to expand or diversify and add
other products. HOUSEHOLDS WHICH HAVE
A good example is a woman who preserves beetroot in jars and who is already FARM FRESH Limpopo is the largest producer of tomatoes in the southern hemisphere PHOTO: LEON SADIKI ACCESS TO ELECTRICITY
supplying to one of the grocery chain stores. Before, she was operating from a small
space that did not meet safety standards and requirements. Now, thanks to support
from the IDC, she has expanded her business to better premises and can expand her
small manufacturing business. How to 20%
“These are the people who we can assist and take to the next level. We make them
aware of some of the legislative requirements as well as offering financial and non-
financial support in other areas,” he says. IS THE ANNUAL
The IDC interacts with would-be entrepreneurs and small business owners from all PERCENTAGE OF GOODS AND
spheres of life, says Bapela, but it is those who have a clear idea of their market and SERVICES COMPANIES
how they are going to get their product to that market that are most likely to be
successful. OPERATING IN LIMPOPO
“For example, a guy who is an engineer in the mines and who has been doing that HAVE AGREED TO SOURCE
job and managing a section for some years, we find that those are the guys who have grow FROM LOCAL BUSINESSES
what it takes. So, there is this opportunity for them to jump to the other side and be
the supplier or provider of services to the same industry that they are working in.”
On the mining front, Limpopo is on a growth trajectory. It has just under 70
operating mines, mainly in the Sekhukhune area and Waterberg region. Close to 90 R38.8bn
are in the pipeline, depending on whether there is water availability, which is usually
an impediment for the development of new mines, he says.
“That is also one of the reasons for the massive housing developments in rural IS THE VALUE OF THE
Limpopo. It means more people are getting employed and more money is being Limpopo SOUTH AFRICAN ENERGY
pumped into the villages, and that is where the growth is taking place.”
The mining developments are mainly in the platinum space. However, coal mining METALLURGICAL BASE
opportunities exist in the Waterberg area, from Thabazimbi all the way to the PROJECT, WHICH WILL
Vhembe district around the Makhado area. BE HOSTED BY THE
“Coal has been around Mpumalanga for many years, but we have always known
that there were big reserves in Limpopo,” says Bapela, adding that this explains why MUSINA SPECIAL
Eskom has one of its biggest new power stations, Medupi, in Limpopo. ECONOMIC ZONE
The development of the new power station also led to the development of new The province offers many opportunities for
junior mines coming in and taking advantage of supplying Eskom.
“Anglo Platinum has offloaded some of its assets in North West and chosen to
expand in Limpopo. The quality of the reserves is significantly better and the cost of entrepreneurs with great ideas, the IDC’s R923m
extracting is less in Limpopo, because in North West they have to dig deeper.
“With the expansion of mines, you start seeing the development of new residential Kgampi Bapela tells Setumo Stone
estates, shopping malls and with all that there is demand for private hospitals, schools IS THE PORTION OF THE
and so forth.” R2.9BN ALLOCATED BY
He says one of the reasons behind the plan to have a special economic zone (SEZ)
in Tubatse was to leverage the benefits of having up to 40 mines in the area. The THE IDC NATIONALLY IN
idea is to locate all mining-related activities in one area to improve efficiency in THE PAST FINANCIAL YEAR
trade. The SEZs bring in the private sector to be part owner of that development. TO BLACK INDUSTRIALISTS
The second SEZ in Limpopo is the Musina SEZ, which will host the R38.8 billion South
African Energy Metallurgical Base Project. This project can transform the economy in
Limpopo. Built off a mineral resource base, it will develop businesses around it that
process the riches that come out of the ground. 6 391
Bapela says the Limpopo provincial government and the local mining houses have
given an undertaking that up to 20% of their spend would be in the province. This
means increasing localisation and ensuring that where possible the companies operating IS THE NUMBER OF JOBS IN
there buy from Limpopo businesses. THE 2015/16 FINANCIAL
“We are looking at opportunities for import replacement. You will find that mines are
consuming certain commodities and it is common to import these from overseas. We YEAR THAT WERE CREATED
are looking into those opportunities to see how best we could set up small AND SAVED (LARGEST
manufacturing.” AMONG THE PROVINCES)
Limpopo also has a lot of potential for growth in the tourism sector. Up to 80% of the
Kruger National Park is situated in Limpopo, but the first province that comes to mind
when people think of the park is Mpumalanga. The province has not done enough to
market Limpopo as a tourism destination, he says. ROOM TO GROW The brand-new, 160-room Radisson Park Inn hotel in Polokwane, Limpopo 67%
The province has 53 state-owned game reserves covering just over 200 000 hectares
and that this has the potential to create many opportunities. A small game reserve such
as Madikwe in North West, he says, has been successfully commercialised. Nambiti in The ‘Best’ hotel in Polokwane IS THE PERCENTAGE OF
KwaZulu-Natal covers only 20 000 hectares, but is equally successful. THE TOMATOES GROWN IN
“We have been active in the tourism space. In the current financial year, we are SOUTH AFRICA THAT ARE
dealing with several hotel transactions.” Limpopo The new Park Inn by Radisson that opened last week on some of the most beautiful properties in the world are
One of them is a Radisson that will open in Polokwane soon. “It is the IDC Silicon Street in Polokwane, Limpopo, has been dubbed hotels. That developed into a hobby and I started GROWN IN LIMPOPO
first luxury hotel in Polokwane with 160 rooms and it is 100% black- regional “the first real hotel in Polokwane”. collecting photos of hotels.”
owned,” he says. There are also hotels are in Thohoyandou, manager “It is indeed the first real hotel in Polokwane,” says His first hospitality project was a 20-room bed-and-
Magoebaskloof and Bela-Bela. Kgampi owner Mofasi Lekota (59), adding that he has always breakfast lodge in Midrand, followed by a 50-room lodge
Bapela says the IDC takes advantage of government initiatives such as Bapela been fascinated by property, “especially beautiful in Makhado in Limpopo and an 80-room hotel in 53
the department of trade and industry’s black industrialist programme, PHOTO: properties that enhance the landscape”. Mbombela in Mpumalanga.
which funds up to 50% of the value of a project limited to R60 million. SUPPLIED “Hotel development gives me that inner sense of “I started small and learnt the ropes before embarking
“We managed to get 100 applications recently. Obviously, not all of them satisfaction when I see the dramatic transformation of on a project the size of the Park Inn by Radisson in IS THE NUMBER OF
will make it through, but some are promising,” he says. plain veld into a beautiful architectural structure that, Polokwane,” says Lekota, also an avid admirer of STATE-OWNED NATURE
“I always say I see Limpopo as what Gauteng was maybe 80 when complete, will give jobs to so many of our people, business magnate Sol Kerzner. CONSERVANCIES WITHIN
years ago. The resources are here and there is no other province safe comfort for many of our guests and hope for so The Park Inn has 160 guestrooms and event space for
that has the level of mining developments like Limpopo,” many of our people who are fast losing hope. 120 people. Other features include free wireless internet, THE GOLDEN HORSESHOE
Bapela says. “My imagination of a world without all these beautiful a restaurant, a lobby bar that leads to an outdoor
“With more people with buying power residing in the buildings is really depressing,” says Lekota, a Polokwane- terrace, an outdoor swimming pool, ample parking and
province, things will start to fall into place.” born businessman, who turned his dream to own such a three meeting rooms as well as a boardroom.
His wish is that every business application that comes big hotel into reality through a partnership with the As part of our growth strategy, he says, “we will be 5.8m
through the door will make it. Industrial Development Corporation (IDC) and the looking at expanding into other geographic areas both in
He says the IDC is sector-focused and therefore there are National Empowerment Fund. South Africa and internationally”. THE POPULATION OF
businesses where it can not get involved, such as retail and “The IDC in particular was helpful and showed “We have a 10-year plan to grow our business to at
property. flexibility in working with us to come up with a capital least 1 000 rooms in and out of South Africa. Park Inn LIMPOPO, MAKING IT THE
All the IDC’s regional offices offer support to help structure that made commercial sense,” he says, adding by Radisson Polokwane represents 160 of those targeted FIFTH-LARGEST PROVINCE
businesses become more funding ready, so that when they that both institutions “are agents of change because they 1 000 rooms.” IN THE COUNTRY
formally approach the corporation for financial backing they make it possible for black people to enter into businesses He says the vision is that “a third of those rooms
have bankable business plans. that we have been excluded from in the past”. should ideally be earning their revenues from currencies
“What makes me want to wake up and come to the office A football fanatic in his youth, Lekota had earned other than the rand”.
every day is knowing that we are making a difference. When I himself the nickname “Best” – after the former English “This is not going to be an easy road. Like in any R53m
drive around the province and see smoke out of a chimney soccer star George Best. However, his passion to become business, we anticipate obstacles along the way. Finding
somewhere where the IDC has funded, it makes me proud to say a famous striker was soon replaced by a newfound love suitable locations that meet our investment criteria is
that this organisation is bring about real change. And I want to see that for beautiful buildings that he spotted during his travels. normally the first hurdle. THE FUNDING APPROVED
happening throughout the province.” However, says Lekota, the nickname has “outlived its “Then, finding a feasible capital structure is the next FOR YOUTH-EMPOWERED
True to his vision and passion, in the past financial year, Limpopo attachment to my soccer prowess and for many years I and normally most difficult to overcome.
accounted for 40% or R6.7 billion of the R15 billion of the IDC’s total used it as my mantra that in whatever I do, I must do “Once those two requirements are met, it becomes BUSINESSES IN THE 2015/16
approvals. my best or not do it at all”. easier to find an appropriate brand, which in the case of FINANCIAL YEAR
) This series is reported by City Press and supported by the IDC “My interest in hotels started more than 25 years ago Polokwane is one of the Radisson brands,” says Lekota. –
when in my local and international travels I noticed that Setumo Stone