Exploring investment opportunities in industrial zones: Incentivising manufacturing and boosting exports

Gauteng, South Africa’s economic powerhouse, is at the forefront of industrialisation. Special Economic Zones (SEZs) play a crucial role in promoting investment, increasing exports and driving beneficiation in key sectors such as mining and manufacturing. SEZs serve as catalysts for economic development by offering incentives that attract both domestic and foreign investment, foster innovation, and create employment opportunities.

Strategic SEZs Driving Growth in Gauteng

Gauteng’s strategy includes the establishment of SEZs across its five economic corridors, utilising regional strengths to encourage sectoral growth. These SEZs play a crucial role in promoting mining beneficiation, enhancing the value of raw materials and increasing the province’s export capabilities.

OR Tambo Special Economic Zone

One of Gauteng’s most significant SEZs, OR Tambo Special Economic Zone (ORTSEZ), is around OR Tambo International Airport. This SEZ supports export-orientated, value-added industries such as mineral beneficiation, aerospace and pharmaceuticals. The presence of a Jewellery Manufacturing Precinct within the SEZ is a prime example of how mining beneficiation can be advanced.

By refining and processing precious metals locally, ORTSEZ fosters industrialisation, job creation and increased global competitiveness for South African-produced jewellery and metal components. With easy access to international markets via air freight, companies operating in this SEZ benefit from reduced export costs and improved global reach.

West Rand SEZ

With traditional mining activities declining in the West Rand, introducing a multi-sector SEZ aims to diversify the regional economy while leveraging its rich mining history. The SEZ will focus on eco-industrial clusters, agro-processing, renewable energy and mining beneficiation.

Investment opportunities in this SEZ include:

• Solar farms and green hydrogen projects to support the transition to cleaner energy.
• Mining-related beneficiation facilities to refine and process raw minerals into higher-value products.
• Bus manufacturing and industrial infrastructure to support broader economic activities in the region.

Vaal SEZ

The Vaal SEZ is a multi-sector development initiative to revitalise the historically industrialised region. With a strong focus on mining and energy beneficiation, the SEZ seeks to attract investments in sectors such as:

• Hydrogen energy and renewable energy component manufacturing.
• Battery energy storage systems and new energy vehicles.
• Advanced logistics and defense-related manufacturing.
• Agro-processing, including medical cannabis.

The Vaal SEZ builds on the region’s legacy as an industrial hub, ensuring continued economic contribution while adapting to emerging global trends.

Lanseria High-Tech SEZ

The Lanseria development corridor, including the proposed Lanseria Smart City, is a high-impact urban development that integrates high-tech industries, advanced manufacturing and logistics. A dedicated SEZ within this corridor will drive industrial agglomeration, boosting economic activity around Lanseria Airport. Potential investment areas include:

• Aviation technology and avionics manufacturing.
• IT and high-tech innovation hubs.
• Mixed-use urban and industrial development supporting Gauteng’s smart city vision.

Investment Incentives for SEZs

The South African government has introduced a range of incentives to attract investors to SEZs, including:

• Infrastructure funding: Access to the Department of Trade, Industry and Competition’s SEZ Fund for bulk and top-structure infrastructure.
• Tax benefits: Reduced corporate tax rates of 15% (compared to the standard 28%) and potential tax reductions for projects over R200-million.
• Duty-free imports: Exemption on raw materials and equipment used within the SEZ.
• Employment tax incentives: Reduced tax burdens for employers in SEZs.
• Accelerated depreciation allowances: Investors can depreciate capital structures at 10% yearly over ten years.

Gauteng’s SEZs are pivotal in driving mining beneficiation, industrial diversification and economic resilience. SEZs provide a compelling investment proposition by leveraging the province’s strategic location, established infrastructure and government incentives. As global markets evolve, Gauteng’s SEZs offer a sustainable pathway for increased manufacturing, value-added exports and economic growth, ensuring South Africa remains competitive in the global economy.

Insights supplied by investSA Gauteng One-Stop-Shop, an initiative within the Gauteng Growth and Development Agency (GGDA); the implementation arm of the Gauteng Department of Economic Development, tasked with leading, facilitating and managing sustainable job creation and inclusive economic growth and development in the Gauteng City region.