The Coega Development Corporation, through its Capital Raising and Sustainability Business Units, together with the Council for Scientific and Industrial Research (CSIR), are undertaking preparatory work towards the establishment of a Biofibre Hub, or Cluster, in the Coega Special Economic Zone (SEZ).
Coega’s partnership with the CSIR offers SEZ investors the best of South Africa’s innovation capability, including the R&D outputs of the National Innovation Clusters and the R&D produced in the country’s leading research universities through the CSIR network. This is critical for the development of new economic sectors.
“The CSIR views this partnership as a necessary doorway to industrialisation. It supports the realisation of the many years of CSIR investment in the natural fibre and composite materials and will further enable rapid commercialisation of other technologies across the CSIR,” Dr Rachel Chikwamba, CSIR’s Group Executive for Advanced Chemistry and Life Sciences.
The co-location of advanced and viable R&D capability within an SEZ is imperative to attract foreign direct investment in knowledge intensive and advanced industrial sectors, as Meike Wetsch, Unit Head of Coega’s Capital and Funding Office puts it: “This is standard practice globally. The availability of advanced R&D capability was key in the industrialisation of global technology leaders including South Korea, China, Europe, and the USA.”
Wetsch adds that an industrial demonstration plant and R&D facility are already operational following the relocation of biofibre processing equipment to the Coega SEZ from the CSIR.
With a total capital deployment exceeding R1 billion over three phases, the Project will include a full-scale industrial manufacturing plant and incubation facilities. These will help emerging industrialists overcome critical barriers to market access.
“Having run numerous enterprise development initiatives within biomanufacturing, nano and advanced materials, as well as agroprocessing, the location of the Biofibre Hub is a strategic move that gives the CSIR global reach, while also making it accessible to emerging industrialists,” states Dr Chikwamba.
The addition of a shared manufacturing facility later in the project, will remove the barriers to entry faced by emerging manufacturers.
“Typically, an emerging manufacturer, when seeking offtake from an original equipment manufacturer (OEM), will have to produce a trial run of the component to export standard in a fully accredited manufacturing facility. This trial run is then subjected to acceptance testing at the OEM, and if found suitable, an offtake contract will follow. With very few shared manufacturing facilities in place, this requirement places emerging industrialists in an impossible situation. Nobody is going to fund a production plant at several hundreds of millions with no offtake in place, and no one will sign an offtake agreement without proof that the supplier has manufacturing capability in place,” explained Wetsch.
The plan is to start with an existing small scale industrial plant, and through capital fund-raising, add a large-scale manufacturing plant. “With the large-scale plant, combined with advanced product development and industrial testing facilities in place, the Biofibre Cluster will help emerging industrialists overcome this problem by providing them withproduction facilities while they are building their market access,” continues Wetsch.
“The Biofibre Cluster will develop, and manufacture composites derived from natural sources. The opportunity is then created to add significant value to South African exports and increased export earnings. These commodities are currently exported in their raw or primary form, as inputs to industrial processes elsewhere in the world – we need to bring those manufacturing jobs here.”
The Project is estimated to add sustainable, non-seasonal agricultural jobs in the Eastern Cape, with significant increases in export earnings once the beneficiation of raw agricultural projects starts taking effect.
The Project will create 6,000 additional jobs in the province, with that number reaching 20,000 by the time the full value chain is developed,” says Chauke.
