Thembela Zweni has hit the ground running as the new Chief Executive Officer (CEO) of the East London Industrial Development Zone (ELIDZ)
Situated in Buffalo City Metropolitan Municipality (BCMM), which includes East London, Bisho, and King Williams Town, the ELIDZ is one of South Africa’s pioneering industrial development zones (IDZs).
It offers a prime location for export-oriented manufacturing and processing, benefiting from its proximity to key transportation routes. The ELIDZ is a leading Eco-Industrial Park, established to promote economic growth and job creation, and offers a highly conducive environment for both local and international businesses to thrive. Spanning over 400 hectares, the ELIDZ features six fully serviced sub-Zones tailored to specific manufacturing requirements. Its commitment to sustainability and environmental conservation has earned it recognition as a leading Industrial Eco-Park by the United Nations Industrial Development Organisation (UNIDO).
The ELIDZ specialises in attracting and facilitating investment in key sectors such as automotive, agro-processing and aquaculture, ICT and BPO, pharmaceuticals, renewable energy, logistics, and general manufacturing.
The Zone provides world-class infrastructure, including advanced logistics facilities, utilities, and a supportive business ecosystem tailored to meet the needs of various industries. Businesses operating within the ELIDZ benefit from various incentives, including tax breaks, duty-free imports, and streamlined regulatory processes.
Moreover, the ELIDZ plays a pivotal role in fostering innovation and skills development in the Eastern Cape region. With a focus on sustainability and technology, the Zone is committed to driving industrial growth and enhancing the competitiveness of the local manufacturing sector.
The ELIDZ also actively collaborates with government entities, educational institutions, and industry leaders to create a dynamic environment that supports economic transformation and development. The ELIDZ currently hosts 41 operational investors and has created 5, 205 active jobs, contributing significantly to the region’s economic development. Their commitment to good governance is reflected in their achievement of nine consecutive clean audits. Additionally, they have secured R8.7 billion in private investment and R579.9 million in new private sector investment in the 2023/24 financial year.
Introducing Thembela Zweni
On 1 July 2024, Thembela Zweni was appointed as the CEO of the ELIDZ. His journey with the ELIDZ spans over 18 years, during which time he has held various executive positions, including serving as the Chief Operations Officer (COO) since 2016. Zweni has been deeply involved in attracting and facilitating investment in key sectors, diversifying the ELIDZ’s offerings to investors, and driving operational excellence.
“My focus has always been on fostering sustainable development and enhancing stakeholder engagement. These efforts have significantly improved our operational efficiencies and renewed our commitment to sustainable growth,” Zweni explains.
Prior to my engagement with the ELIDZ, he served as a corporate banker with the Corporate and Investment Banking division of Standard Bank Group and later as the CEO of the Uitenhage Dispatch Development Initiative (UDDI), a Local Economic Development Agency. Zweni holds a Master’s degree in Business Administration and an Honours degree in Economics, along with additional certificates in leadership and management. His extensive experience in the industrial development has equipped him with the skills and insights needed to leverage the ELIDZ’s strengths, attract investment, stimulate job creation, and propel economic development in the region.
“I am excited to lead the ELIDZ into a new era of growth and innovation, building on our solid foundation and forging new pathways for success,” he adds.
Zweni’s vision for the ELIDZ under his leadership involves turning it into a preeminent investment destination that is an oasis of thriving, sustainable businesses.
“My leadership style is transformational, aiming to revolutionise the ELIDZ through innovation and development. We strive to motivate and inspire our employees to continually raise their standards and achieve what they once thought impossible, breaking new ground in the process,” Zweni avers.
“Our goal is to create an environment where everyone is empowered to reach their full potential.”
In terms of his immediate priorities, Zweni has already managed to stabilise the leadership of the organisation to ensure alignment with the ELIDZ’s vision. This has positively impacted everyone in the organisation. The aim is also to raise the profile of the ELIDZ through strategic engagement with key stakeholders and role players, while he feels there is a need to increase visibility in the target market by participating in strategic outbound and inbound missions. Furthermore, Zweni wants to continue breaking new ground in innovation through the Science and Technology Park (STP). “The ELIDZ stands out as the only SEZ in South Africa to feature a STP,” Zweni explains. “It also supports industrial research and development, technology incubation, knowledge transfer, and the growth of emerging technology industries.”
Value proposition
The ELIDZ is strategically located close to key transportation hubs, including the Port of East London (9km), East London Airport (2km), and the N2 highway. This proximity to essential infrastructure facilitates efficient transportation and logistics, ensuring timely delivery of products to global markets and enhancing the competitiveness of businesses within the Zone.
The ELIDZ is at the forefront of technological innovation, developing robust ICT infrastructure that includes high-speed internet, a state-of-the-art data centre, and support for emerging technologies.
This makes the Zone an attractive destination for tech companies and digital enterprises, fostering a culture of innovation and growth. A range of incentives is also offered by the ELIDZ to attract investors. One of the key benefits is the preferential 15% corporate tax rate. To qualify, companies must derive at least 90% of their income from activities within the SEZ and avoid specific restricted industries. Investors can also access various grants and incentives, including income tax allowances, VAT exemptions, and customs duty rebates, while employers can claim the Employment Tax Incentive (ETI) for hiring low-salaried employees, without the usual age restrictions.
The 12i Tax Incentive further supports both new industrial projects and expansions of existing ones, offering aid for capital investment and training.
These incentives significantly enhance the profitability and competitiveness of businesses operating within the ELIDZ.
Challenges and opportunities
One of the primary challenges Zweni foresees is the decrease in both domestic and Foreign Direct Investment due to global economic pressures that deter corporate investments. To overcome this, the plan is to increase visibility within target markets, conduct thorough research, and package projects with compelling value propositions. Additionally, the ELIDZ will adopt a solutions-oriented approach that appeals to their target markets.
In terms of opportunities, the Africa Continental Free Trade Area (AfCFTA) presents a significant opportunity for companies to establish businesses at the ELIDZ, serving as a gateway to this vast market. “We are conducting studies to better understand the products in this market, enabling us to advise targeted corporates accordingly,” Zweni explains.
“Our manufacturing incubation programme through STP will help the ELIDZ develop and sustain both domestic and global value chains, further upgrading our sectors to become more competitive and attractive for investment.
“Additionally, we aim to leverage our first-mover advantages as one of the leading Special Economic Zones (SEZs) in South Africa.
“The adoption of an Eco-Industrial concept approach, which encourages sustainable development, has also enhanced the attractiveness of the Zone as an investment destination.”
Sustainability and innovation
With an emphasis on sustainability and innovation, the ELIDZ is committed to minimising its environmental footprint through green technologies and sustainable practices. This includes promoting energy efficiency, waste reduction, and water conservation within its facilities. The ELIDZ also supports the development and adoption of renewable energy sources, such as solar and wind power, to reduce reliance on non-renewable energy. Innovation is at the core of the ELIDZ’s strategy, with a focus on creating an ecosystem that fosters technological advancement and competitiveness.
The zone actively encourages research and development (R&D) initiatives, particularly in sectors like advanced manufacturing, ICT, and green technologies. Collaborating with academic institutions, industry partners, and government bodies, the ELIDZ drives innovation and ensures its infrastructure and services align with global best practices.
“Renowned for its commitment to green energy initiatives, the ELIDZ is recognised globally for fostering a sustainable future. Recently, it was awarded the title of the leading Eco-Park in the world by the Global Africa Eco-Parks under the UNIDO. This accolade highlights the ELIDZ’s role as a beacon for Eco-Industrial Parks in South Africa and underscores its dedication to environmental stewardship and sustainable development,” Zweni avers.
In addition, digital transformation will enable the ELIDZ to harness the benefits of artificial intelligence (AI), helping the organisation retain critical business knowledge and enhance productivity and operational excellence. It will also ensure that their products and services are tailored to meet the needs and demands of clients and stakeholders.
Investment and growth
Given the slow recovery of investment in sectors where Foreign Direct Investment (FDI) plays a crucial role, the demand-side stimulus effect of greenfield investments remains dampened, impacting productive capacity growth. To attract new investments to the ELIDZ, Zweni and his team have adopted a multifaceted approach, starting with a comprehensive review of their investment promotion strategy to streamline efforts.
He explains: “Our streamlined processes make it easy for investors to establish their projects, emphasising the ease and cost-effectiveness of doing business here, which directly impacts their bottom line and long-term sustainability.
“Equally important is supporting and retaining our existing investors and tenants through tailored support programmes, regular feedback mechanisms, and continuous improvement initiatives.”
Investor uncertainty and risk aversion continue to exert significant downward pressure on global FDI flows to South Africa, particularly affecting the Eastern Cape. These external factors will likely subdue pipeline growth in both quantity and quality, delay the operationalisation of current pipeline investors, and impact on the ability of the ELIDZ to diversify tenant portfolio risk.
“To address these challenges, the ELIDZ will continue to engage with funders to assist investors in reaching financial close,” Zweni adds.
“We will also develop attractive investment opportunity profiles, including de-risking projects through various in-house incentives.”
The ELIDZ also supports the growth of small and medium-sized enterprises (SMEs) by providing access to cutting-edge facilities, technical expertise, and training programmes. This approach not only enhances the region’s economic resilience, but also ensures that sustainability and innovation are integral to the long-term success of the Zone and its investors.
Risk management and adaptability
The ELIDZ manages risks and uncertainties through a structured approach, ensuring the organisation is prepared for various challenges. This includes scenario planning to anticipate market and environmental changes, allowing the ELIDZ to adapt its strategies as needed. By diversifying investments across sectors, the ELIDZ reduces the risk of over-reliance on any single industry, such as the automotive sector, which constitutes 52% of its investor portfolio.
“The organisation maintains strong relationships with stakeholders, including government bodies and industry partners, to stay informed and address risks collaboratively,” Zweni says.
“Additionally, the ELIDZ invests in infrastructure upgrades to enhance resilience, particularly against climate-related risks, and follows a formal risk management framework to regularly assess and mitigate potential risks.”
The ELIDZ employs a proactive strategy to remain competitive and attract investment. This includes regularly modernising their industrial infrastructure to enhance climate resilience and building strong partnerships with local and international businesses, ensuring alignment with international best practices.
In conclusion, Zweni states: “We focus on high-potential, export-oriented sectors with long-term sustainable growth prospects.
“In addition, we work closely with government agencies to ensure that policies and incentives are optimised for attracting and retaining investors.”
