Business & Investment

Limpopo’s Economic Overview

Limpopo contributes 6.7% to the national economy. Mining, general government services and finance, finance and real estate, and retail and wholesale are the dominant economic sectors in Limpopo, accounting for approximately 66.8% of the provinces gross domestic product (GDP).

The structure of the economy has changed little over the last decade, although the mining sector has become more prominent.

Limpopo is home to some 10.2% of South Africa’s population, according to 2006 estimates.

International Trade

Limpopo has experienced relatively strong growth in international trade in recent years, with exports climbing from R3.9 billion during 2001 to approximately R15.55 billion in 2007.

The European Union – and specifically the UK, Netherlands, Germany and France – remains Limpopo’s most important trading partner.

Trade with North America, and particularly the US, remains strong.

Key markets in Asia continue to be Japan, China, Taiwan, and Indonesia.

Limpopo’s largest trading partners in Africa are Zimbabwe, Mozambique, Zambia and Tanzania.

Trade with Latin America is relatively small. In the Middle East, Israel and Turkey are Limpopo’s key markets.

Limpopo’s main exports emanate from the primary mining and agriculture industries, some manufactured products, and arts and crafts.

Fixed Capital Investment

According to the TIL Investment Tracking System, Limpopo attracted R30.98 billion of fixed capital investments in 2007. Most of the investments were in the form of expansions and new investments particularly by the mining companies. The mining sector has contributed 57% in 2007/08 compared to 25% in 2006/07. Limpopo government contribution to the Fixed Capital Formation amounted to R3.72 billion of which roads and transport contributed 44%.

The Sekhukhune area attracted the most investments, whereas the Mopani area is starting to show signs of improvement (from 1% in 2006 to 4% in 2007). This phenomenon, however, signifies the declining economic activity in the Mopani area as compared to the era of 2004. This area has been affected by land claims and water shortages as well as other negative attributes.

Investing in Limpopo

Major international mining operations contribute to 28% (2007) of Limpopo's economy, making mining the primary driver of economic activity after government services. Substantial mineral reserves include platinum group metals, diamonds, coal, chrome, iron ore and copper.

Electricity generation, such as the Matimba power station in Lephalale, is another major economic activity. Within the same are there is the potential of having the first Coal Liquification plant by Sasol.

Limpopo is also one of South Africa's richest agricultural areas. Abundant orchards of subtropical fruit and nuts form the basis of a thriving agri-industrial sector. Extensive tea and coffee estates are found in the Lowveld. Other notable cash crops include vegetables, cotton and tobacco.

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Trade and Investment Limpopo

Trade and Investment Limpopo is the official trade and investment promotion and facilitation agency of the Limpopo provincial government.

It is the leading business development network for local companies seeking international expansion or new markets in Africa, while to the overseas investor the organisation offers an effective platform and springboard to enter Limpopo, South Africa and the rest of Africa.

• Trade and Investment Limpopo(http://www.til.co.za)

Manufacturing

With its wealth of mineral and agricultural resources, sophisticated infrastructure and proximity to growing consumer markets in Southern Africa, Limpopo offers a number of excellent manufacturing opportunities.

These include tanning, fruit, vegetable and meat processing, brick, jewellery and furniture making, and industrial chemicals and light to medium engineering.

Companies already successfully established in Limpopo include Invensil(silicon smelting), Eskom (electricity generation), Granor Passi (fruit juices), Bonanza (furniture making), Kanhym (meat processing) etc.

Mining

South Africa is a land blessed with a staggering array of mineral resources, this variety reflecting its long and diverse geological history that goes back 3,7 billion years. Limpopo is well endowed with a wide variety of minerals, some of the more important of which are mentioned below. The Minerals Bureau has records of just over 70 operating mines in the province, 50 of which are small to medium scale mines. The larger mining operations in the province include the Venetia diamond mine, the Grootegeluk and Tshikondeni collieries, the Amandelbult, Northam, Potgietersrust, Messina, Lebowa, Marula and Modikwa platinum mines and the copper and phosphate operations at Phalaborwa. Between them, these deposits accounted for some 80% of the provinces mineral revenue

Mining Associations and Relevant Organisations

Nationally:

• Chamber of Mines of South Africa
• Geological Society of South Africa
• Mining Qualifications Authority
• Department of Minerals and Energy
• Department of Trade and Industry

Provincially:

• Trade and Investment Limpopo
• Limpopo Economic Development Enterprise
• Limpopo Business Support Agency
• Department of Local Economic Development and Tourism

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Agriculture

Limpopo is also one of South Africa's richest agricultural areas. Abundant orchards of subtropical fruit and nuts form the basis of a thriving agri-industrial sector. Extensive tea and coffee estates are found in the Lowveld. Other notable cash crops include vegetables, cotton and tobacco.

Agriculture has also stimulated the ancillary development of a growing range of processed products, such as fruit juice and concentrates.

Considerable investment opportunity exists in the areas of processing and packaging of fruits & vegetables as well as opportunities export for beef, pork, chicken eggs, fruit and vegetables. There is also potential for additional production of sunflowers, soya beans and maize under dry-land conditions. Soya beans represent a particularly profitable investment opportunity with substantial quantities currently being imported.

Pre-feasibility studies indicate that peach and almond production is viable, and investigations into the viability of cassava and bamboo production have also been conducted. The Limpopo Provincial Government is facilitating development of new types of farming and further value-added processing of products as diverse as dried tomato, potato mash and canning, essential oils, catfish and goats.

Major investors in Agriculture

• ZZ2 Tomatoes producers
• Sapikoe tea plantationTea manufacturer
• Tshivhase AgriDam (PTY) LtdIs a black owned company that produces banana for local fresh produce markets and other local buyers
• Winkale Trading 9 (PTY) Ltd The producer of dried mangoes for export
• A.M Alberts (Pty) Ltd trading as Progress Milling A milling company

International players

• Willards (crips)
• Mc Cain (frozen fresh fries)
• Giant foods (canning)
• Golden harvest (mixed vegetables)
• Miami Canners

Agricultural association

• NAFU ( National farmers union of South Africa)
• SAMAC ( The South African Macadamia growers)
• CGA ( Citrus growers Association)
• Phadima Agricultural association
• National agricultural marketing council

Provincial stakeholders

• TIL (http://www.til.co.za)
• LIMDEV (http://www.limdev.co.za/)
• LIBSA (http://www.libsa.co.za/)
• Limpopo Department of Agriculture (http://www.lda.gov.za/)

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Tourism

Limpopo is the most northerly situated of the nine provinces in South Africa. It is named after the Limpopo River that flows along its northern border and is associated with a wealth of historical and cultural treasures. It has many geological sites, some of which are caves containing some ancient rock arts. The eastern parts of the province include the Kruger National Park, which is the largest game reserve in South Africa. The Tropic of Capricorn runs through this province just North of Polokwane. Polokwane is the Capital City of Limpopo.

The province covers 123 280 square kilometers, and has a population of 5.5 million people. The majority of the people are living in rural areas. One of the Limpopo’s main assets is the wilderness areas. Its wilderness atmosphere and rich habitat diversity provide potential opportunities for eco-tourism development. Limpopo is in certain quarters associated with legends, myths and ancient civilization. Tourists in search of history can find many places of archeological significance that date back millions of years.

KEY CONTACTS

• Trade and Investment Limpopo (http://www.til.co.za/)
• Limpopo Tourism and Parks (http://www.golimpopo.co.za/)
• South African Tourism (http://www.southafrica.net/)
• South African Tourism Services Association (http://www.satsa.com)
• South African National Parks (http://www.sanparks.org/)
• Department of Environmental Affairs and Tourism (http://www.environment.gov.za/)

(Source: SouthAfrica.info reporter)

WEBSITE: www.gov.za