Businesses pledge close to R110bn at Cyril’s third investment conference

The first day of this year’s SA Investment Conference may have been hit by webcast hitches on Tuesday, but the event concluded on a surprisingly positive note on Wednesday with businesses pledging new investments totalling R109.6 billion.

More than 50 investments were announced in both greenfields and expansion projects across the country, taking investment commitments made over the past three years at the conference to R773 billion.

A notably buoyed President Cyril Ramaphosa said in his closing address at the Sandton Convention Centre that despite the impact of Covid-19, South Africa is “firmly on track to achieve its target of securing R1.2 trillion in investment over five years”.

Read: ‘SA’s private sector is not on an investment strike’

Ramaphosa set the ambitious target of securing $100 billion in new investment back in 2018 when he became head of state and the rand was trading at around R12 to the US dollar.

“We have secured new investment pledges from some 50 companies to the value of R109.6 billion. This takes total investment commitments over the last three years to R773 billion, meaning that we have achieved 64% of our five-year target,” he said.

Show of faith

The president said that while the focus of the conference this year was on the implementation of secured investments, the fact that so many new investments were secured means companies are looking to invest beyond the pandemic.

“It is notable that this year’s conference takes place in an extremely subdued economic environment [due to Covid-19],” he added.

“There were times at the height of the virus that we as government were asking whether we should even have the SA Investment Conference this year. We are holding this conference in a difficult time, but it is comforting to see the new investment pledges we have secured …

“We are seeing a significant amount of smaller investments, even in sectors that have been hard hit by Covid-19 such as tourism and hospitality,” Ramaphosa noted.

He hailed the conference as a success with 1 700 participants (mainly joining virtually) and a broad spread of investments in sectors including mining, manufacturing, agri-processing, automotive, ICT, petro-chemicals and tourism.

Read: SA sees just over $5bn in FDI in 2019 – UNCTAD report

“I never expected that we would hit the R100 billion mark for new investment pledges secured this year. To put a hybrid conference [virtual and face-to-face plenary sessions] like this together is not easy,” he said, probably alluding to the technical difficulties that took place on the first day of the event.

Earlier pledges now invested

Earlier in his opening plenary address, Ramaphosa said that of the around R664 billion in commitments secured at the previous two investment conferences in 2018 and 2019, around R172 billion had already been invested.

“The sector that has seen the greatest flow of investment from these commitments is mining and mineral beneficiation, with just over R63.6 billion having been spent to date. The flow of investment into the ICT sector currently stands at R31 billion. Our automotive sector has attracted some R23 billion,” he said.

Mining giant Anglo American is the largest single investor.

Group chair Nolitha Fakude noted in one of the sessions on Wednesday that around R57 billion of its R85 billion commitment made in 2018 has already been invested.  The group announced at the event that its investment pledge has now been increased to R100 billion.

JSE-listed Aspen Pharmacare, which announced an investment of R3.4 billion in 2018, said that most of these funds have already been invested into its new plant in Port Elizabeth. According to the Durban-based group, this represents the single biggest investment in the history of South Africa’s pharmaceutical industry and coincidently the plant will be manufacturing Johnson & Johnson’s Covid-19 candidate vaccine.

Read: Aspen to make Covid-19 vaccine candidate

During his address, Ramaphosa also noted Aspen Pharmacare’s expansion venture as one of the first investment pledges at the inaugural SA Investment conference. He hailed the group’s preliminary agreement with Johnson & Johnson to manufacture and package its Covid-19 candidate vaccine.

“Aspen has been able to build further capability to manufacture vaccines following the investment commitment they announced at our inaugural conference. This would position the Eastern Cape as a global hub for the manufacturing of vaccines and other pharmaceutical products,” he said.

Projects amid the pandemic

Ramaphosa noted that of the 105 investment pledges made by local and international businesses at the previous two investment conferences, 21 projects have been delayed or put on hold due to the Covid-19 pandemic. These projects represent around 10% of the total commitments (R664 billion in 2018 and 2019).

“This means that despite the severe disruption of the last few months, the vast majority of projects are making steady progress,” he said.

“Significantly, these investments are taking place throughout the country, with projects planned or underway in all eight metropolitan municipalities and 26 district municipalities in all provinces.”