- The Vaal Special Economic Zone (SEZ) is seeking strategies around hydrogen manufacturing and cannabis production to reindustrialize the Vaal region.
- The region faces challenges in terms of its current infrastructure, which has been in decline since the late 1990s.
- The SEZ is in talks with multiple investors in the green energy and agriculture sector.
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Green hydrogen and cannabis production will form key parts of the Vaal Special Economic Zone (SEZ) strategy to reindustrialize the region, according to Zirk Jansen, Vaal SEZ program manager.
Vaal SEZ is “one of the new kids on the block” having only been appointed in 2021, Jansen said at the 2022 German-African Business Summit.
An SEZ is a geographically delimited area in which governments “facilitate industrial activity through tax and regulatory incentives and support for infrastructure,” according to the department of trade, industry and competition. There are currently about 11 SEZs in SA.
The Vaal zone differs from other special economic zones in Gauteng in that it encompasses three different townships in the Sedibeng District Municipality. This spatial difference allows the Vaal SEZ to have multiple sites, which can serve multiple sectors, Jansen said.
While many of these municipalities currently “face challenges,” significant competitive strength still resides in manufacturing resiliency in this area, Jansen said.
The region also has a strong skills base, with two large universities in the area: Vaal University of Technology and Northwestern University, he said. This puts Vaal in a good position to address national unemployment across the area.
One of the key components of the Vaal SEZ strategy is to harness the country’s hydrogen economy by making Vaal the “preeminent hub for low-carbon manufacturing and renewable energy production,” Jansen said.
While the region has infrastructure, it faces challenges in terms of repair and maintenance, he said. The SEZ therefore wants to reindustrialize the Vaal through the country’s green economy.
While this Hydrogen Valley will have a strong focus on hydrogen, it will also focus on other alternative energy sources and attract manufacturers of parts, components and services in the alternative energy space, Jansen said.
“We cannot do this in isolation,” he said. “You have to build strong links with companies. There are many rural areas that have to benefit from this and what we can offer.”
Jansen acknowledged that, in terms of the current situation in the area, they are faced with industries in the sector, particularly metallurgical, which have been in decline since the late 1990s. This decline is partly due to the fact that the industries have divested from the region, and a main objective of the SEZ is to attract new investors to the region.
Vaal SEZ is also in talks with larger markets like Sasol to see how the area can bolster their value chains and attract some of the critical component makers that serve them, Jansen said.
The area sees a great opportunity for the region in the renewable energy space. Jansen said that Vaal has opportunities in the manufacture of hydrogen, electrolysers, solar batteries and solar panels.
The Vaal region has also seen interest in the agricultural sector, especially the cannabis and hemp industries.
“We’ve had a fair share of investor interest that we’re busy maturing and once we’ve addressed certain regulatory enablement issues, we’ll be able to unlock this industry fairly quickly,” Jansen said.
Other parts of the Vaal SEZ strategy include:
- High impact investments in the value chain of food, agriculture and agro-industries;
- Investment in inbound logistics (air, road, rail, river) to exploit the locational advantages of Sedibeng District;
- Investment in the blue economy and the tourism sector on the back of the Vaal river,
- Build a smart city along the Vaal River to enable SEZ development and boost urban regeneration; Y
- Build strong local links between rural/municipal economies with value chains that the Vaal SEZ will develop and strengthen.
