Minister Winde Announces Investigation of Special Economic Zones for Aquaculture Sector

The Western Cape Government is looking into the establishment of Special Economic Zones (SEZs) to boost the local aquaculture industry.

Alan Winde, Minister of Finance, Economic Development and Tourism, made the announcement today, 12 June 2013 during a visit to two of the province's largest abalone farms, Abagold and HIK Abalone Farm.

Both farms are based in Hermanus and together they produce over 400 tonnes of abalone each year. Abagold is one of the biggest farms in South Africa and employs 350 people. Earlier this year the company won the SA Premier Awards Exporter Award. HIK Abalone Farm has 1500 tanks and features a hatchery, a grow-out farm and its own processing facility.

The Western Cape has the highest number of abalone farms in the country, with 20 operating in the province. Minister Winde said the aquaculture sector in the province was projected to show triple digit growth over the next ten to fifteen years.

“According to a study commissioned by the Western Cape Department of Economic Development and Tourism, it is estimated that in order to maintain the current level of per capita fish consumption, global aquaculture production will have to grow from 45.5 million tonnes per year (as recorded in 2004) to 80 million tonnes by 2050. Globally, production from capture fisheries has levelled off and most of the main fishing areas have reached their maximum potential. Aquaculture will be the only way to fill the gap. In spite of its vast natural and human resources, the contribution of Africa to global aquaculture production is extremely low – only 1% in 2005 - relative to the contributions made by other continents. To ensure that the Western Cape plays a leading role in filling this gap and in increasing Africa’s contribution to global production, the Western Cape Government is focusing on removing red tape which is hampering the industry’s growth.”

Minister Winde continued: "Rising electricity costs over the past few years have hit abalone farmers hard. Farmers in municipal areas are particularly affected as they cannot negotiate special tariffs with Eskom.

"The Western Cape Government is investigating whether energy costs could be reduced by way of zoning arrangements, such as the declaration of Special Economic Zones. These zones will then be entitled to the incentives offered by SEZs."

Minister Winde said the Department of Economic Development and Tourism, in collaboration with the Western Cape Aquaculture Development Initiative and the National Department of Agriculture, Forestry and Fisheries were working together to declare the area from Hermanus to Gansbaai as an SEZ. The ultimate decision on the designation of an SEZ rests with the National Department of Trade and Industry.

In addition to investigating the possibility of declaring SEZs to benefit the industry, the Western Cape Government aims to facilitate R50 million investment into the sector during this financial year: "Many of the farms are currently expanding and this creates more jobs, especially in the rural and coastal areas in and around fishing towns. This is why the Western Cape Government, through the Western Cape Aquaculture Development Initiative, supports the growth of the industry. We are identifying firms who will be selected for this investment project," said Minister Winde.

Minister Winde added there were also efforts to transfer suitable land owned by the Department of Public Works to municipalities for abalone farming.

The Western Cape aquaculture sector currently employs 2300 people, representing 78% of the people employed in the industry countrywide. The majority of these are permanent jobs.