The department of small business development, tourism and environmental affairs (Destea) has invested R12-million to grow the economy and create employment in the Free State.
The funds were used to procure a 20MVA transformer as part of the upgrade of the area’s electricity capacity.
This will ensure that the Rui Star Iron-Steel Plant, situated in the Thaba Nchu industrial area, functions efficiently and effectively and remains sustainable.
The department has spearheaded the project’s monitoring process.
Rui Star Iron-Steel Plant is owned by Chinese steel giant Hangda Steel, and it has invested another R288-million in the business as the company sources scrap metal across South Africa and processes it into steel and iron.
The business already employs 120 people and aims to create another 500 jobs when the project’s phase one is fully commissioned.
Destea MEC Thabo Meeko said: “This is one of the key results emanating from continuous engagements with different stakeholders, investors, and potential funders.
“We are on a mission to attract investors so that we bring new money into our economy and create jobs to reduce the high rate of unemployment.”
Meeko said the company was initially set up in a factory situated in Botshabelo and later found that the electricity capacity in the area was far less than what it required for the project. Consequently the project was later moved to Thaba ’Nchu.
“The project is in the final stage and [is] envisaged to kick off in the first week of next month.
“Once power capacity has increased, 500 jobs will be created. We will continue with the road shows to other local municipalities to identify economic opportunities.
“The economic trajectory of the province must be informed by collective effort, to mobilise social partners around economic growth and development in the context of the mixed economic approach.
“It is through changing the structure of the South African economy that inclusive growth will become possible. Inclusive growth cannot occur if those who are excluded are not given fair access to economic opportunities,” he said.
Over a period of 10 years, between 2011 and 2021, the Free State economy grew at an average rate of a mere 0.46%, and in the same period the province contributed 4.9% to South Africa’s gross domestic product (GDP).
Meeko said with investments such as the Rui Star Iron-Steel Plant, it was expected that the economy in the province would grow at an annual average rate of 1.45% to 2026 and will still contribute 4.9% to the country’s GDP.
He said provisions were being made for small, micro and medium enterprises (SMMEs) to be provided with operational spaces towards formalisation of small businesses.
“To this end, the Free State Development Corporation has spent over R2.7-million in rental incentives at its industrial parks, and over 25 SMMEs benefited from this incentive.
Meeko added that his department would also continue to support township enterprises through promoting supplier diversity programmes.
This will assist local enterprises to capitalise on existing procurement opportunities and to pro-actively build partnerships to collaborate on supplier development initiatives.
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