DURBAN (DUR): An alternative route into Southern Africa

Friday, August 28, 2015

Durban is a tourists’ haven with a diverse and rich cultural heritage, a tropical climate along a golden coastline, access to pristine world heritage sites such as the Drakensberg mountain range, St Lucia wetlands, and a number of game reserves that are home to the Big Five.

The city of Durban is the primary gateway to the province of KwaZulu- Natal, a province that boasts the second largest economy in South Africa, with a large manufacturing and logistics sector. King Shaka International Airport (DUR) is KwaZulu-Natal’s primary international airport. The airport handles 5,6 million passengers and 49 000 flights per annum, with 800 weekly connections to other destinations within Southern Africa, giving it an ever-growing catchment area. Moreover, Durban is home to Durban Harbour, Africa's busiest general cargo port, and the largest container terminal in the Southern Hemisphere. It is also 90 minutes from Richards Bay Harbour, which handles (on average) a through- put of over 80 million tonnes annually, representing an impressive 60% of South Africa's total seaborne cargo.

Why KwaZulu-Natal?
The province of KwaZulu-Natal is roughly the size of Portugal, with a population of 10.3 million people. The province has well-developed infrastructure, with upgraded road and railways, as well as a reliable tele- communications network. The province also has a large skilled and semi-skilled labour pool, as a result of the high number of universities (as well as other institutions of higher learning) in the country. The province is serviced by one of Africa’s most sophisticated financial services sectors, with a credible judiciary and a functioning public services sector that, in the last 20 years, has come to support an ever-growing commercial and professional services sector.

Economic drivers
Tourism, manufacturing, and agriculture are the major wealth- generating sectors in KwaZulu-Natal’s economy. Both the manufacturing and agricultural sectors have had a considerable effect on the local economy, especially in component production, assembly, processing, and the professional services sectors. A prime example of this is the automotive cluster, which has spawned a rapidly growing set of industries that are key in the supply chain for the assembly of vehicles.

The electronic manufacturing sector is another example of this, and is a focus for Dube TradePort’s Industrial Development Zone (IDZ). Electronic goods constitute one of the most air-freighted product groups, because they are predominantly lightweight, high-value, and form part of the ‘just-in-time’ supply chains. Dube TradePort IDZ has been successful in attracting a number of multinational firms, such as Samsung Electronics, who are currently operating their first facility in Africa (manufacturing televisions and monitors) within the precinct. This electronics giant has chosen to be located here because of the value offered by Dube TradePort IDZ, and the expansive trade links the province has with the Sub-Saharan African region and the rest of the world.  Moreover, it is the world-class infrastructure that the province has invested in that allows multinational firms to base their operations in KwaZulu-Natal, to be in the prime position to access the rest of the African continent, and to gain that ‘first mover’ advantage in a market with a lot of potential.

Durban Aerotropolis
King Shaka International Airport is at the centre of the emergent Durban Aerotropolis, which is set to become a major trade and business centre for Southern Africa. The provincial government of KwaZulu-Natal, together with a number of stakeholders (including the private sector), is committed to developing an expansive Aerotropolis development.

The development will bring about a highly competitive business environment, which is specifically designed to accelerate business efficiencies and enhance the global supply chain.

Expanding route development in KwaZulu-Natal will continue to play an important role in developing the Durban Aerotropolis, as greater air connectivity will help ensure the growth and development of the province. Both tourism and manufacturing rely on airlines, which provide the critical access business needs to compete globally.