Gavin Adams, Cluster Development Director for the dti explains cluster incentives to business owners

Delegates listen to presentations at the 2016 Business Retention and Expansion summit

Michelle Joja, researcher for the City’s Department of Economic Development presents her findings

Industrial Survey reveals Philippi opportunities

Philippi is set to become a focus for development of a metal industry cluster, particularly in the area of metal furniture manufacture, after a City of Cape Town study showed that this industry is already taking shape in the area and could be consolidated to boost the local economy.

The study, conducted for the City’s Economic Development Department, sought to identify industry clusters in five industrial areas of the city, with the aim of strengthening them and identifying where opportunities for more cluster developments exist.

At the seminar, Director for Cluster Development at the dti Gavin Adams told delegates that the department was keen to invite applications from businesses working for cluster development funding. 

He explained his department’s incentive scheme which would enable groups of businesses working together to apply for funding on an 80/20 basis where the department would carry 80% of the costs of:

  • Shared infrastructure
  • Shared hosting of a central office
  • Business development costs such as skills upgrading and business planning

The City’s survey results have prompted the Department of Trade and Industry to begin work with businesses in the Metal Manufacturing value chain in Philippi to find ways to expand and enhance it.

The Industry Survey results were presented by researcher Michelle Joja at the recent Business Retention and Expansion summit held at Philippi Village recently.

The study was conducted as a census of Industrial areas across the City of Cape Town. The aim of the research was to assess and identify the industrial activities in the five city industrial areas and to identify value chains which would benefit from coordinated focus. One of the areas surveyed was the Metro-South East Corridor which included Philippi East. Survey data on Philippi East was presented to the meeting.

The survey identified unused, or economically inactive industrial land which could potentially be used in economic development initiatives. The Philippi East Industrial Survey had revealed that 62% of the industrially zoned land had no economic activity on it at the time of survey.

And of the economic activity that was under way on industrial land, only 16% was in fact industrial in nature. Manufacturing businesses occupied just 10% of land (contributing 26% of the economic activity). Retail outlets accounted for the greatest single economic activity type – 60% of all economic activity, occupying 20% of industrial land. The land use for retail services was disproportionate and was not enabling the Philippi economy to grow as it should.

Much of the remaining industrially zoned land was being used for residential purposes – mostly informal. This land was not economically active.

Ms Joja noted that expanded industry in Philippi East would enable economic development that would lead to job creation. The area had significant opportunities for absorbing its high unemployment.

Apart from the Metal Furniture manufacturing cluster, four other possible value chains had been identified in the area: Radio, TV and Communication Equipment; Metal Scrap and Waste; Ferrous and Non-Ferrous Metal Goods.

The City of Cape Town Industrial Survey results for Philippi East showed significant opportunity for the area but also highlighted some risks, most notably safety and security concern. PEDI has begun to address this through its Peace Officer Project launched in April, and is working with city law enforcement agencies to improve security in the area.

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