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Manufacturing & Logistics

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Gauteng is responsible for nearly 40% of South Africa's and 12% of sub-Sahara Africa's GNP (Gross National Product), with nearly half of South Africa's manufacturing base being located in the Province.

In addition to heavy industrial enterprises in the metals and petrochemical sectors (Arcelor Mittal and Sasol), light manufacturing areas are found to the northern, eastern and central parts of the metropolitan areas. This includes a number of industrial parks around the OR Tambo International Airport. In addition, there are a number of mature industrial areas, including the automotive cluster to the northwest of the Province.

In the creation of a competitive "next generation" development strategy, it is necessary to differentiate between the different industrial/distribution functions. These include time critical (the movement of goods in up to 24 hours within the same continent and within 48 hours on an intercontinental basis) and time definite (the movement of goods within a period ranging from 24 hours to weeks as "say when" services, therefore requiring accurate delivery at a predetermined period of time).

Time-definite distribution functions typically include bulk driven activities which include ores, grains, cement, aggregate, mineral products, and primary materials, as well as manufacturing/ processing activities, which are not high value-added, are not perishable and do not utilize manufacture to order or just in time concepts. Value-added distribution functions on the other hand, typically include higher value-added goods and activities which are time sensitive and utilize just in time concepts as well as perishable product handling/processing which is not handled in bulk. The focus in Tambo Springs is on distribution functions which are both Time-definite and Time critical functions and is primarily a container freight-focused facility.

The Tambo Springs development goes beyond the creation of a traditional industrial park by providing an efficient environment which facilitates manufacturing, distribution, transportation and logistics activities. The increased value of the location is further driven by its advantages as a logistics gateway. In this context, it should be noted that from the outset, the project brings some of the benefits of an IDZ/EPZ project due to the planned linkages by means of a secure and bonded land bridge to the Coega IDZ. In addition, the operational plan includes an SEZ component within the Tambo Springs Gateway which is designed to attract manufacturing businesses that qualify in terms of the applicable legislation. It will also incorporate a secure and bonded area which meets the needs of such Regulatory Authorities as the World Customs Organisation, Department of Homeland Security and others.

Specific Market Niches to be addressed as part of the operational plan include:

Manufacturing, Transportation, and Distribution within a secure and bonded environment, with a focus on goods which have an international origin and destination;

  • Rail-intermodal and truck related logistics functions;
  • Regional manufacturing and warehousing activities;
  • Time-critical manufacturing, processing (value added logistics) and JIT distribution;
  • Clean manufacturing and processing where relevant industries derive competitive benefits from being located in the immediate area of the distribution hub.

In particular, the Logistics Gateway is suited to attracting enterprises which utilize postponed manufacturing techniques, which require the creation of an efficient value-added logistics capability.

Given the afore going and the efficiency benefits involved, the Tambo Springs development should in line with international experience, achieve a greater absorption rate to that achieved by other Class A industrial areas in Gauteng.

Metropolitan Distribution Function

The metropolitan/local distribution function aims at a more efficient movement of freight/goods within the Gauteng catchment area. The local distribution of freight is to be initially undertaken utilizing transitional LTL truck and Van transport as is the case at City Deep and other distribution hubs in the Gauteng City Region.

In future, local distribution by LTL truck and Van could be complemented by the use of the metro system to distribute freight during off-peak (overnight) periods within the metropolitan areas. An advantage of this approach is that the rail driven metropolitan distribution function reduces the amount of road traffic for the movement of freight within urban areas. In addition, it would reduce costs given the introduction of the toll road system. While this is not seen as a Phase1 option given Metro Rail constraints currently, it is important to note for future reference that Tambo Springs can be linked into the existing Metro Rail system via a short linkage on an existing servitude.

The local distribution network (road and later rail) can in addition to servicing commercial outlets, be used to facilitate the movement of freight between other associated industrial zones or transportation hubs, including the areas adjoining or part of OR Tambo airport.
This capability will enable the efficient distribution of freight within the catchment area, by utilizing the efficient Inland Distribution Network. It will further enable the inland port to be an integral part of a Gauteng Logistics Platform enabling synergies to be generated with existing industrial parks/areas and transportation locations including City Deep.

Competitive Advantages

Given the aforegoing, the competitive advantages of Tambo Springs include the following:

  • as a logistics gateway, the entire Tambo Springs operational concept and integrated functional plan creates a more efficient distribution network as part of the Gauteng logistics platform;
  • benefits derived from being located in a facility that offers an integrated multifunctional solution, including especially the high-speed broadband IT&C infrastructure which provides a competitive advantage and acts as a catalyst for an "intelligent" transportation network in Gauteng. This enables a more efficient movement of goods between transportation hubs, manufacturing/warehousing areas and retail outlets;
  • the gateway function further enables the movement of goods and freight which arrives in bulk, to individual retail locations by using a "just in time" (J+-T) pull system. This reduces traffic and congestion as well as wastage and returns;
    • operational efficiencies derived from a truly intermodal logistics facility developed on a greenfields basis;
  • improved efficiencies arising from specialized custom-made facilities using modern design concepts;
  • the blue chip tenants which are attracted to the facility because of its overall competitive advantages are such that they naturally draw the market (local distribution operations);
  • reduced congestion in and around the inland port facility given its location and connectivity;
  • the net effect of the aforegoing, is a reduction of inventories being achieved as part of a reduction in warehousing and distribution costs.
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