The Coega Development Corporation and the Council for Scientific and Industrial Research (CSIR) have signed an agreement and are undertaking preparatory work to establish a Biofibre Hub or cluster in the Coega Special Economic Zone (SEZ).

Under the terms of the cooperation agreement signed in 2022, Coega will assist the CSIR with the commercialisation and industrialisation of intellectual property, while the CSIR will assist in the development of the Coega SEZ’s value proposition in knowledge-intensive and advanced manufacturing sectors by becoming an official research and development (R&D) partner of the corporation.

With a total capital deployment of R1-billion over three phases, the project will include a full-scale industrial manufacturing plant and incubation facilities. These will help emerging industrialists overcome critical barriers of access to market.

The co-location of advanced and viable R&D capability within an SEZ is imperative to attract foreign direct investment in knowledge-intensive and advanced industrial sectors.

“This is standard practice globally. The availability of advanced R&D capability was key in the industrialisation of global technology leaders like China, Europe, South Korea and the US,” says Coega capital and funding office unit head Meike Wetsch.

An industrial demonstration plant and R&D facility are already operational, following the relocation of the biofibre processing equipment to the Coega SEZ from the CSIR.

Once financed, the project will be further developed in the Coega sustainability business unit, led by Coega chief sustainability officer Telly Chauke.

Typically, an emerging manufacturer, when seeking offtake from an original equipment manufacturer (OEM), will have to produce a trial run of the component to export standard in a fully accredited manufacturing facility. This trial run is then subjected to acceptance testing at the OEM and if found suitable, an offtake contract will follow, highlights Wetsch.

“With very few shared manufacturing facilities in place, this requirement places emerging industrialists in an impossible situation. Nobody is going to fund a production plant at several hundreds of millions with no offtake in place and no one will sign an offtake agreement without proof that the supplier has manufacturing capability in place,” she emphasises.

The plan is to start with an existing small-scale industrial plant and, through capital fundraising, add a large-scale manufacturing plant.

“With the large-scale plant, combined with advanced product development and industrial testing facilities in place, the Biofibre Hub or cluster will help emerging industrialists overcome this problem by providing them with production facilities while they are building their market access,” Wetsch notes.

“The Biofibre Hub or cluster will develop and manufacture composites derived from natural sources. An opportunity is then created to add significant value to South African exports and increase export earnings. These commodities are currently exported in their raw or primary form as inputs to industrial processes elsewhere in the world. We need to bring those manufacturing jobs here,” she adds.

Further, by adding value locally, the project is estimated to add sustainable and non-seasonal agricultural jobs in the Eastern Cape, with significant increases in export earnings once the beneficiation of raw agricultural projects starts taking effect.

An economic forecast model developed for the Department of Economic Development, Environmental Affairs and Tourism by Wetsch and Eastern Cape Rural Development Agency Dr Langa Blouw indicates that the project will create 6 000 additional jobs in the province, with that number reaching 20 000 by the time the full value chain is developed.

“The CSIR has demonstrated its capabilities on natural fibres and developed prototypes that were tested and approved by a select few in the automotive industry. The biggest hurdle has been the ability to serve the same industry at commercial scale. Emerging industrialists do not have the capacity to supply industry sustainably at desired quantities and quality, and they need to be enabled,” said Department of Science and Innovation and CSIR National Centre for Nanostructured Materials chief researcher and director Professor Suprakas Sinha Ray.

South Africa has considerable technological innovation depth that can be successfully commercialised, but the problem is that existing R&D funding covers only the innovation cycle to prototype level. The final and most expensive stage of industrial demonstration and commercialisation is not covered, concurs Wetsch.

“By crowding in private capital, we not only cover this funding gap, but ensure that our R&D is industry-relevant and can be commercialised. By providing the route to commercialisation and further investment, we will be able to create sustainable R&D revenues that can fund our research institutions, thus laying the basis for a knowledge-intensive and innovation economy,” she says.

Coega’s partnership with the CSIR offers SEZ investors the best of South Africa’s innovation capability, including the R&D outputs of the National Innovation Clusters and the R&D produced in the country’s leading research universities through the CSIR network. This is critical for the development of new economic sectors.

“The CSIR/Coega Biofibre Hub or cluster project will contribute to the greening of the automotive value chain by supplying bio-composites to high-tier suppliers that manufacture automotive components. The CSIR has already developed several applications, including interior door panels and parcel trays for the automotive industry.

“The prototypes were fit for commercial use. This is critical for maintaining the competitiveness of the export-facing automotive sector, especially as carbon pricing on exports starts taking effect,” highlights Wetsch.

“The CSIR views this partnership as a necessary doorway to industrialisation. It supports the realisation of the many years of CSIR investment in the natural fibre and composite materials and will further enable rapid commercialisation of other technologies across the CSIR,” says CSIR advanced chemistry and life sciences group executive Dr Rachel Chikwamba.

“Having run numerous enterprise development initiatives within biomanufacturing, nano- and advanced materials, as well as agroprocessing, the location of the Biofibre Hub or cluster is a strategic move that gives the CSIR global reach, while also making it accessible to emerging industrialists,” she adds.