Posted: July 18, 2023
A project for the manufacturing of liquefied petroleum gas (LPG) cylinders will be rolled out at the Coega Special Economic Zone (SEZ) in Gqeberha in the first quarter of 2024.
The Coega IDZ, which is one of the 10 designated SEZs under the Department of Trade, Industry and Competition’s (the dtic) Special Economic Zones Programme, will house the multimillion-rand plant that will be built by Kili Energy. The Johannesburg-based oil and gas solutions company pledged an investment of R500 million at the fifth South African Investment Conference that was hosted by President Cyril Ramaphosa in Johannesburg in April this year.
Pledges made at the conference contributed in bringing the total value of investment pledges over a five-year investment mobilisation period to R1.51 trillion, thereby exceeding the initial target of R1.2 trillion set by President Ramaphosa.
According to the Chief Executive Officer of Kili Energy, Mr Mfanafuthi Dube, the company has partnered with global financiers, as well as innovative and dynamic companies with oil and gas and LPG cylinder manufacturing experience, for the rollout of the Coega project. Kili Energy is a 100% black operated and managed company focused on developing oil, gas and energy, and LPG cylinder manufacturing projects. Its main focus is on midstream and downstream market segments in the oil and gas value chain and energy space.
The R500 million investment will entail leasing a 7,000m2 factory at the Coega IDZ for a 10-year period, the acquisition of equipment from a Turkish original equipment manufacturer, as well as vehicles. The factory is projected to manufacture 1.5 million cylinders per year.
Dube says the project is expected to create 120 sustainable direct jobs.
“Currently in South Africa 99% of the LPG cylinders are imported. Our aim is to close the importation gap and allow all participants in the LPG industry an equal opportunity to create their own markets downstream. This kind of investment is significant as South Africa imports most of its LPG cylinders, dominated by ‘dumb’ cylinders with no Internet of Things solutions capability that monitors the presence of flammable gases and toxic vapours in the atmosphere in order to prevent gas leakages, which our smart cylinders will have,” points out Dube.
“This investment will greatly contribute to the economy by addressing the demand side management for Eskom. This will help ease the pressure on the electricity grid especially in winter as more households use LPG for cooking and heating. This will also contribute to our United Nations Sustainable Development Goals (SDG) commitments to lower carbon emissions,” said Dube.
More importantly, Dube says the increased usage of the LPG across the country has a potential to minimise the political risk related to the social instability that the negative impact of blackouts can cause amongst people that cannot afford solar related solutions or going to restaurants when they are unable to cook at home due to load shedding.
Bongani Lukhele – Director: Media Relations
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Issued by: The Department of Trade, Industry and Competition (the dtic)