ISITHEBE Industrial Estate, on the KwaZulu-Natal North Coast, is very much a viable location, positioned as it is between Durban and Richards Bay and with a highly competitive rental structure.

This emerged from an analysis by the German-based Mesopartner consultancy, which specialises in devising local economic delivery programmes to produce fast results.

The study was commissioned by the Ilembe District Municipality, within whose jurisdiction Isithebe falls. Mesopartner was working in conjunction with a German Government programme of economic co-operation in South Africa (Gesellschaft fur Technische Zusammenarbeit (GTZ)/Business Development Support and Local Economic Development).

After the analysis, steps are already being taken to introduce a programme at the estate against HIV/Aids, as well as a crime control initiatives. Isithebe is owned and operated by Ithala Development Finance Corporation. It began as part of the industrial decentralisation programme of the pre-1994 political dispensation, with tenants offered substantial incentives to locate there, as well significant wage differentials by comparison with Durban. Since then, Isithebe has had to compete on equal terms, yet still has a high occupancy of 89%.

Mesopartner, which is active in various developing countries, conducted a Participatory Appraisal of Competitive Advantage (PACA) exercise in Ilembe in February this year, which included two workshops; interviews with businesses on the estate; four mini-workshops with businesses and interviews with micro-enterprises. Heading the exercise was Jorg Meyer-Stamer, who is based in Duisburg, Germany.

The Mesopartner diagnosis is that Isithebe is still well-run and provides a solid operating environment.

It still has a critical mass of occupancy and a large pool of relatively skilled and experienced labour, though there is a skills constraint at management levels and in some technical categories.

On the downside, HIV/Aids is beginning to have an impact; there is weak networking between businesses operating from the estate; there is a disconnection between Isithebe and surrounding communities (emerging small businesses and micro-entities are not taking advantage of what Isithebe has to offer); crime is becoming a concern; and an unjustified overall negative perception could become self-fulfilling.

Mesopartner recommends:

• Concerted action to counter HIV/Aids, involving Ithala, business tenants and organisations such as Lovelife.
• Reduction of transport costs through an internet-based system of part loads and load sharing. This creates the opportunity for a transport brokerage.
• Creative and aggressive marketing.
• Creating a safer business environment by fast-tracking proposals to redefine police station boundaries. Business Against Crime, Ilembe Municipality and Ithala need to meet the provincial commissioner of police to press for an urgent decision on the new boundaries and for greater police visibility.
• Establishment by Ithala and Ilembe District Municipality of a database of emerging entrepreneurs to link with established business and provide outsourcing opportunities.
• Creation of a labour broker agency.
• The setting up of labour relations and human resource services. "This Mesopartner exercise confirms that Isithebe has a future," says Ilembe Municipal Manager Buks Pretorius.

"It's strategically located between Durban and Richards Bay, it still has a high occupancy, in spite of the withdrawal of the decentralisation subsidies, and I see its continued success as a key part of Ilembe's integrated development programme. "The municipality has committed itself to augmenting the water supply to Isithebe. We are determined to make Isithebe work even better in the future."

Two of the Mesopartner recommendations are already being implemented, says Mike Newton, Ilembe Director of Economic Development and Planning. Ithala has made available a vacant factory for a programme against HIV/Aids, to be run by the GTZ-linked German NGO, Inwent. Four Isithebe companies have already signed up for the programme. Ilembe has also applied to the provincial government for funding to establish an Ilembe Chamber of Commerce and Industry to co-ordinate measures against crime.

"As soon as we can we will start looking at the other projects recommended." The estate continues to be an effective manufacturing hub, says Kwazi Sithole, Ithala's Properties Executive, in spite of the playing fields having changed significantly.

"By remaining committed to our industrial clients and by actively involving ourselves with local role-players to promote further growth in this area, the industrial estate continues to be an effective manufacturing hub, offering cost-effective production space to prospective investors midway between the important import and export facilities offered by Durban and Richards Bay."