Creative Industries

Driving economic development

In 2008, it was estimated that the global market for the fast growing creative industries was USD 1.3 trillion – on a comparative level to the global automotive industry. The main sectors comprising the creative industry include graphic design, advertising, film, video and animation, music, performing arts etc. This exciting sector in the Western Cape and Cape Town is a melting pot of creativity, attracting foreign and local investors and merging international trends with local creative culture. Currently, Cape Town is competing to become the World Design Capital in 2014.

In conjunction with Cape Town Partnership, the Creative Cape Town theme was developed which promotes cultural and creative industries as part of the economic strategy for the Central City. National events like the Design Indaba , the advertising sector’s Loerie Awards, and the country’s leading fashion week happens in Cape Town. Cape Town is furthermore considered one of the top ten film production centres in the world, with the recent announcement of the latest James Bond to be filmed in the City, along with international artists like Coldplay and Robbie Williams recording their music videos in the Western Cape.

The Industry in Numbers:

• The creative industries sector contributes approximately ZAR6bn towards Cape Town’s economy
• Approximately 18,000 people are employed by the sector in the Western Cape
• The film industry is one of the highest growth sectors in the industry, with growth rates recorded at 10-20% during the early 2000’s, and strong growth in the region of 7% p.a. anticipated over the next five years
• Foreign Direct Investment of ZAR235m has been invested in the clothing and textiles sector between 2004 and 2010.

Main Advantages of Investing in the Western Cape in Creative Industries:

• The City of Cape Town hosts several film and design festivals annually, including the Design Indaba, Cape Town Fashion Week, and the Encounters International Documentary Film Festival
• Cape Town also offers affordable production costs for film and video production (15% cheaper than Australia and 20% cheaper than Europe), as well as the biggest visual effects studio in South Africa
• Investment of ZAR430m in a world-class film studio to boost the local capacity for producing films and commercials
• The Western Cape has a solid and growing skills bases with local institutions offering tertiary qualifications in fashion, clothing management, textile technology, interior and jewellery design
• There is strong local, provincial and national government support through the Cape Film Commission and the Cape Craft and Design Institute

Incentives

The incentives for the creative industries sector focus mainly on the film and television industry. The new film and television production incentive comprises of the Location Film and Television Production Incentive, and the South African Film and Television Production and Co-Production Incentive. The incentive is intended to increase local content generation and improve location competitiveness for filming in South Africa.

The South African Film and Television Production and Co-Production Incentive offers financial support to South African productions and official treaty co-productions with budgets of at least ZAR2.5m (about $310 000). The incentive offers a 35% rebate on the cost of films and full-length television programmes for the first ZAR6m ($745 000) spent and 25% for the remainder of production expenditure.

The Location Film and Television Production Incentive aims to attract big-budget overseas film and television productions. It offers a 15% rebate to foreign-owned productions with a South African spend of at least ZAR12m (about US$1.5-million).

Both schemes, set to run until 2014, cap the rebate at ZAR10m ($1.24-million) per production.

The Industrial Development Corporation’s Media Business Unit funds film, broadcasting and post-production projects. Assistance is usually in the form of loan finance. Its minimum participation is R1-million and no more than 49% of a project.

For more information, please click here to be directed to our incentive brochure, or alternatively contact the portfolio manager listed below.

Contacts

For further information, please contact one of the Portfolio Managers below:

• Ebrahim Khan - Head: Investment Promotion, Email: ebrahim@wesgro.co.za
• Rehana Boolay – Strategic Projects Portfolio Manager Email: rehana@wesgro.co.za

Tel: +27 (0)21 487 8600