Overview
South Africa presents potentially lucrative opportunities for U.S. firms involved in Green Building Technologies (GBT). According to McGraw-Hill Construction in the World Green Building Trends survey, the growth of green building in South Africa exceeds that of established sustainability building regions such as Europe, Australia, United States, United Arab Emirates, Singapore, and Brazil.
Needs The South African government, together with the private sector, recognizes the need for energy-efficient building systems and practices. To achieve a green and sustainable building culture, South Africa requires extensive international, financial, and technical support. Green building technologies and practices from developed countries, such as the United States and Australia, are sought.
Market Developments
Efficiency Rising energy costs and changing regulations driven by environmental realities have led to an urgent need for more energy efficient buildings in South Africa. This has resulted in greater awareness of and increased demand for designs and products that reduce the energy intensity of buildings. The market for improved energy efficiency interventions and resource efficient building materials is also growing steadily within the South African construction sector.
GBCSA The South African government’s progressive green policy is exemplified in South Africa’s involvement with the World Green Building Council (WGBC), where it used the expertise and guidance of other nations in establishing the Green Building Council of South Africa (GBCSA) in November 2008. The GBCSA is the entity currently leading the green revolution in South Africa. Market trends indicate great potential in this growing market and a growing desire and ability to offer more environmentally friendly products. GBSCSA is positioned strongly to lead the green building movement in South Africa and has been recognized as the fastest growing member of the World Green Building Council.
Finances While green building in South Africa is still about the drive for companies to operate in a more socially and environmentally responsible manner, financial incentives are becoming realized. Businesses strive to operate more efficiently in a climate of sharp increases in operating expenses such as electricity and water. As these costs rise, businesses are looking for ways to contain their total cost of occupation. Developers in South Africa are focusing on matters of bottom line, with the second motivation being natural resource conservation.
Skills The green building industry is gaining momentum in South Africa, however, resources, including skilled professionals and manufacturers of green products and services are limited. Despite these constraints, the green building market in South Africa, is responding with a diverse range of green building materials, products, and an accelerated growth of certified professionals.
Statistics In South Africa, certified new green buildings cover over two million square meters and savings in electricity, water consumption and waste disposal at these buildings are having a significant impact on reducing the construction sector’s carbon footprint. Developers of a sample of 50 certified projects expect their buildings will result in yearly savings of 76-million kilowatt hours, the amount of electricity needed by 5,300 households for a year; yearly carbon emissions savings of 115-million kilograms, the equivalent to having 28 000 fewer cars on the road; and savings of 124 million liters of water a year - enough to sustain 34 000 households for a year.
Market Data
Mitigating Variables Currently South Africa’s commercial property sector remains vulnerable to shrinking economic growth rates across many parts of the national economy. An over-supply of office space in some of the major commercial centers has also led to a decrease in the number of ‘new build’ projects. There are positive trends in the rising number of speculative, multi-tenant commercial buildings that are choosing to target certification and there is an increase in the number of commercial properties that are undergoing refurbishment to Green Star Standards. Against this backdrop, the GBCSA reports that the value proposition for green buildings remains resilient thanks to their superior tenant retention rates and lower operating costs versus conventional, non-green buildings.
Estimates Although no formal statistics are recorded for green building products in South Africa, the building and construction materials market is estimated at about $10 billion per annum, with 60 percent sold direct to end-users and 40 percent via the distribution/merchant network. Of this total, 18 percent worth of materials are used in the additions, alterations, and home improvement market (including unrecorded home improvement).
Concentrations As increasing environmental pressures take hold in South Africa, the country’s major construction companies and developers have shown they are focusing on pursuing green practices and projects, particularly in renewable energy projects where opportunities are emerging. There is a growing recognition that climate change opportunities exceed risks, and companies now seek to develop capabilities around greener practices and technologies on a wide scale across business units. Green Star SA certified buildings are currently located predominantly in Gauteng, the Western Cape, and the Durban/Umhlanga area of Kwazulu-Natal. Green building in South Africa continues to gain traction.
Sub-Sector Best Prospects
Green Technologies in the following categories offer opportunities for U.S. companies:
- Natural Heating and Cooling; Natural Lighting (design of buildings to make optimal use of daylighting) and Energy-Saving Lighting technologies.
- Energy Generation: photovoltaics, wind turbines, solar hot water heaters, flat panel collectors, evacuated tubes.
- Heating, Ventilation and Cooling, Greenwalls, Glazing and Windows, Solar Shading, Greenroofs/Cool Roofs, Permeable Paving, Water-Efficient technologies, Structural Insulated Panels and Formaldehyde–free board.
- Alternative Building Technologies
Opportunities
Trade-offs South African trained environment professionals are taking seriously the ambition to lessen the carbon footprint associated with buildings and residences, especially by using design and technological innovation to decrease energy consumption and limit waste. Local suppliers and manufacturers, however, are reluctant to tie funds up with expensive green stock and resources amidst the decline in the general construction industry.
Changes Architects, consulting engineers and sustainability consultant teams are constantly coming up with alternative and cost-efficient building designs to offset the impact of the building on its immediate environment. Previously it was thought to be costlier to make the upfront capital investments to go green, however, volatility in both the cost and availability of power and water is influencing a mind-set change.
Outsourcing These circumstances leave a small but growing niche of green manufacturers in South Africa, resulting in many complex green building products being outsourced from abroad (mainly from Australia and the EU). In the long run, South Africa should have adequate resources to supply many green building materials, if they partner with relevant international companies to source technological expertise and obtain distributor and/or licensing agreements with these foreign entities. This is a potential opportunity for U.S. companies to explore.
As a first step, U.S. companies seeking South African representation should contact U.S. Commercial Service South Africa (https://www.trade.gov/south-africa)
Exhibitions
Trade Events in South Africa
The Green Building Convention
Venue: Century City Exhibition Center, Cape Town or Virtual
November 15-17, 2023
https://gbcsaconvention.org.za/
Resources
Green Building Council of South Africa
Green Cape
For More Information, the U.S. Commercial Service, South Africa, can be contacted via e-mail at: Jaisvir.Sewpaul@trade.gov; Phone: +27 21 702 7379; or visit our website at https://www.trade.gov/south-africa.