Historic R11 billion auto investment at Coega IDZ gains traction


The Coega Development Corporation (CDC), which manages the massive Coega Industrial Development Zone (IDZ) just outside Port Elizabeth, on Tuesday celebrated a historic R11 billion investment deal with the Industrial Development Corporation (IDC) and Beijing Automobile International Corporation (BAIC) at a sod turning and signing ceremony.

The establishment of the Chinese vehicle manufacturing plant in the IDZ is expected to create 2 500 direct employment opportunities, with an indirect job creation prospect of 10 500.

In attendance at the sod turning were Eastern Cape Premier, Phumulo Masualle; Nelson Mandela Bay Executive Mayor, Athol Trollip; Board Chairperson of the IDC, Busi Mabuza; Minister of Economic Development Department of SA, Ebrahim Patel; Ex-Mayor of Nelson Mandela Bay, Danny Jordaan; CDC Chairperson, Dr Paul Jourdan; CEO of Industrial Development Corporation, Mvuleni Geoffrey Qhena, and CDC CEO, Pepi Silinga.

The Chinese delegates included the Chairman of the BAIC Group, Xu Heyi; Embassy of the People’s Republic of China in the Republic of South Africa Econimic and Commercial Counsellor, Rong Yangson; Deputy Secretary General of Beijing Municipality, Liu Yinchun; Associate Counsel of State-owned Assets Supervision and Administrative Commission of People’s Government of Beijing Municipality, Xun Yongli; Director of Headquarter Economic Development Office of Beijing Municipal Commission of Commerce, Du Lei; Deputy Director of Automobile and Transportation Equipment Industry Division of Beijing Municipal Commission of Economy and Information Technology, Zhu Xiaolong; Vice-Chairman of BAIC Group, Dr Wei Huacheng, and Vice-General Manager of BAIC Group, Sheng Andong.

This new Billion Rand project was established in the hopes of growing South Africa’s Automotive Industry contribution, and aims to improve the corporations’ ability to facilitate the export of goods to other countries. It also hopes to increase the countries productivity and create over 2 500 jobs, both direct and new within their local supply chain.

“We are honoured to have partnered with BAIC, who share our vision to establishing a world-class facility at this wonderful site. It is indeed exciting that at this time in the country’s industrial and automotive industry, we are able to bring in such an investment which has enormous job and socio-economic implications,” said Board Chairperson of the IDC, Busi Mabuza.

The South African operation has been officially named BAIC Automobile SA, and the first phase of this project, which has been divided into two phases, will see an investment of R4.6 billion with first production expected in 2018.

BAIC said it hopes to reach an initial annual production target of 50 000 units (BAIC sedans, SUVs and bakkies) by 2022 and thereafter increase to 100 000 units per year. The company is already creating a deleasrhip network across the country which will sell 40% of its cars, with the rest being exported.

“[What we are witnessing today] is by far the largest investment by BAIC outside China. It is by any measure, a large and very significant investment on this continent. This investment can help to energize the local economy and contribute jobs and investment opportunities,” said Minister of Economic Development Department of SA; Ebrahim Patel.

“We hope that BAIC will find many local South Africans who have the requisite skill, and that our institutions in the Eastern Cape will be able to produce the needs of the factory and the investor." 

Two weeks ago, the Nelson Mandela Bay Business Chamber welcomed the R11 billion investment saying it would boost job creation in the city.

"We are in particular excited about the 2 500 direct employment opportunities this investment is expected to create, with an indirect job creation prospect of 10 500," Kevin Hustler, CEO of Nelson Mandela Bay Business Chamber, said then.

"An investment of this scale, reported to be the largest single investment in Africa in decades, is expected to be a major catalyst for the region’s economy."