Success for Jobs Fund at East London plant

NOVEMBER 6, 2015

The R154-million metal surface treatment plant in the East London Industrial Development Zone is to celebrate its second operational year as a major supplier to Mercedes-Benz South Africa (MBSA) this month.

This follows a financial injection of R38 million by the Development Bank of South Africa’s Jobs Fund, R18 million by its German-Austrian owners RG Brose, Linde + Wiemann and Voestalpine and another R115 million by the East London Industrial Development Zone (IDZ).

The Jobs Fund, established by the South African government in 2011, awards grants to organisations through a competitive project application process where the best ideas are funded.

The plant, located in the East London IDZ, supplies aluminium-treated automotive parts to the East London original equipment supplier (OEM) Mercedes-Benz South Africa (MBSA).

The MST plant is one of 12 projects in the province funded by the Jobs Fund. The total investment for these projects is over R430 million.

“The plant, a first-of-its-kind to be built in South Africa in over 30 years, is a significant milestone for the region,” says the Economic Development, Environmental Affairs and Tourism MEC Sakhumzi Somyo who visited the plant today.

“It has been instrumental in improving the competitiveness of the region as a suitable destination for the automotive sector. No longer do other East London manufacturing companies send their parts to Port Elizabeth. These can now be treated at this facility,” he explains.

Furthermore, demand for the aluminium and aluminium-treated products is growing with automakers using more of the metal in the production of their vehicles. In the United States alone, demand for aluminium in this sector has grown three-fold since 2011.

“The South African picture is not dissimilar as we built to the same levels as Europe and the United States,” says Linde + Wiemann General Manager Johan Steyn.

“The metal’s growth is due to its characteristics in the automotive sector. Chiefly, the metal is is lighter which is helping automotive manufacturers in driving down emissions,” explains Steyn.

The metal is highly corrosion-resistant.

Steyn also adds that there has a significant increase in aluminium content, for instance, components of MBSA’s 205 model comprises 50 per cent and upwards of aluminium.

The establishment of the MST plant has also achieved a key goal for the Jobs Fund. It has created 442 manufacturing jobs (including 92 jobs within the MST facilitated have been created as a result of introduction of this technology in the region), and another 2,619 jobs during construction.

The project has also been responsible for bringing scarce and valuable skills to the province as well as the latest technology in aluminium-treatment.

“The success of this project is the culmination of highly collaborative efforts of important role players in the Eastern Cape automotive sector which include not only my Department but the East London IDZ, the Automotive Industry Development Centre (AIDC) which provided support, as well as the plant’s client, MBSA, which was largely responsible for the viability of the plant,” says Somyo.

The Jobs Fund has supported four other automotive projects in province – the AIDC in Fort Jackson, AIDC’s engineering and supplier skills programme as well as the landmark partnership with Mercedes-Benz South Africa to create 500 internship opportunities and the permanent placement of 360 trained artisans.

East London IDZ CEO Simphiwe Kondlo says that the project “is one further demonstration that the region can assemble the capability and determination to enter and capture international markets with products of an extremely high quality and premium technology content”.