We have the space for proposed R11bn vehicle plant: Coega

APRIL 29, 2016

The Coega Development Corporation (CDC) is bullish that the Coega Industrial Development Zone (IDZ) will be able to meet the needs of OEMs wishing to invest in South Africa.  This means that the Coega IDZ would also be able to not only meet but exceed the needs for the establishment of an R11-billion Chinese vehicle manufacturing plant in the Eastern Cape.

“It is safe to say the CDC offers the only 11 500ha of prime industrial land (biggest in Southern Africa), with modern bulk infrastructure, and related services in a dedicated automotive zone which has ready access to two ports (Port of Port Elizabeth and Port of Ngqura), with Customs Control Areas (CCAs), and necessary municipal systems and approvals already in place to meet the needs of an automotive giant seeking to invest in country,” says Dr Ayanda Vilakazi, CDC’s Head of Marketing and Communications.  

Vilakazi was responding to a recent statement by the Industrial Development Corporation (IDC) which announced that the Beijing Automobile International Corporation (BAIC) is set to start construction of a new facility in the Eastern Cape before end of this year or early next year to manufacture pick-up trucks, sport utility vehicles and sedans.

In 2016, the CDC aims to finalize the Multi-OEM (Original Equipment Manufacturer) facility in zone 2 to further stimulate growth in the sector. The envisaged Coega Multi-OEM complex will have shared facilities that will include a supplier park (56 hectares), an e-coating plant (3 hectares), a paint shop (3 hectares) and a vehicle distribution centre (3 hectares), amongst other amenities.

Figure 1: Artistic impression of the Coega OEM Complex comprising vehicle assembly halls and shared service infrastructure, adjacent to the Port of Ngqura.

“The investment by BAIC would be a welcome development as it would make a significant contribution to the economy of the Eastern Cape. It will create employment opportunities, and fast-track training and development for many of our people in the automotive sector.

Such developments also create opportunities for small and medium enterprises (SMMEs),” he says.

The Automotive Industry is one of the largest manufacturing sectors in the South African (SA) economy. Additionally, this sector has proven to be a key role player in so far as employment creation and economic empowerment for many citizens.

The Coega Industrial Development Zone (IDZ), with 11 500ha of prime industrial estate, is the preferred investment destination in South Africa for small and large organisations; it is already home to a dedicated auto logistics park where VWSA is located and the FAW assembly plant in Zone 2, both of which make a significant contribution to the Nelson Mandela Bay’s economy, according to Vilakazi.  

General Motors also has a large warehouse from which it supplies parts to the rest of Africa from the Coega IDZ.

The three original equipment manufacturers in Nelson Mandela Bay – Volkswagen, FAW and General Motors export thousands of vehicles a year through the nearby Port of Port Elizabeth.

South Africa’s designated container hub, the port of Ngqura, is integrated into the IDZ.

Additionally, each of these investors have contributed significantly to the socio-economic landscape of the Nelson Mandela Bay through job creation opportunities as shown below:

Table 1: Socio-economic impact made by automotive investors in the Coega IDZ

Investors

Jobs Created (Estimated)

 

Operational

Construction

General Motors Pan African Distribution Centre (SA/USA)

110

784

FAW (China)

350 

300

Faurecia (French)

226

 325

Benteler (Germany)

361

400

Rehau (German)

463

421

Rehau expansion

325

Grupo Antolin (Spain)

83

165

Grupo Antolin (Expansion)

164

Q-Plus (Germany)

30

 

Inergy (French)

18

 

Hella

20

 

 

Image: In 2014, President Jacob Zuma opened a R600-million FAW Assembly Plant in the Automotive Hub at Coega IDZ in Zone 2, Port Elizabeth.