Ricochet News

R120 million Defy production facility re-launched in East London

Nov 25, 2014
R120 million Defy production facility re-launched in East London

Trade and Industry Minister Dr Rob Davies has re-launched the Defy production facility in line with the Industrial Policy Action Plan (IPAP).

“The current work is building on last year’s IPAP, which recognised the white goods industry as a strategic one with a growth potential. Hence we developed a white goods strategy with key interventions of upgrading the technology and meeting the environmental imperatives through energy efficiency requirements.

“This year’s IPAP has recognised the new entrants in the market as well as mergers of old companies like Defy with Arçelik… as a step that bodes well with our foreign direct investment efforts and manufacturing support,” said Minister Davies.

The white industry encompasses heavy consumer durables such as air conditioners, refrigerators and stoves, which used to be painted only in white enamel finish.

The new Defy ‘side-by-side’ refrigerator production facility, located in East London in the Eastern Cape, is worth more than R120 million.

In addition to the production facility being in line with IPAP, the Minister expressed his excitement about the investment and encouraged more businesses to follow the example of companies like the Arçelik Group -- a household appliances manufacturer in Turkey.

The overriding goal of IPAP is to prevent industrial decline and support the growth and diversification of South Africa’s manufacturing sector.

“The re-launch of this factory shows the confidence that the Arçelik Group and other investors have in South Africa’s economy and the manufacturing sector in general. Through the Manufacturing Incentive Programme, we provided a grant to the value of R30 million, which supported investment of about R200 million in upgrading the Ezakheni factory in Ladysmith. 

“We are also pleased that Defy has confirmed  that once the production volumes reach forecasted levels, a second shift will be introduced which will create about 100 additional permanent jobs,” said Minister Davies.

The Chairman of the Board of Directors for Koç Holding (which owns Arçelik), Mustafa Koç, said Arçelik acquired Defy in 2011 with the biggest industrial investment made by a Turkish company in Africa.

“The young population of the continent, growing urbanisation and the rapidly increasing middle class had convinced us to make this investment. We believe that Defy South Africa and the African continent have immense potential. We are here to support Defy to excel on this opportunity,” said Koc.

He said since the acquisition, they had invested over R500 billion in upgrading Defy’s three manufacturing sites and technology.  

Furthermore, Koç said their goal was not only to supply the South African domestic market but also to make Defy a production centre for export markets in Arçelik’s global supply network. - SAnews.gov.za

Photo caption: Trade and Industry Minister Dr Rob Davies (c) at the re-launch of the Defy plant in East London. Source: Marcel van der Holst.