A new vehicle manufacturing plant where cars from various manufacturers – most of them probably from Asia – will be assembled, is planned for East London, say officials of the city’s industrial development zone (IDZ).

The announcement was made yesterday at the Automotive Week conference in Port Elizabeth, with Buffalo City cleverly releasing the news at a time when scores of motor industry executives are in Mandela Bay.

IDZ officials and consultants said the first phase of the plant – with an investment equivalent of an estimated R4-billion – could be up and running by the middle of 2011.

It could provide up to 1 500 jobs when it reached its planned “critical mass” of 50 000 units a year in its first phase, said Automotive Investment Holdings consultant Corrie Kotze.

He could not say when that figure would be reached, although he was confident the project would meet the needs of manufacturers keen to assemble in South Africa but reluctant to build assembly plants because of high investment costs.

Instead, they could lease space, equipment and expertise in a plant shared with others.

They would also share services – like warehousing, security, medical and stockyards – which would again make economic sense.

Kotze said the cars to be built would be from various manufacturers and that building several different makes in a single plant was not new.

It had been a model at various stages in the history of this country’s motor industry, including, for instance, Mercedes, Honda and Colt vehicles being built at what was now the Mercedes-Benz factory in East London.

IDZ business development executive manager Tembela Zweni said the vehicles would probably be from India, China and Korea, with several of them already active in the domestic market through importing fully built- up vehicles.

Using the new plant, they would bring in completely- knocked-down kits and assemble and paint these in East London.

At the start of the first phase, the vehicles would comprise mainly imported components, but there would be an opportunity to introduce and increase South African content.

Zweni said a 40ha site had already been identified for the assembly plant.

Talks were also going on with potential operators and potential investors as the plant would be a joint public-private enterprise, with the IDZ funding some of it.

Kotze said it was difficult to give an investment cost at this stage as it was not known what equipment the various manufacturers would install themselves, but to build an equivalent plant would probably cost about R4- billion.

An IDZ official said current investment in the zone totalled more than R1-billion, 15 companies were operating there, and construction was under way to accommodate six new companies.

Meanwhile, an international boost to component industry training was also announced at the conference.

It came from the United Nations Industrial Development Corporation (Unido) and is to be used to expand a business partnership programme run through the Automotive Industry Development Centre.

Unido representative Tom Kenyon said 4000 workers had been trained through the programme – titled Trisano, which is the Sotho word for “working together – to attain world-class manufacturing levels.

They and empowerment companies involved in the component industry were now benefiting.

Source: The Herald