Ford injects R16bn into Africa’s first automotive city
Ford MotorCompany SA has made an investment of $1.05 billion (R15.8 billion) in theTshwane Automotive Special Economic Zone (TASEZ), which is billed as Africa’sfirst automotive city.
The automaker says the investment is the biggest in Ford’s 97-year history in SA. It will be channelled towards multiple projects, including the construction of the TASEZ; developing new advanced technologies and systems to modernise and grow the Ford Silverton Assembly Plant; and creating an additional 1 200 jobs to support expanded vehicle production of its Ranger pickup truck, bringing its workforce in SA to 5 500 employees.
The Tshwane, Silverton-based automotive hub, which was first announced in November 2019 by president Cyril Ramaphosa and Gauteng premier David Makhura, is designed to help SA’s automotive sector better respond to the demands of the fourth industrial revolution and compete with global players.
Developed through a joint partnership with Ford Motor Company, the Department of Trade, Industry and Competition (DTIC), Gauteng Provincial Government and City of Tshwane, the hub was established as part of the 2035 Automotive Master Development Plan, as set out by the DTIC, with the aim to help the automotive sector become a globally competitive and transformed industry.
Ford announced the investment at a media briefing attended by president Cyril Ramaphosa, as well as several key government leaders, including DTIC minister Ebrahim Patel, public enterprises minister Pravin Gordhan, Gauteng premier David Makhura, City of Tshwane executive mayor Randall Williams, and senior Ford executives.
Speaking at the event, Dianne Craig, president of Ford’s international markets group, noted the overall investment includes $686 million (R10.3 billion) for extensive upgrades to the Silverton Assembly Plant, which includes construction of a new body shop with the latest robotic technology and a new hi-tech stamping plant, both of which will be located on-site for the first time.
“This investment will further modernise our South African operations, helping them to play an even more important role in the turnaround and growth of our global automotive operations, as well as our strategic alliance with Volkswagen,” said Craig.
“Ranger is one of our highest volume, most successful global vehicles. This investment will equip our team with the latest tools and facilities to deliver the best Ford Ranger ever, in higher numbers and with superior quality.”
While the automaker says it will not introduce autonomous vehicles to the South African market anytime soon, it has ramped up plans to locally-develop more connected technologies in all its vehicles through the integrationof smart mobility and network connectivity features.
With this investment, Ford says its Silverton Assembly Plant, which forms part of the TASEZ, is expected to generate revenue exceeding 1.1% of SA’s gross domestic product.
The annual installed capacity at the Silverton plant will increase to over 200 000 vehicles from 168 000, supporting production of the Ford Ranger pickup truck for the domestic market and export to over 100 global markets.
In addition, Ford says it is preparing to build new vehicle modification and training centres – the latter developed to ensure all Ford employees are equipped with the knowledge and the latest skills required to maximise the efficiencies of the enhanced Silverton facilities.
Attracting foreign direct investment
The South African government, in an effort to reposition itself in the world economy, established the Special Economic Zones (SEZ) in various parts of the country, with the main aim to attract foreign direct investment and export of value-added commodities.
Addressing delegates at the event, president Ramaphosa pointed out that since its inception in 2014, the SEZ programme has managed to attract R18.6 billion worth of private investment from 136 operational companies.
“The SEZ programme is playing a very significant role in supporting the implementation of the country’s Economic Reconstruction and Recovery Plan. In our own experience, special economic zones have proven to be an effective tool both to enhance our productive capacity and crowd in private sector investment. This includes foreign direct investment, which often involves technology transfer from international companies. This development presents a perfect opportunity to use our country’s comparative and competitive advantages to accelerate industrialisation,” said Ramaphosa.
The TASEZ project, which started ground works in August, has so far created hundreds of jobs out of the estimated 8 700 job opportunities that the project is expected to generate during the construction phase. Another 2 100 permanent jobs will be created from the operations of the project.
Around 18 companies have already been engaged to set up operations in the 162.6-hectare vicinity, with nine already confirmed to establish factories by the end of 2021.
“The extensive upgrades and new state-of-the-art manufacturing technologies will drive efficiencies across our entire South African ecosystem – from sequenced delivery of parts direct to the assembly line, to increased vehicle production line speeds and precision of assembly to ensure the world-class quality that our customers expect,” said Andrea Cavallaro, director of operations at Ford’s international markets group.
Ford is also working closely with all three spheres of government and relevant state-owned entities such as Transnet, in developing the Gauteng Province – Eastern Cape Province High Capacity Rail Freight Corridor.
This will be a full-service line linking the Silverton Assembly Plant and the TASEZ with Port Elizabeth, which is home to Ford’s Struandale Engine Plant and the Coega Special Economic Zone, according to Ford.