The Coega Industrial Development Zone was a hive of activity Tuesday where Chinese automaker, BAIC, broke ground for its R11 billion rand auto assembly plant.
The mega-project by Beijing Automobile International Corporation will be done in partnership with the Industrial Development Corporation with BAIC holding 65% equity.
According to a joint statement BAIC "intends using this manufacturing facility as its springboard into the rest of African continent. "At full capacity, the plant will produce up to 100 000 units a year consisting of cars, SUV's and pickups."
Speaking at the unveiling of the new joint venture, IDC CEO, Geoffrey Qhena, said the major investment was evidence of South Africa's reputation as the continent's industrial powerhouse.
"We are extremely excited to announce a deal of this magnitude and economic importance to the country, the automotive industry already plays a pivotal role in enhancing our reputation as leading industrial economy. The industry also makes a significant contribution to the economy through local and export income and creates more than 100 000 jobs" he said.
Construction of the plant will start in December and is expected to be complete in the first quarter of 2018.
Qhena said more than 2 5000 jobs will be created during the construction phase.
BAIC Group chairperson, Xu Heyi, said the new plant was central to the company's global expansion plans that service the sub-Saharan and North Africa markets, and eventually the Middle East from South Africa.
"Our dealings with our local partner, the IDC, and with government and industry leaders fill us with the confidence that South Africa-and the Coega IDZ in particular- is the right place to be" said Heyi.
The group's brands include BAIC Motor, Foton, BBAC, BHCM and CHANGHE which is the official manufacturer though joint ventures of Mercedes. Benz, Hyundai and Suzuki vehicles in China.
IDC's CEO, Qhena said 60% of the BAIC vehicle components will be supplied by existing and new local manufacturers.
"The location of the plant in Port Elizabeth is therefore no accident as the city and surrounding area have a wealth of component manufacturers that supply the local automotive plants. This will not be to the exclusion of other manufacturers located near to the other manufacturing hubs in Gauteng, KwaZulu-Natal and North West" he said.
Qhena added that local supply will be prioritised, with plans for the BAIC facility including future construction of the supplier park in the Coega IDZ to facilitate supply.
Eastern Cape Premier, Phumulo Masualle, expressed his government's profound appreciation to the Beijing Automobile International Corporation for chosing the Coega IDZ in Nelson Mandela Bay for its R11 billion vehicle manufacturing plant investment.
"As the Eastern Cape government we feel extremely happy to be part of this auspicious occassion, repositioning the Eastern Cape as part of South Africa's mainstream in our changed socio-economic development landscape. It is no longer a dream deferred but is a reality," Masualle said.
Premier Masualle said the Eastern Cape was steadily shedding its label as simply being percieve as a "labour sending province of unskilled mine workers to one that is now the home and the hub of the most advanced forms of technology as well a research institutes that can showcase some of the best practises that industrialisation and technical competence can display."
Meanwhile, IDC also released its annual results at the Coega Development Zone, the first time it was done outside its Sandton headquarters.
Qhena said the IDC had raised its funding approval in the 2016 financial year by 26 percent, approving R14.5 bn as it sought to inject momentum into the South African economy.
He said this came in the first year of the state development finance institutions new, proactive, value chain- based strategy to industrial development.
"The past year's performances fills us with tremendous sense of pride and achievement, particularly as it coincided with our 75th anniversary" he said.
Qhena said in the past financial year, the IDC had facilitated the creation and saving of more than 15 200 jobs while investing R11.4 billion bringing total investments over the past five years to R57.8 bn, an increase of 122%.
