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Gauteng is a compelling automotive investment says Ms Welile Maleka, acting CEO of Supplier Park Development Company, which manages the Automotive Supplier Park at Rosslyn. She says the automotive industry is seen as a key growth sector, with aims to increase vehicle production. By Ian Armitage 2
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he South African automotive industry has historically been considered a critical industry in the South African economy and the government has identified it as key to the country’s future, with the aim of increasing vehicle production to 1.2 million units by 2020, while significantly increasing local content at the same time. They are ambitious targets. And Gauteng has “a significant part” to play. In 2011 the automotive sector contributed almost seven percent to South Africa’s GDP, making it the fastest growing manufacturing sub-sector in the country. Gauteng is South Africa’s leading hub of the vehicle manufacturing industry and home to three of the seven local vehicle assemblers and over 160 automotive component manufactures. It is “an automotive force to be reckoned with,” says Welile Maleka, acting CEO of Supplier Park Development Company (SPDC), which manages the Automotive Supplier Park (ASP) at Rosslyn. She says that Gauteng is “open for business” and that SPDC is “introducing practical measures to reduce the cost of doing business.” The ASP, just in case you’ve never heard of it, is a
manufacturing cluster based in the northern perimeters of Pretoria. It was developed, says Ms Maleka, to “create a beneficial environment for automotive component suppliers by providing infrastructure, logistics and services.” She says that by grouping different technologies, services and service providers, the ASP achieves “synergies and optimisation” through economies of scale and contributes to the sustainability and growth of the South African automotive industry. “The ASP is dedicated as a facility to OEMs such as Ford, BMW, Nissan/Renault, DaimlerChrysler and offers significant benefits, including cost benefits through shared infrastructure, services and facilities concept; central logistics warehouse and container depot; close proximity to vehicle manufacturers; world class infrastructure and offices, conference facilities and a retail centre,” Maleka explains. SPDC’s mandate is to “support the automotive industry” and its mission is to develop “value adding location solutions” in Gauteng and contribute to the development of Gauteng as a “world class global automotive manufacturing region”. Its strategic goals include reducing the cost
Welile Maleka, acting CEO, SPDC
The focus of current policy is on converting the market from one based only on small scale local consumption to that of large scale manufacturing and exports
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of doing business, attracting and retaining manufacturers and facilitating the creation of jobs. “We are unique. We obviously manage the ASP and the area boasts the highest concentration of vehicle manufacturers in the country, all of which have become strategic partners,” Maleka says. “This is a tremendous project that’s matured and it works solely to support the automotive industry in our province.” She believes that Gauteng is now “firmly established” as the leading hub of vehicle manufacturing, not just in South Africa, but in southern Africa, and the province is well positioned to benefit from several new initiatives. Key initiatives to grow and support the automotive industry are set out in the “New Growth Path” plan and the “Industrial Policy Action Plan”. 4
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These are underpinned by incentive programmes like the Motor Industry Development Programme (MIDP) and its successor, the Automotive Production and Development Programme (APDP) – that will become effective in 2013, Maleka says. “The focus of current policy is on converting the market from one based only on small scale local consumption to that of large scale manufacturing and exports.” Countries like South Africa are becoming the new transnational regional hubs for assemblers – and the potential for Gauteng is almost limitless, Maleka says. “This industry can contribute to the broader objectives of job creation, skills development and broad-based black economic empowerment,” she explains. “For instance, a world-class Supplier Incubation Facility (SIF) has been launched in Pretoria as a joint initiative between the
The automotive industry has a leading role in our economic future
SPDC Focus manufacturing
Gauteng Provincial Government and the Ford Motor Company of Southern Africa. It is a R100 million investment in the vehicle manufacturing industry and a vital injection in the economy of Gauteng.” It is indeed a “vital injection”. The provincial government committed R50 million for the construction of the facility and an additional R15 million for start-up costs for BBBEE. A further R32 million has been allocated for training and development programmes at the assembly plant. “Moves like this are very important,” says Maleka. “It highlights the strong level of confidence Ford has in South Africa.” So, then, we should expect a very bright future? “We should. The automotive industry has a leading role in our economic future,”
says Maleka. “The automotive sector still has a way to go and the initiatives we have launched are designed to meet these challenges through dedicated training programmes and the integration of blackowned enterprises into the supply chain.” The success of recent projects has confirmed Gauteng’s ability to conceive and execute public/private partnerships in the automotive manufacturing sector and there can be little doubt that it has strengthened the province’s reputation as an attractive destination for investment that will ultimately benefit whole of Africa. “The industry is entering a new period of sustained growth and Gauteng finds itself at the centre of that growth path, with a vision to become the leading region for the future of the automotive industry in Africa,” Maleka concludes. END
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