Coega has with the attraction of the R11 billion investment by the Beijing Automotive Group co., Ltd in 2016, affirmed the vital role it is playing in stimulating the development of the automotive industry in the Nelson Mandela Bay Municipality (NMBM) and Eastern Cape (EC) at large. The BAIC Group’s commitment to locate at Coega and other automotive related investments attracted over the past decade, is in line with the Coega Development Corporation’s (CDC) objective to continue to play an increasingly relevant role in enhancing the region’s automotive footprint and in contributing to the sustainability of the automotive sector by providing opportunities to service the local and export markets.
Most notable achievements thus far include the location of BAIC Group ‘s passenger vehicle assembling facility and FAW’s heavy vehicle assembly plant in the Coega IDZ. FAW became operational in July 2014 when the facility was officially opened by Honourable President Jacob Zuma. The BAIC Groups facility will start production in December this year at the conclusion of the construction phase started in January 2017 .Coega also continues to locate new investors or facilitating increasing the capacity of automotive component suppliers in the Nelson Mandela Bay Logistics Park (NMBLP)
The CDC’s offering to automotive investors includes cost effective comprehensive manufacturing solutions in Zone 1 and 2 of the Coega IDZ and also in the Nelson Mandela Bay (Automotive) Logistics Park in Uitenhage. CDC’s objective is to support automotive investors, assemblers and component suppliers alike with a diverse range of services to allow companies to focus on the core business of manufacturing and distribution.
The business solution offered to automotive investors includes:
• Establishment of production activities in a safe and secure manufacturing environment such as:
· Land and buildings for lease,
· Shared telecommunication networks,
· Shared 24-hour security and other services in an enclosed and fenced off area,
· Municipal services of world class standard,
· Assistance to access investor support and incentives available from national, provincial and local government, and,
· The option to locate in a customs controlled area (CCA) offering duty and VAT suspension.,
· A basket of other investor services including worker recruitment and training to address the specific needs of each investor.
A location in the Coega IDZ or the NMBLP has the benefit of providing:
• Logistical solutions providing easy access to the National Freeway connecting all major cities in the Eastern Cape and other SA provinces and other African markets.
• Access to export markets via South Africa’s newest deep-water Port of Ngqura, the existing port of Port Elizabeth; and an international airport.
• Linkages with government supported initiatives such as interfacing the Eastern Cape Automotive Industry Forum and the Eastern Cape Tooling Initiative and others supported by Provincial and national government.
The CDC is involved in activities to continuously improve the competitive position of the IDZ and the NMBLP and is aiming at providing an extremely competitive manufacturing location for the automotive sector in South Africa. One of the expressed objectives is to further progress on the establishment of a Multi OEM Complex in Zone 2, a Customs Controlled area offering a duty and VAT suspended environment.
It is CDC’s aim to intensify efforts to locate:
• First, second and third tier automotive component suppliers in the NMBLP and Zone 2.
• Original Equipment Manufacturers (OEMs) to assemble passenger, bus, truck and agricultural
vehicles in Zone 2.
• Shared services to Zone 2 to accommodate particularly OEMs with small production runs. The
shared facilities are inclusive of an E-Coating facility and paint shop.
• A purpose built, fully effective tooling manufacturing and servicing cluster.
• A logistics service platform complimented by a full range of other support and complementary
industries. This is inclusive of a Vehicle Preparation and distribution centre (VPC/VDC).
The CDC is in process of establishing a Multi-OEM complex for the automotive assembly and components manufacturing sectors in Zone 2. FAW and BAIC Group are currently anchoring this initiative which is in line with CDC’s strategic plan embracing an OEM industrial clustering approach.
It is envisaged that the Multi-OEM complex will house vehicle assembly halls and shared service infrastructures. First, second, and third tier automotive component suppliers will all be brought together in one mega-automotive zone. The envisaged Coega Multi-OEM complex will have shared facilities that will include a supplier park, an e-coating plant , a paint shop and a vehicle distribution centre, amongst other amenities.
The multi-OEM cluster will also offer investors advantages such as lower infrastructure investment costs, increased production flexibility for contract manufacturing opportunities through shared services, and enhanced supply chain management. Another benefit envisaged is the reduction of inventory holding costs.
Assembly halls under the vehicle manufacturer’s own brand name will be supported by a network of shared services and facilities that will reduce assembly costs.
For investors who wish to take advantage of opportunities in the automotive sector, please contact our expert in the automotive sector,
Mr. Gustav Meyer on: