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Coega lures more auto investors

29 July 2008

Six auto component manufacturers are in the process of concluding investment deals worth more than R1-billion with South Africa's Coega Development Corporation (CDC), with their factories to be located within the Nelson Mandela Bay Logistics Park in Uitenhage.

The investment will increase the total number of investors operational in the logistics park to nine by March 2009, as well as seeing an additional 2 530 people being employed between July 2008 and July 2010.

The announcement comes hot on the heels of a takeover of the logistics park by the CDC in collaboration with the Nelson Mandela Bay Municipality, in a 50-year lease agreement between the two parties.

The CDC said in a statement this week that it was now responsible for the management and further development of the logistics park in close co-operation with all relevant stakeholders.

Four investors are currently operating in the park, and the CDC is making good progress in building platforms for the factories for another four investors.

According to the corporation, they are working on tight time-frames, as products to be manufactured in the area are scheduled to be used by existing original equipment manufacturers (OEMs) in the region that are planning to launch new products in the market.

"The positive impact of these developments to the economy of the Eastern Cape will be huge," said CDC marketing and communications manager Senzeni Ndebele. "They will bring dramatic shifts in people's lives in the metro and in the province much quicker than often expected."

Boost for Eastern Cape

The investments by the six component manufacturers and the OEMs are expected to be massive boosts for the Nelson Mandela Bay and the Eastern Cape province.

The province already accounts for 27% of South Africa's output in the sector, with four OEMs and over 100 component manufacturers. Sixty percent of the province's automotive output comes from the Nelson Mandela Bay region.

The growth of the auto sector from investments into the logistics park and at the Coega Industrial Development Zone (IDZ) will strengthen the competitiveness of the region.

The combined effects of developments in the automotive sector, including those in the East London IDZ, will position the Eastern Cape and South Africa well in competing against the country's global counterparts - all of which is significant in the light of expectations that Africa will be the third-largest market for vehicles in the next 10 years.

Meanwhile, the CDC is in serious negotiations with Indian and Chinese companies, who have expressed interest in bringing at least two OEMs to South Africa.

A massive automotive contract manufacturing facility is also on the drawing board for zone two of the Coega IDZ, as part of the CDC's strategy to enhance competitiveness and attract more companies to the auto cluster.

SAinfo reporter