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Chinese automaker to invest in SA

30 November 2011

Chinese vehicle manufacturer First Automobile Works (FAW) is to invest US$100-million (about R840-million) in the construction of a state-of-the-art truck and passenger car plant at the Coega Industrial Development Zone outside Port Elizabeth in the Eastern Cape province.

The multi-million dollar investment is being hailed as a success for the government, which has been trying to attract increased foreign automotive investment into South Africa.

"This is a big accomplishment for the Eastern Cape and has the potential to create hundreds of new permanent jobs in the province, contributing to the strengthening the province's economy," Eastern Cape Economic Development MEC Mcebisi Jonas said in Port Elizabeth this week.

Top-level meetings

Jonas said the commitment by FAW to build the plant in South Africa followed a number of meetings between FAW executives and SA government representatives, including President Jacob Zuma, Trade and Industry Minister Rob Davies, Nelson Mandela Bay Mayor Zanoxolo Wayile, and Coega Development Corporation CEO Pepi Silinga.

He said FAW's decision to build the plant in South Africa was significant as it would be one of the biggest manufacturing investments by a Chinese entity in the country so far.

The entrance of FAW into the province would also add to the existing list of automobile manufacturers in the province, which includes Volkswagen, General Motors, Ford and Mercedes Benz.

"It's expected that negotiations will be concluded towards the end of February next year, followed by the signing of an agreement at Coega. Construction will start shortly after the signing of the contract."

Location, skills, support

Jonas said FAW's decision was prompted by Coega's location, the proximity to the port of Ngqura, logistical solutions on offer, the availability of skills in the Port Elizabeth metropolitan area and support mechanisms offered by the Coega Development Corporation.

The plant will be built on 400 000 square meters of land and is expected to produce 5 000 trucks annually, as well as light commercial vehicles and passenger cars.

"The truck assembling facility is expected to create 400 to 500 jobs, with more jobs being created when FAW start producing an additional 30 000 passenger vehicles annually," Jonas said.

Source: BuaNews