German car part manufacturer to build R178m plant in Uitenhage

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Benteler Automotive, the multinational automotive component manufacturer, will invest R178 million in the Nelson Mandela Bay Logistics Park to supply parts to Volkswagen South Africa (VWSA).

The investment will create 250 jobs and increases the investment by the nine companies in the park and 25 investors in the Coega industrial development zone to R40 billion.

Founded in 1876 and based in Germany, the family-owned Benteler Group today employs almost 25 000 people at 150 locations in 35 countries. It will produce and supply dashboard carrier panels and body parts, front and rear bumpers and chassis parts directly to VWSA’s production plant located adjacent to the park.

VWSA managing director David Powels said this formed part of the company’s plan to increase the local content of vehicles built for the domestic and export markets.

“The company’s all-out initiative is to achieve 70 percent local content in its South African-produced vehicles.

“In addition to the local content benefits the company’s investment brings to VWSA, it is also beneficial to the region due to the skills transfer that will take place,” he said.

Construction started this month and production is expected to commence by mid-June next year. A total of 450 people will be employed during the construction phase.

Luis Madaleno, the managing director of Benteler Automotive South Africa, said it chose to establish itself in the logistics park in Uitenhage to be close to VWSA while the newly opened Port of Ngqura would provide the ideal base from which to export.

“Locating to this area not only benefits the company, as we can tap into the skilled workforce in the area, but we’ll also contribute to the development of Nelson Mandela Bay and the province,” he said.

Pepi Silinga, the chief executive of the Coega Development Corporation, said the investment was a massive boost for Nelson Mandela Bay and the Eastern Cape.

“The number of jobs it will create will have a very positive impact on the lives of the people in the region,” he said.

Benteler SA is the ninth investor in the logistics park.

VWSA announced a year ago it had attracted several key national and international component manufacturers to set up operations in Uitenhage. It said about R1bn would be invested in new facilities by the middle of this year, which would create 1 000 jobs.

VWSA spokesman Bill Stephens said on Friday that facilities established by interior plastic component manufacturer Faurecia Interior Systems, side mirror and cable manufacturer Flextech, bumper manufacturer Rehau Polymer and headliner and door panel manufacturer Grupo Antolin were already operational.

Stephens said metal pressing parts manufacturer Bloxwich, which had planned to invest in the park, had been a casualty of the global financial crisis.

Bell-Essex Corporation’s factory, situated next to the VWSA plant but outside the park, would be completed shortly, he added.

Other park investors are plastic fuel tank manufacturer Inergy and logistics companies Mediterranean Shipping Company and Schnellecke.

By Roy Cokayne

source: Business Report

Orders from parent firm to export 6000 cars puts brakes on VW shutdown

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THOUSANDS of employees were handed an early Easter present yesterday when Volkswagen SA announced a “surprise” multimillion rand export contract had been secured, staving off a planned two- week shutdown at the Uitenhage plant.

VWSA managing director David Powels said that after export orders for the Uitenhage-built Polo had been halved at the start of the year from 40000 to 20000, a German parent company order for an additional 6000 had been confirmed this week.

“We had been planning to close down production during the week before Easter and in the week after the holiday, as both would have been short weeks,” he said yesterday.

“However, the order – valued at between R500-million and R600-million – means that the plant will no longer have to work the short weeks.”

The Easter weekend runs from Friday, April 10, to Monday, April 13.

Powels said the German market was experiencing a “buying down” to smaller cars and that Volkswagen AG – which yesterday reported the best annual sales and profit figures in its 70-year history – had asked Uitenhage to provide the extra vehicles.

Powels said VWSA “were obviously not happy” after the export order was halved “and informed Germany of the significant consequences” of this “in terms of our head count”.

“Those representations, our record of producing world-quality units and our ability to increase volumes helped our case at a time of continuing demand for Polos,” he said.

“It is very good news and enables us to keep the plant running,” said Powels, although adding that the local market was still “very dismal”.

“However, our R3-billion investment to secure the future of our operation is still firmly on track, although some programmes not directly related to product, productivity and quality improvements, and skills training have been delayed,” Powels said.

The process of offering voluntary retrenchment packages to 400 employees was still under way and should be completed next month.

The new export order was hailed by Port Elizabeth Chamber of Commerce and Industry (Percci) chief executive Odwa Mtati as “a very positive development, especially in the current economic climate”.

“We are happy that this will enable employees to continue working, coupled as it is with positive spin-offs for component manufacturers.”

The National Union of Metalworkers of South Africa (Numsa) said “a move in the direction of avoiding further job losses and expanding employment should be welcomed”.