The East London IDZ and Johnson Controls will be making a joint announcement of a new multi-million rand investment on Tuesday, March 19, 2013 at the ELIDZ Automotive Supplier Park (ASP).
The massive R380 million investments is an expansion of the Johnson Controls current plant situated at the ELIDZ and will create 180 new jobs. The plant currently supplies Mercedes Benz South Africa (MBSA) with cockpits for the W204. The company has now been awarded a contract to further supply the new generation C-Class W205 with overhead systems, instrument panels, headliners, door panels and cockpits.
“The new C-Class is a global programme and will be produced on four continents. The ability to serve our customer, Daimler, on those four continents with the existing teams and infrastructure was part of the decision to award JCI globally with the W205, said JCI South Africa Vice President and General Manager, Marco vom Wege.
He added that the decision to localise with the intended technology depth was very much influenced by the current discussions that the organisation was having with the government on extending the value chain and local content of the South Africa automotive sector.
“If you look at the technology that we will be bringing to South Africa, we are confident that we can localise more components with other customers in the near future. The logistic chain and import costs as well as the risk of exchange rate fluctuations will drive this further localisation,” added vom Wege.
Mercedes Benz South Africa (MBSA) Vice President Manufacturing, Arno van der Merwe has welcomed the expansion of the JCI plant as it will broaden the impact on economy. “Any increase of local content to us is a victory and gives us an opportunity to deepen our economic impact. In 2012, we spent in excess of R25 million on skills and education to develop local capabilities and skills. We want to draw suppliers closer as this will allow us to influence our cost base and leverage the logistic challenge that we are often confronted with”, he said.
Van der Merwe said the welcoming environment to investors provided by the ELIDZ has been central to MBSA’s success in growing its business over the years. Currently, five new factories that will supply components to MBSA are under construction in the zone.
“The upcoming W205 will increase MBSA’s capacity by more than 50 percent which will see the company creating an additional 800 jobs, with 200 of these being highly skilled Technicians and Engineers”, he said.
According to ELIDZ CEO Simphiwe Kondlo the investment will introduce new automotive capability, technology and skills into the South African automotive industry. “The JCI project adds further value to the region’s automotive sector capabilities. It extends the current regional value chain and through the JCI Academy initiative it will extend the competitiveness of the region’s automotive skills base,” he said. Kondlo added that the ELIDZ had various initiatives in the automotive sector that were meant to diversify the region’s automotive offering.
“To date the East London Industrial Development Zone has attracted 14 automotive investors with a shared investment value of just over R1.2 billion. The latest multi-million expansion by internationally renowned Johnson Controls Automotive and the establishment of a Metal Surface Treatment Plant as well as our Multi-Model OEM projects, are further examples of the role of the ELIDZ in strengthening the region’s automotive sector,” he said.