EAST LONDON IDZ – MBSA PARTNERSHIP INCREASES LOCAL CONTENT
The East London Industrial Development Zone (ELIDZ) has in the past 12 months attracted and settled a significant number of auto players in the process doubling the investment value in the sector.
Through the Mercedes Benz South Africa’s (MBSA) W205 C-Class project, the ELIDZ has attracted six new investors worth over R890 million. About 849 jobs existed in the automotive and related industries before the W205 project. More than 534 additional job opportunities have been created following the introduction of the project.
According to ELIDZ Chief Executive Officer Simphiwe Kondlo the move from the Mercedes Benz W204 C-Class to the exciting new generation W205 has seen the deepening of local content where the region is starting to see more primary manufacturing happening at the ELIDZ automotive suppliers.
“The East London Industrial Development Zone is extremely proud of the impressive export production achievement of MBSA and the major contribution that the C-Class launch represents for the status and future of the automotive industrial output and potential of the Eastern Cape. It is one further demonstration that the region can assemble the capability and determination to enter and capture international markets with products of an extremely high quality and premium technology content”, said Kondlo.
He added that the ELIDZ engagement with MBSA in building the automotive production capacity of the Eastern Cape is a vital partnership that underpins the attraction of foreign investment and the location of new, competitive production and product technologies. In this respect, the establishment of a world class e-coating facility at the IDZ in support of the new C-Class production heralds a significant achievement for the auto industry development in South Africa and is set to grow the total automotive investment base located within the Buffalo City Metro.
“At the same time, the achievement of the new model launch also enables and supports the long-term enhancement of employment potential in the region through the major and sustained investment into the development and retention of world class industrial skills. MBSA is also commended for its efforts to deepen local content and the ELIDZ is working to ensure that it prepares a receptive and world class manufacturing production location in the IDZ that is well configured to accommodate and continue to grow such investment, in support of further development of local content inputs and growth in employment”, he said.
When ELIDZ was designated in 2002 it had to look at a strategy that would get the zone up and running and further achieve its mandate of attracting investors, bringing in new technologies and creating jobs. The automotive sector was identified as an anchor sector as the region continues to lead in this sector.
“We had to come up with a clear selling proposition and the key attraction for ELIDZ as the value proposition was that of housing just-in time just-in sequence suppliers which made the automotive supplier park like an extension of MBSA plant. Logistics processes and short quality loops that were designed as part of the concept helped in streamlining the flow of components to the MBSA plant, creating an efficient supply chain”, said Kondlo.
This added a lot of what the ELIDZ provided as a strong infrastructure platform with modern factory facilities where the issue of infrastructure and support services will not be a concern anymore and that significantly reduced the burden on suppliers who would have to develop these on their own.
“This meant that IDZ’s value offering allowed suppliers to mainly focus on their core business, which contributes towards improved quality of supply for MBSA. The centralisation of some support services in the cluster also improves the economies of scale and lowers the production costs for suppliers to MBSA”, concluded Kondlo.