With an investment of R550m, the Africa Auto Group is ready to enter the injection moulding industry in a move that will further boost Nelson Mandela Bay as a big player in the automotive industry.
The company, based in Perseverance, is set to be a tier 2 supplier for original equipment manufacturers (OEM).
The investment was revealed on Thursday during the fourth SA investment conference in Sandton which President Cyril Ramaphosa is using to woo industry leaders to pump money into the economy.
Africa Auto Group is 100% black-owned.
It is the venture of former Nelson Mandela Bay Business Chamber director Mandla Madwara and his partner, Lionel Arnolds, an engineer with extensive industry experience who has worked for Engen Petroleum, KMP Engineering and Coreworth Projects.
Madwara, a director of Africa Auto Group, said he was excited that it had moved from concept to bankability.
“We are now negotiating prices with the OEMs, which means the project is viable.
“We are finishing up the pricing.
“They will go through their internal process up until nominations,” he said.
The investment is funded by the auto industrial transformation fund supported by the department of trade, industry and competition.
It is a result of the 2035 SA Automotive Master Plan, which aims to increase domestic production of the components on vehicles driven on SA roads from about 37% in 2015 to 60% by 2035.
The master plan also seeks to foster the creation of black-owned tier two suppliers for Original Equipment Manufacturers.
Three of the country’s seven OEMs are located in the Eastern Cape.
“We fit the aims and objectives of transforming the motor industry, especially the supplier bank and localisation,” Madwara said.
“It will be a benefit for everybody because when these parts are important it is on a dollar-euro rate.”
According to Madwara, production of the factory is expected to take place in the last quarter of 2022 or the first quarter of 2023.
An offer to purchase the land in Perseverance has already been signed.
“We have got a group of professionals that have designed and costed the top structure.
“We have also got a company from Spain that specialises in designing a paint shop for small parts,” Madwara said.
He said it would take about 10 months to equip the factory which, once up and running, was expected to employ 70 to 100 people a shift.
“This is a typical entrepreneurial journey.
“It costs time, money and emotions but what is exciting is that we also as black people have decided we are going to build our own thing from scratch.
“It is also exciting because we have a story to [tell] the young entrepreneur, that these things can be done,” Madwara said.
Ramaphosa told the investment indaba on Thursday that it had been nearly four years since SA had embarked on its ambitious drive to raise R1.2-trillion in new investment over five years.
“Despite the impact of the pandemic‚ by the time of the third SA Investment Conference in 2020‚ we had raised a total of R774bn in investment commitments,” he said.
Ramaphosa said said the country was now two-thirds of the way in reaching its target.
“Of the R774bn committed‚ around R316bn has so far been invested.
“Of the 152 investment pledges‚ 45 projects have been completed.
“A further 57 are under construction,” he said
A total of 15 projects had been put on hold‚ in several cases due to the effects of the pandemic.
Ramaphosa said SA also needed reliable railways and ports to work efficiently.
He said though the establishment of the Transnet National Ports Authority as a separate entity might not be transformational‚ the move was long overdue.
“Transnet will soon start the process of providing third-party access to the freight rail network‚ a development that will encourage more efficient use of some of our country’s most valuable infrastructure assets.” — Additional reporting by TimesLIVE
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