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Taiwanese group opens R170m fuel cell factory in SA

Bringing technology that protects cellular networks against power outages to a country grappling with load shedding.
Chem Energy president Angelin Maharaj (in face mask) leads a tour of the new plant near Durban. Image: Supplied

Chem Energy, a subsidiary of Taiwanese multinational Chung-Hsin Electric and Machinery Manufacturing (Chem) Corporation, on Monday opened its R170 million high-tech fuel cell factory at the Dube TradePort Special Economic Zone (SEZ), north of Durban. 

Chem Corporation, which is listed on the Taiwan Stock Exchange, said in a statement that the new facility “is the most advanced fuel cell factory of its kind in the world”.

A supplier and service provider of fuel cell technology to Vodacom since 2010, the group has $200 million (around R3.4 billion) business in South Africa, according to Chem Energy President Angelin Maharaj.

The new factory represents an investment of around $10 million (R170 million) and becomes Chem’s flagship facility for the production of its newest fuel cell technology, known as G5, Maharaj told Moneyweb.

An aerial view of the Dube TradePort Special Economic Zone near King Shaka International Airport. Image: Supplied

“Chem Energy completed its state-of-the-art fuel cell factory on schedule at the end of March, pausing full operations in accordance with the national shutdown to fight the Covid-19 pandemic, while continuing to support its installed systems throughout the Vodacom network,” he said.

Cellular network protection against outages

“With this technology, South Africa now has the capability to ensure its cellular networks are protected against load shedding at a critical time during this pandemic, when reliable communications is of the highest importance in the battle against the deadly Covid-19 virus,” added Chem Energy director Hal Koyama.

“These fuel cells enable immediate and rapid deployment to rural areas to provide power to villages, clinics, schools and informal settlements, where the grid is not available,” he explained.

Chem Corporation’s factory represents the latest technology-related investment into the Dube TradePort SEZ.

The burgeoning economic zone has attracted more than R3.2 billion in investment to date, according to Nomusa Dube-Ncube, KwaZulu-Natal MEC for Economic Development, Tourism and Environmental Affairs.

Last October, Dubai-based Mara Group opened its Maraphone smartphone factory at Dube TradePort with an initial investment of $50 million. The group has committed to investing a total of $100 million into the plant. South Korean electronics giant Samsung also has a LCD television and refrigerator manufacturing plant within the SEZ.

Read:
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Dube-Ncube said the investment by Chem Corporation represents a milestone accomplishment for foreign investment into KwaZulu-Natal and South Africa.

“We are excited to team up with Chem and [the] industry to help rapidly expand the adoption of this important technology and the growth of highly skilled jobs in this new industry sector,” she said.

Hamish Erskine, CEO of Dube TradePort, added that having a fuel cell manufacturer within the SEZ would open the door for South Africa to ultimately establish local supply chains that service this type of high-tech manufacturing.

“The potential universal application of fuel cell technology will undoubtedly power the next wave of development from telecommunications to the automotive sector. We are proud to have Chem Energy located within our precinct.”

Maharaj said Chem Energy’s new factory will employ up to 50 people and will be able to produce around 1 500 fuel cell products once the plant is at full capacity.

“We already have an almost 10-year track record in [the] local market supplying Vodacom,” he said. “There are around 30 000 cell towers in South Africa and 300 000 on the entire African continent … With Chem Energy making its G5 fuel cell products on South African soil, the country and the continent represent huge market opportunities for us.

“There are also significant opportunities around rural electrification, with our systems capable of powering up to 200 households,” added Maharaj.

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These companies will hardly pay any taxes however the SME which do pay taxes will be hammered for every cent.

It’s great to see the investment but at what cost to the economy and citizens.

How does one source the methanol water fuel? A few years back Sasol was the major bulk methanol source – a byproduct of the coal to oil process I think. They quoted Chicago prices. I am gatvol for diesel the past couple of weeks.

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