A total of R20.13 billion is to be invested in South Africa by the Ford Motor Company and its suppliers for the production of the new Ranger and a bakkie for Volkswagen at Ford’s assembly plant in Silverton in Pretoria and the adjacent Tshwane Automotive Special Economic Zone (SEZ).
Andrea Cavallaro, director of operations at Ford’s International Markets Group, on Tuesday said the investment will create 1 200 jobs at the Silverton plant to increase Ford’s workforce to 5 500 at the plant and add a further 10 000 jobs to the already 50 000 jobs across Ford’s local supply network.
Cavallaro said Ford is investing a further $1.05 billion or R15.8 billion into its South African operations as it defines an exciting new era for Ford in South Africa.
“It’s the biggest investment in Ford’s 97-year history in South Africa and one of the largest ever in the local automotive industry and represents Ford’s firm and ongoing commitment to South Africa and its people.
“With this investment, Ford is expected to generate revenues exceeding 1.1% of South Africa’s GDP, further entrenching the automotive industry as one of the country’s key manufacturing sectors,” he said.
Cavallaro said this investment “ticks off” another 1% in President Cyril Ramaphosa’s drive announced in 2018 to attract $100 billion in investment into South Africa within five years.
- $686m or R10.3 billion of the investment provides for extensive upgrades to the assembly plant in Silverton, including increases in the plant’s installed capacity from about 168 000 to 200 000 vehicles a year and to drive significant improvements in production efficiency and vehicle quality.li>
- A further $365 million or R5.5 billion investment by Ford in tooling at its major supply factories.li>
- Investments of R4.33 billion by 12 automotive component suppliers, including existing and new suppliers in the country dedicated to producing components for the new Ranger and Volkswagen Amarok product, in facilities and to set up their businesses adjacent to the Silverton plant.li>
Cavallaro declined to comment on the investment related to the production of the new Volkswagen Amarok.
“We have an agreement with Volkswagen and are responsible for setting up the facility to produce the vehicles but we are not going to provide commentary on the investment that is related to Ford versus VW,” he said.
This follows Volkswagen and Ford announcing a new alliance in January 2019 in terms of which they would jointly develop bakkies and vans, starting in 2022, in a bid to reduce costs in an increasingly competitive market.
Azar Jammine, the chief economist at Econometrix, said the investment is positive news in the midst of very negative news in other spheres.
“It’s very welcome and sends a positive message that they still see this economy managing to present a reasonable market for basic products,” he said.
President Cyril Ramaphosa said Ford’s investment is a clear statement of the company’s confidence in the government’s SEZ programme and its ambitions for its South African business.
Ramaphosa said the SEZ programme is playing a very significant role in supporting the implementation of the country’s Economic Reconstruction and Recovery Plan, which was launched in October last year to respond to the economic impact of the pandemic.
“Since its inception in 2014, the Special Economic Zones programme has managed to attract R18.6 billion worth of private investment from 136 operational companies.
“An additional 99 investment expressions of interest by companies, worth R48 billion, are currently being considered.
“We hope to get a large slice of this landed as viable projects, as we work with firms to turn ideas into commercial reality,” he said.
Ramaphosa said the development of the Tshwane Automotive SEZ infrastructure, which is supported by the Department of Trade, Industry and Competition to an estimated value of R3.15 billion over the next three years, will see the creation of an expected 2 000 direct manufacturing jobs.
The total short-term jobs to be created during the construction phase is estimated at around 8 600, he added.
Trade, Industry and Competition Minister Ebrahim Patel said Ford’s investment announcement was made possible by five policies championed by Ramaphosa that underpinned decisions to significantly upscale manufacturing in South Africa.
Patel said these were special economic zones, the mobilisation of investment, the masterplan driving policy, the opening of new markets for locally produced products and pioneering the district development model that brings together the three spheres of government in a social partnership with the business sector, communities and labour.
Cavallaro said the Silverton assembly plant is already one of Ford’s largest production hubs in the world for Ranger bakkie and one of the largest Ford truck plants outside of the United States.
He said the extensive upgrades to the Silverton plant include the construction of a new body shop with the latest robotic technology, extensive changes to the paint facility and final assembly to improve vehicle flow, expansion of the plant’s container and vehicle yard and the construction of a new vehicle modification centre.
Ford will also be building a high-tech stamping plant, which will be located at the Silverton plant for the first time and provide all the sheet metal components for the Ranger on-site, and a new Ford-owned and operated chassis line in the Tshwane Automotive SEZ for the new vehicle programme.
Ford is also working closely with all three spheres of government and relevant state-owned entities, such as Transnet, in developing the Gauteng–Eastern Cape High Capacity Rail Freight Corridor.
This will be a full-service line linking the Silverton assembly plant and Tshwane Automotive SEZ with Port Elizabeth, the home to Ford’s Struandale engine plant and the Coega SEZ.
“The GP-EC High Capacity Rail Freight Corridor will channel all of Ford’s inbound and outbound logistics exclusively through Port Elizabeth to support the higher production volumes. It is projected to create thousands of jobs within the value chain,” said Ford Motor Company of Southern Africa vice president operations Ockert Berry.