Eastern Cape Business 2024

The 2024 edition of Eastern Cape Business is the 17th edition of this successful publication that, since its launch in 2006, has established itself as the premier business and investment guide for the Eastern Cape. The Eastern Cape Development Corporation (ECDC) is supporting this issue of the journal, both in providing up-to-date information for editorial use and in sharing information about its activities. It will also distribute the journal through its regular channels. While the Eastern Cape has deservedly earned the title of South Africa’s wind energy province, there are other developments taking place in East London, the Coega SEZ and near Humansdorp that promise to give new meaning to new energy. Vanadium batteries, green ammonia and green hydrogen are among the aspects that form part of the Special Feature on energy that appears in this journal. The centenary of the massively important automotive industry is celebrated with reference to Ford Motor Company’s start in the “Auto City” of Port Elizabeth, as it was known, in 1924. The province’s two Special Economic Zones are attracting investors and exports are on an upward trajectory, which will be helped by upgrades of the Eastern Cape’s three ports. Overviews are provided on the other key economic sectors of the province and the potential of the oceans economy and the prospects of oil and gas for this coastal province are examined. The major business chambers in the province have made contributions to the journal and the newest chamber, the Maritime Business Chamber, which has its headquarters a short distance up the hill from the Port of Gqeberha, makes its second appearance in the journal.

SPECIAL FEATURE A

SPECIAL FEATURE A century of automotive manufacturing The Eastern Cape celebrated an important milestone in 2024 and welcomed a new motor marque to its OEM stable. Investment is happening and employment numbers are good. The Minister of Trade, Industry and Competition, Ebrahim Patel, and Samir Cherfan, Stellantis Middle East and Africa Chief Operating Officer, have signed a Memorandum of Understanding. The year 2024 marked a significant milestone for the Eastern Cape’s motor industry. Not only did the year signify a century since Ford Motor Company’s first model was produced, but the celebration followed closely on the 2023 announcement by Stellantis that it would be making a big investment into the province. Stellantis makes and distributes 14 automotive brands, from Alfa Romeo to Maserati. Stellantis has confirmed its intention to develop a R3-billion greenfield manufacturing facility in the Coega SEZ with the Industrial Development Corporation (IDC) and the Department of Trade, Industry and Competition (the dtic). This forms part of the company’s strategy for the Middle East, South Africa and Sub-Saharan Africa, where it plans to grow market share above 12% by 2030. The first vehicles are expected to start rolling off the assembly line in early 2026 and the CEO of the Coega Development Corporation (CDC) has given the province’s newest original equipment manufacturer (OEM) a warm welcome. Khwezi Tiya went on to say that “an anticipated 1 800 jobs will be created in the metro and about 2 097 for the Eastern Cape Province”. A century on, Ford continues to invest in its Eastern Cape facility. The company now makes engines at its Struandale plant in Gqeberha where R600-million is allocated to making the 3.0L V6 turbo-diesel engine for the Ford Ranger, which is assembled in Tshwane. Ford has also initiated discussions about the feasibility of developing a sophisticated rail corridor between Gauteng and the Eastern Cape. The company wants to send parts to Pretoria and export vehicles through the Port of Gqeberha. In a five-year period, all of the OEMs with long histories in the province, Mercedes- Benz South Africa, Volkswagen Group Africa, Isuzu and Ford, collectively invested more than R22-billion in plant expansions and preparations for new models. Chinese group FAW is the other large OEM active in the province. Major makers The 520 963m² Kariega facility of Volkswagen South Africa is one of four plants worldwide that makes right-hand-drive Polos but the only one in the world that makes the Polo GTI. By the start of 2018, Volkswagen South Africa had spent more than R6.1-billion on its plant in Kariega, an investment that enabled the manufacture of two-million Polos and Polo Vivos. This milestone was achieved in December 2022 when a lefthand-drive Ascot Grey VW Polo, set to be shipped to Germany, rolled off the production line. More than 80% of the plant’s vehicles are exported. EASTERN CAPE BUSINESS 2024 18 PHOTO: Stellantis

The Kariega plant of Volkswagen Group Africa has gone past the two-million mark in Polo and Polo Vivo production. Mercedes-Benz South Africa’s new C-Class project (W206) has sparked several other related investments, which collectively will create 2 078 new jobs over two years. The production of the C-Class vehicle is a technological marvel and the plant regularly wins international awards for quality. MBSA has also begun the rapid expansion of its electric vehicle (EV) charging station infrastructure. Phase 1, which is being rolled out by Chargify, will see R15-million invested in 67 stations in 2024 to be followed by a further R25-million set aside to increase the number of stations to 126 nationally. The partnership with Chargify is part of MBSA’s expansion of its Enterprise and Supplier Development (ESD) programme. In 2021, MBSA announced a R13-billion investment to accommodate the production of the latest C-Class vehicle. This included three new assembly lines, a new body shop and more advanced robots. Much of this is happening in the East London Industrial Development Zone (ELIDZ), which has made a commitment to localising the 2nd and 3rd-tier automotive components that are not currently in South Africa. Both the ELIDZ and the Coega Special Economic Zone have areas dedicated to automotive and automotive components manufacture. Isuzu SA has completed its consolidation project, with truck and bakkie manufacturing now taking place at its new headquarters in Struandale, Gqeberha. Isuzu launched the seventh-generation D-MAX bakkie in 2022, using for the first time a new body shop at the Struandale manufacturing plant and a new chassis assembly line at the company’s Kempston Road facility. Home-grown manufacturer of powertrain and catalytic converter assembly systems, Jendamark, exports to 18 countries. Continental Tyre South Africa is producing a 19-inch tyre at its New Brighton facility in Port Elizabeth. An Aftermarket Programme to assist independent mechanics and panelbeaters to get better access to the budgets spent annually by the insurance industry, has identified 73 panel beaters in its first year of operation. The intention is to find up PHOTO: Volkswagen Group Africa 19 to 300 such businesses to link them to the automotive value chain, which includes the insurance industry, estimated to be in the region of R40-billion, and the national government automotive fleet (R100- million). The scheme is run by the Automotive Industry Development Centre – Eastern Cape (AIDC-EC) and offers a three-year programme for participants. The Provincial Government of the Eastern Cape intends partnering with the private sector to establish a Component Supplier Development Fund to expand access to finance for smaller enterprises. Another task of the AIDC-EC is to prepare the province for the introduction of electric vehicles. This entails promoting renewable energy projects within the sector, rolling out skills programmes to assist with the transition to new technologies and installing electric-vehicle charging stations on major routes. The most recent announcement stated that 13 EV charging stations would be established in 2024. ■ R22-billion: invested by Big Four in five years 60 000: employed 118: component suppliers 56%: of South African cars exported Source: SOPA 2024