Eastern Cape Business 2017 edition

OVERVIEW
in East London. Mercedes-Benz
set new exporting standards
in April 2016 when it moved
more than 10 000 vehicles
out of East London Port in the
month. Transnet Port Terminals
(TPT) and Transnet National
Ports Authority (TNPA) shared
the accolades for the logistical
achievement, which was
part of a three-month total of
25 860 new Mercedes-Benz
W205 C-Class vehicles shipped.
In the same month, the
Eastern Cape Exporters’ Club
named Volkswagen Group
South Africa as “Best Exporter
OEM” with Ford receiving a merit
award for increased turnover
and job creation. VWSA exported
20% more Polos in 2015 than
the year before, and kept up the
momentum into 2016. Coming
off investments totalling R5.9-
billion between 2007 and 2014,
VWSA will put up another R4.5-
billion for new models to be produced
in Uitenhage from 2017.
The “Best providers of services
to exporters” award gives an
interesting insight into the support
industry that something as
complex as the automotive industry
requires: the 2016 winner
was logistics company Morgan
Cargo and a merit award was
won by Motor Industry Customs
Brokers, a company that specialises
in helping OEMs deal with
red tape and customs.
An Automotive Production
and Development Programme
(APDP) is in place to support
the automotive industry and to
encourage investment. It is run
by the Department of Trade and
Industry (dti).
Components
Only 35% of the components and parts used to make vehicles in
South Africa are produced locally. The large number of vehicle models
produced in South Africa is a complicating factor for the components
sector: low volumes often mean high prices. Two Port Elizabeth companies
export significant portions of their production to overcome this:
Schaeffler SA exports to its international parent so that it can achieve
higher volumes. Shatterprufe supplies the majority of windscreens
to the South African market but there are 12 model ranges to serve.
About 150 automotive suppliers of various types operate in the
Eastern Cape. Sectors include leather works, batteries, automotive
tooling, catalytic converters, glass, lamps, radiators and alloy wheels.
Foundries, such as those run by Murray & Roberts, supply the industry
with cast iron and aluminium.
The catalytic converter sector experienced incredible growth for
a number of years but some volatility in the platinum mining sector,
together with increased interest in electric vehicles and hybrids, means
that exporters (largely based in Port Elizabeth) have had to work harder.
SJM Flex SA, manufacturer of flexible, stainless-steel couplings,
was named overall exporter of the year by the Exporters’ Club in 2016.
Catalytic converter Eberspächer SA won a merit award in the corporate
category for what the judges called its “entrepreneurial flair and major
accomplishments”. Testing company Jendamark Automation also won
a merit award.
Firestone was the first tyre company to be established in Port
Elizabeth. It was soon followed by Goodyear (in Uitenhage) and General
Tyre (now Continental Tyre SA). Continental has about 1 600 employees
and sells tyres domestically and internationally. Bridgestone has
production facilities in Port Elizabeth and Brits.
Both the Coega IDZ and the East London IDZ are trying to attract
companies in the components manufacturing sector.
ONLINE RESOURCES
Automotive Industry Export Council: www.aiec.co.za
Automotive Industry Development Centre: www.aidc.co.za
Automotive Production and Development Programme:
www.thedti.co.za
Catalytic Converter Interest Group: www.sassda.co.za
Coega IDZ: www.coega.co.za
East London IDZ: www.elidz.co.za
National Association of Automotive Component and Allied
Manufacturers: www.naacam.co.za
National Association of Automobile Manufacturers of South
Africa: www.naamsa.co.za
43 EASTERN CAPE BUSINESS 2017