South African Business 2018 edition
Welcome to the sixth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by an e-book edition at www.southafricanbusiness.co.za. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as sustainability and African trade provide unique insights, together with an interview with the newly elected chairman of the African Association of Automotive Manufacturers, Mr Thomas Schaefer. Another special feature focusses on an exciting project to transform South Africa’s small harbours and coastal properties. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at www.globalafricanetwork.com. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by an e-book edition at www.southafricanbusiness.co.za Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as sustainability and African trade provide unique insights, together with an interview with the newly elected chairman of the African Association of Automotive Manufacturers, Mr Thomas Schaefer. Another special feature focusses on an exciting project to transform South Africa’s small harbours and coastal properties. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. Visit www.globalafricanetwork.com for more business and investment news, opportunities and events.
Welcome to the sixth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by an e-book edition at www.southafricanbusiness.co.za.
Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as sustainability and African trade provide unique insights, together with an interview with the newly elected chairman of the African Association of Automotive Manufacturers, Mr Thomas Schaefer. Another special feature focusses on an exciting project to transform South Africa’s small harbours and coastal properties.
South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at www.globalafricanetwork.com.
First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by an e-book edition at www.southafricanbusiness.co.za
Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as sustainability and African trade provide unique insights, together with an interview with the newly elected chairman of the African Association of Automotive Manufacturers, Mr Thomas Schaefer. Another special feature focusses on an exciting project to transform South Africa’s small harbours and coastal properties.
South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. Visit www.globalafricanetwork.com for more business and investment news, opportunities and events.
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OVERVIEW<br />
• Volkswagen SA exported 20%<br />
more Polos in 2015 than the<br />
year before, and kept up the<br />
momentum into 2016 and<br />
2017. In <strong>2018</strong>, the Uitenhage<br />
plant will introduce three<br />
shifts, increasing export<br />
volumes even further.<br />
• National export volumes<br />
reached a record 344 822 in<br />
2016, earning R118.1-billion.<br />
• Mercedes-Benz exported<br />
more than 10 000 vehicles out<br />
of the Port of East London in<br />
one month in April 2016.<br />
• BMW will invest R6-billion to<br />
start producing the X3 sportutility<br />
vehicle.<br />
• Nissan will double local production<br />
from <strong>2018</strong>.<br />
• Ford will hire 1 200 new staff as<br />
it ramps up production of the<br />
Ford Ranger and introduces<br />
the Ford Everest.<br />
• In 2016, Toyota invested<br />
R6.1-billion into a large plant<br />
at Prospecton, Durban. The<br />
company regularly sells about<br />
a quarter of the vehicles sold<br />
in <strong>South</strong> Africa, and accounts<br />
for the same proportion<br />
of exports.<br />
The latest foreign investment,<br />
and one of the biggest, will see<br />
Beijing Automobile Corporation<br />
(BAIC) take a 65% stake in a<br />
multi-billion-rand joint venture<br />
with the Industrial Development<br />
Corporation at the Coega<br />
Industrial Development Zone<br />
outside Port Elizabeth. BAIC is a<br />
Chinese state-owned enterprise<br />
with several brands. The intention<br />
is to start production on the<br />
85 000m² site in <strong>2018</strong> and the<br />
target is annual production of<br />
100 000 cars, bakkies and sport-<br />
utility vehicles. About 2 500 jobs are expected to be created. This follows<br />
the earlier investment of Chinese manufacturer First Automotive<br />
Works (FAW), which has established a R600-million assembly plant in<br />
Zone 2 at Coega.<br />
Companies like BAIC and FAW may well be positioning themselves<br />
to push into Africa, not only for selling vehicles but for sending automotive<br />
parts and partly-assembled kits further north. A new pan-<strong>African</strong><br />
organisation has been established to promote the auto industry on the<br />
continent, the <strong>African</strong> Association of Automotive Manufacturers (AAAM).<br />
Automotive components<br />
<strong>South</strong> Africa has a sophisticated automotive component sector. The<br />
catalytic converter sector experienced incredible growth for a number<br />
of years but some volatility in the platinum mining sector, together<br />
with increased interest in electric vehicles and hybrids, means that<br />
exporters (largely based in Port Elizabeth) have had to work harder.<br />
A catalytic converter changes bad gasses coming out of exhausts<br />
into less harmful gas. The converter uses platinum group metals (PGMs),<br />
of which <strong>South</strong> Africa has about three-quarters of the world’s reserves.<br />
Tyre and glass manufacturers are clustered around the areas where<br />
the automotive industry is active. Sumitomo Rubber <strong>South</strong> Africa,<br />
which includes Dunlop among its brands, is spending R2-billion on<br />
expanding production in Ladysmith, KwaZulu-Natal. Bridgestone Tyres<br />
has plants in Port Elizabeth and Brits and Continental makes tyres in<br />
Port Elizabeth.<br />
The large number of vehicle models produced in <strong>South</strong> Africa is<br />
a complicating factor for the components sector: low volumes often<br />
mean high prices. Two Port Elizabeth companies export significant portions<br />
of their production to overcome this: Schaeffler SA exports to its<br />
international parent so that it can achieve higher volumes. Shatterprufe<br />
supplies the majority of windscreens to the <strong>South</strong> <strong>African</strong> market but<br />
there are 12 model ranges to serve.<br />
ONLINE RESOURCES<br />
Automotive Industry Development Centre: www.aidc.co.za<br />
Automotive Industry Export Council: www.aiec.co.za<br />
Automotive Supplier Park: www.supplierpark.co.za<br />
National Association of Automobile Manufacturers of <strong>South</strong><br />
Africa: www.naamsa.co.za<br />
National Association of Automotive Component and Allied<br />
Manufacturers: www.naacam.co.za<br />
SOUTH AFRICAN BUSINESS <strong>2018</strong><br />
102