A multibillion-rand joint venture between Chinese carmaker Beijing Automobile Industrial Corporation (BAIC) and the Industrial Development Corporation (IDC), launched on Tuesday, will see the construction of the largest automobile plant built in South Africa in 40 years.
The R11 billion plant, one of the city’s biggest-ever investments, is set to create 2 500 direct jobs during its construction phase, and aims to produce 50 000 units in its first year of production. These will include pickup trucks, sport utility vehicles (SUVs) and sedans for the African market.
One of the BAIC group’s subsidiaries, truck, bus and agricultural equipment maker Foton Motor, already has a presence in the South African market.
The project launch coincided with the IDC’s financial results presentation, which was held in Port Elizabeth.
While the financial institution recorded a decline in revenue in the last year, leading to a profit loss from R1.65 billion to R223 million, it plans to increase its investments.
“The IDC is still open for business,” said the investment vehicle’s CEO, Geoffrey Qhena. “We know times are tough, but we know the notes to play.”
BAIC’s group CEO, Xu Heyi, said the joint venture would have created 10 000 jobs during the first production phase of 50 000 units, which ends in 2022.
Construction of the plant is set to begin before the end of the year or early next year. IDC spokesperson Mandla Mpangase said the plant’s exact location had not yet been finalised and was still subject to a feasibility study, which had begun.
“We have just signed the agreement to set up the plant in PE, which will have some really great economic spin-offs,” Mpangase said. “The final selection of the actual location will be finalised shortly before the completion of the bankable feasibility study.
However, because of the export element, it would make sense for the production facility to be in the coastal area.”
While the bulk of the construction bill will be footed by BAIC, the IDC will be a co-funder.
– Citizen reporter