Business

Ford to invest R15.8 billion in South Africa

Automobile manufacturer Ford will invest R15.8 billion in South Africa – the most significant investment in its 97-year history in the country, said Andrea Cavallaro, operations director of Ford International Markets Group.

The international motor company made the announcement on Tuesday at the Tshwane Automotive Special Economic Zone – following President Cyril Ramaphosa’s visit to the site.

Ford has a Silverton plant in Tshwane, which is one of five facilities throughout the world that assembles the Ranger model – the others being Argentina, the US and two plants in Thailand, said Cavallaro.

Ford Motors South Africa produces Rangers for domestic sale and export to over 100 global markets; this includes the entire African continent, Middle East, Mexico and Europe.

The majority, or R10.3 billion of the R15.8 billion investment, will go towards extensive upgrades at the Silverton assembly plant.

Cavallaro said the investment would also create 1 200 incremental jobs for Ford in South Africa. It will increase the employees at the Silverton plant to 5 500 and will add 10 000 new jobs across local supply jobs.

Ramaphosa said that Ford’s decision to invest in South Africa demonstrated its confidence in the country as an investment destination.

He also noted the development presents an opportunity for the country to use its “comparative” and “competitive” advantage to further industrialise, and that SA has many advantages which must be capitalised on to help bolster the manufacturing base and improve export capacity.

“We will be exporting to about 150 countries, that is a phenomenal feat to achieve, and we are achieving it already.”

The investment would not only create employment but contribute to skills development.

The President said that Ford should stay in the country for another 100 years – as it aids in positioning the country in global and regional value chains.

Since the inception of the Special Economic Zone programme in 2014, it has attracted R18.6 billion worth of private investment from 136 operating companies, explained Ramaphosa. An additional 99 investment expressions of interest are currently being considered.

The R15.8 billion investment is 1.3% of the total R1.2 trillion investment drive – which Ramaphosa set to be achieved over five years, according to Trade and Industry Competition Minister Ebrahim Patel, who was also at the briefing.

Patel highlighted that SA produced 627 000 vehicles in 2019. Last year – which was arguably the toughest in the industry due to the Covid-19 pandemic – saw the industry produce 70% of its normal output.

South Africa is the continent’s largest automotive assembler, Patel added. About five billion automotive components are sourced annually from local and global suppliers and finally assembled in South Africa by all original equipment manufacturers, Patel said. If all the vehicles manufactured in South Africa were lined up, they would cover the entire coastline of the country.

Hovever, new vehicle sales remain subdued, with domestic sales in January down 13.9% compared to the previous years.

The National Association of Automobile Manufacturers of South Africa expects that a full recovery of new vehicle sales to pre-Covid-19 levels could take three years. –News24