President Cyril Ramaphosa on Tuesday launched a new automotive hub outside Pretoria, which will host new factories for vehicle part suppliers.
The City of Tshwane has made available 162 hectares of land for the new Tshwane Automotive Special Economic Zone (SEZ), which will be built close to Ford's assembly plant in Silverton, Pretoria.
The zone will focus on supplying components to car manufacturers in Tshwane. Other auto assembly plants based nearby include Nissan and BMW.
Government has started constructing the new hub, which will have Ford as an anchor investor.
Nine Ford suppliers have confirmed that they will set up operations in the new SEZ, says Ockert Berry, vice-president of Ford in the Middle East and Africa. "Having these suppliers located adjacent to the Silverton Assembly Plant is a crucial step towards increasing the efficiency of our local operations, and unleashing further potential increases in production capacity for the domestic and export markets," Berry said.
The initial phase of the new automotive hub is expected to create 7 000 jobs. Once complete, the SEZ could create an estimated 70 000 jobs, Ford said in a statement. It is expected to boost employment in the surrounding communities of Mamelodi, Nellmapius and Eersterust.
Speaking from the site of the hub, Ramaphosa hailed the development as important to the economy, as the country works to attract investment to jumpstart the sluggish economic growth. He said the development will not only be a "catalyst for growth, but will also bring jobs and support local industries".
"South Africa is still proving to be an attractive investment destination," he said, adding that the development will help address the twin challenges of low growth and unemployment.
The project comes as government is engaged in efforts to drive investment into the country, with Ramaphosa set to open the second Investment Summit, in a bid to lure capital into the country.
President Cyril Ramaphosa turning the sod at the new Tshwane Special Economic Zone in Silverton. He is joined by Ministers, Ebrahim Patel, Khumbudzo Ntshaveni, Gauteng Premier David Makhura and Tshwane Mayor, Stevens Mokgalapa. #TshwaneAutoSEZ pic.twitter.com/L6yXKBWwRV— the dti (@the_dti) November 5, 2019
"One may be tempted to think that with the current economic climate, we will not be able to attract investment," he added. He said over 1 000 investors will attend the meeting to be held over the next two days in Johannesburg.
South Africa is battling stagnant economic growth, with the country's GDP forecast by National Treasury to grow by just 0.5% this year compared to 1.5% projected earlier in the year. Unemployment, meanwhile, stands at a staggering 29.1%.
Commitment to SA economy
Ford's domestic turnover contributes over 1% to the country's gross domestic product (GDP), and the company also has a components plant in Struandale, outside Port Elizabeth.
The company said its ongoing investment in the local operations between 2009 and 2018 amounted to R11bn. Its R3bn investment in 2016 saw it boost production capacity at Silverton, where 720 vehicles are produced per day, and around two thirds of the cars, which include the Ford Ranger, are destined for export markets.