Government has welcomed car maker Ford’s investment into the South African economy.
The new Ford investment at the manufacturer’s Silverton plant, when completed, will pump R1.3 billion in wages and salaries annually into the Tshwane economy.
Tuesday’s announcement follows the designation of the area as a Special Economic Zone (SEZ) in late 2019 by the Minister of Trade, Industry and Competition Minister Ebrahim Patel.
The R16 billion in investment would cover expansion of the Ford assembly plant in phases to reach a capacity to assemble 200 000 vehicles locally, principally centred on the new Ford Ranger bakkie.
An anticipated 1 200 jobs would be created in the Ford plant with thousands of additional jobs at suppliers to the company.
The announcement was preceded by a site visit by President Cyril Ramaphosa and other dignitaries to the construction site where a supplier park is being built.
President Ramapahosa gave the keynote address at the event.
The Ford Motor Company had been in negotiation with the Department of Trade, Industry and Competition (DTIC) on the expansion of the plant, making it one of the largest Ford Ranger plants outside of the United States.
Patel said five key government policies championed by the President, informed the decision of Ford, and enabled rapid decision-making.
“First, the Special Economic Zones framework. In October 2019 we revamped our Special Economic Zone policy, leading to the designation of Tshwane as an Automobile SEZ. Based on this, Ford took the opportunity to announce that they will help build a massive supplier hub in Tshwane and this in turn made the massive investment in the Ford plant itself worthwhile.
Tshwane is on the road to becoming an Auto City, producing cars for local use and export to more than 150 countries,” said the Minister.
Patel said the mobilisation of investment also played a role.
“President Ramaphosa set a target of R1.2 trillion of fresh investment needed to be raised over a five-year period, in order to grow the economy. Today’s announcement of R16 billion by one firm alone is 1.3% of the total.
It will create jobs for women and young people and opportunities for small businesses and local suppliers,” he said.
South Africa’s master plans which drive policy
“The reimagined industrial strategy focusses on sector partnerships which we call master plans. The Ford announcement is made possible by the auto-master plan, which seeks to double jobs and auto production in South Africa by 2035.”
The Minister said transformation and opportunities for small and medium businesses are key goals of the master plan.
African Continental Free Trade Area (AfCFTA)
“Fourth, the opening of new markets for locally-produced products, including the new African Continental Free Trade Area (AfCFTA), which has now entered the implementation phase. It will create a massive market and demand, for locally-produced machinery, clothes and food, and of course Ford Ranger vehicles.
“Fifth, the District Development Model which brings together the different spheres of government within an area to drive better coordination and implementation. It shows that the state can be agile and implementation-focused,” he said.
The announcement of the first major investment was made in less than 15 months following the designation of the SEZ.
The Minister said further announcements will be made in the next 18 months as suppliers finalise plans and take occupation of state-of-the art production facilities.
Minister Patel paid tribute to the partnership with the Premier of Gauteng and the work of the Director General of the DTIC and the senior management of Ford Motor Company for their problem-solving approach to the project.
“This is a boost for our efforts to recover growth and jobs in the economy following the impact of Covid-19 on livelihoods and to prepare South Africa for the opportunities of the AfCFTA,” Minister Patel said.