The secret to the success of the Tshwane Automotive Special Economic Zone (TASEZ) lies in its partnerships, says board chairperson Lionel October.
He was speaking to Power FM’s Noluthando Mthonti-Mlambo during the business focus on 25 October 2023.
TASEZ is based on partnerships between SEZ and the communities of Mamelodi and Eersterust, the Ford Motor Company of Southern Africa and its international component manufacturers that come from Thailand, Portugal, Brazil, as well as South Africa, and government.
“If the three partners work together the community gets real benefits – [jobs and skills development], government provides the world-class infrastructure required, and the private sector creates the jobs and brings the technology, creating our export platforms that is the secret to success,” October said.
TASEZ is one of 10 SEZs set up in South Africa to help grow the South African economy. SEZs are geographically designated areas set aside for distinct economic activities and are supported by special arrangements and systems that are often different from those that apply in the rest of the country.
They are seen as engines that can propel government’s strategic objectives of industrialisation, regional development, and employment creation forward through attracting Foreign Direct Investment and exporting value-added commodities.
Looking at the impact of TASEZ on the South African economy, October pointed out that it is a relative newcomer to the SEZ space, being built in record time, in two years and during Covid-19. This was thanks to strong leadership from the president, the Minister of Trade, Industry and Competition and the provincial and local governments, October said.
In addition, Ford invested R16-billion into expanding their plant in South Africa. “They are now producing the new Ford Ranger vehicle in one of the biggest plants in their stable, exporting to over 100 countries.”
Ford’s investment has seen the creation of highly skilled jobs – 2 000 created by Ford and 3 200 created by TASEZ. “This development has really been beneficial to the local economy.”
Considering how South Africa’s SEZs measure up globally, October looked to China and the Asian Tigers, pointing out that their success can be attributed to SEZs. “While they obviously provide tax incentives and import incentives, but the real winning proposition that we see from China is power, land and logistics.”
It is important to provide a proper logistics system, rail and road; to provide regular and consistent electricity; and to provide a well-developed zone in which to base the manufacturing businesses.
In the case of TASEZ, the partnership with the City of Tshwane ensures consistent power to the zone, October said. “We’re working on a railway link between Tshwane and Gqeberha to use Port Elizabeth as an export port.”
Added to this is the world-class infrastructure provided within the TASEZ hub.