Ford Archives

MEC tours TASEZ, sees firsthand how SEZs can help accelerate reindustrialisation

Special economic zones (SEZs) are ideally placed to help accelerate the country’s much-needed industrialisation, securing foreign direct investment that can be used to create jobs, develop infrastructure and boost local economies. Africa’s first automotive city, the Tshwane Automotive Special Economic Zone, is one of these key drivers. SEZs are viewed as key instruments to making South Africa an attractive option for foreign direct investments. SEZs are important instruments in advancing the country’s strategic objectives of industrialisation, regional development, the promotion of exports and job creation. Tuesday, 16 July 2024 saw the Gauteng MEC for economic development and treasury, Lebogang Maile, visit three of the 12 factories currently based in the SEZ – Ford Frame, Feltex, and Sodecia – to see for himself what the zone provides. TASEZ was established through a committed investment and against a very tight deadline – and during Covid 19 – setting the bar for the development of new SEZs in South Africa. From its beginnings in the dusty veld on the outskirts of Silverton in 2020, to seeing the first cars come off the production line in November 2022, TASEZ has shown just what can be achieved with a solid investor and strong leadership from all three tiers of government. Looking to expand, Ford Motor Company of Southern Africa committed to a R16-billion investment to produce an extra 40 000 vehicles a year, moving from 160 000 units to 200 000 units annually. Supporting Ford’s investment was the political will to drive the project and ensure its success. All three tiers of government become equal shareholders, each with clearly defined roles. The factories based in the SEZ all produce components for Ford, with a focus on just-in-time and just-in-sequence systems. The first phase of TASEZ’s development saw the creation of 3 244 permanent jobs within the zone, with more than 65% from the surrounding communities: 32% going to women and 65.4% by the youth. In addition, more than 5 071 construction jobs were created. “This is in line with the department’s objective of strengthening access into the economy for marginal communities,” Maile noted. “This brings the total of direct jobs created through SEZ to over 8 000 direct jobs resulting in more than 18 396 indirect jobs.” TASEZ CEO Dr Bheka Zulu said: “We are aware of the important role SEZs play in helping to accelerate reindustrialisation of our economic hubs.” He added: “TASEZ is well-placed to help create jobs, support our local communities and boost their economies, and share knowledge and skills.” TASEZ’s Phase 1 also saw 256 opportunities ring-fenced for small, medium and micro enterprises, totalling R1.7-billion in procurement spend. The SEZ is now focusing on its Phase 2 development, and embracing the challenges the South African automotive manufacturing sector faces, in growing the sector, creating jobs, providing access to skills development, ensuring materials and jobs are localised, and including the requirements need for the era of new energy vehicles (NEVs). Over the next two years, Ford will be investing an additional R5.2-billion for the production of the first-ever Ranger plug-in hybrid electric vehicle (PHEV).

TASEZ features on Power FM business programme

News / By Jenny Tennant

The secret to the success of the Tshwane Automotive Special Economic Zone 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.

TASEZ hosts Smarter Mobility Africa Summit delegates

News / By Jenny Tennant

Participants at the 2023 Smarter Mobility Africa Summit toured the factories based at the Tshwane Automotive Special Economic Zone on 4 October 2023 to get a glimpse into the future of the automotive industry. The group, who attended the annual summit, were looking at how the automotive industry is adapting to new, innovative and technologically driven developments. The summit, now in its fifth year, takes place at the start of national Transport Month held every October. This year’s theme for Transport Month is Siyakhe – we are building. According to the Department of Transport, the month draws attention to the multiple transport infrastructure services from aviation and maritime to public transport and roads. It is also a time to highlight South Africa’s road safety campaigns and create awareness of the economic benefits of the sector. The focus for the month is on how the country can build a better transport infrastructure to grow South Africa together. The delegates toured the Ford plant, looking at what the future holds in terms of new energy vehicles. Welcoming the visitors to TASEZ – Africa’s first automotive city – the acting CEO, Rebecca Hlabatau emphasised how important the automotive industry is to growing South Africa’s economy and tackling the country’s triple threats of poverty, inequality and unemployment. “Integrated smarter mobility is central to growing our economy, creating decent jobs, increasing equality, and protecting the environment,” she noted. TASEZ has a very important role in this regard as a special economic zone focused on supporting the transformation and development of the sector, Hlabatau added. “We hope you have gained some insight into the enormity of the projects going on in the sector during your tour this morning, including seeing a glimpse at what TASEZ offers its investors.” While creating an enabling environment for the manufacture of top-quality vehicles is crucial to what TASEZ offers, equally important is the creation of jobs for local communities. The SA Automotive Masterplan This is all in accordance with the South African Automotive Masterplan 2035. The plan has stipulated that the automotive industry must have made significant changes to ensure that South Africa can be a global role player. Key to the Masterplan is a globally competitive and transformed industry that actively contributes to the sustainable development of South Africa’s productive economy, creating prosperity for industry stakeholders and broader society. With this in mind, the objectives identified in the Masterplan include South Africa producing 1% of the world’s vehicles, using 60% local content, and making sure that 100% of those employed by the manufacturers are South African. “As we answer to those objectives, it is crucial for TASEZ to support young, emerging entrepreneurs to find ways to use their innovative and creative skills to come up with unexpected but relevant solutions to the changes in the sector.” Although a relative newcomer to the special economic zones space, TASEZ has been playing an important role in making sure the Automotive Masterplan targets will be met. By the end of 2022/23, TASEZ saw a total of R4,6-billion invested, against a forecast of R3,4-billion. During this same time, the investors employed 2 425 people against a target of 1 688, bringing the total number of people currently employed within the zone to 3 028. More than 65% of these jobs come from the surrounding townships and consist of 39% woman and 52% youth. “And like Smarter Mobility Africa, we too believe that together we will be able to build a better transport system in South Africa that will grow the economy and create jobs,” Hlabatau concluded.