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‘Vision with action can change the world’

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It is fitting, in a month where the world remembers former president Nelson Mandela, that the Minister of Trade, Industry and Competition, Parks Tau, opened his budget vote address with a quote from Madiba: “Action without vision is only passing time. Vision without action is merely day-dreaming. But vision with action can change the world.” These words reverberate within the Tshwane Automotive Special Economic Zone’s core, sitting at the heart of the special economic zone’s (SEZ) ethos. Speaking in Parliament on 16 July 2024, Minister Tau noted that the words also echo the country’s aspirations to build a dynamic, industrial and globally competitive South Africa that is transformed, inclusive and equitable. This is “anchored on industrialisation, transformation, job creation and building a capable and developmental state”. The minister emphasised the importance of manufacturing-led growth. “Manufacturing creates jobs in upstream and downstream sectors,” Tau explained, adding that these jobs were typically permanent and paid decent wages, with workers able to access to skills development and career path opportunities. Instruments such as the South African Automotive Masterplan are crucial; with their focus on supporting localisation, increasing investment, and creating and retaining jobs. “We have industrial capabilities as a country,” he added. The Department of Trade, Industry and Competition (the dtic) would, in identified industries, work closely with relevant state-owned entities and industry to support local manufacturing of key products and to create jobs. Growing the export markets Of importance to TASEZ, is the fact that the minister identified the need to expand and improve exports. South Africa’s automotive sector already exports the bulk of the vehicles manufactured here. In May 2024, naamsa noted that “record high vehicle exports ensured that the automotive industry outperformed the rest of the manufacturing sector” last year.  “The export value of vehicles and automotive components increased by R43.5-billion, or 19,1%, from the R227.3-billion in 2022 to a record R270.8-billion in 2023, comprising 14,7% of total South African exports.” Naamsa noted the export performance included “record exports to all major regions, including the European Union, Africa, the Southern African Development Community, and North America”. Minister Tau pointed out that South Africa’s location at the tip of “the second-fastest growing region in the world”. To reduce a dependence on a small domestic market, “the dtic will implement new export measures, coupled with expanding the current measures and improving their effectiveness” and will work towards expanding its export footprint through BRICS+ (Brazil, Russia, India, China,Iran, Egypt, Ethiopia and the United Arab Emirates), the African Continental Free Trade Area (AfCFTA), the African Growth and Opportunity Act (AGOA) partnership with the United States, and the Economic Partnership Agreement with the EU. Turning to SEZs, the minister reminded parliament that the reason the country had set up SEZs was “to expand economic activity to under-developed parts of South Africa. There are many benefits to this including, creating jobs closer to where our people live and thereby reducing the cost burden poor people carry.” There was no logical or economic rationale for forcing people to live far from their families in increasingly crowded living spaces. “Spatial equity is therefore, a non-negotiable.” Referring to the 11 SEZs established so far, the minister noted: “These SEZs have generated investments amounting to R19.6-billion. In addition, these SEZs provide an on-going revenue stream to national government through ongoing corporate, PAYE and VAT payments. These contributions to tax revenue across over 100 firms located in SEZs far outweigh the initial establishment costs.” Like TASEZ, which is located between Eerstrust, Mamelod and Nelmapius, South Africa’s industrial parks are often located in or adjacent to townships. And these industrial parks provide jobs and incomes to people from the neighbouring townships. “We, therefore, encourage private-sector participation in the industrial parks, in order to assist to improve operations and facilities, and encourage private sector investment.”

TASEZ recognised at the Transport Evolution Africa Awards

2023 – a successful year for TASEZ

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From the launch of an initiative supporting women development to signing a partnership agreement with local communities to hosting interested investors from BRICS countries, the Tshwane Automotive Special Economic Zone is helping change South Africa’s economic landscape. TASEZ has a vision to be the benchmark for special economic zones (SEZs) in the country, contributing to the growth of the automotive sector by being a major creator of new businesses and contributing to employment, transformation, and socio-economic development. It is a big ask for any organisation, particularly one that is three years old. Celebrating women leadership This year has been a particularly busy one for the SEZ. One significant event was the launch in September of the Women of the SEZs, an initiative to empower women, champion diversity, foster inclusivity and celebrate achievements of women in all spheres of the SEZ space. As TASEZ board member Susan Mangole noted, the event aimed to “inspire and build women”, serving as a testament to the unyielding determination of women who continue to steer the course of progress, innovation, and collaboration within the SEZs and beyond. Encouraging investment TASEZ also held its own on the international stage, hosting delegates to the 15th annual BRICS Summit held in Johannesburg in August. BRICS, made up of Brazil, Russia, India, China and South Africa, incorporates more than 40% of the global population and accounts for over 25% of the world’s economy. A number of investors from Brazil, Russia, India and China toured the TASEZ Silverton facilities to find out for themselves what Africa’s First Automotive City has to offer. The SEZ provides world-class production facilities, steers investors towards tax incentives and helps source well-trained workers. At the end of the tour the deputy chair of the BRICS Manufacturing Working Group, Lesetja Mogaba said TASEZ had showed the delegates just how to link industrial development to local community needs. “This is a class act,” he added. International and local relations Egyptian Prime Minister Mostafa Kamal Madbouly visited the Ford Frame plant at TASEZ in August 2023. In addition, TASEZ played host to several other African partners from Uganda and Zimbabwe, who wanted to learn firsthand how TASEZ had managed to grow from a vacant lot into a well-established manufacturing hub in two short years. Questions were asked on how TASEZ is run, what incentives are provided to investors, and what lessons were learnt in the process. Equally critical to the success of TASEZ is its partnerships with the local communities, and to this end the organisation signed a memorandum of understanding with the Community Project Committee (CPC) in February 2023. The document outlined the formal ties between TASEZ and the surrounding communities of Mamelodi, Eesterust and Nellmapius. TASEZ and the CPC are committed to working together to create job opportunities while at the same time building an inclusive automotive industry. Good governance Good governance sits at the heart of all TASEZ’s business efforts, and August saw the company receive a clean audit from the Office of the Auditor-General. This was the third year in a row that the company received such a result. Board chair Lionel October noted TASEZ’s “unwavering commitment to transparency, accountability, and excellence”. The clean audit reaffirmed TASEZ’s commitment to prudent financial management, effective controls, and ethical practices, he added. management, effective controls, and ethical practices, he added. Awards for industry excellence September saw TASEZ CEO Dr Bheka Zulu recognised at the Transport Evolution Africa Awards for his “inclusive leadership”. The awards, which acknowledge “the achievements of transport trailblazers in making an impact locally, nationally and continentally”, formed part of a three-day gathering of decision-makers, businesses and organisations involved in the transport sector. In addition, TASEZ sponsored a special lounge at Transport Evolution Africa to showcase the offerings of South Africa’s SEZs and encourage investors to talk business with the SEZs represented. The year ended on an exciting note, with TASEZ receiving another award: this time the Council for the Built Environment and the Construction Education Training Authority honoured the SEZ as a state-owned entity that implemented infrastructure projects timeously at their inaugural Built Environment Recognition Awards held on 7 December 2023 under the theme “Road to Professional Registration”. The award recognised the efforts TASEZ made to establish and develop Phase 1 of the SEZ in the midst of the Covid-19 pandemic. A new year is just around the corner and will bring a new phase of development to TASEZ, as it begins work on Phase 2.

TASEZ signs agreement with Motheo Group

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Continuing on its track to shape the future of automotive excellence, the Tshwane Automotive Special Economic Zone has concluded a partnership agreement with the Motheo Construction Group. Construction is about much more than erecting buildings, it is about developing people, and that is exactly what was on display when the Tshwane Automotive Special Economic Zone (TASEZ) signed a Memorandum of Understanding with the Motheo Construction Group. The important event took place in the City of Tshwane on Thursday, 2 November 2023, watched by a young group of construction learners who are part of the Motheo Academy. TASEZ executive of business development Msokoli Ntombana spoke of the close relationship the SEZ has with the Motheo Group. The Motheo Group’s website states: “We put roofs over heads, but we also put work boots on feet … We believe in building our nation not only with bricks and mortar, but with the powerful spark that comes from unity.” As the CEO of the Motheo Group Lettie Mashau noted: “Skills development is critical as it has a positive impact on our communities.” This is closely aligned with the ethos of TASEZ, which has a mission “to be a catalyst for employment, transformation, and socio-economic development and industry growth”. Ntombana explained that TASEZ was established as part of the country’s drive towards industrialisation. “But to industrialise, we need our people to be trained.” The partnership with the Motheo Group speaks to the government’s targets, he added, pointing to the fact that the construction group also focused on developing women in the male-dominated construction sector. Ntombana then turned to the learners and encouraged them on their journey, noting that “some of you will own your own companies in the future”. The young learners, who will be working on construction sites within the TASEZ hub, were advised by Mashau “to think beyond finding employment but how they will, in the future, create employment for others”. She shared how she too began as a young trainee, working her way up to her current position. “Like the founder of the Motheo Group, Dr Thandi Ndlovu, we need to leave something even when we are no longer here,” she said.

TASEZ features on Power FM business programme

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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

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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.

The chairman of the board of TASEZ visits the hub

TASEZ gets clean audit for third year in a row

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TASEZ chairman of the board Lionel October has congratulated the entity on its sterling performance in receiving a clean audit from the Office of the Auditor-General. The Tshwane Automotive Special Economic Zone (TASEZ) is proud to announce it has received a clean audit for its 2022/23 financial report. This is the third consecutive year the entity has received such a finding from the Office of the Auditor-General. “It is with immense pride and gratitude that I announce a momentous achievement that reflects our unwavering commitment to transparency, accountability, and excellence,” said board chair Lionel October. “This clean audit reaffirms our commitment to prudent financial management, effective controls, and ethical practices.” The clean audit means that TASEZ produced financial statements that are free from material misstatements and have no material findings on reporting on performance objectives or non-compliance with legislation. “It reinforces our position as a reliable SEZ for local and international investors, assuring them that their investments are managed with the utmost integrity and diligence. Our ability to consistently uphold the principles of transparency and accountability is a cornerstone of TASEZ’s reputation as a world-class hub for automotive investments,” October added. TASEZ, known as Africa’s first automotive city, provides an SEZ that offers a range of financial incentives and high-level support services to investors. Its mandate is to accelerate economic reform through attracting investment and creating jobs and opening up opportunities for small, medium and micro enterprises – and ultimately transforming the automotive sector.