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Tshwane Automotive Special Economic Zone

Together, we can grow the auto sector

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By Mandla Mpangase From attracting foreign direct investments, to supporting auto component producers, to providing skills for the future, to opening up opportunities for local communities, the Tshwane Automotive Special Economic Zone (TASEZ) has an several key roles to play in the transformation of the automotive manufacturing sector.  TASEZ CEO, Dr Bheka Zulu, described just some to the work TASEZ does during a panel discussion on the opening day of South Africa Auto Week 2024 in Cape Town. TASEZ is a key partner of this annual gathering of the industry. A hot topic at the high-powered event, taking place from 15 – 18 October 2024, is that of training skilled workers for an evolving sector, as the production of new energy vehicles (NEVs) is no longer on the horizon, they are already here. “South Africa’s workforce must keep pace,” Dr Zulu said. The rise of EVs, autonomous driving technologies, and smart manufacturing requires an entirely new set of skills. This is where the TASEZ Training Academy comes into play. With the manufacturing sector in constant change as the Fourth Industrial Revolution takes hold, TASEZ, through its’ training academy, is making sure that workers are equipped for this future. “This initiative is critical in ensuring that the country not only retains its competitive edge in automotive manufacturing but also contributes to the development of a highly skilled, future-ready workforce.” “But,” Dr Zulu told the panel, “our academy goes much further; it also offers training to emerging businesses and small, medium and micro enterprises (SMMEs) in both business management as well as the soft skills of marketing their products.” The CEO pointed out the importance of supporting SMMEs and the local communities bordering the SEZ. Currently SMMEs are estimated to contribute 40% towards South Africa’s Gross Domestic Product (GDP). The National Development Plan highlights the importance of SMMEs to the economy. It envisages that 90% of all jobs will be generated by small enterprises in 2030. “As South Africa charts a course toward a more competitive, inclusive, and sustainable automotive industry, we must all go all out to make grow and transform our sector,” Dr Zulu added.

Collaboration is needed to gear up to new auto future

Thought leaders / By

If South Africa is to transform the automotive sector as spelt out in the South African Automotive Master Plan 2035, the industry must take decisive action on a wide range of issues, including decarbonisation, writes TASEZ CEO Dr Bheka Zulu. As the country’s special economic zone (SEZ) focused primarily on the automotive industry, the Tshwane Automotive Special Economic Zone (TASEZ) is ready to play a key role in moving the transformation efforts forward. While South Africa has set itself the task of zero net emissions by 2050, many of the country’s automotive export markets have set stringent targets over the next decade and the original equipment manufacturers (OEMs) are gearing up for the change. No doubt, this will be one of the main talking points at this year’s South African Auto Week, taking place in Cape Town from 15 – 18 October 2024. The theme for this year’s event is Reimagining the Future Together: Celebrating 100-Years of automotive heritage, passion, resilience and ingenuity. Among the topics up for discussion are “Decarbonising the auto sector”, “A path to net zero”, and “SA NEV (new energy vehicle) transition: Policy choices and support instruments”. It is against these current discussions that input from research by Deloitte, Automotive Pathways to Decarbonisation, becomes both prophetic and doable. The report, that “by 2050, automakers are expected to reduce CO₂ emissions by 90%”. It goes on to note that “to reach these aggressive targets, however, the entire value chain will need to be decarbonised”. The Deloitte report states: “Despite ongoing advances in the fuel efficiency of vehicles with internal combustion engines, the automotive sector’s pathway to decarbonisation requires accelerated adoption of electric vehicles (EV). Beyond the regulatory push to reduce tailpipe emissions, this shift is also being driven by consumer demand. In response, automakers around the globe have been ramping up EV production and sales.” However, the sector is faced with the high costs of expanding EVs into the market place, inconsistent regulatory frameworks globally, insufficient access to green inputs such as batteries and steel, a lack of competitive green business models and strong sustainable strategies, the report adds. But all is not lost. “By quickly ramping up EV production, increasing usage of renewable energy, and establishing material circularity, automakers can enhance the industry’s ability to meet the Paris Agreement’s science-based emissions reduction targets.” Deloitte suggests OEMS and component producers adopt circular business models and transition clean energy in both production plants and usage by prioritising sustainability when extracting and processing basic materials, producing vehicles and their parts, and decommissioning vehicles at their end-of-life. “To achieve this target state, the sector will need to eliminate traditional sector boundaries, involve suppliers and customers in the solution, and foster strong cross-sectoral collaboration.” This is where TASEZ is well-equipped to play a significant transformative role as an SEZ. Its strength is in building strong strategic partnerships, supporting current and potential automotive manufacturing tenants in creating green facilities that incorporate the latest technologies, and helping to train a workforce familiar with future trends within the industry. TASEZ’s facilities already embrace green energy solutions, using battery and solar elements. In addition, the SEZ’s close ties with local industry associations, training institutions and industry role players ensure that investors are provided with access to the latest technologies. Because TASEZ is based in the City of Tshwane, it is surrounded by academic, innovative and technological institutions, which are more than capable of supporting tenants in terms of research and development. It is only through partnerships and collaborative action across the entire value chain that a strong decarbonised sector will be built – and there is not too much time left to do so.

Clean audit for TASEZ makes it four in a row

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Not only is the Tshwane Automotive Special Economic Zone (TASEZ) an innovative driver of economic development through supporting the manufacturing sector, it is also a shining example of good governance. Africa’s first automotive city has received its fourth clean audit from the Auditor-General, cementing TASEZ’s reputation as the premier special economic zone (SEZ) for automotive investments in South Africa. “This can be attributed to the effectiveness of the board’s strategic guidance and the SEZ’s commitment to rigorous corporate governance,” says TASEZ CEO Dr Bheka Zulu. This, as TASEZ heads into its Phase 2 development, broadening its offering to diverse investors in the automotive manufacturing space. The clean audit is important as it provides investors with comfort of knowing that the SEZ is committed to sensible, judicious and transparent fiscal management, Dr Zulu adds. “It assures our investors, both international and local, that their investments are managed with integrity and diligence.” As one of the key implementors of South Africa’s industrial development policies, TASEZ plays a critical role in the SEZ ecosystem. TASEZ’s mandate is to accelerate economic reform through attracting investment, creating jobs, and opening up opportunities for small, medium and micro enterprises, particularly for the communities of the nearby townships of Mamelodi, Eersterust and Nellmapius.

CDC/243/24: For the design and construction of the Ford outbound logistics sequencing facility on Phase 2 of TASEZ

Tenders / By

The Coega Development Corporation (CDC) is inviting capable and competent contractors with a proven experience and track record in EPC/Turnkey Projects to submit their bids for the design and construction of the Ford outbound logistics sequencing facility on Phase 2 of the Tshwane Automotive Special Economic Zone to be in The Willows 340-JR to be known as Samcor Park X10, Pretoria. This is an EPC/Turnkey contract and therefore the bidders should submit their proposals either as joint ventures (JVs), consortia or as single entities if they possess all the requisite skills in-house. Bid documents may be collected during working hours from Friday, 6 September 2024 from the CDC’s main office located at 145 Herbert Road, Eastwood, Arcadia, Pretoria, or can be downloaded with E-Tender Portal A mandatory briefing meeting will be conducted on Monday, 16 September 2024 at 10h00 on site, at Tshwane Automotive SEZ, Manitoba, The Willows 340-Jr, Pretoria. All enquiries regarding this tender must be in writing only, and must be directed to Ms Zine Mtanda, Unit Head: Supply Chain e-mail: [email protected] from 6 September 2024 to Tuesday, 29 October 2024 (now extended). The closing date has been extended to now extended to Monday, 11 November 2024 at 14h00 (see addendum below to be signed).

TASEZ Training Academy lauds new graduates

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With the manufacturing sector in constant change as the Fourth Industrial Revolution takes hold, the Tshwane Automotive Special Economic Zone, through its’ training academy, is making sure that workers are equipped for this future. The TASEZ Training Academy celebrated the graduation of 163 learners, presenting them with certificates of achievement on Thursday, 15 August 2024. With the graduates demonstrating exceptional dedication and skill in their training, the event was seen as an opportunity to recognise the learners’ hard work and commitment. The celebration showed the special economic zone’s commitment to providing much-needed skills development in a rapidly changing automotive industry. “Now is the time to lead a skills revolution in this country,” says chairperson, Lionel October TASEZ, adding that the TASEZ’s academy was set up to close the skills and technology gap. “As articulated in the South African Automotive Master Plan, the industry needs to be expanded, becoming more inclusive,” says CEO, Dr Bheka Zulu, adding that “a skilled, agile and adaptable workforce is essential to achieve this.” TASEZ, Africa’s first automotive city, is ideally placed to make an impact on inclusive jobs creation and upskilling. “TASEZ is delivering on its vision to be the benchmark for special economic zones in South Africa while contributing to the growth of the automotive sector,” says Dr Zulu. As the automotive industry is gearing up for production of new energy vehicles and for exports to markets that have set targets to reach a carbon neutral environment, South African manufacturers will need to move swiftly to embrace Fourth Industrial Revolution skills. It is against this backdrop that the Automotive Master Plan has set a number of ambitious targets to be met by 2035, including: The automotive industry is one of South Africa’s most important economic sectors, contributing 4.3% to the country’s gross domestic product. The industry is also the country’s fifth largest export sector accounting 18.1% of total exports. However, the sector – as the country – faces the intense challenge of unemployment alongside an unskilled labour force. Figures are disheartening, with Q2 numbers indicating the highest unemployment rate since 2022. Currently South Africa’s official unemployment rate stands at 33.5.9% for the second quarter of 2024, up from 32.9% for the first quarter of 2024, according to StatsSA. The expanded unemployment rate, which includes those who are no longer actively looking for employment, increased to 42.6%, up from the first quarter figure of 41.9%. These numbers represent the 8.4 million people who are now unemployed, with more than 76% of those having been without a job for more than a year. A focus on skills development and training has never been so important, notes Dr Zulu. “Skills development has the potential to turn the tide against unemployment,” he adds.

TASEZ’s academy celebrates skills development

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The TASEZ Training Academy is gearing up for a day of celebration, with the handing over of certificates to their newest group of graduates on Thursday, 15 August 2024. The training team is hosting the event as part of its on-going commitment to much-needed skills development in a rapidly changing automotive industry. With the 163 graduates demonstrating exceptional dedication and skill in their training, the event is an opportunity to recognising their hard work and commitment.

TASEZ supports African conference on optimising economic growth regionally

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The start of Women’s Month saw some 150 women leaders from across Africa gather in Cape Town to discuss critical issues related to the blue economy, from boosting regional cooperation for sustainable development to building and diversifying the maritime industries across the continent, from training and education to legal rights at sea. The delegates, representing leadership and management in different sectors of the blue economy, were taking part in the 7th WISTA Africa Conference, held at the University of Cape Town’s School of Business Conference Centre from 31 July to 2 August 2024. With the world becoming ever smaller and more interconnected due to technological advances, the theme of the conference was fittingly entitled “Turning the tide: Towards effective regional co-operation to optimise economic growth” – placing an emphasis on several of the United Nations’ Development Goals, including Goals 1, 2 and 14, which refer to the eradication of poverty; working towards a world with zero hunger; and conserving our oceans, ensuring they are sustainably utilised. Set up 50 years ago, in 1974, WISTA – Women’s International Shipping & Trading Association – is a global networking association for women in leadership and management roles in the maritime industry, with the vision of promoting diversity in the maritime, trading and logistics sectors, empowering women to lead through their unique perspective and competencies, with the conviction that gender diversity is key in providing a sustainable future for the shipping industry internationally. It currently has more than 4 000 members representing maritime authorities, port authorities, shippers, agents, business owners, maritime lawyers, maritime media, government authorities and other leaders in the sector in 56 countries and holds consultative status with the International Maritime Organisation (IMO) and has observer status at the United Nations Conference on Trade and Development (UNCTAD). The Cape Town conference, hosted by WISTA South Africa, saw representatives of various WISTA associations from across Africa, alongside industry players and other key participants, meet to discuss strategies to promote diversity, equality. Panel discussions covered: TASEZ looks to regional cooperation As a key sponsor of the conference, the Tshwane Automotive Special Economic Zone (TASEZ) was particularly interested in the panel on regional cooperation, where CFO Rebecca Hlabatau was one of the panellists. As a representative of one of South Africa’s special economic zones, the sustainability and success of our ports’ infrastructure and operations are particularly important; with the bulk of manufactured goods produced in South Africa being exported on ocean-going vessels. SEZs can serve as hubs for regional trade, facilitating the flow of goods and services across borders. And by harmonising policies and regulations within the SEZs, African nations can create a more cohesive economic bloc, enhancing competitiveness in the global market. Of particular interest to transforming and building South Africa’s economy is ease of doing business, particularly in exports, Hlabatau told the gathering. In the case of TASEZ, this includes exporting cars, trucks and automotive components manufactured locally. According to figures from naamsa published in May 2024, the automotive industry outperformed the rest of the manufacturing sector in 2023 due to “record high vehicle exports”. Naamsa noted that “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” – linking to South Africa and the region’s blue economy. “Key to South Africa’s growth is the African Continental Free Trade Agreement (AfCFTA),” Hlabatau added. The AfCFTA aims to fast-track intra-African trade and has the potential to grow our economies as well as improve the lives of people across the continent by opening up markets to Africa’s more than 1.3 billion people. It has the potential to lead to diversification of exports, acceleration of growth and an increase in investment as well as employment opportunities for South Africans and the rest of the continent, she noted. By eliminating barriers to trade in Africa, the objective of the AfCFTA is to boost intra-Africa trade, particularly trade in value-added production and trade across all services sectors of Africa’s economy. Exports to AfCFTA countries already account for nearly a quarter of South Africa’s global exports.

TASEZ CEO draws from the past to build a future of self-respect and dignity

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On this Mandela Day Dr Bheka Zulu, the CEO of the Tshwane Automotive Special Economic Zone (TASEZ), reflects on the legacy left by Tata Nelson Mandela in building a South Africa that truly reaches its full potential. Today, 18 July, we make time to reflect on the profound impact Nelson Mandela had on our country, and indeed, the world. His wise words flowed in many directions, sharing his experiences, teaching his philosophies, and touching wide and diverse topics. But none of these words were more important that those regarding the youth of this country. Speaking at a rededication of a school in the Eastern Cape in 1995, Madiba said: “Our children are the rock on which our future will be built, our greatest asset as a nation. They will be the leaders of our country, the creators of our national wealth, those who care for and protect our people. “But if they are to take on this great responsibility, the rich potential in every child must be developed into the skills and the knowledge that our society needs. Education is the key to that process. It is also a door which opens from every village and city onto our larger society and indeed onto the whole world.” It is heartbreaking to look at the challenges facing the youth right now; with low economic growth, high unemployment, and lingering poverty and inequality. That South Africa’s economy has been constrained is nothing new, with the Reserve Bank’s growth expectations for 2024 and 2025 sitting at 1.2% and 1.3% respectively. These rates are not nearly enough to help the country grow jobs and create business opportunities for small, medium and micro enterprises (SMMEs). The statistics are harsh, with young South Africans bearing the brunt of these issues. Unemployment among the youth – people between the ages of 15 and 34 – totalled 4.9 million in the first quarter of 2023, according to figures released by Statistics South Africa in May. The youth unemployment rate sits at 46,5%. According to Statistics South Africa (Stats SA) “South Africa, like many countries globally, grapples with the challenge of youth unemployment. This is supported by statistics indicating a 45,5% unemployment rate among young individuals (aged 15-34 years), in contrast to the national average of 32,9% in the first quarter of 2024.” The automotive industry plays a strategic role in growing South Africa’s economy. In 2021 it contributed 4.3% to South Africa’s GDP, with the export of vehicles and automotive components reaching a record R207.5 billion – equating to 12.5% of South Africa’s total exports. Becoming globally competitive and transformed But much more is expected from the sector. The South African Automotive Masterplan’s (SAAM’s) vision is to create “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”. Targets set include: It is against this background that TASEZ needs to stand up and play its part in growing the automotive industry alongside helping young South Africans develop the skills and experience they need to gain work in the ever-evolving sector. To quote Mandela, from a President’s Budget Debate in Parliament in 1996: “Jobs, jobs and jobs are the dividing line in many families between a decent life and a wretched existence. They are, to many, the difference between self-esteem and helplessness.” Beyond job creation, the establishment of SMMEs across the country is critical; driving growth, providing employment opportunities, and opening new markets. South Africa sets a great store on the SMME sector as a driver of economic development and growth. In the National Development Plan 2030, SMMEs are identified as having the potential to contribute between 60% to 80% to the country’s gross domestic product growth and employ 90% of the workforce. The NPD, which has set a target of 24 million people in employment by 2030. Of that, 21.6 million people would be in SMMEs. Youth development is a key component of TASEZ’s business case, with our SEZ helping boost the economies of our neighbouring communities of Eersterust, Mamelodi and Nelmapius, providing job opportunities and training programmes for young South Africans and emerging SMMEs. TASEZ’s Phase 1 development saw 3 244 permanent jobs in the automotive manufacturing sector created, with a further 5 071 jobs in construction. SMME procurement spend totalled R1.7-billion. As the SEZ continues to grow, more job will arise, along with SMME procurement opportunities. In addition, TASEZ is planning to create an automotive incubation programme and focus on skills development in support of Tier 1 and Tier 2 suppliers along with expanding the hub and creating 3 000 new jobs. What we need to be aware of is that these are not merely numbers and statistics to us – each job created or project supported represents real families and community members living secure lives with dignity and self-respect. Picking up the baton from Madiba, we know that we have to be daringly ambitious and resolutely committed to contributing our South Africa’s growth, expanding beyond our borders to impacting regional and African development.