KwaZulu-Natal automotive supplier park to be operational from 2021

Multibillion-rand plans to develop areas south of Durban, including the development of an automotive supplier park special economic zone (SEZ) to attract Japanese and other investors and a R4 billion logistics park, are expected to revive the region and create hundreds of jobs.

The plans include the possible manufacturing of the first hybrid vehicle by Toyota South Africa in Durban next year and the development of a locally branded vehicle.

Durban’s R2.2 billion automotive supplier park special economic zone will be operational in 2021, with automotive manufacturer Toyota as one of the agreed tenants. About 1 339 jobs will be created as a result of the investment, Economic Development, Tourism and Environment MEC Nomusa Dube-Ncube said during the signing ceremony of a memorandum of understanding (MoU) between the Ithala Development Finance Corporation (IDFC) and the South African Technicians Association (Sata).

Economic Development, Tourism and Environmental Affairs (Edtea) MEC Nomusa Dube-Ncube said the government had been negotiating with Toyota SA to attract foreign investors to take up tenancy at the new automotive supplier park.

The manufacturing sector contributed 17.4% to the province’s Gross Value Added and employed
334 714 people, of which 295 557 worked in the formal sector and 39 200 in the informal sector of the economy, she said.

“We are eyeing the automotive sector as a catalyst for the reconstruction and transformation of our economy. The automotive sector has suffered billions in losses as a result of COVID-19. This has resulted in job losses,” Dube-Ncube said.

She added that before the pandemic, the government had been working swiftly to ensure that the Automotive Supplier Park SEZ, located south of Durban, was operational next year.

Dube-Ncube said the department had had successful negotiations with Toyota, which had agreed to take up tenancy in the park.

“We agreed with Toyota South Africa that they should lobby automotive suppliers to its parent company in Japan to locate their operations in our SEZ. One can never over-emphasise the contribution that Toyota has made in our economy. The company spends R24.2 billion on procurement,” she said.

“We want to ensure jobs are created in the provision of bulk infrastructure development. We also want to promote innovation and localisation in particular through the manufacturing of the first South African car in KwaZulu-Natal.”

“In Kenya they have Mobius, in Uganda they have Kiira, in Malaysia they have Proton, in India they have Tata – in KZN we want to have our own brand,” Dube-Ncube said.

“We want the impact of the sector to be felt in the township and rural communities. An automotive repair or service facility located in the city and suburbs has a jobs multiplier of 3.6. This means that for every one job at the facility, there are an additional 2.6 jobs supported in the local economy,” she said.

Nigel Ward, executive vice-president, manufacturing and support at Toyota South Africa and president of the Durban Chamber of Commerce and industry (DCCI), said the firm was seeking to attract component manufacturers in Thailand, Japan and the EU.

He said the plan for the autopark, which would be located in Illovo, formed part of the Department of Trade and Industry’s automotive production development plan.

“We are working closely with the Premier’s office and the Edtea MEC around the auto supplier park. We have a very definite plan over the next five to 10 years to increase our local content to bring more people into the province to manufacture for us. It is new work and new business from Thailand, Japan and the EU,” he said.

He said that to be competitive it was important for the firm to switch to the local supply of components that were currently being imported.

“We are planning a new passenger vehicle in 2021, and one of the options is it will be the first hybrid (electrical and normal combustion) produced in Durban,” Ward said.

He said the DCCI welcomed the developments and was encouraging collaboration among businesses including major firms like Engen, Sapref, Defy, Mondi and SAB.

“It is an area that in the past 10 to 15 years has been neglected. All the new developments have been north of Durban and west of Durban in uMhlanga Ridge and Cato Ridge. There hasn’t been a lot of new development down south. There is a lot of potential down here,” Ward said.

Dube-Ncube said the government also welcomed investments in the Durban South Basin, including the R4 billion, 35 8000m² Clairwood Logistics Park being developed by JSE listed-developer, Fortress REIT.

Grant Lewington, the national leasing manager at Fortress REIT, said roads, including parts of the M4, had been upgraded at a cost of R100 million.

“Construction of the first 25 000m² facility has been completed and rented out to Sammar Investments, a warehousing company,” he said.

“We are now nearing completion of the second facility, which is also about 25 000m², which will be completed in May 2021 and rented to African Sugar Logistics,” he said.

Lewington said construction on a third 20 000m² warehouse facility had commenced and was expected to be completed next year. He said 56 000m² on the property had been earmarked for use as a container terminal that would open in September next year.

“The proximity to the port allows us to be competitive and because of that we are thinking of introducing rail to the park,” Lewington said.