KLT Automotive SA embarks on plant expansion and diversification project
KLT SA chief executive Paul Leonard said the company would be investing a further R20million to increase the production of chassis frames at its Hammanskraal factory from an average of 500 a day to 630 a day.
Leonard confirmed that KLT was one of two remaining bidders for the supply of chassis frames for the next-generation Ranger from 2022, was considering establishing a smaller version of its Hammanskraal plant close to Ford’s plant, and was bidding for the contract to supply chassis frames for the Ford Everest.
He said one of Ford’s requirements to be awarded the replacement business for the Ranger was that final assembly had to be done within a 5km radius of its plant to reduce logistics costs. “It makes absolute sense to press and do sub-assemblies from this (Hammanskraal) location, but to do final assembly close to Ford.
“That plant would be capable of doing 200 chassis a day and could lead hopefully to the awarding of the business for the new (Ranger) frame. Two facilities for the plant that we are looking at in Waltloo are 1.5km from Ford’s plant, which is a lot closer than 65km. We think that plant could generate another 200 new jobs,” he said.
Leonard said the project to increase the production capacity at its Hammanskraal plant had an aggressive timeline, because the expectation was to have the additional volume available from July next year.
Sarabdeep Hanspal, the chief operating officer of KLT SA, said the expansion of the Hammanskraal facility would create about 100 jobs. Hanspal said KLT was already one of the biggest generators of jobs in the area.
Leonard said KLT SA, part of the family-owned Indian-based KLT group, started operations at Hammanskraal in 2011 after its Indian parent company secured the Ford Ranger contract.
“It has generated employment for close on 1000 people, which in a depressed area like this means an extended family of close to 20000 relies on KLT SA,” he said.
Shriraj Deshpande, the general manager finance at KLT SA, said KLT SA had invested more than R450m in the Hammanskraal facility in the past seven years, and the Ford Motor Company had invested about the same amount. Deshpande said the company had also invested significantly in human capital and training.
Leonard said the future for KLT SA was bright and it was “very close to knocking on the door of Toyota”, while interest in the company’s products had also been expressed by Nissan SA and Isuzu SA.
He said KLT SA had established a non-automotive plant in Johannesburg about six months ago and was looking at establishing a second non-automotive plant there.
Its current Johannesburg plant did steel processing for another customer base, and the additional plant would probably do tubes and precision tubing. “This will broaden KLT SA’s customer footprint. It’s not easy to get into the customer base, so we are also looking at acquisitions. That is another way of joining the customer pool,” he said.
Empowerment group Kapela Investment Holdings has a 30percent shareholding in KLT SA. Kapela chairperson Israel Skosana is a former chief executive of SA Express Airways and Zungu Investments, executive director of Absa and chairperson of the South African Civil Aviation Authority.
- BUSINESS REPORT