Metair contract deal will create 3300 new jobs
The deal is expected to create 3300 jobs and see the JSE-listed international manufacturer and distributor of energy storage solutions and automotive components spend up to nearly R1billion to tool up.
This formed part of Ford's investment and production expansion programme ahead of new vehicle launches for the local market and to meet the demands of its export-driven business.
Metair plans to invest more than R900million to tool up for the expansion.
Metair’s share price rose 4.9percent to R17.26 on Friday afternoon, before closing at R17.16.
Metair chief executive Theo Loock said the company was delighted to expand its relationship with Ford.
The investment approved by Metair’s board was its largest to date for a single customer, and more than 3300 jobs were expected to be created, with the largest portion in northern KwaZulu-Natal.
Total funding requirements were estimated at R1.3bn for Metair, while more than R900m would be invested in property, plant and equipment. This included construction of a new manufacturing facility in KwaDukuza in northern KwaZulu-Natal.
A new logistics facility would be established in Silverton, Gauteng, where Ford’s manufacturing plant was located.
National Association of Automotive Component and Allied Manufacturers executive director Renai Moothilal said the outlook for the South African motor industry remained positive, with original equipment manufacturers (OEM) and component manufacturers investing significant capital to expand their facilities for model changes and additional models.
Metair’s Hesto Harnesses would be the largest beneficiary in the new contracts, supplying a range of wire harnesses, but a number of other subsidiaries would also support Ford, including Unitrade, Automould and Lumotech, with a variety of wires, plastic and chrome-plated parts, as well as headlights and taillights.
Trade, Industry and Competition Minister Ebrahim Patel said Metair had made big strides in the international automotive sector, “and we will continue to support industries that drive technology and skills transfer, but also create employment opportunities over the long term”.
In response to the disruptions caused by the Covid-19 pandemic across the automotive industry, Metair had developed Vision 2022, which would shape its recovery by leveraging OEMs’ new model launches, as well as planned stimulus measures from various governments and industry associations globally.
“Metair’s automotive components vertical is entering an important investment phase to support the OEMs that will drive our future growth and support South Africa.
“The anticipated supply of the full spectrum of components to a range of new customers, including Ford, will see Metair securing between R25bn and R28bn of turnover over the model life from mid-2022, depending on the final project volumes and launch dates,” said Loock.