Roy Cokayne

Construction of the R600 million vehicle and truck assembly plant in the Coega industrial development zone (IDZ) for First Automobile Works (FAW) was set to start in November, the Chinese vehicle manufacturer said last week.

An estimated 1 000 jobs would be created in the construction phase. About 500 permanent jobs were expected to be created when the first phase of the truck assembly facility was commissioned.

Further employment would be created in the second phase, when FAW started production of 30 000 passenger cars a year.

FAW said it had appointed WBHO Construction, part of listed construction and engineering group Wilson Bayly Holmes-Ovcon (WBHO), as its contractor for the design and construction of the plant, which is expected to be completed by next December.

The construction contract is worth about R200m, with funding for the entire project provided by FAW and the China-Africa Development Fund.

The first phase is FAW’s truck plant, which will be built on 400 000m2 of land in Zone 2 of the Coega IDZ. It is expected to produce 5 000 trucks annually.

The plant’s production will be extended in a second phase to include light commercial vehicles and passenger cars.

Zhao Dan, the project manager for FAW Africa Investment, said the decision to appoint WBHO Construction to design and construct the plant had been made after a long period of tough discussions.

“The successful bidder has been requested to finalise the construction contract for this award. FAW plans to sign the agreement with WBHO in October and construction will commence in November. We are eager to turn the investment into reality,” he said.

Mehdi Abbas, FAW South Africa’s operations manager, said in February that the investment was based on using South Africa as an export base for other parts of Africa.

Abbas said commercial vehicles were exported directly from China to Angola, Tanzania and Kenya, where FAW sold in excess of 3 000 units a year. He said the R600m plant formed part of a $100m (R817m) investment in South Africa, with the balance to be used to develop grassroots part suppliers.

Ayanda Vilakazi, the head of marketing and communications at the Coega Development Corporation, said the project award reconfirmed that FAW “is here to stay”.

“This is big news for the Eastern Cape, but particularly Nelson Mandela Bay [metro], because of the huge economic spin-offs for the city. Moreover it emphasises the fact that a number of Bric countries, in particular China and India, are watching South Africa with interest and are not afraid to match intention with investment.”

Vilakazi added that the automotive supply chain would benefit from the investment. He said FAW’s decision to invest in the IDZ was because of its strategic location, proximity to the Port of Ngqura, the logistical solutions offering, the availability of skills in Nelson Mandela Bay, and support mechanisms offered by the Coega Development Corporation.

Arnie Van Jaarsveldt, the managing director of WBHO Construction for the Eastern Cape, confirmed that the company had formally received the award after five months of rigorous bidding processes in Port Elizabeth and at FAW’s head office in Changchun in China.