Mercedes-Benz drives investment
An address by PRESIDENT CYRIL RAMAPHOSA during a visit to the automaker’s South African plant in East London
IT IS a great honour and privilege to have been invited by Mercedes-Benz to witness the announcement of this major new investment.
This is an investment in the company’s productive capacity.
It is an investment in the economy of the Eastern Cape.
It is an investment in Mercedes-Benz’s future in South Africa.
But most importantly, it is an investment in people.
In the six decades that Mercedes-Benz has been in South Africa, it has done much more than build cars; it has built livelihoods, developed skills and created opportunities.
Now, with this investment, the company will touch the lives of more people and its work will have more impact.
We say this is an investment in people because it creates and sustains employment.
We know that employment is the most direct and sustainable way to tackle poverty and inequality.
It empowers people, improves the quality of their lives and increases the prospects for their children.
It is for this reason that South Africa has placed the creation of jobs, especially for young people, at the centre of its economic policy.
It is for this reason, too, that South Africa has embarked on an ambitious investment drive to encourage companies like Mercedes-Benz to see the country as an attractive investment destination.
In all our efforts, we are focusing on investment which – like this announced here today – expands the country’s manufacturing sector, increases our export capacity and contributes to job creation.
We say this is an investment in people because it deepens the commitment that Mercedes-Benz has to developing skills and nurturing talent.
Our visit earlier today to the Mercedes-Benz Learning Academy confirms that this company places great value on apprenticeship and learnership programmes.
It understands that for its business to grow, for it to keep pace with rapid changes in production methods, it needs to train new entrants and continuously upgrade the skills of existing employees.
It understands also that many of the skills that are required in the workplace are best developed in the workplace.
In prioritising the development of the technical and vocational education and training sector, government has emphasised the need for greater collaboration between TVET (technical vocational education and training) colleges and the companies in the industries that they are meant to serve.
The skills that these colleges develop must be informed by the real-world needs of industry.
We are proud of the role that the Jobs Fund continues to play in supporting the Mercedes-Benz Learning Academy, demonstrating the value of partnership and shared responsibility.
This should serve as a guide and an inspiration as we work to build a social compact among government, business, labour and civil society for job creation and skills development.
It is only through working together in implementation of a common programme that we will succeed in creating employment on a scale that effectively reduces poverty and inequality.
We say this is an investment in people because it builds networks of opportunity.
Mercedes-Benz is not only investing in its own business; it is investing in its many suppliers and in the development of the infrastructure that supports the production and export of its vehicles.
This “multiplier effect” is particularly strong in manufacturing, which requires many inputs from a wide range of suppliers from several different industries.
An increase in the production of Mercedes-Benz vehicles creates greater demand in several supplier industries, stimulating new investment and job creation in many other parts of the economy.
Distinguished guests, the decision by Mercedes-Benz to further increase its investment in South Africa is a firm statement of confidence in the country and its economy. It is a statement about the skills that are available in South Africa and those that can be developed.
It is a statement about the quality and the reliability of the numerous suppliers that such an operation depends on. It is a strong statement about the country’s logistics infrastructure and capabilities, and about its location as a global export centre.
This investment should send a clear signal to investors around the world that South Africa is more than capable of sustaining an advanced manufacturing sector – and doing so profitably and sustainably.
This investment reinforces the government’s commitment to developing the auto industry and says much about the success of the Automotive Production and Development Programme.
What has been achieved in the auto manufacturing sector underscores the value of well-designed, effectively targeted incentive programmes in industries that have great potential for growth and job creation. As part of our industrialisation process, we will continue to promote local procurement in both the public and private sectors to stimulate demand for local goods.
We are also determined to lower manufacturing costs by, among other things, significantly improving Eskom’s financial and operational performance, aligning port and other tariffs with our industrial strategy and sustaining investment in rail and road infrastructure.
Through the development of special economic zones and industrial parks, we are putting in place the necessary infrastructure and support for a manufacturing boom.
We are working to ensure it is easier to invest and do business in South Africa.
Through InvestSA, we are making regulatory processes simpler, faster and more efficient, and as part of preparations for our Investment Conference in October, we are strengthening our investment promotion and facilitation capacity.
The investment Mercedes-Benz has announced today is also a firm statement about its confidence in the African continent as a whole.
The agreement among heads of state earlier this year on the establishment of an African Continental Free Trade Area will have profound implications for the growth and development of the continent.
It will accelerate the industrialisation of the continent as a massive new market of over one billion people is created.
It will enable greater flows of investment, trade, skills and technology between African countries, offering great opportunities to companies that are already wellestablished on the continent and creating space for the emergence of new companies.
We trust that Mercedes-Benz will be among those South African companies that see the opportunity in these developments and will ready themselves to take advantage of the regeneration of Africa.
In concluding, allow me to congratulate the Daimler Group for having embraced so enthusiastically this opportunity to expand its manufacturing business in South Africa.
It is testimony to the success of the company over many years, to the skills and capabilities of its employees, and to the strong bonds it has built with its suppliers.
Mercedes-Benz South Africa has entered the new dawn with confidence.
It has made an investment in the people of this country.
Where it has led, we expect many other companies to follow.
I thank you.