BAIC forging ahead with supply park

Memorandums of understanding already signed with SA firms

CHINESE vehicle manufacturer BAIC South Africa is forging ahead with plans to complement its projected R11-billion manufacturing investment in Port Elizabeth with a component supplier park. Memorandums of understanding have already been signed with a number of South African component suppliers.

This was revealed by senior BAIC Group leaders in Beijing this week, where the vehicle giant discussed its plans around its first full value chain manufacturing plant outside of China.

Speaking in the presence of South African Embassy officials at BAIC’s headquarters, BAIC SA vice-president Zhang Liang said its new facility in the Coega Special Economic Zone was under construction and would begin with imported components.

BAIC SA falls under the Chinese stateowned company’s BAIC International division which also enjoys a presence in a number of other countries, none of which are, however, complete value chain operations.

BAIC SA has a 35% shareholding by South Africa’s Industrial Development Corporation (IDC).

The company had sent a delegation to a recent component expo in South Africa and had also engaged with South Africa’s National Association of Automotive Component and Allied Manufacturers, Zhang said.

BAIC SA had established a team tasked with developing its local component supplier base.

“This team has conducted a three-month investigation into component supply and it has already submitted a report.

“As a result, some local suppliers have already signed memorandums of understanding.

“As agreed with the IDC, we are committed to establishing a component supplier park in the immediate vicinity of the BAIC plant at Coega.

“Six component suppliers have already been earmarked for the supplier park.”

Zhang, who also spoke at length around the controversial SMME challenges which have impacted heavily on the construction of the Coega plant, said the supplier park would also create a significant number of job opportunities.

“[This] month our head of strategy will be visiting the site to undertake the appropriate studies with regard to the supplier park,” he said.

At the heart of the construction stoppages and general delays have been demands by Port Elizabeth SMMES for contracts at the site.

“We will be trying our best to catch up with the project schedule,” he said, also acknowledging that the delays had serious financial impacts. Assuring SMMEs that the company was committed to providing 35% of the construction work to that sector, Zhang said while BAIC was still familiarising itself with the region’s rules, regulations and expectations from SMMEs, it was rolling out the project in full compliance with South African laws.

Asked whether he had a message for the SMMEs, Zhang said: “It takes time to learn all the rules [local culture and expectations] and sometimes there have been misunderstandings.”

He said while the actual vehicle production would require specialised skills, a number of other job opportunities would be created for locals within the greater factory environment.

In addition, when asked whether the Coega plant would be as automated as the company’s highly sophisticated and automated plant in Beijing, Zhang said no, adding that the local facility would be far more labourthan robotic-intensive.

Acknowledging that the project had experienced hiccups, economic counsellor Thandukwazi Nyawose, who is based at the South African Embassy in Beijing, said the South African government was trying to help undo some of the blockages being experienced at the site.

ý The Herald was invited, along with other media companies, to Beijing by BAIC South Africa, which paid for airfare and accommodation.