BAIC factory at Coega rolls out first vehicle
The first BAIC vehicle to be assembled in Africa was rolled out by the presidents of China and South Africa via live video link from Centurion, near Pretoria, on Tuesday.
The vehicle, an X25 compact SUV, was unveiled before hundreds of guests, including political and business leaders, and the heads of parastatals at BAIC South Africa’s new production facility in the Coega Development Corporation special economic zone (SEZ) in Port Elizabeth.
The event took place a day before the start of the Brics summit in Centurion.
Brics is a grouping of Brazil, Russia, India, China and SA.
Chinese President Xi Jinping and President Cyril Ramaphosa both expressed their pleasure via the live feed at the BAIC milestone.
“This confirms the value of the relationship between our countries and the practical, solid co-operation that we enjoy at an investment level,” Ramaphosa said.
Referring to the agreements signed in 2015, Xi said the event demonstrated that China had kept its word.
He said China was now the largest vehicle manufacturing country in the world, that Africa and Asia had huge potential for growth and that China would be playing a role in driving rapid growth on the African continent.
The BAIC SA investment – one of 26 bilateral agreements signed between the two countries in 2015 with a total value of R94bn – is the single largest automotive investment in South Africa in 40 years.
Tuesday’s event represented the first phase of an R11bn joint venture between Chinese manufacturer BAIC International and the Industrial Development Corporation (IDC) to assemble vehicles for not only the South African market, but also markets across Africa.
The first phase focused on the construction of an assembly line, with other manufacturing elements such as a paint shop and press shop to be constructed at later stages.
The first vehicles of BAIC will be produced on a semiknocked down basis, but it will produce vehicles on a completely knocked down basis later and plans ultimately to operate a “full value chain” facility in the city.
The facility’s initial production target of 50,000 vehicles a year is expected to be ramped up to 100,000 when the plant is running at full capacity.
Jobs in the metro – more than1,000 have already been created – are expected to increase significantly as the various phases of the plant construction and operations progress.
This includes jobs for SMMEs, which have been awarded contracts worth about R200m during the first phase of the project alone.
BAIC Group chairman Xu Heyi described the relationship between the two countries as one of “golden co-operation”, which ensures the realisation of prosperity through Brics cooperation.
IDC chief executive Geoffrey Qhena said the event would further redefine economic ties between South Africa and China.
In a speech prepared for delivery at the launch, Eastern Cape premier Phumulo Masualle said: “Since President Cyril Ramaphosa’s global drive to drum up a further R1-trillion investment into the South African economy over the next five years, the [province] has seen an uptake in Chinese business interest into the Eastern Cape as an investment destination.
“Since the start of construction at this state-of-the-art facility, we have already seen no fewer than 1,243 construction jobs created, with a further 2,720 direct jobs in the first phase expected when the plant becomes fully operational,” he said.
“Given the subdued global economic climate over the last decade, we are also optimistic on our future growth prospects as this investment represents the single largest investment in continental Africa in recent memory.
“As the provincial government, we want to play our role
in providing a conducive environment for trade and commerce to flourish, not only for maximising opportunities within the South African market, but we believe the Eastern Cape is poised to be a critical gateway to the SADC region for, in particular, the automotive and agricultural sectors.”
It was also revealed at the unveiling that the vast majority of the vehicles to be produced at the facility would be exported to the rest of Africa.
BAIC is planning similar operations in Mexico, South-East Asia and India and the Coega project would assist it to internationalise the company, while South Africa stood to benefit from industrialisation.
More benefits are expected to be reaped from a component supplier park to be established in the vicinity of the Coega plant, which will not only attract foreign component manufacturers but also cater for domestic market entrants.
The local component content on vehicles to be produced there – about 30% at present – is expected to increase to as much as 60%.