Huge investment in local enterprises
The largest Equity Equivalent Investment Programme in the country was launched recently
years, in support of local enterprise and supplier development.
“These agreements are also positive for the companies that participate in the EEIP. I want to commend Caterpillar for embarking on this journey with us as partners to stimulate and grow the South African economy. I look forward to see these commitments being executed,” said Trade and Industry Minister Davies.
The company applied for participation in the EEIP to empower local and black-owned enterprises through Enterprise and Supplier Development. In 2016, Caterpillar Southern Africa was granted exemption from selling equity and instead to participate in the EEIP.
The proposed programme is aimed at contributing towards product localisation to increase South African industrial base. The investment amount is R1.3 billion based on the 25 percent of the business value from the South African operation.
The approved business plan seeks to promote localisation and industrialisation and is expected to create about 3 900 direct and indirect jobs.
Minister Davies said the company's commitment is one of its largest engagements in Africa to date. It is also part of the previously announced plan of Caterpillar, its independent dealers and the Caterpillar Foundation to invest more than $1 billion in countries throughout Africa over five years.
Caterpillar's Director for Southern Africa, Chris Monge, said the commitment will help to develop South Africa's local industrial supplier base. “Our multi-year commitment will help develop South Africa's industrial local supplier base, generate more inclusive economic growth, and support our goal to be a leading B-BBEE organisation in the industries we serve. We look forward to working with the South African government towards transformation and industrialisation,” said Monge.
The Managing Director at Caterpillar Industries (Pty) Ltd, Zakieya Parker, said the company's participation in EEIP supports the development of local suppliers and enterprises.
“Our participation in EEIP supports the development of local suppliers and enterprises, local content, skills transfer and development and job creation.The localisation opportunities we are looking at include sourcing components locally to support the mining, construction, energy, and transportation industries,” said Parker.
Caterpillar has been in South Africa since 1927, operating through independent dealer Barloworld Equipment.
The company recently invested in a new 60 000m2 parts distribution centre in Johannesburg, which is improving customer service by expanding availability of parts throughout the southern African region, including the islands of Mauritius, Madagascar and Reunion.