BAW to expand facility at a cost of R250m

BAW SOUTH Africa, a subsidiary of BAW China, plans to expand its locally produced product range to include a school bus and panel van following the investment of a further R250 million to expand and upgrade its vehicle assembly facility in Springs in Gauteng.

The facility currently only assembles semi-knocked down (SKD) kits of the BAW 16-seater Sasuka taxi for the South African and sub Saharan Africa market.

The expansion of the facility will result in it becoming a completely knocked down (CKD) assembler of Sasuka kits and widen its exports into Africa. The BAW facility was established in 2012 with an initial investment of R196m.

Tony Godycki, a consultant to BAW SA, said the expansion and conversion to a full production facility was a step in BAW’s goal to become a fully-fledged South African vehicle manufacturer and exporter.

“While the initial focus will remain the South African and southern African market, it will use its status as a manufacturer under the MIDP (Motor Industry Development Programme) medium and heavy commercial vehicle programme to expand BAW’s reach in all countries that have a preferential trade relationship with South Africa,” he said.

Godycki said the annual capacity of the SKD facility was 4 800 units on a single shift and would increase to 6 000 units on a single shift following the expansion and conversion of the plant.

He said the SKD facility employed 211 people and the expansion was expected to create an additional 80 permanent jobs, which ranged from production to quality assurance, logistics and management and supervision.

Godycki said the rationale for the investment was to reduce the import duties paid by BAW South Africa and its manufacturing costs while creating jobs.

Preparations for the new facility have already commenced and it is expected to be completed by March next year.

BAW South Africa plans to introduce a 2.8 diesel engine variant of the Sasuka taxi into the local market in June.

BAW SA had to date sold more than 3 000 Sasuka taxis produced at the Springs facility.

Apart from a general upgrade of the plant and its facilities, the investment will result in the construction of a new body assembly plant, paint plant, trim plant, a larger component warehouse to support full production and new parts and accessories warehouse.

It will also result in the localisation of parts and components, which will be sourced from the domestic automotive component manufacturing industry.

BAW SA is also investigating the potential to export certain parts and completed components to other BAW manufacturing facilities, including BAW China.

Godycki said BAW SA was targeting an about 40 percent local content level in the vehicles produced once the CKD facility was operational.

He said this local content level was a requirement to obtain a certificate of origin to benefit from the preferential trade agreements that South Africa had with other African countries.

Godycki said BAW SA had to date sold more than 3 000 Sasuka taxis produced at the Springs facility, the majority of them into the South African market with about 30 units to customers in Namibia.

He said BAW SA anticipated growing its sales by about 20 percent a year over the next five years.