CDC : Sod turning ceremony to mark R11bn Chinese investment
Pretoria – The Coega Development Corporation (CDC) on Tuesday hosted a sod turning ceremony to mark the R11 billion investment by the Beijing Automobile International Corporation (BAIC) at the Coega Industrial Development Zone.
Earlier in August, Trade and Industry Minister Rob Davies announced the successful contractual conclusion between BAIC and the CDC to establish a completely knocked down (CKD) automotive manufacturing plant in the Coega IDZ.
The BAIC investment is an outcome of the Forum on China-Africa Cooperation (FOCAC) that was held in Johannesburg in December 2015, where President Jacob Zuma and Chinese Prime Minister Xi Jinping signed no less than 26 bilateral agreements valued at approximately R100 billion.
The Minister described the investment as significant and deepens South Africa’s economic relationship with China.
“The size of this investment demonstrates confidence by China and confidence in South Africa as an investment destination. The investment is strategic and is a major project in terms of our bilateral relationship and a key project supported by the Inter Ministerial Committee on Investment,” said Minister Davies at the time.
The project positions the Eastern Cape as an automotive hub and has the potential of deepening the component supply chain, job creation and economic development.
According to Dr Ayanda Vilakazi, CDC Unit Head of marketing and communications, the 85 000 square metre plant will occupy 54 hectares of land in Zone 1 of the Coega IDZ.
It is expected to create 2 500 jobs directly and more than 10 600 jobs indirectly.
“The plant is the single largest investment in the whole of Africa and is expected to start with construction before the end of the year, lasting little over 18 months with production commencement by the end of 2017.
“Furthermore, the plant will have a maximum annual production capacity of 100 000 units,” said Vilakazi.
As a result of the BAIC investment, the economy-wide Gross Domestic Product (GDP) impact in the Eastern Cape province is estimated at R945.1 million.
This represents about 0.41 percent of Eastern Cape’s 2014 GDP at constant 2010 price.
The spending related to the construction of new facility to accommodate BAIC’s vehicle manufacturing plant within the Coega IDZ would result in direct and indirect output of R2.4 billion in the Eastern Cape, of which the majority of expenses to benefit the Metro.
“When adding the induced effect of the wage income, the impact of the economy-wide effect is estimated at R3.3 billion for the Eastern Cape province,” adds Vilakazi.