AUTOFORUM

The first phase of BAIC’s R11 billion PE assembly plant unveiled by SA and Chinese Presidents

Jul 29, 2018 South Africa, Manufacturing, Semi knockdown, Automotive, economy, BAIC, Beijing Automotive International Corporation, Ceoga

Grant West

The presidents of South Africa, Cyril Ramaphosa and the People’s Republic of China, Xi Jinping, in July unveiled the first BAIC vehicle assembled in Africa. The reveal was via a video link from Pretoria to the Beijing Automotive International Corporation (BAIC) plant in Coega, Port Elizabeth.

The chairperson of BAIC International, a Chinese state-owned company, Xu Heyi proudly hosted dignitories, VIP’s, guests and the media at their new semi-knocked down (SKD) plant – the first manufacturing base outside of China. The completed R2 billion first phase of this plant consists of 42000m2 of assembly, body shop and installed robotic equipment, as well as a 4200m2 office tower. An additional 21000m2 paint facility is planned to begin construction soon and is scheduled for completion by the end of 2019.

Heyi said that this plant, situated in the Special Economic Zone at Coega, would provide the company with a gateway into the whole of Africa, with 60% of the vehicles assembled at the plant targeted for export into markets outside of South Africa. He added that the plant would have an initial capacity of 50 000 units, which would increase to 100 000 units over time.

“Once the plant is in production, the planning is to assemble a range of passenger, SUV and LCV vehicles suitable for the African market,” said Heyi. This plant is part of a four-leg expansion strategy for BAIC, based on in-depth research, with the headquarters in China servicing the South East Asian market and this Coega plant servicing all of Africa. A further international hub is planned for Mexico, in order to cover both the North and South American markets. The planned plant in India will deviate from the other plants and be focused on commercial vehicles. These four plants will become the company’s major international headquarters and “will be supported by many additional secondary developments”.

BAIC’s investment in South Africa stemmed from the signing of 26 bilateral agreements between South Africa and China, which has resulted in a total investment of in excess of R90 billion. Chairperson of the Industrial Development Corporation (IDC), Busi Mabuza, said BAIC’s planned investment of R11bn in South Africa was “a wonderful milestone” and showed the benefits of these bilateral agreements. She referred to the current BRICS summit in Johannesburg, saying membership of BRICS allows South Africa to access development investment through like-minded nations. “The IDC has a 35% shareholding in this assembly plant project,” said Mabuza.

BAIC expects that full scale production of its X25 compact SUV will begin in the fourth quarter of this year and it says it will provide permanent employment to 120 local people at that time. When questioned with regards to qualifying for incentives out of the current APDP, it was stated that BAIC will only qualify once the plant can start complete knocked down (CKD) production and its paint plant is fully operational. BAIC added that they expect to have at least four local suppliers within the planned automotive supply park, for this project.