info.afrindex.com
China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
photo from Will Walton
Beijing Automotive International Corporation (BAIC) invests R11 billion in a semi-knocked down (SKD) vehicle assembly plant in South Africa, which is a part of its international expansion.
Xu Heyi, the chairperson of BAIC International, said that the company’s assembly plant in Coega’s Special Economic Zone would service the entire African continent and not just the South African market.
South Africa is only the gateway country towards the continent of Africa,” Heyi said at a milestone celebration at BAIC's plant in Coega to prepare for the production of SKD vehicles on Tuesday.
BAIC said 60percent of the vehicles manufactured at the plant, which would have an initial annual capacity of 50000 units in the first phase but would eventually increase to 100000 units, were destined for export markets in Africa, the Middle East and Latin America, with remaining 40percent for the South African market.
“After the plant is put into production, it is planned to manufacture BAIC passenger cars, SUVs (sports utility vehicles), light trucks and other automotive products (that are) suitable for these markets,” he said.
Heyi said that BAIC’s international strategy was not to just chase after markets, but to embark on market expansion that is based on thorough and careful studies to establish their own international business model.
He said South Africa was the first one where it would use its production plant in Coega, BAIC’s first full functional manufacturing base overseas, to cover the entire African continent.
President of the People’s Republic of China Xi Jinping and South African president Cyril Ramaphosa unveiled the R2billion first phase of its planned R11bn investment in South Africa, and the first BAIC vehicle ever assembled on African soil, via a video link from Centurion.
Busi Mabuza, the chairperson of the Industrial Development Corporation, which has a 35percent shareholding in the project, described it as “a wonderful milestone”.
The investment by BAIC in South Africa flowed from the signing of 25 bilateral agreements between South Africa and China in 2015 with a total value of R94bn.
The investment has provided significant job creation boost to South Africa’s economy, with 1540 direct construction jobs created to date following the ground-breaking ceremony in Coega in 2016, with BAIC anticipating that it would be providing permanent employment to 120 people by the end of this year.
BAIC will only qualify for incentives in terms of the Automotive Production and Development Programme once its paint plant is ope
