The development of the Tshwane Automotive Special Economic Zone (TASEZ) has been supported by a R2.5-billion investment by the South African government. TASEZ, branded as South Africa’s first automotive city, is considered a forerunner in South Africa’s growing industrial revolution.
Bringing together automobile manufacturers and car part suppliers together in one economic zone is an initiative that has been supported by the government since its inception in 2019. TASEZ is still under construction, with the first phase expected to be completed in the next couple of months.
As a leading supplier of metal car parts and assemblies, Formex sees this investment as a catalyst for fast-tracking the development of TASEZ. It will enable us to add value to the sector through closer cooperation with our customers operating within the zone. Our automotive components and welded assemblies will be used on the vehicles that are manufactured within this zone, so the investment is a welcome injection into the future of our industry.
This investment by the Department of Trade, Industry and Competition (DTIC), bolsters other investments into this Special Economic Zone (SEZ). Ford Motor Company South Africa has put forward a R16-billion investment and a further R4.3-billion injection has come from automobile component suppliers. Construction of the necessary infrastructure is already underway, making South Africa an attractive destination for future investment in the automobile industry.
President Cyril Ramaphosa assesses progress at TASEZ ©GovernmentZA
Government contribution to TASEZ development
TASEZ is a project that was officially launched by South African President Ramaphosa in 2019. Due to the effects of the global pandemic in recent years, construction was delayed for a number of months shortly after the project commenced. In September 2020, after a recovery plan was set into motion, work on the TASEZ returned in full swing.
Fikile Majola, Deputy Minister of DTIC, remarks that the development of this SEZ has been undertaken extremely quickly. The rate of this development is unprecedented in South Africa. At present, around 70% of construction is now complete. During a recent visit to the construction site in Tshwane, Deputy Minister Majola reviewed the progress already made and evaluated the readiness of the site for different investors.
Majola explained that the development of the TASEZ will have an extremely positive effect on the South African economy – particularly in terms of attracting investment and job creation. The zone is expected to open up 2000 job opportunities, the bulk of which come from the international automobile giant, Ford.
Tshwane Automotive Special Economic Zone
TASEZ is located in Gauteng, between Silverton and Mamelodi, just outside the Tshwane city centre. Almost 40% of South African car production happens in this region. Automobiles destined for both local and export markets are manufactured here. Well-located for both domestic and international markets, this SEZ serves to connect suppliers and manufacturers along the car production value chain. Logistical costs are kept low due to ease of access to the rest of South Africa and the African continent.
The TASEZ is propelling South African car manufacturing into the next generation of industry. High-speed connectivity and other ICT infrastructure form the technological backbone of this industrial zone. This paves the way for smart manufacturing and Industry 4.0, with technologies such as machine learning and smart automation taking production capabilities to the next level.
The project allows for highly customisable solutions for manufacturers. Fit-for-purpose buildings that enable economies of scale are key characteristics of this world-class automotive city. The South African government’s R2.5-billion investment helps local car manufacturing keep up with global shifts. If South Africa is going to continue to be a hub of automobile production, such investments are vital to future-proof the industry in a changing global climate.
President Ramaphosa speaks at the TASEZ assessment meeting ©GovernmentZA
Government investment to boost SEZ development
SEZs are geographically designated areas in which specific economic activities are targeted. Since February 2016, a number of SEZs have been set up with the intention of stimulating economic growth, revenue generation, employment and foreign direct investment. The government hopes to attract investment through tax incentives and other forms of support, such as building allowances.
The international competitiveness of SEZs is created through coordinated planning, bringing together different players from the same industry – namely manufacturers and their suppliers. Fostering collaboration among industry stakeholders helps to lower costs and improve efficiency.
The TASEZ will also become home to suppliers of car parts and components for Ford and other manufacturers, such as Nissan. These brands will also have easy access to logistics providers that they work with. There are currently discussions underway to upgrade existing infrastructure to allow for better access to roads and railways.
Additional infrastructure needed for TASEZ
Zutari, an engineering consultant and advisor in South Africa, has been involved in the assessment of TASEZ on local traffic and logistics. The consultancy has completed a traffic impact assessment for the zone. It has revealed that further infrastructure upgrades are necessary to ensure the smooth running of the logistics chain in and out of the automobile city.
The assessment indicated that eight major intersections on nearby roads need to be upgraded due to the development of TASEZ. Additional infrastructure is also being developed, including the construction of water and sewer systems, earthworks, stormwater drainage and upgrades to existing roads.
President Ramaphosa speaks at the TASEZ assessment meeting ©GovernmentZA
Automotive production in South Africa set to grow
Although TASEZ is still under construction, it has already provided employment and stimulated economic growth. As with other SEZs, this economic zone supports socio-economic development by bringing manufacturers and suppliers together in one designated area. TASEZ is housed on 204 hectares of land.
Formex eagerly anticipates the completion of the project, looking ahead at the massive potential for growth in the automobile industry in South Africa. We also see the value of the investment as a stimulus for the local economy and much-needed job creation. As a leading manufacturer and supplier of automotive components, Formex eagerly awaits the future of this zone and the massive benefits that it will bring.
Header image: ©TASEZ.co.za
Formex Industries is a metal forming and assembly company that supplies a variety of complex products to the local automotive industry and the export market. The company is based in the Nelson Mandela Bay metropole, South Africa’s foremost region for automotive manufacturing and export.
Formex is a supplier with 69% black ownership, of which 37% are black women. The company is owned by Deneb Investments Limited – a subsidiary of Hosken Consolidated Investments Limited (HCI) – one of South Africa’s biggest true B-BBEE companies listed on the Johannesburg Stock Exchange (JSE).
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