Economy in Eastern Cape given massive boost by automotive parts company

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The automotive industry remains a pivotal sector in the Eastern Cape economy and is seen as a crucial cog in the wheel to grow the economy in the province. The provincial government continues to provide support to grow the sector and has welcomed the latest investment in the sector.

VM Automotive, a component supplier, is one of the latest local manufacturers to be contracted to Mercedes Benz SA, and BMW to supply steel parts. Job creation is top of the agenda as the province grapples with an unemployment rate of more than 49%.

The venture by VM Automotive is a R450-million investment. This forms part of an effort to revive ailing economy of the Eastern Cape. It is set up in the small industrial town of Ntabozuko, formerly known as Berlin, 50 kilometres inland from East London.

Premier Oscar Mabuyane says this is a fulfilment of their investment drive looking at the manufacturing industry to revive the flagging provincial economy.

“We are driving the investment, we have made commitments that we are revitalising our industrial parks – you talk about your Berlin, Fort Jackson, Dimbaza and others across the Kei. We spoke about it in our State of the Province Address, we continue speaking about it. It is now here and it talks directly to the economic reconstruction and recovery plan. It responds to issues of unemployment in the local areas with the skills that are here and technology that is globally competitive.”

Company CEO, Gibson Njenje says they aim to expand their footprint locally and create more jobs.

“Our expansion will have to start here at home first. We have got to target many other OEMs first. Currently we are supplying to Mercedes Benz and BMW from our Rosslyn plant in Pretoria. There’s VW, there’s Toyota, there’s Isuzu that we’re still talking to. That’s our approach in terms of here but we also want to look beyond the automotive sector to other users of metals.”

Economist, Professor Bonke Dumisa, says there is much to consider to solidify the economy through manufacturing.

“The major reason why manufacturing died in all the provinces and the country it was because we said we are now part of the World Trade Organisation so all other people must do as they please, bring their goods to the country as they please without us interfering and yet when you go to countries like China, you have all the hurdles you still have to go through in order to sell goods. So we must start by addressing that.”

The province will write to President Cyril Ramaphosa requesting him to visit this plant. The commitment to invest in this plant was made at the Presidential Investment Summit.