17 October 2005
German industrial group MAN Ferrostaal is to make two major investments in South Africa, together worth about R1.8-billion, Business Day reports.
According to Business Day, Ferrostaal will invest in a stainless steel precision strip mill at Coega in the Eastern Cape and an oil rig manufacturing plant at Saldanha Bay in the Western Cape.
The investments will be made in fulfilment of the company’s “offset” obligations under the SA government’s industrial participation programme, which requires any multinational company that wins a government tender worth more than US$10-million to spend roughly 30% of the value of the contract on local investment.
In terms of the offset programme, major arms contractors, including Ferrostaal, are committed to investing US$4-billion in South Africa in return for arms deal contracts.
According to Business Day, $1.5-billion of this has been committed and invested so far.
The newspaper reports that Ferrostaal has approved a €80-million (R640-million) investment for the first phase of a stainless steel precision strip mill at Coega’s industrial development zone, with €120-million (R960-million) envisioned in a second phase.
And last week, Business Day reports, the company presented the SA government with details of a R200-million oil rig manufacturing plant at Saldanha Bay and a repair facility in Cape Town harbour.
Both projects are expected to get under way in March 2006.