German firm buys into E Cape IDZ

15 September 2006

Automotive components manufacturer Foxtec-Ikhwezi, a joint venture between Germany’s Otto Fuchs and South African black economic empowerment firm Ikhwezi Investment Holdings, has launched a new R116-million plant in the East London Industrial Development Zone (IDZ).

According to Eastern Cape newspaper Daily Dispatch, Foxtec-Ikhwezi aims to manufacture around 1.5-million aluminium suspension struts in 2007, increasing to 4.5-million in 2008, with some 80% of the parts destined for the export market.

Foxtec-Ikhwezi’s plant is four kilometres away from the East London harbour and less than a kilometre from DaimlerChrysler South Africa, which will take up 20% of production for the new Mercedes Benz C-Class model.

Foxtec-Ikhwezi director Pieter Bosch told Daily Dispatch that other local original equipment manufacturers (OEMs) keen to up their local content would benefit from the presence of an empowered company like Foxtec-Ikhwezi.

“In addition, as this is a new technology available in South Africa through the hot forging processes and machining of a local raw material for the automotive sector, it is envisaged that OEMs will soon approach Foxtec-Ikhwezi to manufacture related component parts,” Bosch said.

Construction of the plant has already created 120 new jobs, and six employees have just returned from a 10-week training course in Germany.

When the deal was first announced in December, Simphiwe Kondlo, CEO of the East London IDZ, said it was “just what we wanted. We have a foreign direct investor, a local empowerment partner and an export-orientated manufacturing business using high technology and sophisticated skills.

“The skills that are going to be transferred to the local partner and employees are new to this country and will positively add to the city’s manufacturing capacity,” Kondlo said.

Willy Gauss, a director of Ikhwezi, said the IDZ was the ideal location due to its proximity to both to DaimlerChrysler South Africa and the harbour. “We have very strict timelines for the project, so the IDZ’s professionalism and eagerness to assist us in delivering within those timelines was a contributing factor to our decision to locate within the zone,” he said.

The East London IDZ is one of several duty-free processing zones in South Africa created to stimulate the global competitiveness of local manufacturers.

According to Business Day, Otto Fuchs is the fourth investor in the IDZ, the others being glass manufacturer Universal Safety Glass, abalone exporter Seatek, and transport and logistics company Milltrans.

Labour Minister Membathisi Mdladlana was scheduled to deliver the keynote address at the official launch of Foxtec-Ikhwezi’s plant on Friday.

SouthAfrica.info reporter

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