R1.1 billion automotive facility opens at Dube TradePort’s TradeZone 2

NIYANTA SINGH|Published 6 months ago

Ribbon cutting ceremony during the Ogihara South Africa launch that took place yesterday. The launch was an attempt to further investment between government and international investors, in attempt to further strengthen the automotive industry in KwaZulu-Natal. From left to right: Managing Director Toyota Tsusho Wayne Bowyer, Leadership of Toyota Tsusho Corporation Andrew Velleman; CEO Toyota SA Motors Andrew Kirby; MEC EDTEA Reverend Musa Zondi; Department of Trade, Industry and Competition (DTIC) Minister Parks Tau; CEO Ogihara Hiroshi Morita; and Executive Vice president Manufacturing TSAM Nigel Ward.

A R1.1-billion automotive components manufacturing facility was officially inaugurated at Dube TradePort’s TradeZone 2 recently. This development marks not just a significant foreign direct investment in KwaZulu-Natal, but also signals a new era for the province’s burgeoning automotive sector.

The facility is the result of a joint venture between Toyota Tsusho Africa (Pty) Ltd (TTAF) and Ogihara Thailand Corporation Ltd (OTC). Speaking at the launch, MEC for Economic Development, Tourism, and Environmental Affairs (EDTEA), Rev Musa Zondi, emphasized that this new development reflects the sustained momentum in KwaZulu-Natal’s economy. He highlighted the strategic role that Special Economic Zones (SEZs), such as the Dube TradePort, would continue to play in the growth of the vital automotive sector.

Ogihara SA’s 32,000m² site at TradeZone 2 will house a relocated manufacturing and assembly plant from Thailand. This facility will produce pressed steel components specifically for Toyota South Africa Manufacturing (TSAM). Construction is already underway, with the company planning to commence manufacturing operations by June 2025.

Ogihara SA represents the largest investment secured by the Dube TradePort since its inception alongside Durban’s King Shaka International Airport. It is the second major automotive investor in the zone, following Mahindra South Africa’s establishment of its vehicle assembly facility in 2018.

Mr Zondi expressed optimism about future developments, noting that this facility would not be the last automotive sector investment in the region. He cited the success of Dube TradePort to the north of Durban and revealed that the Dube TradePort Corporation would be the developer and operator of the proposed Durban Automotive Supplier Park (ASP). This project, currently in the advanced planning stage, aims to attract more component manufacturing and car assembly firms and will be located to the south of Durban in collaboration with the eThekwini Municipality.

“We are exceptionally pleased that after an extensive site selection process, Ogihara SA decided to locate its state-of-the-art manufacturing facility at Dube TradePort’s TradeZone 2,” said Hamish Erskine, CEO of Dube TradePort. “We believe this is because we can meet the private sector's needs for a stable environment that is secure, well-operated, and sustainable, with green energy solutions becoming increasingly crucial for international supply chains and production.”

Ogihara SA, registered in 2023, is poised to manufacture automotive components for online fitment, supporting Toyota South Africa Manufacturing’s next-generation Hilux IMV build programme. This venture marks a significant step towards Toyota Tsusho Africa’s local value addition improvement strategy and aligns with national targets. It is also one of the largest localisation projects undertaken by TSAM to date and sets a benchmark for further large-scale localisation projects.

Andrew Kirby, CEO and President of Toyota South Africa Motors, spoke at the event, stating, “This joint venture marks a significant step towards our Local Value Addition (LVA) improvement strategy, by localising the production of these critical components. The inclusion of Ogihara SA in our local manufacturing ecosystem will not only create new job opportunities but also enhance our capabilities in producing high-quality body parts for the automotive industry. This collaboration exemplifies our commitment to localisation and underscores the possibilities for growth and development in the KZN province.”

The automotive industry is South Africa’s largest manufacturing sector, with KwaZulu-Natal’s automotive manufacturing sector, primarily based in the south of Durban, contributing about R21 billion to the local economy annually and employing around 20,000 people. Nationally, the automotive industry contributes 5.3% to the GDP, and in 2023, vehicle and automotive component exports reached a record value of R270.8 billion.

Mr Zondi highlighted the broader economic impact of this investment, noting that it will create 230 jobs initially, scaling up to 300 within five years. This investment will also play a critical role in supporting South Africa’s steel sector, with Ogihara SA committing to source 90% of its steel sheets locally.

“Through its commitment to source 90% of steel sheets locally, Ogihara SA will strengthen South Africa's steel manufacturing sector, which is critical for the country’s industrialisation objectives,” Mr Zondi said. “Because 54% of a vehicle's manufacturing comprises steel, this investment is an important contributor to the growth and sustainability of this sector too.”

Ogihara SA is one of seven private sector investors secured for Dube TradeZone 2, with a total private sector investment value approaching R2 billion and expected job creation of around 600 within the next five years. The 45-hectare Dube TradeZone 2 will continue to target further investments in manufacturing, assembly, logistics, and the automotive sectors. Since its establishment, Dube TradePort Corporation has attracted R4.6 billion in private sector investment and created more than 5,000 permanent and 51,000 indirect jobs.