Leading Chinese vehicle manufacturer First Automobile Works (FAW) has appointed WBHO Construction as its preferred contractor for the design and construction of its vehicle and truck assembly plant in Zone 2 of the Coega Industrial Development Zone (IDZ). Construction will commence in November and is expected to be completed by December 2013.
The R200-million construction investment will see over 1000 jobs created during the construction phase, the Coega Development Corporation (CDC) confirmed yesterday. Overall FAW will invest R600-million in the Coega IDZ, through joint funding provided by FAW and China-Africa Fund.
Zhao Dan, FAW Project Manager for FAW Africa Investment said earlier this week the vehicle manufacturer looked forward to cooperating with the CDC and WBHO Construction in delivering the FAW plant – and commencing production.
“After a long period of tough discussions, which started shortly after the land lease agreement was signed with Coega on February 28, 2012, FAW finally concluded its negotiations with various construction companies and decided to appoint a contractor to design and construct the FAW Coega Assembly Plant,” said Zhao Dan. “It was decided to award WBHO the construction bid. The successful bidder has been requested to finalise the construction contract for this award. FAW plans to sign the agreement with WBHO in October 2012 and construction will commence in November 2012. We are eager to turn the investment into reality.”
The company’s investment at the Coega IDZ centred on the zone’s strategic location, proximity to the Port of Ngqura, logistical solutions offering, and the availability of skills in Nelson Mandela Bay and support mechanisms offered by the CDC.
CDC head of marketing and communications Ayanda Vilakazi said the appointment of WBHO was exciting as it was a step forward in realising the project on a tangible level.
“Coega welcomes the appointment of WBHO Construction as this reconfirms that FAW is here to stay. This is big news for the Eastern Cape, but particularly Nelson Mandela Bay because of the huge economic spinoffs for the city,” Vilakazi said. “Moreover it emphasizes the fact that a number of BRIC countries, China and India in particular, are watching South Africa with interest and are not afraid to match intention with investment.”
He added that the automotive supply chain would benefit from the FAW investment.
A spokesman for WBHO Construction confirmed that the award was formally received earlier last week after undergoing five months of rigorous bidding processes, both in Port Elizabeth and in Changchun, China, FAW’s head office.
“It was not easy and as always the budget was tight. The negotiations were intense and arduous but in the end a fair deal was struck between the two parties,” said Arnie Van Jaarsveldt, managing director of WBHO Construction Eastern Cape. “WBHO Construction and their consortium – Uhambiso Consulting Engineers, Studio d’Arc Architects, RPE Quantity Surveyors together with their team of specialist sub-contractors – are very pleased and excited to have won this design and construct bid and look forward to a very successful relationship with FAW and their consulting engineers MMI, together with the CDC.
“It was a joint effort and all the design, construction work and specialist sub-contractor trades and work will be carried out by local companies.”
WBHO Construction said it looked forward to further growth in its relationship with the CDC and its future investors, it having successfully completed a number of contracts in the IDZ to date, including the Business Process Outsourcing Park/Centre of Excellence Building, General Motors Pan-African Distribution Centre, Rehau, and Grupo Antolin Extensions.
Van Jaarsveldt also emphasized the importance of job creation during the construction phase – a direct benefit to the people in the area of Nelson Mandela Bay and those that have been up-skilled on previous construction projects in the Coega IDZ.
The truck plant, the first phase of FAW’s development in the Coega IDZ, will be built on 400 000 square meters of land in Zone 2 and is expected to produce 5 000 trucks annually, as well as light commercial vehicles and passenger cars in the second phase.
The truck assembling facility is expected to create over 1000 jobs, with further job creation opportunities evolving when FAW starts production of an additional 30 000 passenger vehicles annually during the second phase of the development.
In 2010 FAW produced 2 558 166 vehicles, an increase of 31.6% from 2009. This included more than 300 000 trucks making it the third-largest truck manufacturer in the world. Since entering the market in 1984, FAW has produced 16 million vehicles and has consistently been a Fortune 500 company. Additionally, FAW has joint venture operations with many of the world’s leading vehicle manufacturers including Volkswagen, Toyota and Mazda. In 2010 over a million automobiles were sold through these joint venture operations.
FAW launched their J6 Truck tractor in South Africa on Thursday, September 6 at Soccer City in Johannesburg.
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