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Biggest automotive investment in Africa in the last 40 years

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BAIC Impression
An artists impression of how the future of BAIC plant will look like at the Coega IDZ.

The Coega Development Corporation (CDC) will on Tuesday, 30 August 2016 break ground to mark the historic Beijing Automobile International Corporation (BAIC) R11 billion investment at the Coega IDZ.

The event follows the announcement by the Minister of Trade and Industry, Dr Rob Davies on the successful contractual conclusion between BAIC and the CDC, effectively ensuring the establishment of a completely knocked down (CKD) automotive manufacturing plant in the Coega Industrial Development Zone.

According to Dr Ayanda Vilakazi, CDC Unit Head marketing and communications, “the 85 000 square metre plant will occupy 54 hectares of land in Zone 1 of the Coega IDZ, with an expectant number of jobs totalling 2,500 directly, and more than 10,600 jobs indirectly.”

“The plant is the single largest investment in the whole of Africa and is expected to start with construction before the end of the year, lasting little over 18 months with production commencement by the end of 2017. Furthermore, the plant will have a maximum annual production capacity of 100 000 units,” adds Dr Vilakazi.

The CDC, which celebrates 16 years of existence, has empowered growth and development through driving sustainable socio-economic development in the Eastern Cape and the country at large.

As result of the BAIC investment, the economy-wide GDP impact in the Eastern Cape Province, due to the BAIC construction project, is estimated at R945.1 million. This represents about 0.41 percent of Eastern Cape’s 2014 GDP_R, at constant 2010 price. The spending related to the construction of new facility to accommodate BAIC’s vehicle manufacturing plant within the Coega IDZ would result in direct and indirect output of R2.4 billion in Eastern Cape, of which the majority of expenses to benefit the Metro.

“When adding the induced effect of the wage income, the impact of the economy-wide effect is estimated at R3.3 billion for the Eastern Cape Province,” adds Dr Vilakazi.

The BAIC investment is an outcome of the Forum on China-Africa Cooperation (FOCAC) that was held in Johannesburg in December 2015, where South Africa’s President Jacob Zuma and Chinese Prime Minister Xi Jinping signed no less than 26 bilateral agreements valued at approximately R100 billion.

According to the Minister of Trade and Industry, Dr Rob Davies; “the size of this investment demonstrates confidence by China and confidence in South Africa as an investment destination. The investment is strategic and is a major project in terms of our bilateral relationship and a key project supported by the Inter-Ministerial Committee (IMC) on Investment.

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.