Business

Construction on Baic SA megaplant behind schedule

2019-02-26 09:41

Beijing Automotive Industry Holding Company (Baic), which owns Baic SA together with the Industrial Development Corporation, has revised its original timelines for the completion of its R11 billion vehicle assembly plant following numerous delays.

The factory is being built at the Coega special economic zone in Nelson Mandela Bay, Eastern Cape.

The production of vehicles from semi-knocked-down kits, which contain the parts needed to assemble a vehicle, was supposed to have been under way by end-2018 – but this is now only expected to commence in the second quarter of this year, when construction on the welding shop and assembly plant is complete.

Phase one of the project is estimated to churn out 50 000 units a year. Full production was supposed to commence in 2022, but this has now been pushed out to 2023 with an estimated production rate of 100 000 units a year.

In addition, a paint shop that was scheduled for completion last year will now be finished in 2020.

Baic SA spokesperson Zikona Captain confirmed these changes in an interview with City Press.

Asked whether the project would exceed its budget, Captain said: “Adequate contingencies were built in to cater for any unforeseeable developments.

“The R11 billion is the overall project value estimate. We are currently implementing just the first stage, phase one of the project, which is about 35% of the project’s total value.”

The project, Baic’s first outside China, has not been without its challenges, added Captain.

“These include ensuring compliance with South Africa’s regulations regarding construction safety, as well as compliance with local labour laws. Another challenge has involved the company having to deal with numerous demands from small, medium and micro enterprises.” – Max Matavire

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October 13 2019