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Mercedes-Benz’s R10-billion investment and expansion to its East London plant is proof that South Africa is open for business, a delighted President Cyril Ramaphosa has said.
Markus Schäfer, member of the divisional board of Mercedes-Benz Cars, production and supply chain management, said Tuesday’s announcement was part of celebrating the 60-year anniversary of the plant in East London, but it was also dedicated towards the centenary of late former president Nelson Mandela who would have been 100 years on July 18 if he were still alive.
“Together with you we want to write the next chapter of this site’s success story. That is why we are making our East London plant ready for the future, for the future of mobility and the future of automobile production. We [are] investing €600 million, that is equivalent to R10 billion.
“With this investment we are expanding the plant’s capacity and we are making our future vision for East London a reality. We are making East London smarter, greener and more flexible. And on top of that we are implementing technologies of tomorrow,” he said.
The announcement was attended by hundreds of Mercedes-Benz workers at the East London plant on Tuesday. Also in attendance were dignitaries including government ministers, business people and executive directors of Mercedes-Benz in South Africa.
Ramaphosa thanked Mercedes for investing a “whopping” amount of R10 billion in the company’s productive capacity and said this would change not only the economy of country but also of the Eastern Cape.
“This is a big amount and we give thanks to Mercedes-Benz for this. This is an investment in the economy, not only of South Africa but to the economy of the Eastern Cape. It is an investment into the future of Mercedes-Benz in South Africa but more importantly it is an investment in the people of our country and the people of this province,” said Ramaphosa.
He said Mercedes-Benz was demonstrating to all and sundry in this country and beyond its shores that South Africa was indeed a good investment destination.
The president said with the R10 billion investment, Mercedes-Benz would touch the lives of many more people and their work would even have more impact.
“We say this is an investment to people because it is an investment that is going to create more jobs. It is an investment that is going to sustain more employment. I sure that this R10 billion investment has to create more job opportunities, how many they would be you [Mercedes-Benz] are still keeping it as a secret, but I can already calculate quite a number of jobs are going to be created. And thank you for helping us with our job-creation campaign here in the Eastern Cape,” he said.
Ramaphosa said the creation of employment was the most direct and sustainable way of tackling poverty and inequality as it empowered people and improved the quality of their lives and increased the prospects for their children.
“It is for this reason why South Africa has placed the creation of jobs, especially for young people, at the centre of our economic policy. It is for this reason too that South Africa has embarked on an ambitious investment drive to encourage companies like Mercedes-Benz to see South Africa as an attractive investment destination. In all our efforts we are focusing on investments which like this one expands the country’s manufacturing sector, increases our export capacity and contribute to job creation,” Ramaphosa said.
Schäfer said the investment in East London made a lot of sense but it was not only an economic decision. Above all it was a strong signal for its workforce in East London and the people of South Africa.
“It shows we place our trust in the region and in this country and this continent. And our commitment here in South Africa comes with a vision. As we invest in our facilities we want the entire region and the entire country to profit and benefit from it. But it also means we believe we can help to build an even better South Africa,” he said.
Schäfer said Mercedes-Benz was conscious to the fact that its responsibility did not end at the factories’ gates. He said all together they had 290 000 employees globally and did business in almost every country in the world.
“As [a] global player of this size we are well aware of the central role we play in society and we are proud to accept it,” he said.
He said Mercedes-Benz had committed to localise its value chain in South Africa by deepening its operations with local suppliers.
He said this step would support black economic empowerment and the expansion of the production capacity would create new jobs in the country.
“All these initiatives will help to improve living and labour conditions here the Eastern Cape,” he said.
Schäfer said one of the reasons for the investment was in support of programme Ramaphosa had for the future of the country. He said the investment was a response to the 10-point plan or the “new dawn” as introduced by Ramaphosa which was striving for jobs, growth and transformation.
“The campaign aims for new investments, new work and new opportunities and education. When it comes to driving forward this initiative you can definitely count us [Mercedes-Benz] in. We believe that your strategy and our love and vision fit together very well,” Schäfer said.
Trade and Industry Minister Rob Davies said the investment had great significance.
“We are hoping that this investment will lead to more investments by component manufacturers,” he said.
Davies said the automotive sector was central to the country’s manufacturing industrialisation and future.
“The industry is the largest sub-sector of manufacturing in our country and contributes about 7% to the country’s GDP,” Davies said.
Oscar Mabuyane, MEC for treasury, economic development, environmental affairs and tourism in the Eastern Cape said he was pleased by the announcement.
“This announcement actually continues to stimulate our economic growth in the province. There are a lot of other areas that we should be looking at in terms of giving the necessary meaning. This talks to real meaning of microeconomics interpreting the macroeconomic strategy. So we are quite happy with this, we need more and multiply what we have seen.
“But also government must try to compliment what the private sector is trying to do. We have got a port here [East London] that we definitely need to develop with modern technology to be able to handle investment opportunities like these. As long as our East London port is not at the level it should be it will also limit the ambitious plans of Mercedes-Benz to grow this plant bigger than what it is,” Mabuyane said.
