Vehicle manufacturer Volks- wagen of South Africa (VWSA) has secured a R12-billion contract to supply its German parent, the Volkswagen group, with diesel particulate filters (DPFs) for the next five years.

VWSA will complete the contract in partnership with local catalytic converter and exhaust systems manufacturer Eber-spächer South Africa, which will share the production volume.

A DPF is designed to remove diesel particulate matter, or soot, from the exhaust gas of a diesel engine, and is rapidly gaining popularity as global emission standards are becoming stricter.

The component forms part of the latest common rail engines that are manufactured by the Volkswagen group.
VWSA MD David Powels says the deal was one of the biggest export contracts for a single part ever awarded to the South African company.

“Further, it is a coup for the South African automotive component manufacturing industry.”

Collectively, VWSA and Eber-spächer South Africa will invest about R55-million in tooling and equipment to manufacture the DPFs.

In addition, the investment in the broader national supplier base will reach about R26-million. Eighty per cent of these suppliers are based in the Nelson Mandela Bay region, in the Eastern Cape.

VWSA estimates that the new contract will secure more than a hundred new jobs in the region.

VWSA and Eberspächer South Africa will use the most modern DPF manufacturing method, known as calibrated stuffing, which encompasses new laser measuring and sizing technologies.

“This is the benchmark in the Volkswagen group and will benefit the South African catalytic converter industry as a whole,” says Powels.

DPF production will start in November.

From VWSA, the parts will be shipped to the Volkswagen group’s Kassel plant, in Germany, where they will be completed and sent to various user plants in the automotive manufacturer’s global network.

“The decision to award the contract to VWSA proves emphatically that South Africa can be globally competitive in terms of pricing and technology, even when measured against the best global players in the DPF industry,” says VWSA purchasing division head Karlheinz Hell.

Eberspächer South Africa MD Henry Eksteen says the project is unique in its approach of cooperation and the use of manufacturing capabilities of two companies.

“This type of parallel project, we believe, will become the benchmark for the future, where an OEM (vehicle manufacturer) can join forces with a specific technology partner to optimise processes and, thereby, gain access to global business for their region and country.”

Catalytic converters are South Africa’s biggest single automotive component export.

Export sales of catalytic converters reached R18,3-billion last year, compared with R15,8-billion in 2006.

South Africa has a 14% market share in the global catalytic converter manufacturing industry.

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