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Apr 08, 2010

Ford doubles pick-up, engine investment to R3bn

FMCSA president and CEO Jeff Nemeth talks about the company's R3-billion investment in South Africa (08/04/2010) Camera work: Nicholas Boyd; Editing: Darlene Creamer
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The Ford Motor Company of Southern Africa (FMCSA) on Thursday said that it would double its investment to produce a new-generation pick-up at its Pretoria plant, as well as the new Puma diesel engine at its Struandale plant, in Port Elizabeth, from R1,5-billion, as announced in 2008, to R3-billion.

FMCSA president and CEO Jeff Nemeth said in Johannesburg that the added funding would be used to increase the level of mechanisation at the plants, and to facilitate further local component development.

Assembly of the "next-generation global compact pick-up", as Nemeth described it, would start in the second half of next year, with the engine plant starting production of the Puma engine in early 2011.

The investment would increase total annual capacity at the Silverton plant to 110 000 left-hand drive and right-hand drive units - up from 2008's 55 000 units and last year's 28 000 tally - with around 75% of the vehicles destined for export markets, primarily to the rest of Africa and Europe.

The Struandale plant would install capacity for 220 000 engines, of which 75 000 would be for the Silverton plant, while the balance would be exported.

The investment programme would see FMCSA increase local content on its vehicles from the current 35%, to more than 60%, said Nemeth.

Working with roughly 65 different South African component suppliers, FMCSA's annual spending on local components would increase from an estimated R2-billion a year to around R6,5-billion.

"The announcement highlights our commitment to expanding the South African automotive industry, which will enhance the country as an export base for vehicles, engines and components," said Nemeth.

"The investment represents a significant next step in the ongoing expansion plan of Ford's Asia Pacific and Africa region, and underscores the central role of our South African operations. With the continued support of the South African government and hard work and dedication of all our partners, we will continue to drive our operations forward in South Africa."

Nemeth said the investment programme would not immediately create additional jobs at the plants, as the company was still emerging from a four-day production week following the global recession, which had dampened vehicle demand.

Trade and Industry Minister Rob Davies said at the announcement that recent investment by vehicle manufacturers in South Africa now totalled R9-billion.

"These investments do not drop out of the air, they have to be won."

Davies said both FMCSA and government had worked hard to secure the US carmaker's purse.

Edited by: Creamer Media Reporter
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