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Oct 01, 2012

Toyota parts centre leads new round of investment from manufacturer

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TSAM president and CEO Dr Johan van Zyl discusses the significance of the company's new parts distribution centre. Camerawork: Nicholas Boyd. Editing: Darlene Creamer. Recorded: 01.10.12
 
 
 
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Toyota South Africa Motors’ (TSAM’s) new R363-million parts distribution warehouse was the first big money spent in a fresh multibillion-rand investment cycle by the Japanese manufacturer, said TSAM president and CEO Dr Johan van Zyl on Monday.

“We will be looking at investing into the production of new models at the plant again, and expanding our business,” he told Engineering News Online at the opening of the parts centre, located in Ekurhuleni.

TSAM currently assembles the Hilux, Fortuner and Corolla models at its Prospecton plant, in Durban, which has the capacity to produce 220 000 units a year. It also assembles the Quantum minibus in a new investment programme announced earlier this year, set to expand soon.

“We’ll be making announcements as the projects come to fruition,” said Van Zyl.

He added that government’s new Automotive Production and Development Programme (APDP), active from 2013, provided a stable backdrop for TSAM’s investments, but that political and economical stability also played a role.

Van Zyl noted that recent labour unrest at the Marikana platinum mine, in which 46 people died, had tarnished South Africa’s image abroad.

“We have to ensure that we manage this situation well, and that we do not create a negative environment for investors.”

He added that Toyota remained positive about South Africa, and and that it would continue its investment programme into the country.

MUST INCREASE LOCAL CONTENT
While the APDP was a “good programme”, it was necessary to increase the local content in South African vehicles built for the local and export markets, said Van Zyl.

“When we review the APDP, we’ll have to look at how we can improve local content and how we can build in more benefits for component manufacturers.

“We’ll have to look at engines and gear boxes, which would, of course, require large investments. And, we require these additional investments as the component sector is where the most jobs are created.”

Current local content on the Corolla was around 40%, and 60% on the Hilux.

Van Zyl said exports of these models from the Toyota plant were progressing steadily, with an improvement expected on last year’s numbers.

While debt-ridden Europe was proving a challenging market, Africa was growing steadily in its take-up from the Durban plant.

“Algeria will sell more than 400 000 vehicles this year,” noted Van Zyl.

“Africa’s middle class is starting to grow, and it is no longer only the State and semi-State institutions buying vehicles,” he adds.

NEW PARTS DISTRIBUTION WAREHOUSE
TSAM’s new parts distribution centre was built and equipped in 15 months, and was designed to serve the company’s Southern African Toyota, Lexus and Hino dealer network with daily deliveries. It would also support 70 international destinations where South African-built Toyota vehicles were found.

The new facility had 39 000 m2 of storage space and a further 3 000 m2 of office space. This area hosted the company’s customer service and logistic support divisions.

In the second phase, Toyota would add a further 38 000 m2 of warehouse space, making this facility the largest of its kind on the African continent.

Until this second phase was completed – expected in 2015 - the new facility would be supported by the company’s existing warehouse infrastructure of 22 000 m2 located in Sandton.

The new warehouse carried 2.2-million parts pieces of 110 000 different parts and components, valued at more than R350-million.

* There are currently 108 Japanese companies active in South Africa, creating 15 000 jobs.

 

Edited by: Creamer Media Reporter
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