Name of the Project
BAIC vehicle manufacturing plant project.

Location
The plant will be located in the Eastern Cape Industrial Development Zone (IDZ) of South Africa.

Project Owner/s
The Industrial Development Corporation (IDC) and the Beijing Automotive Group Corporation (BAIC) have signed a deal to develop the vehicle manufacturing plant.

BAIC will be the major shareholder, holding 65%, with the IDC holding 35%.

Project Description
The project entails the construction of a completely knocked-down vehicle manufacturing plant in the 50 000 ha Coega IDZ, which is linked with the Ngqura deep-water harbour, located not far from Port Elizabeth. The car manufacturer plans to export about two-thirds of its production, so access to harbours is critical.

The plant will produce passenger, multipurpose and sports-utility vehicles (SUVs), as well as bakkies, and will be rolled out in phases. The plant will have an initial capacity of producing 50 000 vehicles a year, ramping up to 100 000 units a year.

The project will be rolled out in two phases.

The first phase will have an installed capacity to manufacture 50 000 units a year and will include a body shop, a paint shop and an assembly line. It will produce small cars, small SUVs and pickups – three of the most popular vehicles in South Africa.

Phase 2 will double production to 100 000 units a year.

The project consolidates the Eastern Cape as an automotive hub, with companies such as Volkswagen, Mercedes Benz and General Motors already major investors in the province.

Plans for the BAIC plant include the future construction of a supplier park in the Coega IDZ to facilitate parts supply to the assembly line.

Potential Job Creation
According to data released by the Coega Development Corporation, total local labour since the start of the project stands at 1 839 people.

The is well on its way to exceeding 35% small, medium-sized and microenterprise (SMME) participation.

To date, the value of construction tenders allocated to SMMEs has numbered R44.1-million.

Capital Expenditure
The investment is valued at R11-billion.

Planned Start /End Date
The project broke ground in 2016.

All construction should be completed in 2020.

Latest Developments
Following a delay in the completion of the BAIC SA project, full-scale vehicle production is now scheduled to start before the end of the year.

By July 2018 BAIC SA said it had completed only the critical construction and equipment installation milestones for Phase 1 of the R11-billion assembly plant.

At the time, BAIC SA announced that the full-scale production of its compact SUV, the BAIC X25, would start in the fourth quarter of 2018.

Now, however, new timelines have been established for the completion of the project, and a new work schedule has been adopted for all contractors on site, BAIC SA CEO SA Nemo Tian has said.

According to BAIC SA, principal contractor Beijing Industrial Designing & Researching Institute will start work on site in the second quarter of 2019, with full-scale vehicle production to start once the assembly and welding facilities have been completed.

Tian has said the yearly 50 000 vehicle target should be reached in about three years from the start of production, after which the plant will increase output to 100 000 vehicles a year.
  
Although the automaker plans to continue importing parts from China, BAIC SA will also purchase parts from local suppliers, noted the company in its statement.

BAIC SA said it has already compiled a local supplier procurement database of more than 100 companies.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
IDC, tel +27 11 269 3000 or fax +27 11 269 3116.
BAIC, tel +86 10 56630185 or email haojinyi@baicintl.com.