Localisation in South Africa is set to increase as Johnson Controls’ East London plant expands from a just-in-time vehicle interior component operation to a local manufacturing facility in a R380-million project.

This came as Johnson Controls secured a contract to supply Daimler subsidiary Mercedes-Benz South Africa (MBSA) with interior components for the new C-Class W205 series.

Johnson Controls, which currently had a smaller facility assembling cockpits for MBSA’s W204 series, would install ten new technologies and processes into the 13 000 m² facility over the next year, ramping up to full production by April 2014.

The facility, based at the East London Industrial Development Zone’s (ELIDZ’s) Automotive Supplier Park, would supply MBSA with interior components, including headliners, instrument panels, overhead systems, cockpits and door panels, Johnson Controls Automotive Experience VP and GM of electronics Jeff DeBest said during a media visit on Tuesday.

However, the raw materials for the components would be imported, owing to a limited market in South Africa.

The parts and components for the new C-Class W205 series would be produced for Daimler – under a global programme – in four countries, namely South Africa, Germany, the US and China.

The investment comprised over R230-million for the capital equipment, close to R80-million for recruitment and training, and about R65-million for the global programme and technology support.

DeBest commented that South Africa would be the second country after Germany to host such technology.

MBSA VP for manufacturing Arno van der Merwe commented that the new series vehicle, on which production would start next year, would result in an increase of more than 50% of the car manufacturer’s capacity, adding about 800 new jobs.

Johnson Controls VP and GM Marco vom Wege believed that, while the development of localisation in South Africa had been difficult, owing to a lack of technology and skills, its new facility’s technology would result in the localisation of more components with other customers in the future.

Trade and Industry Minister Dr Rob Davies praised the initiative, saying the investment would move the country into a higher plane of manufacturing and build technology, while aiding South Africa’s efforts to localise and drive the Industrial Policy Action Plan.

He added that component manufacturing offered the greatest opportunities for job creation and that the establishment of the new facility flagged the ELIDZ as a stable and sustainable programme.

The ELIDZ, situated neatly between the airport and the harbour, had grown from receiving R600-million in private investment in 2009, to boasting investment of R4-billion from 32 investors – 87% of which were foreign direct investors – in 2012.

Currently, 23 of those investors were operational, with another eight undertaking construction.

The industrial zone, with the automotive sector as its anchor cluster, secured 14 automotive component investors, with a shared investment value of just over R1.2-billion, ELIDZ CEO Simphiwe Kondlo said.

The industrial zone’s most recent investor, Voesalpine Stamptec, was expected to open its first Southern Africa-based automotive unit in February or March next year.

The R30-million facility would be responsible for the assembly and supply, over the next seven years, of the cross beam below the seat of MBSA’s C-Class W205 series.

Voestalpine, which develops and manufactures structural vehicle components, welding parts and assemblies for the automotive market, currently had facilities in Gauteng specialising in railway and steel commodities.

The company aimed to expand to accommodate for assembling parts for other local original-equipment manufacturers in the future.

The ELIDZ is one of four Department of Trade and Industry- (DTI-) designated IDZ’s in South Africa.

IDZ programmes were developed by the DTI to boost the country’s export capability and global competitiveness.