R12bn VW contract to create over 100 jobs

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Volkswagen South Africa (VWSA) in Uitenhage has been awarded a R12 billion contract to manufacture diesel particulate filters which will secure over 100 jobs in the Nelson Mandela Bay region where it is based. The deal is one of the biggest export contracts for a single part ever awarded to the company, VWSA Director David Powels said in a statement.

“Furthermore, it is a coup for the South African automotive component manufacturing industry,” he said, adding that production was scheduled to start in November 2008.

The automotive component contract will supply the Volkswagen group with diesel particulate filters for the next five years while providing intensive training of operators and quality personnel.

The filter is a device designed to remove diesel particulate matter from exhaust fumes.

As part of the contract VWSA will embark on a partnership with local catalytic converter and exhaust systems manufacturer Eberspächer South Africa, which would share the production volume.

Collectively, the two companies will invest about R55 million to manufacture the parts. In addition, a R26 million investment will be made in the national supplier base.

Commenting on the contract, Eberspächer SA Managing Director Henry Eksteen said the project was unique in its approach of cooperation and utilisation of the manufacturing capabilities of two companies.

The parts would be shipped to the Volkswagen Group's Kassel plant in Germany, where they would be completed and sent to various user plants in the Volkswagen Group's global network.

“The decision to award the contract to Volkswagen of SA 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,” said VWSA Purchasing division Head Karlheinz Hell.

Article published courtesy of BuaNews

[19 Jun 2008 14:22]