This represents an additional R1.5 billion to the investment last year with the upgrade and expansion of production facilities at the company's assembly plant in Silverton, Pretoria, and its engine plant in Struandale, Port Elizabeth.
The assembly plant in Silverton, scheduled to begin production of its new compact pick-up truck in 2011, will be transformed into a high-volume, flexible single platform line that will accommodate the new pick-up truck.
Equipped with state-of-the-art automation and the utilization of Ford's global manufacturing processes and systems, the plant will be positioned as a Ford regional centre of excellence for the new global compact pick-up truck.
The upgrade of production facilities at the Struandale engine plant is also currently underway. The engine plant will start production of the next generation Puma diesel engine in early 2011, which will utilize Ford's newest diesel powertrain technologies.
The investment will increase total annual capacity at the Silverton assembly plant to 110 000 units, with approximately 75% of the vehicles being produced for export, primarily to markets in Africa and Europe.
The Struandale engine plant will install annual capacity for 220 000 machined components of which 75 000 will be used for engine assembly for the Silverton assembly plant and the balance will be exported.
“This 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 president and CEO, FMCSA Jeff Nemeth. "It ensures that Ford maintains a viable and strategic presence in Southern Africa."
As part of the investment, FMSCA plans to continue working with the South African government to accelerate and enhance human resources training and development of the auto industry's current and future workforce to ensure they possess the necessary skills required to support the launch.
"This 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 Africa operations," Nemeth continued.
Both FMCSA and government reconfirmed their full commitment to future growth and development of the South African vehicle manufacturing and associated industries. This includes an agreement of strategic objectives to develop worker skills, improve supply base capabilities, and accelerate the transformation of black economic empowerment.
"It's critical for the South African government to continue to support initiatives that help foster a strong and globally competitive auto industry - one that is prepared to capitalize on future opportunities and realize the potential for growth and success," Nemeth emphasized. "We'll also continue to work closely with our partners to ensure there is total alignment and
commitment to deliver the cost competitiveness and world-class quality and safety standards that have secured this investment."
Local suppliers to FMCSA stand to benefit from the expanded capacity, as increased local content will be sourced to meet increased production and output.
FMCSA currently achieves about 35% local content, which will increase to more than 60% when production begins.
Working with roughly 66 different South African suppliers, annual spending on local components will increase from an estimated R2 billion each year to approximately R6.5 billion.
"The magnitude of this project is indicative of how South Africa can benefit from having a globally competitive auto industry. In addition to the direct implications to FMCSA, this investment will have a multiplier effect with indirect job creation for local suppliers, and overall economic benefits from increased demand of locally produced content," said Nemeth.
