South Africa: Ford invests $ 1 billion in local factories

Published on : 04/02/2021 – 00:17

For Ford, this is his biggest investment ever in the country, with more than a billion dollars (830 million euros). It will be used in part to modernize its factory near Pretoria. What to favor a little the economic recovery, while the automobile is a strategic sector for South Africa.

From our correspondent in Johannesburg,

This investment announced by Ford will increase the production capacity of the Silverton plant, on the outskirts of Pretoria. With the aim of assembling nearly 200,000 vehicles per year, from 2022. And for the group’s director of operations, Andrea Cavallaro, this shows that the country remains attractive for investors: “ It’s our biggest investment in the country since we started here 97 years ago. Mr. President, you will be happy to see that this represents 1% of your promise made in 2018 to attract 100 billion dollars of investments in 5 years »Says Andrea Cavallaro.

1,200 new jobs are expected to be created following this announcement, as the pandemic has hit the South African economy very hard. President Cyril Ramaphosa is therefore delighted with this good news. ” This sets the tone for this year, which we are sure will be positive. This shows our seriousness in the application of our reforms, the repositioning of our economy, and the creation of jobs. », He declares.

► To listen also: South Africa, the German group Mercedes-Benz increases its investments

Efforts that were able to convince Ford to bet on South Africa

The automotive sector represents more than 6% of the country’s GDP. And to promote its development, a special economic zone was created in 2019, in this part of the city. It is these efforts that were able to convince Ford to bet on South Africa, according to economist Isaah Mhlanga, when the American company announced last month the closure of its last three factories in Brazil: “ In South Africa, the automotive sector is profitable, thanks to all the support that the state provides to this sector, through its Ministry of Trade and Industry. The sector is in fact subsidized, in exchange for job creation in the country », He explains.

Pretoria’s production is partly intended for the domestic market, but mainly for export. And South Africa’s weight on the continent also gives it a big advantage, according to Joshua Cobb, Industry Specialist for Fitch Solutions: “ The agreement creating the African Continental Free Trade Area could have been a key asset for South Africa to secure this investment, given the potential this represents in the long term. This is one of the sectors that should benefit from this agreement, thanks to the facilities already in place and the skills that the country possesses. », analyse Joshua Cobb.

For its part, the Toyota company also announced a few days ago an investment of nearly 170 million euros, for the assembly of a new model in its factory near Durban.

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