Metair approves investments as new vehicles to start in SA
The group’s board has approved a R900m investment programme, which includes building a new production facility in KwaZulu-Natal
The board of Metair, the manufacturer, distributor and retailer of batteries and automotive components, has approved a R900m capital investment programme as it gears up to benefit from a number of new vehicle types entering production in SA.
The group has secured key contracts over the next two to three years — notably contracts with Ford, which has invested heavily in SA in recent years.
Metair will be constructing a new manufacturing facility in Stanger, KwaZulu-Natal, and a new logistics facility in Silverton, Gauteng, the group said in a trading update.
The board’s approval of the R900m capital investment, including major investments in greenfield facilities, will create about 3,300 jobs, the group said.
Even before Covid-19 hit, vehicle production volumes for 2020 were forecast to be static or slightly down, but the group said it is optimistic about the next three years, having secured contracts with Mercedes-Benz, as well as for new Nissan, Volkswagen and Isuzu models.
In addition to Metair’s Hesto Harnesses, which will be the largest beneficiary supplying a wide range of wire harnesses, a number of other subsidiaries will support Ford, including Unitrade, Automould and Lumotech, supplying a variety of wires, plastic and chrome-plated parts, as well as headlights and tail lights.
“Securing Ford as a major customer is a critical step in ensuring the long- term growth and sustainability of the automotive components bertical business,” the group said in a statement.
“The board remains cognisant of the company’s solvency and liquidity ratios in the current operating environment and will therefore closely monitor and review actual capital commitment and optimal timing requirements.”
In afternoon trade on Friday, Metair’s share price was up 1.6% to R16.70, having fallen about 27% so far in 2020.