President Cyril Ramaphosa speaking at the official launch of the Tshwane automotive hub at the Ford Motor Company in Silverton, Pretoria on November 5 2019.
President Cyril Ramaphosa speaking at the official launch of the Tshwane automotive hub at the Ford Motor Company in Silverton, Pretoria on November 5 2019.

The creation of a Tshwane automotive investment zone that will generate an initial 6,700 jobs, with the promise of more later, underlines SA’s attractiveness to foreign investors, President Cyril Ramaphosa said on Tuesday.

However, he said all levels of government must untangle their “regulatory logjams” if SA is to fulfil its potential as an investment destination.

Central government is spending R3.5bn on infrastructure for a special economic zone (SEZ) next to the Silverton vehicle assembly plant of Ford Southern Africa. The 81ha first phase has already been fully taken by local and international companies supplying components and services. Most are existing suppliers that will relocate from current premises, but Ford MD Neale Hill says some are new. Production is expected to begin in January 2021.

Inducements include tax, duty and VAT breaks, as well as job-creation benefits. The zone is an extension of the OR Tambo International Airport SEZ. Besides central government, the Gauteng and Tshwane development agencies are also in on the deal.

A further 81ha adjoining the current land will be released for development later.

Ramaphosa said the willingness of central and local government to work together showed what could be achieved when the government removed investment obstacles. For example, in the past, companies building new factories could take three years to clear regulatory hurdles for water supply. In future, it should take no longer than three months.

Government decision-makers, he said, should be as “agile and entrepreneurial” as their private-sector peers.

Hill said the closer proximity of suppliers would reduce Ford’s costs and make it more competitive. Since 2009, the company has invested more than R11bn in Silverton, which builds the Ranger bakkie, and in the Struandale engine plant in Port Elizabeth. The Ranger is exported from SA to more than 100 markets around the world.

Silverton has an annual production capacity of about 168,000. Hill says the medium-term plan is to double the actual current annual production of about 100,000.

The SEZ is another step in Tshwane’s ambition to become Africa’s “motor city”. BMW, Nissan and a number of truck companies all have assembly plants on the other side of the city, in Rosslyn, along with dozens of supply companies.