A solution that seeks to save approximately 7000 jobs in the Automotive and Tyre Manufacturing Industry in SA.
Submission Date : 2022-06-21
South Africa, Gqeberha, 22 April 2022 – The Coega Development Corporation (CDC), the developer and operator of the 9003ha Coega Special Economic Zone (SEZ) located in Gqeberha announced today that more than R200m was invested by the Department of Trade, Industry and Competition (the dtic) to facilitate the solution for Orion Engineered Carbons (OEC) in order to preserve jobs in the province and municipality and ensure the sustainability of the industry. This was announced at the Sod Turning ceremony that was attended by the Honourable Deputy Minister of the Department of Trade, Industry and Competition (the dtic), Mr. Fikile Majola and the MEC for the Eastern Cape Department of Economic Development, Environmental Affairs, and Tourism (DEDEAT), Mr. Mlungisi Mvoko, who were amongst the leaders of business in the Nelson Mandela Bay Municipality (NMBM).
The Deputy Minister Majola who officiated over the ceremony welcomed the OEC investment, and emphasised its importance to the automotive and tyre industry in the country. He applauded the CDC and OEC as well as the TNPA for finding a solution that would be sustainable to the sector whilst saving thousands of jobs in the Eastern Cape.
The Coega Development Corporation through support from the Department of the dtic, worked together with Orion Engineered Carbons South Africa (OEC SA) and Transnet National Ports Authority (TNPA) to provide OEC SA with a solution that is meant to keep its business sustainable. This is a solution that seeks to save approximately 7000 jobs in the Automotive and Tyre Manufacturing Industry in SA. This aligns very well with CDC's vision of being the leading catalyst for championing of the socio-economic development, and broader government objectives as set out in the Economic Reconstruction and Recovery Plan (ERRP) and other government Policy Prescripts.
Had it not been for the interventions, collaboration and support of the parties involved, the region would have lost a project of significant value which would have led to an increase in unemployment, loss of government revenue, and formed a perception that the region is not an attractive investment location. Approximately 7,000 people are employed in the associated tyre manufacturing value chain, most of whom would have lost their employment. It is with thanks to the collaborative effort of the CDC, OEC, TNPA and the dtic that such a risk has been averted, and it is against this backdrop that the CDC sees all these parties as strategic stakeholders for this project.
The CEO of OEC, Mr. Corning Painter, emphasised the importance of the investment to the company and how it will stimulate the entire value chain of the automotive sector including the tourism industry. The project, which entails the development of two 18,000 m3 (cubic metre) tanks for the storage of carbon black feedstock with ancillary infrastructure. A pipeline is proposed from the offloading berth within the Port of Ngqura to the new storage facility to supply feedstock / black oil to the OEC tanks. This project is in line with the OEC's vision, to be the premium supplier of carbon black, generating long-term benefits for stakeholders while remaining committed to responsible business practices through a focus on team culture, reliability and sustainability.
The project will result in the construction of the storage facility and associated infrastructure, it is estimated to create over 150 jobs (50 construction phase, and 100 jobs during the operational phase of the project) over a 10-month period.
"The importance about this investment, it enables the continued production of automotive tires in South Africa. OEC is a very important supplier of this product, but more importantly is the momentum of investment we expect we are going to see in the next year or two as part of the economic, reconstruction and recovery plan and for us as Coega because we are at the coal face of execution of converting the idea to reality we mobilize ourselves to respond to the opportunity and be able to attract more investors in the Coega SEZ," concludes Khwezi Tiya, CDC’s CEO.