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NEWSLETTER

JULY / AUGUST 2011

Mercedes-Benz

C-CLASS FACELIFT launched at the ELIDZ Automobile makers Mercedes Benz South Africa (MBSA) launched the highly anticipated face lift of their successful compact executive car, the C-Class model at the East London Industrial Development Zone (IDZ) Automotive Supplier Park on Thursday July 14. Speaking at the event, MBSA Sales and Marketing Vice President, Passenger Cars Eckart Mayer said that hosting the launch of the C-Class facelift was an important day for East London.

London plant. “We will be operating three shifts and producing almost 400 vehicles per day and this will lead to job creation and to more suppliers coming to the East London IDZ ASP.,” he adds The Mercedes Benz East London Plant currently produces 200 cars a day.

“The plant here has been very successful and has received numerous international awards. We have been impressed by the quality of components coming from these world class facilities provided by the East London IDZ,” he says

Speaking at the media launch Managing Director of JohHosted by the suppliers of headliners and cockpits to the C-Class, Johnston Controls (JCI), the event was a show of confidence by Mercedes Benz SA (MBSA) to the East London IDZ’s world class facilities that [have] enabled components suppliers to produce high quality just in time and just in sequence produces to the client. It was also a show of confidence to the East London plant for producing a high quality vehicle that has won a number of JD and Powers international awards.

Turning his attention to the future, Mayer says the next generation C-Class will culminate to increased volumes at the East

Speaking at the launch ELIDZ CEO Simphiwe Kondlo said he was proud to have been part of the team that worked alongside MBSA

in developing the world class ASP that has proved to be the cornerstone of the highly acclaimed C-Class model. “We need to celebrate these pockets of excellence and be proud of the achievements of the suppliers in the ASP. JCI has produced quality components for the C-Class; and their being chosen as the supplier for the new and improved facelift is testimony to that fact,” says a proud Kondlo The launching of the C-Class facelift in the East London IDZ, however, was just the beginning of greater things to come for the company and the Buffalo City area in its entirety. “This is just the precursor to something bigger; the ASP suppliers are already part of the upcoming W205 model that will be built here in East London,” adds Kondlo To meet up with the expected demand the East London IDZ is already one step ahead and expanding the ASP to accommodate new suppliers to the MBSA’s most successful model.

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Renewable Energy Pilot Project for East London IDZ The move towards attracting green energy investors is fast gaining momentum in the East London IDZ as Renewable Energy experts Gehrlicher Ikhwezi have installed a pilot Photovoltaic (PV) solar project in the Vehicle Storage Centre in zone 1 A; a first project of this nature for South Africa and Africa. The Vehicle Storage Centre (VSC) is currently utilised by automotive industry giants, Mercedes Benz South Africa. GerlicherIkhwezi, a potential East London IDZ investor, identified the VSC as the best location to pilot a project that could pave the way for a thriving RE sector in the East London IDZ. The company has product specific items designed for car storage facilities. Gerlicher – Ikhwezi is a partnership between leading German RE Company and East London’s own Ikhwezi Investment Holdings. This Renewable Energy initiative comes hot on the heels of the Minister of Finance Pravan Gordarn announcing funding amounting to R800 million that has been set aside for green economy initiatives. ELIDZ Senior Researcher Chris Ettmayr says Gerlcher- Ikhwezi, after being granted approval by MBSA, will cover 568 parking bays with solar panels that will generate 1 MW of energy.

“This is a milestone for the East London IDZ because we are promoting and stimulating projects in the green energy sector. We are already a clean IDZ and a project like this will go a long way in showing that we are supporting green energy initiatives,” says Ettmayr, emphasizing that this is the first project of its nature in the continent. Asked how this will be of benefit to MBSA Ettmayr says the cars will be under a solar roof that will protect them from hail and other forces of nature. “But, that is not as important as the fact that MBSA has already proven that it supports the move towards saving the environment. They’ve shown this by manufacturing environmentally friendly vehicles,” adds Ettmayr

“The 1 MW of energy produced by the PVA project can be used to power a solar battery that will charge their car batteries. Also, if MBSA were to purchase the energy, this would reduce their carbon footprint.” Carl Müller from Gehrlicher Ikhwezi is exciting about the project saying that the company has already received permission from the East London IDZ to develop a 10 MW peak within the zone. However, for Gehrlicher Ikhwezi it is important to first test the market before developing the 10 MW peak which is set to revolutionarise the energy sector in the South Africa, and the rest of the continent.

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“We discussed with the East London IDZ and MBSA the possibility of developing a 1 MW peak for the open space in the VSC; and we received permission and we installed [this] 1 unit,” says Müller “This unit has the potential to provide 14, 1 kilowatts peak, and this should translate to about 20 000 kW per annum; from that one unit alone, you can just see the potential.” If the pilot is successful, Gehrlicher Ikhwezi hopes to install 71 units that cover eight parking bays at a time. With government talking the RE talk; Gehrlicher Ikhwezi can already see the proverbial light at the end of the tunnel. But, for RE to be truly opened up, a number of milestones need to be met. Firstly, the Renewable Energy IRP 2010 needs to be finalised and published. This is a multiyear strategy that aims to ascertain Renewable Energy needs in South Africa and the different sources best for the country. “The other important aspect is the feed in tariff where the government [can] purchase energy from independent power producers at a fixed rate; this will open up the market and will give investors more surety for the future as government is a stable client,” says Müller, adding that this also needs to be promulgated in order to open up the Renewable Energy market in the country. The East London IDZ already has an investor in the sector, Matla Solar Water Heaters, and is currently developing a solid value proposition for the Renewable Energy sector.


Chemin joins

ELIDZ Community The South African Chemical Technology Incubator, Chemin has joined the ever growing East London IDZ family of tenants.

are able to grow [to] beyond just selling their products to households, but, if possible to chain stores.

An initiative of the Department of Trade and Industry and funded by the Eastern Cape Economic Development and Environmental Affairs and Small Enterprise Development Agency, Chemin is responsible for technology transfer and business incubation for Small Macro and Medium Enterprises and Small business.

Another area of focus for Chemin is innovation; an area the East London IDZ Science and Technology Park [also] aims to exploit.

The company’s head office is in Port Elizabeth, but due to its success Chemin is now rolling out its programmes to the reach the greater Eastern Cape, and ultimately the rest of the country. Chemin also assists in organising training for the Small Macro and Medium Enterprises (SMMEs) and negotiates with suppliers so that the small businesses are able to purchase material at discounted prices to enable [them] to be competitive when it comes to price. Chemin also ensures that the SMMEs selling fast moving consumer goods

Intellectual Property is normally an Achilles’ heel for small businesses where innovation is concerned, and Chemin also assists business in this regard. Currently Chemin has about 50 clients, with formulations contributing to 40 of that number. For the East London plant Chemin will purchase equipment that include, mixers and filling machines for liquid chemical detergents, powder soap mixers, cosmetic mixers and laboratory equipment to enable clients to test their finished products before distribution. The R1 million for this equipment has been provided by the Eskom Foundation Even though the incubator specialises in chemicals, [its] operation is clean and compliant to legislation as well as industry rules and regulations; and that is how it fits [in] with the East London IDZ requirements for clean industries.

JCI has new plant manager Walking up the stairs at the Johnston Controls Instruments (JCI) factory in the Automotive Supplier Park, an imposing figure awaits me, the kind of man you would think twice before you fire an insult at. I’m glad I’m only there to profile this person for the tenant newsletter and not discuss what the best rugby team in the country is; he’s a Stormers fan, I’m a Shark. This figure dwarfs me and his grip is firm; but, contrary to my thoughts, his welcoming smile is even more surpassing than his demeanour and I’m starting to feel at ease with this figure. He introduces himself as Fanie Calitz, the new Plant Manager at JCI, and offers me a drink, I was feeling welcome already. Curious, I wanted to know who this gentle giant is and what interest does he have in the automotive industry. “I’m an adrenaline junkie and the automotive sector fits my persona. It’s a very active industry where survival of the fittest is the order of the day, and this is especially true of the local auto industry,” he says As challenging as the industry is, Calitz has lived up to the demands of the industry as he’s career began in auto sector before stints at tyre experts Continental and Dunlop. His talents as an accomplished engineer, however, did not go unnoticed in other sectors, and soon Eveready batteries came knocking at his door.

A successful career as Maintenance and Manufacturing engineer at Eveready Batteries was not enough to extinguish the automotive spark inside Calitz, and a move to Super Group where he was responsible for customising Trucks for customers soon ensued. This brought Calitz talents back to the highly competitive automotive sector, where automotive paint specialist, Venture SA was waiting. Ironically Calitz was to return to the city that is home to the school he matriculated in, Port Rex Technical High School, in East London “I was head hunted by Venture SA in 2008 as the East London Plant Manager and the experience I gathered there has prepared me for this job. The first thing a person notices when they look at a car is the colour [paint] and if the quality of the job is good, people will notice that; defects are just as visible,” says Calitz “Quality then becomes very important when working with paint. With JCI the same is also very true, the cockpit, is the interphase between the customer and the car, if it [cockpit] it’s of high quality, the owner will know and appreciate that.” JCI has a number of quality awards from their clients and, with his background firmly rooted in the automotive sector and level of his skills; Calitz seems to be at the right place then. It’s not only quality that attracted Calitz to JCI, though, the company’s bright future was also a pull factor. “The foreseen growth within the plant is very encouraging and exciting for me. The relationship we have with both Mercedes Benz and the East London IDZ is growing, meaning that the future looks bright, not only for me and JCI but the industry here in the city.”

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Big Express Freight joins ELIDZ

Logistics experts Bigfoot Express Freight has added to the growing list of investors that have settled in the East London IDZ when the company started their operations from Zone 1D on March 1, 2010. Bigfoot Express Freight (Pty) Ltd was initially founded in 1989 by husband and wife team CEO Sun Moodley and (MD) Rina Moodley, offering the next day service between Kwa-Zulu Natal and the Eastern Cape. Bigfoot is an independent express distribution company, which offers various distribution and fulfilment solutions to its valued clients throughout the major centres across South Africa. The company has since evolved into one of the leading express road freight distribution companies in South Africa. The company boasts a comprehensive fleet of over 187 vehicles with full satellite tracking, and 452 committed and well trained staff.

Areas of Expertise

the areas of expertise covered by Bigfoot Express Freight are summarised as follows: • • •

Collections: Planned with the client’s dispatch department ensures effective time utilisation and increased productivity. Sorting: Clients can confidently dispatch multiple consignments as all freight are checked and sorted to destination upon arrival at the depots. Consolidation: All part loads are placed together and a full consolidated load are planned.

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Freight Packing: Is planned effectively to ensure proper weight distribution per axle. All packing specifications are considered and adhered to, which ensure that in-transit freight breakages are minimised. Freight is then properly secured. Long Haul: Regular long haul trips promote efficient scheduled freight deliveries.

Bigfoot Express Freight also offers an airfreight service • • • • • •

Distribution: On arrival at the destination depot, the freight is unpacked and sorted into various delivery routes. Deliveries: Planned delivery routes ensure maximum productivity and a minimum of travel time. Warehousing and Storage: Warehouses are mainly used to sort freight; however, on the client’s request goods are stored until receivers are ready to accept delivery. Tracking and Tracing: Bigfoot Express Freight, using most upgraded software available, promote an improved control over consignments and goods can be tracked and traced at anytime from collection to delivery. P.O.D. Management: In order to offer a transparent service a comprehensive live ‘track & trace’ system, with scanned proof of deliveries is available on the e-docs document imaging system available within 24/48 hours from delivery. Accurate Billing: Automated weighing and dimensioning equipment ensures that clients are accurately billed for consignments.

STP Pilot Park on the cards With the Science and Technology Park (STP) still a relatively new concept in South Africa, the East London IDZ will take a pragmatic approach and launch a pilot project sometime this year. The pilot STP project, to be housed at the Office centre in Zone 1C is set to boast a number of important functions of an innovation park. Speaking about this planned pilot park Dr Nkem Abonta says it is important for the East London IDZ to test the STP model before fully implementing it. “The Science Park concept is fairly new in South Africa; the only existing one is the Innovation Hub in Pretoria. It is then important for us to learn by doing because the STP has its own model and cost of error could be too high,” warns Dr Abonta

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The facility will have a coaching laboratory, a technology transfer station on renewable energy, and an advanced tooling centre. “Another reason for a pilot park is that we do not want to only talk about concepts; we want to demonstrate relevance by immediately delivering value with some STP functions, even on pilot a thriving and successful pilot will engender enthusiasm and confidence in the stakeholder public, by demonstrating promise of what value a full STP can deliver.” says Dr Abonta. With a pilot project the STP team hopes to build a virtual STP community that will be comprised of politicians, industry players, academic institutions and the community at large. More importantly, the setting up and success of a pilot project will build credibility for the East London IDZ STP, greatly enhancing its status as a leader in industrial innovation.


ELIDZ attends MBSA

Supplier Day Stuttgart, Germany – Mercedes-Benz South Africa (MBSA) hosted a series of talks between leading international automotive component suppliers, the South African government, the East London Industrial Development Zone (ELIDZ) and top Daimler AG officials in a bid to encourage further local growth in the component supply industry and to openly debate challenges to achieving greater localisation in this important sector of the SA auto industry. Following the December announcement of Daimler AG that it was to invest a sizeable R2-billion into the MBSA plant in East London for the production of the next-generation C-Class, the group’s focus has been on fruitful discussion with the Department of Trade and Industry to find ways of attracting more international component manufacturers to invest in SA, establish large-scale production here and thus create more jobs and wider industry infrastructure. The delegation to Germany included Minister of the Department of Trade and Industry, Rob Davies, who expressed support for the initiative and pledged government’s commitment to finding optimum solutions within the scope of the existing and future legislative framework for a significant strengthening of the automotive industry in South Africa.

At present the industry contributes in the region of 7% annually to the country’s GDP and is responsible for well over 30 000 jobs. Other key government representatives also included the MEC of Economic Development in the Eastern Cape Province, Mr Mcebisi Jonas, who emphasised the provincial government’s commitment to supporting a thriving automotive sector in the Eastern Cape. Forming part of the delegation, Mercedes-Benz SA’s Eastern Cape suppliers with successful South African history namely Eberspaecher, Foxtec-Ikhwezi and Johnson Controls actively contributed to the forum, citing world-class benchmark examples of the high standards found in the South African manufacturing environment. “The Mercedes-Benz plant in East London follows exceptionally good global processes and standards outlined in the Mercedes-Benz

production system for all Mercedes-Benz passenger cars plants,” said Rainer Ruess, Vice-president at MBSA responsible for manufacturing and procurement. “We will be bringing more than a dozen new technologies to South Africa in the car and production processes,” said Ruess. “MBSA will localise more than 40% of the components for this next-generation Mercedes-Benz C-Class local manufacture. We expect to see more investors and new suppliers in and around East London, all with the latest technologies coming to the country. These developments will certainly strengthen the entire automotive value chain. “With the pledged support of the South African Government, MBSA plans to make optimum use of the South African regulatory environment and leverage the advantages presented through the Government’s Industrial Policy Action Programme (IPAP), as well as the Automotive Investment Scheme (AIS) and the future Automotive Production Development Programme (APDP),” said Ruess. “This supplier growth initiative is intended to further enhance the R2-billion Daimler investment and will certainly have a positive economic impact on the local supply. The investment also provides for extensive skills development and training locally and in Germany, as well as for new plant and equipment, and the introduction of some of the very latest manufacturing technology.” Speaking about the initiative, East London IDZ CEO, Mr Simphiwe Kondlo, said the East London IDZ was very encouraged by MBSA’s efforts to encourage localisation of key component suppliers. As the East London IDZ we have been home to some of the component suppliers for MBSA’s current C-Class, W204 and we have gotten to understand some of the critical success factors for both suppliers and MBSA. We are currently talking to a number of the potential suppliers for the coming C-Class in a bid to locate their plants into the East London IDZ’s state of the art Automotive Supplier Park. MBSA aims to remain at the forefront of local automotive growth and this initiative has provided a mechanism for sustainable engagement between government, and international and local interests.

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ELIDZ hosts Learnership graduation ceremony The East London IDZ played host to the graduation ceremony of 71 learners at the conference centre on Thursday July 14. The learnership programme is an initiative by the Eastern Cape Office of the Premier that aims to equip youths with much needed skills for the job market. The programme sees government working in partnership with the Sector Education Training Authorities (SETAs), the Buffalo City Further Education and Training (FET) College, the private sector, District Municipalities and other partners to develop the skills of young people to equip them for the job market.

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The East London IDZ and its partners have participated in the programme since its inception in 2007. Some of the companies and ELIDZ partners that hosted learners include Feltex Trim, Feltex Caravelle, Feltex Fehrer, Foxtec-Ikhwezi and MC Synchro. The event was attended by dignitaries from the Office of the Premier, Merseta Chief Operations Officer Wayne Adams, hosting companies, East London IDZ CEO Simphiwe Kondlo and guest speaker: Merseta Chief Operations Officer Wayne Adams.

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1 . Choir at the Learnership graduation ceremony 2. Simphiwe Kondlo (CEO-East London IDZ), Litha Geza (DDG - Office of the Premier), Mr D.R. Singh (FET College CEO) and Mr Wayne Adams (MERSETA COO) arriving at the ceremony 3. Eastern Cape Member of the Executive Committee (MEC) for Education Mandla Makupula 4. Choir setting the tone for a special ceremony 5 & 6. Some of the Learnership graduates 7. Litha Geza (DDG - OTP) leaving the ceremony

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STAKEHOLDER FUNCTION 2010 1.

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1. MD Chwephesha Channel - Vumile and Mandisa Nxele 2. Charl and Claire Human - Molan Pino 3. Joe Ntsomi - Ti Fuels 4. Mr and Mrs Rainer Ruess with Mr Zolile Tini - Chairman of the Board - East London IDZ 5. Les and Tish Holbrook - Chairman of Border Kei Chamber of Business

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For any queries contact Nonkumbuzo, Mdintsi

Tel: 043 702 8200 Fax: 043 736 6405 info@elidz.co.za www.elidz.co.za

EL IDZ_Zone Beat_March_2011  

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