Volkswagen South Africa (VWSA) on Monday announced that it will invest R750-million in a new, state-of-the-art paint shop in Uitenhage.
Addressing the media, VWSA MD Andreas Tostmann said construction of the facility will start in May and is anticipated to be completed and operational in the first half of 2007.
Earlier this year, the company confirmed its commitment to the Nelson Mandela metropole and the Eastern Cape with the announcement that it will invest more than R2-billion in its facilities in the next three years.
Tostmann said the new paint shop is part of this investment plan. He added that over the past five years, VWSA has invested more than R2-billion in plant machinery and facilities to enable the growth of both its domestic and export business.
The new paint shop will enable the company to continue to remain a world-class supplier of vehicles to both the domestic and world markets.
Tostmann said: “You might well be asking how VWSA can justify an investment of R750-million in a new paint shop facility, which in essence represents an investment in a process. Certainly it gives us more capacity, but I need to elaborate on the benefit of this investment.
“The new facility will give us substantial improved flexibility. This means that we will be able to paint and thereby manufacture a greater variety of car shapes and sizes, ranging from the ultra-small car segment up to the B or medium-class segment.
“This flexibility gives us confidence going into the future to accommodate changes in this very dynamic industry.”
The company said it does not anticipate any job losses due to the new paint shop and it will redeploy 150 to 200 workers, Tostmann said.
“The investment of R750-million covers the period of approximately 15 years on three product life cycles. We will be equipped to accommodate ever-decreasing product life-cycle time frames.”
In addition, Tostmann pointed out the 15-year investment will take VWSA eight years past the 2012 Motor Industry Development Plan (MIDP) time frame.
He said: “It is critical that we plan our business past the 2012 MIDP extended period.”
The new facility will ensure that the company can accommodate the production growth potential facing it over the next 15 years.
“To give you some idea on this potential, we estimate that domestically produced vehicles for both export and local consumption will exceed 800 000 units in 2010, growth of over 70% on 2004. Specifically, the new paint shop will increase our daily unit output to in excess of 500 units,” Tostmann added.
Technically, the new paint shop will offer the most advanced application systems, materials, environment control and energy recovery systems to be found anywhere in the world.
He said that a key factor to the successful switch from the current to the new facility will be the training and development of VWSA’s people.
The new project will necessitate the employer to improve the skills and level of expertise of staff substantially. Training will therefore take place locally and internationally.
The new paint shop will be build adjacent to the current facility, which will be fully operational until 2007 when production will swing mainly to the new operation.
Tostmann estimated that more than a third of the R750-million investment in the new facility will be sourced locally. — I-Net Bridge