/ 20 July 2018

Public-private partnership benefits East London

Markus Schäfer of Mercedes-Benz Cars shows South Africa President Cyril Ramaphosa the virtual painting training station at the Mercedes-Benz Learning Academy in East London.
Markus Schäfer of Mercedes-Benz Cars shows South Africa President Cyril Ramaphosa the virtual painting training station at the Mercedes-Benz Learning Academy in East London.

Mercedes-Benz Cars will produce the next generation of the C-Class in East London and will expand its plant with an investment of €600-million. This includes the construction of a new paint shop and a new body shop, an upgrade of the assembly shop and new logistic warehouses. Overall the new buildings will comprise an area of approximately 100 000 square metres: an addition of two-thirds of the already existing buildings. The new workshops will incorporate environmentally friendly and state-of-the-art technologies.

“With the investment of 600 Million Euro we are significantly expanding our plant in East London and equipping it for the future. The decision to have the new generation of the C-Class built in East London re-affirms our commitment to South Africa and efforts to revive economic growth, as well as the socioeconomic development of the East London region,” said Markus Schäfer, member of the divisional board of Mercedes-Benz Cars, production and supply chain, during President Cyril Ramaphosa’s visit to the Mercedes-Benz plant.

Ramaphosa said: “A central priority for government this year has been to encourage significant new investment in our economy, necessary to realise economic growth, employment and reduce inequality. The announcement by Mercedes-Benz Cars to inject R10-billion into the South African economy signals the positive momentum we are making to realise the ambitious target of raising R1.2-trillion in new investment.

“This investment by Mercedes-Benz Cars endorses South Africa as a favourable destination for investment; and correspondingly, demonstrates our determination to work with all social partners to seize the opportunities that are opening up for greater investment and faster growth.”

Schäfer and Andreas Engling, Mercedes-Benz South Africa’s chief executive and executive director of production, welcomed distinguished guests from South African and German spheres of politics and business, including Trade Minister Rob Davies; Finance Minister Nhlanhla Nene; Phumulo Masualle, Eastern Cape premier; Oscar Mabuyane, MEC for economic development; Xola Phakathi, mayor of Buffalo City and Andreas Kellermann, vice president, head of production: S-, E- and C-Class.

This year marks the 60th anniversary of Mercedes-Benz passenger vehicle production at the East London plant. Over the years, the plant has evolved as a significant contributor to South Africa’s trade balance and an economic multiplier for East London.

The plant actively commits to the community of East London and the Eastern Cape. One example is the Mercedes-Benz Learning Academy (MBLA) — a flagship and sustainable public-private partnership in co-operation with the national treasury and the Jobs Fund, it demonstrates the commitment of Mercedes-Benz South Africa to empowerment and youth development in the automotive manufacturing sector. Since 2004, MBLA has offered world-class quality training and transferable skills, qualifying hundreds of skilled artisans in the Eastern Cape.

“With initiatives like the Mercedes-Benz Learning Academy, we are promoting the overall industrial and commercial development of the Eastern Cape. The solid manufacturing heritage of the East London plant would have not been possible without the dedication and passion of our employees and robust labour relations that continue to put us in a competitive position in terms of quality, delivery and cost,” said Engling.

The investment of €600-million will be used for a wide expansion of the plant. Many different parts of the plant are affected by the expansion, both green- and brownfield. The new body shop is designed for higher capacities and features more than 500 “Internet of Things”-ready robots, laying the foundation for Industry 4.0 readiness. 700 tonnes of steel will be installed for the addition of three lines in the assembly shop; this expansion will take place in the existing building.

Utilising new methods, the new paint shop will be more energy-efficient and more environmental friendly. Overall, the energy consumption per produced vehicle will be reduced by 25% in the East London plant. This is in line with the plant’s initiative for green production. Other examples include an on-site battery storage container, rainwater harvesting on rooftops, water storage of one million litres and the creation of green corridors.

About Mercedes-Benz Cars operations

Mercedes-Benz Cars Operations is responsible for passenger car production at over 30 locations around the world; three of them are currently being established. Within a flexible and efficient production network with around 78 000 employees it includes the central functions of production planning, TECFACTORY, logistics, and quality.

Mercedes-Benz Cars produced more than 2.4 million Mercedes-Benz and smart passenger cars last year, marking the seventh record in a row. The network is based on the product architectures of front-wheel drive (compact cars) and rear-wheel drive (for example the S-Class, E-Class, and C-Class) as well as the SUV and sports car architectures.

In addition, there is a powertrain production compound (engines, transmissions, axles and components). Each of these production compounds is grouped around a lead plant that serves as a centre of competence for the ramp-up of new products, technology and quality assurance.

Mercedes-Benz Cars is ready for the electro mobility: Around the globe electro hubs are built for the production of electric vehicles and batteries. The focus of day-to-day work is on the continuous improvement and refinement of state-of-the-art production methods, which allow future high-tech vehicles to be produced in a way that is efficient, flexible and environmentally friendly, according to typical Mercedes-Benz quality standards.

All of this revolves around the employees and their expertise, whose work is systematically supported by ergonomic workplace design and intelligent automation. In addition to its own production plants, Mercedes-Benz is increasingly leveraging partnerships and utilising capacities at contract manufacturers as part of its growth strategy.

About Mercedes-Benz South Africa and East London plant

The East London plant started production of Mercedes-Benz passenger cars in 1958. Today the C-Class sedan for export to right-hand and left-hand markets are produced at the premises. In 2017 the production volume reached 110 000 vehicles. The plant also started the production of Mercedes-Benz trucks in 1962. Today trucks and buses of the Mercedes-Benz brand as well as trucks of the Fuso brand are produced. In total the plant employs 3 300 people; the majority work at the passenger vehicle production.