Ford has invested a further R600 million in South Africa, with its latest investment earmarked for a third engine programme and upgrades to the company’s Struandale engine plant in the Eastern Cape port city of Gqeberha (formerly Port Elizabeth).
Vice president of operations at Ford South Africa Ockert Berry said on Thursday the investment in the engine plant is in addition to the group’s R15.8 billion investment in the Silverton assembly plant and supplier tooling it announced in February this year to support production of the next-generation Ford Ranger.
Berry said through its latest investment, Ford SA is introducing a third diesel engine to the Struandale plant: the new 3.0L V6 turbo diesel engine that will power selected next-generation Ranger models when production commences in 2022.
“The majority of the investment is going into expanding and modernising the current assembly line that has produced the existing 2.2L and 3.2L Duratorq TDCi engines since 2011, with 792 000 engines assembled to date,” he said.
Established in 1964, the Struandale engine plant (which currently employs 850 people) has since produced 10 different engine types.
Ford Struandale engine plant manager Shawn Govender said the plant has to date produced more than 3.81 million engines.
Berry also disclosed that Ford SA and the government are in discussions about further phases to the Tshwane Automotive Special Economic Zone (TASEZ) adjacent to the Silverton plant.
“We are already busy working on phase two of this development. Unfortunately we ran out of space. There are a lot more suppliers who want to move in and we’ve got a lot of knocks on the door to provide more space,” he said.
Of the total R15.8 billion investment in South Africa related to the new generation Ranger, R10.3 billion is being invested in the Silverton assembly plant, R5.5 billion in supplier tooling, which is focused on improving quality and the flow of vehicles through the plant, and R4.3 billion by 14 suppliers in the TASEZ.
The investment in the plant will increase the installed capacity to 200 000 vehicles a year, with about two thirds exported to the global market, especially to Europe.
About 8 700 jobs will be created during the construction of the first phase of the TASEZ, with an estimated 2 100 new jobs created for operations in the zone.
“This shows what can be done if industry and government start pulling [together] and have oversight on how it gets done,” said Berry.
He added that the land for the second phase of the TASEZ has already been earmarked by the government for that purpose.
“So that is a done deal. We know where we can go and what size is available.
“We are now working on what are the key priorities for phase two because, even with that, it’s not going be enough. There will be a phase three required as well.
“We are working at the moment with government on what are those key top 10 facilities that we require in phase two and then they plan to commence with it … There [are] no blockers or anything [to phase two] and I think we are going start clearing and construction to have equipment in that phase two in by next year already,” he said.
Berry pointed out that only one of the 14 suppliers in the TASEZ had relocated and the others are all new suppliers to Ford SA.
“The key point on our agenda was not to move jobs around in the country but to create new jobs and only then will be willing to put them into the TASEZ, otherwise we are fooling ourselves if we move jobs from somewhere else,” he said.
He added that the new suppliers will have a positive impact on local content in the new generation Ranger.
Berry is unsure what the local content level will be in the new generation Ranger when it is launched in 2022 but stressed that Ford SA will make sure it is above the 60% local content threshold.
He said Ford SA is pushing to increase local content and the next phases of the TASEZ form part of that drive.
Turning back to the engine plant investment, Berry noted that the plant will have an annual installed capacity of 21 000 units of the 3.0L V6 turbo diesel engine when production commences in the middle of next year.
He said the combined installed capacity for this line is 130 000 engines per year, although it has been designed to allow the split between the two engine programmes to be adjusted based on future demand.
“The investment programme includes new equipment as well as retooling, upgrading and redeployment of existing machining operations for the cylinder head,” he added.
Govender said component machining of the cylinder head, block and crankshaft for the Duratorq TDCi has passed 6.86 million units, or almost 2.3 million component sets.
Of these, 4.2 million components or 1.4 million sets have been exported to Thailand and Argentina, he said.
Berry said in addition to the new 3.0L V6 engine programme, Ford SA is further modernising and upgrading the existing assembly line for the 2.0L Single Turbo and 2.0L Bi-Turbo engines to accommodate design changes for the next-generation Ranger.
“The updates being introduced on this assembly line will facilitate greater complexity with additional derivatives of the 2.0 litre diesel engines being introduced, increasing the current nine derivatives to 13 when production commences for the next-gen Ranger in 2022.
“This will be supported by a move from the current two-shift production to 2.5 shifts, increasing the 320 engines produced per day when we launched this programme to 445 units per day to meet the significant local and international demand for the Ranger,” he said.
Installed production capacity for this assembly line remains at 120 000 units per annum, Berry added.
By Roy Cokayne
This article first appeared on Moneyweb and was republished with permission. Read the original article here.