Toyota and Ogihara launch a manufacturing plant in KwaZulu-Natal
The construction of Toyota Tsusho Africa and Ogihara Thailand Corporation’s R1.1 billion manufacturing plant at Dube TradePort north of Durban will be completed in July next year.
Speaking at the launch on Thursday, Toyota South Africa Motors president and chief executive Andrew Kirby said the project, which began more than two years ago, was “a milestone” for the company.
“Ogihara South Africa is a joint venture between Toyota Tsusho Africa, a subsidiary of CFAO, and Ogihara Thailand. This collaboration has focused on localising the production of press parts for our Hilux and Fortuner models at the Toyota plant in Prospecton [in] Durban and is set to commence production in July 2025,” Kirby said.
“By investing in this facility, we are localising approximately 25,000 tonnes of metal pressing materials, which was previously imported, through our partnership with ArcelorMittal South Africa.”
Kirby said Ogihara SA had invested R630 million and Toyota South Africa R545 million in the development. The development, located on a 32 000 m2 site at Dube TradePort’s TradeZone 2, will include a manufacturing and assembly plant relocated from Thailand that will produce pressed steel components for supply to Toyota South Africa.
“This joint venture marks a significant step towards our local value addition improvement strategy by localising the production of these critical components. The inclusion of Ogihara SA in our local manufacturing ecosystem will not only create new job opportunities but also enhance our capabilities in producing high-quality body parts for the automotive industry,” Kirby said.
The initiative is aligned with the South African Automotive Master Plan to 2035 (SAAM 2035), which is supported by the Automotive Production and Development Programme (APDP), he said.
“It will result in an increase in the local content contribution for our Hilux and Fortuner models and by way of example the local content for Hilux will increase from 52% to 54%, and therefore aligning ourselves closer to the SAAM 2035 localisation targets,” Kirby said.
“This 2% increase in local content translates to approximately R700 million of additional spend in South Africa per year.”
SAAM 2035 aims to increase the localisation of the parts supply chain across the vehicle sector to 60% by 2035. The plan’s vision hinges on four principles: global competitiveness, shared stakeholder prosperity, sustainability and transformation.
Kirby said the plant would create 250 new direct jobs and “many more” indirect jobs benefiting people in the Durban area.
Minister of Trade, Industry and Competition Parks Tau said the anchoring of developments in special economic zones (SEZ) would enable his department to leverage trade agreements to export products.
“We are convinced it will bring substantial foreign direct investment to South Africa, create numerous employment opportunities and further deepen the localisation of our economy in alignment with the South African Automotive Master Plan objectives,” he said.
The investment was also evidence of the strong partnership between the government and the private sector.
He said the economic relationship between South Africa and Japan is steadily growing. “At last count, we have roughly 130 Japanese companies invested in South Africa.”
Ogihara South Africa is the largest investment secured by the Dube TradePort since its inception as an SEZ and was the second vehicle sector investor to set up in the zone after Mahindra South Africa commissioned its vehicle assembly facility in 2018.
The province’s economic development, environmental affairs and tourism MEC, Musa Zondi, said the Dube TradePort will be both the developer and operator of the proposed Durban Automotive Supplier Park in collaboration with the eThekwini metro municipality. The supplier park, which will be south of Durban, also aims to attract component manufacturing and car assembly firms.
“As outlined in the SAAM 2035, a key objective of the country’s automotive industry is to increase domestic vehicle production to 1.4 million units by 2035, representing approximately 1% of global output,” he said.
He said Ogihara South Africa also offers a lifeline to the steel sector, where the future of ArcelorMittal’s steel plant in KwaZulu-Natal hangs in the balance.
“Through its commitment to source 90% of steel sheets locally, Ogihara SA will strengthen South Africa’s steel manufacturing sector, which is critical for the country’s industrialisation objectives,” Zondi said. “Because 54% of a vehicle’s manufacturing comprises steel, this investment is an important contributor to the growth and sustainability of this sector too.”
The trade, industry and competition department said the manufacturing segment of the vehicle industry employs about 115 000 people from component manufacturing to vehicle assembly. In addition, downstream jobs account for about 320 000 jobs in the national economy.
Ogihara South Africa is one of seven private sector investors secured for Dube TradeZone 2, with a total private sector investment of close to R2 billion expected to create about 600 jobs within five years.
Dube TradePort has so far attracted R4.6 billion in private sector investment and created more than 5,000 permanent jobs.