Component suppliers to a Mercedes Benz plant in East London, South Africa, have the opportunity to position themselves optimally for both exports and local delivery.
A supplier park has been established in the East London Industrial Development Zone (IDZ), which neighbours on the Mercedes Benz plant. Located on the Indian Ocean port city of East London’s West Bank, the IDZ is linked to both the existing adjacent port and airport and comprises 251 hectares net usable land available for new industry. The IDZ includes a designated customs secured area, duty free zone and offers tax incentives and low service costs.
Both the Mercedes Benz plant and the IDZ link directly with the port of East London, with the East London airport forming the western border of the IDZ. The Mercedes plant is the sole provider of right-hand-drive C-Class Mercedes Benz cars to the world. It has recently been awarded a contract to supply the new C-Class (W204) to right hand drive markets.
“Since we started production of the Mercedes-Benz C-Class at the end of 2000, we have consistently met and exceeded DCAG’s stringent quality and delivery targets, and played an important role in the success of the C-Class both in local and global markets. We are confident the East London plant will be in a position to make a valuable contribution to DaimlerChrysler’s future production requirements,” says Dr Hansgeorg Niefer, chairman of the management board of DaimlerChrysler South Africa.
The East London plant currently produces about 55 000 vehicles a year, of which more than 40 000 are right-hand-drive C-Class sedans. Some 75% of production is exported to several foreign markets, with the UK, Japan, Australia and other Pacific Rim countries receiving the bulk of exports. DCSA’s production plant in East London enjoyed its best year ever in 2004. Production and exports not only reached record levels, but its production quality met and exceeded its parent company’s highest standards, according to Niefer.
“With the plant now running at full capacity with two shifts five days a week, production increased by a further 4,8% over 2003. At the same time our quality and on-time delivery levels continue to improve, which bodes well as we prepare to build the next generation Mercedes-Benz C-Class.” Exports of right-hand drive C-Class models from East London also reached record levels in 2004. Of the 33 000 units that left via East London’s harbour, 44% were destined for the United Kingdom, 11% for Japan, and 11% for Australia, with the remaining 9% for various smaller markets. The South African market accounts for some 25 % of the plant’s output.
Positioned for delivery
Component suppliers housed in the adjacent IDZ are well positioned to supply the plant, as well as other OEMs in South Africa. There are direct road and rail links between the East London IDZ and the other major automotive hubs of Gauteng and Port Elizabeth. Exports to the rest of the world are routed through the port of East London, which is integrated into the operations of the IDZ. East London is at the centre of the major manufacturing regions around the globe, with scheduled container services providing reliable delivery dates for just in time production.
Exports and imports of fully built units are handled through one of the most modern car terminals in the Southern Hemisphere. The facility can safely store 2800 vehicles. It has a designed throughput capacity of 50 000 units a year (using a dwell time of 14 days).
If needed, the terminal capacity can be further extended to eight storeys – this would mean that 7000 extra bays would be available, providing an annual throughput capacity of 180 000 vehicles.
Some of the terminal’s outstanding features are:
· A ground floor area of 8300m2 for containerization of vehicles for export.
· An import and administration area of 12 200m2. Here vehicles can be inspected and cleared by customs.
· Vehicles are provided with maximum safety and security, with full protection from natural elements.
· Provisions are made for natural and mechanical ventilation to ensure efficient extraction of exhaust emissions.
Automotive Supplier Park
A project to establish an Automotive Supplier Park (ASP) within the East London IDZ is well advanced, says Louis Kasuyi, general manager business development in the East London IDZ.
It is being developed in partnership with the Automotive Industry Development Council (AIDC), which has assisted with similar projects elsewhere in South Africa. AIDC MD, Dr Paulo Fernandes says the parks, together with an auto cluster in the Coega Industrial Development Zone outside the Indian Ocean city of Port Elizabeth, “do not operate as competitors but as powerful allies in ensuring speed, cost and delivery efficiencies of South Africa’s manufactured output, with special focus on vehicle assembly and components’’.
AIDC Supply Chain Development Manager, Eddie Kitching says Supplier Parks, while relatively new to South Africa, have improved the competitiveness of manufacturers internationally. The establishment of a supplier park in the East London IDZ was aimed at creating sustainable economic growth in the local automotive and manufacturing industry by grouping different technologies, suppliers and service providers for various customers.
Kasuyi said tenants would show considerable cost and speed improvements as a result of the ASP’s world-class logistics configuration and the sharing of services like a highly advanced IT network.