Toyota Tsusho Africa (TTAF), a subsidiary of Toyota Tsusho Corporation, announced yesterday the formation of a new joint venture, Ogihara South Africa (OSA), which will see an investment injection of more than R1.1 billion into the production of essential manufacturing components.
This investment will increase the local content on the Toyota Hilux, Toyota Fortuner and Toyota Corolla models to allow Toyota South Africa Motors (TSAM) to further support the local value-added targets.
TTAF is in collaboration with Ogihara (Thailand) Corporation (OTC) and TSAM in forming OSA.
The strategic investment in the South African automotive industry is apportioned with TSAM contributing R545 million and the TTAF-Ogihara joint venture investing R630m.
The announcement was made at a ground-breaking event that took place at the construction site at Dube TradePort in Durban.
Andrew Kirby, CEO and president of TSAM, said they were committed to elevating their local procurement ratio by leveraging TTAF’s extensive business expertise and operational efficiency.
Kirby said the joint venture marked a significant step towards their Local Value Addition (LVA) 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 will also enhance our capabilities in producing high-quality body parts for the automotive industry,” Kirby said.
“This collaboration exemplifies our commitment to localisation and underscores the possibilities for growth and development in the KZN province.”
OSA is one of seven private sector investors secured for Dube TradeZone 2, with a total private sector investment value of close to R2bn and an expected job creation of around 600 within the next five years.
OSA’s 32 000m2 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 TSAM.
OSA is the single largest investment secured by Dube TradePort since its inception, alongside Durban’s King Shaka International Airport.
This is the second automotive sector investor to set up in Dube TradePort after Mahindra South Africa commissioned its state-of-the-art vehicle assembly facility in 2018.
The OSA venture will phase in the sourcing of additional local press parts that are currently imported. This significant step will not only boost local industry capabilities and economic growth, but will also lead to an increase of 25 000 tons a year in locally procured steel.
Construction of the facility has commenced and the company aims to resume its manufacturing operations in June 2025 and production commencing in July 2025.
The new partnership is poised to significantly add to local manufacturing with the production of small to medium stamped parts for TSAM.
This strategic partnership will not only raise TSAM’s local procurement ratio by 2%, translating to an estimated R700m in annual spend, but will also drive significant job creation, with 250 new jobs expected by 2026.
“As a committed corporate citizen operating within South Africa, this collaboration not only aims to bring significant foreign direct investment to our country, but will also create numerous job opportunities and further deepen localisation within our economy, in line with the objectives outlined by the South African Automotive Masterplan,” Kirby said.
The South African Automotive Masterplan (SAAM) 2021-2035 aims for South Africa to manufacture 1% of global vehicle production – equivalent to 1.4 million vehicles – a year by 2035.
This target is set to significantly enhance the country’s position in global vehicle production rankings. Furthermore, the plan seeks to double employment in the automotive sector to 240 000 jobs.
According to the Department of Trade, Industry, and Competition (dtic), the manufacturing segment of the automotive industry currently employs about 115 000 people across its various tiers of activity (from component manufacturing to vehicle assembly), which, combined with the industry’s strong multiplier effect, leads to it being responsible for about 320 000 jobs in the South African economy.
The dtic minister, Parks Tau, said the plant will bring substantial foreign direct investment to South Africa, create numerous employment opportunities, and further deepen the localisation of the economy in alignment with the Automotive Masterplan objectives.
“The department is focused on implementing and enhancing masterplans to boost key industries, attract investment, create jobs and drive transformation,” Tau said.
“Specifically, the Automotive masterplan aims to make South Africa’s automotive industry globally competitive and sustainable, benefiting both industry stakeholders and society at large.”