Sumitomo Rubber South Africa (SRSA) is investing R2-billion to upgrade and expand its Dunlop tyre manufacturing plant at Ladysmith, KwaZulu-Natal province with the second phase of the investment being recently commenced.
This second phase – being implemented at an estimated value of R910-million – focuses on the introduction and manufacture of truck and bus tyres for commercial use. Due to the unavailability of suitable manufacturing capacity locally, these Dunlop branded products are currently being imported into South Africa from SRI’s plants in Japan and China. This new investment will establish a suitable local manufacturing base and terminate the current import arrangement.
Phase 1 – valued at R1.1-billion and which commenced in 2014 – focused on the upgrading and modernisation of the plant’s capacity, introducing new technology and equipment aimed at increasing manufacturing output of high quality passenger and Sport Utility Vehicle (SUV) tyres. Its parent company, Sumitomo Rubber Industries (SRI) in Japan, allocated the investment for the development of Phase One. This coincided with the introduction of new SUV tyre models that were not yet manufactured at the Ladysmith plant. “This is our response to the market trend and demand for these models in both South Africa and other African markets,” Haffejee said.
The investment is a catalyst for both socio-economic and technological advancement in South Africa with the direct job creation impact and employment spinoffs as a result of the completion of Phase One already being realised.
“Employment levels are already increasing due to Phase One. The first of nearly 120 new employees needed over the next few years have already been recruited. Phase Two will attract a further 300 new employees. This will increase the employment of the plant to more than 1 200 employees on completion of the second investment phase,” says company CEO Riaz Haffejee.
He adds that this investment consolidates the company’s commitment to the South African and KwaZulu-Natal provincial economy, as well as the Ladysmith community. “As one of the largest employers in Ladysmith, it will deepen our impact on stimulating job creation through increased production and industrial development competitiveness.”
An investment of this magnitude, amidst the current economic environment, has been made possible through strong collaboration and partnership between the company and government at various levels.
In what is an exemplary model of private-public sector partnership, the Department of Trade and Industry (DTI) approved SRSA’s application for a support grant of an estimated R300-million under the Automotive Investment Scheme programme toward this initial phase rollout. In addition, the implementation of the DTI’s Tariff-free Trade Agreement (T-FTA) will enhance foreign trade and is set to strengthen export activity into key African areas.
The Emnambithi Ladysmith Municipality, which donated the underutilised tract of land adjacent to the existing plant to SRSA at no cost, is further underscoring this innovative partnership approach. The development will take place on this piece of land. SRSA will explore onsite resource efficiency improvements in renewable energy generation and water management interventions.
“Our investment underscores the confidence of our company’s foreign owners in South Africa as an investment destination. It reaffirms what is possible when government and industry work together in pursuit of mutually beneficial economic and industrial objectives.
“We will continue to support government with innovative solutions and constructive engagement to overcome regulatory challenges and impediments crucial to our industry and the pursuit of employment generating, high growth and competitive industrial and manufacturing initiatives,” Haffejee concludes.
It’s all good news for South Africa and FleetWatch wishes SRSA a healthy return over the years on this investment into our economy. May the jobs continue to grow.