India’s Mahindra to open SA assembly plant at Dube Tradeport SEZ

By Suren Naidoo

Indian automobile giants, Mahindra & Mahindra, will open an assembly plant at Durban’s Dube TradePort Special Economic Zone (SEZ), adjacent to King Shaka International Airport.

While the official opening and announcement is set to take place tomorrow, SA Property Insider has reliably learnt that Mahindra is the vehicle manufacturer that will set up shop at the SEZ as part of a multi-million rand investment.

Earlier today, Dube TradePort put out a media alert that KwaZulu-Natal Economic Development and Tourism MEC, Sihle Zikalala, would ‘unveil a multi-million rand vehicle assembly plant” at the SEZ tomorrow morning.

It said the plant would have an annual production capacity of 2500 vehicles and “contribute handsomely to the economy of the province”. It added that the investment comes after KZN “implemented measures aimed at making it more investor friendly, by launching a One Stop Shop to make conducting business more effortless”.

An aerial view of the Dube TradePort Tradezone. Phase 1 has attracted some R1.5 billion in investment. Now Phase 2 is being launched and has attracted Indian automaker, Mahindra, as a major investor.

Dube TradePort did not reveal any further details, however, Zikalala comments in the media alert: “We are excited about investments that we continue to attract as a province. Our flagship Dube TradePort SEZ is doing exceptionally well in terms of creating and enabling environment that attracts investments worth billions. This is expected to increase in the near future as two pharmaceutical projects worth R2.5 billion are expected to be concluded this financial year”.

It is understood that Mahindra’s new assembly plant investment is part of Phase 2 of Dube TradePort’s Tradezone, which is aiming to attract some R10 billion in investment over its development period. Phase 2 will bring some 50ha of new, serviced land on stream at the SEZ. Phase 1 has attracted more than R1.5 billion in investment.

Investors in Phase 1 include South Korean electronics conglomerate Samsung, which has a television assembly plant at Dube TradePort; Chinese fibre optics cables company, Yangtze Optics Africa Cable; Italian-linked gearbox manufacturer, Rossi SA; Tufbag SA; Retractaline; DB Schenker; condom manufacturer HBM-SA Health; and, bearings manufacturer, Amsted Reelin, amongst others.

Mahindra first announced plans to establish an assembly plant in South Africa back in October last year, but did not identify its choice of location. It is believed it was a choice between the three coastal cities that have major automotive manufacturing hubs – Durban, East London and Port Elizabeth.

Mahindra again mentioned plans for the plant earlier this month, when newly appointed CEO of Mahindra South Africa, Rajesh Gupta, said in a statement the planned plant would be for certain Mahindra vehicles, including its new Pik Up model.

“For the next step in our strategy of becoming a truly South African automotive player, we will start with assembly of the Mahindra Pik Up on local soil. This will offer us a sound footing on which to further entrench our South African sales success,” Gupta said.

Meanwhile, Mahindra’s plans for a South African local assembly plant comes hot on the heels of its plans to invest $230 million in US automotive mega-hub, Detroit, Michigan. While the US plan is a much more ambitious venture in the world’s largest car market, its South African plant is seen as a major industrial coup for KZN, which has long been eyeing other global automotive players to set up a plant in the province.

Japanese automotive heavyweight, Toyota, has had a fully-fledged multi-billion rand assembly plant in Durban, south of the city at Prospecton, for decades. The new Mahindra plant, while much smaller and initially as a semi-knock-down operation, represents a major boost for KZN, which is also planning a multi-billion rand automotive supplier park, south of the city. Dube TradePort Corporation is now also driving that mega-project.