Mahindra and Mahindra Ltd has opened a new semi-knockdown assembly plant in the coastal South African city of Durban which is expected to give a boost of more than R95 million (USD 7.7 million) to the economy of the KwaZulu-Natal province, authorities have said.
The Indian automaker's plant in the Dube TradePort Special Economic Zone (SEZ), next to the airport, which was officially opened on Friday by provincial Economic Development MEC Sihle Zikalala and Indian High Commissioner Ruchira Kamboj, has a capacity to produce 4,000 of Mahindra's two models of its Pik-Up range, known as 'bakkies' locally.
Besides sales in South Africa, where Mahindra bakkies have been gaining ground, the assembly line will also turn out vehicles for export into the rest of Africa. Speaking at the launch, provincial Economic Development head Zikalala said Mahindra's decision to establish the assembly plant in KwaZulu-Natal was an indicator of the province's "rising star in terms of investor confidence." He added that the issue of unemployment in the region would also be addressed by Mahindra.
"Of the 24 staffers to be hired in the new assembly plant we have been assured 80 percent would be locals that had not been employed before and hopefully this would fit the youth profile" Zikalala said. He also commended Mahindra for its skills development initiatives, which have already seen scores of South Africans being skilled in India in various fields before returning to jobs at home.
"We also acknowledged that the company would be extensively investing in skills development, including sending staff to India to gain more capacities, which would contribute in the expansion of skills base in the province," Zikalala said.
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Small and medium enterprises would also receive a boost as Mahindra plans to source 40 percent of components locally. Confirming this, Mahindra South Africa CEO Rajesh Gupta said it was part of Mahindra's long-term plan to increase employment and help develop local companies through local sourcing. Gupta explained how Mahindra's market share in South Africa had grown exponentially since it first entered the country over a decade ago.
"In the last five years alone it has grown its market share by a compound annual growth rate of over 4.6 percent a year which puts us in the league of the five fastest growing company in the same period. "Much of this growth was achieved in a declining market (for motor vehicles) which indicates our increased acceptance and popularity in the South Africa market," he added.