Metair Secures Key Contracts to Support Ford’s Investment into SA

Investments to create over 3300 new jobs and support the sector’s long-term growth ambitions:

  • R900 million capital investments; including major investments in greenfield facilities
  • Over 3300 new employment opportunities generated
  • Ford new model launches to service the export and local markets
  • Metair to secure between R25 billion and R28 billion of turnover from mid-2022 onwards

Metair, a leading international manufacturer, distributor and retailer of energy storage solutions and automotive components, is pleased to announce that it has secured multiple contracts to support Ford Motor Company of Southern Africa (“Ford”) ahead of new vehicle launches aimed at the local and exports markets. This forms part of Ford’s comprehensive investment and production expansion programme to meet the demands of a growing export-driven business in South Africa.

Theo Loock, Metair’s Chief Executive Officer, commented: “We are delighted to expand our relationship with Ford and look forward to working with them through their new model launches and beyond as they drive their expansion programme in the long-term. The investment approved by Metair’s board to support Ford is the Group’s largest to date for a single customer and we anticipate that over 3300 jobs will be created, with the largest portion in northern KwaZulu Natal.”

Total funding requirements are estimated at around R1.3 billion for Metair with the total capital investment in property, plant and equipment for Metair estimated at over R900 million. This commitment will include the construction of a new manufacturing facility in Stanger, northern KwaZulu Natal. A new logistics facility will also be established in Silverton, Gauteng, where Ford’s manufacturing plant is located. All investments are expected to deliver returns in line with Metair’s targets over the life of the contracts and the Company will continuously review its financial commitments in line with the operating environment to ensure adequate capital management and liquidity throughout.

Renai Moothilal, Executive Director at The National Association of Automotive Component & Allied Manufacturers (NAACAM), commented: “The outlook for the South African automotive industry remains positive with OEMs and component manufacturers investing significant capital to expand their facilities for model changes and additional models. This major commitment by both Ford and Metair towards the South African automotive manufacturing sector is a welcome development which is totally aligned with SA Automotive Masterplan 2035, and its emphasis on increased localisation and market growth whilst participating in this global industry.”

In addition to Metair’s Hesto Harnesses, who will be the largest beneficiary supplying a wide range of wire harnesses, a number of other subsidiaries will support Ford, including Unitrade, Automould and Lumotech, with a variety of wires, plastic and chrome plated parts, as well as headlights and taillights.

In welcoming the news, Minister of Trade, Industry and Competition, Ebrahim Patel added: “This investment comes at an important time given the impact of COVID-19 on the South African economy. This material commitment by both Ford and Metair is reflective of the long-term confidence in South Africa as a key destination in the global automotive value chain. Metair is a great example of a local company that has made huge strides in the international automotive sector and we will continue to support industries that drive technology and skills transfer but also create employment opportunities over the long term.”

In response to the disruptions caused by the COVID-19 pandemic across the automotive industry, Metair developed a Vision 2022, which will shape its designed recovery by leveraging OEMs’ new model launches as well as planned stimulus measures from various governments and industry associations globally. Securing Ford as a major customer is a critical step in ensuring the long-term growth and sustainability of the Automotive Components business. 

“Metair’s Automotive Components Vertical is entering an important investment phase to support the OEMs that will drive our future growth and support South Africa. The anticipated supply of the full spectrum of components to a range of new customers, including Ford, will see Metair securing between R25 billion and R28 billion of turnover over the model life from mid-2022, depending on the final project volumes and launch dates. We believe that the investments we are making now will strengthen Metair’s position as the shift towards localisation accelerates in light of the inevitable structural global trade disruptions resulting from COVID-19,” concluded Mr Loock.