Component suppliers spread labour risk

Component suppliers to the South African automotive industry are setting up operations in neighbouring Lesotho and Botswana to take advantage of incentives and to spread labour risk. This is being made possible by efficient logistics links between the Maseru, Gaborone and the automotive hubs in Gauteng, Durban, East London and Port Elizabeth. Johnson Controls, which this year celebrates its 20th anniversary of operations in South Africa, recently moved its cutting operations from Port Elizabeth to Maseru. According to Les Boelke, communications manager Europe and Africa for Johnson Controls, the move was made in part for logistics reasons. The Maseru plant supplies seat cover components to Johnson Controls plants in East London, Port Elizabeth and Pretoria. Lesotho National Development Corporation (LNDC) caretaker chief executive officer, Tseko Bohloa, is quoted by the Lesotho Times as saying that leather seat components will also soon be produced in Lesotho for the BMW plant in Rosslyn, Pretoria. The leather factory, according to Business Report, is relocating from Rosslyn. Botswana has been attracting component suppliers for some time through its Motor Industry Development Plan (MIDP). It provides quota-free access to global markets through the Lome, Cotonou, Agoa and other trade agreements. To qualify for a South African Customs Union certificate of Botswana origin, at least 25% of the production cost must be represented by materials produced and labour performed in the country.