FORMEX Industries is gearing itself for new projects that are planned for Volkswagen South Africa (VWSA) and the expected localisation drive from other automotive original equipment manufacturers (OEMs).
The Gqeberha-based metal forming and assembly company announced this latest R102-million investment commitment at the recent South Africa Investment Conference in Johannesburg. It comes on top of the R200 million already invested over the past four years.
The company said in a statement that it had secured a new contract with VWSA that will enable it to purchase outright a new facility in Struandale, Gqeberha, as well as to extend and upgrade it to bring it in line with international standards and equipment.
“Formex will purchase one of the largest auto transfer presses in the country to boost capacity. The deal will also help us to create more local jobs than the 100 already created since 2018 and contribute more to the entire automotive supply chain,” it said.
The company added that this latest planned contract will enable it to manufacture more than 20 new automotive components that were previously made in Portugal. “Not only will this enhance localisation, but it will also cut out delivery delays and cost increases due to importing components for locally-made VW vehicles.”
Although VW is the OEM that enabled this investment, others have supported the need for this investment. “Ford, Mercedes-Benz, Isuzu, Faurecia, Purem and Toyota have supported Formex as a direct and indirect supplier of automotive components. Most of our customers will at some point in time also benefit from the new facility and equipment that will be purchased.”
The company said its employees, Deneb Investments Limited and social partners, including the Nelson Mandela Bay Municipality, the Department of Trade, Industry and Competition and the Automotive Investment Transformation Fund (AITF) have also contributed to its production capacity increase, through hard work, grants, incentives and funding.