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R297m lifeline for carbon black tyre manufacturer

Home Manufacturing & Processing Automotive R297m lifeline for carbon black tyre manufacturer

AN investment of almost R300m will ensure that Orion Engineered Carbons remains in business and part of the automotive value chain.

The investment arrangement, involving the company, the Coega Development Corporation (CDC), the Department of Trade & Industry and the Transnet National Ports Authority (TNPA), is likely to save thousands of jobs.

The deal aims to protect about 7,000 jobs in the country’s auto and tyre manufacturing industry. Orion Engineered Carbons and the other parties to the deal will invest R297m to finance the building of a liquid fuel storage facility at the Port of Ngqura.

Rescued from imminent shut down

The construction of the facility and associated infrastructure is expected to create work for about of 150 people. Orion was rescued from imminent closure after TNPA announced that it would be decommissioning the Dom Pedro Tank Farm and Dom Pedro Terminal at Gqeberha’s port by December.

The farm and terminus were crucial for the importation and storage of the liquid fuel (black oil) used by Orion to make carbon black used in tyre production.

The project involves the development of two 18,000 m3 (cubic metre) tanks for the storage of carbon black feedstock with ancillary infrastructure.  A pipeline is proposed from the offloading berth within the Port of Ngqura to the new storage facility to supply feedstock / black oil to the OEC tanks.

Only producer of carbon black in sub-Saharan Africa

Orion group CEO Corning Painter said the company faced no other choice but to shut down, and that this investment shows how private and public partnerships can work together for development as well as job creation and preservation.

The investment in the storage terminus was made possible through the intervention of the CDC, a partnership with TNPA and the Department of Trade and Industry department.

Orion will build the tank farm — and continue operating in the Bay, while the CDC-facilitated investment totals R237m and covers infrastructure.

The CDC will lease the land to Orion and has committed to appointing an operation and maintenance entity to operate the facility.

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