Out-Law / Your Daily Need-To-Know

Out-Law News 1 min. read

South Africa woos investors from Thai automotive sector in trade mission


South Africa is to sign an agreement with Thailand aimed at encouraging investment in new manufacturing facilities in both countries.

South Africa’s investment promotion agency, Invest South Africa (ISA), is expected to sign a memorandum of understanding (MOU) with the Board of Investment Thailand in Bangkok that ISA said could see “Thai investors setting up manufacturing plants in South Africa”.

ISA’s acting head Yunus Hoosen said one of the agency’s objectives “is to identify potential foreign investors and attract them to invest in the country, in an effort to grow the economy and create employment opportunities”.

“The MOU that we will be signing with Thailand is aimed at promoting and facilitating cooperation between the two countries on investments in automotive, agro-processing and electronics sectors. It will also enhance our collaborative efforts to attract investments into our countries,” Hoosen said.

Officials from South Africa’s KwaZulu-Natal-based Richards Bay Industrial Development Zone (RBIDZ) said they will be part of the delegation to Bangkok aiming to encourage Thai automotive component manufacturers to invest in the RBIDZ.

According to South Africa’s government, total trade with Thailand in the first three quarters of 2016 grew 24.3% over the corresponding period in the previous year to hit 29.9 billion rand ($2.2bn).

Interest by the Thai automotive industry in South Africa dates back several years. In 2015, South Africa’s Department of Trade and Industry said the Thailand Automotive Parts Manufacturers Association (TAPMA) “had shown interest in partnering and forming joint ventures with their South African counterparts in order to grow the sector in both countries”.

TAPMA said then the sector “is going for higher regional and global competition”… and I do hope for more collaboration in future for Thailand and South Africa”, she said.

A 2016 report by the International Trade Administration of the US Department of Commerce (3-page / 168 KB PDF) said Thailand ranked 21st for US exports of automotive parts, “and it is also a global production hub for the major automotive companies throughout Southeast Asia”.

The report said: “Thailand’s auto component industry will remain a bright spot for the auto sector as exports of components to regional markets will continue to grow. With 2,400 auto suppliers, there are significant economies of scale. For the first nine months of 2014, the value of auto component exports from Thailand grew 11 percent year-on-year to $12.9bn.

Encouraging investment from countries in the region and further afield is the goal of South Africa’s Medium-term Strategic Framework for 2014-2019. The framework includes proposals to “examine the entire automotive sector… to secure even higher levels of investment and production, higher exports, deepening localisation and expanding employment”.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.