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Nissan SA's switch to Maputo port is purely based on lower charges
November 2, 2009
By Roy Cokayne
Nissan South Africa has switched its completely built up vehicle imports from Durban's port to Maputo to benefit from lower costs.
Pat Senne, a spokesperson for the Rosslyn-based vehicle manufacturer, confirmed on Friday that the decision was "purely cost related" and had been implemented during the latter part of last year.
Nissan SA's plant general manager for manufacturing, Neil Craddock, said the company still used Durban's port for its completely knocked down component imports.
David Powels, the president of the National Association of Automobile Manufacturers of SA (Naamsa) and managing director of Volkswagen South Africa, warned last month that the motor industry was seriously considering using Maputo to export and import because it was much cheaper.
Powels said this would be "tragic" as it would leave South Africa's ports half empty, but this would be the unintended consequence of competition and of Transnet not meeting the industry's needs.
He said South African port charges were 10 times more expensive than China's and believed South Africa was the only country in the world to have cargo dues while the country's ports were also far behind global standards in terms of productivity.
Powels said the automotive industry had engaged Transnet on this issue but these negotiations had not borne fruit.
Craddock said Nissan SA planned to ramp up its vehicle production to 45 000 units this financial year after it dropped to about 33 000 units last year because of the run-out of some models and the global financial crisis severely denting total industry production.
He said this optimistic outlook was based on the strength of new export opportunities and demand for the Nissan NP200 bakkie and Renault Sandero, which was now built at Nissan SA's factory under the Renault Nissan alliance.
"If you look at this financial year, I think we are one of the few manufacturers in the South African market that is actually forecasting a higher volume than we did last year because of these opportunities," he said.
Craddock stressed exports were key to Nissan SA's long-term survival and increasing its production above the 50 000 unit annual production threshold to qualify for incentives available in the Automotive Production and Development Programme to be implemented from 2013.
He said Nissan SA used to source components only from Japan but now sourced these items from 16 countries worldwide, including three countries in South America, seven in Europe and six in Asia.
Craddock said materials management of both overseas and local suppliers had become a key challenge, with production often hampered by long lead times and packing configurations that were at odds with the production line's requirements while operational challenges closer to home also spilled over into the manufacturing arena.
He admitted it was battling with the inability of some local suppliers to meet the delivery expectations.
Nissan SA earlier this year said it aimed to increase the local content in the vehicles it manufactured at its Rosslyn plant to an average of 60 percent from 40 percent in its 2007 financial year, but did not put a time frame on this goal.
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