Production to resume at Chinese car plant in South Africa

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Operations are scheduled to resume at the Beijing Automobile International Corporation (BAIC), a new Chinese car manufacturing plant in Port Elizabeth, South Africa, that was officially opened by President Cyril Ramaphosa and his Chinese counterpart, Xi Jinping.

Production was hampered for nearly three weeks at the 11 billion rand factory in Coega special economic zone, after contractors abandoned the project as a result of unpaid bills. BAIC SA, launched in 2016, is a joint venture between China’s BAIC Group which owns 65 percent and South Africa’s Industrial Development Corporation (IDC) which owns 35 percent.

In the last dispute, three companies- Scribante, WBHO, and Ivor Smith Electrical suspended work on August 31, 2018, complaining that their payment had been delayed since July 2018. A report by City Press reveals Scribante is allegedly owed 31 million rand while Ivor Smith is owed over a million rand. WBHO was also allegedly owed millions of rand.

Mandla Mpangase, BAIC’s spokesperson, said the dispute was over work certificates and not outstanding money. Mpangase who is also IDC’s spokesperson notes that the dispute is only with Scribante and WBHO. He said they are the only two contractors that have stopped work.

BAIC SA met with the site manager of the Beijing Industrial Design and Research Institute, the company which had appointed the principal contractors. An agreement was reached to resolve the dispute and pay the subcontractors that had suspended work.

The car plant is expected to produce about 50,000 units annually. About 40 percent will be sold locally, while most of the vehicles will be exported to African countries, the Middle East, and Latin America.

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