Johannesburg — AUTOMOTIVE component maker Foxtec-Ikhwezi today officially launches a new R116m vehicle components plant in the East London Industrial Development Zone (IDZ).

The East London IDZ is one of several duty-free processing zones meant to stimulate the global competitiveness of local manufacturers.

Foxtec-Ikhwezi is a joint venture between Germany's Otto Fuchs and local black economic empowerment company Ikhwezi Investment Holdings.

The company is the fourth investor in the IDZ. The other investors are glass manufacturer Universal Safety Glass, abalone exporter Seatek, and transport and logistics company Milltrans.

IDZ spokeswoman Ayanda Ramncwana said yesterday that Foxtec-Ikhwezi had already started exporting products to Germany for testing.

Foxtec-Ikhwezi is expected to manufacture 1,5-million aluminium suspension struts next year, and production is likely to increase to 4,5-million parts in 2008. The IDZ said that it expected 80% of the production to be exported and the other 20% to be supplied to vehicle manufacturer DaimlerChrysler for the new C-Class Mercedes Benz model.

"It is envisaged that OEMs (original equipment manufacturers) will soon approach Foxtec-Ikhwezi to manufacture related parts," Foxtec-Ikhwezi director Pieter Bosch said.

The IDZ's CEO, Simphiwe Kondlo, said that because of its location in an environmentally sensitive area and in close proximity to residential areas, the IDZ targeted "cleaner" and small to medium industries.

"Although to date the (small businesses) have been limited to the activities such as construction, we want to aggressively move (them) into the manufacturing sector," Kondlo said.