BDC inks Lobatse automotive plant deal
Brian Benza | Friday December 18, 2015 13:35
The factory will be relocating from South Africa where it supplied automotive wiring harness to the original equipment manufacturers of Nissan, Renault and Volkswagen vehicles.
BDC head of communications and marketing, Boitshwarelo Lebang confirmed the signing of the deal in Malaysia last week but declined to give further details on the plant that is expected to create around 400 jobs at its initial stages.
“Yes, the agreement was signed for the project in which BDC is a partner. BDC is proud to be a partner in this project, which we believe will stimulate economic activity in the country, unlock value in the manufacturing sector, create employment for Batswana and drive exports.
“More details regarding the project will be shared at an opportune time in the near future,” she said.
According to media reports from Malaysia, PAT Corporate resources senior vice-president Goh Song Gan said the new assembly plant in Lobatse was in the final stages of construction and will be 20,000 square metres after completion, making it one of Botswana’s largest manufacturing facilities.
“We have had to allocate a lot of funds for the relocation of our manufacturing facilities from South Africa to Botswana, around the region of 20 million South African Rand for the relocation, training and retrenchment costs.
“This will have to go into our profit and loss and this is what dragged down the performance of the group this year,” Goh was quoted by The Star as having told reporters after the signing ceremony of ordinary shares subscription agreement and shareholders agreement between PAT and BDC.
“We are sure of the positive impact this will have on our top line and bottom line in the next two to three years,” he said.
For the third quarter ended September 30, Pasdec posted a net loss of 6.9 million Malaysian Ringgit ($1.6 million), some 976 percent lower than the net loss of 699, 000 Malaysian Ringgit (162,000) sustained in the same period last year and Goh believes the new Lobatse factory, after signing major deal with Nissan and Volkswagen, will help the company’s financials to return to the black soon.
He said Pasdec expected the contribution from the manufacturing segment to increase from its current level of 30% as new contracts worth P1.2 billion and over P1 billion from Volkswagen and Nissan, respectively, came in. PAT is owned by the Pahang State Development Economic Corporation (Pasdec). Botswana is also expected to benefit from PAT technology transfer as well as boost its export capacity, which is currently dominated by diamonds.
Founded in 1969, PAT WAS one of South Africa’s leading automotive component manufacturers that helps the design and manufacture of world-class automotive wiring harnesses. The company became part of Pasdec Group in 2000 and among its clients are Nissan, Mercedes Benz and Toyota.