By Fakir Hassen, IANS
Johannesburg : A 147 million rand ($21.8 million) joint venture between ArcelorMittal SA, the local subsidiary of the global steel giant headed by Lakshmi Mittal, and vehicle manufacturer Toyota is expected to give a big boost to South African economy.
The new company, Toyota Tsusho South Africa Processing (TTSAP), will be a steel processing company for use in the manufacture and assembly of vehicles by Toyota South Africa.
The move follows the identification of Toyota South Africa by its mother company as a major supply node for Toyota’s global markets.
Production will be increased in 2008 to 220,000 vehicles annually, of which 60-70 percent will be exported.
TTSAP will be based in the coastal city of Durban on existing land within the current Toyota South Africa property. At full capacity, TTSAP will employ almost 100 people.
Rick Reato, CEO of ArcelorMittal SA, said that the investment was in line with the company’s automotive market strategy to grow its involvement in this nationally important industry.
“A key part of ArcelorMittal’s strategy is to expand and foster relationships with selected key industries. A key priority within this strategy is the automotive industry, not only for its size but also because of its importance for ArcelorMittal.”
Reato said currently the ArcelorMittal group supplies 25 percent of all flat steel used in the automotive industry and that Toyota represents five percent of the total flat steel that ArcelorMittal supplies to the automotive industry globally.
“The automotive industry is also a key sector for us locally. Of ArcelorMittal SA’s total flat steel production, the automotive industry represents 8-10 percent, which is a substantial amount for a single industry. Toyota consumes 48 percent of the flat steel offtake.”