Pretoria and Durban - The first automotive airbag cushion manufacturing plant in South Africa was officially opened in Hammersdale outside Durban yesterday creating 250 job opportunities over the next three years in an area where unemployment has soared to 70 percent after the do-sure of most of the textile mills.

Following an initial investment of R15 million, it is anticipated that a total of R50 million will be invested in the project over the next four years by joint venture partners Automotive Safety Components International (ASCI), the European operating division of the world's largest airbag cushion manufacturer, and Gelvenor Textiles (gt), a leading local manufacturer of hi-tech engineered fabrics for specialised applications.

About R150 million will be invested across the industry by Sans Fibres, Gelvenor, joint venture ASCIgt and the system assemblers - TRW, Autoliv and Takata - which assemble the made-up modules of which the airbags are one component.

ASCI holds 75 percent of the equity in ASCIgt, with the balance held by Gelvenor Textiles, which is a part of German entrepreneur Claas Daun's Kap Group but not part of the JSE Securities Exchange-listed entity Kap International Holdings.

Dan Karney, the president of the European Automotive Group, ASCI's holding company and the chief executive of ASCIgt, said yesterday they had secured an opening order of 400000 units with the Atlantis subsidiary of German-based TRW for airbag cushions for General Motors' Holden cars for the Australian market, which had made the investment viable.

TRW will assemble the airbag modules, including the inflators and electronics, before the product is exported.

Another order for 600 000 units was expected in the "very near future", he said.

There had been strong interest from the automotive industry and the facility would be making 2 million airbag cushions by 2006, Karney predicted.

ASCI's decision to invest in South Africa was in line with its strategy of expanding to countries where manufacturing costs were lower, such as the Czech Republic, Romania and China.

Karney said ASCIgt would manufacture the same style product and to the same stringent specifications and quality standards as ASCI internationally.

"There is huge potential for growth in the South African market, with more and more airbags being used in virtually every make of vehicle," Karney said.

David Baksa, the operations manager for ASCIgt, said the single line currently installed in the facility was set up to produce 1 million airbag cushions a year using the automated laser cutting system. Additional sewing machines would be added as required to cater for production increases.

"We anticipate test approval of the product will come through by mid-year and production will start in the third quarter," he said. Baksa predicted that all the car companies would be interested in the facility once it had proved itself.

PUBLICATION: Business Report
DATED: 23rd February 2005