R2-billion tyre factory on the cards for important South African car-building city

The Nelson Mandela Bay Municipality is hopeful of striking a deal with Chinese tyre manufacturing giant, the Sailun Group, to establish a tyre manufacturing and recycling facility at the Coega Special Economic Zone.

According to the municipality’s Executive Mayor, Babalwa Lobishe, the R2 billion investment was proposed during strategic engagements with the Coega Development Corporation (CDC) and Sailun Group.

Consisting of six brands, the group is a major global player, operating several production bases and becoming the first Chinese manufacturer to supply tyres to the International Automobile Federation (FIA).

Sailun is currently conducting feasibility studies to establish a manufacturing hub that will supply the Southern African Customs Union (SACU) and the broader sub-Saharan African market.

According to Lobishe, the company is considering Coega following delays at its originally proposed location elsewhere in South Africa.

The proposed development includes a 20-hectare manufacturing facility with an estimated production footprint of 100,000 square metres and will incorporate renewable energy generation.

This will include battery storage systems and the use of treated industrial return-effluent water to support sustainable manufacturing.

During its first phase of operations, the proposed facility is expected to produce over one million passenger-vehicle tyres and 300,000 truck and bus tyres every year.

Future expansions are expected to increase production significantly, in line with local and regional market demand.

Sailun Group’s investment is projected to create around 200 direct jobs during its initial operational phase, increasing to approximately 800 permanent jobs as the facility expands.

The development is expected to create more than 1,200 direct employment opportunities across sectors like construction, logistics and other supporting industries.

“Nelson Mandela Bay is ready to compete for global investment. We are determined to create an enabling environment where investors can establish, grow and contribute meaningfully to our local economy,” Lobishe said.

“Every major investment we secure creates employment, stimulates local businesses, expands our manufacturing capability and restores confidence in our city as an investment destination.”

Ongoing discussions

The mayor noted that the municipality is committed to working with all relevant stakeholders to ensure Nelson Mandela Bay presents a competitive and investor-friendly proposition.

“Our role as local government is to facilitate sustainable investment while ensuring responsible governance and long-term municipal sustainability,” she said.

“Through coordinated planning and responsive service delivery, we are committed to creating an environment where strategic investors can succeed, and where local communities benefit through employment, enterprise development and economic inclusion.”

Engagements between the municipality and the CDC are ongoing and have so far focused on providing Sailun with certainty regarding service delivery, utility tariffs, infrastructure planning, and renewable energy.

Additionally, the Nelson Mandela Bay Municipality sought clarity on streamlining municipal processes and facilitating coordinated investments.

It said that these discussions sought to ensure that the municipality remains internationally competitive while maintaining responsible municipal governance and sustainable service delivery.

According to the municipality, Sailun’s proposed investment aligns with its long-term development priorities by attracting direct international investment.

Lobishe added that it also presents a crucial opportunity to reinforce Nelson Mandela Bay’s reputation as South Africa’s automotive capital and contribute meaningfully towards national industrialisation targets.

“This investment is about far more than a manufacturing plant. It is about restoring confidence, creating hope through sustainable jobs, strengthening our industrial economy and demonstrating that Nelson Mandela Bay is open for business,” said the mayor.

“We will continue working with all spheres of government and our strategic partners to unlock opportunities that improve the lives of our residents and grow our local economy.”