Gigaba praise DCD’s investment in manufacturing

 Public Enterprises Minister Malusi Gigaba hailed engineering company DCD Group for its role in the drive to reindustrialise the South African economy.

Gigaba was speaking on Friday last week at the launch of a R240 million recapitalisation plan by DCD Rolling Stock, a unit of the globalising engineering firm DCD Group. The company has characterised the recapitalisation as a move to further consolidate its reputation for being a leading manufacturer and supplier of locomotives, wagons and bogies to railway, mining and industrial operations. The investment positions the company to participate in the state driven rail infrastructure development programme. State owned enterprise Transnetr is rolling out a R310bn investment programme and a large chunk of this in the rail sector.

Gigaba said “Developing a manufacturing sector involves coordinated capital allocation, investments in plant, skills, technologies, learning and all kinds of associated infrastructures, ranging from logistics and energy infrastructure to broadband facilities to research and development infrastructure, without any guarantee that such investments will be successful.”

It is within this policy paradigm that I am pleased and honoured this morning to be with you to launch the DCD rolling stock recapitalisation programme following the opening of R380m manufacturing facility for DCD Ringrollers last year in November; as well as your recent investment in a new R400m Wind Tower factory in the Eastern Cape.”

These type of investments will bolster our manufacturing capabilities and we appreciate the confidence demonstrated by DCD Groups to South African economy. This strategic investment by DCD is part of positioning South Africa, as an African engineering hub of Africa while reversing de-industrialisation.”

DCD Rolling Stock said due to its large-scale nature, the company’s recapitalisation programme will be rolled out over a three to five-year period. Phase 1 involves a R100-million investment in the regaining and upgrading of its 42 000 m2 manufacturing facility and its manufacturing equipment.

DCD Rolling Stock General Manager Petrus Mulaudzi said “The DCD Group has invested a total of R80-million to regain this facility from our sister company DCD Protected Mobility, which has moved to a new purpose built manufacturing plant in Isando, Gauteng. An additional R10-million was spent on the installation of four robotic welding cells in October 2013, while the balance was spent on repairs.”

Mulaudzi said the recapitalisation programme is essential in promoting internal skills development and growth within DCD Rolling Stock. “Despite years of downturn, the railway industry in South Africa and the rest of the continent, looks set to rapidly expand. It is therefore important for DCD Rolling Stock to proactively prepare for this by investing in our people and infrastructure.”

“By establishing a world-class manufacturing facility through the recapitalisation programme, DCD Rolling Stock can add substantial value to this supply chain in the short- to medium-term future,” said Mulaudzi.

He added that Africa in particular holds the greatest potential for the company’s growth into the future. “Under-developed countries with burgeoning mining industries, such as Mozambique, Zambia and Tanzania, will serve as the catalyst for railway development, due to the fact that an increasing number of mines will require a link to a port for exporting purposes.”

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