Pretoria (NNN-SANEWS) : The R200 million investment by Lucchini South Africa is a vote of confidence in the South African economy, says Acting Head of Investment South Africa (InvestSA), Yunus Hoosen.

Speaking at the launch of South Africa’s first internationally-owned forged wheel manufacturing facility by the Italian company in Germiston, Johannesburg Hoosen said it is heartening to see a foreign company investing in South Africa and contributing to job creation and economic growth.

He added that government fully supports Lucchini SA’s commitment to the localisation programme, and recognises the transfer of knowledge and technology to this plant in South Africa.

Hoosen emphasised that this indicated a clear vote of confidence in South Africa’s involvement in industrialisation and skills capabilities.

“More importantly, we need to applaud the skills and supplier development programmes of Lucchini SA. We are aware that this investment has and will continue to create opportunities for skills and supplier development. Continuous programmes to upskill Lucchini’s employees will be creating relevant skills that must be sustained and optimised to lever spill over effects to other manufacturing sectors,” said Hoosen.

Lucchini, Chief Executive Officer Augusto Mensi said approximately 45 new jobs will be created through the company’s initial investment with planned local product content of between 30 to 40%.

“A further investment is envisaged as further growth into the regional market is anticipated. We see the investment into Lucchini SA as a first step into our expansion into Africa,” said Mensi.

Lucchini South Africa (Pty) Ltd is a recipient of the dti’s 12i Tax Allowance Incentive of approximately R36 million and a training allowance of approximately R1.6 million. This investment supports government’s plans for job creation and localised manufacturing of railway products.

The 12I Tax Incentive is designed to support Greenfield investments (i.e. new industrial projects that utilise only new and unused manufacturing assets), as well as Brownfield investments (i.e. expansions or upgrades of existing industrial projects). The incentive offers support for both capital investment and training.

Among the objectives of the incentive programme are to support the Investment in manufacturing assets, to improve the productivity of the South African manufacturing sector; and the training of personnel.

Industrialisation

The acting head of Invest SA said government has placed industrialisation at the heart of its economic growth and development policy.

The National Industrialisation Policy Framework, he added, was the principal government policy that has formulated an approach for advancing industrialisation in the country.

“The annual Industrial Policy Action Plan (IPAP) iterations give effect to the vision of the framework, through prioritisation and implementation of specific programmes and projects in achieving industrial policy imperatives. The rail transport equipment sector is one of the key sectors prioritised in IPAP, with great growth potential for the creation of new and decent employment, innovation and business opportunities,” said Hoosen on Friday.

He added that the collaboration between the dti, Department of Public Enterprises and National Treasury, state-owned entities such as the Passenger Rail Agency of South Africa (PRASA) and Transnet, and the industry at large, has resulted in the designation of rail rolling stock in 2012.

The designation provides a framework to achieving a minimum local content threshold of 55 to 80% on different rolling stock classes as procured by government.

“Public procurement can be a powerful industrial policy lever for pursuing industrial development, innovation, and creating decent jobs. Using public procurement to develop, acquire and embed new technologies in key sector supply chains also has a direct multiplier effect on industry development and the creation of strong backward and forward linkages,” said Hoosen.

Invest SA is housed within the Department of Trade and Industry.