13 September 2022
KwaDukuza mayor Lindile Nhaca this morning, 12 September 2022, welcomed President Cyril Ramaphosa to the launch of the new Hesto Harness Plant following a strategic partnership which has created over 4000 new jobs and a lot more.
“As we launch the new Hesto Harness Plant with the President of the Republic, I am reminded of the hard work that was set upon us. We have worked together with sector departments, entities and investors towards the fulfilment of this goal.
The ceremonial visit by the president does not only underscore our determination but also highlights a well managed public-private partnership which is also a culmination of deep work that has spanned over a period of over eight years.
KwaDukuza has been instrumental in this project particularly in the efforts for lobbying, mobilisation of resources and for the facilitation of investments not only for the people of KwaDukuza but for the entire district. We were also able to propel members of council to support this investment and subsequently lobbied for the expansion of the plant to be built nowhere else but here at home and this is a culmination of our work and a commitment that was also aimed at ensuring that the region benefits in line with the resolutions of the Presidential Investment Conferences.
This morning, we welcomed the President of the Republic who was accompanied by the minister for Trade, Industry and Competition, Ebrahim Patel, the KZN Premier, Nomusa Dube-Ncube, the Leader of Government Business and KZN MEC for Economic Development, Tourism & Economic Development (EDTEA), Siboniso Duma and other guests to the historic launch which KwaDukuza used as a launch-pad towards economic recovery after experiencing major economic shocks. The launch comes after the devastating downturns from the impact of Covid-19, the July 2021 civil unrests and the April floods which saw several people losing jobs.
In welcoming this project, we are more than inspired to have a strategic and transformative corporate citizen here at home. In becoming the biggest employer in the region and with the new extension, Hesto went on to employ over 7200 people excluding indirect jobs that have been created.
Indeed, job creation couldn’t have been possible without the collaboration of various stakeholders at the height of the Covid-19 pandemic. We collaborated during difficult times and such was a commitment by various stakeholders including KwaDukuza Municipality, KZN Trade and Investment, DTI, Transnet Freight, the KZN Office of the Premier and KZN EDTEA who the first to initiate a conversation around the project with a view of ensuring that land was acquired for the purpose of expanding this facility for the benefit of our people.
Cooperation amongst the three spheres of government and state-owned enterprises underlines the best approach for intergovernmental relations through the alignment of strategic goals in the National Development Plan.
In reflecting upon on how this journey started, it is worth noting that KwaDukuza Municipality has been a good host and excellent service provider to Hesto for almost three decades. The trust between the council and other parties owes its foundation to the long and lasting relations which had been established when Hesto Harness moved out of the Sithebe Industrial Area in 1993 to KwaDukuza.
Eight years ago, KwaDukuza Council hosted a delegation that was led by the now retired Managing Director, John Chandler of HESTO Harness (PTY) LTD, who initiated a request for a partnership with KwaDukuza Municipality in their bid for the contract to produce automotive components for the launch of the 2021-2022 Ford Ranger. This was an expansion project to an existing plant which had already employed over 2400 people.
The Council agreed in-principle to avail municipal land parcels adjacent to the existing Hesto Harness plant, giving the investor rates rebates and subsequently prioritising the the project in processing all town planning and building related permits.
This investment facilitation was done as a partnership until it culminated to the award of the contract to Metair/Hesto in 2020 amid the Covid-19 pandemic.
FENDING OF COMPETITION FROM INDUSTRIAL DEVELOPMENT ZONES
Upon being awarded the contract by Ford Manufacturing South Africa, the municipal land adjacent to private property was inadequate for the new investments. KwaDukuza Municipality in February 2020, formally approach Transnet Freight to release one of their land parcels to Hesto which was a parcel earmarked for an international rail manufacturing investor. The primary driver for approaching Transnet was that Hesto was also offered an alternative investment site at Dube Trade Port Auto manufacturing zone.
Due to our relationship founded upon trust spanning close to 30 years as well as the investor incentives which where presented by KwaDukuza Municipality, Hesto managers took a decision to support the investment also based on the following:
- Selling of the council owned property opposite the Hesto Plant on nominal cost (10% of the property market value).
- Offering the investor five-year rates rebates, this affected as soon as the property was transferred to HESTO.
- Fast-tracked all town planning and building plans approvals process in line with council policy on Catalytic Project approval process by the Development Assessment Committee.
- Facilitated both business and job opportunities in an orderly manner.
- Offered a strong skilled labor base in our district, which can easily fit in HESTO operations.
KwaDukuza Municipality’s proposal became so competitive that it was able to fend-off competition from Dube Trade Port IDZ. The municipality is proud of being able to compete with industrial zones that enjoyed various national government incentives and support.
UNLOCKING AND SECURING TRANSNET LAND
KwaDukuza Municipality in partnership with Trade and Investment KZN, DTI and Office of the Presidency were able to engage the leadership of Transnet Freight to consider offering Hesto a long-term lease for vacant land for the purpose of developing the new factory.
This took a number of engagements with all spheres of government for Transnet and Hesto to reach a win-win agreement on the land negotiation process. Transnet Board has today fulfilled its strategic mandates of contributing towards unlocking economic development and investment opportunities through their properties. We wish to thank Transnet for releasing the land parcels which were a major game-changer in this transition which helped seal the deal for the council and the people of KwaDukuza.
All of these events took place during the first Covid lockdown (March 2020 until July 2022). We accordingly wish to recognise other strategic stakeholders who worked tirelessly to unlock this project which is today regarded as a post-Covid-19 economic recovery plan projects.
FACILITATION OF BUSINESS/SUB-CONTRACTING OPPORTUNITIES
KwaDukuza Municipality has been able to develop a sustainable model for facilitating business opportunities for local contractors. When the Hesto Harness site was handed over to the main contractor, there were site disruptions caused by local business forums. There was a strong demand for a slice in the project, despite the known council approach on facilitating opportunities to bona-fide local contractors and businesses.
It is through the wisdom of the council that the main contractor of the development was supported to obtain a court interdict against the business forums, whilst the municipality was working towards finalising its business/sub-contracting model.
The municipality working with the main contractor was able to advertise and invite interested local contractors to register on the database for sub-contracting purposes. That process yielded good results and saw stability on site. Local contractors were able to secure sub-contracting opportunities worth R52 million, from a specialized contract of R280 million. This model has been used and replicated in the second factory that is constructed by another Metair subsidiary (Unitrade). This model is also being adopted by private investor and property developers who chose to work with KwaDukuza Municipality. This has reduced instances of instabilities caused by business forums.
BEST PRACTICE MODEL FOR COMMUNITY BASED RECRUITMENT
Hesto in 2018, advertised 48 job opportunities which were mired by protests from a political formation which acted against the Hesto recruitment policy. KwaDukuza Municipality was compelled to intervene in this process in order to establish a lasting solution.
The then Hesto recruitment policy empowered existing staff to make referrals and recommendations to their family members for employment opportunities. It was alleged then that only relatives and family members of Hesto staff members would be appointed by Hesto. The municipality engaged the management of HESTO when it was agreed that the open advertisement process will be done, this led to more than 15 000 applicants being enlisted for 48 posts. This happened during a time when the municipality was still negotiating the final land disposal deal to secure the Ford contract to include clauses that will ensure fair and transparent recruitment process of new employees at the new plant.
This led to Hesto developing a system that will allow local people to be recruited using an online communication platform. Hesto and KwaDukuza Municipality further agreed on a principle that employees should be recruited from across Ilembe district as follows:
| Municipality | Percentage of people recruited |
| KwaDukuza | 60% |
| Mandeni | 20% |
| Ndwendwe | 10% |
| Maphumulo | 10% |
Approximately 4000 new employees have been appointed by Hesto since last year and they were recruited based on agreed principle and split of job opportunities across the district. From such interventions, there has been no public protest against the recruitment process; and this alone symbolises that the lessons learnt in 2018 and the impact of remedial action taken in 2019 towards ensuring stability and that this exercise was not a waste of time.
MULTIPLIER EFFECT
The multi-million Rand investment by Hesto has ensured that it benefits the region and cuts across various businesses directly and indirectly. This investment has benefited the local public transport sector, giving a short in the arm to the industry with new customers, local retail and property sector are also benefitting from the new facility. This investment has also stimulated expansion of other businesses i.e. Unitrade within the value chain of Hesto to invest and expand in KwaDukuza
VOTE OF CONFIDENCE TO KWADUKUZA MUNICIPALITY
The Hesto investment is another vote of confidence and highlights KwaDukuza Municipality as a leading investor destination of choice. The investment also shows the ability of KwaDukuza Municipality to retain existing investors and ensure that they expand within the jurisdiction.
We are committed to provide an enabling environment and investment eco-system that will ensure the retention of existing jobs and the creation of new jobs.
We also believe that Hesto Harness investments will be a catalyst for the expansion of the KwaZulu-Natal Auto Component Cluster to our area. This will lead to more investments in the manufacturing sector and the reindustrialization of our economy.
We can never be thankful enough for the partnership and collaborative work of various stakeholders in securing this major investment”, said Nhaca.
Ends
Main Image: KwaDukuza mayor welcomes President Ramaphosa earlier today, flanked by the KZN Premier Nomusa Dube-Ncube. Photo credit: Juan Venter
Issued by KwaDukuza Municipality Office of the Mayor. For inquiries please contact:
Mr. Sphelelo Ngobese
Manager: Intergovernmental Relations and Protocol
T: 032 437 5133 | C: 073 784 7822
E: SpheleloN@kwadukuza.gov.za
