Manufacturing

AFC is arranging a project development facility to support Africa’s largest gas-to-methanol plant. (Image source: AFC)

Africa Finance Corporation (AFC), a leading infrastructure solutions provider, has announced that it is arranging a project development facility to support Africa’s largest gas-to-methanol plant

The aim of the project (located in Akwa Ibom, Nigeria) is to significantly reduce CO₂ emissions by offsetting flaring of natural gas and turning it instead into a valuable chemical for solvents, paints, plastics and car parts. It will target producing an initial 1.8mn tonnes per annum (MTPA) of methanol and is expected to generate more than 18,000 jobs. Moreover, it will allow the West African country to minimise the environmental impact of exploiting its vast natural gas reserves, assumed critical to the economic development of the country.

“This innovative project is transforming an immense negative for Nigerians into a very significant positive by harnessing this country’s abundant gas reserves as a unique opportunity to become a global leader in low-carbon manufacturing and energy systems,” said Samaila Zubairu, president and CEO of AFC. “This strategic collaboration with Blackrose and IFC underscores our dedication to supporting Africa’s pragmatic transition to net zero, emphasising rapid industrialisation, local job creation, and socio-economic advancement through the production of methanol, a versatile and low-carbon industrial feedstock.”

AFC has committed development stage financing to de-risk the project and enable it reach financial close, along with providing financial advisory services to the sponsors to raise the required project financing and support successful delivery of this transformational project. The venture is led by Blackrose, a project development and investment firm, and co-developed with the International Finance Corporation (IFC), the private sector arm of the World Bank Group, which are co-financing alongside AFC.

A global leader in low-carbon manufacturing

According to AFC, the project will be implemented in two phases. The first phase will produce low-carbon methanol, a chemical essential to the manufacturing of hundreds of everyday products and a lower emissions alternative fuel used in hard-to-decarbonise sectors.

Phase two of the project will expand methanol production to include ammonia, a critical feedstock for fertiliser production. Both phases will have an installed capacity of 1.8MTPA.

By utilising best-in-class energy efficient production methods, the plant will achieve a much lower net carbon intensity compared to traditional methanol synthesis techniques, while also reducing CO₂ emissions by converting gas that would otherwise have been flared. Additionally, the project incorporates plans for carbon capture and offset strategies as well as the use of external hydrogen to bring targets even closer to carbon neutrality.

L to R: Wayne Bowyer, managing director of Toyota Tsusho Africa; Andrew Velleman, CEO of CFAO South Africa; Andrew Kirby, president and CEO of Toyota South Africa; Rev Musa Zondi, KZN MEC for Economic Development, Tourism, and Environmental Affairs; Minister Parks Tau, SA Minister of Trade, Industry and Competition; Hiroshi Morita, CEO of Ogihara Thailand; and Nigel Ward, Toyota EVP: manufacturing and manufacturing support. (Image source: CFAO South Africa)

CFAO South Africa, a company dedicated to delivering an integrated mobility ecosystem to support the development and growth of the automotive industry, has announced a joint venture between Toyota Tsusho Africa, one of its subsidiaries, and Ogihara Thailand

The collaboration will see the formation of Ogihara South Africa as well as the construction of a new component manufacturing plant at the Dube Tradeport in Durban to supply products to Toyota South Africa. This represents a strategic investment of R1.2bn (approx. US$67mn) into the South African automotive industry and is expected to create numerous employment opportunities while further deepening localisation in line with the South African Automotive Masterplan.

“CFAO South Africa is a leader in South Africa's mobility market,” remarked Andrew Velleman, CEO of CFAO South Africa. “This joint venture further strengthens CFAO Group's commitment to expansion in South Africa. We are excited about the significant positive impact and value this new plant will bring to the automotive industry and the broader economy. We will continue to drive innovation, growth, transformation, and sustainability in the automotive sector."

“The inclusion of Ogihara South Africa in our local manufacturing ecosystem will not only create new job opportunities but also enhance our capabilities in producing high-quality body parts for the automotive industry," said Andrew Kirby, president and CEO of Toyota South Africa. "This joint venture marks a significant step towards our LVA (Local Value Addition) improvement strategy by localising the production of these critical components.”

Globally, an estimated one billion tyres reach the end of their useful life every year. (Image source: Adobe Stock)

The South African Tyre Manufacturers Conference (SATMC) has been appointed to the Waste Tyre Management Industry Advisory Committee to help support the Waste Tyre Management Plan that was approved by the cabinet in March this year

The national strategy seeks to address several challenges faced by the waste tyre sector, including limited local processing capacity, storage depot limitations, and logistical constraints. It is being driven by the Ministry of Forestry, Fisheries and the Environment, and emphasises collaboration between the public and private sectors while encouraging the participation of new SMMEs across the waste tyre value chain. It plans to progressively divert new waste tyres from storage while simultaneously processing larger portions of stockpiles to ultimately achieve 100% waste tyre coverage.

To attain this goal, Dion George, Minister of Forestry, Fisheries and the Environment, has recruited the help of the SATMC, announcing their appointment in July. Other committee representation includes the Retail Motor Industry (RMI); the Tyre, Equipment, Parts Association (TEPA); Tyre Recycling Industry Association of South Africa; the Recycling Association of South Africa and the Waste Tyre Management Forum, as well as the Black Business Council (BBC), Business Unity South Africa (BUSA); Minerals Council South Africa, the Department of Science and Innovation; and Department of Trade, Industry and Competition.

SATMC has now issued a statement welcoming their inclusion, with managing executive Nduduzo Chala commenting, “As the SATMC, we look forward to working closely with all committee representatives and the broader industry to drive forward the objectives of the Waste Tyre Management Plan, which include expanding waste tyre processing capacity, developing monitoring systems, and supporting municipal waste management initiatives. This crucial environmental initiative deserves the full support of the entire tyre industry value chain to reduce the negative environmental impacts of waste tyres.”

Chala further expressed enthusiasm for the establishment of three dedicated waste tyre management regions nationwide, each involving multiple organisations working together to meet this pressing environmental challenge. Region 1 covers the Northern Cape, Eastern Cape, Western Cape and southern Free State; Region 2 covers KwaZulu Natal, Mpumalanga and Limpopo; and Region 3 covers Gauteng, North-West Province and northern Free State.

Tyre repurposing

Bringing the SATMC on board brings its experience in actively identifying and leveraging opportunities for repurposing waste tyres. It is committed to ensuring that what is produced by tyre manufacturers is reused effectively.

“We are currently on a research and fact-finding mission to explore potential uses for waste tyre products. This is part of a broader strategy to integrate waste tyres into the economy sustainably. What we would like to see is for these waste products to be converted into usable material, for example, tyre crumb used in road infrastructure or waste tyres used in the construction of schools and other social projects,” remarked Chala.

Another crucial initiative is the tyre mutilation initiative, which ensures that dealers mutilate tyres correctly to prevent them from re-entering the market. The SATMC developed a standard for this process years ago, which included guidelines and posters for dealers to ensure compliance and awareness.

“Prior to the finalisation of the Plan, the SATMC had long been advocating for a process that would cater to the processing of end-of-life tyres. We continue working closely with TIASA, TEPA, the Waste Management Bureau, and the government to ensure that steps are taken to drive improvements and sustainability in both collection and processing of tyre waste,” Chala added.

Increased regulation

Chala also spotlighted the need for better regulation of part-worn or second-hand tyres which pose safety risks for road commuters and add to the burden of incorrect disposal of waste tyres.

“We urge the government to prioritise the regulation of second-hand tyres as part of its overall road safety strategy,” he surmised. “This will help to prevent the sale of unsafe tyres and protect the lives of South African motorists.”

Chala concluded by noting that the SATMC’s technical committee intends to conduct a new study to investigate the prevalence of illegal second-hand tyres in the market. Research in 2020 from the organisation suggested that 63% of tyres sampled were deemed illegal and current estimates suggest there now between 1mn and 1.5mn illegal tyres circulating in the country.

At the show in Johannesburg, companies and investors are encouraged to be part of Africa’s industrial renaissance. (Image source: Manufacturing Indaba)

According to the organisers of the upcoming Manufacturing Indaba Conference and Exhibition, running from 22-23 October 2024 in Johannesburg, Africa is rapidly positioning itself as a key player in the global manufacturing landscape

The continent, is offering unrivalled opportunities for growth and investment with manufacturing contributing more than 10.5% to Africa’s GDP. Led by nations such as South Africa, Nigeria and Egypt, there are significant strides being made in industries such as automotive, textiles and consumer goods. Moreover, the organisers noted that the increasing focus on industrialisation (prioritised by most nations), coupled with favourable policies and emerging trade agreement such as the African Continental Free Trade Area (AfCFTA) is creating an “ideal” environment for businesses seeking to expand their global footprint.

A manufacturing revolution

These market dynamics are spurring interest and excitement for the industry so that it now sits on the cusp of a manufacturing revolution.

Another facet at the forefront of this change are the emergence of special economic zones (SEZs). The Hawassa Industiral Park in Ethiopia, for instance, has become “a magnet” for foreign direct investment the organisers have noted. Specifically, the textiles and apparel industries have flourished around the zone.

This is a familiar theme across the continent, with other success stories including the growth of the automotive sectors, particularly in Morocco and South Africa. These two countries now nearly produce a combined one million vehicles a year.

There is also a general shift towards sustainable practices, in line with the global appetite for reducing emissions. The organisers have expressed that investments in renewable energy and green manufacturing are gaining momentum across the continent with a number of leading initiatives to reduce the industry’s carbon footprint. This is further making the continent an attractive destination for investors alongside the readily available workforce emerging from Africa’s rapidly growing population.

With the continent on the right road to become the next global manufacturing powerhouse, stakeholders are being encouraged to participate in the Manufacturing Indaba Conference and Exhibition in South Africa. Gathering industry leaders, policymakers and investors to discuss the future of manufacturing, it will serve as a platform for attendees to be part of the industrial renaissance currently underway.