Toyota South Africa Motors (TSAM) Commences Production Of Virtually All Its Models At Its Prospecton Plant In Durban
Toyota South Africa Motors (TSAM) has commenced production of virtually all its models at its Prospecton plant in Durban following the suspension of production on 12 April due to significant damage caused by flooding in April.
TSAM President and CEO Andrew Kirby confirmed this on Thursday, at the official opening of a R365 million expansion to the company’s parts distribution warehouse in Boksburg.
Kirby said “it feels like an eternity” since production at the plant was suspended, adding that TSAM started up its:
Catalytic converter export line and Hino truck production line in May;
The Hilux, Fortuner and HiAce production line last week; and
The Corolla Cross line this week.
“This is an important milestone and we will follow up with starting up the Corolla Quest production line next month,” he said.
“We are very anxious to accelerate our production volumes and, of course, are very aware that our customers have been waiting for quite a long time and we will do everything we can to try and address those back orders as fast as we can.”
Kirby said it is difficult to comment on the cost incurred due to the damage to the plant, but confirmed that it will be “in the billions”.
He said TSAM is covered for the equipment replacement and for some business continuity disruption but this is only a very small portion of the cost.
Kirby said the company has made some progress with its claims from insurance companies and has even received some advance payments. It is still in the process of reconciling with its insurers what that final figure will be and what TSAM’s final additional cost will be.
He said that because of the impact of the mud and flooding, the normal approach would have been to replace everything – but that would have taken another six to nine months, given the global situation with semiconductor shortages, shipping delays and equipment manufacturers that have significant back orders.
He said TSAM instead took a route of trying to source what it could from all over the world, with tremendous support from its colleagues in Japan, and embarking on a tedious process, especially with the plant’s electronic control units, of ensuring that every single component was cleaned, dried and tested.
He said this is important in the context of the ramp-up plan for the plant, because the company knows that over time not all of the repaired parts will be stable.
There is now a constant process of fitting and installing parts as they arrive.
Kirby said TSAM has therefore decided not to work any overtime until the end of September and will be using weekends to install a lot of the parts as they arrive.
“We thought this was the most appropriate approach to take, which means our start of production is not immediately to full production. We will ramp up over the next eight weeks and accelerate from there.
“We will have significant volume already in August because the lines will be up and running but it will not quite be where we want to get to.
“We will be back at the same volume as pre-flood at the end of September and we will obviously do whatever we can to address the [vehicle supply] backlog,” he said.