WALVIS BAY – Deputy minister of industrialisation Verna Sinimbo says the ministry is on the verge of resolving the bottlenecks around the N$190 million Peugeot Opel assembly plant at Walvis Bay.
Responding to questions posed to her during her recent visit to the coast, Sinimbo specifically said they are at the penultimate end to resolve the issue around the export duty that has afflicted Peugeot the opportunity to export vehicles assembled in Namibia.
The plant, which was officially opened in December 2018 by President Hage Geingob, faces some challenges due to regulatory complications that continue to deny the company access to the highly sought-after southern Africa region. This was due to a lack of an agreement between Namibia and the southern African markets it intended to export the vehicles to as well as some additional duties arising as a result of rules of origin aspects of the SADC – economic partnership agreement (SADC – EPA).
“The Peugeot plant has demonstrated its capability to assemble the vehicles it intended to and is indeed gearing to export the vehicles once a few matters are finally ironed out,” she said.
According to Sinimbo, other aspects concerning production target were not an issue as the plant has demonstrated its ability to assemble here in Namibia.
“The plant is experiencing an export duty matter that is being resolved to ensure that we can finally sell cars. It is not a matter of not meeting production targets,” she explained.
The plant that assembles Peugeot 3008, Peugeot 5008 and Opel Grandland X models could only assemble at least 93 against a target of 1 551 by earlier this year due to the challenges it faces.
The sales were also not promising because of a customs sales agreement that needed to be finalised. Asked when Namibia would reap benefits from their investment in the plant, Sinimbo said the creation of an industry from scratch does not necessarily translate into profits immediately.
“Projects like this will take some time to start making profit - that is if you are focusing only on financial profit.
We are more interested in ensuring economic profit like creating jobs, value chains linkages, local content, technological transfer and spillover effects as well as the creation of regional sourcing opportunities to help drive both SADC and SACU’s industrialisation imperatives. All of these will take time to be created, but work towards ensuring them starts from day one,” she said.
Sinimbo added the way forward for the plant is to finalise the export duty issue and then continue to ensure that it yields economic profit for the country.