Metair CEO, Riaz Haffejee, says this shift is being driven by increased awareness of the threat of global warming and its influence on emission regulations, consumer expectations and business strategies.

Haffejee believes the move to NEVs will be relatively quick in the highly regulated European markets, facilitated by government subsidies, whereas other markets may take longer.

“All markets are, however, likely to first move to hybrid cars and then, over time, transition to Battery Electric Vehicles (BEVs),” he says.

Haffejee adds that in response to changing market trends and future technology requirements from certain Original Equipment Manufacturers (OEMs) and industrial partners, Metair is moving its lithium-ion production line, currently at Rombat in Romania, to Mutlu Akü in Turkey.

He says this move aims to leverage Mutlu Akü’s brand strength, operational expertise, access and positioning within a growing market for lithium-ion products.

Haffejee says Mutlu Akü will also benefit from recently available incentives that will recover the initial investment.

The production line will be located within Mutlu Akü’s existing production facilities, and the relocated production line is expected to be installed and commissioned during the second half of 2022, he says.

Haffejee’s comments coincided with the release of the group’s annual financial results to end-December 2021 and an update on the group’s recovery plan from the COVID-19 pandemic.

He says Metair’s recovery has unfolded broadly as anticipated, with the energy storage business recovering quickly in a V-shaped path, while the automotive components business has followed a more extended project-based U-shaped recovery.

Haffejee reckons the energy storage business performed better than expected, while unplanned supply chain costs negatively affected the performance of the automotive components business.

He says new projects have progressed well in both cost and delivery timetables, and the group continues to explore ways in which to unlock value within the energy storage business.

Metair’s largest automotive components project, involving a total investment of R1 billion, is the new Ford Ranger project.

Of this total investment, more than R700 million will be invested this year into Metair’s automotive components business in South Africa, the vast majority of it into the Ford Ranger project.

It includes the investment of a further R165 million to localise the automotive copper wire used by Metair’s Hesto Harnesses.

Haffejee says it is anticipated that the Ford Ranger project will create more than 3 000 new jobs at Metair, with the majority of these being created in 2023.

The new Ford Ranger is scheduled to be launched in the fourth quarter of this year.

Metair’s group revenue increased by 23% to R12.62 billion in the year to end-December 2021 from R10.23 billion in the previous year.

Haffejee says this improvement reflects the strong rebound following the COVID-19 lockdown restrictions in 2020.

The automotive components business’s contribution to total group revenue improved by 36% to R6.7 billion year-on-year, while revenue from the energy storage business grew by 18% to R7.6 billion.

Haffejee says the energy storage business benefited from strong export demand and sustained local aftermarket and OEM demand.

He says OEM customer volumes of the automotive components business grew strongly in the first half of the year, but the momentum slowed in the second half owing to supply chain-related disruptions to OEM production in South Africa.

Group operating profit improved to R1.16 billion from R0.6 billion, with the operating margin recovering to 9.2%, from 5.5% in 2020.

Headline earnings per share increased by 139% to 354 cents from 148 cents.