VW has secured a R1,7-billion contract to export catalytic converters to Europe and China over the next five years.

VWSA has followed up a recent R2,16-million deal to supply catalytic converters for the new VW Polo in Europe with a R1,7-billion deal to export converters to Europe and China, the Uitenhage-based company announced on Thursday.

This brings the value of catalytic converter contracts secured by Volkswagen in recent weeks to almost R3,9 billion. The two biggest contracts are for the supply of catalytic converters to Europe for Audi’s 1,6-litre A3 and A4 (R373 million) and 1,8-litre engined A3, A4 and A6 (R1 billion). VW will, in addition, supply catalytic converters for the 1,8-litre Passat B5 (R300 million).

Volkswagen managing director Hans-Christian Maergner said the new contract business had been placed with Port Elizabeth-based Eberspaecher - formerly known as Autocat - for the manufacture of catalytic converters for two Audi models and a Passat model.

"As a global player Volkswagen has been the leading exporter of vehicles from this country for the past decade - having proved that we can fulfil vehicle orders for countries as diverse as China, Australia and the European Union," said Maergner.

"Our export of 30 000 Golfs to Europe has allowed us to rejoin the global vehicle and component supply network and benefited South Africa in terms of foreign exchange earnings and the transfer of skills and technology.

“Our component export business within the Volkswagen Group is now coming on stream and we expect to export components with a value in excess of R1,5 billion this year to countries within North and Central America, Europe and Asia. The catalytic converter contracts form part of an overall strategy, which will involve the announcement of additional contracts for engine components, alloy wheels and replacement parts in the near future," he added.

Maergner said that catalytic converter contracts were a primary target for motor manufacturers because of their high value and packing densities that made them easier to ship to the end customer.

"Volkswagen fully supports the principles of the Motor Industry Development Programme and is using the export rebates gained to offset the import of certain VW and Audi products into South Africa," he said. The catalytic converter industry has also played a significant role in creating employment in South Africa with the arrival and establishment of companies that take care of the whole manufacture process from press parts, matting, ceramic substrate, coating through to the canning process."

Eberspaecher SA chief executive Paul Erasmus has also announced an additional investment of R5,5 million in its company’s production facility to cope with the increased export order from the Volkswagen Group.

"Each contract has unique requirements in terms of technology transfer and logistical support, and hence we have decided to expand our manufacturing ability with the addition of new equipment,” he said. In addition, 66 more jobs had been created.