Dar es Salaam-based industrialist Reginald Mengi last week signed a deal with a South Korean firm to set up a vehicle assembly plant in the country.
The $10 million deal between Mengi’s IPP Automobile Company Ltd and Youngsan Glonet Corporation will bring to two the number of vehicle assembly plants in Tanzania. The other one is Ursus, a Polish tractor assembly plant at Kibaha.
Mr Mengi, the IPP group executive chairman, also has interests in processing, mining and the media.
Speaking after signing of the deal, Mr Mengi announced that the plant, to be built at Kurasini, will be up and running by September next year. He added that it is expected to assemble around 1,000 vehicles per year.
It targets commercial and construction trucks, buses and sports utility vehicles.
The plant is expected to directly employ at least 500 people and another 500 in distribution and sales in Tanzania, Rwanda, Kenya, Uganda, Zambia and Malawi.
According to IPP Automobile chief executive Godfrey Bitesigirwe, importation of parts has already begun for the assembly of Hyundai, Kia and Daewoo vehicles.
Tanzania joins Rwanda and Kenya in establishing car assembly plants in the region. Volkswagen is operating two car plants — in Kenya and Rwanda. Kenya is the region’s leader in motor vehicle assembly, with three plants.
It is also home to Mobius, a mass market vehicle specifically designed for Kenyan roads. In Uganda, Kiira Motors Corporation has its vehicle assembly in Kampala and hopes to manufacture all the parts to assemble its Kayoola electric bus by 2039.