Pretoria - The spirit of self empowerment is abundant in an initiative by a group of Volkswagen South Africa (VWSA) employees, whose newly established company beat nine other bidders to win a contract to assemble Volkswagen buses and heavy trucks.

The group that won the contract, Mzantsi Truck and Bus, is wholly black owned, having been created by 43 employees at VWSA's passenger vehicle plant in Uitenhage. Most of them are shop floor workers and all are members of the Abakhuseli Savings Club.

Vusi Mancapa, previously VWSA's logistics planning manager, resigned earlier this year to become the production manager of Mzantsi, where he is also a director. Except for Mancapa, the shareholders have no day-to-day involvement in the running of Mzantsi.

Mzantsi's other directors are Buyile Gqubule, Nkosinathi Clay, Sydney Msizi, Joseph Majola and Xolile Festile.

Under the contract, Mzantsi will manage the assembly facility, which has been set up on a site adjoining the passenger car plant, with VWSA giving technical and other expert input when needed.

The award of the contract followed VWSA announcing in January last year that it would introduce Brazilian-sourced trucks and buses into the local market.

Markus Tschirschwitz, the head of commercial vehicle sales and the marketing manager at VWSA, said Resende, Volkswagen's truck and bus plant in Brazil, was its partner in the venture and would supply the semi-knocked-down components, such as engines and chassis.

The trucks and buses will be sold by a separate national dealer network that is already selling and servicing VWSA's small and medium commercial vehicles.

VWSA and its commercial vehicle dealer network are investing about R300 million in the new venture, which is expected to create about 400 new jobs in VWSA's dealer network and the Uitenhage plant.

Mancapa said Abakhuseli was about 12 years old and financially "very strong". Initially Abakhuseli gathered money for a year before sharing it among its members.

However, the savings club later started to develop long-term business interests at the request of its members.

"An investment in Telkom's share issue in 2003 was the first step towards some medium-term savings. The members were prepared not to part with the shares for three years and made a 600 percent return on their investment," Mancapa said.

He said six members had been tasked, after the Telkom investment, to look for strategic long-term projects.

"We saw the assembly business coming to Volkswagen and formed a company to bid. This was our first attempt at investing in a long-term project."

Mancapa said Mzantsi was an initiative strictly inspired by the members of the savings club and did not result from an approach by VWSA. Mzantsi became fully operational two weeks ago when it started officially assembling three different bus models for VWSA.

Mzantsi had been on site at the bus and truck assembly plant since the beginning of the year. Much of the work to date had been on building prototypes and sorting out technical start-up problems.

But Mancapa said the model line-up Mzantsi would assemble was not yet complete. A line-up of 12 truck models would be added between December and next April.

With the introduction of the heavy trucks, South Africa will be the only market to sell the complete Volkswagen commercial vehicle range, from the half-ton Caddy panel van to the Titan tractor.

Mancapa said the savings club members had raised R1.2 million "this year alone" for the project, with about R250 000 "cash-in-hand from their own savings" and the balance from a financial institution.

He said the members of Abakhuseli had signed an agreement in terms of which they committed not to part with any of their savings for the next five years.

"Only after five years can we start expecting a return [on the facility]. Our investment in Mzantsi is not that lucrative now but the business has a lot of potential to grow," he said.

"The whole business is sales-volume driven. We believe the country's economy will be our saviour in the long term."

Mancapa said raising the finance for the project had been difficult, even problematic, but Mzantsi had established a good relationship with Standard Bank.

He said they initially thought it would be easy to raise the funds from the national or provincial government but this had proved to be difficult and time consuming.

"There were a lot of delays and stringent prerequisites by the department of trade and industry despite us submitting all our credentials and business plan," he said. "We haven't given up on them but we couldn't wait that long."

Mancapa said Mzantsi was not being assisted financially by VWSA. "The six of us spent day and night on the bid and financing the whole thing."

The capital invested by Mzantsi this year had been spent on motorised material handling equipment, small hand tools, office equipment and computers and vehicles.

He said Mzantsi had 17 employees but the headcount would increase to 28 with the introduction of the truck assembly operations.

Mancapa stressed that these were newly employed people and not workers transferred from VWSA. Their main source of labour was the Uitenhage-Dispatch Development Initiative, a human resource development centre established jointly by the private sector and the Eastern Cape government that trained matriculants in preparation for employment in the motor industry.

Mancapa said Mzantsi's conditions of employment were similar, but not identical, to VWSA's employment contracts. "For instance, the aim here is to cross-train people in everything and not have any dedicated specialist jobs, and to minimise the wage gap so people can see themselves as equal and fully trained to do any job."

He described his move from being a VWSA employee to a boss as "a big challenge". "We [VWSA] have never built these vehicles before. It's very challenging from that perspective. Volkswagen's quality standards are also as stringent as they are in the passenger plant. It's a huge learning opportunity but from that we derive excitement."

Tschirschwitz said the sales target for the truck and bus operation was 1 000 units a year but "that will obviously not happen in the first year". VWSA would export its buses and heavy trucks to right-hand drive markets in Africa. Exports to Australia were "a target" and it would also explore opportunities in Thailand, Malaysia and Hong Kong.