The offset arrangement arising from SA's R66bn arms deal has seen the construction of a $2,1m aluminium tubing at Maritzburg.

The factory was built by Thyssen, which is part of the German consortium that won the tender to build four corvette platforms.

This is one of the first greenfield projects started from scratch to come from the offset arrangement.

The aluminium tubing to be made at the factory will be used in the SA automotive industry.

The industry is now importing aluminium tubes that are used in the manufacture of motor vehicle radiators.

The company, to be known as Alltube, will be able to produce 400 tons of aluminium a year, and it is expected to generate close to $35m in sales over the next five years.

The plant is situated in Campsdrift, next to the new Hulett Aluminium factory, which will be a supplier to the project. Production is expected to start next month.

German company Allexim owns 60% of Alltube, while an empowerment consortium, Ennovative Solutions has a 20% stake.

Alltube CEO Theo Lodemann holds 10% while a private investor will hold the remaining 10% of the group.

With acknowledgements to Larry Claassen and Business Day.