Positive noises from the newly formed government, combined with promises of support from the Department of Trade and Industry to meet the needs of the local catalytic converter sector, all provided fresh hope that large-scale catalytic converter manufacturing would stay in South Africa, said the new chairperson of South Africa's Catalytic Converter Industry Group (CCIG), Paul Thompson, on Tuesday.

The industry group had been in discussion with government around the provisions of the new Automotive Production and Development Programme (APDP) – set to replace the current government Motor Industry Development Programme (MIDP) – to provide greater incentives for companies making use of locally produced platinum and stainless steel, such as the catalytic converter manufacturing industry.

These discussions had been experiencing delays, causing concern among industry members around the sustainability of local production.

Thompson said it appeared that government recognised the importance of the catalytic converter industry as the only large-scale beneficiator of precious metals in South Africa, as well as giving a nod of approval to the jobs it created and the technology it brought into South Africa.

However, while the country currently supplied an estimated 11% of the world's automotive catalytic converters, there was a real danger that the industry could be lost if there were no incentives to ensure continued investment, he emphasised.

Without support, it would not be possible for local catalytic converter producers to compete against plants abroad, which have much shorter logistics lines to their customers. South Africa's supply lines run all the way from the domestic market to Europe, and even further.

The country's catalytic converter industry was built around the incentives offered by the APDP precursor, the MIDP, noted Thompson.

However, discussions on the APDP had stalled owing to uncertainty about what the new government's priorities and policies would be, according to outgoing CCIG chairperson Hans Kuehn.

“While we were encouraged that the former Minister of Trade and Industry had identified the catalytic converter industry as being a sector worth supporting, we were deeply concerned by the delay in the announcement of the nature of these envisaged support measures.

“Combined with the present global economic uncertainty, the lack of clarity with regard to industrial policy affecting our industry is making it extremely difficult for the overseas parents of our member companies to make decisions regarding their future involvement in South Africa.

“We trust that the new government under President [Jacob] Zuma will move rapidly to address this concern and to provide certainty for our industry going forward,” he said.

Export sales of catalytic converters from South Africa reached R18,3-billion in 2007.

Catalytic converters reduce the harmful emissions from vehicles.

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