Trade and Industry Minister Rob Davies recently reported that revised guide- lines for the National Industrial Participation Programme (Nipp) would be circulated “shortly”. This would form part of the “strengthening and alignment” of Nipp with “other public procurement levers, namely Designations and the Competitive Supplier Development Programme”. Nipp applies to all government procurement programmes which involve imports with a value of more than $10-million.
“The key feature of the new guidelines is the move away from indirect Nipp and the placing of strong emphasis on direct Nipp in the aerospace sector,” he elucidated. “Nipp obligations arising from the proposed purchases by State-owned companies will be used to strengthen the aerospace manufacturing activities.”
Further, the Department of Trade and Industry (DTI) is planning to incorporate the local aerospace industry into the Manufacturing Competitiveness Enhancement Programme. This is an incentive that provides matching grants to increase the competitiveness of South African companies to support feasibility studies into innovatory products and systems and to open new markets. “This process will be finalised shortly and gives effect to the DTI’s efforts to increase its support for the sector,” he said.
Currently, the local aero- space (and defence) industry benefits from the Aero- space Industry Support Initiative and the National Aerospace Centre. Both of these are instruments to support these local sectors and include government departments, research agencies and private- sector companies. They are intended to support research, development and innovation and to improve the competitiveness of the local industry in general and individual companies in particular.
Under these two schemes, during the last financial year (2012/13), the DTI provided R21-million to support 169 organisations. In addition, six companies received support to comply with accreditation, certification and standards requirements. The National Aerospace Centre has a joint post graduate sponsorship programme with European aerospace company Airbus, which fund the full-time studies of post- graduate students. To date, each partner has contributed R2.7-million to the scheme. Airbus has raised its annual contribution from R540 000 to R830 000 for the next three years, Davies cited.
The DTI also supports the Centurion Aerospace Village (CAV), again in close cooperation with research organisations and private-sector companies. “In keeping with similar initiatives in other sectors, the CAV is designed to be a cluster development park supported by the public sector,” he explained. “It is important that we restate the fact that this support comes with strong conditionalities. “This support for private- sector companies is designed to enable these companies to raise their competitiveness and, wherever possible, to become part of global supply chains and service links.”
Davies was delivering the keynote address at a function in Centurion at the facilities of local company Aerosud. At that function, European planemaker Airbus Military, part of the Airbus group, announced that it had awarded South African aerospace company Aerosud major component contracts for the A400M airlifter for the entire programme. Aerosud designs and manufactures the fuselage linings, cockpit linings, galleys and wing tips of the A400M. Now it will do so for the entire life span of the aircraft. Most of these parts are made from composite materials.
“Aerosud won this contract in competition against other bidders in an open tender process around the world,” highlighted Airbus VP: International Cooperation Simon Ward when announcing the new contract. “I cannot stress enough that this was a global competition. “For Aerosud, its local supply chain and South Africa, all of this represents incomparable potential for sustainable industrial, commercial and socio- economic benefits.”
Davies welcomed the awarding of the contract. “One of the areas in which we are competitive is composite materials,” he highlighted. “We have, we believe, a number of strengths [in the aerospace sector]. “This contract highlights those strengths. This is a great day for South African manufacturing.”
He noted the various incentives and support structures his and other departments had created to support the local aerospace industry. “In keeping with the broad perspectives set out in our industrial policy, we are of the view that the aerospace industry is a strategic one – one characterised by significant levels of value addition and technology intensity.” He thanked Airbus for the company’s support of, and involvement in, the local aerospace industry.
“This is really a very very special opportunity for us as the Aerosud group,” affirmed Aerosud group MD Dr Paul Potgieter. He thanked the Minister for the support provided by his department. “These incentives are seen by us as massively important. “We could not access the intentional market without them.”
“I am happy to reaffirm Airbus’s commitment to South Africa and its aerospace industry,” stated Ward. “Today, Airbus-related work is the main contributor in South Africa for the sector by value, and probably by volume in terms of the sheer number of parts manufactured here for our programmes.”