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Apr 23, 2004

Foreign imports on the agenda for Sapma–DTI meeting

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Africa|China|India|South Africa|Counterfeit Products|Mining|Requiring Specialised Pumping Equipment|Department Of Trade And Industry|South African Pump Manufacturers Association|World Trade Organisation|Roger Daubeney
africa|china|india|south-africa|counterfeit-products|mining|requiring-specialised-pumping-equipment|department-of-trade-and-industry|south-african-pump-manufacturers-association|world-trade-organisation|roger-daubeney
© Reuse this The South African Pump Manufacturers Association (Sapma) reports that it plans to approach the Department of Trade and Industry (DTI) to indi- cate its concern and awareness of unlevel trading conditions in the international arena.

This compromises the competitiveness of South African pump manufacturers, due to barriers and incentives given to other countries and, conversely, cheap pumps being dumped in the South African market from abroad.

The decision to approach the DTI was the result of several discussions held with Sapma members and the approach is scheduled to take place during the next six months.

“It is relatively simple to obtain ISO-accredited pumps from China and India, costing less than the production costs of the same products in South Africa.

“The result is that many of these pumps and components are sourced from abroad, thereby supporting offshore employment.

“This is a serious problem in the industry, and should be resolved to create a level playing field for local pump manufacturers, so that they can remain competitive,” executive member Roger Daubeney tells Engineering News.

He adds that the association would like to participate in any initiatives set out by the DTI to curtail this problem, including World Trade Organisation negotiations on tariffs and duties on imports.

Another solution to the problem could be the implementation of incentives for international companies interested in manufacturing product in South Africa.

Manufacturing under licence would enable local pump manufacturers to compete for exports and imports.

According to Daubeney, this is one of Sapma’s goals for the next few years.

Moreover, the association plans to collaborate with a range of other industry associations facing the same challenges to create a united front.

Despite the dumping of product, the local pump industry is vibrant, with much business in the market supported, until recently, by the large number of projects in the mining and water-reticulation sectors.

“The only sector that is still showing signs of struggle is the agricultural sector, which has been battling for the last two years,” says Daubeney.

He adds that the increase in projects had been due to mine expansion, especially among platinum mines, with almost all pumps sourced locally.

Moreover, mining pumps’ requirements have changed slightly, due to the fact that there has been a decrease in the number of new shafts sunk and an increase in the number of surface plants developed.

This has benefited the slurry-pump industry enormously.

On the other hand, Daubeney adds that other sectors have been stagnant in terms of pump demand, since many large projects, such as power stations and industrial complexes, have been completed.

“Business is constantly changing, resulting in pump manufacturers having to find new markets and introduce new products to remain competitive.

“Moreover, local manufacturers have been influenced significantly by mergers and international ownership of large pump companies, with the small manufacturers left to feed on niche markets requiring specialised pumping equipment.

“Mergers and international ownership have become part of the South African pump industry, with about five of the biggest companies owned by international companies.

“Companies can either grow organic- ally or through acquisitions,” says Daubeney.

He comments that, despite the growth prospects, the industry faces several challenges, including the quality of castings, lack of training programmes and counterfeit products.

“There is currently a high reject rate in locally-manufactured castings, which comprise 90% of pump material.

“This is of great concern to the association, since there are many new good-quality raw materials on the market.

“Moreover, high reject rates result in longer lead times,” Daubeney notes.

He adds that foundries should decide whether they wish to participate in the local pump industry or not.

One of the factors contributing to the poor quality levels of castings is the lack of trained employees, as a direct result of new technology and the shortage of artisan-training programmes.

“The lack of training stems from the pressure for companies to reduce costs so that they are able to maintain growth margins.

“This, coupled with new machinery, has shifted the focus away from shop-floor skills to automation.

“The new machines require a different kind of staff; therefore the staff complement remains the same but they are performing different jobs,” Daubeney explains.

Sapma has been active in training people in the industry, by presenting a yearly pump course, which is scheduled to be held in July this year.

The course, which attracts over 50 delegates each year, is delivered by specialists in the pump industry.

This year, the association has gone a step further by offering a practical training bursary to a technikon student for six months between semesters.

This bursary, which provides on-site training for the student in a factory of one or two of the association’s members, is expected to create interest in the pump industry from technically-qualified people and allow the association to identify future pump specialists.

“We currently have a student working at one of the member companies on a trial basis.

“The current bursor’s six-month practical will be completed by July, enabling us to provide feedback on the project to all association members at the pump course.

“Moreover, we intend to make this a yearly event, and possibly expand it to two students a year in the future,” says Daubeney.

He adds that students are chosen on academic achievements in hydraulic-related subjects.

The association also continues to be concerned that counterfeit pump components are more readily avail-able in the industry than in the past.

These components, being produced by people without the registered designs and responsibility for the products, tend to be selected only from lucrative pump components.

Moreover, the quality of the com-ponents is often good.

However, they are not always dimensionally accurate and, therefore, are often unable to perform the function that the original product can perform.

Further, the suppliers of these counterfeit components are unable to provide the technical advice required by customers if problems arise.

“Counterfeit products are detrimental to original-equipment manufacturers’ reputations.

“It has presented a problem for the industry over many years, but has been exacerbated by more people jumping on the bandwagon,” Daubeney explains.

Looking ahead, he concludes that the local industry needs to attract international pump companies to increase its competitiveness in the import and export markets.

In order to do this, the industry needs to promote itself as a high-quality low-cost production market, where these companies are able to manu-facture their products.

“If South Africa is able to place itself in this category, international com- panies will manufacture products locally for both domestic and global consumption.

“This would benefit South Africa significantly in the long term,” says Daubeney.

He notes that the economy also plays a vital role in the pump industry, explaining that if the economy is in good shape and inflation is controlled, then costs could be kept low.

However, if an economic disaster occurs and inflation runs wild, a large quantity of products will have to be imported, resulting in job losses locally.

Daubeney adds that, in spite of the current barriers, many companies have been able to increase their exports.

However, in the main, the rand remains too strong for exports in relation to the cost base.

He foresees steady growth in the South African pump industry, and a thrust towards supplying products to Africa.

“South Africa is well placed com-mercially and technologically, to take advantage of any projects taking place in Africa,” says Daubeney.

Sapma is also now in its fortieth year and, during this period, membership has remained fairly constant despite the mergers and takeovers in the industry.
Edited by: zeena isaacs
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