A diversified funding mixture to stimulate industrial activity and development will help to improve success and can lead to growth partnerships with investors and government, as well as more rapid growth if successful, states industry body Commercial Aerospace Manufacturing Association of South Africa (Camasa).
“The proposed stimulus funding of R3-billion will take the form of smaller contributions from a range of sources, which reduces the impact on government funding and broadens the investment benefits from this initiative,” says Camasa co-chairperson and aviation manufacturing multinational Aerosud South Africa MD Johan Steyn.
The association suggests that the public sector, possibly through the Industrial Development Corporation, can provide R1.2-billion of funding; R1.2-billion be borrowed from development finance agencies and/or the open market; and R600-million be borrowed from venture capital firms to help form long-term growth partnerships with industrial companies and startups.
The funding will mainly be used to incubate smaller advanced manufacturing startups and enable existing businesses to invest in more efficient equipment and processes. The association aims to help the industry to double exports to R6-billion within five years if a deep working partnership with relevant government organisations and investment partners is forged.
Few national aviation industries grew to be successful without government support, highlights Camasa co-chair and local aviation propulsion manufacturer Adept Airmotive executive director Themba September.
“Whether it was part of war efforts that were repurposed for commercial aviation post-war, or more recent examples of peacetime aviation development such as Morocco and Tunisia, as well as Ethiopia to a lesser extent – most national aviation manufacturing industries started against a backdrop of a supportive State and policy environment.”
September highlights the need to ensure that local registration and certification processes are responsive and regularly updated so that local companies can sell their products to international aviation supply chains.
Certifications are a necessity for international work in the quality- and safety- focused world of aviation, adds Steyn.
Local certification is necessary to apply to internationally recognised aviation safety authorities and enter international markets. Improving the work done by government organisations and agencies is crucial to support the industry and the industrial sector, explains September.
“Local certification must be in place for a company to apply for certification with the most broadly used international aviation safety certification bodies, including the US Federal Aviation Authority and the European Union Aviation Safety Authority.
“If we can secure local certification, we will be able to expand and produce for larger commercial supply chains beyond the niche markets available to producers of specialised, but nontype (noncertified) aviation products.”
Adept Airmotive manufactures rotary, fixed-wing and unmanned aerial vehicle propulsion systems that exceed most fuel-type specifications because they can use lower-toxicity fuels or biofuels to produce propulsion instead of the toxic aviation gasoline fuels.
The company sells a range of three engine variants to international clients.
“Adept Airmotive is good example of a local advanced manufacturing startup that can grow its international reputation and market, but faces barriers, including certification requirements. Aerosud will also provide workspace at its Gauteng facility for the Durban-based company while it expands, works to secure certification and grow its market,” says Steyn.
Adept Airmotive exports more than 95% of its products and local demand is too sporadic and small to sustain the company. Aviation manufacturers must find their place in the international aviation trade to survive, confirms September.
“We should recognise the opportunity to support local industrial intellectual property development and commercialisation and possible impact on helping the industry to find its place in the international aviation sector. This requires a steady working relationship with regulators and the industry,” he says.
Specifically, the stringent quality standards will prompt the industry’s direct suppliers to use more advanced processes and technologies to maintain their ability to meet requirements.
“We are not very good at commercialising our intellectual property in South Africa, and driving quality improvements throughout the supply chain will help with localisation of South African intellectual property and productive capacity,” September concludes.