http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.71Change: 0.12
R/$ = 10.90Change: 0.05
Au 1194.13 $/ozChange: -6.09
Pt 1245.50 $/ozChange: -0.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Feb 03, 2012

Is South African industry globally competitive?

Back
Agriculture|Africa|Defence|Environment|Industrial|Africa|South Africa|While Building|Automotive|Building|Chemicals Industry|Duty Applications|Power|Far East
Agriculture|Africa|Defence|Environment|Industrial|Africa|||Automotive|Building||Power|
agriculture|africa-company|defence|environment|industrial|africa|south-africa|while-building|automotive|building|chemicals-industry|duty-applications|power|far-east
© Reuse this



In our business, we deal with trade remedies and duty applications on a daily basis.

One lasting impression is that South African industry is tied into an enormous battle to be globally competitive. This view appears to be quite representative across a broad section of industries.

Severe challenges posed by imports, primarily (but not exclusively) from the Far East, are a reality. Our market is just another target market for companies producing enormous volumes and the extent of government subsidisation and support in some of these countries poses a real threat to local industry.

Against this backdrop, one would expect more frequent and more focused applica- tions for protection in the form of antidumping and countervailing duties. Yet many industries are just too fragmented to orchestrate a focused approach when applying for protection. At least, remedies are available to deal with dumped or subsidised imports and better communi- cation within industries can go a long way to ensuring that these remedies are properly exploited.

Of greater concern is the real possibility that our industries are just not competitive, even in a fair trade environment.

Our history entails a legacy of protection and a focus on being self-sufficient, stemming from the sanctions era. While we developed world-class technologies in areas ranging from defence to the chemicals industry and agriculture, very few of our major inventions and technological advances made it into the global arena in a big way.

In addition, our primary industries con- sist of only a handful of players established in an era where ‘sanction busting’ was the way to get into global markets. Many of these cornerstone industries are the ones most often applying for additional protection against imports.

Our most commonly recognised big indus- try that finds itself integrated into global supply chains is the automotive industry and this seems to be possible mainly as a result of substantial government support. While this may sound rather damning, it provides enormous insight. Most governments around the world support big industry in one way or another. Should our government not have more industry-focused programmes at the scale of the automotive industry programme?

With an enormous need for job creation, the current focus on support for small, medium-size and microenterprises (SMME) is both commendable and necessary. SMMEs are, however, exposed to global trends and unfair trade practices, with limited ability to withstand the rigours of the international market. While building an economy primarily on SMMEs may assist in job creation and provide greater social stability, it does little to integrate our industries into global supply chains, where production takes place with the benefit of real economies of scale.

To develop a globally competitive export industry, a substantial local market is often required. Even with the size of our population, our spending power on more than the most basic items is limited. For many industries, the benefit of having a significant local industry as a springboard just does not exist.

The common strategy of always seeing Africa as a primary market to develop that springboard into the global market is also flawed as most African markets are already importing at globally competitive prices, and obtaining market penetration is a lot more difficult than originally thought.

It should be clear that the stumbling blocks to South Africa becoming a global player are not only a lack of skills and perceived high electricity costs – the truth is we are behind the curve on global industrial development and challenges like skills shortages and a volatile currency are just secondary hurdles.

There appears to be only one answer – government and industry need to replicate what has been achieved in the automotive sector for other key industrial sectors, and this needs to be done with the same urgency and in parallel with the development of SMMEs.

Edited by: Martin Zhuwakinyu
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Pieter du Plessis & Donald Mackay News
I have uncapped Internet access at home. Or so I though until recently. Suddenly, it turned out that my 'uncapped' MWeb Internet access was subject to a 'reasonable usage' policy, despite my paying for uncapped Internet access every month.
The International Trade Administration Commission (Itac) may request the commissioner of the South African Revenue Service (Sars) to impose provisional antidumping duties to prevent further material injury being caused to a domestic industry during the time it takes...
Fair trade, as well as what it entails, is proving to be an increasingly subjective concept. World Trade Organisation (WTO) agreements appear to be more 'open to interpretation' than ever before and, in some cases, trade remedy actions appear to defy all logic. Two...
More
 
 
Latest News
South African Nuclear Energy Corporation (Necsa) group corporate services executive Ambassador Xolisa Mabhongo stressed on Thursday that South Africa currently had only one Integrated Resource Plan (IRP) for electricity, the IRP 2010, and that the IRP Update...
Small Business Deputy Minister Elizabeth Thabethe
South Africans needed to become more entrepreneurial and create their own jobs, instead of expecting government to create jobs or rely on private-sector employment. “We need to become masters of our own destinies,” Small Business Development Deputy Minister Elizabeth...
Plans to increase gross domestic expenditure on research and development (GERD) to 1.5% of gross domestic product by 2019 are yet to be formally adopted, despite the target being incorporated in the draft strategic plan of the Department of Science and Technology...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
Updated 7 hours ago In the next 20 years, it was expected that, in Africa, more people would live in cities and towns than in rural areas, United Nations Habitat executive director Dr Aisa Kirabo Kacyira said at the Human Settlements Indaba that took place earlier this month in...
Updated 7 hours ago Tough-talking Human Settlements Minister Lindiwe Sisulu has committed government to building 1.5-million low-cost houses over the next five years, telling the Human Settlements Indaba in Johannesburg on Wednesday that the State would achieve this target through the...
Updated 7 hours ago Over the past 20 years there has been persistent concern about deindustrialisation in South Africa, as well as the fact that locally produced manufactured products have been increasingly displaced by imports.
Updated 7 hours ago Financial agreement for Ghanian independent power producer (IPP) Cenpower Generation Company’s $900-million, 350 MW combined-cycle gas-turbine power plant was finalised earlier this month, paving the way for the project’s construction to begin before 2015 in Tema,...
Updated 7 hours ago The revenue implications for South Africa of ‘base erosion and profit shifting’ by corporate taxpayers are firmly in the crosshairs of the Davis Tax Committee (DTC) and Judge Dennis Davis hinted last week that recommendations were being considered to “detect and...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks