http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.15Change: -0.05
R/$ = 11.65Change: -0.10
Au 1283.66 $/ozChange: 10.51
Pt 1240.50 $/ozChange: 12.30
 
 
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 Letters 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
SAA acting CEO Nico Bezuidenhout, Finance Minister Nhlanhla Nene and SAA chairperson Dudu Myeni
Finance Minister Nhlanhla Nene has assured that loss-making national carrier South African Airlines (SAA) will not receive another bailout from government, noting that the most recent R6.4-billion government guarantee had only been provided in support of an intensive...
South Africa's cumulative trade deficit was R95.3-billion in 2014, the South African Revenue Service (Sars) said on Friday. In 2013, it was R71.4-billion, Sars said in a statement.
Certain regulatory approvals remain outstanding in Telkom’s proposed R2.67-billion takeover of JSE-listed Business Connexion (BCX), the parties said in an update to shareholders on Friday. BCX noted in the statement that the Competition Authority of Botswana had...
More
 
 
Recent Research Reports
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
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.
 
 
 
 
 
This Week's Magazine
The international Square Kilometre Array (SKA) radio telescope – which is to be jointly hosted by South Africa and Australia with, later, outstations in other countries – may not yet exist, but international scientific working groups are already deciding what...
A free Web-based solar power plant capacity-planning tool offers project planners and developers, as well as governments, a means to assess the solar energy potential of thin-film solar PV power over an area of land. The tool was developed by thin-film solar...
As yet, no specific methodology, timeline or costs have been finalised to remedy the water ingress, excessive to contractual specifications, into the Gautrain tunnel between emergency shaft two (E2) and Park Station, says Bombela Concession Company technical and...
ASTRAPAK The group highlighted that executive strategic interventions and other group-wide business improvement imperatives were progressing favourably
The “seriously disruptive” electricity outages in South Africa have cost packaging group Astrapak more than R2-million in “irrecoverable downtime costs”, the company said on Monday, adding that the power cuts were negating some of the benefit of energy saving...
Bakkies and more affordable cars dominated South Africa’s new vehicle market in 2014. Unaudited data from the Department of Trade and Industry (DTI) shows that South Africa’s most popular vehicle in 2014 was the Toyota Hilux, selling 37 562 units.
 
 
 
 
 
 
 
 
 
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