https://www.engineeringnews.co.za

SA has to ‘focus heavily’ on manufacturing, learn from past mistakes – Zalk

SA has to ‘focus heavily’ on manufacturing, learn from past mistakes – Zalk

Photo by Duane Daws

19th May 2014

By: Leandi Kolver

Creamer Media Deputy Editor

  

Font size: - +

Past events have illustrated the importance of manufacturing with regard to the South African economy and, therefore, the country has to “focus heavily” on this sector, Department of Trade and Industry deputy director-general Nimrod Zalk said on Monday.

Speaking as part of a panel discussion at the Manufacturing Indaba, in Kempton Park, he noted that the significant role manufacturing played in stimulating growth and addressing unemployment.

However, Zalk stated that the country also had to learn from the past, explaining that, historically, South Africa invested in megaprojects in sectors such as the mining sector, which increased activity in the local manufacturing sector while the projects were under construction.

While this “mini boom” was good for local manufacturing, South Africa did not, during this construction period, sufficiently build the market to sustain autonomous sectors that could export their goods following the completion of the megaprojects, thus, causing a slump in local manufacturing once the megaprojects were completed. 

“We need to take this into account as we invest into the next set of mega infrastructure projects,” Zalk said.

Meanwhile, the South African Institute for Entrepreneurship CEO Guy Harris stated that South Africa had to regain its position as leading manufacturer.

Chairing the panel discussion, he said South Africa had not fully made use of the benefits of its Brazil, Russia, India, China and South Africa (Brics) partnership and the size of the Southern Africa Development Community market.

“We now have a clear document guiding us going forward, in the form of the National Development Plan (NDP), [but] now we need to ensure that the NDP [is implemented],” he said.

Also speaking as part of the panel, Barclays markets principal Peter Worthington said there had to be a significant push from the top – government and large businesses – to bring manufacturing to Africa; however, he also noted that the South African manufacturing sector was facing numerous challenges.

These included currency volatility and an uncertain operating environment, specifically in terms of energy security and labour-relations issues.

Worthington said the country needed a better labour relations framework to avoid lose-lose situations as was currently being seen in the platinum industry, where the Association of Mineworkers and Construction Union had been striking since January 23.

Also speaking on the topic of stability, Zalk said there had to be a shift towards longer term committed sets of investment and “deep entrepreneurship” in the manufacturing sector to achieve a more stable environment.

“We need people to commit for 10 to 15 years,” he noted.

Development consultant Dr Shawn Cunningham added that the risk of business failure was also significantly high, stating that something had to be done to address “risk issues”.

He pointed out that, in the past, few small businesses had invested in formal innovation and research and development, stating that this would be an important component of modernising the local manufacturing industry.

Meanwhile, also speaking as part of the panel, Deloitte risk advisory director Karthi Pillay said there was no shortage of understanding of the problems that the local manufacturing sector faced.

“But now, how do we get South Africa to focus on being competitive?” he asked, stating that he was not only referring to local competitiveness between manufacturers, but also the international competitiveness of South African manufacturers.

He highlighted that, according to the 2013 Deloitte Competitiveness Survey, South Africa’s manufacturing competitiveness ranking was expected to slide to twenty-fifth position, out of 38 countries, over the next five years, compared with its twenty-third position in 2010 and twenty-fourth position in 2013.

“We [as South Africa] have to ask ourselves, what are we going to be famous for 15 years from now and how do we build on that,” Pillay said, adding that the country had to come up with a strategy to reach its goals by, perhaps, focusing on a few specific products.

Edited by Tracy Hancock
Creamer Media Contributing Editor

Comments

Showroom

SABAT
SABAT

From batteries for boats and jet skis, to batteries for cars and quad bikes, SABAT Batteries has positioned itself as the lifestyle battery of...

VISIT SHOWROOM 
Actom image
Actom

Your one-stop global energy-solution partner

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.099 0.152s - 150pq - 2rq
Subscribe Now