While South Africa faces a list of crises, including unstable electrical supply, stumbling economic growth and labour unrest in many sectors, the weak rand presents challenges and opportunities for South African pumps companies, says the Southern African Pump Systems Development Association (Sapsda).
Sapsda director Lester Fine says the weakening rand has given local pumps manu- facturers a price advantage, while pumps importers will be hard hit by increased import tariffs.
“With the recent fall of the rand, locally produced solutions are going to become more competitive, but the potential growth of the industry will be hindered by the lack of capacity and skills,” Sapsda chairperson Gareth Langton points out.
He explains that weak commodity prices globally have resulted in many local pumps companies supplying lower-cost solutions, predominantly through imported products. However, Langton notes that this trend has resulted in a significant number of job and skills losses for pumps manufacturers.
The proposed mass job cuts in the mining and steel industries have shown the frailties of South Africa’s free-market system, Langton highlights. This is particularly evident in the steel-manufacturing sector, which has come under severe pressure, owing to cheap imports from Asian countries. Subsequently, local manufacturers are facing the possibility of enforcing mass job cuts and closing the doors of poor-performing plants to lower overhead costs.
Steel producer ArcelorMittal has threatened to halve its workforce to 3 000 if government does not impose higher import tariffs on Chinese steel importers. Langton holds that only time will tell if government intervention will prove effective or if it will be a case of “too little, too late”.
He adds that the recent turmoil in the steel industry should serve as a warning to government, which should be more proactive to ensure the safety of South Africa’s manufacturers.
“The time is fast approaching that government, business and labour from all sectors need to start having serious heart-to-heart conversations on how they can work together to develop the economy. We are continually seeing labour [unions] making demands that business either cannot or will not accept and, as a result, jobs are lost. Business then becomes increasingly dependent on imports, further losing skills, while government loses its tax revenue base. This is simply not sustainable,” Langton asserts.
Despite the many challenges that local pumps manufacturers face, the industry has the potential to become a world-class supplier of high-quality pump products and will be able to compete with other “low-cost countries” if manufacturers improve their operational efficiencies, he concludes.